You took a cash loan with the intention of quick repayment, while you pay and pay back, and you can’t see the end. The deadline for the contract is so distant that you are considering accelerating it. Do you know how to pay off your cash loan quickly?
Early loan repayment
When planning faster loan repayment, it is worth reviewing the entire loan agreement and regulations first. You need to check that there is no accident that prevents you from paying off your cash loan early. Some banks may reserve this option. If it turns out that there is a possibility of early repayment, it is worth reading or asking a bank adviser about the conditions necessary to meet.
From December 18, 2011, an act was in force stating that the borrower has the right to repay all or part of the debt before the date specified in the contract. However, there is a provision that financial institutions may charge compensation for early repayment of the loan, however it should not be higher than 1% of the amount repaid early.
You do not need to inform the bank in advance about your loan repayment. So you can decide on this step at any time. You have to prepare for it well in advance. First of all, to be able to repay the loan, you need to have the right amount of money, so a good way to save and persevere.
Then it is worth calculating it well to realistically assess whether the earlier repayment will actually pay off. This is not always so obvious. Although they repay the loan early, you can avoid charging further interest, but it is worth checking whether the additional costs will not exceed the standard fees.
Ways to repay your loan faster
If you are unable to pay off the entire loan, you can always do it gradually, e.g. by paying a double installment. As if you would pay a double installment every month, the loan period is reduced by half and with it, the number of interest is reduced. This is one of the options that the bank can offer you.
The second option does not shorten your repayment period, but makes future installments much smaller. All you have to do now is pay back more to pay less in the future. This option is a good option for people who do not care about breaking their relationship with the bank, but are afraid that they may have problems paying back their installments (because a child will be born and expenses will come, because he will retire, etc.) or simply want more financial freedom. It is worth making a decision to pay higher installments.
However, if you necessarily want to get rid of your cash loan as soon as possible, the first option will be more pleasant for you. Of course, it requires paying high installments for some time, but if you have such financial possibilities, it is worth using them. You will get rid of credit much faster and regain financial freedom.
What else can you do to pay back your loan faster?
To pay off the loan faster, reducing its cost, you can also opt out of additional fees, e.g. credit insurance. However, this is a risky way and it is not always an option. Another, also risky way is to repay one loan with another. This is an option for those who find a really attractive offer at a low interest rate.
You need to accurately calculate the costs and compare both loans to be sure that you can profit, or at least not lose on this surgery. You have to be careful not to fall into debt and you have to be aware that you will still have a loan. It is worth having savings and paying it off quickly.