© Copyright Acquisition International 2024 - All Rights Reserved.

Article Image - How to Repay Your Loan Faster?
Posted 23rd February 2022

How to Repay Your Loan Faster?

Whenever you’re in debt, your main goal should be to repay it as fast as possible. Sure, taking out a loan can be a good thing as it provides access to needed credit.

Mouse Scroll AnimationScroll to keep reading

Let us help promote your business to a wider following.

How to Repay Your Loan Faster?
Person opening an empty wallet

Whenever you’re in debt, your main goal should be to repay it as fast as possible. Sure, taking out a loan can be a good thing as it provides access to needed credit. 

However, loans can be bad when they accrue too much interest. This post will take you through some tips to help you repay your loan faster. 

How to Repay Your Loan Faster


1. Seek Debt  Consolidation and Relief Services

If you have trouble keeping up with debt repayments, you can seek debt consolidation services.

Debt consolidation firms can help you combine all your debt into one lump sum. Therefore, instead of making monthly payments to different lenders, you’ll be making one monthly payment.

Further, these companies can work with lenders to help reduce the interest rates on your loans, thereby reducing the overall cost of the loan.

Various financial relief firms in the UK, such as Reform Debt Solutions, collaborate with other stakeholders to offer borrowers debt consolidation and relief services. 


2. Deposit More Than The Stipulated  Minimum Amount Every Month

Clear your debt and save on interest by depositing more than the required monthly minimum. The main goal is to pay an extra amount regularly and repay your loan faster. 

If you have several debt sources, handle one at a time. Clear the balance quickly as you continue depositing minimum payments on the other debts. 

Some loan providers allow borrowers to pay an extra amount every month, stating that it goes towards the principal. Just ensure that you can handle these additional payments without hurting your budget. Instead of making monthly payments, opt for bi-weekly. 

Before making these payments, go through the loan terms and conditions to determine if prepayment penalties or extra fees apply. 


3. Make Several Payments More Than Once A Month

Pay your credit card bills regularly, more than the standard once per month. This will help you stay on track of your debt balance and lower your utilisation/balance ratio.

The credit balance/utilisation ratio is the percentage of the total available credit that you’re currently using. This ratio is among the elements used by credit reporting bureaus to calculate credit scores.


4. Consider The Snowball Method Of Clearing Debts

The snowball method entails settling the smallest debts first, then taking the funds that previously paid for that loan and rolling it to the next smallest loan. This process continues until you clear all your debts.

This strategy helps you build momentum as every balance is cleared. Although it takes some initial work to establish this technique, it’s what you need to come up with a repayment plan that keeps you motivated to finish.

Studies show that the snowball method is beneficial because it builds confidence—you begin with the smallest loan and get quick wins. This makes you feel like you’re making progress.

You’ll get great satisfaction from clearing a loan and closing the account. This will give you the motivation to proceed to the next debt.

The only con is that you may end up spending more cash on interest payments since you’re prioritising balances over APRS.


5. Try Consolidating Your Credit Card Debt

You can use a personal loan to consolidate credit card debt spread over several cards. There are several benefits of debt consolidation, the greatest of them being lower interest rates. If you have a good credit score, you can get an annual rate of roughly 6%.

Furthermore, you won’t have to worry about making monthly payments for each card as all the debt is consolidated into one. To top it all off, it can help improve your credit profile.

Nevertheless, these debt consolidation loans are not suitable for everyone. Like car loans or mortgages, you’ll have to apply first and be approved.

Your credit score determines the interest rates you’ll incur. If you have a bad credit rating, the interest could likely be higher or almost equal to that of your cards.

The loan term can also affect the interest rates. The longer the term, the higher the interest rates and vice versa.

You have to also be on the lookout for any charges like an origination fee that might cancel out any savings you could get from consolidating your debt.

Keep in mind that even if it makes sense to consolidate debts, you’re not in the clear to actually pay it back. You must still purpose to repay the entire loan on time. Although, if you’re having a hard time managing your credit card, consolidating it may be an excellent place to start.


6. Try The Debt Avalanche Approach

The best way to reduce your debt burden would be to start by paying off the debts with the highest interest rates first. Doing this will decrease the overall interest rates, reducing your general debt.

After clearing the first loan, move on to the next with the second-highest interest rates and pay them. Do this till you pay off all your debts.

