Should I Pay Off My Student Loans Early?

Should I Pay Off My Student Loans Early?

Uploaded on
Jan 31, 2023
Last updated on
Feb 24, 2023
Uploaded on
Jan 31, 2023
Last updated on
Feb 24, 2023
pay off student loans early
Pay the debt early?

Ever thought of paying off your student loans early? Then take a minute and read this blog. There are plenty of reasons why you should not pay your student loans early. Paying off your loans early is a big deal, but it is a bit different when it comes to student loans. Unlike other loans, student loans have a lower interest rate which can help you focus on other goals, such as buying your dream home, a new car, etc. If you are still thinking of paying off your student loans early, then keep on reading this blog. We will give you all the info that you will need.

When should you pay off your student loan early?

Let's discuss when will be the perfect time for you to pay off your student loans early. There are a few boxes you need to check when you are going to repay your student loan. These boxes are a few basic indicators to help you understand if you are in the sweet spot of paying off your student loans early.

If you are saving a good amount of money for your retirement

If you're already investing for retirement and on schedule to meet your long-term objectives, it may make sense to put some extra money toward paying off your student loans early.

If your income is high enough to fund other goals

If your income is high enough that you can save for other financial goals while still having money left over, it may make sense to repay your student loans faster than usual.

If you have paid off your high-interest debts

If you have no credit card debt or other high-interest debts, it may be a good idea to pay off your student loans early.

Pros and cons of paying off student loans early

There are a few pros and cons that we should discuss before you make any calls to pay off your student loans early.


  1. Pay less than you will at the end: Since your student loan, like most other debt, accumulates interest when you carry a balance, paying off the loan sooner saves you money. It gives the debt less time to build, resulting in lower long-term payments.
  2. Gain a head start on other financial goals: With one fewer monthly payment to make, you'll be able to allocate money from your student loans to other uses, such as saving for a home or retirement, paying off your rent, or taking a vacation.
  3. Increase your debt-to-income ratio: Eliminating a large monthly payment may improve your debt-to-income ratio, a statistic that most lenders consider when considering your credit. With an improved debt-to-income ratio, you may be able to get lower interest rates on credit cards, mortgages, and other loans.


  1.  Increased monthly payments: You may find it difficult to pay off your student loans early, especially if you are in you just got a job or earning not much of money; repaying your student loans early requires you to make additional or higher payments, so only raise your student loan payments if you can manage to do so without making significant sacrifices.
  2. There are no options for student loan forgiveness: It makes no sense to repay your student loans early if you are qualified to have them forgiven after a set amount of time, dependent on your employment. You're better off making the minimum payments until the debt is discharged.
  3. Makes you lose your focus on other financial goals: There are some financial goals you should not put off, and focusing on your student debt may distract you from them. For example, if you don't currently have an emergency fund, put any excess money there first.
pros and cons of paying off student loans early

Few ways on how to pay off student loans quickly

Now that we have told you about the pros and cons, we hope you have made up your mind. If you have decided to repay your student loans early, here are a few ways how to repay your student loans early.

Pay more than the bare minimum:

Paying more than the minimum on your student loans will help you reduce the principal balance of your loan and pay it off faster.

Start a side hustle:

Look for ways to make more money to go toward your student loans. Pick up babysitting jobs, drive for Uber or Lyft, sell old items online, or donate plasma, for example. Even the smallest of things can go a long way.

Pay biweekly rather than monthly:

Making biweekly payments on your student loans will result in 26 half-payments in a year. This implies that instead of 12, you'll be making 13 full payments on your loans each year.

Make a lump-sum payment:

Consider putting any money you get, whether from tax returns or a financial gift, into your student debt repayment.

Refinance at a lower rate: 

If you can find a lower interest rate, refinancing can help you pay off your loan faster. You may be able to reduce the main balance on your loan more easily if you reduce interest charges.

Tips on how to pay off your student loans early

As we gave you a few ways to help you repay your student loans early, let us give you some tips as well.

Invest in a savings scheme

If you have some liquid assets on hand, it will be easier to plan your financial security. By leveraging these funds, you can either reduce your debt or put it in a savings account or other savings schemes. But how can you decide which of the two is the best? 

Choose a savings plan if the interest earned exceeds the interest paid on your student loan. This will allow you to pay off the loan gradually over time without burdening yourself. Meanwhile, if your investment is yielding less than the interest on your student loan, it is prudent to reduce your debt burden.

Develop a personal budget

Creating a personal debt budget is what keeps you from overspending when you have the need. Personal student budgets allow you to keep track of your costs while making regular payments in a methodical manner. With more, you have a better chance of navigating between your important and non-essential duties and streamlining your monthly/annual budget. Your college debt will be paid off without compromising your lifestyle or appetites.

If you face issues making a budget, our blog on how to budget will surely help you.

Consider Consolidating

Loan consolidation is the most well-known method of repaying debt at a fixed interest rate. If you happen to have numerous student loans, loan consolidation allows you to combine them together and pay back sums depending on the average interest rate on the loans being merged.

These were all the basic things you need to know about paying off your student loans early. If you want to know more, here are a few tips on hassle free student loan repayments!