5 Ways To Pay Off Your Loan Faster

Tuesday, August 15th, 2017

Credit card debt? Business Loan?

Home loan? Personal loan?

No matter how you borrowed money from a lending institution or bank, the good news is that you can pay it off faster with some commitment and good budgeting habits.

Here are 5 ways to pay your loan off faster:

 

1. Make Fortnightly Payments

Arrange to pay half the payments to your lender every two weeks, instead of your regular monthly repayment. It can make a huge difference over the life of your loan. Because your payments will be applied more often, your overall interest is reduced. And because there are 26 fortnightly cycles in each year, you will pay an extra payment.

Stick to this over the duration of your loan and you can save yourself months – and lots of money. Just be sure that you discuss this with your lender to ensure it fits your contract without attracting any penalties.

 

2. Round The Payments Up

Rounding up your payments is stress-free way to pay extra money off your loan without really noticing a huge difference to your cash flow.

So, if your repayment is an odd number, such as $213.45, round it up to $240 each payment and you’ll be reducing your repayment schedule in no time – again, check with your lender to make sure it does benefit you.

Over the life of your loan, it can make a significant difference to reducing your debt faster.

 

3. Find Extra Money

Got access to some extra funds? Whether old Auntie Mabel has sent you some birthday money, or you’ve made a few extra dollars getting rid of your unwanted jeans on eBay, any extra dollars you access can make a difference to your loan repayments. Sure, you might not think that additional $50 will have an impact but if you find yourself doing it a few times a year over the life of your loan, you might have it paid off a few months faster than you expected to.

 

4. Refinance Your Loan

This is easy – and could save you lots of interest and time.

It works if your credit rating is good and you can talk to a friendly and experienced broker to help you find a better deal.

Refinancing your loan is a great way to find a better interest rate – and that means real savings for you.

 

5. Go Paperless

Depending on your lender, you might be able to access some small benefits and savings simply be refusing their paper trail of financial records and electing to go electronic.

With easy access to all your financial repayments on your computer or smartphone, you can also set reminders to pay on time and minimise the stress and additional fees that come with late payments.

Remember – no matter what you have borrowed, there is always a benefit in paying it off faster. And with that debt out of the way, you can look at other more meaningful investment opportunities to help build your secure financial future.

If you have any questions about your finances, either personal or business, please do not hesitate to contact Loans Actually on (03) 8805-1850 or email glenn@loansactually.com.au


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