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Are you looking for the relief of being debt-free sooner than expected? No more monthly payments, no more interest piling up, just financial freedom. If you have a personal loan, you might feel like you're stuck with it for years, but the truth is, you don’t have to follow the standard repayment schedule. By taking a proactive approach, you can pay off your loan much faster and save thousands in interest.

You're not alone in this journey. As of 2025, the average personal loan balance in the U.S. is $11,652, with interest rates ranging from 6% to 36%, depending on credit history and loan terms. That means borrowers could pay thousands more than they initially borrowed if they stick to minimum payments.

But there's good news: You can cut down your repayment time and save money with smart strategies. In this blog, we’ll look at the top 5 ways you could pay off your personal loans.

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1. Switch to Biweekly Payments

If you’re currently making monthly payments, shifting to a biweekly schedule can significantly reduce the time it takes to repay your loan. Instead of making 12 payments per year, you’ll make 26 half-payments, which adds up to 13 full payments annually.

This extra payment goes directly toward the principal, helping you reduce the total amount owed much faster. Plus, since interest accumulates daily, paying more frequently means you’ll owe less interest over time. Before making this switch, confirm with your lender that they allow biweekly payments without penalties.

How Biweekly Payments Save You Money

Let’s say you have a $15,000 loan at a 9% interest rate with a 5-year term.

Monthly payment: $311.38
Total interest paid over 5 years: $3,682

Now, if you switch to biweekly payments:

Biweekly payment: $155.69
Loan payoff time: 4 years and 6 months
Total interest paid: $3,205
Interest savings: $477

Even a small adjustment in your payment schedule can lead to significant savings.

2. Round Up Your Payments

One of the simplest ways to pay off your loan faster is by rounding up your payments. Instead of paying the exact amount due, round it up to the nearest $50 or $100.

For example, if your monthly payment is $275, rounding it up to $300 means you're putting an extra $25 toward your principal each month. Over time, this small habit can cut months off your repayment period and reduce the total interest you’ll pay.

Even if you can only afford to round up by $10 or $20 per month, it still makes a difference. The key is consistency.

3. Make Extra Payments Whenever Possible

If you receive unexpected money, a tax refund, a work bonus, or a cash gift, consider applying it directly to your loan. These lump-sum payments can reduce your loan balance significantly and shorten the repayment period.

Making one extra payment per year on a 5-year loan can cut your repayment period by several months and reduce the total interest paid.

How to Find Extra Money for Payments

Use cashback rewards from credit cards or apps.
Cut unnecessary subscriptions and redirect that money.
Sell unused items and apply the earnings to your loan.
Use tax refunds wisely, applying even half of a refund to your loan can make a big difference.

4. Refinance Your Loan for a Lower Interest Rate

If your credit score has improved or interest rates have dropped since you took out your loan, refinancing could be a great option. Refinancing means replacing your current loan with a new one that has better terms, such as a lower interest rate or a shorter repayment period.

For example, if you originally took out a loan with a 12% interest rate and now qualify for a 7% rate, refinancing can lower your monthly payment and help you pay off the loan sooner. However, watch out for prepayment penalties or fees associated with refinancing.

Who Should Consider Refinancing?

Borrowers with improved credit scores (above 700 for the best rates).
Those with high-interest personal loans (above 10%).
Borrowers who can commit to a shorter repayment term.

5. Use the Debt Snowball Method to Stay Motivated

Paying off a loan can feel overwhelming, especially if you have multiple debts. The Debt Snowball Method is a simple and effective strategy that helps you build momentum and stay motivated as you pay off what you owe.

Instead of focusing on interest rates, the Debt Snowball Method prioritizes paying off the smallest balance first while making minimum payments on all other debts. Once you clear the smallest debt, you roll that payment into the next smallest debt, creating a "snowball effect" that gains momentum over time.

How the Snowball Method Works

Let’s say you have the following debts:

Pay extra on the smallest debt first: Instead of just paying the $25 minimum, you put extra money toward the $500 credit card balance until it’s fully paid.
Roll that payment into the next debt: Once the first debt is gone, you take that payment and apply it to your personal loan, in addition to its usual minimum payment.
Keep rolling payments forward: As each debt is paid off, the amount you are paying continues to be added to the next balance.

To learn more about this method, you can read Understanding the Snowball Method for Debt Repayment.

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Bonus Tip: Consider Debt Consolidation or Debt Avalanche Methods

If you’re struggling to manage multiple loans, debt consolidation or the debt avalanche method can help you simplify payments and save money on interest.

Debt Consolidation

Debt consolidation involves combining multiple debts into one single loan, often with a lower interest rate. This can be done through:

A personal loan with a fixed interest rate
A balance transfer credit card with a 0% introductory APR
A home equity loan if you own property

By consolidating your debt, you no longer have to track multiple due dates, and a lower interest rate can reduce the total cost of repayment. However, qualifying for a lower rate depends on your credit score, if your credit is low, this option may not be ideal.

Debt Avalanche

If you don’t want to consolidate, the debt avalanche method helps you pay less in interest over time. Unlike the snowball method, which focuses on small balances, the avalanche method targets debts with the highest interest rates first.

How the Debt Avalanche Method Works

List all your debts, ordered from highest to lowest interest rate.
Make minimum payments on all debts except the one with the highest interest rate.
Put extra money toward that highest-interest debt until it’s gone.
Move to the next highest-interest debt and repeat the process.

This method saves more money than the Snowball Method because it eliminates costly interest faster. However, it requires discipline and patience, since high-interest debts may take longer to pay off.

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Final Thoughts

Paying off your personal loan faster is about being strategic with your finances. Whether you switch to biweekly payments, refinance for better terms, or cut back on unnecessary expenses, every step you take brings you closer to financial freedom.

Start today. Even small changes can have a big impact over time. With professional debt settlement plans, you can pay off your personal loan even faster. The team at Shepherd Outsourcing Services can help you with personalized debt management plans, consolidation, and settlement. Let us find the best path for you out of debt. Get in touch with us today.