A bank loan is a convenient way to borrow the funds needed to buy a new car, remodel your home, or pay for sudden expenses. Most lenders offer affordable payment terms and reasonable rates. However, the longer it takes you to pay off a loan, the more it costs you due to interest. Below are some tips to help you pay off your loan as soon as possible.

How to Pay Back a Bank Loan Quickly

1. Pay More Each Month

Aim to pay more than the scheduled minimum monthly amount, and consider adding an extra $50-100 to the payment. For some families, this would mean cooking in two additional times a month instead of getting takeout or dining in a restaurant.

Tightening your belt may seem difficult at first, but budgeting out monthly expenses will make it easier. Depending on the length of the loan, it could shave months or years off the payoff date and reduce interest payments by hundreds or thousands of dollars.

2. Funnel "Found Money" Toward Loan Payoff

Anytime you experience a financial windfall, direct some or all of those funds toward your outstanding debt. For instance, when you receive a tax refund, use it to pay off what you already owe instead of buying something new. Do the same for a winning lottery ticket, holiday gift money, or an unexpected inheritance.

Keep in mind that no new purchase will be as satisfying as being debt-free. Sacrificing new purchases for a while will be worth it in the end.

3. Make Biweekly Payments

Instead of making payments once per month, send in half the monthly amount every two weeks. This offers numerous benefits. When your bank receives half the payment due two weeks early every month, it reduces the amount of interest that accrues.

By doing this, you will also end up making 26 disbursements since there are 52 weeks in a year. This will add an extra payment to the year. The additional full remittance, along with the early half-payments, will cut down the payoff time considerably.

For an affordable, low-hassle bank loan, contact Magnolia Bank. They have locations throughout Hodgenville and Elizabethtown, KY, and have served Larue County and the surrounding areas for more than 100 years. They specialize in both business and personal banking, offering small business, auto, and mortgage loans, as well as savings and checking accounts. They also provide online banking for your convenience. Learn more about the company online, or call (270) 358-3183 to ask about a specific bank service.