The greatest benefit of this approach is that it’s quick, and you get to save a lot of money. You save a lot on interest when you repay the high-interest loans first.

Moreover, this approach has a straightforward payment structure. The debt avalanche technique is the best if you have difficulties devising your own loan repayment strategy.

The biggest disadvantage with this approach is that you can easily lose morale as repaying your debts can take longer, especially if you have several debts.

Additionally, this technique only works if you have disposable income. The goal is to have some leftover cash after you’ve made all your repayments.


Wrap Up

The strategies above will help you pay off your debt in no time. Repaying loans within the specified tenure improve your credit score and increases your success rates for your next loan application.

However, go through the prepayment terms and conditions carefully and don’t make haste to repay the loan urgently in your bid to settle your debt as early as possible. 

Categories: Finance, News

You Might Also Like
Read Full PostRead - Eye Icon
2016 Most Innovative Hedge Fund Manager – USA
29/06/20162016 Most Innovative Hedge Fund Manager – USA

Vida Capital is an alternative asset manager focused exclusively on longevitycontingent assets, including life settlements, annuities, notes, and structured settlements. Vida seeks to provide strong absolute and risk-adjusted returns. The Vida team are value i

Read Full PostRead - Eye Icon
Protecting Money in the Digital Age
13/11/2023Protecting Money in the Digital Age

Money Protects is an innovative financial and technology company based in Dubai, focused on providing clients with services relating to managing wealth and ensuring stable finances that will keep them debt free for a sustainable future.

Read Full PostRead - Eye Icon
Make Platform Payments Your Superpower
06/12/2022Make Platform Payments Your Superpower

Vertical market software is particularly niche, and it should be tailored to each business – as well as across every industry.

Read Full PostRead - Eye Icon
Training Video Production: What You Need to Know
17/05/2023Training Video Production: What You Need to Know

From brands migrating online and working teams switching to a remote-first approach—to the world’s top-rated universities launching online courses for international students, the value of e-learning tools becomes more evident from day to day. And even

Read Full PostRead - Eye Icon
United Bankshares, Inc. Announces Increase in Earnings
30/04/2015United Bankshares, Inc. Announces Increase in Earnings

United Bankshares, Inc., today announced earnings for the first quarter of 2015. Earnings for the first quarter of 2015 were $34.6 million or $0.50 per diluted share, an increase from earnings of $30.1 million or $0.48 per diluted share for the first quarter o

Read Full PostRead - Eye Icon
How to Prepare Your Business for Expansion: A Quick Guide
03/02/2023How to Prepare Your Business for Expansion: A Quick Guide

There’s no doubt that starting a new business can be very rewarding, but there are also challenges that come with it. Making sure that your business is thriving and taking the next steps will be vital to your success.

Read Full PostRead - Eye Icon
How to Avoid the Top 5 Reasons for ERP Failure
06/12/2021How to Avoid the Top 5 Reasons for ERP Failure

Growth for any company is always a healthy sign. As your business grows, the process to centralize all systems, procedures, and communications between departments becomes increasingly complex. This might negatively impact your operations and cause a major fina

Read Full PostRead - Eye Icon
6 Sustainable Promotional Products That Leave a Memorable Brand Impression
06/11/20236 Sustainable Promotional Products That Leave a Memorable Brand Impression

IMG Source – https://unsplash.com/photos/a-close-up-of-a-paper-bag-on-a-table-NzO8KVLzpQc In an era where environmental concern informs consumer behavior more than ever before, businesses are under increasing pressure to align with these values. Traditio

Read Full PostRead - Eye Icon
7 Ways To Grow Wealth by Saving Money on Everyday Expenses
06/04/20227 Ways To Grow Wealth by Saving Money on Everyday Expenses

When we spend money day-to-day, we rarely focus our efforts on saving money here and there. Most people buy without a conscious effort to save for the future. However, if you take a few steps to save money gradually on everyday expenses and purchases, it will

Our Trusted Brands

Acquisition International is a flagship brand of AI Global Media. AI Global Media is a B2B enterprise and are committed to creating engaging content allowing businesses to market their services to a larger global audience. We have 14 unique brands, each of which serves a specific industry or region. Each brand covers the latest news in its sector and publishes a digital magazine and newsletter which is read by a global audience.