Jane wants to pay off her loan faster

Hi Ritzy,

I have had a home loan for ten years and never feel like I am getting ahead.  I’m craving that financial freedom from debt.

What are some tips to pay off my loan faster?

Thanks,

Jane

 

 

Hi Jane!

Thanks for your question!

There are a few things people can do to pay off their loan faster…  I’ve listed some of them below.  

Ideas for people to pay their home loan off faster (general advice only!):

  1. Pay the home loan more frequently.  Einstein talks about compound interest as the 8th wonder of the world, and it applies here. You’ll end up paying less interest if you choose to pay off your loan weekly  (e.g. 1/4 of the monthly amount) or fortnightly (1/2) rather than monthly.  
  2. If you have a variable loan, get a 100% offset account and just put as much money in there as possible.  Remember, an offset account is an Australian invention so it must be cool.
  3. Throw big one-offs at your home loan - think work bonus, whatever - if you have a big one-off, don’t spend it all, use it to reduce your home loan.  You’ll be better off in the longer run.
  4. Check you’re in the right product and have a competitive rate… check out Home Loans - learn the lingo (https://www.f-empowered.com.au/blog/2018-1).  

Home Loans are hard going, but hopefully the tips above can help.

Cheers,

Ritzy