Abstract: A method of reducing a principal amount of a loan. The method comprises determining a payment schedule of a series of payments for repaying the principal amount of the loan, each payment comprising a principal portion and an interest portion, receiving payments, and crediting the principal portion of received payments towards the principal amount of the loan. The method also comprises investing at least a part of the principal portion in a portfolio comprising at least one investment instrument and applying at least a part of any gains made from the portfolio to the principal amount of the loan.