Make Extra Payments
Most Canadian personal loans allow you to make extra payments without penalty. Even one extra payment per year can shave months off your loan term and save hundreds in interest.
Round Up Your Payments
If your monthly payment is $287, round up to $300 or $320. The extra amount goes directly to principal, reducing your balance faster.
Use Windfalls Wisely
Tax refunds, bonuses, and inheritances are perfect opportunities to make a lump sum payment on your loan. Check your loan agreement for prepayment rules first.
Switch to Bi-Weekly Payments
By paying bi-weekly instead of monthly, you make 26 half-payments per year (equivalent to 13 monthly payments instead of 12). This extra payment each year can reduce a 5-year loan by several months.
Refinance at a Lower Rate
If your credit score has improved since you took out the loan, you may qualify for a lower rate through refinancing. Compare current rates on CanuckLenders.com.
Avoid Late Payments
Late payments in Canada result in fees and can damage your credit score, making future borrowing more expensive. Set up automatic payments to never miss a due date.