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Loans allow you to cover significant expenses, but their convenience comes with the additional cost of interest. However, if you pay off the debt early, you can cut down on your out-of-pocket costs by reducing the overall amount of interest you pay. While the prospect may seem challenging, you can achieve it with help from the below tips. 

How to Pay Down Lines of Credit Quickly

1. Evaluate Your Budget

Budgeting is key to reducing debt. Start by reviewing and totaling up your monthly income and expenses to determine how much additional money you have each month. This also allows you to identify areas of potential savings. For example, if you eat out often, consider restricting restaurants and take-out meals to one or two per week. Budget the additional savings toward reducing your loan balances. 

2. Pay Extra Monthly

loanEvery loan has a monthly payment, yet, that's only the minimum amount you must pay. Paying extra each month reduces the overall balance that you owe, along with reducing the total interest over the life of the credit. While the balance reduction may seem like a minimal amount at first, it quickly adds up to significant savings and can cut months—or years—off the repayment timeframe. 

3. Focus on the Highest Interest Rate

Consumer loan interest rates vary by style, lendee, lender, and the economy. As a result, many individuals carry loans at different rates when they have multiple accounts. In such situations, review the interest of each one, and then focus the bulk of your early repayment on the policy with the highest rate. By eliminating that account first, you save yourself the most money.

 

Since 1932, residents in Russell, KY, have turned to First & Peoples Bank and Trust Company for their financial needs. From personal loans and mortgages to credit cards, the local institution provides many banking services for their clients' needs. They also have locations in Ashland, Greenup, Flatwoods, and South Shore. Browse their range of offerings online, and request personalized assistance at (606) 836-0211.

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