Getting rid of purchase or hire agreements

Check your expenses to find out if you should pay some of them off early.

07:06 25 September 2013

We might have any number of bills piling up such as vehicles, mortgages, hire purchase agreements, credit cards, and other loans. These are just a few of the bills that we might find making up our monthly expenses. No matter what your financial status is, paying off some of your bills before the agreement or term is finished typically saves you lots of money.

Here are a few things to consider if you want to get out from under some of your bills:

• For loan terms such as vehicles and mortgages, find out if the lender assesses any types of fees for paying off your loan before the intended end of the term.  If you will only save a little bit of money by paying a loan off early but you will incur a hefty fee it might not be worth it to pay off that particular loan early.

 

• Find out if there are particular requirements in order to pay off loans early. Some lenders might require you to send any amount beyond the normal monthly payment as a separate payment indicating to apply the amount to the principal so that it is not applied to the interest by default.

 

• For certain contract purchase agreements like ones for cars, you might be able to return the car for a reduced cost. Such a reduced price would be considered a settlement and might help you get out from a long-term debt.

 

• If you decide that the object of your purchase agreement is worth keeping, you can work towards paying it off and then keep and maintain it. It’s important to figure out which option is going to be best for you financially before you make the decision.