Save Interest on loans by paying earlier than the due date

paying your repayment earlier than the date it is due means that the capital on which interest can be charged is reduced earlier and as a result, less interest is charged. The small saving in interest results a greater portion of future payment sbeing allocated to capital repayment and a snowball effect results, saving thousands over a long term loan.
Etiquetas: interest save
Escrito en 19-09-2010 22:21 | 2 Comentarios | Favorito 0 veces | Marcado 0 veces como inapropiado
 

Comentarios

#1     I understand the concept but am not clear on the details. Does making my monthly payment early cause the snow ball effect, and how early would I have to make it? Before the next billing date?
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Sherrill
Escrito en 23-09-2010 00:11
#2     pay early on high interest rate debts first... then work on the others... some of the low interest rate debt with depreciating value (like a car with zero or low interest rate) just keep monthly payment to minimum since it does not do you any good to pay it off early with a depreciating value (kinda like how the houses are now - why pay early when its a negative value in it) you can make use of your money better putting into investment machine. Bottom line its where you put your money, I like my money to work for me.
Escrito en 07-10-2010 06:44

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