Let’s say you took out 10,000 with a 5.29% interest rate.
Yearly, that loan interest is 529$. If your loan accrues interest everyday that’s 1.18 per day, total of 44.08 a month.
Say your monthly payment on the loan is 31 dollars a month. You are not paying a single penny towards the principle! THAT’S CRAZY! It’s like PacMan in reverse steady yummy yum away at your hard earned pay! Oh, the Horror, the Agony, the PAIN!!
You may think that loan is going down but once you check your account balance, let’s say 5 years, it grew a extra 2,700; leaving you devastated and more stressed out.
The objective is to pay more weekly instead of monthly to get rid of the debt. By doing so, you are created a gap to only put more towards the principle. This will help you pay the loan off super fast and enjoy your hard earned money. This is a technique you must conquer especially if you already don’t make a lot of money.
You have to set a routine. I will pay this week, this day, this hour of the day! It only makes the process easier for you. It gives you a hint of sunshine at the end of the tunnel quicker than what you had. Paying off loans could be a pain but with a great scheduled plan you could be debt free quicker than you think. Stick to your routine and get it gone.
Congrats! You have successfully paid off your loans and are at a standstill with what to do next with all this money. Well, let me give you some wealth building pointers. Just how Interest was working about you, it’s time for interest to totally work in your favor! Yes, you heard me correctly. Through investing in the Stock Market you could grow your money at a spectacular rate. Let’s say you put the same amount each week or month you had going towards your loan, now switched in your investing account; that makes it easier because that’s money you never spent on yourself. The end game is so phenomenal after paying your debts.
If you come from a lower class income you don’t have time to play around with your debt. This has to be the first thing you think about when you wake up and when you go to sleep. You have to find ways to knock this debt out quicker. The government or nobody else owes you a penny and isn’t going to lend you a helping hand. You have to get up, make something happen, and make way more than the monthly payments. Write it on paper in all caps, “I WILL PAY THIS LOAN OFF, I WILL BEAT THE INTEREST”! Until goal is complete you have no time to get 8 hours of sleep. Continue working and putting your mind to great use. Pay that debt and reverse it to build wealth too.
Question: Are you paying close attention to your debts interest accumulation!?