Can I Pay Off My Personal Loan Early?
Personal loans can be a practical and efficient way to achieve a goal. Whether you want to start your own business, buy a new car, or pursue any other endeavour that requires a cash injection, life can be a little easier when your bank balance is healthier.
With careful planning and budgeting, you can work out an affordable repayment schedule for your personal loan. However, as time goes on, circumstances may change, putting you in a better financial position than expected, and you may want to pay off your loan more quickly – perhaps even in full.
While some lenders charge penalties for early loan repayment, that's not the case for personal loans taken out through Harmoney.
The Financial Benefits of Paying Off a Personal Loan Early
The primary benefit of paying off a personal loan early is that it saves you money. Regardless of your loan term, the sooner you can pay off your debt, the less money you'll have to pay in total. This is because, with interest, you pay more the longer you have a loan.
Using our personal loan calculator, you can see this in action. A $30,000 loan with an excellent credit history totals $3,898 in interest over three years, but $6,228 over five years.
With Harmoney, unlike many other lenders, there is no fee for paying off your loan early. Apart from the fee you pay at the start of your application, the only money you pay is the return on your loan and the agreed rate of interest (unless your account becomes overdue).
Other Benefits of Paying Off a Loan Early
In addition to saving money, you'll also enjoy the feeling of freedom from debt. This is particularly true for individuals paying off debt consolidation loans, as they understand the stress of having unmanageable debts.
Once you've paid off all the money owed, your monthly budget will stretch further, allowing you to allocate your income to areas you may have been neglecting.
How to Pay Off Your Loan Early
There are three ways to pay off your Harmoney loan quicker than outlined in your contract:
1. Increase your monthly repayments:
If you've been able to make your monthly repayments easily or your financial situation has improved, consider increasing the amount you pay back each month. By doing this, you'll make larger contributions and pay back your debt more quickly.
To change the details of your personal loan through Harmoney, email our customer service team at service@harmoney.com.au or call 1300 042 766.
2. Pay a lump sum:
If you come into some extra money, such as winning a big contract or receiving a generous birthday present, putting it towards your loan will reduce the amount owing and lower the interest for the remainder of the term.
To do this, make a payment to Harmoney through BPAY. Log into the portal to see the reduced amount owed, along with your BPay details.
3. Paying off your loan in full:
If you want to pay off your remaining loan in one go, log into the Harmoney dashboard, go to 'My loan,' click on 'Payout,' input the date for the final payment, and choose an option from the drop-down menu. If satisfied with the estimated payment, click 'Send instructions' for the next steps.
These instructions will guide you on how to pay off your debt early. Ensure to make the payment by the specified date to avoid any changes to the situation.
If you have the means, paying off your loan early can be a smart move. Just be sure to check your budget to ensure you won't encounter any short-term cash flow problems.
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