Five Ways to Pay Off a Loan Early

If you’re like most Americans, you owe money toward a large loan. Whether that means carrying thousands of dollars in credit card debt, having a hefty mortgage in your name, or making car loan payments each month – loan debt is part of your life.

It can all get kind of depressing—but it doesn’t have to be that way. You can pay off your mortgage, auto loan, credit card debt, and any other debt you’re carrying quicker than you thought possible with a carefully applied technique. These tricks won’t hurt your finances in any dramatic way, but they can make a big difference to the total interest you’ll pay over the life of the loan and help you become debt-free faster.

A note of caution before we explore these tricks: Check with your lender before employing any approach, as some loan types have penalties for making extra or early payments.

1. Make bi-weekly payments. Instead of making monthly payments toward your loan, submit half-payments every two weeks. The benefits to this approach are two-fold:

  • Your payments will be applied more often, so less interest can accrue.

  • You’ll make 26 half-payments each year, which translates into an extra full payment on the year, thereby shortening the life of the loan by several months or even years. If you choose this method with a 30-year mortgage, you can shorten it to 26 years!

2. Round up your monthly payments. Round up your monthly payments to the nearest $50 for an effortless way to shorten your loan. For example, if your auto loan costs you $220 each month, bring that number up to $250. The difference is too small to make a tangible dent in your budget, but large enough to knock a few months off the life of your loan and save you a significant amount in interest.

3. Make one extra payment each year. If you can’t make bi-weekly payments, but you like the idea of an extra yearly payment, accomplish the same goal by committing to just one more payment in the year. You’ll only feel the squeeze once (tax or bonus time, perhaps) and you’ll still shorten the life of the loan. You can also spread that extra payment throughout the year. Divide your monthly payment by 12 and then add that cost to your payments all year long. You’ll be making an extra payment while hardly feeling the pinch.

4. Refinance. If interest rates have dropped since you took out your loan or your credit has improved dramatically, contact DoverPhila Federal Credit Union to ask about refinancing, whether the loan is with us or not. Refinancing makes the most sense if it can help you pay down the loan sooner. You should easily be able to afford shortening the life of the loan with a lower interest rate.

5. Boost your income and put all extra money toward the loan. Cut the life of your loan short by earning more money and putting the extra cash towards your loan. Consider selling stuff on Amazon, moonlighting as a consultant, or taking on a side hustle. Even a job that nets you an extra $200 a month can make a big difference in your loan.


Triumph over your loans by using one or more of these tricks to make them shorter and pay less interest. Feel free to contact DoverPhila Federal Credit Union if you have questions about loan repayment or if you need a fresh perspective on debt repayment. Our free, on-staff financial counselors can help!

Cash Flow Budgeting: A Fast, Flexible Way to Fix Your Finances

You’ve heard it from a million places: Budget your money! Make a firm plan and stick with it. It’s the pathway to prosperity!

For many people, though, that advice just doesn’t resonate. They feel constricted by a budget. Keeping cash in separate envelopes makes them feel like they can’t have a life. It takes too much planning and too much rigid denial. They break their budget and sometimes wind up in serious financial trouble.

Other people have an inconsistent cash flow, making creating and keeping a budget difficult. Maybe they’re freelancers who work gig-to-gig. Maybe they’re in commissioned sales. Maybe their hours fluctuate from month to month. Whatever the reason, it’s hard to make a detailed plan when your bottom line changes every month.

The answer isn’t to give up on budgeting. The collective wisdom, that monitoring your expenses and income streams is the way to stability, still holds true. It might just require a different approach to budgeting: cash flow focus.

Cash flow focus is the strategy used by most businesses. They pay their fixed costs, and whatever is left is used to grow the business. You can manage your finances the same way. Just follow these four steps:

1. Automate your savings. Even if you disregard everything else in this article, implementing this one tip can be life-changing. Figure out how much of your income you can save, and then take that out as soon as you get paid. You can set up monthly transfers from your draft account to your savings account. You can also divide the money between the accounts on a per deposit basis. How you choose to do so is less important than doing so.

Like the saying goes, pay yourself first. This savings provides you the flexibility to cover big expenses or make major purchases on your schedule. It’s the single most important step in any budget, but it’s even more important with cash flow budgeting.

When you automate your savings, you remove the money you saved from consideration. You can’t spend it; you’ve already spent it on savings. The importance of this kind of savings will become more clear once you see this budget in action.

2. Pay your needs and your priorities. Make a list of your essential expenses each month. Include your rent or house payment, your car loan, and your utilities. Also include your student loan payments, your insurance, and other necessary expenses. These are your “fixed costs.” They get paid after your savings contributions are made.

Next, make a list of your priorities. Include your charitable contributions, vacation savings, and retirement account contributions. These are your “growth expenses.” They get paid after your fixed costs.

If you don’t have enough money to make these bills, you don’t need a better budget. You need to lower those bills or increase your income. No amount of spreadsheet magic will change that bottom line.

