No one really enjoys paying off their loans year after year. When other financial responsibilities are competing with the loan you have to repay, this can lead to a lot of stress. This is what causes many people to make the bare minimum payment each month. However, whether this works or not depends on what your financial goals are. Feel free to talk to a Kingsport bankruptcy attorney if your loans are bringing you to bankruptcy.
HOW MUCH SHOULD I PAY ON MY LOANS?
How much you should pay for your monthly loan payments depends on your situation and goals. If your goal is to keep living the way you are now, then making the bare minimum payment works. However, if your goal is to buy a house, new car, or invest, then you may need to rethink this strategy.
One of the biggest credit mistakes people make is paying the bare minimum. The main problem with doing this is your loan builds interest each month. This means the longer you take to pay off your loan, the more you will have to pay in total. Your loan will keep growing the longer you take to pay your loan off.
For people with multiple financial responsibilities or low income, the bare minimum payment may become their only option. Those who can afford to make extra monthly payments and do not could be wasting the potential to save money. Many financial experts advise people to make the maximum monthly payment they can each month.
A helpful tool that can help you decide on this is a loan payment calculator. Using an online loan calculator will show you what your future finances could look like. This can estimate your monthly payments and the yearly income you would need to make them.
PAYING YOUR LOAN OFF FASTER
There are several ways you can pay off your loans faster to save yourself money in the long run. Making the maximum payments you can each month is one of the best strategies. Some people also do bi-weekly payments, that is, making loan payments every two weeks. This tends to lower interest and pay the loan off faster.
You can also try dedicating yourself to making at least one extra loan payment each year. This can be however much more you want to pay. Rounding up your monthly payments can also be a fun game to play. A loan payment that is $265 can be rounded to $300 instead.
Refinancing your loans is an option when you want to lower your overall interest rate and you can dedicate to repaying the loan faster.
BANKRUPTCY LAWYER IN KINGSPORT, TN
Paying off loans is often slow and can make you feel like you are losing money at times. Falling behind on loans can be even more stressful. Consider calling us today at Tom Bible Law at (423) 690-7712 if your loans have brought you to bankruptcy. Our legal team of Tennessee bankruptcy lawyers might be able to help you find a solution to your financial problems. You can find us in the Tennessee cities of Chattanooga, Kingsport, and Tullahoma.