Here are 5 simple ways to ensure you repay your personal loan faster.
1. Get the lowest interest rate before you take out the loan.
Quite often the first and only place borrowers look for a loan is their current bank. Here’s a no-brainer – look a little further than your bank or other banks.
There are plenty of lenders out there and they range from the big 4 banks to non bank lenders. If you get pre approval from your lender for a new car and you walk on the car lot with that in your back pocket, you can use that to bargain down the on site lender. Ask for a lower rate or to waive application fees.
2. Make more frequent payments.
If the interest on your loan is calculated daily on the outstanding balance then don’t wait till the repayment is due, pay it as soon as practical.
If you get paid weekly and your repayments are monthly then you may be able to make more payments.
3. If you get a bonus or have a windfall, stick it in the loan.
Do you get an annual bonus or maybe a tax refund. Pay it into the loan if you don’t need access to it before the term of the loan is up.
4. Do a personal budget
Do up a personal budget to find savings and use them to make extra payments.
5. Watch the fine print for early payout fees
The last tip is to make sure you won’t get stung if you fully repay the loan before the end of the scheduled loan term.
Read your loan documents very carefully to make sure there’s no surprises.