pay off loans

7 Tips to Help You Pay Off Loans Responsibly

Canadians are carrying about $2.5 trillion in debt, with a third of that being non-mortgage debt. 

When you take out a loan, the intention is always to pay it back as efficiently as you can. For many folks, life intervenes and you’re left with more new debt piled onto the old debt. Everyone needs to borrow cash from time to time, but the real key is paying it back responsibly.

In this post, we’re going to give you 7 undeniable tips that will help you pay off loans in a responsible manner. The better you are at paying off your loans, the sooner you’ll climb out of debt and the better your rates will be for future loans.

It can be daunting to look at the amount owed on a loan, but keep reading and you’ll have the right strategies to take care of it in a timely manner.

1. Work With a Budget

If you’re going to tackle your loan(s) in an efficient manner, then you yourself need to be efficient with your money. Budgeting doesn’t come naturally to everyone, but it’s the thing that will get you out of debt faster and build better habits for the future.

Even if you’ve already got a budget in place, you’ll need to tailor it so that you can account for loan payments. There are countless budgeting techniques out there, as well as apps that can keep track of your money and spending for you. 

Whatever you end up doing, make sure that your monthly loan payments are a priority along with rent, car payments, and groceries. It’ll become clear where you need to cut costs when you get a definitive picture of your income versus your expenses.

2. Pay More Than Your Minimums

All loans, whether they’re credit cards or short term loans, come with minimum monthly payments. These are set by the lender so that you pay the loan back with interest by the end of the loan term. With credit cards, your monthly payments are a percentage of your credit card balance.

Either way, your best bet is to pay more than your monthly minimums. It’s easy to budget for minimum payments, but if you’re really going to chip away at your loans, then you have to budget for more.

Not every lender will allow you to go outside of the terms, so it’s important to consult with them first. If it is possible, paying, say, $80 per month instead of the minimum of $40, will pay off your loan in half the time. 

3. Decide Which Loan to Tackle First

When it comes to tackling multiple loans responsibly, there are two main schools of thought. The first is the “avalanche” method of tackling the largest debt first, while the other is what is called the “snowball” method.

Your most expensive loan is likely the one with the highest interest rate, so it’s in your best interest to pay that one off first. The more interest you pay, the more you’re spending on the loan in the end.

With the snowball method, you’re taking the approach of getting rid of the easiest loans first. The idea is that you’re seeing results faster and that should keep you motivated to keep going to the next loan, and the next, and so on. 

There are pros and cons to each method, and deciding which one is right for you will depend on your particular debt situation.

4. Quit Credit Card Spending

One thing’s for sure: you shouldn’t be actively taking on more debt while you’re trying to pay your other loans off. Do everything you can to stop your credit card spending in its tracks. 

For some people, this could mean literally removing credit cards from their wallets and deleting them from online shops. The less temptation there is to spend, the less likely you are to do it.

At the end of the day, you have to take that money that you would be spending and put it toward your other loans. Once you pay off your loans, you can start using your credit cards again.

5. Changing Spending Habits

Your spending habits in general may need to change if you’re going to get your debts paid off quickly. In addition to credit card spending, you need to take stock of where your money goes.

In your budget, you probably have money allotted for things like eating out, shopping, and entertainment. Consider how much these things are cutting into your budget and what you can cut out.

If you’re going out to eat once per week, look at how much that costs you at the end of the month. You can potentially halve the number of times you go out and have enough saved to make a way bigger loan payment.

6. Consider Debt Consolidation

Loan consolidation is a strategy some people use to combine multiple loans into one monthly payment. It can help you lower your interest rates and ends up being much easier to keep track of.

If you’re looking for a better repayment plan, consider online loans from Easternloans. We offer Canadians an alternative to loans from regular financial institutions that they may not qualify for because of their debt situation.

Sometimes you need money fast, whether it’s because of some emergency or to consolidate other debts. Our no credit check loans are easy to obtain and give you a better chance at getting out of debt responsibly. 

7. Finding Money

If you look around you, there’s probably more money to be found than you immediately realize. We all accumulate stuff in our lives, most of which we don’t need or even use. Take stock of what you’ve got and start selling it through online marketplaces like Kijiji or Craigslist.

You’ll be surprised at how things can add up. With this money, you can make a lump payment to put a big dent in one or more loans.

Another thing you can do is take on a side hustle for a few months. If you’re finding it difficult to keep up with your loan payments and you’ve got extra time on your hands, why not take a retail position or do some blog writing? There are loads of opportunities out there that can make you a quick buck.

Pay Off Loans Faster and Better

These tips will help you pay off loans in a more efficient manner. Paying off your loans more responsibly will have positive repercussions as you borrow in the future. Don’t let them sit there, accumulating interest when you can take the initiative and pay them off sooner.

Paying off your loans starts with finding better loans in the first place. At EasternLoans, we can help you get fast loans with terms that suit your situation. It doesn’t matter what your credit score is or what your financial standing is, apply for a loan today and get your money fast.


Get Cash in a Flash, quick & Instant loans

New Loan Renew your loan