Borrowing

4 small moves you can make to help you pay off your student loans ASAP

Twenty/20

Paying off your student loans can seem like a never-ending process, especially if you've accumulated a significant amount of debt. And for many grads, that's the reality: About 69% of students from the class of 2018 took out student loans and they graduated with an average debt balance of $29,800, according to Student Loan Hero.

There are ways to make the process of getting rid of those loans a little faster, though, and a little less painful. Here are some small moves you can make that can help you pay off your student debt.

1. Plan ahead

Get organized and make a spreadsheet that contains basic information about each of your loans, including balances, interest rates, and contact information for your loan servicer(s).

Once you have a clear idea of which loans you want to tackle first, decide what strategy you want to use. Two of the popular, effective approaches are known as "snowball" and "avalanche," and each involves focusing your extra efforts (and cash) toward one debt at a time, and making the minimum payments on all of the rest.

You can also start planning ahead by researching employers that offer tuition assistance or student loan repayment programs that make it easier to pay down your debt.

VIDEO1:2301:23
What's the Difference Between a Debt Avalanche and a Debt Snowball

2. Start early

Student loan experts recommend beginning the repayment process as early as your first semester in college. "If you're in school, you can pay the interest quarterly so that you're not paying interest on interest," says April Sanderson, a financial counselor with LSS Financial Counseling. "Paying the interest while you're in school prevents it from capitalizing."

With average interest rates on student loans creeping upwards of 6%, you could cut down your repayment timeline drastically if you start chipping away at your interest early in the life of your loan.

To find that extra cash, consider a getting side hustle, like tutoring or selling unused items online. Tutors with expertise in high-demand subjects like calculus can earn as much as $140 an hour.

3. Pay more than the minimum

Making extra payments toward your principal balance means you'll accrue less interest over time, and that will ultimately help you pay off your debt faster. Adding even just $25 more per week can make a huge difference over time and shave months or even years off of your repayment timeline.

"If you want to speed things up, you're going to want to make more than the minimum payment," says Michael Kitchen, a student debt expert at Studentloanhero.com. "Anytime you pay extra, you want to make sure that they're applying the money to the principal."

If you want to speed things up, you're going to want to make more than the minimum payment.
Michael Kitchen
Student debt expert, Student Loan Hero

Talk to your lender to ensure your extra payments are going directly to your principal and to the loan you want to repay first. Then be sure to check that your payments are applied correctly.

If you haven't landed a full-time job or figured out your next move after college, there are ways you can get ahead on payments anyway, says Sanderson: "If they're still in that transitional period where they haven't quite gotten their adult job yet, they should put whatever money they can each month into a savings account in order to get used to making a monthly payment."

4. Set up autopay

Paying off your student loans on time means being consistent. Setting up autopay gets you in the habit of managing a budget and can help you avoid missing a payment or incurring late charges, since your loan becomes delinquent the day after you miss a loan payment.

Some loan servicers will even offer you a discount if you choose to enroll in automatic payments or paperless billing options. Sallie Mae, for instance, will offer a .25 percentage point interest rate reduction if you are actively making your loan payments on time.

Staying on top of your payments and paying off your loans as quickly as possible will free up more of your income for larger purchases or investments later on in life.

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