Golden Tips to Follow to Pay Off Loan Faster – Our Guide

Mar 05, 2020

Now that you have received the amount you applied for, you’re done with the easy part. After all, getting personal loans these days involves fast processing to make it convenient for you and other borrowers. The hard part, however, is managing your payment schemes and paying on time.

Before you apply for a loan, you should have a solid plan on how you’re going to pay it back. You can’t just borrow an amount and throw caution in the air. This is why many financial advisors warn against getting loans that will not generate any income. Nevertheless, there are methods to ensure that you will pay your monthly dues on time. If you take the suggestions below, you can even pay off your loan earlier. Here they are. 

Pay it off earlier than your deadline 

You must make allowance for a bi-weekly payment. Talk to your lender about your intentions. If they don’t accept your terms, you can look for another lender who’s more than willing to let you pay faster than the period you applied for. 

For example, your monthly obligation is R155.50, you can divide it into two, which makes it R77.75. If you can pay off your loan faster, you will pay lower interest rates. This will actually help you save more money in the end. Aside from that, the lenders will see that you’re an excellent payer. If you re-apply for loans in the future, your good records will show.

Round up the amount when paying

If your monthly obligation is R155.50, pay R200 instead. If you decided to do the bi-weekly as stated in the previous item, pay R100 every two weeks instead. The higher you round up, the better. Sure, that’s an extra amount that you have to pay every month, but in the end, you will save more money on interest. It will also shorten the term of your loan and finally close the account faster than initially planned.

A side hustle is a game-changer

You need to have another source of income other than your monthly salary to be able to pay off the loan. Sell items legitimately. Provide services legitimately. You can sell your old stuff on eBay. A little R20 here or another R15 will add up and will help you pay off your loan faster. If you don’t want to touch your primary source of income, a side hustle should pay off the loan. Get an extra job that will pay you R100 a week. You can babysit or tutor kids. You can also bake cupcakes and deliver it to a company that has graveyard shift workers. 

Pay off extra whenever you can

Sometimes, the money flow is terrible, and sometimes it’s good. If you follow the tips above, the bad times won’t touch you and your obligation to pay the loan. Whenever the cash flow is good, make an extra payment of R50 or R100. Before you know it, you’ve finally paid off your loan in a shorter time. Therefore, you have saved a lot of money on interest. 

Conclusion

Paying your loan on time is easy, but you have to intend to do so. To make the most out of your payment, however, you need to follow the golden tips mentioned above. If you do, you’re not just going to pay off the loan on time, you’ll also pay it off earlier than the term specified.

If you’re in South Africa and looking for fast loans, get in touch with us today. We’re happy to help.