Reducing Your Loan Interest Payments

Reducing Your Loan Interest Payments
If you​ have a​ long-term loan with high interest,​ then you​ might find yourself paying almost as​ much in​ interest payments as​ you​ are towards the​ money you​ borrowed .​
If this is​ the​ case,​ then you​ should look at​ ways to​ reduce those loan interest payments .​
Reducing your loan interest payments will help you​ to​ pay off your loan more quickly,​ and thereby save yourself money .​
Here are some tips on​ how to​ reduce your loan interest payments.
Change your loan
One way to​ reduce your interest payments is​ to​ swap to​ a​ different loan company .​
Refinancing your loan with another company might seem like a​ lot of​ work,​ but if​ you​ can get a​ lower interest rate you​ could save a​ lot of​ money .​
Shop around and compare loan prices to​ see if​ you​ can get a​ better deal than you​ are now .​
Even if​ you​ reduce your APR by 1 or​ 2%,​ you​ could save yourself a​ significant amount of​ money.
Bi weekly payment
Another method for reducing loan costs is​ to​ start paying bi-weekly .​
Instead of​ paying your monthly amount,​ pay half of​ your monthly amount every two weeks .​
There are 4.3 weeks in​ every month,​ so you​ will find that you​ pay your 12 months' payment in​ just 11 months .​
This will leave you​ one whole month of​ extra payments,​ thereby reducing your loan amount and interest .​
This method can save you​ a​ lot of​ money .​
If your loan company will not accept prepayment every two weeks,​ then just pay 13/12 of​ your monthly payment each month,​ thereby accomplishing the​ same as​ bi weekly payments .​
Although some loan companies charge for overpayment,​ most lenders will be able to​ accommodate this payment method.
Early settlement
Another way to​ reduce your interest payments is​ to​ pay off larger parts of​ your loan at​ once .​
This will reduce the​ total amount you​ owe,​ and therefore reduce your interest payments .​
Some lenders charge for early settlement,​ although many allow you​ to​ pay back up to​ a​ certain amount before charges take place .​
Even the​ smallest extra payment can help to​ reduce your loan interest payments and save you​ money .​
The more you​ pay,​ the​ quicker your loan will be paid off and the​ more money you​ will save.
Using credit cards
To reduce your interest payments on​ a​ loan you​ can take advantage of​ credit card 0% offers .​
If you​ can find a​ card that has 0% for 6 months,​ then use this card to​ pay off part of​ your loan .​
Although you​ will pay much higher interest once this time is​ up,​ if​ you​ can pay back the​ credit card in​ this time you​ will save money on​ interest payments.
Secured loans
Although they are more risky,​ secured loans generally have lower interest payments .​
If you​ refinance to​ a​ secured loan,​ you​ could save a​ lot in​ interest payments .​
However,​ you​ need to​ make sure that you​ can afford the​ payments,​ as​ otherwise you​ risk losing your home .​
If you​ follow at​ least one of​ these steps,​ you​ will reduce your interest payments and save yourself money.

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