Owing money can cause a lot of stress and worry, whether you have borrowed from a friend or a loan company. If you are looking for a way to pay back your loans faster and clear yourself of debt, it helps to have a plan.
Paying your loans back quickly could potentially save you money in the long term, as you may build up less interest on the amount you owe. It can also be beneficial for your credit score; lenders in the future might be more inclined to lend money to someone who has proved they can repay quickly and efficiently.
Whether it is credit card debt, car finance, or a one-off loan that got you out of a tight spot, this article will give you some ideas for how to repay your loans faster.
Make repayments more regularly
Many loans require you to make just one monthly payment. However, depending on your loan agreement, you may be able to pay fortnightly or weekly instead to make the total monthly repayment slightly higher. This will increase the number of repayments you make throughout the year and could also decrease the amount of interest you pay by allowing you to bring the balance down faster.
Add one extra payment
It’s not always realistic to pay weekly, but you could still benefit from adding one extra repayment a year to your loan plan. This could be done in a lump sum made from extra cash you saved throughout the year or by adding a bit extra to each monthly payment.
Cut back on expenses
Taking a detailed look at your finances and where your money is being spent can highlight areas where you could cut back. This could include shopping at cheaper supermarkets, meal-planning to save on food waste and limiting any paid subscriptions. The money you save doing this can be kept to one side and used to make a lump sum towards paying off your debt.
Find extra income
If you can’t find ways to spend less, then perhaps you can find a way to earn more instead. This may be done by picking up odd jobs here and there, doing some gardening for a neighbour or making money online. You could also make money selling unwanted items - eBay, Facebook selling sites and car boots are a great way of getting rid of old items you don’t need any more to earn a bit of extra money.
Prioritise your debts
If you have multiple debts to different lenders, you will need to prioritise. Decide which will provide the biggest benefits if you pay them off faster – for example, those with the highest interest rate or shortest interest-free period.
Things to consider
Before you start paying off your debt with extra installments, check your terms and conditions with your loan provider. Companies may charge a fee for early repayments, so you will want to discuss this before making any decisions.
About Morses Club
At Morses Club, we understand that feeling out of control when it comes to money can be tough. We offer small cash loans to help with those unexpected costs. Our loans aren’t right for everyone, and you should only borrow what you can afford to pay back. If you would like to find out if a Morses Club cash loan is right for you, then read our FAQs for more information.