Here’s How To Pay Off $100,000 Of Student Loans

If you have student loan debt, you may be wondering what is the best way to pay off student loans.

Here’s what you need to know.

student loans

Whether you have $20,000 or $100,000 or more in student loan debt, here are the best options for paying off student loans:

1. Refinance student loans

Student loan refinance rates are incredibly cheap right now, starting at 1.9%. Student loan refinance is the fastest way to pay off student loan debt. Debt restructuring is when you combine your existing federal student loans, private student loans, or both into a new student loan with a lower interest rate. You can choose new loan terms, including variable or fixed interest rates and a loan term of 5 to 20 years. Lenders favor borrowers with at least 650 credit points, stable and recurring income, and a low debt-to-income ratio. If that sounds like you, you could be saving thousands of dollars in interest on your student loans.

This student loan refinance calculator shows how much you can save by refinancing student loans.


2. Apply for student loan refinance to a co-signer

If you do not have good credit or a stable monthly income, you can always apply for student loan refinance from a qualified co-signer. A co-signer such as a parent, spouse, or other close family member can help you get approved for a student loan refinance and receive a lower interest rate. Co-signers share the same financial risk of not paying off their student loans, so it’s important to choose a close family member or friend.


3. Apply for student loan forgiveness

There are many types of student loan forgiveness programs, including government loan forgiveness, teacher loan forgiveness, and other programs offered by state governments. The House of Representatives also recently repealed a key student loan forgiveness rule that could affect you. The Government Loan Forgiveness is the federal government’s primary program that forgives all of your federal student loans. You must meet all eligibility requirements, which include making 120 monthly payments while working full-time for a qualified government or not-for-profit employer. You can start by completing an employer certification form with the US Department of Education. Don’t fall for companies that promise to waive all student loans—they don’t exist.


4. Consider an income-based repayment plan

For federal student loans, consider an income-based repayment plan such as IBR, PAYE, or REPAYE. Your payment is based on your discretionary income, family size, and other factors, and is typically lower than the standard repayment schedule. After a period of time (say, 20 or 25 years), your federal loan (not a private student loan) may be forgiven. While your monthly payments are lower, you won’t get a lower interest rate and your balance will continue to accrue interest. The other important thing to remember is that you owe income taxes on the amount of student loan waiver you receive.


5. Paying off student loan debt the old-fashioned way

You can also pay off student loan debt the old-fashioned way: by simply paying them off. Here are two smart ways to pay off student loans faster. The debt avalanche method is the best repayment strategy when you want to minimize most student loan interest. Always pay your minimum monthly payment, and then focus on paying off your highest-interest student loan debt first. Once this is paid off, switch to the student loan with the next higher interest rate until your student loan is paid off. The snowball method works best for borrowers who want psychological gains. This strategy states that you always pay your minimum balance and then pay off the smallest balance first and then the next higher balance until your student loans are paid off.

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