How to Pay Off Student Loans Fast in 5 Steps

First Republic Bank
October 20, 2020

It’s no secret that many Americans face challenges in paying off their student loan debt. As of June 2020, roughly 44 million Americans have a combined total of more than $1.6 trillion in student loan debt, according to CNBC. If you graduated with a huge amount of debt, it may be difficult to focus on other future financial goals, like buying a first home, moving to your dream city or starting a family.

Note: Currently, all payments for certain types of federal student loans are suspended until May 1, 2022 per an executive order by the President. Interest will not accrue during this time period. (Note updated on 12/22/2021)

If your student loan payments were exempt from this freeze — or if you want to eliminate your debt to reach other financial goals — finding ways to pay off your debt faster can save you thousands of dollars in the long run. Consider these efficient strategies to help you pay off your student loans faster and take back your financial freedom.

1. Assess your current financial health

You can’t begin to pay down your student loan debt responsibly until you get a full view of your entire financial picture. To do this, figure out your total annual income (after taxes), your total debt and other financial obligations, and your credit score. Consider your savings, and whether you have enough cash on hand to weather the “what-if’s” in life.

Beyond the “numbers” of your current financial situation, think about where you are in your career and your financial goals: are you a recent graduate? Looking to buy a home in two years? This all factors into whether refinancing is right for you.

Bottom line: The stronger you are financially, the better position you’ll be in to secure the best interest rate if refinancing is in your future.

Bonus Tip: If you have debts with higher interest rates than your student loans (like credit cards, for example), it might make sense to work on paying those off completely before putting any of the following debt repayment plans in place.

2. Try refinancing

Refinancing is paying off  your existing student loans into a completely new loan, with a different loan term, and at a potentially lower interest rate. Refinancing often results in reduced monthly payments and/or  the opportunity to pay your loans down faster.

If you’ve already refinanced, you might consider refinancing your student loans again if you think you may qualify for a lower interest rate. In short, refinancing can free up more money in your monthly budget for other living expenses or financial objectives.

Bonus Tip: Keep in mind when you refinance into a new loan, you may be required to forego special features of federal student loans, such as loan forgiveness and income-based repayments.

3. Make higher monthly payments

You might think finding extra money each month to make extra payments toward your student loan debt is impossible, but here are some smart ways to make it happen:

  • Go over your monthly expenses line by line to cut down on wasteful spending, such as paying for cable or a gym membership you never use. You should also take a full inventory of discretionary expenses — like travel, ordering from restaurants, etc. — and prioritize your spending to achieve your goals.
  • Make the most of your prime career-growth years by fully utilizing your job benefits in order to free up funds to put toward your student loan debt every month.
  • Put extra cash (bonuses or tax refunds) toward your student loans.

4. See if your job offers loan forgiveness options

You can’t always plan your career around jobs that will help you pay your student loans more quickly, but keep in mind that certain fields offer loan forgiveness programs that could significantly decrease your loan balance and how much you end up paying in the long term. If you happen to work in one of these fields — like public service or teaching, for example — check with your company to see if you qualify for full or partial student loan forgiveness.

Bonus Tip: Many job listing sites allow you to search for jobs that offer loan forgiveness as part of their incentive packages. For example, on, simply type “loan forgiveness” in the “what” box and add your location to generate a list of companies that offer loan forgiveness perks.

5. Sign up for automatic payments

You’ll need to check with your student loan servicer for specifics, but many offer discounted interest rates for automatic payment enrollment. You can even set up the payment date every month based on when it’s convenient for you. This can save you money every month and prevent you from missing payments, which can tack on extra fees and negatively impact your credit score.

Bonus Tip: Most loan servicers send you a notification before they deduct the payment from your bank account, so you can be sure you have the funds to cover it. Start making payments while you’re still in school. Most students don’t even think about making payments on their student loans until after they graduate. However, paying down student loans as soon as possible could help you save significantly in the long run — even small payments can add up.

Which student loans should you pay first? If you have the means to make payments on your federal loans while in school, it’s best to tackle unsubsidized loans first. These loans begin accruing interest as soon as funds are disbursed, so making early payments could help you pay less interest over the life of the loan. Subsidized loans, on the other hand, don’t actually accrue any interest while you’re in school. For private student loans, you can direct any prepayments to the loans with the highest interest rates — especially if they are variable — to save the most money. While you're doing your research, learn more about how student loan interest works.

