According to Student Loan Hero, Americans owe a whopping $1.48 trillion in student loan debt, spread among 44 million borrowers. The average student loan debt for a 2017 graduate was $39,400—at an undergraduate level.

These statistics would leave anyone in this situation overwhelmed. How can one get out of this debt in the shortest amount of time? Is it even possible to pay off your student as quickly as possible? We are going to share some practical tips to help you get out of your student loan soon.

• How do I pay off 6 Figure Student Loans?
• What are the Benefits of Paying off your Student Loan Early?
• Can you Negotiate Student Loans when Paying off?
• What is the Average Time to pay off the Student Loan Debt?
• Does Settling Student loan debt hurt your Credit?

How do I pay off 6 Figure Student Loans?

For those with $200,000 student loan balances, getting debt-free can seem like an insurmountable task. But Laurel Taylor, CEO and founder of student debt solutions company FutureFuel.io, proves it’s possible to pay off student loans — even in the six-figure range.

Read Also: Should you Consolidate Your Student Loan?

Paying off six-figure debts is no easy feat, but getting serious about student loan repayment is the first step. Making additional payments is huge — whether that’s putting your tax refund toward your student loans or just a portion of your holiday bonus.

“Compound interest is working against you every month—and sometimes every day,” explained Taylor, who graduated from Texas State University and the MIT Sloan School of Management with around $150,000 in student loan debt.

There are quick steps borrowers can take to speed up repayment and get out of debt fast.

1. Refinance your student loans

Student loan refinancing can help make repayment easier. There are several benefits, including:

1. Lower interest rates
2. Lower monthly payment
3. Consolidating loans
4. Saving money
5. Federal benefits aren’t affected

The majority of student loan lenders charge no upfront fees, because decades of interest payments and a new client is more valuable than a few hundred dollars in upfront fees.

Credible can help you compare prequalified student loan refinancing rates from up to 10 lenders without affecting your credit score. Plus, Credible offers a best rate guarantee.

You should also use a student loan refinance calculator to view your potential payment amounts and ensure the new loan’s payment is within budget.

Once you’ve determined the best deal, then you can apply for the loan. Make sure you have the following documents on hand before you start the loan application:

• Your driver’s license and Social Security card
• The most recent statements for your school loans
• Your two most recent paystubs
• Your most recent W-2 and tax return

After you’ve submitted your application, it’s just a waiting game.

2. Ask a loved one to cosign a refinancing loan

Not everyone qualifies for a student loan refinance. If you’re one of these people, don’t fear — you have options. You could get approved by adding a cosigner to your loan application, specifically someone with stable income and an excellent credit score.

You can easily add a cosigner to your loan application via Credible. With Credible, you can even compare multiple cosigners to see which one gets you the best loan rates and terms.

If your relatives don’t want to cosign a refinancing loan, consider asking them if they would contribute to your monthly loan payment — every dollar helps.

“Student debt impacts the lives of entire households,” Taylor said. “You’re not alone, and your spouse, mom, or favorite auntie may be willing to throw you a bone when he or she discovers that just $25 a month can shave two years and a near $5K off of your student debt.”

3. Pay your loan bi-weekly instead of monthly

This reduces your interest and equates to an extra payment every year.

Reminder: Refinancing your student loans can help you lower your monthly payments. This essentially replaces your existing loans with a new one — ideally one with a lower interest rate. You can also refinance into a longer-term loan, which also lowers your payments.

Just keep in mind that rates vary greatly between lenders, so be sure to use a tool like Credible to shop around and view rates tables from several lenders before you refinance.

4. Ask your employer for help

The Employer Participation in Repayment Act (introduced in 2019) would allow employers to give up to $5,250 in tax-free student loan assistance to any worker annually.

While it hasn’t passed in Congress just yet, some employers still offer repayment benefits, with major companies like Aetna, Estee Lauder, Fidelity, New York Life and Staples among them. Be sure to ask your employer or workplace HR department what they can do (or would be willing to do) to help you pay off debt.

