If the term is new to you, the word “loan” simply refers to an arrangement where a borrower gets money or property from a lender, and the borrower agrees to return the property at some point in the future, usually with interest. Usually both the lender and the borrower agree on a specific time to repay the loan, and the lender bears the risk that the borrower may not repay the loan.
In matters of economics, loans can come from various sources, including individuals, corporations, financial institutions, or governments. Loans help grow the economy by boosting the money supply. They also create avenues for competition, expand business operations, and bring new products to the market. For many financial institutions, loans are a primary source of revenue.
At the same, many borrowers who get loans find it difficult to repay their loans within the stipulated period. However, by implementing the following tips, you can find it easy to repay your loan without much difficulty.
Bi-weekly payments can reduce the amount of your loan significantly. Instead of making regular monthly payments, divide the monthly payment by four and submit on a weekly basis. You will find it easier to manage this reduced amount, and less interest will accumulate because of the reduced repayment period.
Secondly, you can repay your loan faster by rounding off the amount you are supposed to pay monthly. For example, if your monthly loan repayment is $264.50, you can round off the amount to $300. This can bump up the overall amount by an extra 50 or 100 dollars every month. This eventually shortens the loan repayment period, and reduces your interest by a significant margin.
Another way to repay your loan faster is by finding some extra funding that you can put towards loan repayment. An extra job, tax refund, or bonus money can help you clear a greater part of the loan within a shorter time. You can also make one or two extra payments. For instance, if the amount is $360 per month, you can round off the amount to $400, which will give you one month’s extra payment every year.
Another way to clear your loan faster is to refinance it at a cheaper rate. Many banks are open to borrowers seeking that kind of assistance. If you are able to clear your loan in time, you can regain financial stability and even qualify for more loans. Other benefits of paying off your loan faster include less stress, and the freedom of not being a slave to any lender.