Is it even worthwhile to repay a loan faster than expected? Definitely. If there is a possibility, it can be used to settle the loan. This applies to both small loan amounts as well as larger ones.
A significant advantage in the faster repayment is the reduction of the term. It makes a big difference, for example, if you repay your houses in 30 years or 25 years.
Make a financial overview
A financial overview will tell you exactly what financial leeway you have on a monthly basis and what you can do to repay the loan faster. By optimizing your finances, you can expand your financial leeway so that there is more money available to repay the loan faster.
How do I optimize my finances? This succeeds on the one hand, that you look at your spending more closely. Look for ways to reduce them.
Here are some saving tips:
- Saving money in the household – In the household you can save a lot of money, the savings in the year can be several hundred to a thousand euros.
- Saving money while driving – Already with very simple savings tips you can significantly reduce the monthly cost of your car.
Increase the monthly loan installment
Talk to your bank about whether it is possible to increase the monthly loan installment. Because banks are interested in keeping you as customers, they will respond to your request, of course only if your finances allow it.
How high should the increase be? Of course, the increased loan rate should not be a financial burden. But even small increases make a positive impact, these need only be considered over a longer period.
For example, if you increase your monthly installment by 50 euros, the repayment will increase to 600 euros per year, to 3,000 euros in 5 years and to 6,000 euros in 10 years.
- Save 50 euros a month – In this article I give useful saving tips on how to easily save 50 euros a month.
Use the special repayment
The special repayment is an unscheduled repayment. Often this is offered at higher loan sums as a home loan. In doing so, the bank grants you the option of repaying part of the loan far away from the established financing plan.
In the best case, the special repayment is offered without special interest, as well as several times a year. It is important in the case of a loan to contractually hold this special repayment. Should special interest be charged, it is important to calculate exactly whether it is still worthwhile.
Otherwise, it makes sense if you deposit the money in a savings account as additional financial security.
Summary – Pay off a loan faster
There are several ways to repay a loan more quickly. A financial overview gives you precise information on how much you can set the repayment. Through various savings tips you can increase your financial flexibility in the month significantly and the savings you can use it to repay the loan faster. This approach is worthwhile, as the repayment term can be significantly reduced. Even a small increase in the credit rate is noticeable over a longer period of time.