What is the best way to pay down your loans?
How does Deposit Optimization work?
- Choose the loans you want to make extra payments on.
- Choose the type of extra payment — one-off, monthly, or a fixed total payment.
- Choose your savings goal.
- We calculate and show you the best way to pay down your loans.
When you have more than one loan
Many households have more than one loan — for example a mortgage, a car loan and other consumer loans.
With more than one loan, starting with the highest interest rate or the lowest principal is not always the most economical. Aurbjörg's Deposit Optimization analyzes all your loans as a whole, orders them by mathematical optimization results, and follows no old rules of thumb.
What do you get out of Deposit Optimization?
Deposit Optimization shows you clearly how best to prioritize extra payments and what it delivers:
- Which loan first: Which loan it pays to make extra payments on first.
- Payment order: The order in which it is best to pay down your loans.
- Annual yield: What annual yield the payments are equivalent to.
- Term impact: How much you shorten the total loan term.
- A precise payment schedule.
- How your principal and payment burden develop over time.
- Visual results showing principal, interest and remaining balance with and without extra payments.
Maximize total savings or present-value savings
You choose whether to maximize your extra payments for total savings or for present-value savings.
When you maximize total savings, you maximize the total interest cost saved over the whole loan term.
When you maximize present-value savings, you maximize the value of future savings in today's money.
Compare different payment strategies
Should you start paying down the loan with the highest interest, the lowest principal — or take the Aurbjörg route?
Many people use the avalanche or snowball method when paying down debt. Aurbjörg's Deposit Optimization compares these methods with the Aurbjörg route and shows you clearly which one delivers the most benefit.
