Debt can be a monkey on your back, stealing your hard-earned money with every due date. But it doesn’t have to be this way. You can crack down on your budget to pool more money into cash advances and pay off debt faster than you thought possible. Keep reading to learn more.
Why Should You Pay Off Debt Faster?
Paying off your cash advance loans and lines of credit come with many benefits.
Freeing Up Your Budget
First off, by crossing out your debt ahead of schedule, debt will no longer tie up your monthly income. You’ll have more money to put into savings or splurge on something fun.
Some online direct lenders will apply extra payments against the principal balance. If that’s the case with your account, you may reduce how much interest you pay over the lifetime of your cash advance. That’s because interest gets calculated off your principal — by lowering this number, less interest accrues.
When it comes to line of credit personal loans, these revolving accounts are available on an as-needed basis as long as you keep your balance low. Once you bring your balance back to zero, you’ll have your full credit limit available to help you in an emergency.
Check This One Thing Before Going Any Further
With so many benefits to making extra payments, you may be ready to double down on your budget. But first, you should always read your cash advance loan contract carefully.
The installment loan experts at MoneyKey encourage their borrowers to make as many extra payments as possible, but not all online direct lenders have the same policy. They might charge you for any additional payments that go above and beyond your scheduled bills.
While there are no such penalties for paying off a cash advance through MoneyKey early, you may have to consider this fee if you have another lender.
This is why you need to know if your payments will go against the principal. Depending on how much you save on interest, it might be worth the charge. Or not.
How to Pay Off Cash Advance Loans Faster
Such a big goal can feel overwhelming, so it’s best to keep your strategy simple. Check out these basic tips to help you double down on payments.
1. Trim the Unnecessary Stuff from Your Budget
Trimming down 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 cash. Not sure where to start? Here are some ideas:
- Stop using expensive cash machines or ATMs when taking out money
- Cancel your gym membership and workout from home for free
- Switch banks to cut down on banking fees
- Start following a meal plan to avoid takeout and save money at the supermarket
- Hit pause on streaming services until you pay off your debt
- Jump to another cell phone provider with better plans
- Cancel subscription boxes
2. Earn More Money
If you already run a tight ship, you may not have a lot of bad spending habits to cull. You may not find any more in your budget until you get another income stream.
Think about your skills and interests. Could you leverage any of your hobbies into a side gig? If not, consider taking on a part-time job on the weekends. You can use your entire paycheck for extra payments.
There are plenty of reasons to pay off your cash advance early, so check that it’s something your lender allows!
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