4 Steps to Pay Off Student Loan Debt FAST

Over $2,800 in student loan interest accrues every second. Needless to say, student loans suck, and everyone knows it. But what can we do about it?

A recent study by AIG and EverFi has confirmed what a lot of us already know; graduates are finding it harder and harder to pay off their debt. Over 50% of recent graduates in this study, have $50,000 or more in student loans, while only 22% felt they had the ability to actually pay those debts off.

A lack of awareness, financial literacy, and ever growing higher education costs (200% in the last 30 years) have crippled graduates' ability to properly move on from college life to the real world. At the same time, most financial institutions are struggling to deliver products to help these 44 million Americans pay off these loans. What can they do?

While it might be overwhelming and daunting to think about, paying off student loans might be simpler than you think.

Here are the four steps to eliminating your student loans as fast as possible:

1.) Figure out how much debt you owe

The first step in any debt pay off plan is to wrap your mind around how much you actually owe. Sit down and write out a list of the institutions you have loans with. If you do not have online access to your loans, go ahead and sign up at the institutions website to gain access. The whole objective is to figure out the terms of your loan; total amount owed, interest rate, payback period, and what your monthly minimums are. It might take some time, but I promise it is time well spent.

2.) Calculate your monthly disposable income

The next step is the most crucial! Disposable income is the amount of money you have left over in your bank account after your crucial expenses (house, car, utilities, etc) have been paid. While Netflix or going out to dinner every night might be seen as a necessity, those types of expenses are not included.

Congratulations, you just found your magic ticket out of debt! Regardless of if its $1,000 or $100, this is your launch point for paying off your debt faster.

3.) Avalanche Method - Attack your highest interest debt first

There are two main debt repayment methodologies that you have probably heard of; debt avalanche and debt snowball. The debt avalanche method focuses on paying your highest interest debt balance first, while the debt snowball method focuses on the lowest total balance owed. Both are great methods, and have their pros and cons, but based on getting out of debt as fast as possible, the debt avalanche method is the way to go. The best part about it is that the debt avalanche will not only get you out of debt the fastest, but it will also save you the most money! It’s a win/win!

What this could mean for you?

Example: 30,000 student loans - 2 separate student loans with the same balance ($15,000), but different rates (5% and 6%) and monthly minimums ($200 and $300). Typically with student loans, the higher the interest rate, the higher the minimum payment per month, even if you owe the same amount on both. Let’s also pretend you have $100 disposable income each month.

Using straight line math for simplicity, The payoff dates and amount saved would be:

With Avalanche - Debt paid off March 2025

With Snowball - Debt paid off September 2026

Approx. Interest Savings Difference - $1,350

Even with simple inputs, the evidence is clear. When it comes to paying off your student loan debt as fast as possible, the avalanche method is superior.

4). Use as much disposable income as possible

The last step in our process is the easiest to understand, but also the toughest for people to put into action. Now that you know your debt, disposable income info, and method for eliminating debt, it’s time to attack it with every dollar you can! Put as much money as possible towards your highest interest rate debt each month and watch as you slowly see your debt burdens, worries, and stress melt away. Continue this trend until you have paid off each and every debt in your life!

While it is that simple, It is important to note that paying off your student loans is not going to be easy. It will take sacrificing some of life’s “nice-to-haves” for a few years. Maybe fewer vacations, fewer nights out on the town, or less clothes in your closet are all that is keeping you from the debt free life you are on wanting! Sacrifice for a moment, and I guarantee on the other side of this hole you’re in will be zero financial stress, more money than you know what to do with, and an abundant mindset towards the next phase of your life! Just put in the time and discipline and it is yours for the taking.

Still think you might need a little help figuring all of this out, or even a little accountability? We created an app that solves this entire process for you and more → check us out on iOS or Android!



Contact Us


Overland Park, KS 66213

  • Facebook
  • LinkedIn - Grey Circle

By signing up for Destiny, you acknowledge that you have read and agree to Destiny's Terms and Privacy Policy

© 2020 Destiny. All rights reserved