Category: Loan Repayments

Five Tips to Ensure You Repay Your Loan on Time

It is really important that you make your loan repayments on time. If you miss a repayment you will get charged and you may find that your interest rate will go up. It will appear on your credit record and not only will it make it harder for you to borrow money in the future you may also find borrowing is more expensive and you may have trouble with other things such as renting a home or getting a job. It is therefore so important to make those repayments and below are five tops to make sure that you do.

Set up a direct debit for your loan repayments so that the money leaves your bank account as soon as you are paid. Make sure that there are not too many other payments going out that day, so that there is a big chance that there will be enough money there to cover the cost of the loan. Think about the date that you are paid and if it is not the same date each month (perhaps the last Friday of the month) then set the payment to come out on the next day that you know the money will definitely be available (such as the first of the month). By doing this you will not have to remember to make the payment and you should have money in your bank account to cover it.

Make sure that you are aware of how much your loan will cost you each month. Sites like Emu Payday Loans display this information clearly but other lenders may not divulge the full picture. If you have a variable interest rate then it could change. Most lenders will increase their interest rate if the Bank of England base rate goes up. You need to be aware of these changes so that you can ensure that you will still have enough money to cover the loan repayment. Find out how your lender lets customers know about rate changes and when you do get notified make sure that you calculate what that will mean for you in monetary terms so that you can check that you have enough money to cover the change in repayment amount.

It is wise to make sure that your loan rates are competitive. It is wise to frequently compare rates so that you know that you are not paying more than necessary. It may mean that your repayments will not increase too much over the term of the loan and therefore it will make it easier for you to manage. Do make sure that you check whether there are fees for switching though. There may be administration fees for opening new accounts and fees for paying back loans early, so make sure you are aware of these first.

It can be a really good idea to make sure that you have some money in reserve to cover a few loan payments just in case you are short of income for a few months. If you save some money each month this could soon add up to enough to cover a few repayments. You will then have the peace of mind of knowing that you have some extra money to play with just in case you find that you are short for some reason.

If you think that interest rates will rise or that you will be short of money one month, then you may worry that you will not be able to cover the cost of the repayment if this happens. This can be a difficult situation to cope with particularly if you have not managed to save anything as suggested above. It can therefore be worth having a backup plan in case this happens. You might be able to do some overtime at work, ask for an advance on your salary, sell some things to raise money, borrow form friends or family or something else. If you have a plan, then you will be able to relax more and not worry so much about what might happen should you be in this situation.

So there are some things that you can do to help make sure that you will pay back your loan on time. It can help you to put your mind at rest if you know what your options are and that you are as well prepared as possible. It is also a wise thing to do as it could end up saving you a lot of money.