So You’ve Fully Paid Off Your Loans. What Now?

Paying for personal loans is tedious work. It takes years to get fully paid, all the while taking away a huge chunk off your income. Utility bills and credit cards are enough trouble to think of monthly. But it’s too much when increasing personal loan rates are added to the equation. The responsibilty is enough to make you go crazy if you don’t gather your wits and tighten up your belt.

However, slowly but surely payments lead to a rewarding “fully-paid” sign in the end. And once you’ve completed your loan payments, you’ll have an overflowing amount of extra money per payday.

You probably think you can now indulge on things you’ve only dreamed about back when you had the loan to repay. Maybe another loan for a new car is tempting? But hold that thought. You should be smart as a whip now when it comes to loans. You don’t want to go through years of repayments and interest rates again, do you?

If you’re extra cash is boggling you, why not put it in to good use?

If you have other existing loans like a student loan or mortgage, add that extra money as monthly payment. That way, you’ll be done with another loan faster and have more extra money after it too is repaid. Weigh which of your other loans need supplementing the most. If your student loans rack up exorbitant interest rates faster then I suggest using your extra money for it. If your mortgage is hanging by a thread, the money should go there instead.

Furthermore instead of buying unnecessary things, why not put that extra money into a retirement fund? You can contribute on employee deferred compensation programs. You could also use it to make bigger contributions to your 401k. These are wiser ways of spending your money as it is helping you get a more secured life for your future.

Another smart way of spending that extra money is by saving up on emergency funds. I cannot stress enough the importance of having a safety cushion should things go askew. Emergency funds allow you to have peace of mind despite the fact that you’re sick and can’t go to work for weeks. It allows your family to eat even when you cannot generate income for a while.

Everyone wants extra money in their hands. But sadly, not everyone knows what to do with it. Remember, money spent is money gone. So use yours wisely before it’s gone.