It’s helpful to automate savings for these expenses, too. That way, you never get caught short on these bills. Transferring this money to a check-only draft account can be a helpful way to ensure you don’t spend it.

3. Spend the leftovers. This message may sound peculiar for personal finance advice. Remember, though, that you’ve already automated your savings. What you’re spending here is the leftovers – the extra that’s left at the end of the month.

 Spend this money however you like – don’t worry about putting this much in entertainment and that much in travel. Just keep track of how much you’ve spent so you don’t accidentally overdraft your account.

This approach allows you to go out or indulge in a latte. You don’t have to worry about including it in your budget. Your spending habits might change as the month goes on, just like a business. If you know there’s a big outing before you get paid again, you may want to save some money for that. You don’t need to say that you can’t go because you didn’t budget for it.

4. Roll over what’s left. If you have worked in a big business, then you have seen departments desperately spending at the end of the fiscal year. Departments buy cases of pens and paper, knowing that they will lose whatever they don’t spend. Fortunately, you’re more flexible than a big business. You don’t have to spend it all. If you have money left over at the end of the month, then you have more to spend the next month.

If you have a month with slightly higher expenses, you can cover it from a previous month’s slightly lower expenses. Your spending will change from month to month, as might your income. So long as you keep the former smaller than the latter in the long run, you’ll be fine.

That’s what cash flow budgeting is about: flexibility. You don’t have to write your non-budgeted spending purposes in stone. You don’t have to mess with cash envelopes or other strategies. You can spend when you have money and save for when you don’t.

DoverPhila Federal Credit Union can help if you’re thinking about adopting a budget. A friendly, knowledgeable financial counselor can walk you through the savings tools you need. You can automate your savings, flex your spending, and build toward financial security. Members can call 330-364-8874 or stop by the credit union’s main office on Fillmore Avenue in Dover for more information.

Sticking to Financial Resolutions

Ohioans, like most Americans, entered 2019 hoping to better their finances, but many have likely already fallen off track.

In an Ohio Credit Union League 2019 consumer survey, 69 percent said their New Year’s resolution was to get on a budget. That statistic isn’t surprising; many Americans looked critically at their financial situations as they headed into 2019. Statista, a platform providing statistical data on a variety of topics, polled 2,000 people about their New Year’s resolutions in early January. The survey found financial goals were the fourth most-popular New Year’s resolution, falling just behind dieting, exercising, and losing weight. 

Americans had good intentions to get their finances in order in 2019, but that doesn’t mean they’ve necessarily stuck to their new budgets. According to research commissioned by GuideVine, a service that matches people with financial advisers, 70 percent of Americans with a budget struggle to stick to it.

And it’s not likely that making your budget a New Year’s resolution will make keeping with it any easier. According to the Ohio Credit Union League survey, 79 percent of Ohioans make incremental improvements toward keeping their resolutions each year, but fall short of keeping them. Another 14 percent have never kept a New Year’s resolution.

The average American doesn’t fare much better. According to a study of 1,450 Americans by Vitagene, 88.6 percent reported they’d likely keep their resolutions for a year or less. Another 36.6 percent of respondents said they usually keep their resolutions for a month or less, meaning they’d be off track by February.

Although your train may have gone off track, all hope is not lost. Here are some tips to help you attain your resolution of getting down to business, paying off bills, buying a house, opening an IRA for retirement, or getting on a path to better financial stability. 

  • Use a budgeting tool. A successful budget must be recorded somewhere. DoverPhila Federal Credit Union offers Banzai, an award-winning financial literacy program that has user-friendly budgeting tools such as calculators, simulated games, and an interactive library with educational articles. Consider budgeting apps such as EveryDollar and YouNeedABudget if you’re looking for more mobile options.

  • Be realistic about spending and saving. Don’t set goals you can’t realistically achieve with your budget. Trying to spend too little or save too much each month could create frustration, which will increase the likelihood that you will dump your budget altogether. Instead, map out incremental changes you can make that will add up to big financial gains over time.

  • Keep goals in mind. Reminding yourself how you would ultimately like your money to work for you can help with exercising control over impulsive spending habits. Consider making your goals visual if you have a hard time picturing your long-term goals when you are tempted to splurge. Try keeping a picture of your ideal retirement in your wallet or a list of all the reasons you want that new car stuck to the fridge. 

  • Reward yourself. It is important to keep long-term goals in mind, but rewarding yourself for small budgeting wins along the way will keep you feeling positive about your budget. The more positively you feel toward a task, the more likely you are to continue performing it. After you reach certain budgeting goals, treat yourself to a small splurge. You earned it!

  • Seek help. Consider asking for help if you are struggling with sticking to a budget. Sometimes, aid can come in the form of a family member who shares household finances. Other times, however, you may require an expert opinion. DoverPhila Federal Credit Union offers free financial counseling to members and is always happy to aid with budget set-up and maintenance.

DoverPhila Federal Credit Union is here to help you reach your financial resolutions. Call the credit union at 330-364-8874 or visit your local credit union for more information.