Save a little money each month and at the end of the year you'll be surprised at how little you have. 

Ernest Haskins.

Why You Should Pay Your Bond Faster Than Required

It is essential that you pay additional amounts into your bond account. Any spare money you may have should go into this account. This is so for a number of reasons:

Firstly, your bond repayments are not tax deductible, while the interest on any type of savings you may make is. In a nutshell this means that if you're, for example, saving at 10% per annum you will have to pay tax on the interest received on your investment. And if the savings rate is 10% (as per example) the bond rate is going to be about 3-4% higher. So, when you pay extra money into your bond you are actually saving at 14%. So you are immediately scoring 3-4%. And on top of this it's a tax free saving.

Secondly, if you have a look at the capital repayments as related to your interest factor of your monthly payment you'll find that most of it is interest for a large number of years.

Please use the calculator below to work out your savings when you pay additional amounts on your monthly installments. It is one big eye-opener.

Type in the loan amount and the additional payment amount you would like to add to your original installment then click on the Calculate button.  Loan Amount    R Additional Monthly Payment    R Annual Interest Rate      % Repayment Term (20 years = 240 months)   months Original Installment    R New Installment    R Period reduced by    months Value Saved    R                    Payment Comparison Original Installment   New Installment   Monthly Installment R  R  Repayment Term   months   months Last Installment   Total Amount Paid R  R

 

	If you apply what this calculator shows you are going to SAVE YOURSELF A LOT OF MONEY.
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