As I mentioned in my previous blog post, Can I pay off my consumer proposal early?, you are allowed to pay off a consumer proposal early. The biggest advantage to doing this is that your proposal information will purge from your credit report sooner. In other words, you will be able to rebuild your credit score quicker. Here are some ways you can consider in order to pay off your consumer proposal early:
Lump sum payments
If you come into money while paying off your consumer proposal, whether it be a bonus, a tax refund, etc., consider making a lump sum payment which will reduce the length of your proposal.
Biweekly payments
This option seems like a no-brainer…especially if you are paid biweekly. By opting to pay biweekly, instead of monthly you are actually making one extra monthly payment per year. For instance, instead of paying $200 monthly, pay $100 biweekly instead.
Higher regular payments
By opting to pay a slightly higher amount per month, you will actually paying off your consumer proposal quite a bit sooner. For instance, if you pay an extra $25 a payment, you are actually paying an extra $300 per year. Only choose this option if it accommodates your financial situation.
If you combine this method with the biweekly payment option, your consumer proposal will be paid off even quicker.
I’m here to answer any questions you have regarding consumer proposals. Please do not hesitate to contact my office if you have any questions.