5. Consider an income-driven repayment plan

Deferment or forbearance options can be tempting, but income-driven repayment plans can be a much better long-term solution. These programs set your monthly payments based on your income and earnings, rather than your total student loan balance.

Though this makes it easier to make payments and stay afloat, there are some caveats: First, it will likely extend the time it takes to pay off your loan. Because of this, it may also increase the amount of interest you’ll pay in the long haul (though it depends on exactly what repayment plan you qualify for).

To see if you qualify for an income-driven repayment plan, submit an application online at StudentLoans.gov or send a request to your student loan servicer.

6. Deduct your student loan interest on your taxes

This can give you a larger tax refund, which you can then put toward your debts

What are the Benefits of Paying off your Student Loan Early?

You may be wondering if you should include your student loans in your debt payment plan or if you should worry about paying off your student loans early. If you’re able, there are several good reasons to focus on paying off your student loans as soon as possible. 

Your Debt -to-Income Ratio

One good reason to pay off your student loans is that it will lower your debt-to-income ratio. That means that you have more money available to you when it is time to buy a house or to borrow money for a car.

If you pay off your student loans, you will not only be free of those monthly payments, you’ll also be able to reach your other financial goals more easily. Plus, you’ll have the opportunity to invest the money you’d otherwise be sinking into your student loans. Then you’ll really be able to focus on building wealth. 

The Tax Break Isn’t That Great

One common misconception about student loans is that you should keep them for the tax break. This may be enough reason to put the student loans at the end of your debt snowball, but you should realize that you can only deduct $2,500 off your taxable income.

This deduction also begins to phase out when making between $75,000-$80,000 ($140,000 and $170,000 if you file a joint return) per year, and after that you are no longer eligible for the deduction.

This amount is nominal and you may pay much more in interest than you’d save via the tax break over the life of your loans. It’s better to be rid of the student loans rather than hanging on to them for a tax break.

It’s Costing You

Even if you take advantage of the student loan tax break, you should consider how much money you are losing each month due to both your student loan payment and interest. Depending on the amount of student loan debt you have, your payment may take up a sizable chunk of your budget. 

If you pay off your student loans, you will be able to save up more quickly for other financial goals, such as saving up for a down payment on your first home, taking a trip, starting an investment portfolio, or opening your own business. 

It’s Virtually Unescapable

Many people who are overwhelmed by student loan debt hope that bankruptcy may offer a solution to their problem. However, if you declare bankruptcy, it’s rare that your student loans will be discharged through that process. There are few ways you can get rid of your student loans—disability, death, or qualifying for certain student loan forgiveness programs. 

That’s why you should focus on paying off your student loans. There’s really no getting out of it.

Get Rid of Financial Worry

If you want to reduce your financial stress, you should work on paying off your student loans. Even if your student loans are at the end of your debt payment plan, you can benefit by working on getting out of debt and reducing the amount that you owe.

Getting on a budget, and making a debt payment plan can help you clear up your debt and make it possible for you to stop worrying about money. It should be part of your plan when you first graduate from college.

Can you Negotiate Student Loans when Paying off?

Student loan settlement is when you settle your student loans for less than what you currently owe. If your loans are in default and you have a lump sum to pay off right away, your lender might be willing to settle.

The settlement amount varies by your lender. Some might be willing to settle for 50 percent of your loan, while others might require more — upward of 90 percent of your loan.

Student loan settlement is a great option if you are behind on your debt and can pay off a good chunk of it right away. But not every lender is willing to settle a debt for less than you owe, and not every lender will agree to your terms.

Settling your student loans doesn’t happen as soon as you’d expect. You can’t settle if your loans are in good standing and you make timely payments every month. Even if you’re a little late on your last payment, you’re usually not considered eligible to settle your student loans.

When you’re late making a student loan payment, your loans are delinquent until you make that payment. If your loan continues to stay delinquent, it will eventually go into default. You can start requesting a loan settlement in delinquency, but only if it’s on its way to default. You can also request a settlement once your loan has passed into default.

