How an Extra $25 a Week Can Get You Out of Student Loan Debt Faster


Putting an extra $25 a week toward your student loan balance can help you pay off your debt much faster—and save you money in the long run.

Let’s say you have $37,172 in student loan debt, the average balance for 2016 college grads. Rates vary from loan to loan, and depend on what kind of loans you have and when you borrowed that money. But for this example, we’ll estimate about 5% on the combined balance over four years. If you stick with the standard 10-year repayment plan for federal loans, you’ll pay roughly $395 a month for the next 120 months.

However, with just an extra $25 per week—so, about $495 a month instead of $395—you would cut down your repayment time by 29 months and pay off your loan in full in a little more than 7.5 years. You’d also decrease the amount of interest accrued over the course of the repayment period from more than $10,100 to about $7,500. (Check out the Department of Education’s calculator here, where you can run the numbers based on your own loans.)

“If you can’t afford an extra $20, even an extra $5 can make a difference,” says Betsy Mayotte, president and founder of The Institute of Student Loan Advisors (TISLA). "Assuming your goal is to pay off your loan as quickly as possible, every extra dollar you spend is going to reduce the principal balance, which means that the next day there is that much less interest accruing and more of your payment will be going toward your principal next month.”

These small changes can help you make a big dent in your debt.

Find creative ways to save

Kiera Carter, 30 and living in Los Angeles, paid off her $111,000 student loan debt in just under nine years. In addition to working full-time jobs at digital and print publications, she became more conscious about how she spent her money and trimmed her budget significantly.

“I still went out and had fun with my friends. I just tried to have more of a say in where we went and looked for places where I didn’t have to spend a lot of money to have fun,” says Carter. She chose BYOB restaurants with affordable specials and $3 dollar bottles of wine.

Carter also cut costs by shrinking her clothing budget and purchasing affordable staples for her wardrobe instead of designer clothing. She even wore H&M pieces to a red carpet event during fashion week.

A friend of Mayotte’s with significant loans got her family to stop spending $5 bills. Instead, they put them in a jar, Mayotte says, and every few months, they'd count them up and use them to make a loan payment, showing themselves that a little could go a long way.

Motivate yourself

Kevin Ha, the 32-year-old in Minneapolis behind the Financial Panther blog, motivated himself to save extra cash by calculating the daily interest that his law school student loans were accruing. Ha owed $87,052, and he paid off the principal amount in an impressive 2.5 years. However, he then had to pay $15,847.51 in interest.

“I used to do the math and figure out how much I was paying in interest each day. It was usually 15-20 bucks, and I used to think, ‘I could be spending that on food or other things I needed.’ It motivated me to pay my loan off as quickly as possible,” says Ha.

Make some extra cash

In his spare time, Ha used food delivery or dog walking apps like Postmates and Rover to make an extra $10-$20 per day, something he says most people can do in an hour. He also recently told Grow about another of his side hustles: He brings in $21 a month just by snapping photos of hiring signs.

Carter took on freelance writing gigs, plus an extra job, to help chip away at her loans.

“I had a weekend job, I was a lifeguard in college and lifeguarded on the weekends even after [I] graduated. That extra money was really crucial,” Carter says.

After all, it’s often the small changes that make the biggest difference in the long run.

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