Did you take out a personal loan for a holiday gift? 3 tips to pay it off quickly

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You may be able to pay off your debt sooner than you expected.

Many people face a dilemma while on vacation. I want to make the season as special as possible for my family, but I don’t have the savings to do so. It is easy to get into debt there.

It’s common for consumers to go into debt on their credit cards, especially during the holiday season. However, credit card interest rates can be very expensive, and credit card interest rates can rise over time, putting borrowers at a disadvantage.

Personal loans, on the other hand, are a more affordable option for borrowing money. They tend to have lower interest rates than credit cards and, just as importantly, these interest rates are fixed.

If you took out a personal loan this past holiday season to pay for gifts or other expenses that were important to you, it could take years to pay off that loan. It is not a short-term loan repaid within 12 months.

However, there are usually no penalties for paying off a personal loan early. Doing so can save you a lot of interest. So if you want to pay off a pretty fresh personal loan quickly, here’s how.

1. Have a solid budget

Sticking to a budget can help reduce spending overall. Also, the less money you spend, the more money you may have available for loan repayment purposes.

If you’ve never been budget-conscious before, don’t panic. Setting a budget is easy as you just open a spreadsheet, list your various bills and add them up. Next, you need to make sure your spending is less than what you’ll be bringing home with your monthly paycheck.

There are also various budgeting apps that you can use to make budgeting easier. Many of them sync with your credit cards and checking accounts to help you track your spending seamlessly.

2. Reduce unnecessary expenses

If your rent is $1,200 a month and you can’t move, keeping the rent down probably isn’t an option (and finding roommates in a one-bedroom house might not be a reasonable move). Hmm). However, if you want to cut back on non-essential expenses in your budget, such as social outings and dining out at restaurants, you may be able to free up a significant amount of money to pay off your personal loans.

Is it difficult to stop having fun for a while? of course. But the upside is that you can pay off your personal loan debt faster.

3. Have a side job to increase your income

If spending less is not practical or desirable, there are other ways to free up money to pay off debt. It’s a side business to increase your income. Opportunities abound in the gig economy these days, so consider how much time you can devote to your side hustle and find a gig that’s right for you.

Better yet, find a side job that you really enjoy. Giving up hours of weekly downtime is not easy. Find a job you enjoy, like walking the dog or teaching young children to play their favorite instrument.

Many people are in debt while on vacation. But if you’re currently sitting on a personal loan balance that you want to get rid of, you can follow these tips to round out a debt-free year.