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What is the smartest way to pay off student loan debt

Student loans generally have the benefit of lower interest rates and can be amortized over an extended period of time. In fact, you may want to let your student loan be the last debt you get rid of. Instead, concentrate your immediate repayment efforts on your other debts. Reducing other debt by accelerating repayment and/or decreasing interest costs, most certainly puts extra funds in your hands. It is a smart thing to do and over the long haul, can really add up. So make extra payments when possible and explore potential lower rates through consolidation for debt other than student loans.

Consolidating student loan debt with other debt is not a good option. If your student loan is with a financial institution, the consolidation loan rates may be significantly higher than what you currently pay. And, if your student loan is a government student loan (Canada Student Loan), consolidation is not a good option either. The interest paid on a Canada Student Loan is tax-deductible but if consolidated with other debt you lose that valuable privilege. Also with a Canada Student Loan, if you apply and qualify for remission, the government would pay out a large portion of the debt. Reducing taxes or getting a 'refund' from the government are both appealing, so it is worth it to keep those options open.

If you wish to crunch a few numbers, check our helpful education calculator.

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