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student loans

Small Changes to Pay Off Your Student Loans Faster

Student debt is the invisible burden that many of us carry. According to Student Loan Hero, the average student loan debt for Class of 2016 graduates was $37,172, up six percent from the previous year. Debt impacts every financial decision you make, from if you are ready to buy a house, to smaller choices like eating out or bringing a lunch to work.

After years of hard work to earn a degree, it can feel like an impossible task to prioritize paying off debt, but it doesn’t have to be. Here are some minor changes anyone can make that will have outsized effects on your student loan balance.

Make a Budget, and Stick to It


A clear budget is the best thing you can do to keep your finances in line, whether or not you are making student loan payments. Debt can feel like an impossible task to overcome when considering the complete timeline of the loan. Instead, breaking your spending down into monthly bite-sized pieces can be the trick to getting on the right track. If you are living beyond your means, a budget can help clarify how far off you actually are, and where you can make adjustments to improve spending habits.

Consider downloading a budgeting app linked to your bank account or credit card to help hold yourself accountable and enforce new spending habits. Passive tracking of your spending will give you an accurate picture of where you slip up and could stand to spend less, without spending hours adding transactions into a spreadsheet.  Many apps also have push notifications or weekly summaries that keep users honest and aware of their habits.

If you already have a budget established, but find yourself frustrated with maintaining and focusing on your financial goals, please see 7 Ways to Budget for Happiness.

Pay More Than the Minimum

No one wants to see more money dedicated to an expense, but this adjustment could save you money in the long run. The bigger the bite you can take out of your principal loan balance, the shorter the length of your loan. Getting out of debt sooner means you will avoid more interest payments and remove the cloud of student debt from affecting future financial decisions.   

Decide on a larger amount than the minimum required to pay, that still fits within your budget, and set up automatic payments at this new price point. You will be saving yourself the decision to spend more on your loan payment each month and set yourself up for more responsible spending habits.

Refinance Your Student Loan

Revisiting your loan and refinancing to a lower interest rate could have a major impact on the amount you pay in interest over time. When you refinance student loans, you get credit for the positive changes to your financial profile since you originally took out the loans. A student loan refinance is a good choice for anyone who has seen advances in their income, career, or credit score since they were in school.

This is another one-time decision that will ripple throughout the life of your student loan. Doing a little legwork to apply for refinancing can make an outsized impact on the length of time you spend living with debt.

Live Below Your Means


After establishing a budget, your spending shouldn’t go up just because you have more cash on hand. If you negotiate a raise, or take a new position that comes with a salary bump, put this extra cash flow towards your loan repayments. Of course pat yourself on the back for improving your salary and earnings potential over time, negotiating an offer or raise is no small achievement.

If you have been holding off on having a salary discussion with your manager consider calculating the impact your added income could have on your loan timeline. It is important to remember that your spending does not have to reflect your new and improved paycheck, and you shouldn’t try to match your peers’ habits if they are not focused on debt repayment.

Put Your Bonus Back to Work

There may be no better feeling than getting a check back after tax season. While it might be tempting to splurge and treat yourself with this surprise cash windfall, the best option is to put that money back to work for you. Making a large one-time payment towards your debt is an easy way to make a dent in your total, and it didn’t come out of your planned budget. The same is true for an end of year bonus that came as a surprise. A bonus that reflects the hard work you did this year should be put towards creating a solid and debt-free future for yourself.

The same could be said about cash gifts from friends or family. If you aren’t sure what you want for the holidays this year, a donation towards your student debt is something everyone can get behind.

Don’t Put These Changes Off

It can seem like a lot to make each of these changes at the same time, especially if you have a lot of other changes going on in your life. However, an expensive vacation, job change, or move can actually be the best time to reexamine your finances. When life is throwing a lot your way it can feel like the last thing you have time to examine is your finances. But the sooner you make a change, the larger the impact.

This article was written by Carolyn Pairitz Morris, Senior Editor at Earnest.

Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.