Most loan holders take 16-19 years to pay off their student loans.
Taking out a loan comes with great responsibility. One of the greatest responsibilities of being a loan holder is paying off your loan, whether it’s a small personal loan or a large student loan.
Many financial advisors suggest making small payments toward your loans as soon as you’re able to. But some lenders charge extra fees for paying off loans early. So, what should you do?
If you’ve been wondering, “Can you pay off a loan early?”, you’ll find your answer in the below guide.
Double-Check for Prepayment Fees
Unfortunately, there’s no clear and direct answer to whether or not you should invest in early loan repayment. Much of the answer depends on possible repayment fees.
As bizarre as it sounds, some lenders charge you extra money for paying your loans off early. If this is the case for your lender, it may be best to follow your original projected payment timeline.
If your lender doesn’t ask for repayment fees, then you’ll need to weigh the pros and cons.
Pro tip: This is one of the reasons it’s important to compare lenders. When checking out possible lenders, such as fastloandirect.com, compare interest rates and additional fees.
Weigh the Pros and Cons
There are pros and cons to paying off debts early. You’ll need to weigh your options and choose what’s best for your lifestyle and income.
One obvious pro to paying off debt early is the major stress relief you’ll feel once submitting your final payment. The loan is gone, and you’ll be able to move your future budget around for other payments.
However, a con to paying off your loan early is not having much money left in the present. Paying off a loan feels great, but you can’t use rent money to pay it off!
What Else Can You Do With the Money?
If you decide to not pay off your loan early, there are some helpful things you can do with an extra income you might have.
Invest in an emergency savings account. Take a little bit of money each month to set aside for car repairs, home renovations, or medical bills.
You can also pay off credit card debt or any debt you might owe to friends or close family members.
Wait, Can You Pay Off a Loan Early?
Like many things in the world, there’s no straightforward answer to the question, “Can you pay off a loan early?” There are a few things you’ll need to double-check to reach your answer.
Clarify any potential prepayment fees with your lender. If you don’t have to worry about extra fees, guarantee you have the extra money to pay off your loan ahead of time.
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