When to consider repaying a loan early
Mortgages, Motivation No Comments »By BILL LUBINGER
NEWHOUSE NEWS SERVICE
When you have the ability to repay a loan sooner than it’s due, should you? And can you, without penalty?
The answer varies according to the loan type and your circumstances. Here’s some insight from Greg McBride, senior financial analyst at Bankrate.com:
• Mortgage: Yes, a home loan can be repaid ahead of its term, and there are many ways to do so. You can pay more each month, with the extra money applied toward the principal. Or you can make lump-sum payments any time, but be sure to designate that the money is to go toward the principal.
Should you? Not necessarily. Mortgages are usually a debt with the lowest interest rates, plus homeowners get tax breaks on the interest.
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