All of us are most likely to borrow money or secure a personal loan when the time comes. What makes personal loans ideal is that lenders allow their borrowers to use it for various reasons, such as starting up a business.There’s nothing wrong with borrowing money because as much as you want to avoid doing it, you’ll have no choice, especially if there’s an emergency. Of course, when you borrow money, you are required to pay it off.
In this article, we’ll give you several tips on how to pay back your personal loans faster.
- Pay off Your Loan with Bi-Weekly Payments
Instead of paying off your loan every month, you can also do it on a bi-weekly basis. Doing so will help you shave off a couple of months from the duration of your loan, especially if it is more than two years. Taking personal loans from Everyday Loans or other lenders can allow you to avail of loans that are designed to be paid on a bi-weekly basis as a way of helping borrowers.
By paying on a bi-weekly basis, you’ll be able to pay an extra month each year since there are 52 weeks in one year. It won’t change your monthly expenses, but it will surely help you save a ton of money and make sure that your loan will be paid off quickly.
- Pay a Month in Advance if Possible
If you can make an extra payment, do it. This sounds easy enough, but it requires discipline to be able to pull this off. If you manage to do this regularly, you’ll be able to pay off your loan faster. You can use bonuses or incentives from work to pay off your loan, and this will have the same effect as paying off your personal loan on a bi-weekly basis.
- Make an Extra Payment
Paying an extra payment every month can also help you pay off your personal loan faster. Say for example, your monthly payment is $120. You can divide that by 12 months, which is equivalent to $10. Make an effort to add $10 to your monthly payment, which will now be $130.
- Choose to Pay off Your Loan over a Shorter Period
Another alternative for paying back your personal loan faster is to do it over a shorter period. While this does help you quickly pay back your loan, this will require you to pay a higher monthly payment. Short-term personal loans may be harder to pay off because of their high monthly payments, but you actually get to save money from it because of lower interest payments.
Before you decide to opt for a short-term loan, make sure that you look at your budget first and try to figure out a high repayment amount that is manageable for you. What’s important here is that you’ll be able to pay your monthly payment without wiping out your whole income. You still have other expenses to worry about and you don’t want to spend your monthly income just on your loan.
- Consolidate Your Loans
This is perfect for individuals who have more than one personal loan. Consolidating your loans will help you pay off your loans faster as all of them will be combined into a single but larger piece of debt with favorable payment terms. This is very helpful, especially if you are struggling with your current repayment terms because of the high interest or loan terms. To do this successfully, talk to your lender about your options for consolidating your loans.
- Refinance Your Loan
Refinancing your loan is ideal for individuals who are struggling to pay off their current personal loans. If you think that your loan is too much for you to handle every month or if you’ve found a special deal to reduce the overall interest of your loan, refinancing can be a good option for you.
Refinancing a personal loan means you’re going to apply for a new loan that will cover the balance on your current loan. Once approved by the lender, you can then use the money you receive from your new loan to pay off the old one. The value of refinancing your loan, however, depends on your current financial standing and the loan terms. So, it’s important to compare how much your current loan is costing you and what the new loan will cost you.
There are many ways to pay back your personal loan faster. Consider the tips above to make sure that your loan will not be costing you more than what’s necessary. Paying off your personal loan faster can help save money from interest payments. Aside from that, paying back your personal loan faster also means less stress and headaches since you don’t owe anything anymore!