Managing debt is no joke. According to one study, the average Canadian household’s debt represents 177% of its disposable income.
With the majority of consumers carrying some type of debt, it’s easy to see why most of us are anxious about managing our finances. Short-term loans are a great way to get the money you need in a hurry, but when they’re adding to a pile of existing expenses, figuring out how to pay them back can feel stressful. This is especially true when you’re trying to speed up your loan repayment timeline and get out of debt!
Luckily, the right repayment strategies can help. Let’s take a look at how to reconsider your finances and move toward the debt-free life you’ve been dreaming of.
Create a Plan of Attack
First things first: gather all of the information on your personal loans in one place. If you have more than one loan, paying all of them off can get complex fast.
Make sure you understand the different types of loans you have as well as the payment date, method of payment, and amount to repay on each loan. Consider listing all of this information in a single document for easy reference.
From there, find a loan repayment method that works for you. Some people swear by the snowball method and paying off small debts first, while others prefer to tackle the biggest loan first. Each option has its pros and cons, and there’s no single right answer, so find an option that works for your financial situation.
You should also consider setting up bill reminders on your phone or computer. Other helpful tactics like automatic bill pay can make your payments a breeze, allowing you to pay back your loans fast without ever missing a payment.
Make Extra Payments When Possible
Making extra payments is by far the best way to pay back a loan fast. When you pay anything more than the minimum, you can speed up your timeline and pay less in interest.
However, keep in mind that not all lenders allow you to make early payments. Some lenders will even charge a prepayment penalty, so be sure to read the fine print! At Thunderloan, our easy loan process lets you pay whenever you can: your first payment must happen via automatic withdrawal, but any payment after that can be made early.
If your lender allows you to do so, there are a few ways to pay a little extra. You can start small by rounding up your monthly payments to the nearest $50, for example. This won’t put a huge dent in your budget, but it can add up toward repayment over time.
You can also set a goal to make an extra payment each week or month, depending on your financial situation.
Reconsider Your Budget
If you’re struggling to find extra cash to pay off your loan early, take a hard look at your budget. Are you spending more than you should?
If you don’t already do so, begin keeping track of your spending habits. This includes everything from major purchases to the soft drink you ordered with lunch. You can use a spreadsheet, an app, or a pen and paper.
Once you have this record, look at where your money is going. Do you feel comfortable with how much you’re spending in different areas of your life? Consider setting spending limits and defining a budget to cut down costs.
Often, this exercise helps you notice ways you might save some extra money. Here are some common things you might want to cut back on, especially if you don’t feel you’re getting your money’s worth:
- Outdated streaming or app subscriptions
- Cable bills
- Unused gym memberships
- Delivery expenses and memberships
- Cloud data storage
- Unnecessary insurance
- Expensive cell phone plans
- Frequent entertainment purchases
- Monthly bank fees
If you’re struggling to curb your spending, there are plenty of ways to remove temptations. Consider unsubscribing from email newsletters that tempt you into impulse buying, for example, or delaying a major purchase for a few hours or days to rethink it.
You may also be able to find ways to whittle down various bills you’re paying each month. Negotiate to lower your internet bills, find a credit card that offers better cash back options, or switch to a new option for your home or auto insurance.
Get a Secondary Income Stream
Getting a second income stream can be a huge help when you’re paying off loans. Depending on your skill set and the amount of free time you have, there are plenty of ways to add some extra cash to your budget.
If you’re looking for short-term gigs, consider selling things you don’t want on eBay, taking online surveys, renting out your belongings, selling crafted items, and more. You can also get quick cash for errands or fix-it work via apps like TaskRabbit.
If you want a more substantial payout, you can put in more time and effort by getting a second job. Try delivering food or groceries, tutoring online, or working as a virtual assistant.
There are also plenty of ways to earn some passive income, from advertising on your car to writing an e-book to renting out a room.
These extra gigs may not earn you enough to pay off your loan in one fell swoop, but they can help you work toward repayment much faster.
Pay Off Your Short-Term Loans Fast
Paying off your short-term loans fast can free up more of your hard-earned cash, but you’ll have to be smart about your loan repayment strategy on the front end! As you work to get your finances into shape, be sure to try the tactics above to pay down your debts.
If you still need fast cash without a credit check, Thunderloan can help. Our flexible loan options allow you to adjust your payment frequencies as needed, and we’re even happy to let you pay off your loans faster than expected! To get started, fill out our online form to claim your cash.