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Learn strategies for paying down your debt faster.
Paying down your debt faster can help you get a head start on your goals, whether it’s applying for new credit, saving on the cost of borrowing, or just reducing your debt. Here are some strategies to think about when considering repayment plans that could help you pay your debt off faster.
Loan interest rates, payments, and terms are closely related. Keep in mind that changing or adjusting one of these factors will result in changes to the others.
For example, with a $10,000 loan at 8%, and a payment term of 2 years, you would pay $452 per month. But if you changed the term to 3 years, you’d lower your monthly payment to $313 per month.
This example and chart are for illustrative purposes only. A $10,000 loan with a 5-year term at 7% Annual Percentage Rate (APR) would be repayable in 60 monthly installments of $198 each, or repayable in only 48 monthly installments of $239.46 each. The actual payment amount and year-end balance will vary based on the APR, loan amount, and term selected.
Before you apply, we encourage you to carefully consider whether consolidating your existing debt is the right choice for you. Consolidating multiple loans means you'll have a single payment each month for that combined debt, but it may not reduce or pay your debt off sooner. By understanding how consolidating your debt benefits you, you'll be in a better position to decide if it is the right option for you.
Annual percentage rate
The annual percentage rate describes the interest rate for an entire year, instead of just per month, as applied on a loan, mortgage, credit card, etc.
The principal of the loan is the amount borrowed.