5 Strategies for Canadians to Pay off Student Loan Debt Quicker


Student loan debt is a significant issue for many Canadians, with over a million people in the country currently carrying student loan debt. It can be challenging to start your professional life with such a significant financial burden, but there are ways to combat it. In this article, we will discuss different strategies that Canadians can use to pay off their student loan debt faster.

Strategy 1: Refinancing Your Student Loans

Refinancing your student loans can be a smart move to lower your interest rates and improve your repayment terms. There are two main options for refinancing in Canada: refinancing through the Canada Student Loans Program (CSLP) or refinancing through private financial institutions. Here’s a comprehensive look at each option:

  1. Refinancing through the Canada Student Loans Program (CSLP): If you have federal student loans, you can refinance them through the CSLP. This program allows you to consolidate your federal loans into one new loan with a lower interest rate and better repayment terms. The CSLP offers competitive interest rates and flexible repayment options.
    • Canada Student Loans Program: Website
  2. Refinancing through private financial institutions: Another option is to refinance your student loans through private financial institutions. These institutions specialize in student loan refinancing and may offer even lower interest rates and more favorable terms than the CSLP. However, it’s crucial to research and compare different lenders to ensure that the interest rates, fees, and repayment terms they offer are favorable and worth pursuing.

Before making any decisions regarding refinancing or debt consolidation, it’s essential to carefully review and understand the terms and conditions offered by the financial institution. Ensure that the company or service you choose is reputable and has a track record of providing reliable services to borrowers.

Remember, refinancing your student loans can help you save money on interest payments and potentially shorten your repayment timeline. However, it’s important to assess your financial situation, consider the impact of any potential fees, and determine if refinancing is the right choice for you. By exploring the available resources and comparing different options, you can make an informed decision and take steps toward paying off your student loan debt more effectively.

Strategy 2: Opt-In for Automatic Payments

Opting for automatic payments can be a convenient and beneficial strategy when repaying your student loans. By enrolling in automatic payments, you give your loan provider permission to automatically withdraw your monthly payments from your bank account. Here’s why this strategy can work in your favor:

  1. Preferential Interest Rates: Many loan providers offer preferential interest rates to borrowers who opt for automatic payments. These rates are often significantly reduced compared to standard rates. By choosing automatic payments, you can take advantage of these lower interest rates, which can save you money over the life of your loan.
  2. Timely Payments and Grace Period Benefits: If you’re already making timely payments on your student loans, enrolling in automatic payments may not directly reduce your outstanding balance. However, if you’re still in the grace period and haven’t started repaying, enabling auto-payments allows you to secure better terms. You’ll never miss a payment, and you’ll benefit from the lower interest rates offered.

To opt-in for automatic payments, you’ll typically need to log in to your loan provider’s online portal or contact their customer service. Follow their instructions to set up automatic payments securely.

While automatic payments offer convenience and potential interest rate savings, it’s important to keep an eye on your bank account balance to ensure sufficient funds are available for automatic withdrawals. Be aware of any fees or penalties associated with failed or returned payments.

By choosing automatic payments, you simplify your repayment process, reduce the risk of missed payments, and potentially save money through lower interest rates. It’s a practical strategy to stay on track with your student loan repayment.

Strategy 3: Make Extra Payments When You Can

Making extra payments on your student loans can help save money on interest payments and accelerate the repayment of your student loan debt. For Canadians, there are several ways to make additional payments and effectively manage your loan repayment. Here are some comprehensive strategies to consider:

  1. Understand Principal Payments: When making extra payments, it’s crucial to ensure that the additional funds are applied to the principal balance rather than the interest. By doing so, you can effectively reduce the outstanding balance and shorten your repayment timeline.
  2. Utilize Payoff Calculators: Investing in your financial education is key. Take advantage of online payoff calculators, readily available on the Internet. These tools allow you to calculate how much you need to pay extra each month to achieve your desired payment date. By utilizing these calculators, you can set clear goals and establish a feasible repayment plan.
  3. Prioritize Additional Income: If you have extra income from bonuses, tax refunds, or side gigs, consider allocating a portion of these funds towards making extra loan payments. By prioritizing additional income towards loan repayment, you can make significant progress in reducing your loan balance and potentially pay off your student debt faster.

Remember to consult with your loan provider to ensure that any extra payments are properly credited to your principal balance. Additionally, be aware of any prepayment penalties or fees associated with making extra payments on your student loans.

