For people who got debts and want to be free from it for good, it is most likely that they have tried a number of different methods to repay it. If you want to make loan repayment less stressful and challenging for your finances, then the points below can help you out.
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.
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 – as a matter of fact, rounding up your payments help you to make payments become effortless and effective. Much like paying loans biweekly, you don’t need lots of funds to slash several months off the term of your loan. 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. That is automatically lessened on your payments on the last term of the loan.
If you wanted to, it is possible to add 50 to 100 dollars to the payments you are making every month. Over that period, it will add up to a big amount allowing you to save on interest while shortening the loan term.
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. You can use the money from bonus on work or tax refund which helps in repaying 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.
We can’t deny the fact that repaying your loan puts a huge strain on your budget but you can lighten up this burden by making yourself aware of the tips discussed.