5 Secrets to Saving Money on Your Student Loans

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Photo by stevendepolo

Student loans can be a huge burden for many graduates.

Not only do they eat up a big chunk of your monthly income, but the fact that you’re stuck paying them back for 10+ years can make them feel never ending. That’s why at some point almost every borrower asks themselves the same question: How can I save money on my student loans?

Perhaps you’re just looking to tighten up your budget, or you need some extra money each month to make ends meet. Either way, cutting down the costs of your student loans seems like an obvious goal–and it should be!

Too many borrowers repay their loans without ever exploring ways they can reduce their costs, and it ends up costing them hundreds or thousands of dollars that they didn’t need to spend.

If you want to cut down on your student loan expenses, here are 5 simple tricks that will help.

1. Sign up for autopay

Score an easy win by signing up for monthly autopay on your student loans.

Most lenders will offer a rate discount of 0.25% or 0.50% just for signing up for the service. This may seem small, but it amounts to about a $300 savings for every $10,000 borrowed on a 10-year loan–or more like $700 per $10,000 for a 20-year loan.

If you have $30,000 in student loans, that means just by having your payment automatically withdrawn, you’ll save about $900 or $2,100.

Plus, it’s one less thing you’ll have to worry about each month.

2. Add a cosigner

If you have a creditworthy cosigner that you can add to your loan–a family member or even a close friend–then you may be able to get a better rate.

This will only apply to private student loans (or if you refinance all of your loans through a private lender), but it could mean shaving 1-2% off of your interest rate, which could save you thousands over the life of your loan.

Adding a cosigner isn’t for everyone, but it can be a pretty simple way to save some dough.

Your Student Loan, Your Way.

Variable rates from 4.98% - 12.79% APR


3. Take advantage of your tax deduction

Did you know that you get to deduct your student loan interest on your taxes each year?

Borrowers can deduct up to $2,500 in interest each year, which reduces their taxable income and either increases their return or reduces their tax bill at the end of the year.

While this isn’t a tax credit (meaning you don’t your dollars back on a 1:1 basis), it can save you a good chunk of change on your taxes. And what do you think you ought to do with that money you’re saving?

If you said “put it toward your student loans”–you’re right!

Remember that by making that extra payment on your loans, you’re not just reducing your bill by that amount, but you’re also saving the interest that would have accrued on that balance from now until your loan is completely paid off.

A one-time $500 payment could end up saving you closer to $1,000 over the life of your loans.

4. Make payments every 2 weeks

This is almost a mental hack for cutting down on your loans. If you pay half of your payment every 2 weeks rather than the full payment every month, you’ll end up making an entire extra payment each year.

Let’s do the simple math. If your payment is normally $300 per month, you would instead make a payment for $150 every two weeks. Instead of paying $3,600 ($300 * 12) per year on your loans, you’ll end up paying off $3,900 ($150 * (52 / 2)) without even really noticing it.

Of course, this didn’t technically save you money (except for the interest that would have accrued on that extra balance), but mentally it feels the same as making your normal payments while shaving at least a full month off your repayment each year.

5. Shop around for rates

The number one way to save money on your student loans? Get a better interest rate.

You can use all of these above techniques to whittle away at your payments and they can end up saving you a bunch of money. But, the biggest savings you can get is by refinancing and knocking 1 or 2% interest off of your loan.

A savings of 2% interest on $30,000 in loans means a total savings of about $3,600 over the life of a 10-year loan–or more than $8,000 for a 20-year loan!

Check out sites like Credible or LendKey to get quick rate offers without going through a formal credit check.


Lender Rates (APR) Eligibility
Citizens logo.
6.97%-15.03%* Variable
5.99%-14.00%* Fixed
Undergraduate and Graduate
Sallie Mae logo.
6.37% - 16.70% Variable
4.50% - 15.49% Fixed
Undergraduate and Graduate
Credibe company logo.
4.98% - 16.70% Variable
4.07% - 15.66% Fixed
Undergraduate and Graduate
Lendkey company logo.
6.07% - 11.31% Variable
4.39% - 10.39% Fixed
Undergraduate and Graduate
Ascent company logo.
6.22% - 16.08% Variable
4.09% - 15.66% Fixed
Undergraduate and Graduate
6.54% - 11.08% Variable
3.95% - 8.01% Fixed
Undergraduate and Graduate
Earnest company logo.
5.62% - 18.26% Variable
4.11% - 15.90% Fixed
Undergraduate and Graduate
4.98% - 12.79% Variable
8.42% - 13.01% Fixed
Undergraduate and Graduate
College Raptor is not a loan lender and does not assume responsibility for suggesting a loan to a user who may not be eligible for it. Rates, terms, conditions, eligibility, approval, and other considerations are the decisions of the lenders and may vary depending on which lender or marketplace the user selects. We urge users to carefully consider and review all loan options and terms before committing to taking out a loan.