How to Pay Back Your Loan Faster

Wondering how to pay off loans quickly and ease some financial burden? Read our handy hints on how to pay off loans fast!

Knowing that you have money that needs to be paid back – whether it be to a member of your family or a financial institution – can be very stressful, leading you to feel that you're not in total control of your finances. Add in any interest repayments, and it's no wonder that many people ask how to pay off loans quickly.

If you're aiming to live debt-free, here are some helpful hints to help you pay off loans faster and relieve some of your financial burden.

Increase Your Repayment Amounts

This sounds like a given, but there are ways to do this that won't leave you out of pocket.

One of the easiest ways to do this is to write up a new budget, allowing room for a higher rate of repayment than what was originally promised to your lender. A budget is a great thing to have planned regardless of whether or not you want to pay off loans faster, and this will help you control your money into the future.

Another way to increase your repayment amounts is to round up your payments – you can potentially knock a few months off your loan this way, without even realising you're giving up some extra money. For example, if your auto repayment for your loan is $172.42, round it up to $200 instead. This is an effortless way to speed up the repayment process.

Make Fortnightly (Rather Than Monthly) Payments

By making fortnightly repayments instead of monthly repayments, you will be able to pay off your loan faster. This accomplishes a number of things:

  • Because there are 26 fortnights in a year, you'll pay off an extra two weeks over a one-year period
  • Less interest will accumulate, since your repayments are being received more frequently
  • Doing this frequently enough can reduce your loan by a few months
Some lenders may penalise you for making more frequent repayments however – just check with yours before starting a fortnightly repayment schedule.

Find Some Extra Cash

No, we don't suggest you start looking for a pirate's treasure stash… instead, consider selling items such as clothing that you no longer need, and put the spare cash towards your loan. You don't need to sell things for hundreds of dollars – 20 dollars here and 12 dollars there will still add up over time.

Additionally, if you have a side job, put a little of your earnings from that towards your loan repayments.

Refinance Your Loan

When it comes to how to pay off loans quickly, this is a trick that could potentially halve the lifetime of your loan and save you a good amount of interest. By refinancing your loan, you can take advantage of some of the lowest interest rates in history.

Ignore Any Introductory Rates

To encourage people to take out loans, some lenders will advertise a period of low repayment rates. By ignoring these and paying the standard rate, you're setting yourself up to pay off loans faster by reducing the life of the loan, even if it's only for a couple of months. You'll avoid any shock once the introductory period ends and your repayments suddenly jump up, too.

While taking out a loan isn't always an enjoyable thing, knowing how to pay off loans quickly is excellent knowledge to have handy if the need for a loan arises. By understanding how the repayment process works, you can more confidently settle any financial debt that has been looming over you.

If you need a small loan fast, apply with Sunshine Loans today. We've been brightening rainy days since 1999 and have helped out thousands of people who just need a little help getting on top of life's expenses.