For those of you who have been following my loan repayment
posts, you’ll see that I actually make multiple payments on my loans every
month. There are a few reasons I do
this.
1.
There is a reduction in the interest rate if I
set up automatic payments. I have these
set to the minimum for each month so that I don’t ever forget to pay and mess
up my credit score.
2.
I also don’t know how much I’m going to
contribute to my loans (and the breakdown between them), so I keep the automatic
payments low to give me more room to change things later.
3.
It makes me really sad to see $1,200 fly out of
my bank account on the 30th, but I don’t mind so much if it leaves
in four $300 payments. I realize this is
all in my own head, but, again, it gives me more flexibility as I go through
the month. (Note: I later realized I
also am paid biweekly. Sometimes it’s
best to stagger my payments a bit so that I don’t overdraft or have to switch
e-fund money into my checking account and then later switch it back.)
I do the same thing with my Discover card. I’ve found that it helps me to truly keep
track of what I spend if I pay it off more regularly and I’m not going to drain
my entire bank account in one go.
Do you pay your bills
in one installment or multiples? What do
you see as the benefits?
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