5 tips that will allow you to pay off your debt faster, be debt free before retirement & allow you to start building additional wealth…
One of the biggest problems I see when working with busy professionals and business owners is that due to their massive workloads and lack of free time, they neglect to track and put plans in place to ensure they position themselves and their families in an optimal position to be debt free and enjoy the fruits of their labour long before retirement.
With the Reserve Bank reducing the cash rate down to record lows… now is the perfect time to review our debts, take advantage of super-low interest rates and put a plan in place to pay off your Debt in record time!! In fact, with the banks finally ‘loosening’ their lending criteria and making it easier to switch lenders, you are in a powerful position to negotiate incredibly good deals and lock them in going forward.
Did you know that Australians are currently carrying more debt than ever before and it is now even more important to step back and take control of your finances, tackle your debt ‘head on and ensure you enjoy a debt free retirement.
These are my top 5 tips to making sure that you are debt free in record time.
1. REVIEW YOUR EXISTING LENDING PROVIDER
The lending market couldn’t be any more competitive at the moment; competition for your business is tight and banks are keen to lend their money, even offering cash rebates in some cases to get your business. That means a win for you in the short term and the long term. If you haven’t reviewed your loan for some time, it’s probably a great time to do this now. There’s every chance you can find a better deal, save money on interest, and pay off your mortgage sooner.
2. PAYING YOUR MORTGAGE FORTNIGHTLY INSTEAD OF MONTHLY
One simple and powerful strategy you might be able to use to reduce your home loan faster is to pay your repayment installments fortnightly (rather than monthly). By making fortnightly payments, you’re effectively adding the equivalent of one extra monthly payment towards your mortgage each year.
While it doesn’t sound like much, that extra payment really does add up.
For example, with a $400,000 loan at 4% per annum for 30 years, fortnightly payments could save you approximately $46,000 in interest over the life of the loan and reduce your loan term by four and half years. Weekly payments could save you even more.
3. GET AN OFFSET ACCOUNT
A mortgage-offset account is a loan feature that could help you save on interest by allowing you to “offset” the balance owing on your loan with any savings you may have.
For example, if you have a $400,000 loan at 4% per annum for 30 years and keep a balance of $30,000 in your “offset” account, you would only pay interest on $370,000. This could save you more than $61,000 in interest and reduce the term of your home loan by almost three years.
There can be some restrictions with this strategy so it is always important to seek advice tailored to your circumstances.
4. TRY THE DEBT SNOWBALL METHOD
Many financial experts advocate a ‘debt snowball method’, which involves paying off your smaller debts first – scoring quick wins and keeping you motivated and on track to becoming debt free.
This method involves, listing all of your debts from smallest to largest, throwing all of your ‘excess’ funds at the smallest balance, while making the minimum payments on all your larger loans. Once the smallest balance is paid off, start putting that extra money toward the next smallest debt until you pay that one off too, and so on.
Over time, your small balances will disappear one by one, freeing up more dollars to throw at your larger debts. This
“snowball effect” allows you to pay down smaller balances first logging a few “wins” for the psychological effect — while letting you save the largest loans for last. Ultimately, the goal is snowballing all of your extra dollars toward your debts until they’re demolished — and you’re finally debt-free.
5. GET HELP FROM AN EXPERT
Banks will only recommend their own ‘in-house’ loan products, which only represents a tiny fraction of the options available to you in the market – and may not necessarily be best suited to your needs.
On the other hand, an expert Lending Consultant who has access to multiple lenders in the market will provide you a wide array of options – this will greatly increase your chances of arranging lending that is most suitable to your needs and unique circumstances – they also provide added benefits, such as
- Ensuring you get the lowest interest rate available for your unique requirements and situation – saving you $$
- Project Management of your loan set up – saving you precious time
- Application screening – improving the chances of your loan being approved
ARE YOU READY TO DEMOLISH YOUR DEBT?
The quicker you start, the more money (and time) you can potentially save.
So what is the next step? Simple – Join me for a valuable 45-minute “Debt ‘Demolition” strategy session.
In just 45 minutes, we will take an in depth look at your lending situation and requirements, analyse opportunities for improvements, discusss ideas on how to save money and look at customised strategies designed for you to ultimately pay off your loan quick…
I designed it specifically for busy people like you who want to ensure their hard work is paying off, fast track the repayment of their debts and have a plan in place to ensure they are debt free in record time! Giving them more choice on what to spend their priceless time on.