By implementing a strategy of making extra payments when you can, combined with an understanding of principal payments, payoff calculators, loan refinancing options, and prioritizing additional income, Canadians can effectively manage their student loan repayment and achieve financial freedom sooner.

Strategy 4: Switching to Biweekly Payments

One effective strategy to accelerate your student loan repayment is by switching to biweekly payments. This approach involves making half of your monthly student loan payment every two weeks. By adopting biweekly payments, you can benefit in multiple ways and make significant progress towards paying off your loan sooner. Here’s why this strategy is advantageous:

  1. Accelerated Repayment: With biweekly payments, you end up making 26 half-payments in a year, which is equivalent to 13 full monthly payments. This means you effectively make one extra month’s payment each year. By consistently making these additional payments, you can shorten your repayment timeline significantly. As a result, you’ll be able to become debt-free sooner and save on interest charges.
  2. Increased Savings: Biweekly payments allow you to save significant amounts of money over the life of your loan. By making the equivalent of one extra monthly payment each year, you reduce the overall principal balance at a faster rate. This not only reduces the total interest you pay but also helps you save money that can be directed towards other important financial goals or investments with higher returns.
  3. Ease of Debt Reduction: Biweekly payments make it easier to pay off your overall debt amount with each payment. By splitting your monthly payment into smaller, more manageable amounts, it becomes less burdensome to meet your financial obligations. This can provide a sense of progress and accomplishment as you witness the gradual decrease in your loan balance.

When considering biweekly payments, it’s important to review your loan terms and consult with your loan provider to ensure there are no additional fees or penalties associated with making extra payments. Most providers offer the option to switch to biweekly payments through their online platforms, making it a convenient and straightforward process.

By adopting the strategy of switching to biweekly payments, you can accelerate your student loan repayment, save on interest charges, and achieve financial freedom sooner. Take advantage of this approach to make steady progress towards paying off your loan while maintaining a manageable payment schedule.

Strategy 5: Repayment Assistance Programs

For students struggling with student loan debt, the Government of Canada offers Repayment Assistance Programs (RAPs) to provide temporary relief and support. Let’s explore the two main programs, their benefits, and important considerations:

  1. Repayment Assistance Plan (RAP): RAP is designed to reduce the burden of student loan payments for individuals facing financial difficulties. This program offers two options:
  • Payment Reduction: RAP can reduce or eliminate student loan payments for a specific period, typically ranging from 6 to 12 months. During this time, you won’t have to make payments, providing temporary relief.
  • Income-Based Repayment: Alternatively, RAP can lower your monthly payments to a specified percentage of your income, usually around 20%. This ensures that your loan payments remain affordable based on your current financial situation.
  1. Repayment Assistance Plan for Borrowers with Disabilities (RAP-D): RAP-D provides additional support to students with disabilities who require longer-term assistance or have difficulty repaying their loans within a standard timeframe. The key features of RAP-D include:
  • Extended Assistance Period: RAP-D allows students to utilize RAP for an extended duration beyond the initial period, providing continued payment reduction or income-based repayment.
  • 60-Month Total Debt Repayment: In cases where additional support is necessary, RAP-D allows eligible students to extend their repayment period to a maximum of 60 months, enabling a more manageable debt repayment schedule.

When considering enrollment in a Repayment Assistance Program, it’s essential to research and understand all requirements and limitations. Ensure that you meet the eligibility criteria and gather the necessary documentation for the application process. Additionally, if you remain eligible, be diligent in reapplying for the program every 6 months to continue benefiting from the assistance.

Repayment Assistance Programs provide a valuable safety net for students facing financial difficulties. They offer temporary relief through payment reduction or income-based repayment options, allowing individuals to manage their student loan debt more effectively.

Repayment Assistance Plan (RAP) Eligibility and Application: Link

Additional Government Supports and Repayment Assistance

The Government of Canada is committed to assisting students in pursuing post-secondary education and providing support to borrowers in managing their student loan debt. In Budget 2022, several initiatives were introduced to enhance these supports. Let’s explore the key programs and benefits available:

