When you take out an advance, you have to pay it back. That’s borrowing 101 and something you probably already know. Before you can even get your money, you have to agree to pay it back on time according to your lender’s schedule.
But did you know you’re allowed to do more than the status quo?
Paying off your cash advance faster might make a lot of sense if you owe online loans with monthly payments. Let’s explore why before sharing some tips to make extra payments a reality.
Why Should You Pay Off Debt Faster?
Reason #1: You Pay Less Interest
If your payments go toward paying down your principal (that is, the amount you borrowed), you might be able to lower how much interest you accrue over the lifetime of your loan.
Why? Because your payments will reduce the number that your interest is calculated by — the lower this is, the less interest will multiply.
Some fast cash loans online work this way, but not all of them will, so talk to your financial institution to see how extra payments may affect your interest.
When it comes to short-term online loans with monthly payments, you’re usually borrowing at a high interest rate, so anything to control your interest accrual will come in handy.
Reason #2: You’ll Free up Your Budget
Paying off your advance faster is still a good idea, even if your interest amount is fixed. That’s because you’re on course to removing your payment from your monthly budget.
The faster you pay it off, the faster your money will become yours to spend again. You’ll have one less obligation to juggle, giving you the freedom to buy things or handle unexpected expenses with more confidence.
Do All Online Loans Direct Lenders Let You Pay off an Advance Early?
Some lenders might charge a pre-payment penalty if you make any additional payment that goes beyond what’s in your contract. Depending on the size of the penalty, it could negate paying your loans off early.
Luckily, legitimate lenders dedicated to responsible lending practices won’t ever charge these fees. In fact, they’ll encourage you to make early payments for the reasons discussed above!
How to Pay off Your Cash Advance Early
You’ll want to sit down with your budget to see if you can cut down on expenses that limit how much free cash you have to put toward your advance. Check on discretionary expenses, as they make up the easiest spending to control or stop outright.
2. Round Up Payments
One simple trick to paying off your advance early is rounding up your payments to the nearest $10. So, if you’re meant to send off $132 each month, try for $140 instead. This is a great option if you can’t cut a lot of spending out of your budget.
3. Use Any Windfalls
Birthday presents, tax refunds, and bonuses—funnel all these extra earnings into your loans online. It’s a painless way to knock off some debt.
4. Earn More
If the above options don’t work, consider getting a side gig. You can use this entire paycheck to make extra payments, and you won’t have to sacrifice other expenses.
If your online direct lender allows them, extra payments can help you save interest and free up your budget. That doesn’t sound so bad, right? So, try these tips to pay off your cash advance faster.