Debt can be a monkey on your back, stealing your hard-earned money with every deadline. But it doesn’t have to be that way. You can reduce your budget to pool more money into cash advances and pay off your debts faster than you ever thought possible. Keep reading to learn more.
Why should you pay off your debts faster?
Repaying your cash advances and lines of credit has many advantages.
Free up your budget
First, by writing off your debt sooner than expected, debt will no longer tie up your monthly income. You’ll have more money to spare or splurge for something fun.
Reduce interest
Some online direct lenders will apply additional payments to the principal balance. If this is the case with your account, you can reduce the amount of interest you pay over the term of your cash advance. This is because interest is calculated on your principal – lowering this number means less interest accrues.
Credit release
As for personal line of credit loans, these revolving accounts are available as needed as long as you keep your balance low. Once you bring your balance down to zero, you will have your full credit limit available to help you in an emergency.
Check this thing out before going any further
With so many benefits to making extra payments, you might be ready to double your budget. But first, you should always read your cash advance loan agreement carefully.
MoneyKey’s installment loan experts encourage their borrowers to make as many additional payments as possible, but not all online direct lenders have the same policy. They may charge you for additional payments that go beyond your scheduled bills.
Although there are no such penalties for refunding a cash advance via MoneyKey early, you may need to account for these fees if you have another lender.
That’s why you need to know if your payments will go against the principal. Depending on how much you save on interest, it could be worth it. Or not.
How to repay cash advance loans faster
A goal this big can seem overwhelming, so it’s best to keep your strategy simple. Check out these basic tips to help you double your payments.
1. Cut unnecessary things from your budget
Reducing your budget is the best way to pour more money into debt. Track your past spending habits, looking for unnecessary splurges that tie up your money. You do not know where to start ? Here are some ideas:
- Stop using expensive ATMs or ATMs when withdrawing cash
- Cancel your gym membership for free and train from home
- Switch banks to reduce bank charges
- Start following a meal plan to avoid take-out and save money at the supermarket
- Press pause on streaming services until you pay off your debt
- Switch to another mobile provider with better plans
- Cancel subscription boxes
2. Earn more money
If you’re already running a tight ship, you might not have a lot of bad spending habits to kick. You may not find more in your budget until you get another source of income.
Think about your skills and interests. Could you take advantage of any of your hobbies in a side concert? Otherwise, consider taking a part-time job on weekends. You can use your entire paycheck for additional payments.
Conclusion
There are plenty of reasons to pay off your cash advance early, so make sure it’s something your lender allows!
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