Paying your loans off in small amounts can be easier on the wallet in the short term, but in the long run, you’ll end up spending more and being burdened with debt for longer.
Learn the fastest ways to repay loans below and reap the benefits!
Here are some tips for paying back your loan faster
1. Pay more
If you can afford it, make larger monthly payments to pay off the principal more quickly.
For example, a $2500 fast loan with 6.8 % interest and a 10-year payback period would cost $28.8 a month. Making $70 monthly payments instead of $28.8 enables you to repay the fast loan in just over 36 months.
By paying the principal more quickly, you will also pay less on interest.
2. Make additional payments
The less you owe, the less interest that you will be charged. By budgeting effectively or receiving a bonus from work, you may be able to make additional payments to your fast loan.
3. Create a clear plan
Creating a clear plan is one of the simplest and fastest ways to repay loans.
- Start by understanding exactly when your loans will end or if it’s a credit card, then check the current balance.
- Next, create a goal to pay it off within a specific period of time. You’ll need to understand exactly how much money to put aside each week to achieve this.
- Commit to your plan and you’ll have a clear pathway to becoming debt free ahead.
Make it a routine to pay it off monthly. If you’re facing difficulty in coming up with the monthly payments, create a budget and cut back on your expenses. This way, you can lift your debt obligations off your shoulder faster than ever.
4. Automate savings
Automatically transferring money into alternative accounts is a great way to save extra cash. Rather than spending money on trivial things such as movie tickets or unhealthy meals, automatic payments can help you set aside that extra cash to pay off your debt.
Make sure you will only use that account to repay your fast loans and other types of debt. This will require sacrifice in certain areas, but it will ensure you are one step closer to financial freedom.
Hide your credit card in a safe place
Don’t be a victim of credit card theft. With easy access to your credit cards via pay pass; strangers who have access to a lost credit card can easily tap on purchases less than $100. Keep your credit card securely in your wallet. If you lend your card to friends or family, make sure you keep track of any transactions online.
Keep your phone in your pocket.
The same rule applies to your mobile phone. With the rise of Apple Pay, you can purchase your transactions through your mobile phone. Make sure that you keep your phone locked with a passcode so that strangers cannot make any payments without facial recognition or a passcode.
5. Close some credit cards
Having them in your wallet may tempt you to spend more. Leave only the low-interest credit cards for your urgent needs.
6. Consolidate your debts
One of the best ways of ensuring that you continue to pay off your loan quickly is to consolidate your debts into one neat and tidy bundle. This will also protect you against the rising interest rates across different loans. This will benefit you in the long run; whilst making it easier to manage your debts.
7. Be proactive by increasing your income
Earning cash while dealing with your debts is a good way to stay proactive about overcoming debts. You don’t only generate wealth to pay for your loans; you also build your nest egg. If you can put away $100 every month out of your income, that would be $1,200 in annual savings.
At the Australian Lending Centre, we can clear debt management plans to help you move towards a financially secure life. It takes discipline and planning, but you can surely do it.
Contact Australian Lending Centre to get back on track.
