How to Pay Off a Personal Loan Faster
If you’re working towards becoming debt-free, you’ll want to use every trick in the book to save money and increase your income, so you can pay down your debt faster. In this article, we’re going to tell you about some of the best ways to pay off your personal loan (or any other type of debt, for that matter) a lot faster.
Make Bi-weekly Payments
Instead of making the same regular monthly payments, pay half the amount to your lender every two weeks. Doing this can reduce your interest and shave off several months off your loan term. Before considering this option, be sure to discuss it with your lender since some may not allow flexibility in terms of payments.
Round Up the Payments
An effortless way to pay extra without hurting your budget is to round up your payments. Just like bi-weekly payments, you don’t need a lot of additional funds to knock a few months off the term of your loan.
You could even bump up your payments by an extra $50 or $100 every month. Over time, this can add up to a significant amount and will save you more money on interest and shorten the term of your loan.
Find Extra Money
Sell clothes on eBay, sell books on Amazon, or choose to impulse save than to impulse buy. By doing this, you can use the extra funds to pay down your loan. In the beginning, small amounts like $20 and $12 might not seem like a lot, but they definitely add up.
Make One Extra Payment
If you don’t have enough cash flow to commit to bi-weekly payments, you could get the same result by making one extra payment a year. To do this, you should use the money you earn from a tax refund or bonus from work to help pay your loan faster. You can also divide your monthly payment by 12 and add this amount to your future payments.
Refinance Your Loan
The easiest way to get rid of your debt is to find local banks or credit unions that are offering low-interest rates on personal loans. Then, refinance your loan.
