Getting the best deals out of home loans and credit cards simplifies finances that can save time and money. It also takes away a lot of pressure. There are no magic bullets when it comes to reducing the principal of the loan, or paying credit cards, except to pay as early and as often as possible.
Thinking in these terms and implementing them where applicable can achieve that needed peace of mind.
- Pay Regularly
While this does not make a great deal of difference, it is still worthwhile to pay regularly, say, fortnightly or monthly. It is always better to have the money out of the general bank account as early as possible so it does not get spent for unnecessary things.
- Get the Deposit as High as Possible
As people with mortgages are most likely aware, the first few years can be mind-numbing as thousands of dollars in repayments are plugged in, only to find the principal debt has dropped by a few hundred dollars. Because of the way interest is worked out, by keeping the deposit as high as possible, the principal is cut into much earlier.
- Pump Pay Increases into the Mortgage
Take a holiday for a month or so, then pump a pay raise into the mortgage or other loans with higher interest.
- Mind Other Debts
Personal loan and the credit card repayments are often the monthly destabilizers. First of all, be wary of lines of credit. Get rid of the smallest debt first, then the next and the next.
- Choose Lenders Wisely the First Time
The costs of changing lenders can be quite damaging. Compared with the saving of, say, a quarter of a per cent, the cost involved can make changing lenders not worth it especially for short-term loan plans.
- Use the Redraw Facility
If it is there and being paid for, use it.
- Pay the Fees Upfront
What seems to be negligible monthly account-keeping fees can mean something on the total yearly repayments. Pay the fees upfront, otherwise, they are added to the load, with interest attached.
- Salary Crediting
This may work for some people who have disposable income. Make sure that the higher interest rate paid for a fully featured loan will be more than compensated by the savings from the salary crediting.
- Keep an Eye on Mortgage Options
For most people, mortgage is the biggest single payment every month. Rates and options should be looked into. Mortgage brokers can be contacted as necessary. They may have a current better deal to offer.