Whether you’re paying back a hefty mortgage, paying off a credit card, or making car loan payments every month, your goal is to quickly pay off your private money loans. If you’re late on payments or paying the minimum amount towards your loan, you’re looking at a negative credit report and many extra dollars of interest payments throughout the life of your loan.
There are simple tricks you can try to help lighten the load of your loan payments. With budgeting and discipline, you can pay off your auto loan, credit cards, student loans, or other debt quicker than you think. By using our three strategies for paying off a private money loan, you will be debt-free in no time!
A popular strategy to pay off your private money loan is by refinancing. If your loan’s interest rates dropped or your credit score has changed for the better, then you should consider refinancing. Doing so can help you pay off your loan sooner by shortening the life of the private loan. It’s best to refinance with your original private money lending company to ensure that the original loan is paid in full.
Round Your Payments Up
Try to round your payments up to the nearest $50 to pay off your private money loan more quickly. For example, If your loan costs you $120 every month, try to pay $150. If rounding up $50 is too steep, try to round your payment an extra $10 or $20. Rounding up payments will help knock off a few months of paying off your loan and save you from added interest.
To make a significant impact on your private money loan’s balance, consider rounding your payments to the nearest $100.
Make One Extra Payment Every Year
If rounding up your monthly payments is not budget-friendly, consider making one additional payment every year. You can accomplish the same goal as rounding your payments by making an extra payment. This way, you’ll only need to squeeze your finances once a year, and you’ll shorten the life of your loan by a few months or even years, depending on your balance.