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RE: Spend Money to Save Money

in LeoFinancelast year

There is also a method called "velocity banking" that uses short-term higher interest loans to pay off larger loans, like your mortgage in a shorter time. You use a second, high interest loan to pay big chunks of the large first loan,. Then you aggressively pay off the the higher interest loan. It works better if the second loan is a revolving line of credit which you also use to pay down your monthly expenses. By dumping your paycheck into the line of credit, you are reducing the amount of interest you pay on the second loan. And by paying big chunks at a time, you are lowering your overall interest on the second loan too. People are able to pay off both loans in a shorter period doing this.

There are a bunch of videos on YouTube about velocity banking. Some people even use credit cards to do this.

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This is done through credit cards too, where all expenses go on credit and then before the end of the month, the card is paid off so there is no interest. I am considering doing this :)