When it comes to paying off loans, there is typically not a one-size-fits-all method. Whether you need to pay off a car loan, credit cards, or any debt, the strategy may vary depending on your financial situation. In this Quick Loans blog, we’ll take a look at some strategies for paying off a loan early to help you evaluate your options.
Find Extra Money
One option to pay down your loan is to find extra money by selling personal items. Look around the house for clothes, books, and other things that you can sell online. While they are small amounts, the extra $15 and $20 will add up. Also, consider getting a part-time job that pays you an extra income-stream each month. Then, put this amount towards the loan.
Make One Extra Payment
Another way to pay off debts quicker is to make one extra monthly payment per year. This strategy is useful if you don’t have a steady cash flow to make bi-weekly payments. Sometime during the year, consider using money from a work bonus or tax refund to help pay down your loan quicker. Also, you can divide your monthly payment by 12, then add that amount to each monthly payment. For example, if your monthly payment is $600, it will become a $650 payment.
Make Bi-Weekly Payments
To pay off your loan a little faster, you can pay every two weeks instead of the regular monthly payment. When your payments are applied more often, less interest will pile up, and you shouldn’t notice a sudden change to your monthly expenses. You’ll accomplish the same result as making one extra payment per year — you just take a different route to get there.