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SIMPLE WAYS TO PAY OFF LOANS FASTER
No one like to take a big chunk out of their paycheck every month and give it to the bank. Yes, it is nice to have the money available when you need it. A better option would be to have the funds available in your own savings account so you don’t have to borrow from a bank or other financial institutions. You not only will save money on interest paid to the bank, the bank will be paying you interest for keeping you cash in a savings or other type of account.
These are a few painless tricks you can use to help pay off your loans off faster without making major sacrifices or really noticing a difference in your day-to-day finances.
Make Bi-Weekly Payments
Submit half of a month’s payment every two weeks instead of one monthly payment. By doing this you will cut the amount of interest that accumulates because payments will be applied sooner. Also, by making payments every two weeks you end up making one extra payment a year.
Refinance Your Loan
Refinance your loan at a lower interest rate. Shopping around for a better interest rate can really save you quite a bit on interest. Do some research online to see if you can find a better rate. It’ll be so worth your time, even if you lower your rate by a few percentage points.
Another option, if your credit has improved since your original loan date, is to simply ask your current lender if they can give you a lower rate.
Contribute Any Unexpected Cash
Put aside any extra funds that you were not expecting to receive. Maybe it’s a birthday card you received with a few buck in it. Or a bonus for a job well done at work. Whenever these gifts come your way make it a point to add the amount to you monthly or bi-monthly payments. Money you never expected to get will not be missed.
Round Up Payments
Round up every time you make a payment, it doesn’t matter if you round-up to the nearest tenth or twentieth or hundredth. Every little bit extra helps and you will probably not even miss the small amount of cash.
Earn Extra Money
Earn some extra cash on the side to help pay off the bank quicker. It doesn’t even have to be a part-time job. You can sell a few household items or gently worn clothing on eBay, babysit a neighbor’s child every now and then or anything else that might bring in a few bucks. You would be surprised how regularly contributing a bit extra can add up and shave months off a loan.
Paying off loans early can save you a lot of money in interest. The faster it is payed the more money you get to keep. Try one or combine a few of these tips and you’ll have that loan paid off in no time.
SIMPLE WAYS TO PAY LOANS OFF FASTER
Please leave a comment if you have any tips or tricks that you’ve used to pay off your loans faster? I’d love to hear them!
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