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Personal loans can bridge the gap between the funds you have and the funds you need for life’s unanticipated expenditures. Although they carry higher interest rates than secured loans, that doesn’t mean you have to pay considerably more than the principal to borrow the money. By taking the following steps, you can pay off your personal loans early, thereby saving money in interest. 

How to Pay Off a Personal Loan

1. Apply Windfalls to the Principal

Tax refunds and stimulus checks can be used to pay down your personal loans faster. You should also consider funneling credit card cash back rewards and small inheritances to these debts. Just confirm that any extra payments you make will go toward the principal, rather than the following month’s interest, so that you can chip away at the balance faster. 

2. Revamp Your Budget

personal loansYou can save at least hundreds of dollars a year by eliminating needless expenditures. If your family watches multiple streaming services, for example, consider cutting back to just one.

You can also free up funds to put toward loans by adjusting the thermostat a few degrees, eating at home more often, and making coffee instead of buying gourmet lattes. Over the course of a year, small modifications to your budget can add up to big savings. 

3. Make Biweekly Payments 

If your loan’s minimum payment is $500, try paying $250 every two weeks instead of $500 every month. You’ll end up making an extra payment of $500 by the end of the year without taking it from the household budget. Also, splitting payments into smaller amounts can make them more manageable. 

 

If you’re facing an unanticipated expense and need a personal loan, turn to Coastal Finance Company in Savannah, GA. Since 1956, this lending institution has been serving borrowers throughout Chatham County. They’re proud to offer terms tailored to those who need financial flexibility. To apply for up to $5,000 with no prepayment penalties, visit their website or call (912) 303-9979. 

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