There are a million and one loan companies around these days. Short term ones available to help you get to the next pay day if you’ve had an unexpected expenditure, or a more long-term loan for a big purchase. It’s the paying the money back when issues can occur. When it comes down to it, paying off your loan or credit card debt as quickly as possible will save you money which, could be put to much better use.
By this I mean seek out and switch over to credit cards with 0% on balance transfers. Also consider switching your bank account to one with lesser charges or offers you a percentage of your spending back. Arrange a meeting with your bank and discuss an authorised over-draft to save any unnecessary charges if you’re going over-drawn every month. You could always take out another loan at a lower interest rate to pay the first off giving you some months of interest free payments to get back on top. Even increasing your monthly payments will save you money in the long run as you’re paying off less interest. Just be sure not to leave yourself struggling with your outgoings each month.
I know we all believe we should be saving for a rainy day, but the truth of the matter is that most debt’s usually cost more than savings earn and so if you can cancel them out you’ll be much better off. The interest rates are always a lot higher on the money you owe rather than what you’re saving. So, it is worth considering using that emergency fund to pay off some debt
Generate more money.
I’m sure we would all be doing this if we could, right? But what I mean is make some cut backs, budget, have a look around your house, your bedroom and put any unwanted and unused items on second hand selling sites to give you a little extra cash in your hand. £10 here and there might not seem like a lot but it will quickly add up over the course of a month or year. If possible, take a part time job to help boost your income. A couple of evenings work in a bar is great for socialising and will bring you in a few extra bucks. There’s opportunities out there for flexible people, plus it doesn’t have to be a long-term thing if you don’t want it to be.
Consolidate your debts with a loan.
If you have a car on finance or several credit cards, contemplate getting a bank loan and paying off a few debts with it. The interest rates are notoriously lower, so you’ll be in a better position each month and could even afford to pay more.
Round up the payments.
This is one way of paying off the money quicker without really realising it. If your monthly payment is £264 a month, rounding it up to £300, an extra £36 a month creates an extra £432 a year. That’s got to help shave a few more months off payments off the length of your loan.
There are lots of benefits to paying off your debts early, not least of which is the easing of stress and strain thinking about monthly payments and interest rates.