How To Pay Your Loans Down

Published on June 25th, 2017

Loans are a godsend for those who need to finance something important in their lives. But if treated frivolously, that debt will wrack up and leave you in a financial hole that you will spend years crawling out of. That is why it is so important to get a handle on your debt early so you can create a plan to pay it off as soon as possible. Here are some strategies to help you get out of debt faster.

Pay More Than The Minimum

This may seem like an obvious strategy to get rid of debt faster, but a surprising number of people stay on their minimum payment plan, taking years to pay off their debts and, in the case with credit cards, may even end up paying more in interest than their original amount borrowed. Paying more than the minimum amount will help decrease debt quicker and will cause you to spend less on interest in the long run. Just make sure your lender does not charge prepayment penalties for your loans in Schiller Park.

“Found Money” Payments

Make a financial commitment to put any “found money” you come into, whether that be birthday money, inheritance, profit from selling something, or bonus, to paying down your debt. It’s easy to see a big, one-time influx of cash as an opportunity to splurge on something you’ve always wanted, but the smart thing to do is to pay down the loans you’ve already taken out. Your “future you” will be very appreciative that you decided to commit “found money” to your personal loans in Schiller Park.

Snowball Method

One method that has worked for some people is the “Snowball Method,” where you list all of your debt from smallest to largest and put all your excess funds into paying down the small debts and continue making the minimum payments on the large ones. Work your way from your smallest to largest debts as you pay off each one. The satisfaction of paying down your smaller debts will maintain motivation to continue paying off the larger debts with bigger payments.  Plus, there is a psychological benefit of knowing that you have a fewer number of debts to pay.

If you are worried about paying down your loans in Schiller Park, then put a plan in place to get them paid off sooner. At Leyden Credit Union, we understand how important paying down debt is to our members, which is why we want to help make decisions that will create a secure financial future. Contact Leyden Credit Union to become a member today!  

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