If you plan to make early loan payments, work with your loan provider to make sure the payments are being maximized to decrease your debt quickly. Also, double check that your payments are going towards the principal of your loan and not just the interest. This is the best way to decrease the amount of interest you’ll owe over the course of your loan.

Bonus Tip: Some lenders offer biweekly payments, rather than monthly, which is another way to pay off debt faster.

Consider a Personal Line of Credit

There’s more than one way to refinance student loan debt; one option is taking out a personal line of credit. Similar to traditional student loan refinancing, a personal line of credit allows you to strategically combine multiple student loan payments into one low monthly payment and potentially save you money by lowering the overall interest rate on the bulk of the loan.

Here’s how a personal line of credit works: this financial product gives you flexible access to a set amount of money over a period of time, called the draw period. A personal line of credit allows borrowers to refinance debt — including student loans and auto loans — and fund additional personal goals, whether it’s upgrading your car or moving to your dream city.

If you’re interested in learning more about a Personal Line of Credit from First Republic and how it might help you achieve your own financial goals, see your rate using this personal line of credit calculator.

Remember: Student loan repayment is a marathon, not a sprint

If you’re currently paying off student loans, it might be hard to envision a life without them. The best thing to do is to focus on the financial goals you can accomplish once that debt is paid off. These actionable methods can help you eliminate those loans faster, so you can focus on reaching your long-term financial goals.

Building a relationship with a trusted banker who can provide personal service and guidance allows you to focus on your career and remaining confident that your financial goals are on track. A banking partner can model scenarios for paying down a student loan or making the most of any bonus income. They can also build a team to help you navigate career developments as new financial goals take hold, such as saving for a child's education, buying a home and investing accumulated wealth.

If you’re still unsure what the right move is for you, consider speaking with a First Republic banker who can provide you with advice on how to pay down your student loans faster and prepare for the future.

First Republic’s Personal Line of Credit – access funds with fixed rates from 2.25% APR (with discounts)1.

1. Annual Percentage Rate. Rates effective as of 06/15/2020 and are subject to change.

Borrower must open a First Republic ATM Rebate Checking account (“Account”). Terms and conditions apply to the Account. If the Account is closed, the rate will increase by 5.00%. Rates shown include relationship-based pricing adjustments of: 1) 2.00% for maintaining automatic payments and direct deposit with the Account, 2) 0.50% for depositing and maintaining a deposit balance of at least 10% of the approved loan amount into the Account, and 3) an additional 0.25% for depositing and maintaining a deposit balance of at least 20% of the approved loan amount into the Account.

Personal Line of Credit consists of a two-year, interest-only, revolving draw period followed by a fully amortizing repayment period of the remainder of the term. Draws are not permitted during the repayment period. Full terms of 7, 10 and 15 years available.

This product can only be used for personal, family or household purposes. It cannot be used for the following (among other prohibitions): to refinance or pay any First Republic loans or lines of credit, to purchase securities or investment products (including margin stock), for speculative purposes, for business or commercial uses, or for the direct payment of post-secondary educational expenses. This product cannot be used to pay off credit card debt at origination.

Personal Line of Credit minimum is $65,000; maximum is the lesser of $350,000 or debt to be repaid at origination plus $100,000. If no debt to be repaid at origination, the maximum loan amount is $100,000. Line of credit cannot be fully drawn at origination.

The terms of this product may differ from terms of your current loan(s) that are being paid off, including but not limited to student loans. By repaying such loans, you may permanently be giving up tax and repayment benefits, including forbearance, deferment and forgiveness, and you may not be able to re-obtain such benefits if this loan is refinanced with another lender in the future.

Contact your legal, tax and financial advisors for advice on deciding whether this is the right product for you. Terms and conditions apply.

Product is not available in all markets. For a complete list of locations, visit Applicants must meet a First Republic banker to open account. This is not a commitment to lend; all lending is subject to First Republic’s underwriting standards. Applicants should discuss line of credit terms, conditions and account details with their banker.

The strategies mentioned in this article may have tax and legal consequences; therefore, you should consult your own attorneys and/or tax advisors to understand the tax and legal consequences of any strategies mentioned in this document.

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