are you struggling to make your personal loan payments? here are some tips to help you out.
Set a Budget and Do Everything That You Possibly Can Do to Stick to It
Setting a budget for yourself is essential. Your budget will determine how much you can spend and how much you need to set aside to cover all of your expenses every week, pay period or month.
If you spend so much money that you cannot cover your fixed overhead costs–the amount you pay for housing, utilities, transportation, food, and other unavoidable necessities–you definitely will not be able to make your loan payments.
Add up the amount you need at each interval to pay all of your fixed costs, then figure out how much of whatever is left you want to have to spend at your discretion.
Combine those two amounts, subtract them from the total amount of money you are earning, and the number you end up with is the most you can spend on everything else, including loan payments unless you get a raise or a windfall.
Do Your Best to Avoid Biting Off More Than You Can Chew When You Take Out a Loan
Do not sign yourself up for an obligation you will not be able to fulfill.
Before you sign for your loan, the financial institution making the loan to you should show you a breakdown of the total amount of your loan, your interest rate, the amount of your monthly payments, and the period during which you will be obligated to make those monthly payments.
Read all of this information very closely.
Once you sign on the dotted line, you will be legally obligated to pay the stated amount to the financial institution each month for the period outlined in the loan agreement.
If you have any doubts about your ability to pay your loan now or in the future, do not sign the agreement. If you have doubts, you can talk to a loan coach.
Pay Close Attention to All of Your Loans’ Interest Rates
Interest rates often get overlooked, but they can add tens of thousands of dollars to your total payment obligation if they are high enough.
Inspect all your loan paperwork carefully to see what your interest rate will be. Your credit score is the biggest indicator of your interest rate. If you have a bad credit score look for personal loans for poor credit options to find the lowest possible interest rate. If you think you can get the same loan amount somewhere else at a lower interest rate, go find out for sure.
If you choose to pay a higher interest rate, you are effectively leaving money on the table.
Keep Track of When All Your Loan Payments Are Due Each Month
Once you have your loan, the last thing you want to do is start to miss your payment deadlines. Even if you only miss them by accident, you will still have to pay late fees and you may even have to pay a higher interest rate for the remaining life of your loan.
If your interest rate increases, that means your monthly payments will increase, too.
Set yourself a recurring reminder or an alert at least a few days before your payment is due so you do not miss any payment deadlines.
Cut Costs Elsewhere in Your Budget Whenever You Can to Help You Pay Off Your Personal Loans Faster Than You Otherwise Would
Until you get a raise or some sort of windfall, one way to get your loans paid off quickly is to cut costs in other parts of your budget.
For example, try cooking at home more often and eating meals out less often. Cooking at home is typically much cheaper than buying a meal out, not to mention healthier. Use the money you saved eating at home rather than eating out and put it toward your loan.
It may not be much, but every little bit counts. If you chip away at your loan’s balance in this way for long enough, you will be able to get it paid off ahead of schedule.
Once your loan is paid off, you can use the portion of your budget that had been going toward your loan payments to pay down any other debts you have or you can save it for a rainy day.
Hold Yourself Accountable for Accomplishing All of Your Financial Goals
Hold yourself accountable for accomplishing all of your financial goals so no one else has to do it. If you let the financial institution that gave you the loan hold you accountable, you probably will not be happy with the results.
If your account gets far enough past due, they will not hesitate to hire a collection agency to start calling you and sending agents to your residence to get you to pay up.
Holding yourself accountable will help keep you on the straight and narrow path to having your loan paid off without incident.
Always Remember to Keep Your Eyes on the Prize at the Finish Line
Never forget that there is light at the end of the tunnel and there is a prize at the finish line. Getting all of your loans paid off in full and on the schedule should be your ultimate goal and accomplishing it will give you an incredible amount of satisfaction.
You will feel free, and it will suddenly seem as though you have quite a bit more money than you ever realized.