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Paying Off a Loan

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Paying off a loan may not seem like much fun, but there are some tips that can help make it easier and possibly quicker. This is a guide about paying off a loan.
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December 15, 20050 found this helpful

When borrowing a large amount of money for a house or a car, make sure you get a loan with no prepayment penalty. Then you should always pay more than the minimum payment. An additional 50 dollars a month can shave years off a mortgage or car loan.

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December 18, 20050 found this helpful

It will also eliminate a lot of interest money on your mortgage if you instruct them to apply the extra money on the principle only. My friend just paid off a 30 year mortgage on her double wide mobile home in 7 years and saved $83,000 in interest.
Harlean from Arkansas

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December 30, 20050 found this helpful

When we had our home mortgage, we had this fee (no choice), but ours only amounted to $8.00. We still paid our mortgage off early, since the $8.00 was a drop in the hat compared to what we saved. I understand that this penalty is often extremely high.

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By hambone1 (Guest Post)
January 27, 20060 found this helpful

We have a car loan thru toyota and they wont let us pay down on it. When I pay extra they just mark it as credit and lower the payment for next month.

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I called and asked about it and they said they dont have a spot to prepay extra. Go figure. I hate that.

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April 19, 20060 found this helpful

I disagree in some circumstances with prepaying your mortgage. Currently, the average 30 yr mortgage rates are about 6-6.5%.

Historically, the return on stocks have been about 10% annually. Additionally, since you get to deduct interest you pay on your mortgage, the actual rate of your mortgage would be about 4.6-5% [assuming a 25% tax bracket].

If you have high interest rate CC's or/and high rates on your car, then pre-pay those off, otherwise invest the money.

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