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BSB 806 015
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How to pay your loan off sooner

Repaying a loan as quickly as possible is a top financial priority for many of us. Whether you have a home loan or a personal loan, there are some simple steps you can take to reduce the life of your loan.

Weekly or fortnightly repayments

Having weekly or fortnightly repayments, instead of monthly, can save you interest and take months or even years off your loan. Check that your loan allows you to make more frequent repayments, and whether there is a penalty for doing so.

Opt for an offset account

If you are paying off a home loan, a linked offset account is a great option. Having your income or savings in an offset account will reduce the amount of interest you pay over the life of on your home loan.

Put a little more into your loan

If your circumstances allow it, you should and put more into your loan whenever possible.

  • If you have a variable interest loan and the interest rate drops, keep paying the same amount in repayments.
  • Increase the amount of your regular repayments if situations change – for example, after a pay rise.
  • Whenever you have some spare cash, consider making a lump sum payment into your loan account.

Every extra dollar will help to speed up the repayment process, but before you start making bigger or more frequent contributions, it’s important to check that your loan allows additional payments and early repayment, and whether there are any penalties for doing so.

You can also give yourself a better chance of repaying the debt quicker by making sure you have the right home loan or personal loan for your needs. If you need help making sense of your loan options, talk to one of our loan consultants on 13 25 77.

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