Five reasons to take the fast track when paying off student loans

Sell books you don’t read. Eat leftovers for lunch. Skip Lyft or Uber and take the bus.

There are plenty of ways to free up an extra $100 each month.

But it’s understandable that your student loan bill might not be the first place you’d want to throw that cash. It’s easy to set up automatic payments and forget about them, accepting your student loan bill as an unwelcome guest who’ll hang out for the next decade or more.

If you have an extra $100 to spare, though, think again. Here are five reasons it’s worth it to pay just a little more than you’re required to.

You’ll actually save money.

Extra money you apply to your loans slashes the amount you owe overall.

Let’s walk through an example. Say you graduated in 2014 with $28,950 in student loan debt, the average amount for that year, and that your interest rate was 6%, the average unsubsidized federal loan interest rate between 2010 and 2014. Using a student loan calculator, you can estimate that you would pay about $321 a month and $9,619 in interest over 10 years, the standard repayment period.

Now let’s say that from the beginning, you pay $421 a month instead of $321. You’ll save about $3,000 in interest by the time your loans are paid off. That could get you a couple months traveling around Europe — or, ahem, a big windfall for your savings account.

2. You’ll be free from debt sooner.

The grad who pays an extra $100 each month toward a $28,950 loan balance will pay off those loans in just over seven years. That’s about three years quicker than the 10-year default timeline for most federal student loans. If you start repaying at 22, you’re done around 29.

You don’t have to get rid of debt before you get married, have kids or buy a house. But leaving your student loan bill behind gives you more flexibility to take on those milestones. Balance your extra loan payments with your savings goals so you can start stashing away for the future now, if possible. A loose budget like the 50/30/20 plan can help.

3. Once debt-free, you can transfer the payment to savings.

Since you’re used to paying a certain amount toward your loans, you can save it for other financial goals when your loans are gone and never miss it. Bump up your contributions to your 401(k) or individual retirement account. Your goal should be to save 10% to 15% of your income for retirement, including a company match on your 401(k).

You can also take the money you’re not putting toward loans and transfer it to a high-yield online savings account. Some banks let you set up multiple savings accounts with labels to help keep you on track, like “Epic Hawaii Vacay,” “New Wheels” or “Dream House Down Payment.”

4. Online or auto-debit payments are easy.

It might take some experimenting to decide on a payment method you like best, but don’t let student loan servicer confusion keep you from contributing that extra $100. Most servicers — the companies borrowers pay their loan bills to — let you make payments from your bank account on their websites, or allow you to pay more than you’re required to through automatic debit each month.

Call your servicer to determine which methods are available. To take advantage of the latter option, you might have to put your request in writing. Also, you’ll likely have the option to “pay ahead,” meaning your payments would go toward future bills. Choose instead to keep having your required monthly payment debited from your account every month so the extra funds lower your balance.

5. That “Congrats, your loan is paid in full!” email will give you all the feels.

You’ve probably pictured what you’ll do when you’ve paid your last student loan bill: Maybe you’ll dance around your room to “Walking on Sunshine,” or maybe you’ll proclaim it on Facebook in carefully constructed phrasing guaranteed to garner hundreds of likes.

Feeling proud and accomplished is a legitimate motivation for paying off your loans, and it’s thrilling to inch closer to that moment, month by month.

Next steps

Before taking aim at your student loan debt, make sure you can afford your other monthly bills and that you’ve started saving for retirement. Then begin making larger payments toward your loans. Tools like NerdWallet’s debt dashboard can show you how much you’d save and how soon you’d be debt free if you contributed more than the minimum toward each of your loans.

If an additional $100 each month stretches you too thin, try $50 or even $25. If that’s still too much, get comfortable making your minimum payment then start to ramp up. When your budget allows for it, a little bit extra can get you to that celebratory Facebook post faster than you expected.

Brianna McGurran is a staff writer at NerdWallet, a personal finance website. Follow her on Twitter: @briannamcscribe.

This article was written by NerdWallet and was originally published by Forbes.