You needed money and you found out that auto title loans are a good solution. But now you are past the Christmas surplus payday payoff and you want to pay off your title loan faster. Or maybe you just hate having debts—most of us do. So, what can you do if you don’t have a lot of extra money just sitting around? You can start with a few budgeting strategies that can help you pay off loans earlier, saving yourself the interest and getting out of debt so you can live your life with one extra worry.
The key to paying off auto title loans —or any debts— is to pay a little extra each payment. Even with something as big as a mortgage, a little extra on each payment cuts down on how much of the principal you have left, leaving you with less interest to pay each time after that extra payment amount.
For example, if you are paying interest on $5,000, and you pay $100 off, you are now paying interest on $4,900. But if you paid $50 or even $25 more each payment, you have $4,850 instead of $4,900, and you’ll have less and less each month for the interest to be calculated on. Paying a little extra each payment can cut months off your total time spent paying off a loan.
Another trick is to look at your budget and see what you are really paying. Collect all your receipts or track online if you only use credit and debit cards. You may be surprised to see that you are spending $100 or more each month on snack foods, or video games, or movie rentals. Cut those extras down or if you can completely out and you may well have extra to pay on your loan, helping you to pay it off much earlier.