Reasons for a federal student loan settlement

You might qualify for a student loan debt settlement with your federal loans if:

• You can’t afford the loan: You’ll need to prove you can’t afford to repay your loan, whether that’s through pay stubs and bills or recent tax returns.
• You’ve redefaulted: If you’ve defaulted on the same loan more than once, you may not have other financing options, like rehabilitation, income-driven repayment plans, deferment and forbearance. Instead, a settlement might be one of your last options.

If you’re behind on your loan and just need a little more time to catch up, or you want to pay your loan but need a different plan, you may not need settlement and should look into other options.

Reasons for a private student loan settlement

Settlements aren’t only available for federal student loan borrowers. You might qualify for a private student loan settlement if your loans are in default.

Most federal student loans consider loans to be in default if you haven’t made a payment in more than 270 days. For private student loans, your loans could enter default as soon as you miss a payment, depending on your lender.

If you don’t have income or assets to show your lender that you’re able to pay back your loan, it might accept a settlement offer. However, you’ll still need to have an offer worth accepting, which usually includes a lump-sum offer or a final amount paid over the course of a few installments.

Tips for negotiating your student loan payment

You don’t have to wait for a potential student loan settlement to get a handle on your payments. If you need help, you may have a few options right now.

Don’t wait until default to negotiate

Missing a payment can already cause your credit score to take a dip and put a ding on your credit report. Before too much time passes, contact your lender and ask about income-driven repayment plans, putting your loan into deferment or forbearance, or consolidating or refinancing your student loans if better terms or interest rates are available.

The best thing you can do is be proactive and avoid putting off dealing with your student loans until it’s too late.

Discuss hardship programs with the lender

If you’ve recently lost your job, had a reduction in hours or are paying off other large bills, tell your lender as soon as you can. Many private student loan lenders offer hardship programs, like the choice to delay payments without facing a penalty, that you might qualify for.

If you have federal student loans, you might be eligible for deferment or forbearance, which temporarily halts your payments without causing your loans to go into delinquency or hurting your credit score.

Know the types of settlement offers

Settling student loan debt almost always happens because the borrower can offer a lump-sum payment. Private student loan settlement depends on your lender. Some lenders might require you to pay at least 70 percent or 80 percent of your loan, while others might be more lenient and accept less.

The longer you go without making a payment, the less you might need to pay when you request a student loan settlement.

If you have federal loans, you have a few different options, including:

1. Paying the remaining principal and interest without any other fees.
2. Paying the principal and half of the unpaid interest.
3. Paying 90 percent of the current balance of principal and interest.

Be open if your loan servicer requests a different settlement offer, and don’t be discouraged if you need to resort to plan B.

Let the lender make the initial offer

While it’s a good idea to have a preference in mind, it’s a good idea to know your options and have your lender make the first offer. That way you can either accept if it’s within reason or start negotiating.

Request a paid-in-full statement

Since this is outside of your normal payment plan, you’ll need to handle a settlement carefully. Get an offer in writing, have a lawyer review the terms and request a “paid in full” statement as part of your terms. Once you’ve paid your debt in full, make sure you get this letter. Otherwise, you may still be on the hook for some of your outstanding loan balance.

Keep this statement handy in case lenders or collections try to request money from you later on. You may also need this when you file your taxes.

What is the Average Time to pay off the Student Loan Debt?

Knowing how long it will take you to pay off your student loans is a crucial aspect in managing your finances and planning ahead for your future. The length of your student loan repayment depends on a few factors, including:

1. Your interest rate.
2. Your total balance.
3. Your income.
4. Your repayment plan.

If you’re unsure how to move forward, a student loan calculator can help you find the best payoff plan for you.

There are two types of loans you can borrow: those issued by the government (federal student loans) and those issued by private lenders (private student loans). While they differ in some ways, they’re both intended to help you fund your higher education with money that you have to repay with interest.

