Cash 1 Blog
How To Pay off Loans Faster and Stress-Free
So, a company approved you for a vehicle or home loan. What’s next? You have the cash now, but you still have to pay back the lender. Luckily, repayment doesn’t have to last forever. Why continue to live in loan denial when you can create a plan to pay back the money you owe now?
We want to assist you in taking a more meaningful approach to money. Here are five tips to help you keep the loan repayment process stress-free.
Track Where Your Money Goes
You control your money — it doesn’t control you. Tracking your spending is the number one technique that will help you keep your finances in order. Knowing where your money goes each month will help you feel more empowered. It will also make you more inclined to reduce your spending.
You can track where your money goes with these methods:
- Take some time to look through old receipts to see where you can cut back. Most people need to spend less at restaurants, bars, salons, or department stores.
- Make a budget. You can do this on paper, in an Excel spreadsheet, with budgeting software, or through a budgeting app on your phone. It would help if you chose a method that works best for your lifestyle.
Track every single expense for at least 30 days, and you'll be in a better position to create the ultimate saving strategy! You’ll be able to see how much you’re putting toward loans, and you'll probably find ways to cut back in other areas to contribute more money to repayment.
We often find ourselves spending money we don’t have and buying things we don’t need. Five pairs of jeans never seem like enough. Two bedsheet sets don’t seem like enough, either. But, perhaps, what you already have is enough. Materialistic goods can only make you happy for a moment, but the real relief (and long-lasting happiness) will come when you no longer owe money to lenders.
Adopting a minimalistic lifestyle helps keep money in your pocket for payments and provides you with more cash for your life post-repayment.
If you’re passionate about living a more frugal life, we have some simple saving tips that you can make today. You may even grow to like these changes!
Start a Side Hustle and Use Additional Income
If you’re cutting down your spending and still not seeing the results you want, you may need to increase your income. The good news is that some side gigs don’t require much time, and with a few hundred dollars more a month, you receive added security. The additional income will knock down interest and principal costs, helping you to pay off loans quicker.
Here are a few examples of side hustles:
- Sell clothing or handmade crafts online
- Offer a service (tutoring, writing, website design, photography, rent out a room in your house, etc.)
- Work odd jobs here and there (dog-sitting, house-sitting, etc.)
- Start a side business
If you receive a raise, a bonus, or a tax refund, don’t spend it all on material items or exotic getaways — put this money toward your loan. You don’t have to dedicate everything toward repayment, but any additional income always helps.
Make Sure You Have an Emergency Fund
Unfortunately, constant spending isn’t going to help you get any closer to saving. Yes, not thinking about an emergency fund now can derail your saving progress later. If you don’t set aside money for emergencies, you’ll dip into your regular income.
Without an emergency fund, you’re just going to feel discouraged when you’re unable to fork over the money should something terrible happen. Shockingly, only 39% of Americans have enough saved to cover a $1,000 emergency.
Whether it’s a medical bill, a totaled car, or a broken appliance; you need to make sure you can afford the unexpected. Even if you don’t think you can afford to put money into savings, if there’s a will, there’s a way. We recommend you keep about six months of living expenses in savings—this will give you a nice safety net that provides enough comfort.
Tackle Debts Strategically
If it’s at all possible, only have one loan at a time. For example, if you know you’re going to apply for a home loan, make sure to pay off your student debt before doing so. However, in almost every situation, it’s crucial to tackle credit card debt first and foremost.
Credit card interest is very high, so you don’t want to be stuck with that brutal interest for too long. It just snowballs into more money and more problems later. If you’re currently repaying more than one loan, focus on one at a time. This can make repayment less overwhelming and help you move through the rest of your loans.
Also, be aware of the interest on your loans. When money sits for too long, the interest continues to pile up. Therefore, it’s generally better to knock out what you owe early.
You shouldn’t be afraid to get a loan — make sure you make payments on time. Loan repayment is a big commitment, but it doesn’t have to be a grueling process. With these tips, you’ll be able to move your payoff date farther from the future and closer to the present. This will ease financial pressure, and soon, you’ll be able to spend your money on things other than a loan.
CASH 1 offers online loans in AZ and NV — we make repayment easy and more flexible! We divide your payments evenly throughout your loan term, or you can pay more than the minimum payment if you so desire. Plus, we give you more time to repay, so you can pay when it’s most convenient for you. Whether you need a title loan or a personal loan, we’re here to help you get cash fast. If you have any questions about our simple process, don’t hesitate to contact one of our knowledgeable Loan Officers.
Joseph Priebe takes pride in assisting audiences with his articles to help them make sound financial decisions.
With over ten years of experience writing financial content his goal at CASH 1 has always been creating engaging and easy-to-digest information for anyone searching for immediate or long-term monetary solutions.
When Joseph is not writing about personal finance, you can find him photographing the Southwest United States with his 4x5 Graflex Crown Graphic camera. He is based in Phoenix, Arizona.