No matter how cautious you are when it comes to spending money, it’s not always possible to prepare for every expense that may arise. When facing a shortage of cash, you may consider applying for a personal loan. This will allow you to get the money you need quickly. However, if you don’t handle your debt properly, it can negatively affect your credit score long term. Here are a few tips to help you stay on track with your payments.

How to Pay Off Your Personal Loan Faster

1. Increase Your Monthly Payments

When figuring out your budget, allocate more money to your personal loan than the minimum amount you’re responsible for each month. Adding even a few extra dollars will help reduce the time it takes to pay off your obligation. It also reduces the overall interest amount so you will spend less money overall. 

2. Pay Bi-Weekly

Although most personal loans have a monthly due date, you can break your payments into two and submit them bi-weekly. This allows you to make an extra payment during months with three paydays without disrupting your regular schedule. Also, less interest will accumulate since you’re paying more often. Discuss this with your lender to make sure there isn’t a penalty for making additional payments.

3. Apply Extra Funds

Any time you receive money above your normal income, apply it to your personal loan. This may include a bonus from work, a tax refund, lottery winnings, or funds you get from eBay® sales. While you may be tempted to save it for a shopping spree or vacation, dedicating it to your loan instead can take several months off your repayment plan.

If you’re interested in taking out a personal loan, talk to the professionals at Spirit of America Federal Credit Union. They’ll help you explore your options and determine the best strategy for reaching your financial goals. Insured by the National Credit Union Administration (NCUA), this member-owned institution has provided the residents of Lincoln, NE, with reliable loan products featuring flexible repayment schedules since 1932. Call (402) 467-1102 to inquire about becoming a member, or visit them online for more information on their offerings.