13 Private Student Loan Payoff Tips That Real People Swear By

Seeing a $0 balance when the time comes is well worth it.

When the CARES Act passed to provide financial relief for Americans during the pandemic, federal student loan payments and interest got put on pause, but private student loan holders were essentially snubbed.

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Private student loans can no doubt be harder to pay off, but it's not impossible. I recently spoke with a couple who paid off $123,000 of student loans in 12 months, along with a woman who paid off her private student loans during the pandemic to get their best debt-slashing tips.

Here are 13 proven student loan payoff tips that you can try if you want to pay your private student loans off faster:

1. Start by checking your loans each month. This can help you stay focused and motivated to pay them off.

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“Checking my account at least once a month kept my loans in the forefront of my mind,” says Nadia Ibrahim-Taney, a self-employed coach who paid off $20,000 of private student loans from grad school. “Just having them in mind and recognizing they are there is a good step. The more you learn about your loan, the more confident you will become in terms of developing a strategy to pay them down.”

It’s important to know exactly who you owe, how much you owe, and what your interest rates are if you’re looking to maximize loan payoff efforts. This can help you form a strategy. Maybe you want to tackle the loan with the highest interest rate first or the one with the lowest balance. 

Paying close attention to your payment plan terms is important as well. If you selected a plan where your payments could increase every few years, it’s important to budget for this. While you don’t have to obsess over your student loans each day, checking in at least once a month can help you stay focused and be accountable. 

2. And use a student loan repayment calculator to set your debt-free date.

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Staying motivated when you’re on a debt repayment journey is key. One of the best ways to motivate yourself is by calculating your debt-free date. Use an online calculator to enter information about your loans, interest rates, and how much extra you're able to pay on your loans each month. Then, you can see how long it will take you to pay them off. 

Play with the numbers and adjust things as you get windfalls or earn extra money. Debt doesn’t have to be forever, so it’s important to have a visual and timeline for paying off your loans. This will help keep you motivated during the days when you might want to give up.

3. Pay your full loan payment each month, then make additional payments whenever you can.

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If you want to pay off your loans early, it makes sense that you’ll need to make extra payments. These extra payments don’t have to be huge — especially in the beginning. The key is to just include extra payments into your budget and plan for them.

For Nadia, she initially focused on putting an extra $25 to $50 toward her student loans each month. “I made my monthly payments automatically through my bank account and made multiple payments with one payment being at the top of each month and the other one two to three weeks into the month,” she added. Over time and during months where your cash flow is better, you can make higher payment amounts and watch the money add up.

4. But make sure that any extra payments you make actually go toward the principal (aka the amount you borrowed), not just interest.

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One thing to be mindful of is how your student loan payments are applied. This will vary by lender, but usually, your payment goes toward interest and any other fees first. 

Then, the remaining amount goes toward the principal balance. When you make extra payments, make sure it’s going toward the principal balance so you can get rid of your loans quicker. You can call your lender to do this or you may even be able to make extra principal payments online. But don't make any extra payments without making sure you know where they're going.

5. Consider trying a debt snowball or avalanche if you have multiple loans to pay off.

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To wipe out your debt using the snowball method, take the loan with the lowest balance and focus on paying that one off first, while continuing to make minimum payments on your other loans. Then, move on to your next lowest balance and work your way up. As you pay off each smaller loan, you’ll free up more money in your budget to make bigger student loan payments. This will come in handy when you get to the loans with higher balances. The snowball method is a great option to start with if you’re unsure of your repayment strategy and need a motivation kick.

The avalanche method works similarly, except you focus on paying off the debt with the highest interest rate first. So, say you have three private student loans with interest rates of 6.8%, 8%, and 10.5%. You’d focus on paying off the loan with a rate of 10% first because by tackling that one initially, you’ll save the most money in interest over time. Then, you’d end with the loan that has a 6.8% interest rate. The avalanche method is all about tackling your most expensive debt first to save the most money, so it's ideal for higher interest debt.

6. If you also have federal loans, take advantage of the current payment freeze to put more money towards paying off your private loans.

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In March 2020, the COVID-19 relief package included a pause on federal student loan payments and interest. In January of this year, this pause of payments was extended to Sept. 30, 2021. There’s no telling if there will be another extension, but there's still time now to take advantage. 

“Before the pandemic, I was paying about $500 per month for my federal loans," Nadia said. “I was able to move this money to my private loans and make extra payments, which allowed me to pay my private loans off in full recently.”

If you have both federal and private student loans, you can temporarily increase your private student loan payment with the money you would have put toward your federal loans until the freeze ends.

