Pay off student loans

7 questions to help you pay student loans faster

Get closer to putting your college days behind you by reducing your student loan debt. 

Help pay student loans off faster:

1. Are you using the right payoff strategy?

Juggling multiple debts? You need a good strategy. Here are two popular payoff strategies that can help you reduce your overall debt, including student loans:


Snowball:
Paying off the smallest balances first—aka, the snowball approach—can free up cash flow the quickest. Even if your smallest loan takes a few years to pay off, using more of your budget to make larger payments on your smaller loans can be one of the quickest ways to start reducing your debt and paying off your student loans. Getting that first balance paid off can help give you a mental boost—and help you start making even bigger payments on your other balances. The bigger the payment, the faster you can lower your principal balance.


Avalanche:
Focus on whichever debt is costing you the most—typically the one with the highest interest rate. It may take longer to feel like you’re making progress, but tackling the costliest debts first may save you the most money in the long run. 

2. Can you refinance your student loans for a better interest rate?

Typically, when you take out student loans, you have little to no credit history—which impacts the interest rate on your loans. The higher your rate, the more your loans cost. But now, you may have a better credit history and higher credit score, which could help you qualify for a lower rate. Lowering your rate by even one percentage point could help you move up your payoff date and may save you thousands in interest payments over the life of your student loan.

How interest rates can affect loan payments:   

How interest rates can affect loan payments:
Example: $29,000 loan with a 10-year repayment term
Interest rate 5.50% 6.87% 8.05%
Monthly payment $315 $335 $353
Total cost $37,768 $40,172 $42,314

3. Should you consolidate your student loans?

If you have multiple student loan balances, you may want to consider consolidating. You can potentially refinance for a better interest rate and reduce the number of monthly payments you have to keep up with. For some, consolidating can lower the cost of your debt, move up the payoff date, and free up cash flow all at once.


Pro tip:
Think twice before consolidating any federal student loans with private loans. When you do this, you’ll give up access to any federal benefits, including repayment plans designed to help low-income borrowers and potential loan forgiveness programs. Plus, federal loans often have lower interest rates than private loans to begin with. 

4. Is student loan forgiveness an option?

If you have private student loans, forgiveness probably won’t be an option. For federal student loans, you might’ve heard about recent plans to cancel student loan debt for some borrowers. There are additional programs that offer federal student loan forgiveness if you meet certain conditions. However, the number of people these forgiveness programs can help is relatively small, and you shouldn’t count on them as part of your student loan debt payment plan.


One of the most common programs is the Public Service Loan Forgiveness program, which offers loan forgiveness to some borrowers who work for a government agency or nonprofit and make qualifying monthly payments for at least 10 years.Disclosure 1 Or, if you’re in a lower-paying field, you could have certain federal student loans forgiven after making payments for 20+ years under an income-based repayment (IBR) plan.Disclosure 2

5. Can you pay a little extra?

If you have private student loans, forgiveness probably won’t be an option. For federal student loans, you might’ve heard about recent plans to cancel student loan debt for some borrowers. There are additional programs that offer federal student loan forgiveness if you meet certain conditions. However, the number of people these forgiveness programs can help is relatively small, and you shouldn’t count on them as part of your student loan debt payment plan.


One of the most common programs is the Public Service Loan Forgiveness program, which offers loan forgiveness to some borrowers who work for a government agency or nonprofit and make qualifying monthly payments for at least 10 years.1 Or, if you’re in a lower-paying field, you could have certain federal student loans forgiven after making payments for 20+ years under an income-based repayment (IBR) plan.2

6. How do student loans affect your credit score?

Student loans may feel like a necessary evil, but one silver lining of taking on debt for school is that it gives you an opportunity to start building your credit history as a young adult. Each on-time payment you make may help add up to a better credit score. And when it comes time to borrow for a car or home, you may be able to score a better deal. 

7. What other financial obligations do I need to balance?

Paying off your student loans doesn’t have to come at the expense of other financial priorities, like saving for retirement or a down payment on a home. It may be true that the sooner you can reduce student loan debt, the sooner you can put more money toward other obligations. But you’ll also need to be able to handle multiple things at once. Using the calculator below can help you figure out how to balance your student loan debt payments with your savings goals.

This content does not constitute legal, tax, accounting, financial, investment, or mental health advice. You are encouraged to consult with competent legal, tax, accounting, financial, investment, or mental health professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information; do not endorse any third-party companies, products, or services described here; and take no liability for your use of this information.

Debt versus savings calculator

This calculator is made available by one or more third party service providers. It is not intended to be an advertisement for a product or service at any of the terms used herein. It is not intended to offer any tax, legal, financial or investment advice. All examples are hypothetical and are for illustrative purposes. Truist Financial Corporation ("Truist") and its affiliates do not provide legal or tax advice. Truist cannot guarantee that the information provided is accurate, complete, or timely. Federal and state laws and regulations are complex and are subject to change. Changes in such laws and regulations may have a material impact on pre- and/or after-tax investment results. Truist makes no warranties with regard to this calculator or the results obtained by its use. Truist disclaims any liability arising out of your use of, or any tax position taken in reliance on, this calculator. Always consult an attorney or tax professional regarding your specific legal or tax situation.

Save more for what’s next.

With the Truist One SavingsDisclosure 3 account, you can build your emergency fund or save for other life goals—like extra payments on your student loans.

Build toward more perks.

The cash in your Truist One Savings account may help you get more benefits from your Truist One Checking account.

Earn interest on your savings.

Grow your savings even more by earning interest on your monthly account balance. See rates.

Waive maintenance fees.

With four options for waiving the $5 monthly maintenance fee Disclosure 4