An Early Bird’s Guide to Paying Back Loans Quickly

Loans won’t leave you alone. Canadians owe $1.75 for every dollar they earn in disposable income. Debt rates are rising across Canada, especially for mortgages and credit cards.

You need to find ways to start paying back loans. You may feel overwhelmed, as though you can’t meet your expenses. But you can once you know some basic facts.

What are some things you should do before you take out a loan? What are different payment approaches you can adopt? How can you find income streams that cover everything?

Answer these questions and you can become debt-free through some simple steps. Here is your comprehensive guide.


Talk to a Financial Advisor

Before you take out a loan, you should talk to a financial advisor. Figure out what your options for loans are. It may make sense to hold off on taking out a loan until you have earned more money.

If you find a loan you like, talk to your advisor about how you can start paying off loans. Go over your financial portfolio and figure out if you can pay back loans right away.

Come up with a strategy for loan repayments. You should keep to the strategy as time goes on, but you can make adjustments if your financial picture changes.

At a minimum, get advice on how to pay back loans. You don’t have to become a client of the financial advisor unless you want to. You can schedule a free consultation with many advisors.


Negotiate Your Terms

You have rights and responsibilities for any type of loan you take, including for lines of credit. Study your rights and keep literature about them on hand.

Never sign onto a loan unless you know what its terms are. This includes your loan early repayment options.

Some loans limit the conditions under which you can pay them back early. Other loan contracts attach fees for early payments. Try to avoid taking out a loan that prevents you from implementing an early repayment plan or making cheap early payments.

You may be able to negotiate some terms of your contract once you are under it. Your lender may feel confident enough to extend early payment options to you. You should remain in touch with your lender through time so you can build trust between the two of you.

Keep a contract handy. If your lender violates the terms, act right away.


Rank Your Expenses

You can only pay for your loan if you are in a good place. Sit down and write a list of all of the expenses you need to take care of. This includes rent, food, and child support.

Then add how much you have to pay for each expense every month. If you have the information on how much you spend every week, you can write that down as well.

Once you have this information in front of you, put each expense in order of importance. The expenses that keep you healthy and safe should be the most important. Your loan may be next in importance or not.

Regardless of where your loan falls on your list, you need to cover your most important expenses first. Make sure you have a place to sleep and enough food to eat. Take whatever extra money you have and cover the other expenses.

You may not be able to meet everything. You may have to scale back your discretionary spending, especially on entertainment. But try to cover as much as possible and take pride in what you can cover.


Pay Every Two Weeks

Most loan payment schedules are monthly. You may be able to strike a deal with your lender so you can make full payments every two weeks. This will cut your schedule in half.

If that’s not an option, you can make half-payments every two weeks for a total of 26 half-payments. This means you will make 13 full payments a year, one more than you would make if you stuck to a monthly schedule. Your loan will also gather less interest because you are paying more often.

A bi-weekly payment schedule is good for people who have a secure job that pays a good amount of money. If you are living paycheck to paycheck, you may need to take another approach.


Round Payments Up

Your monthly payments may amount to something like $235. You can round your payment up to the nearest $50, which would be $250. The extra money does not make a huge dent in your savings, but it can trim the life of your loan down.

If you have a lot of money on hand, you can round up to the nearest $100. Going up to $300 per month means you will make one additional full payment every four months. You may be able to trim a year or more off of your loan.

As with making bi-weekly payments, this is a good approach if you have a lot of money on hand. You don’t have to commit to rounding your payments up on a regular basis. When you have some extra money one month, you can round your payment up.

You may be able to strike an agreement with your lender on rounding up and then rounding down. If you pay an extra $15 one month, you may be able to pay $15 less the next month. Try to negotiate for these terms if you work freelance or temporary jobs.


Make an Extra Payment

You can always make an extra payment at the end of the year. Many people receive holiday bonuses or money back for unused vacation hours. When you receive a check for this, you can send it your lender’s way.

You can also distribute the cost of an extra payment over your other payments. If one monthly payment is $235, you can add $20 to each month. This keeps your end-of-year expenses minimal, which makes it easy to afford presents and winter amenities.


Find Additional Sources of Money

The more money you make, the earlier you can pay back your loans. You should keep a permanent job that pays you a consistent income. But you should try to find other ways to earn money, especially in very little time.

You can find a remote job that you can focus on during your weekends. You can teach classes online, write reviews, and sell artworks. Working just a few hours every weekend can help you cover your loans easily.

If you have a lot of assets, you can sell them. Used books, electronics, and furniture can go for hundreds of dollars. You may be able to make enough money for an extra payment off of one yard sale alone.

If your weekends are busy, you can try to make investments. You can buy a share in a business, or you can invest in hard assets like real estate.


Find a Lender Program

Your lender may offer you a program to expedite your payment process. Many banks and credit unions have lender programs, including for young people learning how to get out of debt.

Some programs charge additional fees in order to use them. Sit down with a representative and get a good sense of what you need to do. You may also be able to find third-party companies that offer debt payoff programs.

If push comes to shove, you can pay off one loan with another loan. You should only do this if times are tight and if the second loan has better terms than the first one.


Save Money

You can still save money while you are paying back loansCreate a household budget that will prevent you from spending too much.

Review your bank account and credit card information. See how much money you have on hand and determine how much you can afford to spend on things like gasoline.

Do not take money out of your retirement account in order to pay for loans. Doing so will mean you have to work until the end of your life, which will make your financial picture worse.

The average Canadian saved over $5,000 during the pandemic. With pandemic restrictions lifting, you may feel inclined to spend this money. But keep it in your back pocket in case conditions change and lockdowns occur again.


Start Paying Back Loans

Paying back loans does not have to be labor-intensive. Talk to a financial advisor and study your rights before you take out a loan. Make sure you can cover your most important expenses.

You can pay once every two weeks, round your payments up, or make an extra payment at the end of the year. Whatever you do, get yourself some extra cash. You can also pursue a lender program, yet you should continue to save for retirement.

Finding loans shouldn’t be difficult either. offers quick and paperless loans. Apply for one today.

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Get your online loan, paperless & fast.

Quick Personal Loans for Canadians :

  • No credit investigation
  • No documents required
  • Repay in up to 90 to 120 days
  • $500 short-term loans