How can you speed up the repayment of your loan? It seems impossible to pay more than the minimum amount on your credit card, car loan, personal loan or mortgage balances. Yes, you need to keep your personal finances healthy enough to pay your mandatory monthly payments and avoid delays in your payments.
At the same time, you may not find it so difficult to get ahead of your debt payments. You may not be able to repay all your loans tomorrow, but advance payments will allow you to pay them several months or even several years in advance, especially in the case of a mortgage.
Here are four strategies to repay your loans faster.
Pay half the monthly amount every two weeks.
To understand this strategy, you will need to calculate a little bit. Basically, you use your monthly payment divided in half to pay every two weeks. One year includes 52 weeks, or 26 half payments or 13 full payments annually. If you pay only at the end of each month, you will only have 12 full payments per year. Even if your loan lasts only two years, this strategy will allow you to complete your loan before the scheduled time.
Round up payments to move forward.
Another solution that will allow you to pay your loan in advance is to round up your payment. For example, if instead of paying $ 175 per month you increase it to $ 200, this will result in an extra month of payments every seven months, even if it does not seem like much. So, in two years, you will have advanced your loan by three monthly payments.
Save to make an additional payment.
You find it difficult to pay every two weeks or to round off your payment month after month! Then another possibility is to make an additional payment when you own the money. You receive an amount of money for your birthday or you get a bonus for the holidays. This money could be used to make an additional payment on your loan. You will get the same results as if you had used one of the two previous strategies.
Do not ask for big loans in the first place.
If a few hundred dollars are enough for you, do not ask the bank for a credit card or a large personal loan. Instead, consider a personal loan online. Only a few hundred dollars, it will suit you if this amount is enough for you. Why apply for a credit card or personal loan for more than what you need?
These strategies will not help you repay your debts overnight. They will allow you to pay in advance to pay them back sooner. You will have funds for one month in case you need to postpone payment.