Being debt-free is one of those things many people want to be, but most of the time people don’t get there for one reason or another. Paying your personal loan quicker will help you become debt free and you then have the chance of saving or spending the money in other areas of your life. It is important to have a good plan if you want to pay off your personal loan quick, or else you end up making payments and not seeing any improvement in your financial situation. Below is 5 ways you can use to pay off your personal loan quickly.
Make Bi-weekly payments
If you have a loan and are required to pay every month, consider submitting half the payments to the lender every two weeks instead of doing it once a month. This will help you in a number of ways. The payments will be applied more often, and this means you will accumulate less interest. Before you can start doing this, talk to your lender. There are some that penalise people who make extra payments or try to pay back their loan balance earlier.
Rounding Up the payments
Rounding up the payment can be a good way of paying extra without having to miss the funds. You will be surprised to find out you have knocked a couple of months off your loan. If you were to make a payment of $258, then consider rounding it off to $300. After a year, you might end up paying two months’ worth of payments without having to put in a lot of effort. You can even pay an extra $100. This will also end up saving you a lot in interest, and it is also going to shorten the term of the loan.
Finding extra money
Try making extra money then use it for paying down your loan. Although the amount might seem small, the money will add up. You can earn extra money by taking a part-time job on the side. If you manage to earn $100 dollars a month from your side hustle, you will end up making an extra payment of $1200 at the end of the year.
Making one extra payment
If you are not able to pay for the loan twice a month, you should consider making an extra payment after a couple of months. The money you get as a bonus or tax refund can be used to pay down your loan faster. This doesn’t seem like much, but it will go a long way in helping you pay off the loan faster.
Lender programs for paying off debt
There are some lenders that will have options to help you pay your loan quicker. There are some programs that will force you to pay additional fees, so find out before you enrol in one. If you see the fees and think it is worth it, then go ahead and pay. If you don’t like the fees, you can look for other ways of paying extra while you avoid the fees.
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