The bottom line is that paying off your loan or credit card debt early will save you money in interest and decrease the overall term of the loan. Just imagine what you could do with your extra money: Purchase a new home,save for retirement, make home improvements, or pay off other debts.
However, one of the biggest is saving money, reducing your risk, and helping to build your credit rating! So follow these little hints to dramatically change your financial life:1. Make Fortnightly Payments
Less interest will accumulate, because your payments will be applied more often.
You will pay an extra payment, because there are 52 weeks in a year, which equals 26 yearly payments (or one extra).
Doing this for the duration of the loan could shave off several months or even years.
Make sure to discuss this with your lender before making fortnightly payments, because you might be penalised.
2. Round up the Payments
You could even go a step further and bump up your payments by an extra $50 or $100 per month. Over time that adds up to a significant amount, which will save you money on interest and shorten the term of your loan.
3. Find Extra Money
Anytime If you sell clothes on eBay, books on Amazon, or chose to ImpulseSave instead of impulse buy, you can use the extra funds to pay down your loan. Although the small amounts like $20 here and $12 there might not seem like a lot, they definitely add up. If you have a small part-time job on the side that pays an extra $100 per month, put that toward the loan. Over the course of a year, that’s an extra $1,200, plus the interest you will save.
4. Make One Extra Payment
If you don’t have the cash flow to commit to fortnightly repayments, you can achieve the same result by making one extra payment per year. Use money from a tax refund or bonus from work to help pay down your loan faster. Or you can divide your monthly payment by 12 and add this amount to all future payments. For example, using the above car repayment you could divide the repayment of $264.12 by 12 months and add $22.01 to each payment. Each payment would be increased to $286.13. equalling one extra payment per year.
5. Refinance Your Loan
This is one of the easiest ways to save interest, and pay off your loan in half the time (if you have semi-good credit, of course). Many local banks and credit unions are offering super-low interest rates on personal loans, mortgage loans and car loans. Call us today and let us do the leg work for you!
6. Contact us today!!
Sometimes we may be able to negotiate extra percentage discounts off your interest rate. This is based on the product you choose, your credit score and your lending profile. Contact us today and let us help you find your loan-your way!