At the end of 2019, American household debt topped $14 trillion, and it continues to rise. The debt crisis is crushing and people are looking for ways to escape.
If you have an interest-bearing loan, there is financial relief for you.
Learn how to pay off your loans and become financially free with these tips.
Increase the Payment Amount
Simply rounding up the amount you owe can make a huge financial difference.
For example, if you owe $250 per month, then round up the payments to $300. At the end of the year, you will have paid an extra $600 or over two months extra payments.
You can shorten the length of your loan by rounding up payments and decreasing your interest.
Make bi-weekly payments instead of one monthly payment. The extra payments will help decrease interest and reduce the length of the loan.
Also, by paying every two weeks, you’ll submit extra money since every two weeks will make 26 payments as opposed to twice a month.
Be sure to contact your lender and ask them about any repercussions or penalties for paying off a loan too early.
Refinance the Interest-Bearing Loan
Interest rates are extremely low today. If you want to make paying off a loan easier, consider refinancing.
Refinancing a loan will do a couple of things for you. You will have lower payments and pay off your loan quicker.
Remember the car you bought at a 6% interest rate? Ask your lender about refinancing to a lower rate. You will need a good credit score and a solid history of payments.
Make Extra Cash
It’s easier than ever before to have a side job. Whether you sell things online or start working for Uber, there are many ways to make an extra dollar.
Saving an extra $200 a month from a side job will be an extra $2400 you can put towards that interest-bearing loan.
Once the loan is paid, you can quit the extra job or make some extra cash for your next venture.
One Extra Payment Per Year
Can one extra monthly payment a year really help? Absolutely.
If you pay an extra payment every year on your home, you could eliminate months of paying on your loan. It’s important to check with your lender about penalties or programs that could assist you.
Sometimes it can be tough to come up with the spare cash. Use quick and easy lenders like Captain Cash loans to help you with your extra payment.
Some lenders have initiatives to eliminate paper bills by signing up for electronic portals.
In return, they’ll lower your interest rate by a marginal amount. The amount will be small, but the savings, in the end, will add up. Ask your lender if they have a paperless program.
Be Your Own Lifeline
If you feel like you’re drowning in an interest-bearing loan, feel comfortable knowing you can be your own lifeline.
You don’t have to be stressed or worried about long commitment. Follow these tips and experience financial freedom in no time.
Be sure to check out more articles to learn how to be financially savvy.