7. If your private student loans have high interest rates, you might look into refinancing them.

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By refinancing your private student loans, you can consolidate them so you’re making one monthly payment each month and secure a lower interest rate, which could save you hundreds or thousands of dollars. For example, if you have $30,000 of private student loans at 8.5% and you’re able to refinance to 2.5%, this could save you could lower your monthly payment by $116 and save almost $10,000 in interest over the life of the loan. However, do some research before you consider including any federal student loans in the deal, as those loans come with some handy features that you can lose when you refinance.

If you’re considering refinancing, shop around for the best rates and offers so you can compare your options (sites like Credible can be a good place to start). Just keep in mind that to refinance a loan you will need to have a healthy credit score. If you are in the process of building your credit, you can try to get a cosigner to go on the loan with you. Or hold off for a year or two and consider refinancing in the future. 

8. Consider making some lifestyle adjustments to lower expenses, if you can.

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To pay off your student loans faster, you may need to make some unique lifestyle adjustments to help lower your expenses. This could mean having a roommate to split your housing costs with, or riding a bike to work so you can save on fuel for your car. For a couple who paid off $123,000 in just 12 months, it meant cutting down one of their biggest living expenses: housing. Anjie and RJ are a New York City couple who run a finance blog during their spare time.

Out of the couple’s $123,000 balance, $46,000 was private student loans and the rest were federal loans. “To pay off our student loans so quickly, we did whatever we could to cut down our expenses, from renegotiating our rent payment upon renewal of our lease to contacting utility companies to request discounts to lower our monthly bills,” said Anjie and RJ.

9. And create a budget that prioritizes paying off your student loans.

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It’s no secret that budgeting can help you pay off debt faster, or reach any financial goal for that manner. So track your finances with a spreadsheet or a budget planner each month to hold yourself accountable. Also, don’t forget to budget a little money for fun or a treat to help you stay motivated.

To cut down their debt, Anjie and RJ stuck to a specific budget and discussed it each week. Then, they made sure to cook almost every meal they ate and limit purchases for nonessential items. 

Btw, if you tend to overspend, one thing you can try is using cash for certain categories. You don’t have to convert to a full-on cash envelope budgeting system — just take some of the categories that you typically overspend in (whether it’s groceries, dining out, or shopping for household goods) and budget for them with cash each month to help keep yourself on track.

10. If you have a two-income household, consider living on one person's income and using the other for debt payoff.

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If you have a partner and you’re both working, see if you can live on one person’s income. That way, you can use the other person’s income to plow through your private student loan balance. Doing this helped Anjie and RJ pay off their 6-figure student loan balance as quickly as possible. Of course, you’ll need to make sure you have a specific budget laid out and are on the same page financially before trying anything like this. 

Living on one person’s income can be a major adjustment but it can also lead to some major results. Nevertheless, if you run the numbers and it makes your finances super tight, you might also think about living on something like 75% of your total combined income and putting the remaining 25% toward student loan debt.

11. See where you can level up your income. A raise, a side hustle, or a new job could help you pay off your loans much faster.

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Once you’ve cut your budget and made necessary lifestyle adjustments, shift your focus to seeing if and where you can earn extra money to put toward student loan debt. For Anjie and RJ, both of them sought out promotions or new roles outside of their companies. With a promotion and a new job, they were able to negotiate higher salaries. Anjie even got a side hustle as an adjunct professor to help raise their income. 

Set a goal for how much additional income you’d like to earn each month and also consider your available hours. For example, if you are only available to work an extra 5 hours per week but want to earn $500 per month, that means you’ll need to make $25 per hour somehow. This could be earned doing things like freelancing online, selling used items, driving for Uber or Lyft, walking dogs, or even mowing lawns in the neighborhood. 

12. Use extra money that comes your way, like tax refunds or bonuses, to make extra loan payments.

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A financial windfall is money that you come across and weren't expecting. This could be anything from a bonus at work to a tax refund or a credit from a utility company. Instead of spending that extra money on something, direct it toward your student loan balance instead. Those extra payments will add up and help you get out of debt quicker.

13. And finally, if you ever can't make a payment, contact your loan servicer right away.

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There may be times when you can’t afford to put extra money toward your loans and that’s okay. You can always slow down or skip months, but what you may not be able to do is skip your minimum payment. 

If you’re in a position where you can’t make your minimum payment for the month, be sure to contact your loan servicer. Simply not making a payment and not contacting them could cause your account to go into default, which can damage your credit and bring on late fees.

Your loan servicer may have programs or relief options to help you. Or, they might even offer to lower your interest rate or give you a one-time extension on your payment. You won’t know this if you don’t reach out and be transparent about your situation. If you ever can't make your payment, it's always better to reach out and ask for help.

Do you have a genius loan payoff tip that we missed? Tell us all about it in the comments below.

And for more money tips and tricks, check out the rest of our personal finance posts.