Pay Off Loan Faster

Maybe you've inherited some money or received a big promotion. Use the extra income to pay off your loan faster. Here's how.

1. Refinance your 20-year loan to a 15-year loan.

By cutting the length of your loan in half, you'll definitely have higher monthly payments, but the lower interest costs can be worth it.

2. Charge ahead with extra monthly or annual payments.

The lender will apply any amount in excess of your monthly payment to reduce the principal of your loan. This can make a huge difference: one extra payment per year on a 30-year loan will reduce the loan to about 18 years.