Honestly, let’s assume you’re like most Americans, you still owe a lot of money. Of course, this includes having a large credit card debt balance, taking out a sizable mortgage, or making regular car loan payments. Credit debt is a fact.
And of course surely now this means you will have to pay hundreds of dollars in interest over the life of the loan. In fact, you also have to deal with the emotional drain of knowing you have years to pay off the loan and you may owe tens of thousands of dollars. The whole thing may be a little sad, but it doesn’t have to be.
Did you know that there are some easy-to-use yet ingenious techniques you can use to lighten your workload? You can pay off your mortgage, car loan, credit card debt, and other liabilities faster than you can imagine if you follow a carefully implemented method.
You can free up more money each month, spend your hard-earned money on the things you want instead of spending it on interest, and be completely debt-free faster than you ever dreamed. Everything is possible
Before you delve into these tips, remember: Check with your lender before using any approach, as some types of loans come with penalties for overpayments or prepayments.
Top Ways To Pay Off Your Loan Fast
1. Be sure to make Payments Every Two Weeks
Instead of making monthly loan payments, make payments halved every two weeks.
This approach has two advantages:
- Your payments will be made more frequently, which means you may have to pay less interest.
- You pay 26 half installments per year, which results in an additional full installment payment during the year and thus shortens the loan term by several months or even years. If you choose this method with a 30-year mortgage, you can reduce it to 26 years!
2. Then round up your monthly payment.
Round up your monthly payment to the nearest $50 to easily shorten your loan. For example, if your car loan is $220 a month, increase that number to $250.The difference is too small to deal a major blow to your budget, but big enough to shave a few months off your loan life and save you a significant amount in interest.
3. Also make one additional payment per year
If the idea of bi-weekly payments seems daunting but you like the idea of making an extra payment every year, you can achieve the same goal by committing to just one extra payment per year.
You only feel the pressure once a year and shorten the loan term by several months or even years. Use a job bonus, tax refund, or other reward to make this payment once a year.
4. Don’t forget to Refinance
One of the best ways to prepay your loan is to refinance. If interest rates have fallen since you took out the loan or your credit rating has improved significantly, this may be a good choice for you. Contact Horizon for refinancing information. We can help you even if your loan is with us right now.
Note that refinancing makes more sense if it can help you repay the loan early. You can do this by shortening the loan term, an option you can easily afford with a lower interest rate. Another way to achieve the same goal is to keep the loan repayment period unchanged and with lower monthly rates by using any of the above methods to reduce the total loan repayment period.
5. Also increase your income and allocate extra money to the loan
However for now, shortening the repayment period is undoubtedly a very good strategy to increase your income to make additional loan repayments.
Lastly, consider cutting back on impulse buying and borrowing the money you save, selling things on Amazon or eBay, selling things on eBay, or working overtime on weekends or holidays to supplement your income. Even a job that pays an extra $200 a month can significantly reduce your loan.
