Paying off your loan

There is a number of different approaches to paying off your loan as there is many different lifestyle situations and different loans. Many people want to pay off their loan quickly where as others are happy to just pay what they need for each payment. The most important thing is to make that monthly minimum payment, that means sticking to a budget.

Budgeting
Budgets are simple in the way you need to start listing all your expenses like

• Mortgage repayments
  
• Groceries
  
• Fuel and car
  
• Leisure activities
  
• Clothes
  
• Utilities
  
• Rates
  
• School fees and expenses

There are reasons for everyone to budget whether it is saving for a deposit or paying more onto your loan, or for when a rainy day comes.
It really makes sense to look at your finances once in a while just to see where your money really is going.
That coffee and magazine this morning over a period of time could take thousands of dollars of interest off your loan or grow your bank account.

Some tips for paying off your loan quickly

1. Make extra repayments as often as you can
   
2. Avoid redrawing when it’s not crucial
   
3. Avoid expensive furniture and car finance
   
4. Consolidate your debts to make one payment
   
5. Pay your credit cards on time and reduce limit
   
6. Match the date of your loan to your pay and even put $50 extra before you get your pay.
   
7. Ask for a pay rise if you think you deserve it or are due for one.

One of the simple ways to look at it is you have 30 yrs to pay off your home. What if you said “no” to yourself lets do it in 15yrs and add to your repayments each month. You would save thousands in interest.

Also look into offset accounts to help reduce the interest as your account balance offsets the loan amount. If you have an offset and do not use it properly you should be.

Always try and remember that what you might want today may just add to your financial burden in the future. Try to limit spending where not really needed like no deposit interest free products.