Working your pay to repay your debt and become free from it makes you try all possible ways to do it from saving money, increasing your income and paying 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 a smart move of you to pay the loan every 2 weeks rather than making the payments every month. By doing so, it will help you accomplish 3 things including less interests as your payments are applied more often, you’ll pay extra payment as 1 year consists of 52 weeks and doing this for the duration of your loan shave off months.
But just before you proceed in such, it is a must to sit this one out 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 – an effective and at the same time, effortless way to pay extra from your loan without missing any funds is done by rounding your payments. This is almost the same when you are paying your loans bi-weekly, you don’t necessarily need to have excess funds to cut off few months of your term. For instance, if you got auto payment that was approximately 289. 84 dollars but has opted to round your payment to 300 dollars, it will create an excess f 10.16 dollars a month or 121.92 annually. Automatically, this is lessened to your payments upon the last term of your loan.
If you wanted to, it is possible to add 50 to 100 dollars to the payments you are making every month. For the said period, rest assure for it to add a significant amount that then lets you shorten your loan and save on interest.
Tip number 3. Make one additional payment – if you do not have the cash flow to commit to making a biweekly payment, you can still achieve the same result by means of making 1 extra payment per year. Use money from bonus on work or tax refund to help in paying your loans faster. Another possible option is by dividing the monthly payments you are making to 12 and add the amount to all future payments you are about to make.
Repaying your loan can become lighter and easier if you will follow the aforementioned tips.