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Creative ways to pay off a loan
If you’ve taken out a loan and want to clear it more quickly than just paying off the set amount every month, you could look at ways you can make a bit of extra money to help towards this. Take a look at some of the more creative ways that could help you pay off a loan:
Sell some of your stuff at a car boot sale: you could de-clutter your home and make a bit of extra cash by selling some of your older, unwanted goods at a car boot sale. Most people turn up to these sales looking for a bargain, so you’re not going to make mega-bucks, but every little extra penny could help. Make sure to get to the car boot sale early and be willing to stay until the end of the day, as these are the times when the serious buyers will be there. Bring plenty of change and some spare carrier bags so your customers can carry their purchases with them. Before you head to set up shop, check online how much your stuff sells for, so you know how much to charge. A good tip is to put prices slightly higher than you want them to go for, as people will want to haggle you down.
Sell some more stuff on eBay: for more commercial and valuable goods, consider selling them on eBay as you’ll be able to reach people who actually want to buy what you have. Bear in mind that you do have to pay fees to sell on eBay: 10% of your final full sale price including any postage, and if you list more than 20 items a month, you’ll have to pay 35p per extra listing. You could also sell some stuff through classified ads in the paper, or see if your work has an online system where you can sell your stuff to your colleagues.
Get a part-time job: if you have some free time, you could get a second job to boost your finances, so you’ll have more money to pay back your loan. Recent research* conducted for us found that one in six adults across the UK say they have a second job to get some extra income. See if you can get a casual job on the weekend, such as working in a shop or behind a bar, or do some freelance work using your existing skills. Take inspiration from one man in America who wanted to pay off his student debs and took a variety of jobs, including a maid, a cook, and a National Park ranger.
Take care of the pennies: by saving up any spare cash you happen to have lying around, you could accumulate a bit of extra money. Get hold of an old, cleaned out jar and put it in a prominent location in your home. Throw in any money you see lying around or you find in your purse or pockets. It may build up quicker than you think, and soon you could have a nice little amount to go towards paying your loan back.
Transfer your balance: you may be able to save some money on your loan by putting it onto a balance transfer credit card with a lower interest rate. The low – or even 0% – interest rate usually only lasts for a few months, so make sure you’ll be able to pay off the amount you owe in this time or you could end up paying more in interest.
Be a tour guide: if you know your city well and have a good memory, you could become a local tour guide in your hometown and offer tours on weekends for a bit of extra cash. Register as a guide on Shiroube, a local guide registry, and you could get people signing up to be shown round by you. You can also set up a basic, free website so people can see what times you’re willing to offer tours. Make sure you plan out a route carefully so you can show everything you want and you’re not going to have to walk miles in between each attraction, and do a couple of ‘dry runs’ by doing a tour for your friends first.
Tutor using your skills: if you speak a second language or are a whiz at English, maths or science, you may be able to get some extra work tutoring children or adults in the evening or weekend. You’ll need to sign up to a tutor website and have Disclosure and Barring Service (DBS) checks run. Decide if you want people to come to your home or if you’re willing to tutor at theirs, as you will probably be able to charge more for this.
Pick up manual work around your neighbourhood: as spring is just around the corner, people may be thinking about getting their homes and gardens in shape for the warmer weather. You could offer your services as a lawn mower, cleaner, dog walker or weed puller to make a bit of extra money on the weekends. Keep in mind that you’ll probably have to bring your own supplies, so you’ll need to factor these costs in.
One more (drastic) option: This isn’t an option that we would recommend, but one student in America was struggling with credit cards and student debt so she decided to sell her flat and become voluntarily homeless, living on her friend’s sofas to save some cash. Whilst making yourself homeless isn’t a good way to pay back a loan, a more realistic option is to downsize your home or flat. If you’re a renter, consider moving into a smaller property that costs less each month, and put the amount you’re saving towards paying off your loan.
*OnePoll questioned a nationally representative sample of 2,000 adults aged 18 and over between 21st November and 28th November 2014, of whom 636 were Scottish residents.