  1. Loan Forgiveness for Family Doctors and Nurses: To encourage healthcare professionals to work in rural communities, the government has increased loan forgiveness for family doctors and nurses. Starting in 2023, nurses may qualify for up to $30,000 in loan forgiveness, while doctors can receive up to $60,000. The government is also expanding the list of eligible professionals and reviewing the definition of rural communities to ensure inclusivity and accessibility.
  1. Elimination of Interest: As of April 1, 2023, no interest will be charged on Canada Student Loans and Canada Apprentice Loans. This measure aims to alleviate the financial burden on borrowers. It’s important to note that provincial interest rates may still apply, so it’s recommended to contact the National Student Loan Service Centre or the respective province or territory for more information.
  1. Student Grant Supports: The government has extended the doubling of the maximum amount of Canadian student grants until the end of July 2023. This means eligible students can access increased financial assistance. Moreover, the eligibility criteria for Canada student grants now consider the current year’s income instead of the previous year, making grants more accessible to students.
  • More information can be found on the Canada Student Grants and Loans website: Link
  1. Easier Access to Repayment Assistance: The Repayment Assistance Plan has been improved to provide more comprehensive support. Individuals living alone, earning less than $40,000 a year, no longer have to make student loan payments upon approval of their application. The maximum payment percentage based on household income has also been lowered from 20% to 10%. These changes came into effect on November 1, 2022.
  1. Expanding Support for Borrowers with Disabilities: Starting from the 2022-2023 school year, the support for borrowers with disabilities has been expanded. The program now includes individuals with persistent or prolonged disabilities, in addition to those with lifelong, permanent disabilities.
  1. Skills Boost Program: The Skills Boost program has been extended until July 2023. It offers a top-up on the Canada Student Grant for Full-Time Students, assisting working adults in affording the cost of returning to school full-time to upgrade their skills. Eligibility for this benefit is automatically assessed when applying for a Canada Student Loan.
  • More information can be found on the Canada Student Loan site: Link

The Government of Canada’s commitment to supporting students and borrowers is evident through these initiatives. It’s crucial to stay informed about the specific requirements, application processes, and timelines associated with each program to take full advantage of the available supports.


Paying off student loan debt faster may feel like an uphill battle, but there are several strategies that Canadian graduates can use to combat it. Refinancing student loans, opting in for automatic payments, making extra payments when they can, switching to biweekly payments, and enrolling in repayment assistance programs are all good strategies that can help save on interest payments and shorten repayment timelines.

Remember that each of these strategies has its unique pros and cons, so take time to research and understand them all before committing to them. Finally, it’s essential to create a budget and be diligent in sticking to it to avoid accumulating more debt after paying off student loan debt.


1. How can I find reputable private financial institutions for refinancing my student loans?

To find reputable private financial institutions for refinancing your student loans, you can start by researching and comparing different lenders online. Look for lenders with positive reviews, competitive interest rates, and transparent terms. You can also seek recommendations from financial advisors or friends who have gone through the refinancing process.

2. Will enrolling in automatic payments reduce my outstanding balance if I’m already repaying my student loans on time?

Enrolling in automatic payments won’t directly reduce your outstanding balance if you’re already making timely payments. However, it can help you take advantage of preferential interest rates offered by loan providers, leading to potential long-term savings on interest charges.

3. Can making extra payments on my student loans really make a difference?

Yes, making extra payments on your student loans can make a significant difference. By allocating the extra payments towards the principal amount, you can reduce the overall balance faster, which can help you save on interest payments and pay off your student loan debt quicker.

4. Are there any additional fees or penalties for switching to biweekly payments?

It’s important to be cautious and review your loan agreement before switching to biweekly payments. Some loan providers may charge additional fees or penalties for making extra payments. Contact your loan provider or review the terms and conditions to ensure a smooth transition without any unexpected costs.

5. How do Repayment Assistance Programs work in Canada?

Repayment Assistance Programs (RAPs) in Canada, such as the Repayment Assistance Plan (RAP) and the Revised Repayment Assistance Plan (RRAP), provide temporary relief to students facing difficulties in repaying their student loan debt. These programs offer reduced or eliminated payments for a specific period or a percentage-based reduction in monthly payments. Eligibility and specific terms vary, so it’s crucial to research and understand the requirements before enrolling.

Additional Resources for Savings and Debt Management

  1. Wealth Solutions Hub. (n.d.). Savings. Retrieved from https://www.wealthsolutionshub.com/everything-finance/savings/
  2. Wealth Solutions Hub. (n.d.). Budgeting Tips. Retrieved from https://www.wealthsolutionshub.com/everything-finance/budgeting-tips/
  3. Wealth Solutions Hub. (n.d.). How to Build an Emergency Fund When You’re Living Paycheck to Paycheck. Retrieved from https://www.wealthsolutionshub.com/everything-finance/how-to-build-an-emergency-fund-when-youre-living-paycheck-to-paycheck/
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