Higher education isn’t getting any more affordable, and if student loans aren’t properly managed, you could be stuck with debt for years down the road. This is because you’ll be charged interest on your loan balance every month, and if you don’t pay your balance in full, that interest will continue to accrue.

The longer you take to pay off your balance, the larger your debt grows, which can impact things like renting an apartment, buying a home and getting approved for credit cards.

Understanding fully how your student loans work and what repayment options are available to you has the potential to both save you thousands of dollars and strengthen your credit score.

How to use a student loan calculator

Student loan calculators can help you figure out how long it will take you to pay off your student loans. All you have to do is enter the loan amount, the loan term (in years or months) and the interest rate per year.

By doing this, you can see how different terms and interest rates will impact your monthly payment and, by extension, your monthly budget. A student loan calculator is particularly handy if you’ve gotten a quote on interest rates but haven’t decided on a repayment term — a calculator allows you to determine the shortest repayment term that your budget will allow.

4 tips for paying off student loans

Here are some additional tips and tricks to help you pay off your student loans faster — without breaking the bank.

1. Pay more than the minimum amount

If it’s possible, pay more than the minimum amount. “If you choose to put more money towards your loans every month, you will end up paying less in interest over the life of your loan and get out of debt faster,” says David Green, chief product officer at Earnest.

By paying more than the minimum, you’ll pay down more of the principal — which can help you pay off your student loans much sooner.

2. Pay more than once per month

Making an extra payment in addition to your required payments can go a long way toward reducing the principal of your student loan. Your loan may have less interest accrued if you can make another payment within the same month. A more significant percentage of that money can be applied to the principal as a result.

3. Create a budget — and stick to it

Paying off a student loan is a long-term effort. A budget helps you identify which expenses are necessary and which aren’t. “By making a budget you can break down your spending into monthly bite-sized pieces and make adjustments to improve your spending habits,” says Green.

To avoid the urge to spend, try setting small goals for yourself or creating a dedicated student loan account with automatic deposits. That way, you remove the temptation to spend repayment funds.

4. Consider an income-driven repayment plan

Paying off your student loans based on yearly earnings can be a great way to chip away at your debt. Income-driven repayment plans, available to federal student loan borrowers, base your monthly payment on your current income.

There are four types of income-driven repayment plans that you can apply for:

• Revised Pay As You Earn Repayment Plan (REPAYE Plan): Pay 10 percent of your discretionary income for 20 to 25 years, depending on your loan type.
• Pay As You Earn Repayment Plan (PAYE Plan): Pay 10 percent of your discretionary income for 20 years.
• Income-Based Repayment Plan (IBR Plan): Pay 10 percent of your discretionary income for 20 years if you’re a new borrower (on or after July 1, 2014) or 15 percent of your discretionary income for 25 years if you’re not a new borrower (on or after July 1, 2014).
• Income-Contingent Repayment Plan (ICR Plan): Pay 20 percent of your discretionary income (or what you would pay on a standard 12-year repayment plan) for 25 years.

Other options for paying down student loans

There’s more than one way to pay off a student loan. You may be surprised at the various repayment options available to you:

• If you’re a private loan borrower, you might want to consider refinancing your loan.
• If you’re a member of the armed forces or a public servant, you might qualify for Public Service Loan Forgiveness.
• If you’re still in school, consider making full or partial payments before you graduate to begin lowering your balance, even if it’s not required.

Federal borrowers can also make progress on their loans during the period of student loan deferment through Dec. 31, 2020. Federal student loan borrowers will not be responsible for making interest or principal payments through the extended deferment, but continuing your payment schedule during the zero-interest period will help you pay down your loans faster.

Does Settling Student loan debt hurt your Credit?

Not in a good way. Debt settlement typically has a negative impact on your credit score. How negative depends on many factors: the current condition of your credit, the reporting practices of your creditors, the size of the debts being settled, whether your other debts are in good standing, how much less than the original balance the debt is settled for, and a multitude of other variables.

