Can you save money while paying loan?

This happens in many people’s lives that they are hit with big expenses and cannot get enough money to pay for extra emergency expenditures.

Unexpected emergencies like medical bills or auto repair bills, or sometimes planned expenditures such as wedding, home renovation, family vacation and consumer product, personal loans are the answer to your solutions. This type of loan is easy to get, with low interest rate and can be used for any financial need.

It is not easy to save money while paying off debt, but you can do it by making a strategy and spend according to the plan. If you will be using all of your paycheck on paying back loan amount and need extra cash for any other emergency situation. You will have to apply for another loan and this cycle goes on and on for many years, burdening you with more debts. This becomes a very stressful and nerve-racking situation for anyone. So, to avoid such situations, plan and focus on saving money.

Pay off loan early

Check carefully and get loan which you can pay off early to save money on interest. Some lenders do not charge prepayment penalty charges if you pay off your loan amount earlier than your due time. Whenever you get extra money you should use it to pay loan, saving you hundreds and thousands of dollars, in interest in the long run.

After paying off loan earlier will make your credit score better, for future loans you can get more favorable terms and rates of your choice.

Pay off bi-weekly

Try to get schedule of paying off bi-weekly instead of every month. You will be paying 26 bi-weekly payments in a year instead of 24 monthly payments, an extra payment every year. You will hardly notice an extra payment every year, but your loan will be paid off earlier than you think, saving money on interest.

Auto payments

In your hectic routine you may forgot to pay loan installment and get extra charges on late payment. Instead you can manage your loan through Auto Pay. Your loan amount will be deduct automatically from your account and you can round it up to your feasibility, such as if your loan installment is $244, you can make it $250 or whatever you can afford easily. Extra paying some money will surely make difference in the end.

Consolidating loans

When you have a number of loans to pay, you can always get benefit from debt consolidation. Make calculations of your all loans added with interest rates. And if you are getting new loan with better rates, think of refinancing your personal loan is worth it. Low interest rates can save some money and simplify your loans.

Before consolidating your loans, keep in mind if there are any pre-payment charges on your current loan and any origination fee or other hidden charges on new loan, will add more money to your debt.

Transfer balance card

When you have paid most of the loan, you can transfer your loan to balance transfer card, if you are getting offer of interest free terms for 1 to 2 years and pay off loans saving money on in absence of interest.

You can open a saving account and put some cash every month for future expenditures to avoid getting loan. Re-schedule your budget and cut back some expenses for a period.

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