These installments consist of the principal amount of the loan itself and the interest rate charged on the outstanding balance. For many, these payments become an unbearable burden or too quickly become tired of the borrower, and then he begins to think of ways to get out of debt faster.
We have already found that a standard loan repayment is required in one installment each month: the amount of credit granted plus interest accrued on the use of the bank’s funds. But there is also a much more economical way of paying off loans – it is the early repayment of the entire debt, which frees the borrower from the interest rate on unused months. But how to collect the entire loan amount, maybe there are other methods of economy? Only someone who learns how to save their daily expenses will be able to return all the money borrowed from the bank. In this article, you’ll find some tips on how to repay your loan faster and improve your quality of life.
Set up a bank attachment for automatic credit repayment and cash storage
No matter how you repay your credit: you make a transfer yourself to a creditor account or through an automated system that regularly withdraws a certain amount from your account on a monthly basis. This amount will then be sent directly to your bank account or credited to your savings account , which will be used to pay off your monthly loan payment a little later. This will remove the same amount anyway. It will be much easier to repay your credit if the regular payment is made on the day you receive your paycheck. Once your earnings are credited to your bank account, the monthly payment will be immediately deducted. Therefore, you will actually get your salary reduced by the amount of your loan payment.
This way simplifies repayment and is considered more psychologically lenient to the borrower than a regular money transfer: you do not see how a certain amount of money leaves your balance and whether or not you switch to a savings account.
Save money to pay off your credit by playing
This type requires that loan repayment, or more specifically, raising money to repay a loan, is to be considered as a game or a race . You can organize such competitions with your friends or relatives, with pre-determined goals and prizes (definitely free). For example, you and your friends are currently repaying instant loans or consumer loans and want to delete them as soon as possible. Therefore, each participant’s credit is divided into 5 parts. In the game, each player tries to clear their next credit payment as soon as possible. Whoever pays the extra money sooner wins, but the loser must now receive a penalty that the riders have agreed in the beginning (eg wash the winner’s car, etc.).
This way, if you lose, you lose nothing, but the repayment of the loan becomes more interesting and exciting . Every next loan repayment ahead of time will be a real holiday for you, after which you must take a few days off and take a break from the financial “race”. Such simple rules of the game will help every borrower to get rid of credit debt almost invisibly.
We collect coins
There is another game – “coin collecting” . Of course, it is more like children’s entertainment, but it helps to pay off debt faster. So what we do: We put all coins with any denomination in USD every night, or even several times a day, out of our purse. We will make an additional payment as soon as the savings bank accrues an amount of 50-100 USD. On the day you make your mandatory credit payment, we don’t forget to “clean up” your savings bank and make an increased payment. This way you will be able to pay off your debt seamlessly.
The advantage of such a “hobby” is that it is relatively difficult for any person to part with paper banknotes and simply put them aside at a designated place (such as a savings bank). But putting a 2 USD coin out of a purse is very easy, you won’t even feel it. Estimating how much you will be able to collect per month by throwing a $ 2 coin every day will bring you to $ 60. This money can be added to the principal of the mandatory payment. By making several of these increases, you will reduce the loan repayment term by several months (depending on the amount of the loan and its repayment term).
Another good way to save money is to round the money spent in the store to a certain size, but put the difference in the savings box. If you find it too difficult to carry out such operations yourself and keep up with your regular cash deposit, you can negotiate such a savings system with your bank. It is precisely for this purpose that long-established savings programs, often referred to as “savings banks” , have been developed. How it works: You shop for $ 28 and pay with a card, then $ 30 is withdrawn from your account: $ 28 goes to the store and $ 2 goes to your savings account. Such programs are “smart” enough, so the customer can determine the amount of rounding (it is allowed to accumulate even the difference to integers). If you pay $ 12.20 at the store, the savings program will only take you $ 0.80, resulting in a $ 13 withdrawal from the card.
Set aside extra income
We are used to spending bonuses, bonuses, winnings or just finding money on additional products and long-awaited luxuries. But try and collect all this unexpected money in one place! Once the amount reaches a certain amount, the money can be deposited into a credit repayment account. Such funds may be collected in a clear or non-clear way through a bank savings account.
Move toward savings
Great if you really manage to repay your loan ahead of time using one of the methods mentioned above. But it is even better if you do not stop accumulating and it will become a habit for you. Even if you are debt-free, you can continue to save money through banking . In addition, the amount you accrue will be charged interest on your bank deposit. You will be able to keep track of their “growth” and generate additional passive income.