5 Ways To Pay Off Student Loans in 2021


According to CNBC, 70% of college student graduate with a significant amount of student loans, and over 44 million Americans collectively holds roughly $1.5 trillion in student loans.

You might be wondering, how to get rid of your student loans in the smartest and financially responsible way. The good news is that there are several ways to do it.

In this article, you’ll learn five effective strategies and tips to pay down your student loans easily.


The most effective way to pay down your student loan is to pay a little extra than the minimum you can. However, you don’t need to pay more each month to pay off your student loan. You can pay extra whenever you think your budget allows you to do. This strategy might help you save money on interest payments.

If your budget allows, make larger payments to minimize the duration of the loan and save money on the interest payments.

Let’s say you owe $25,000 with an interest rate of 6.8%. If the repay period is 10 years, it would cost you $288 a month. Now if you pay $700 a month instead of $288. It will allow you to repay the loan in just over 3 years.

According to Jessica Ferastoaru, a student loan specialist at TCA (Take Charge America), “Let your servicer know to apply for your extra payment rather than placing your account in ahead paid status. This allows you to repay your principal balance in a short period and save money on interest.” If you’re having trouble making an extra payment, you can skip a month and pay extra whenever you can afford it.


Creating a separate account for paying off your student loan is another great approach. When a repayment fund is automatically transferred to your separate account it is very effective because it’s forced. It allows you to save money for your student loan instead of spending it on other expenses.

Make sure to use this separate account for repaying student loans and can’t be easily withdrawn from with a card. Don’t use your saving accounts that already exist because you might withdraw that money for things other than a student loan. This strategy allows you to control your overspending and let you make an extra payment a month.


Debt consolidation can be really helpful when it comes to repaying school loans. The term “debt consolidation” refers to grouping multiple loans into a single loan. It could help you pay your loans more convenient because you’ve only one servicer.

Consolidation can be more beneficial for student loan payment because it can extend your repayment period. It allows you to simplify your loan payment and get other benefits such as student loan consolidation doesn’t require you to qualify on basis of your credit score and there is no maximum loan amount limit.


You can also refinance multiple student loans into a new one. This might help you save more money than any other strategy. Various private student loan companies offer low-interest rates up to 3.5% which is much lower than any federal student loans offer.

Saving money by refinancing your student loan depends on your debt amount, your current interest rate, and your repayment timeline.

With refinancing your lender is responsible for your loan repayment to federal and private loans and your only debt is to that one lender. Remember, going through the refinancing route your only objective is to get a lower interest rate and affordable payment terms.


Instead of making monthly payments, another effective way is to make bi-weekly payments to save money on the interest rate. This strategy can make a significant difference especially when it comes to paying off a large balance.

According to Betsy Maayotte, a financial advisor at American Student Assistance, “Paying your student loan every two weeks work out to a full payment a year” This payment strategy can go longer to help you reduce your principal balance more quickly.

Let’s say you pay a $600 student loan a month, cut your monthly payment in half, and pay $300 every two weeks instead. It allows you to pay off your student loan much sooner and you wind up saving money on the interest.


The key to paying down your student loan is to stay motivated and making sacrifices by getting strict on a budget, but doing so can get you out of your student loan and eliminate years of interest payment.

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Jess | Millennial Money Expert

I saved $100K at 25 and I help millennials and gen z-ers get excited about financial literacy and build wealth. 

In this article, you’ll learn five effective strategies and tips to pay down your student loans easily.