Paying off a loan usually takes a long time and can be stressful. Whether it's a personal loan, student loan, car finance or mortgage, the monthly repayments add up and can weigh heavily on your finances. But what if you could speed things up and reduce your debt sooner than you planned?
In this guide, we’ll walk you through some tips and strategies on how to clear your loan faster. From making small lifestyle changes to adjusting your repayment plan, there are several smart steps you can take without feeling overwhelmed.
Clearing your loan early won’t just bring you peace of mind - it’ll also save you a significant amount of money in interest. If you'd like to take control of your finances and work towards a debt-free future, here’s what you can do.
1. Make Extra Payments Whenever You Can
One of the easiest ways to clear your loan faster is by making extra payments whenever you can. Even small amounts can make a big difference over time. For example, if you get a bonus, tax refund, or some extra cash, you might consider putting it towards your loan.
These additional payments will reduce your overall loan balance, which means paying less interest in the long run. However, you’ll need to make sure your lender allows early loan repayments without any penalties.
If you do this regularly, you’ll shorten your loan term and become free from debt sooner than expected, all without making any big financial sacrifices. In case you’re wondering, our loans come with no early repayment fees, so you won’t face any surprises if you borrow from us.
2. Switch to Biweekly or Weekly Repayments
Switching from monthly to biweekly or weekly repayments can also help you pay off your loan faster. How it works is, instead of making one big payment each month, you can split it into smaller payments made more often.
Because there are 52 weeks in a year, you’ll end up making the equivalent of one extra monthly payment, without really feeling it. This extra payment can reduce your loan balance quicker and cut down the total interest you pay.
It’s a simple change that can make a significant impact over time. Be sure to check with your lender to see if this option is available.
3. Round Up Your EMIs to Accelerate Progress
Rounding up your EMIs (Equated Monthly Instalments) is another great way to speed up your loan repayment. This means, instead of paying the exact EMI amount, you could round it up to the nearest £10, £50 or £100.
For example, if you’ve taken a loan of £1,000 and your EMI for a year is £117, you can round it up to £150. That extra £33 goes directly toward reducing your total loan amount. Over time, these small extras add up to help you pay off your debt early, while saving on interest.
If you’re looking for the best ideas on how to clear your loan faster, this is an easy habit to adopt and doesn’t require a major financial change. You just have to pay a little more each month for quicker results.
4. Use Birthday Cash or Bonuses to Pay Off Chunks
Using windfalls like work bonuses, birthday money, tax refunds, gifts, or any unexpected income may be the ideal way to help pay off your loan early. Rather than spending this extra money on things you don’t need, you could consider putting a portion of it - or all of it - towards your loan. It might not be as exciting, but “future you” will thank you.
These lump sum payments can significantly reduce your outstanding balance and lower the interest you’ll pay over time. Even doing this once or twice a year can make a big difference.
This way, you’ll be able to make faster progress without affecting your regular monthly budget. Every extra payment will help you get closer to a debt-free life.
5. Refinance for a Lower Interest Rate
Refinancing your loan means replacing your current loan with a new one that has a lower interest rate. If you want to learn how to clear your loan faster and save money on interest, this is another effective idea.
With a lower rate, more of your monthly payment will go toward the loan balance instead of interest. You can also choose a shorter loan term to speed things up even more. Just be sure to check for any fees or charges before refinancing, and compare offers from different lenders.
If the numbers work in your favour, refinancing can be a smart and easy way to reduce your debt quickly.
For Loans With No Early Repayment Charges, Choose Salad
Now that you know how to clear your loan faster, you might want to explore our borrowing options as they’re free from additional hidden fees like prepayment charges.
At Salad, we make affordable loan options available for every employed UK resident. As one of the largest CDFI consumer lenders in the UK, we understand that the credit score system isn’t always fair. That’s why we use an open-banking-based assessment to evaluate the financial situation of every applicant.
Applying for one of our new loans doesn’t impact your credit score. We use Open Banking in our initial assessment. If successful, we report your loan to the CRA’s (Credit Reference Agencies). Your credit score won’t hold you back from being eligible.
To learn more about our personal loans, click here and to read more blogs like this one, visit our blog page now.
