5 Ways to pay off your loan quicker

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5 Ways to pay off your loan quicker

Pay more every month

This is a simple, painless way to save interest and pay the loan off quicker. There are two ways to do this. Round your payments up or simply pay an additional amount every month.

Use your annual bonus or tax refund to pay extra into your loan account

Everybody loves to receive a bonus or a tax refund. The temptation to go and splurge your windfall on luxuries is strong. By putting some or all of that money into your personal loan it will have a noticeable effect on the total interest you end up paying. In the medium to long term, this will put you in a much better position and you will then be in a position to afford those luxuries you wanted.

Reduce expenses to pay a little extra every month

There are a number of small indulgences we spend money on almost every day. By eliminating some of these or even reducing them slightly, you will be left with additional money to pay extra into your loan.

That cup of coffee on the way to work in the morning or a cool drink on the way home can add up to a fair amount of money. Reduce these, pay the extra into your personal loan and you will pay it off faster.

Progressive debt repayments

If you have a number of loans or debts that you pay off every month, make a list and take a look at them. While it generally makes sense to pay off those with the higher interest rate faster, another way of doing it is by starting with the smallest one first. Try to pay a little bit more into the smallest one and get it paid up in full. Once that is done, you can take the full amount you were paying into that and pay it into the second smallest debt. Repeat this process, working you way up the list.

Do not skip payments

Some options offer a few months grace before you have to make payments or allow a month off every now and then where no instalment is due. By avoiding these offers and paying the normal amount you will pay your loan off faster.

The Benefits of Paying Off Any Loan Early

The bottom line is that paying off your loan or credit card debt early will save you money in interest and decrease the overall term of the loan. Just imagine what you could do with your extra money: save for retirement, make home improvements, or pay off other debts. There are lots of benefits to paying off your loans early, but one of the biggest is less stress and less risk, because you won’t be a slave to the lender anymore!

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