Is It Possible to Pay off a Personal Unsecured Loan Ahead of Time

Human needs are indeed unexpected. Often spending is greater than the amount of income. Many banks or cooperatives offer you money lending. You can even get an online loan easily now. You will know how the interest, the amount of money to be paid, and the agreement will be the repayment period.


Paying off debt earlier than the stipulated time period reaps the pros and cons. This means that there are advantages and disadvantages you can get in this case. There are no rules that forbid you to repay it early. However, you might need to understand whether this will benefit you or not. What are the advantages and disadvantages of paying off debt early?

The Advantages of Personal Unsecured Loan

  • You can minimize Interest Costs

When borrowing from a licensed moneylender  online for your urgent needs, make sure that you check out if it is a legal lender and also find out the interest rates. However, when you already have enough money, debt repayment can occur more quickly. This brings one of the advantages for you, namely to reduce interest costs. Paying in full means that you have decided to stop the interest that should be in addition to your installments.

  • You can use interest money for other needs

By paying off debt early, it means that you can use the money for other needs. By speeding up repayments, then the interest will also stop growing. The longer you take, the system will also continue and that’s what has to be paid.

It does not look too big but when in the total amount of the final value, it will clearly be seen that the total price is fairly expensive. For that, the faster you pay off debt the smaller the total value of the interest you have to pay. Thus, the interest you are supposed to pay can be used to pay other expenses. After debt repayment is complete, the money you get from work can be saved for the preparation of sudden needs in the future.

  • Your mind is not burdened anymore

In life, it is not only physical that always runs but also mentally thinks about the burdens of problems. The physical and mental state must always be good to get a happy life. The spirit that must be present in the work must be in accordance with the positive thoughts that cross your mind.

When you are in a position of debt, of course, it will be one of the burdens in mind. How to pay off, until when the repayments will be completed, can you pay it off and many other things that have in mind?

When you choose to pay off faster it will make your mind a little free and relieved. How come? Expenses for a certain period of time have been lost when you pay off everything. This is one of the advantages if you pay off debt faster. With one of the burdens paid off, surely you will be more eager to work and find money to meet your next needs.

Disadvantages of Personal Unsecured Loan

  • Loss because you still have to pay all interest that has been predetermined

If you include borrowing money with an annuity interest system, at the beginning of the loan, almost all interest must be paid. What kind of loan has an annuity interest system? Unfortunately, you may not even be aware that almost all loan systems have this system. This system will make you pay most of the interest at the beginning, and a portion of the principal loan will be paid at the end of the loan period. With an annuity system, paying off debt early will be the same as financial profit, because the principal you have to pay is equally high.

  • Emergency funds can be used to pay debts

Sources of paying off debt are often unthinkable when you first owe. This resulted in the absence of a definite source of repayment. One of the most widely adopted ways, in the end, is to use emergency funds that should actually be actually stored and used during emergencies. The bad impact, when you use emergency funds when paying off debt, these funds will be exhausted, and may not be left. Worse, when you get sick or even lose your job, no funds are saved.

  • Credit track record may be less than optimal

On the one hand, it turns out paying off early will make your credit track record less than perfect. Companies or financial institutions prefer credit repayments that are paid periodically according to maturity. If you feel the burden of owing can still be overcome and you feel not too worried, then keeping the credit rhythm according to the initial agreement on a regular basis may you choose.

  • Repayment Source Unstructured

In your mind, there must be a goal that as soon as possible to pay off these debts. However, do not let this cause you financial woes for the following days. Preferably, income and expenditure also have their own list of how much they can run without having to overlap. Do not get to pay off debts that one must owe in another place as a source of repayment. This will have no benefit and will increasingly make a burden on your mind. For that, use the predetermined repayment period as early as possible. Expand the calculation to pay and also the remaining money used to continue running your daily life. That way, surely the financial or financial system in your life can run well.

From the facts above, you can understand them and adjust to your abilities and how you feel. Paying off debt early or paying it off regularly will be a wise choice when you really consider it according to your ability. You clear it off regularly if you still need it or you can just pay it off early if you have the money. It is all in your hands.