In part one of this two-part blog series, we went over some basic tips on paying down a loan debt quickly. There are many reasons why borrowers want to pay down their loans as fast as they can, from saving money on interest to improving their credit score and other areas of their finances.
At 1st Choice Money Center, we proudly offer a wide range of installment loan services, signature loans and title loans that serve as a better alternative to potentially predatory payday loans. Whether you’ve taken out one of our loan types or any other available to you, let’s go over a few additional methods at your disposal if your primary goal is to pay the loan back as quickly and efficiently as you can.
Lower Interest Rate Loan Conversion
In some cases, you’ll have been paying various loan or credit debts down properly for long enough that your credit score will improve as a result. In such situations, your score might have even improved enough for you to qualify for a new loan – one that covers the same amount you still owe, but comes in at a lower interest rate.
With this approach, you can instantly pay down the remaining balance on the higher-interest loan, assuming the new lower-interest loan moving forward. With lower interest rates, your ability to pay down the loan faster should improve, especially if you’re taking the savings and applying them directly to the principal of your new loan.
Whenever you receive additional income beyond that from your primary occupation, use it to pay down your loan. Whether this income from a gift, a tax refund or a work bonus, you’re unlikely to miss this money as part of your daily needs – so why not use it to build your overall financial profile and improve your credit?
Another potential source of additional income here: Taking on a secondary part-time job if it’s possible within your schedule. This approach has two direct positive impacts – you earn extra money that can be used to pay down the loan, for starters, but you also spend a greater percentage of your time working rather than in situations where you might spend money. You may not think that $8 movie ticket is really that great an expense, and on its own it isn’t, but those kinds of purchases add up over time if you’re making them regularly. Cutting back on those sorts of things by filling your time with work kills two metaphorical birds with a single stone, so it’s something to consider if it’s realistic within your daily timeline.