How to minimise costs on a personal loan

How to minimise costs on a personal loan


This is a sponsored post brought to you by Heritage Bank

While needing to borrow money is rarely ideal, there are some situations where a personal loan is the solution you need.  You might be replacing a faulty kitchen appliance, covering some unexpected medical costs, or taking a desperately needed holiday. Whatever your situation is, no doubt you’re keen to ensure your personal loan doesn’t cost you a single cent more than it should. Here are some tips for minimising the total amount you end up paying on your loan.


It starts at the very beginning

Choosing the best product at the outset is key to saving money on your personal loan. Before you apply with the bank you’ve always dealt with, look around to see if other organisations have more attractive offers to consider.


The first rates you see aren’t necessarily going to be the most competitive ones on the market. To get an idea of up-to-date rates (especially considering the way interest rates keep going down), you might want to look further afield than the big four banks. Sites like are a great place to start. Most banks also have repayment calculators that help visualise the week-to-week costs involved – here’s one from Heritage Bank.


Punctuality saves pennies

Do whatever it takes to ensure you don’t miss any deadlines with your loan repayments. Late fees will only make it more difficult to get the debt cleared up and increase the total amount you end up paying over the loan period.


If you are naturally a forgetful person (don’t be embarrassed – you’re not alone!), consider setting a periodic reminder on your phone or asking your lender if they have the ability to create an automatic direct transfer for your payments.


How to minimise costs on a personal loan


Extra dough?  Less payments to go

If at some point during the loan process you find yourself with more money than you expected, investing that cash into a voluntary additional repayment is a wise idea. Before signing off on the loan, check with your lender that doing this will be an option down the track. Whether it comes from a bonus at work, a birthday gift, or even a lottery win, some extra funds going into your loan repayment can help get your due total down faster and save you interest in the long run. Is this the most fun way to use extra cash? No, but it is a smart way; you can anticipate having your loan paid off sooner and use the money you’ve saved to celebrate!


Don’t let fees catch you by surprise

While you may have little or no control over what fees come with your personal loan, you can do yourself a big favour by making sure you are well aware of them and understanding how they will impact your finances. Check that you know exactly what fees to expect before going ahead with a loan. Doing so won’t necessarily save you money, but it could prevent you from finding yourself in a situation where you have less cash than you need because of an unforeseen fee.



A personal loan can be incredibly useful for a variety of circumstances, but it shouldn’t leave you with more financial strife than you had before. If you have any additional tips for minimising costs on a personal loan, please feel free to share with other readers in the comments below.

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