5 Helpful Tips for Managing Your Loan Responsibilities
There’s a lot to be said for receiving a personal loan. Unlike some other loan types, the money from a personal loan can be used for any purpose that you like. Before submitting that application, it makes sense to figure out how you will go about repaying an instant loan in accordance with the loan terms and conditions. Here are a few tips that will help along the way to managing your loan responsibilities.
The Loan is a Priority Line Item in Your Household Budget
There are some line items in your budget that are considered non-essentials. For example, the money that you allocate for entertainment is not essential. Line items like rent, food, and utilities are examples of priorities that must be addressed first.
The payment on your personal loan should also be considered an essential. It receives attention before you spend any money eating out, buying clothing that you don’t need, or splurging on buying some new gadget that could easily wait. Once the loan is repaid in full, you can think about allocating more funds to non-essentials.
Consider Setting Up an Automatic Withdrawal to Cover the Monthly Payment
Some lenders who offer personal loans will require that you authorize automated deductions from a bank account to make the payments. Others will expect you to send in those payments via a funds transfer or by mail. When you have a choice, opt for the automatic bank account deduction.
The reason is that you don’t end up forgetting to log into a secure website and make the payment on time. In like manner, it won’t slip your mind to prepare a payment to send through the post. This one choice will help ensure that the loan account is always current and you avoid having to pay late fees and other charges.
Set Aside the Funds Well Ahead of the Payment Date
Early on, build up some reserves in your bank account so there’s always enough money on hand to make the next loan payment. For your part, pretend that money isn’t there. Doing so reduces the odds that you’ll be tempted to use it for some other purpose and then scramble to replace it before the next payment comes due.
It’s okay if it takes a few months to build up reserves that will cover a loan payment. Once you do have it in place, it won’t matter if your paycheck is late posting to the bank account, or if your hours at work are cut the week before the loan payment is due. You have enough time to figure out what to do next month because this month’s payment is already covered.
Remit the Payment So It Posts Before the Due Date
In the event that the lender does not require you to set up automatic payments, do put yourself on a strict schedule for remitting payments. The most practical approach is to set a personal date for remittance that’s a week or so ahead of the actual due date. Use reminders on your phone or whatever other process works for you; just make sure that payment is sent well before the due date.
The goal is to ensure the payment is received and posted to your account before the due date arrives. Keep in mind that while some lenders post payments to loan accounts the same day they are received, other lenders may take a day or two. When the payment on your personal loan is received a few days before the due date, the odds of it not posting on time are somewhere between slim and none.
Track Your Payment History
Many lenders provide online access to loan accounts. Make it a habit to check your payment history the week after remitting the most current loan payment. You get to see that it was received and applied to the account balance. It’s also nice to look at the current balance and see how it goes down a little from month to month.
Personal loans are excellent for helping with all sorts of situations. Manage your loan responsibly and it will be that much easier to get another one if the need arises. Always be sure you are fully aware of the fees and interest rate being charged BEFORE you sign anything.