Paying off student loan debt seems difficult even with a generous income, so what if you want to pay off student loan debt with a low income? Here's how to do it.

Is it possible to pay off your student loan debt quickly when you have a low income? Many college grads are burdened by thousands of dollars of student loan debt. With recent college grads carrying an average starting balance of $37,172, with a 6.8 percent interest rate you’d be looking at a minimum payment of around $428 per month on a standard 10-year plan.

When you have other important living expenses like your rent or mortgage, groceries, or a car payment, it can be difficult to pay that minimum amount.

Sure, having a higher salary will certainly help, but you can still do this without a huge budget or income as well. Here’s how.

1. Change your mindset and get organized

The first thing you need to do is change your mindset and organize all your debts so you can get a clear picture of what’s going on. If you approach your situation with a defeatist attitude and assume it’s not possible, you won’t make any progress.

It’s important to realize that money isn’t everything when it comes to paying off debt and it’s not even the most important thing. Your mindset and habits are most important because you can earn six figures per year, pay off all your debt, and get right back into debt again if you don’t adopt better spending and money management habits.

Set an end goal for yourself to help you stay motivated and envision what you want your life to look like when you’re debt free.

Then, start focusing on the numbers so you can find out exactly where you stand. It’s important to know who you owe, how much you owe, and what your interest rate(s) are.

2. Break up your big goal into smaller chunks

Once you’ve changed your mindset and have a full understanding of your debt situation, you’ll be ready to set realistic goals and break them down into smaller, more attainable chunks.

For example, if you have $45,000 of student loan debt and you only earn $35,000 per year, setting a goal to pay off your entire balance in 12-24 months may be pretty difficult and nearly impossible to reach.

However, if you say you want to pay down $10,000 per year or put at least $833.33+ toward your debt each month, that’s a more realistic goal that you can track easily. Once you hit one milestone, you can acknowledge your progress and focus on the next one.

3. Choose a debt repayment strategy

If you have a lower budget to work with, you want to make sure you maximize what money you do have to put toward debt.

This is why it’s important to choose a debt repayment strategy that works best for you and your current situation.

If you’re trying to pay off your debt quickly, you’ll need to properly allocate the extra payments you make. Generally, you can choose between the snowball method or the avalanche method for debt repayment.

With the snowball method, you focus on paying down the debt with the lowest balance first, then you roll your payment onto the next debt with the lowest balance.

For example, if you have five student loans, you’ll start working on the one with the lowest balance first.

The snowball method is great for staying motivated since you’ll see your progress quicker.

The avalanche method involves paying off the debt with the highest interest rate first in order to save you the most money in the long run. The interest you pay on your debt each month can cost you thousands of dollars over your repayment term.

If you knock out the loan with the highest interest rate first (the one that’s costing you the most money), you’ll most likely spend less money paying off your debt since you got rid of the high-interest loans quickly.

I would recommend the avalanche method of debt repayment if you have a lower income because every dollar you have to put toward debt is super important and can go further with this particular strategy.

4. Cut expenses, embrace frugality

It’s best to have a solid budget in place when you’re trying to pay down debt on a low income. Go through your existing budget or create a new one and pinpoint any expenses you can cut out or reduce.

See if you can cut cable or cook more meals at home so you dine out less. Maybe you can get rid of your gym membership or save money on clothing by shopping used and taking advantage of sales and coupons.

You can also try to lower your insurance premiums and refinance your debt to lower your interest rate. The list can go on and on but it’s important to commit to living well on less and adopting a frugal lifestyle while you try to pay off your debt.

Lowering your expenses and embracing frugality will really go a long way when it comes to freeing up money for you to put toward your debt.

5. Focus on earning more money

Finally, you’ll want to focus on earning more money in order to pay your debt off faster. Even though it’s more than possible to pay off a ton of debt with a low income, having a limited income puts a cap on how much you’re really able to pay each month.

When you try to earn more money, you can make progress even quicker. You can do this by asking for a raise, getting a higher paying job, or picking up a side hustle.

Side hustling might be the easiest option to act on quickly. You can use your skills and expertise to earn extra money around your full-time job. You can consider flexible side hustles like freelance writing, virtual assistant work, driving for Uber, tutoring, babysitting, walking dogs, photography, etc.

When you do start earning extra money, be sure to avoid inflating your lifestyle and put all the extra money you earn toward your debt.

So using our example earlier, if you want to pay down $10,000 of debt per year and you can only free up $500 per month for student loan payments after reworking your budget and lowering your expenses, you can pick up a side hustle that allows you to earn $500 a month. That way, you can put $1,000/month toward your student loans even without being a big earner.


Paying off student loan debt with a low income is not impossible. However, having a clear grasp of your situation, stretching your budget, and taking steps to increase your income with a side hustle or a raise can certainly help.

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