How to pay off student loans faster

Step one: get the whole picture on one page

Balances usually sit across several servicers, and people commonly discover a loan they had forgotten. Write down, for each: servicer, balance, interest rate, loan type (federal or private) and minimum payment.

Until that page exists, every decision is guesswork.

Step two: choose an order and keep it

Avalanche: attack the highest interest rate first. Mathematically this costs the least in total interest.

Snowball: attack the smallest balance first. It costs slightly more but closes accounts sooner, which some people find easier to sustain.

Both work. The order you'll actually stick to for three years beats the optimal order you abandon in month four.

Step three: make extra payments count

Tell the servicer, in writing, that additional payments should be applied to the principal of a specified loan. Otherwise extra money may be spread across loans or treated as paying next month early, which does not reduce interest the way you intended.

Check the statement the following month to confirm it was applied as instructed.

Step four: only then look at the rate

A lower rate reduces cost, but refinancing federal loans into a private loan permanently gives up federal protections such as income-driven repayment and forgiveness programmes. Understand what you are trading before you trade it — see the refinancing article in this pillar.