Paying off loans can be a painful experience. Debt can often spiral in on itself, resulting in a recursive situation in which your inability to pay off your existing debts simply results in more debt accruing. If you’re smart with your spending (and you have a little financial luck), then you can pay off your debts with speed, and it’s always best to do so in order to avoid lengthy and protracted financial obligations. Here’s how you can try to pay off loans quickly. Of course, if these tips don’t work or don’t apply to you, we’d strongly recommend that you seek professional financial advice. Let’s get started!
Choose The Right Provider
Before you even take your loan out, one of the best ways you can pay it back quickly is simply to choose the right provider. Depending on who you pick for your quick loans, you may find they have better or worse terms for your situation, as well as different conditions and stipulations. Make sure to thoroughly research any potential loan provider before you sign any documents, because you don’t want to regret your choice later on. Talk to the provider as well; if they’re a good option, they’ll be happy to discuss your misgivings or questions beforehand.
Round up Payments
Rounding up payments can be a great way to pay off loans quickly. Let’s say you take out a loan on which you’re paying back £212 a month. If you round that payment up to £250 a month, then you probably won’t see any negative impact in terms of your monthly budget, but the loan will be paid off that much quicker. If you can’t quite manage £250, then even rounding it up to £240 or £230 could help you significantly. Try to save a little elsewhere, then add the money you’ve saved to your loan repayment. You’d be amazed at how helpful this can be!
Take on some extra income
It stands to reason that if you want to pay back loans early, you should be looking at extra sources of income to supplement whatever you’re making right now. This could be anything from selling old stuff you’re no longer using to picking up a side hustle to bring in some more cash. Good side hustle options include tutoring (which you can definitely do if you’re a native English speaker), guest blogging, and renting out any spare accommodation you happen to have; these are all strong ways to make extra money and help you pay that loan back a little quicker.
Make more regular payments
If your budget can stand it, then you should think about making extra payments to your loan. This can help you cut the amount in some unexpected ways; for example, making more regular payments can actually reduce the amount of interest that accrues on your loan, meaning you have less to pay back in the long term. If you’re making monthly payments, try switching to making payments every two weeks and see if that makes a difference. Of course, you should make sure that your provider allows you to do this before you make any commitments.
Pay over the minimum
This might sound obvious, but paying more than the minimum amount is a good idea if your budget can stretch to it. Paradoxically, if you simply let your loan payments carry on without adding anything to them, then you’ll be paying more in the long run. Whenever you find yourself with an unexpected windfall – a tax rebate, for example, or a profit from a sold item – try to add that amount to your next loan payment. Chopping as much as you can off the overall amount is always a good way to reduce your overall loan obligation, and your lenders will love you for it too!
Create a budget
Many people go through life without creating a budget for their spending, leading to irresponsible financial decisions. This is understandable; after all, if you’re living hand to mouth, you may not be able to create a budget for yourself. However, if you’re in a relatively comfortable financial position and simply looking to reduce your loan payments somewhat, then creating a budget is a good idea. Take a look at everything you’re earning and spending and see if you can’t move things around a little. This could help you allocate more money to your loan repayments.
Ask friends and family for help
Hopefully, you have a solid support network around you that you can look to for aid. If you do, then it might be time to ask them for help. If they’re really there for you – and if their financial circumstances permit, of course – then they should be willing to give you a hand, especially if the loan you have is out of necessity rather than for something you simply wanted. If you like, you can even ask a family member or friend to pay your loan off for you, transferring your payments to them; personal friends tend to have much less stringent interest requirements!
Don’t take on too many loans at once
We know it sounds obvious – with the benefit of hindsight, it’s a situation most people would avoid anyway – but try not to take on too many loans at once. If you’re able, keep your debts and expenditures on loans to a minimum. In the long run, building up debt and credit obligations will harm you, so if you do need to take out a loan, do so on a case-by-case basis. Don’t anticipate future financial hardship by taking out loans if you can help it. You’re always better off asking for help from loved ones, selling possessions, or refinancing loans than you are taking on new debt.