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Paying Off A Loan Early

Should you reduce your loan amortization with extra payments?

How to pay off a loan early

There are many different techniques for paying off a loan early. While many people will tell you that their way is best, it’s important to choose a method that works for your budget and lifestyle. Some effective payment methods include:

  • Dividing your monthly principal and interest by 12, then adding that amount to your monthly payment. This adds up to 13 payments per year while eliminating the need for a large lump sum.
  • Use additional money from a bonus, tax refund, or other unexpected windfall to help pay down your principal.
  • If paying off your personal loan early is a top priority, consider looking for a source of additional income that you can dedicate to your goal. Consider taking on a side job, and then putting the money you earn toward your loan.
  • Too busy for a side job? Consider a temporary cut in luxury purchases to fund additional loan payments

Loan payment calculator

Have a payoff timeline you’re trying to meet? Use our loan calculator to help you determine how much you’ll need to add to your monthly payment to meet your goal.

Keep this information in mind when you apply for your next loan

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All loans subject to approval.

Santander Bank does not make any claims, promises, or guarantees about the accuracy, completeness, or adequacy of the information contained in this article. Readers should consult their own attorneys or other tax advisors regarding any financial or tax strategies mentioned in this article. These materials are for informational purposes only and do not necessarily reflect the views or endorsement of Santander Bank.

Santander Bank, N.A. is a Member FDIC and a wholly owned subsidiary of Banco Santander, S.A. © 2021 Santander Bank, N.A. All rights reserved. Santander, Santander Bank and the Flame Logo are trademarks of Banco Santander, S.A. or its subsidiaries in the United States or other countries. All other trademarks are the property of their respective owners.

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