Three tips to pay your debt off faster

Everyone has tips to help you pay your loan off faster. However trying to tackle 50 different ideas at once can be overwhelming. To make it manageable for you, each month we’ll give you our top three ideas to reduce your debt. Pick the ones that appeal the most, and contact your finance adviser if you have any questions.

1. Get a cheaper rate

While this may sound obvious, refinancing your loan to a bank that offers you a less expensive rate can take time and hassle. However at Orium Finance, your personal adviser can take away almost all of the legwork for you. Once the refinance is through, don’t adjust to the new, lower repayments. If you keep your repayments the same you’ll find that over time your loan will reduce at a faster rate. On average, this move can save five years off your loan.

2. Consolidate your debts

If you’ve got credit cards or personal loans, the added interest you’re paying and the higher repayment amounts can slow down your home loan repayments. Roll all your debts together and make one easy repayment, however ensure that your total payment equals the same as all of your smaller payments combined. This way, when you’ve paid off the debts that you’ve consolidated, you’ll have more funds to pay your home loan off faster. Depending on the size of the debts that you’re consolidating, this can save you two to seven years off your loan.

3. Don’t ‘put it on the house’

There are numerous advertisements around saying that you can use the equity in your home to purchase a new car or take a holiday. Do not be tempted to do this. If you wish to purchase a big ticket item, set your budget and open up another account (if possible make it an offset account) to save money into. That way, you get that new car or holiday and your home loan is still on track to being paid off. Continuously borrowing from your home to buy things could leave you still in debt in 20+ years down the track.