November 5, 2021
4 Effective Hacks to Repay the Loan in a Snap
By : Ellie Brown
A loan means it has to be repaid.
And that’s natural.
However, in order to do that, you must simply be aware of some ground rules so that repayment becomes not just a normal transaction to you but a ‘relaxing’ exchange of pounds.
Many in the UK are concerned with repayment in a way that they don’t even get the chance or miss it out when taking a loan comes into existence. You must understand that taking a loan can be a part of your life, and repayment isn’t going to continue like the bills you need to pay at the end of each week or month.
Just like a loan is a temporary thing you need to worry about, repayment is also going to be over pretty soon.
And yes, it can be made to pick up some speed so that you get to experience that relaxation quite earlier.
How to do it then?
Well, read on.
How to Repay a Loan Faster than Usual
It’s not a great deal, though!
Have you taken your first direct loan from a lender in the UK? Or is it your bad credit loan for the first time, and you do not know any efficient ways to repay the amount faster.
Here are a few ways to do that…
- Take help from your savings account
- Go for paying it off twice a week
- Make some extra payment by rounding the amount up
- Help repayment with extra income
Here’s how you can make loan repayment fast and effective.
Take Help from Savings Account
That’s probably the best idea you can ever give your loan repayment plans.
Planning ahead is the key to making sure everything is taken care of.
In this case, your plan involves your savings account for a reason.
When you need the loan, it SAVED your savings account.
When you’re over with the loan and need to repay it back, you can now use your savings account to support your loan repayment once you have gotten the loan.
But, here is something you must never forget.
Make a plan to pay off the loan by taking money PARTIALLY from the savings account. Don’t drain it. If required, calculate your monthly EMI rate and draw money from your savings account for several months or for a whole year.
But all the while doing so, you must keep in mind that you must never ever turn your account empty.
A savings account is meant to help you out with emergencies. If you’re not sure about that, then you may look for the other ways mentioned in this blog to save some cash and help yourself repay your loan account.
There are many ways for you. So, don’t worry.
Go for Paying It off Twice a Week
A healthy way to pay loans; a bi-weekly payment is a great solution to keep up with the expense and manage to repay your debt.
If you are making two payments every 15 days in a month, then you are making a total of 24 or 26 payments in a year.
The math says that when you make an extra number of payments to repay a loan in a year, the life of the loan repayment is shortened.
Professionals often call it ‘shortening a loan’.
And this shortening of a loan means reducing the loan repayment duration to the duration you want it to.
With a bi-weekly payment at the end of a month, you can now reduce your loan repayment duration by months or even years.
Let’s suppose you have taken out a first direct loan and you have drawn a huge amount that comes with repayment duration of 15 years.
If you efficiently use the bi-weekly method, you might reduce it to 2 years, making your repayment duration only 13 or 12 years.
Talk with your lender about these matters and find a solution.
Why Don’t You Round the Amount up?
Sometimes, providing a bit extra helps you finish your deal a bit faster.
Think of it. There’s no complex calculation involved here.
If you have an EMI amount of 190 pounds per month along with the interest rates, you can still pay a little bit extra – like 10 pounds more – and make it 200 pounds so that your repayment itself brings you faster towards completing it.
And what’s more strategic?
Keep increasing the repayment value like this if possible.
Next time, pay 250 pounds at a time. If you can, make it more than that with each month and try to be consistent.
You might be able to repay way faster than how long you have calculated.
Manage the EMIs with an Extra Job
If you’re concerned about repaying your loan amount and somehow stressed about it, do not involve your primary income.
And instead, look for a part-time one.
You can take the help of a part-time job or a small business of your own that can help you with the repayment options.
You can also work contractually or freelance way.
In this way, you don’t put any extra burden on your monthly or weekly income from your prominent job role.
Your repayment then becomes dependant entirely on the part-time job.
Not only it makes you more organised in refunding your debt, but it also helps you manage your expenses in a better way and seek professional fulfilment in a new job.
That’s not bad, is it?
Whether or not it is a debt consolidation loan or something as simple as a first direct loan, you can simply pay off the debt if you are organised in your approach.
To do this in the most efficient way possible, always plan ahead. Decide how you would repay before you take the loan.
You will be as cool as you are even after taking a loan out when you do that.