4 Tricks to Pay Off Your Personal Loans Early

This one simple trick can save you thousands on a loan.

Personal loans can be a lifesaver when you need money quickly, but they can also be a burden if you're stuck with high interest rates. If you are struggling to pay off your personal loans or are feeling overwhelmed and stressed out by the amount of debt you have, you're not alone. Millions of Americans are struggling with high levels of debt, but there are things you can do to get yourself back on track. Following these four simple tricks can help you pay off your personal loans earlier.

1. Make bi-weekly payments instead of monthly payments

By making bi-weekly payments, you'll make one extra payment each year which can help you pay off your loan faster. How does this work? If you pay your loan once a month, then in one year you will be making 12 payments (12 months). By switching to paying down your loan every two weeks, you will be making 26 equal payments, since there are 52 weeks in a year (52/2 = 26).

Even though each payment is equal to half the monthly amount, you end up paying an extra month per year with this method, which results in paying down your debt faster. This trick works for mortgages, too. For a typical mortgage, it can amount to paying off your mortgage eight years sooner!

2. Round up your payments

Instead of paying the minimum monthly amount, round up so you pay a little bit more. For example, if your monthly payment is $456, round up to $500. This may not seem like much, but it can add up over time and help you pay off your loan sooner.

3. Refinance your loan at a lower interest rate

Interest rates have gone up significantly this year as the Federal Reserve has raised rates to combat inflation. Once the Fed achieves its goal of inflation dropping to 2%, then we can expect the Fed to start lowering interest rates. If interest rates are lower than the loan you have, refinancing to a lower interest loan could help you save money on interest and pay off your loan faster. Be sure to take into account any fees you have to pay when refinancing your loan. Your credit score will make a big difference when you refinance. Look to improve your score to help you get the best rates.

4. Make extra payments when you can

Apply any extra money you have, whether it's from a bonus at work or a tax refund, to your personal loan to help pay it off faster. Resist the temptation to spend it and instead put it toward your loan. Look for some side hustles or overtime to bolster your income. Use that money for your loans. Your future self will thank you!

Following these tips can help you save money and pay off your personal loan early. You can also do a combination of these tricks to help you pay your loans down even faster.