Education is priceless, but student loans can stay with you for a long time. Some repayment plans can last up to 20 years. It is easy to let student loan debt linger for a long time, but if you’re eager to break free from student loans sooner, you can start taking steps now to pay them off faster.

There are many benefits to doing this. Paying off student loans early can save you money on interest charges in the long run. Once done paying for your education loan debt, you can put your money towards buying a home, retirement, or other investments. Paying off a loan also reduces your debt compared to your income, making it easier to qualify for other loans.

Key Takeaways

• The average student loan lasts for 20 years, but there are ways to shorten this timeline and get out of debt quicker

• Making additional payments, setting up automatic payments, and considering refinancing are some effective strategies for paying off student loans faster

• Sticking to a budget and considering part-time jobs or side hustles during college can help you raise extra funds to put toward your student loan

So, if you want to get started now, we have put together the five best ways to pay off your student loans faster.

Should you pay off your student loans early?

Settling student loans ahead of term may seem like a good way to free yourself from debt and increase your disposable income. But it should not be your top priority if you are carrying high-interest credit card debts. Hence, before you prioritise eliminating your student loans altogether, there are a few things to consider:

Pros of paying off student loans early

• Reduced interest payments over the life of the loan can save you a considerable amount of money.
• Greater financial freedom and flexibility once the loans are paid off. You can free up more money in your budget for other expenses or savings goals.
• Going loan-free can help lower your debt-to-income ratio and improve your credit score. This can make it easier to get approved for other types of credit with better interest rates.

Cons of paying off student loans early:

• If you pay off your education loan during the course of your studies, there could be a potential loss of tax benefits. For example, international students in the USA can get up to $2500 deductions on interest paid on private student loans from their taxable income.
• Paying off your education debt by taking on new debt, such as a personal loan or credit card, may not be the best strategy. It can inversely add to your overall debt load.
• Putting away all your money to settle your loan could land you in a financial bind in case of an emergency. It is wise to keep aside 3-6 months' worth of living expenses and only allot extra money towards loan repayment.
• By prioritising loan repayment aggressively, individuals may miss out on other investment opportunities that may have yielded higher returns. You could be planning for retirement, saving for a downpayment on your house, or building an emergency fund with that money.