As you work your way in paying your debt and becoming free from it once and for all, probably you have tried virtually any other way to save money, increase your income and pay it faster. The points below can be a big help if you wish to make your loan repayment less challenging.
Tip number 1. Make biweekly payments – it is wise that you automatically make half of the payments to the lender every 2 weeks rather than the typical monthly payment. It will help in accomplishing 3 things as you do so and these include having less interest because your payments are being applied more frequently, you can get to pay an extra since a year composes of 52 weeks and this can shave off months on your loan.
On the other hand, before you get to do this, you have to talk this one with your lender. It’s due to the reason that you may unknowingly pay off your balance earlier than you’ve been expecting or be penalized.
Tip number 2. Round up your payments – as a matter of fact, rounding up your payments help you to make payments become effortless and effective. Similar to paying your loans biweekly, you do not need lots of extra funds in slashing few months off the loan’s term. To give you an example, if you have an auto payment to make that was roughly around 289. 84 dollars, but opted to round the payment to 300 dollars which is basically an excess of 10.16 dollars per month or a total of 121.92 a year. Upon the last term of your loan, this is cut off automatically, allowing you to make big savings.
If you wanted to, it is possible to add 50 to 100 dollars to the payments you are making every month. For sure, over that period, it adds a big amount to it letting you save interest while also shortening the term of the loan.
Tip number 3. Make one additional payment – let us say that you can’t commit to making bi-weekly payments due to your cash flow, that would not be a problem actually as you can still do this by simply making an extra payment annually. Use money from bonus on work or tax refund to help in paying your loans faster. There is another way of doing this and it’s by dividing to 12 your monthly payments and add the quotient to the payments you are set to make for the rest of the months.
It is undeniable that repaying your loan can put a great strain on your finances but by following these 3 tips, you can make it lighter.