Want to Pay Off Your Personal Loan in 2023? Here’s How

This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.

A few savvy moves could leave you debt-free by the end of the year. 

Maybe you took out a personal loan in 2022 to cover a home renovation. Or maybe you needed a large pile of cash to fix up your car, and a personal loan was your best bet.

The upside of borrowing via a personal loan is that you’ll generally snag a lower interest rate than you will with other options, such as a credit card. Plus, personal loans offer the benefit of fixed interest rates, so when you sign one of these loans, you can anticipate the same monthly payments until your debt is paid off.

Now, if you took out a personal loan in 2022, you may not have it paid off before the end of 2023 if you stick to your current payment schedule. But often, personal loans won’t penalize you for an early payoff. And so if your goal is to shed your personal loan debt by the end of 2023, you can employ these strategies to get there.

1. Start budgeting

The simple act of following a budget could make it easier to pay off your personal loan, because it might give you a better sense of how to manage your money. And the start of a new year is actually a great time to put together a budget, because you might be looking at a new (hopefully higher) paycheck, if you’ve gotten a raise. Once you set up your budget, you can play around with different bills to free up more cash to pay off your personal loan.

2. Commit to a few specific cost-cutting measures

If you currently spend the bulk of your paycheck, or all of it, then expediting your personal loan payoff may be tricky. But if you want that loan done with by the end of 2023, then a good bet is to commit to cutting back on a few specific expenses.

You may, for example, want to pledge not to travel in 2023. Is that a big sacrifice? Of course. But it could also free up the money you need to get rid of that debt once and for all. (To be clear, this isn’t to say you shouldn’t take time off from your job. But you may want to go the staycation route so you’re not spending money.)

3. Get a side hustle

Boosting your income could be your ticket to paying off a personal loan more quickly. And while your paycheck at your main job may be getting a lift, chances are, it’s only a modest one.

To make solid progress on your personal loan, consider taking on a side hustle for 2023. The gig economy is still in good shape, and there are different jobs you can look at to boost your income that won’t necessarily interfere drastically with your current schedule.

You might, for example, sign up to drive for a ride-hailing service and simply pick up passengers when it’s convenient to do so. Or, you might find a job like editing or web design where your clients are pretty flexible. Explore your options to find a gig that’s a good fit.

If you’re staring at a pretty large personal loan balance, the idea of paying it off by the end of 2023 may seem daunting. But these moves could be your ticket to knocking out that debt and starting off 2024 with a completely clean slate.

Our picks for the best personal loans

Our team of independent experts pored over the fine print to find the select personal loans that offer competitive rates and low fees. Get started by reviewing our picks for the best personal loans.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

 Read More