Deciding to pay your personal loan before is a wise decision that will help you save money, because the less time it takes you to cancel it, you will be paying less interest. The principle of “less time, more savings” applies throughout the world of credit but this time we will refer to the personal loan.
Let’s say your loan will be paid in 24 installments and you have decided to cut time to 18 installments, that is, you want to pay everything in a year and a half. Here are three strategies that will help you achieve this goal.
1. Reduce areas of your budget:
Do not be afraid to be drastic and choose to cut some expenses in half, the most ‘easy’ to cut will be those dedicated to entertainment such as meals outside, buying clothes, going to the movies, among others. It will be worth doing the trimming.
2. Garage sales:
Of course it does not mean that you will get what is necessary to cancel an extra installment of your loan, but to increase the amount you pay monthly, you can also get rid of those things you do not use and still have some value.
3. Other loan:
This strategy could be applied only in case you find a loan with a considerably lower rate than what you initially obtained. In fact, it would be worth paying off the current loan in a single payment and continuing to pay this at a better rate. Ideally, before taking out a loan you compare all the options in the market to know which one charges you the least and so you don’t have to regret it.
4. Special events:
Are you good at cooking? Why not organize a lunch or a dessert sale? Even up to a coffee sale. These types of events could help you raise extra money to cancel your loan in less time.
Use one or use them all, you decide which ones suit you.