How to pay off your personal loan quickly!
Nearly everyone has had a personal loan at some point in time, whether it was for a new business adventure, some much-needed cash or a new car. But personal loans can take up to five years to pay back! Paying these loans back slowly only costs you more money in the long run. Take the initiative, some money and get your freedom back by paying it off as quick as possible.
1. Know the fine print
The interest rate and repayment rate make a huge difference in the world of loans (especially with compounding interest). Have a look at how much interest is being added to your loan as it compounds, then work out how much extra money you will be paying back if you continue to repay the bare minimum. You might be shocked!
2. Make extra payments
Did you end up with an extra $50 after this week’s budget? Earn a $500 bonus at work? Put it towards paying off your loan. This may not be as much fun as spending it on a night out or going shopping, but you will love yourself for it later. Making extra payments semi-regularly could cut months to years off the length of your loan.
3. Check your budget for wiggle room
If you have $200 to spend on eating out a month and spend $200 on your personal loan per month, then you could limit your eating out to only a $100 and raise your repayment amount to $300.
4. How does your interest rate compare?
A lot of people get locked into a loan and never look at it again, just waiting for years to pass until it’s paid off. If your interest rate is 12.5% and someone else is offering 9.85%, then you should jump on the opportunity to swap loan providers and save yourself some money.
At ITP Car Loans, we can shop rates for personal loans for you. To find out more about this time and money saving service, get in touch with us today.
Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.