By Harrison Jones
If you have no income and need money now, it’s easy to request a payday or personal loan from one of the several online lending platforms in the market nowadays. The loan application process only takes minutes, so it’s not as tedious as applying for a loan from traditional lenders.
No one likes debt, but there comes a time in our lives when we need extra help, and that’s okay. However, if you’re now in a financial position to pay your loans off early, you should. But first, check with your lender if they don’t charge a prepayment penalty. If you think paying off your loan early is the right decision, follow the steps below.
Make bi-weekly payments.
Instead of paying your loan once a month, you can opt to pay it once every two weeks to get a good start on paying off your loan. By doing this, you’re essentially making one extra payment each year because you’ll be making 26 bi-weekly payments, which can help you pay off your loan much faster.
Pay extra when you can.
Paying extra when possible is another great way to get ahead on your loan payments. If you come into some extra money, whether from a bonus at work or a tax refund, put that money towards your loan. Doing this can reduce the interest you’ll accrue over time and pay off your loan much faster.
Alternatively, you can round off your payments. For example, if you pay $232 on your loan, you can round it off and pay $250 instead.
Increase your income.
If you wish to make a huge dent in your loan payments, you may want to consider increasing your income. You can do this by getting a raise or promotion at work or finding a higher-paying job. If neither of these sounds feasible, you can get a side hustle or a part-time job in your free time. Boosting your income will allow you to put more money towards your loan each month and pay it off much faster.
Look into refinancing.
There are many reasons why borrowers might look into refinancing a loan. You can refinance a loan if you wish for a more favorable interest rate, loan terms, or payment schedule. This usually happens when economic conditions have shifted, or the borrower’s credit score has significantly improved. If you’re looking to refinance your loan, conduct thorough research to find out if it’s the best option for you and compare different lenders to find the best deal.
Revisit your budget.
If you’re having a hard time making loan payments, it may be time to revisit your budget. Track your spending and pinpoint where you can cut back in order to free up some extra cash each month. You may be surprised how much money you can save by making minor changes to your spending habits.
Final Words
So there you have it—five tips for paying off your loans early. While there’s no one-size-fits-all solution, any of these strategies can help you save money and become debt-free sooner. In addition, be sure to stay disciplined with your spending and always make loan payments on time. By following these guidelines, you can confidently move forward with your plans to achieve financial freedom.
Author’s Bio:
Harrison has been a freelance financial reporter for the past 6 years. He knows the major trends in the financial world. Jones’s experience and useful tips help people manage their budgets wisely.