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.

Warning About Borrowing

Contact Australian Lending Centre to get back on track.

Choosing the right financial recovery tool can be quite a headache! What’s the best choice between debt consolidation and creating your own repayment plan? What factors should you consider when making a decision? Read on to find out.

Debt consolidation

If you have multiple credit card balances or debts, you should take out a new loan to pay them off. You can save money or pay your debt sooner by borrowing money at a low-interest rate to pay off high-interest loans or credit cards. Aside from making fewer payments each month, you only have one due date to recall–this lessens the likelihood that you’ll miss payments.

But, if you are not careful when choosing a reasonable debt consolidation loan, you may end up deeper in debt because of high interest rates or hefty fees and penalties. So, before you choose a debt consolidation company, make sure that they are interested in educating you on how to use your debts wisely to achieve financial freedom as much as they are interested in lending money to you.

DIY debt repayment plan

Do you have a knack for DIYs? Then, think about getting out of debt without asking for external help. If you’re always late on making payments, or if debt seems too much to handle—it’s time to take the reins. But fixing your debt problems without professional help is a bit challenging for 3 reasons:

You’re in this mess because you created it.
You can’t pinch your skin hard enough. When it hurts, you’ll surely let go. The same thing goes for repayment plans. It’s hard to pressure yourself because you may change the rules when they become difficult to follow.
If your debt is too high and your income is low, you may get a new loan to pay off the high-cost debts. That means you’re paying a loan by a new loan while leaving all other debts unpaid.

Here are some useful tips when choosing between debt consolidation and DIY repayment plan:

Reflect on what you did in the past 3 years

It’s so easy to label our “year” as “tight” or “bad” when debts pile up and income lessens. But there might be goals you’ve met and lessons you learned along the way. Make a blunt and honest assessment not just of the things that went “wrong” but your accomplishments as well–small or big, they don’t matter.

What were you hoping to achieve three years ago? Maybe it was a new house or car, a sales goal, or a vacation. List at least five things you planned to achieve and whether they were realised or not. If not, write down two reasons why you didn’t achieve them.

Next, list 2 things you can do to achieve it next time—this time, consolidation and a DIY repayment plan. Focusing on those two main strategies can help you come up with a tangible solution for your debt problems.

Check your readiness to change your financial life

Maybe you’re set to make some lifestyle changes today because of escalating interest rates, late fees, and frequent calls from creditors and debt collectors. But, what would happen if you only have one creditor to pay each month?

Will you go back to your old borrowing and spending habits? If you make your own debt repayment plan, how determined are you to stick to your goals and resist the urge to adjust them when they’re getting harder to follow?

Ask Yourself

How much money do you have right now? Can you afford to buy what you need and repay your monthly debt? If you’re hard on cash, then it is advisable to get debt consolidation. You will be able to save money on interest, and you have a good chance of reducing your monthly repayments.\

The same thing goes for those who have enough funds but have a poor debt strategy. Debt consolidation helps you pay on time because there’s only one debt to pay.

Contact Australian Lending Centre today to learn more about the most reasonable debt consolidation program and the debt repayment strategy suited to your condition. Apply today or call us now on 1300 138 188.

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