Tips for Repaying a Personal Loan
Getting a personal loan can be a daunting experience. Read our handy guide to repaying personal loans for some great, useful tips on repaying a personal loan and ensuring that the loan is something which you can manage from the very start to the very end of the loan repayment process.
Only apply for the amount you absolutely need and consider alternatives to the loan from the start
When applying for the loan try to keep the original loan request as small as possible. The higher the amount requested, the longer it takes to pay back and the more interest will accrue in the period the loan is being repaid. It also helps if you consider alternatives to the loan, for example could you postpone anything like your Masters, or your purchase of a car until you have at least half of what you need saved?
Focus on the long-term
Far too many of us focus on the immediate needs that a personal loan will meet, without paying much attention to the long term implications of getting a loan that needs to be repaid every month for a set period of time. The longterm implications of the loan should be assessed well in advance of the loan application, but way too often this vital consideration is ignored. If you focus on the whole picture instead of the exciting one that involves spending cash on something you need, then you will master the art of repaying personal loans wisely from the start.
A process of continuous evaluation
When you have a loan to pay back you need to have a repayment plan. Don’t just rely on being able to consolidate the debt at the end of the loan term or hope that it will all work out in the end. Make a commitment to continuously evaluate your financial circumstances and tie this into some form of plan to repay the loan. Check out the ‘personal loan’ brand Wonga – they offer transparent no nonsense advice, tools and information on all their short term loans so use the tools available to help you understand the full cost of a short term loan.
If you are struggling financially you may consider getting a part-time job to help repay the loan, or you may consider looking for a salary increase. Whatever your way of adjusting to any cash shortage, the most vital thing is that you know your finances inside out and that you keep tabs on them as they fluctuate, planning for any changes.
Keep loan documents
It is very important that you keep all loan documentation in a safe and secure place. This will help you if you ever have to contact your lender to discuss your personal or financial circumstances, or if you are reviewing your long term repayment plans. It is amazing how easily we can forget the ins and outs of personal finance liabilities just because our documents go missing! Stay on top of this by planning to keep all documents in regards to the loan secure from day one.
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Category: Loans
