Why should you Pay Off Your Loan Quickly?
There are many benefits to paying off a loan quickly. You save money on your loan interest and improve your credit rating.
Good Credit is incredibly important in securing a new loan. Banks or financial institutions often look at previous loan payment history before giving out loans especially in cases where guarantors are not required. A good credit history would create an avenue for getting large sums of loans without much hassle because there is a track record of payment of previous loan facilities.
Paying your loan early in most cases as against the financial institution/bank calling or sending emails to remind you of your commitment makes the financial institution or bank very willing to give you another loan on request.
How to Repay Your Loans Quickly and Easily
1. Determine the exact payoff amount of your loan
Obtaining the exact amount of money owed on your loan will allow you to make financial plans regarding paying off the loan. If you do online banking, this information can be found under your account summary. Alternately, you can review your mailed monthly statement.
2. Don’t take out a loan with prepayment penalties
It is detrimental it is if there are prepayment penalties (Creditville Quick Loans are without such penalties). Some banks or financial institutions may charge you fees or penalties for paying off the loan sooner than the original life of the loan, especially if you cause them to lose money in interest. These are typically called “prepayment penalties.”
If there are penalties for paying off your loan early, compare the savings you calculated with the amount of the penalties. Then you will know if you will save money by paying off your loan early.
3. Consult with your financial institution for loan payoff recommendations
Your loan adviser may be able to educate you on the most beneficial ways for you to pay off your loan faster, especially if penalties apply. For example, ask your lender if they can decrease the balance of your loan if you can pay the remaining balance in one lump sum.
In some cases, lenders may lower the remaining balance of your loan substantially if you can pay off the remaining balance with just one payment.
4. Apply extra earnings or cash gifts to your loan
Extra income such as tax refunds, bonuses from your job, or cash gifts from birthdays or holidays could be applied to your loan, resulting in a faster payoff. You will be paying more in interest on your loan than you would earn in a savings or money market account. If you receive a job bonus around the holidays or during the year, allocate that money toward your debt payoff plan. “Avoid the temptation to spend that bonus on a vacation or other luxury purchase,” Karimi writes. It’s more important to fix your financial situation than own the latest designer bag.
5. Earn extra income
If you have the time outside your normal work hours, consider starting a side business in order to generate additional money to pay down your loan. Starting a side hustle is something everybody needs as one source of income is barely enough to get by. Examples of side businesses are:
Learn a skill and then charge people money for your services or become a consultant with on the job skills you have gotten, Buy china, artwork, tools, jewelry, perfumes etc. for low prices and then sell them on social media.
6. Sell unwanted gifts and household items
Have any birthday gifts or old wedding presents collecting dust in your closet? Search through your home, and look for items you can sell on eBay or Craigslist. “Do some research to make sure you list these items at a fair and reasonable price,” Karimi writes. “Take quality photos, and write an attention-grabbing headline and description to sell the item as quickly as possible.” Any profits from sales should go toward your debt.
7. Establish a budget and minimize extra expenses
Make a list of your monthly income and expenses, including expenses that occur only once or twice a year. Then you will be able to see if you have extra cash at the end of the month to pay down your loan. If you don’t have extra cash, look for areas where you can cut expenses. Eliminate expenses you do not need such as cable television channels or unnecessary subscriptions. The money you apply to costs such as these can be applied toward your loan instead.
Seek lower rates on mandatory expenses and bills such as auto insurance, internet bills, or airtime purchase by consulting with each of your service providers for bundled or promotional rates. You can get auto insurance quotes online to compare to your current policy.
8. Change your Habits (Like Eating, Leisure etc)
In most cases, a specific meal will cost significantly more if you purchase it from a restaurant than if you buy the meal or ingredients from the market. Change your habits. “Your daily habits and routines are the reason you got into this mess,” Hamm writes. “Spend some time thinking about how you spend money each day, each week and each month.” Do you really need your daily coffee? Can you bring your lunch to work instead of buying it four times a week? Ask yourself: What can I change without sacrificing my lifestyle too much?
9. Reward yourself when you reach milestones
You won’t pay down your debt any faster if you view it as a form of punishment. So reward yourself when you reach debt payoff goals. The only way to completely pay off your loan is to keep at it, and to do that, you must keep yourself motivated, Just make sure to reward yourself within reason. For example, instead of a weeklong vacation, plan a weekend road trip. “Instead of going on a shopping spree, give yourself more than a pat on the back when you do it.”
Remember, if you need Quick Online Loans that do not carry Early Loan Repayment Penalties, Then Creditville Limited is the place to go.