FOR those with mortgage debt or debt, financial expert Seth Godwin may be able to help.
Seth shared with his nearly 80,000 TikTok followers some simple steps to pay off your debt a little faster, saving you money.
His advice is for those who have a simple interest loan – a short-term personal loan.
These types of loans generally charge daily interest instead of monthly interest.
With mortgages, when a payment is made, it is first applied to interest and whatever remains is applied to principal.
Seth advises that once you’ve made a loan payment, take that payment, divide it in half, and then make that half payment twice a month.
Seth said in his ICT Tac: “For example, if your loan payment is $300, you will pay $150 twice a month. This is commonly known as the 15/3 rule,
“This means that you make your first half payment 15 days before the due date and the second half payment three days before the due date.”
Although you don’t have to follow this exact plan.
He advises that you just want to avoid making a lump sum payment each month.
To save even more money, he explains that you can actually make half a payment every 2 weeks.
The reason this works is that the majority of loans and mortgages are simple interest loans, also known as daily allowances, and the less time that elapses between each payment, the less interest you pay.
More money will then go towards the main balance.
“It might not seem like a big change at first, but the more you do it, the more you’ll notice the savings,” Seth said.
Not all lenders allow you to do this, so be sure to check with your lender to see if you have a simple interest loan and can benefit from these savings.
Other ways to save
Another way to save is to refinance your mortgage.
When you take out a new loan to repay your outstanding balance, you then benefit from a new monthly payment which may be lower than before.
You can also set yourself up on an automatic payment schedule.
This way, you are sure to never miss a payment, which would hurt your credit score.
This generally works best for personal loans, auto loans, and mortgages.
The Sun reveals the best way to reduce closing costs.
Moreover, the sun Explain housing bubbles and what would happen if the market collapsed.
We pay for your stories!
Do you have a story for The US Sun team?