People Shared Their Best Advice For Paying Off Student Loans, And It Made My Wallet Happy

The two scariest words in the English language: "interest rates."

If you’re a broke college grad like me and have a cloud of student loan debt hanging over your head, then you might feel that it could take years to pay it all off. There's always budgeting and saving, of course, but in an effort to learn even more tips and tricks, I asked members of the BuzzFeed Community for their best advice for dealing with student loans.

Universal Pictures

Here are their strategies:

1. Utilize auto-pay to make sure you NEVER miss a payment.

Tero Vesalainen / Getty Images

"I set up auto-pay for the minimum amount on both of my loans so that they were paid on time, every time. I wanted to have the state help with repayment eventually, but you only qualified if you never missed a payment. Now that I’m buying a house 10 years after I graduated, I have really great credit because I always paid on time."

—joyg479f13e94

2. Pay 👏 off 👏 that 👏 interest 👏 ASAP.

HBO

"The single most important piece of advice I can give is to do everything within your means to avoid accumulating too much interest — ESPECIALLY if you have private loans. I originally took out approximately $40,000 in loans starting in 1998, and because I hadn’t been making payments because of a grad school deferment, my loan balance ballooned to almost $90,000."

—tickle_bomb

3. Always try to pay more than just the minimum each month to chip away at the interest AND the principal amount.

Ronstik / Getty Images

"My advice would be to double-check how your payment is split between interest and principal. What I noticed early on was that very frequently, my entire payment would go toward the interest instead of the principal. So it was like taking one step forward and then one step back. I made sure to pay extra every single time to ensure that my payment covered not only the accrued interest but also a portion of the principal."

—ramanicossack1

4. Take advantage of grace periods.

Agcreativelab / Getty Images

"Pay something every month, even if you're in a grace period. Just $30 a month (less than the monthly cost of buying Starbucks for most people) during a one-year grace period can start chipping away at interest."

—tayandmiatietheknot

5. Make payday count.

ABC

"I would make my required payment, then on payday I'd put whatever money was left in my checking account (prior to my new paycheck) toward the loan."

—KWo

6. Try the ~snowball effect~ to roll through multiple loans.

New Line Cinema

"Make the minimum payments on all your loans EXCEPT the one with the highest interest rate. Contribute as much as you can afford to that loan until it’s paid off, then repeat this process for the other loans. I did this and paid off over $60,000 in student loans in four years, and the freedom and peace of mind have been invaluable."

—laurad4dd918b71

"I second snowballing your loans! I paid off two of my six loans in six months. I’m working my way to my third in the next couple of months — that’ll be half my loans in less than a year!"

—Ivy Hafer

7. Cash out that 401(k) early*.

Sony Pictures

"Use your 401(k) as a loan killer. I've made three withdrawals over the last six years to knock out high-interest loans that were going to take eons to pay off. I developed a 401(k) payback plan that was about the same as my loan payments and would allow me to pay back the amount in two years or less. The beautiful part: I'm paying interest to myself, so by the time I've paid back my 401(k), I'll be in a better position to take on the next one!"

—j4ef7ebe26

*Typically, making a withdrawal from a 401(k) before the age of 59½ subjects you to an early-withdrawal fee, and you would be responsible for paying income taxes on the withdrawn amount. However, in March 2020, CNBC reported that the Senate approved a package that will allow 401(k) account holders to make a "hardship withdrawal" of up to $100,000 without the early-withdrawal penalty (the amount will still be taxed, though).

8. Use the money from your tax refunds to make student loan payments.

Zimmytws / Getty Images

"I read about a woman who used her tax returns each year to pay off her student loans faster."

—smileyk

9. Budget, budget, budget.

Bravo

"Make a solid budget. Once you have an emergency fund of $1,000 saved up, put literally every extra dollar toward your loans. And then pay off the smaller loans first so you feel accomplished and motivated to keep going."

—janeaustinismyhomegrl

On that note, check out these tips for budgeting and saving money.

10. Read the fine print, and avoid unknowingly falling for consolidation scams.

Gemphotography / Getty Images

"Do NOT pay a company to help you consolidate loans and apply for income-based reimbursement. The federal loan servicing company does that for free, and it’s fairly easy to navigate the site. All of these 'companies' that reach out to offer you help with the applications for a small fee ($500) are complete scams."

—Brooke Lurvey

11. Consolidate and refinance when possible.

NBC

"I rolled my student loans into a mortgage payment when I refinanced. They got paid off, and my payment was still cheaper than it was before!"

—ktjn

"If you've taken out private loans, my advice would be to consolidate and refinance upon graduating and receiving your first job. It may not be worth it for federal loans, since those interest rates are usually lower, but for my private loans, I was able to consolidate and refinance from an average 8% interest rate to 5%."

—n559

12. Never, ever, EVER ignore your payments.

Bluebeat76 / Getty Images

"If you cannot pay, CONTACT YOUR LOAN SERVICER RIGHT AWAY!!! They actually have a lot of options that can help you! Don’t use a deferment or go into forbearance — except as a last resort. Your interest will grow, which will increase the balance and life of your loan. Most people qualify for income-based repayment plans, and payments made on income-based plans still count toward Public Service Loan Forgiveness — even if they qualify for a $0-per-month plan (yes, that exists). If your interest rate is the problem, ask about loan consolidation because you might be able to get a lower rate!"

—Watermelon97

13. See if your employment qualifies you for loan forgiveness programs.

NBC

"If you work for a nonprofit (including colleges and universities) or the government, or you work in education, you may qualify for the Public Service Loan Forgiveness program. After 10 years of making qualifying payments every month (at a lower monthly payment), your loans are forgiven. My monthly rate went from $550 to $187!"

—hinmansp6

14. Rethink your cosigner.

CBS

"About five years after college, I refinanced to a locked rate and removed my mom as my cosigner, both of which were huge reliefs! I now have a much lower, locked-in payment and throw whatever extra I can at other debt. Lowering the monthly payment (by almost $300 per month) helped me conquer the other stupid debt so I can attack these student loans later. Plus, removing my mom as a cosigner felt like a really good move. I’ve still got a few years, but it feels good not to be terrified about how I'll afford my payments."

—welsbychelsea

If you think cosigning sounds a little intimidating, you're not alone! Check out this article on cosigning student loans to learn more.

15. If you can, start making payments while you're still in school.

Nickelodeon

"Begin paying as soon as you take out the loan. You don’t begin accruing interest until you graduate, so all of the money you put in goes toward the principal."

—kelleykatie27

"Start paying off the interest as soon as you take out the loan. For my sister, that’s $25 a month, and sometimes she can pay more."

—LatinaLibra1005

16. Lastly, don't be scared to ask for help.

CBS

"My personal advice would be to remember that you are not alone in debt; you most likely know classmates and peers who have also taken out loans. Don't be afraid to reach out to ask for suggestions and advice. Student loan debt can be a tough mental burden, but there is a light at the end of the tunnel. Stay hopeful, and prepare short- and long-term goals that are feasible to achieve."

—n559

Note: Some submissions have been edited for length and/or clarity.

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