It’s safe to say that having access to a small personal loan when you need one is nothing short of a huge relief. They can be just what you need to help you out of a tight spot. They’re also amazing if you were looking at a bigger purchase and don’t have the cash on hand. Now that you’ve got the loan it’s time to start your repayments. And as someone who is financially savvy, you’ve begun thinking of ways to pay it off as soon as you can to save yourself a bit of cash. But where do you even start? What are the tried and tested ways to reduce your loan balance fast? If you need some inspiration to begin paying off your small personal loan fast, we can help.
What are the benefits of paying off your loan early?
There are so many benefits to paying off your loan early. From saving yourself some money to potentially improving your credit score, take a look at just some of the benefits of paying that loan balance down fast.
Save yourself some cash/
Paying off a small personal loan early can go a long way towards helping you save a fair bit of money. Early repayment of your loan means you could potentially save yourself a lot of money in interest charges or monthly fees. Even just popping $20 or $50 on it here and there can potentially cut weeks or months off your loan. This in turn can end up saving you a bunch of money on saved fees. Now we don’t know about you, but this seems like a great idea to us.
Good repayment history
Paying off your small personal loan early is also a great indicator to potential future lenders that you’re financially responsible. It can be a great sign that you’re more than capable of paying off any future loans that are extended to you. Lenders love clients who are on top of their finances and are usually more willing to lend to them. Good repayment history and an early payout means that lenders are likely going to want to lend to you if you need a loan in the future.
Successfully paying off a small personal loan early can also look great on your credit report. For those of you who may have had a bit of bad credit history in your past, being able to show that you can pay off a small personal loan early can go a long way to helping your credit score improve. With positive credit reporting now being utilised, your on-time repayments will be reflected on your credit report. This in combination with other good repayment practices can be the kick start your credit score needs to start improving.
Our top tips to pay your loan off early
Now that you can see just how helpful paying off your small personal loan early can be, let’s get into the details of just how to go about chipping away at that balance.
Make weekly repayments
If you’re someone who gets paid monthly you probably have your loan repayments set to once a month repayments as well. But, did you know that making your repayments more often can save you money? Yes, by simply making your repayments weekly or fortnightly, you will end up saving money and paying more off your loan than if you continued your once a month repayments. By dividing your regular repayment amount into weekly or fortnightly instalments, you end up making extra repayments on your loan without even knowing it! This goes a long way to paying off your loan, faster.
Make extra repayments
A great way to pay off your small personal loan faster is to make extra repayments when you can. It doesn’t matter if it’s $10 or $100, any extra repayments you’re able to make will go towards paying your loan balance down that much faster. So, rather than spending $10 a day on a coffee and cake, why not put the money on your loan and see just how fast the balance goes down!
Round up your repayments
This is an easy option that you won’t even notice coming out of your bank account. Depending on what your lenders have set your repayments at, it’s a great idea to round up that amount to the nearest 5 or 10. It’s a small enough amount that you will barely notice the difference in your bank balance but enough that it could potentially save you weeks on your loan term.
Make a lump sum repayment
This is perhaps one of the quickest ways you can pay off your small personal loan fast. If you’ve come into some cash unexpectedly or perhaps received a bonus from work, putting a lump sum down on your loan can do wonders at paying your loan off early. Depending on how much you have left owing, you can pay your loan off straight away or go a long way towards having it settled.
Just remember that some lenders may charge you early payout or extra repayment fees if you do decide to make extra or early repayments. It’s always a good idea to check with your lenders first to see what fees might be applicable before you start making your extra repayments.
The low down
Paying your small personal loan off early can have a bunch of positive benefits for both you and your bank account. These range from saving yourself a bunch of money on interest and fees to having a great repayment history with your lenders. Paying your loan off early is always a good choice if you want to save some money. Whether you’re just looking for inspiration or you have serious goals to get that loan balance down as fast as possible, Breezy is always here to help.