Why Debt Settlement Can Ding Your Credit Score

Why should it have a negative impact, when you’re lightening the load of your obligations and your creditors are getting some money? Because strong credit scores are designed to reward those accounts that have been paid on time according to the original credit agreement before they’re closed.

A debt settlement plan—in which you agree to pay back a portion of your outstanding debt—modifies or negates the original credit agreement. When the lender closes the account due to a modification to the original contract (as it often does, after the settlement’s complete), your score gets dinged. Other lenders are likely to take notice and be warier about granting credit to you in the future, too.

Still, it is possible that the reduced debt burden is worth a subsequent drop in your credit score. The high credit card account balances and late or missed payments (and if you are considering a debt settlement, probably you are already far behind) have probably already dented it somewhat. If debt settlement jump-starts you on the path to a sounder financial future, it should be considered.

How Debt Settlements Work

As you know, your credit report is a snapshot of your financial past and present. It displays the history of each of your accounts and loans, including the original terms of the loan agreement, size of outstanding balance vis-a-vis credit limit, and whether payments were timely or skipped. Each late payment is recorded.

You can negotiate a debt settlement arrangement directly with your lender or seek the help of a debt settlement company. Through either route, you make an agreement to pay back just a portion of the outstanding debt.

If the lender agrees, your debt is reported to the credit bureaus as “paid-settled.” While this is better for your report than a charge-off—it may even have a slightly positive impact if it erases severe delinquency—it does not bear the same meaning as a rating that indicates that the debt was “paid as agreed.”

The best-case scenario is to negotiate with your creditor ahead of time to have the account reported as “paid in full” (even if that’s not the case). This does not hurt your credit score as much.

What Sort of Debt Should I Settle?

Since most creditors are unwilling to settle debts that are current and serviced with timely payments, you’re better off trying to work out a deal for older, seriously past-due debt, perhaps something that’s already been turned over to a collections department. It sounds counter-intuitive, but generally, your credit score drops less as you become more delinquent in your payments.

However, bear in mind that, if you have an outstanding debt that was sent to collectors more than three years ago, paying it off through a debt settlement could reactivate the debt and cause it to show as a current collection. Be sure to get this straight with your creditor before finalizing any agreement.

As with all debts, larger balances have a proportionately larger impact on your credit score. If you are settling small accounts—particularly if you are current on other, bigger loans—then the impact of a debt settlement may be negligible. Also, settling multiple accounts hurts your score more than settling just one.

Debt Settlement vs. Staying Current

In your credit history, the most weight is given to payment history, with current accounts having the most impact. If you are behind on other debts, it is important to try first to keep a newer, current account in good standing before attempting to rectify the situation of a long-overdue account.

For example, if you have an auto loan, a mortgage, and three credit cards, and one of those is over 90 days past due, do not attempt to settle that debt at the expense of falling behind on the other obligations. One unpaid account is better than having late payments on multiple accounts.

This is also going to sound counter-intuitive, but the stronger your credit score before you negotiate a debt settlement, the greater the drop.

Read Also: 5 Common Student Loan Scams and How to Avoid Them

The Fair Isaac Corporation, the group behind the FICO score (the most common type of credit score) gives a scenario in which a person with a 680 credit score (who already has one late payment on the credit card) would lose between 45 and 65 points after debt settlement for one credit card, while a person with a 780 credit score (with no other late payments) would lose between 140 and 160 points.

Facing past due debt can be scary, and you may feel like doing anything you can to get out of it. In this situation, a debt settlement arrangement seems like an attractive option.

From the lender’s perspective, arranging for payment of some, but not all, of the outstanding debt can be better than receiving none. For you, a debt settlement packs a punch against your credit report, but it can let you resolve things and rebuild.

Consider the opportunity cost of not settling your debt. If you do not settle, then your score is not hurt right away. However, not settling might lead to continued late payments, going into default, and credit-agency collection attempts. These scenarios may end up hurting your score more in the long run. Sometimes, a clean slate is worth the short-term expense it incurs.