Getting out of personal debts is not an easy task.
You need to cut present expenses, boost earning power, and pay attention to a lot more. Still, if the monthly bills keep on draining your pocket, you are stuck in an endless debt loop.
So, here we have discussed thirteen amazing strategies to clear your loans faster. Following them can save you from penalty charges and keep your credit score high.
1. Pay More Than The Minimum Payment
Paying more than the minimum amount is always an ideal option to clear personal debts faster.
For example, if you are using credit cards, try to clean more than the minimum outstanding balance. This will give you relief then you are paying something out of interest.
More importantly, it will improve your credit score and make the next less outstanding balance figure. Moreover, you will also get an opportunity to have more hold on funds.
2. Start Planning a Monthly Budget
Planning a monthly budget and going with the same saves lots of money. Even you will get knowledge about important expenditures and how you can pay them.
For example, if you have to pay a mobile phone installment on the 10th of every month, the planned budget will never let you forget and save you from paying installment bounce charges.
3. Increase your EMI to reduce the burden
Increasing an EMI is a great way to lessen your financial burden. You can align this system with a salary increase.
For instance, if you will get a salary increment in January, you can also increase your EMI as per the improving salary figure. This could lessen your burden and repay the loan amount faster.
The best part there is no need to sacrifice your current expenditures. You can go ahead with the same.
4. Consolidate Personal Debts With A Personal Loan
Debt consolidation means taking one loan to clear all possible shorter debts. This is a one figure loan.
Choosing debt consolidation serves you relief from not remembering many installments due date. You just need to keep funds ready for one loan payment only.
Moreover, interest on a single loan is always less than the interest paid on many loans. Therefore, you can take advantage of consolidation to clear all possible loans and make payments faster.
5. Create Additional Source To Earn More Money
Creating additional sources to clear certain expenses is always a shaking hand to save the burden. If you are working already hard, there is no need to add an extra shift to your schedule.
There is one more option, if you are living in rented accommodation, you can share your room with another partner. This will reduce your renting burden and save money. Same with property owners to rent a used portion of the property and generate income.
6. Settle For Less Than You Owe
If you have enough funds to clear one smaller loan, you can ask the creditor to reduce interest rates. This will reduce your burden of payment and save money with a reduction in interest rate amount.
Your creditor also has a brighter side that he will get immediate payment than getting monthly equal installments and waiting for a year. Even if you need assistance, some meditators help to settle your loan at the lowest possible cost.
7. Go With Bi-weekly Payments
One of the easiest ways to get command over your loans is to go with biweekly payments. Some of the lenders provide this opportunity to borrowers to settle loan amounts every second week.
For example, if you are paying installments monthly you will get 12 chances to clear your loan account, but with bi-weekly payments, you will have 24 chances to settle the loan amount. This is a quicker way, but check whether your lender offers this offer or not.
8. Take Advantage of Paperless
Many lenders charge less interest if you are paying the loan amount online. Even some of them offer special discounts or cashback for paying loans through paperless technology.
The major reason behind this is that lenders get instant cash in their account whereas in the case of papers or checks they need to wait for two or three working days when the amount will be credited to their account.
Paying a loan online means you can save 0.25 percent (approx.) on loan interest. Then why not take advantage of paperless technology to get a cash discount.
9. Dramatically Cut Your Expenses
This is the golden rule to clear personal debts as soon as possible. Try to save overspending on immaterial things. If possible, pay for those expenses which are necessary.
For example, if you have enough clothes in your wardrobe, then do not plan to buy clothes this winter. Try to reuse your old stuff with little amendments. You can also check DIY skills for transforming old clothes into new ones on the internet.
10. Sell Everything You Don’t Need
If you are looking for a way to get cash and clear some or all portions of your loan amount. Then you can start preparation from your home.
There could be certain things that you had not used for a long time or maybe no more use for you in future selling them at a good price could be a great way to clear some part payment of loan amount.
Therefore, checking unwanted materials like clothes, furniture, vehicles, or others to sell them to nearby stores on online portals will serve you plenty of money.
11. Consider A Balance Transfer
Considering balance transfer does not mean you are paying something out of money. This refers to when you are getting a salary in one account and transferring it to another account.
For example, if you are using a credit card, transferring your salary into a credit card will save you from the hassle of paying interest on the outstanding amount. Whenever you will need money, you can use a credit card.
A circle created with credit cards saves the trouble of late payment or paying the minimum amount.
12. Step Away From Favorite restaurants
Stepping away from the favorite restaurant could seem a little hard, especially when you saw your favorite food.
Keep in mind, paying high bills at a luxurious restaurant let you in trouble for wasting many bucks. You may need to sacrifice some necessities, most importantly hard to avoid lenders knocking on your door.
Therefore, the easiest way is to clear the loan faster is to pay the loan amount and save yourself from interest, then spend the best time at your favorite restaurant.
13. Pay From Bonus or Salary Hike
Whenever you will get an immediate salary hike, increasing your current expenses is not a good idea. A bonus or boost in salary means you will get an additional chance to clear your personal debts immediately.
You can make a prepayment of certain loans to lower your monthly installments or interest rate. Keep in mind, the faster you repay your personal debts, the lower the interest rate lender will charge.
Bottom Line: Clear personal debts faster
Hope the above information helps you understand and choose the best solution to clear your personal debts.
Choosing any method like debt consolidation, paying out of improving earnings, controlling expenses, paying short loans, and clearing more than the minimum amount helps to clear debts faster.
Remember, always make the loan payment on due time and eliminate the hassle of check bounce charges.
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