If you’re like most average Singaporeans, you probably owe money toward a large loan. It could be the hefty mortgage loan in your name, the loan you took up to pay for your tertiary education or the thousands of dollars you carry in credit card debt. Apart from forking out thousands of dollars to pay them off, there’s also the mental load of knowing that you’ll be spending months or even years trying to pay it all back.
It can get depressing really quickly, but know that it doesn’t have to be that way! There are several simple yet effective ways you can practise to help lighten the load. With a carefully applied technique, you can say quickly say goodbye to your debts. These approaches won’t significantly hurt your finances, but there is no doubt that they can make a big difference to the total interest you’ll have to pay over the years. This means you can be debt-free faster! We’ve gathered 3 of these tips and tricks to help you get on your debt-free journey.
Before we move forward, you may want to consider discussing with your personal loan moneylender before employing any of these approaches, lest you are hit with a surcharge or early payments.
1. Make bi-weekly payments
Instead of waiting for the end of the month to pay a portion of your loan, try submitting half-payments every fortnight instead! This will allow you to apply for your payments more often, which means you’ll accrue less interest. Moreover, by making 25 half-payments every year, you will be making a full payment for the year. This will significantly shorten your loan tenure by several months!
2. Make one extra payment each year
If the idea of bi-weekly payments appears a tad bit too daunting, you can try the alternative instead: commit to an extra payment each year. Similar to bi-weekly payments, you are able to shorten the life of your loan by simply making an additional payment! Opt for work bonus, tax refund and the like to make that once-a-year payment to lessen the blow to your finances!
Another option is to spread this extra payment throughout the year. Simply divide your monthly payment by 12 and add that cost to the payments you make every month. Before you know it, you’ll be making a full extra payment at the end of the year, and you wouldn’t even feel the pinch!
One of the most effective ways to pay off your debts is to simply refinance, especially if your credit has significantly improved or the interest rates have dropped due to a policy change and the like. With these favourable conditions, paying off your loan will be so much easier. If you opt for this approach and employ the other tips, you’ll be able to shorten the life of your loan much more.
Triumph over your loans by using these 3 tricks! The faster you are able to pay off your loans, the more savings you can accrue in the long-term. And your financial health isn’t the only thing that will improve – your mental and emotional health too!
If you’re not quite sure how to get started, we are here to help you! Goldstar Credit is a licensed moneylender in Hougang that takes pride in helping one improve their financial health. With our tailored services, we’ll find financial solutions so that money (or the lack thereof) will be the least of your problems! Head down to our outlet to get the ball rolling.