There are many ways to shorten your loan repayment period. Most of them are based on your ability to save money regularly, but don’t worry — even if saving is not your strong suit, there are still effective strategies to make it work!
Let’s go through them one by one 👇
1. Taking out a longer-term loan first — and shortening it later
When you take out a 30-year mortgage, you’re not tied to that bank or that time frame forever.
You can change banks or shorten your loan term at any point.
This approach makes sense if:
- You find a better offer at another bank,
- Your income increases compared to when you took the loan,
- Or interest rates drop, making shorter terms more affordable.
Sometimes your current bank may not agree to shorten your loan period, so refinancing elsewhere is a solution.
It’s also a good strategy for people who struggle to save regularly — and, let’s be honest, many of us sleep better with a 20-year loan than a 30-year one.
2. Making overpayments
This is another great option — especially for people who aren’t consistent savers.
Your only task? Use any extra income left after receiving your paycheck to make an additional payment before you spend it on things you don’t really need.
Most banks now allow online overpayments directly through internet banking.
You can do it:
- Regularly — e.g. every month, or
- Occasionally, when you’ve saved a set amount.
Even small overpayments made consistently can shorten your repayment period by years and save you tens of thousands in interest.
3. Saving until you can pay off the loan entirely
This method requires more discipline.
You build up your savings through systematic investment programs or insurance plans with cashback (we’ll cover these topics separately).
The idea is simple:
You accumulate funds over time — through various savings tools — and set a target date by which you want to be debt-free.
These programs often include mechanisms that motivate regular saving, which helps people who struggle with consistency.
💡 Important note: Build your financial cushion first!
All these strategies make sense only if you already have an emergency fund — a safety net that covers your basic living costs, debts, and unexpected expenses.
The size of this cushion depends on your income, financial obligations, and lifestyle.
Without it, even the smartest repayment plan can crumble at the first unexpected bill.
