Whether you've taken out a personal loan for home renovations, debt consolidation, or an unexpected expense, paying it off faster can save you a significant amount in interest and help you achieve financial freedom sooner. Here are some smart and manageable strategies to help you pay off your personal loan faster—without blowing your budget.
Make Extra Repayments Whenever Possible
Even small extra payments can make a big difference over the life of your loan. By paying more than the minimum repayment, you reduce the principal faster, which means you’ll pay less interest in the long run. Got a tax return or work bonus? Consider putting a portion of it towards your loan.
Switch to Fortnightly Repayments
Most loans are set up with monthly repayments, but switching to fortnightly can shave months off your loan term. Since there are 26 fortnights in a year, you'll make the equivalent of 13 monthly payments annually instead of 12—essentially getting one full extra repayment in each year.
Round Up Your Repayments
Rounding up your repayments to the nearest $10, $20 or even $50 can be a pain-free way to contribute more without noticing a huge difference in your spending. For example, if your loan repayment is $263 per fortnight, rounding up to $280 adds an extra $442 per year.
Refinance If a Better Deal Is Available
If interest rates have dropped since you took out your loan, or your credit score has improved, it could be worth exploring a refinance. A loan with a lower interest rate could mean more of your repayments go towards reducing your loan balance rather than paying off interest.
Set a Realistic Budget and Stick to It
Having a clear and realistic budget helps you stay on top of your finances and see where you can free up funds to allocate towards your loan. Use budgeting tools or apps to track your spending and identify areas where you can cut back—even small savings can be redirected to your loan repayments.
Avoid Taking on New Debt
It can be tempting to take out another loan or open a new credit card while you're still paying off your existing one, but doing so can derail your progress. Focus on paying off your current personal loan before committing to any new financial obligations.
Consider a Flexible Loan Provider
Choosing a lender that offers flexible repayment options and doesn’t penalise you for early repayments can be incredibly helpful. For example, if you're looking for a fast and convenient lending option, a cash loan from a trusted provider can give you the flexibility you need—without locking you into rigid repayment structures.
Stay Motivated with a Clear Goal
Set a target payoff date and track your progress. Watching your loan balance drop can be incredibly motivating. Whether you’re visualising being debt-free or planning for your next big goal, keeping your eyes on the prize helps you stay disciplined.
Paying off your personal loan faster doesn’t have to mean major sacrifices. With a combination of discipline, smart budgeting, and small lifestyle tweaks, you can clear your debt sooner and enjoy the financial breathing room that comes with it.
