If you’re living with debt, don’t be tempted to pay only the minimum amount on your payments each month. 

By paying the minimum, you are mainly paying interest and very little of the loan capital, so you will be beholden to your debts for much longer. This can seriously threaten your financial security, so it’s wise to pay more than the minimum to clear your debts quickly. 

If you need further incentives, here are the reasons why paying off your debt should be a priority.

#1: You will have more money to spend on the things you enjoy

Life should be lived to the full but if you’re beholden to your debts in the long term, you will have less money to spend on things you might enjoy. You might struggle to save up for a holiday, a car, or any other purchase that could add value to your life.

If you can’t afford something, you might be tempted to take out another loan or credit card. This will make your debt situation worse so the best thing to do is pay off your debts as soon as you can to give you the financial freedom you crave. 

#2: You will experience less stress

The more money you owe, the more stress you will experience, especially when you start to struggle to pay off your other expenses. If you do fail to make the necessary bill and loan payments, your creditors will pester you for money and that will add to the stress you are already experiencing.

Constant stress can be harmful to your health, so to protect your well-being, you should make every effort to become debt-free as soon as possible. 

#3: You will avoid a financial disaster

If you have the means to make bigger debt repayments at this stage in your life, you should definitely do so. If you procrastinate and continue to pay the minimum, you will continue to be in debt in the long term. 

Should your financial situation change in the future and you find yourself in a position where you’re unable to pay back any of your debts, then your life will get worse. Your situation might change if you lose your job, or become too sick to work, for example. 

If you do get into a position where you can’t make your debt repayments, you will receive letters from your creditors demanding money. If you don’t arrange a repayment plan with them, you may be subjected to court action, which could include financial penalties and debt collectors at your door. 

To ensure you don’t get into this position, pay off your debts while you can. Your future will be more secure if you do. 

Finally

Money isn’t the root of all happiness but your life will certainly be improved if you’re in a solid financial position. So, pay off your debts as soon as you can, as by doing so, you will experience the benefits that we have discussed here.