Many people often wonder why you should payoff your loans early. Often they look at loans as a time commitment and as long as you are making your monthly payments you really do not need to worry about the loans that you have taken out. Paying your loans off early can be a great benefit to you and your family. Here are five reasons to pay off your loans early.
1) You will save money on interest payments. For the average mortgage you end up paying at least as much in interest as you originally borrowed. You end up paying $250,000 for your $125,000 home. The earlier you pay off the loan the less interest you pay, and you will save more money.
2) By becoming debt free you free up your income for retirement and other savings. If you make the choice to live debt free you can invest now for a more secure future. This may mean the difference between the retirement you have dreamt about and one that is just okay.
3) It gives you the freedom to make lifestyle changes that you want to. You may be able to quit a job that you hate, and pursue a new career. If you have the debt you will be limited in what your choices are because you need to meet your monthly obligations.
4) You can use interest to work for you instead of against you. It is a great feeling to know that you are earning money just by having it. When you borrow money you are losing it to interest every day.
5) Not only does paying off debt increase your saving power, it can increase your spending power. You may have more money each month to spend on the luxuries that you can now afford, since you do not have the same monthly obligations. This could mean a massage or manicure, or a nicer car.
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