This is my second installment of three on finances. Many of my therapy clients are incumbered with debt. One of the best ways to get out from under debt is to pay-off the debt early.
One of the best ways to pay-off debts early is to focus on the loan payment. When you make a loan payment, the payment goes towards the principle and includes interest. Principle is the part of the loan payment that is applied to what is left of the original loan that you borrowed.
Interest is the amount you pay to a borrowing institution for the privilege of buying down the principle. You must keep paying interest along with the principle until the principle is zero. It stands to reason that if you must pay ex amount in interest, you might as well put as much into the principle as you can each time you pay for the interest. As an added benefit as the loan continues, you pay less interest per month making it cheaper to pay-down the principle.
Paying-off the debt early occurs when you make more than the minimum loan payment. Any amount more than the minimum loan payment you make is automatically applied to the principle which makes paying-off the load early a possibility. If you have a car loan for $30,000, for example, it may take 5 years to pay off the loan making the minimum loan payment. But you can pay-off the loan in half the time if you add a certain extra to the minimum loan payment.
Try to figure out a way to add additional principle to every debt payment you make can since you are already paying for the right to buy own the principle. This will help you get out from under debt sooner.