How to Ensure you can Afford your Loan Repayments

If you are thinking of taking out a loan or you already have one, then it will be really important to make sure that you will be able to make all of the repayments. If you miss a repayment then you will have to pay an extra fee and it will show up on your credit record. This means that it is really important to make sure that you are able to make the repayments. Fortunately, there are things that you should be able to do that will enable you to do this.

Start by finding out how much you will need to repay and when

It is really important to start by knowing what you will need to repay and when you will be expected to repay it. If you can, try to set up a direct debit so that the money is repaid just after you get paid. This means that you will have a much better chance of being able to afford the repayment when it comes along. Of course, you will probably have lots of other things to pay at this time as well.

Check to see if you will be able to afford this

It is therefore wise to make sure that you will be able to afford these repayments. It can be a good idea to take a careful look at past bank statements and actually work this out. Consider whether the bank statements that you are looking at are typical as well. You may have payments that go out on some months and not others, for example and you will need to allow for these as well as the things in these statements. It is also worth considering whether you would manage in months where you tend to spend more such as around family birthdays, Christmas or other festivals.

Find ways to spend less

If you think that it will be a struggle, or even to ensure that it definitely will not, it can be wise to spend less money if you can. This will mean that you will have more money available to repay your loan and you will be able to put some aside perhaps as well, just in case you have an expensive month and you run out of money. There are lots of things that you can try to help you to cut down on what you are spending. Every time you buy something, think about whether you really need it and then see whether there is a way to get it cheaper. It is a good idea to think about items that you have contracts for or make regular payments for like insurance, utilities, mobile phones and things as well. You might be able to change suppliers and save a significant amount of money. By just cutting back on the things that it is not necessary for you to have, you could find that you free up a significant amount of money.

Find ways to earn more

It could be easier to earn more if you already spend the very minimum or do not want to spend less. This can be easier for some people than others. It will depend on how many hours you already spend working and whether you have a family to care for. You may also value your spare time and feel like you do not want to work more hours. Trying to find a better paid job or asking for a pay rise is a way around this but it is not always possible. Finding so extra work may not be as hard as you might think. You will be able to pick up odd jobs online or do temp work which could just give you a little bit of extra work but enough to give you the extra money that you need. It is worth thinking about whether you will need to find something that will give you a regular income. It will depend on whether you feel that you will generally be able to manage and just need a bit extra at times of the year when things will be more expensive. If you do a thorough evaluation of your personal finances then you will be able to tell whether this is the case and you will be able to sort things out appropriately,

Make sure that you do all of the necessary research before you take out a loan if you can. Then you will be able to work out whether you can afford the repayments or not. It may be possible to spread the loan repayments over a longer period if you cannot afford them or to borrow less so that you can manage. However, if you come up with a plan to spend less money or to earn a bit more then this could be enough to ensure that you can afford the loan.

Top Tips for Paying off your Loan

If you have a loan then you may wonder how you can repay it. Some loans will have a formal repayment scheme where you have to repay a certain amount each month and others may be less formal. Either way you will need to repay the loan at some point and you will need to make sure that you have enough money to do so.  Below are some tips on how to do this.

Check you can repay it before you borrow

It is ideal to check how much you will need to repay and make sure that you will be capable of repaying it before you borrow the money. You will be able to find out how much needs to repaid by asking the lender and you can see what you can afford by checking your bank statements. Look at how much you normally have available each month to spend on things like this and see whether you think that you will have enough.

Know how much needs to be repaid and when

It is really important that you also find out exactly how much you need to repay and when you need to repay it. This is because you need to be prepared and make sure that you have enough money to make the repayments. It is useful knowing how long you need to make the repayments for as well, so you can be prepared for the long term as well as the short term, if necessary.

Look at bank statements to see if you have enough

You then need to look at your bank statements to see whether you will be likely to have enough money to repay the loan. If you do not then you will need to think about whether you should forget the idea of borrowing altogether. However, if this is not an option for you, then there are other things that you can do which will help you to make sure that you will be able to repay it.

Use savings to repay

If you have savings then you could use these to repay the loan. It is actually best to use savings rather than borrowing money as it is cheaper. However, if you do not have enough savings, then they could help to top up your loan repayments if you cannot manage them otherwise. It can be hard to part with savings like this, as you have probably worked hard to build them up and you may even have something in mind to purchase with them. However, it can be sensible to use the savings as if you miss a loan repayment you will have to pay charges.

Spend less

You may have to reduce the amount that you are spending on other things as well. This could mean that you will need to cut back. However, start by comparing prices on everything that you buy as you may find that you will be able to save money just by switching to different shops, brands or providers. Whenever you buy something you need to think about whether you really need the item. Consider the cost as well and whether you are really prepared to spend that much money on that item. It might be that you decide that you would prefer to not spend the money and keep it towards paying off the loan instead. Think about whether you want to also cut down on some of the things that you are buying. You will still need to pay for all of your necessities but you will be able to cut down on other things and you will need to think about whether this is something that you are prepared to do or that you have to do in order to make the repayments.

Earn more

If you do not want to spend less, then you may need to increase the amount of money that you have by earning more money. This could be tricky but there are actually quite a lot of things that you can do which will help you to get more money. To start with you could sell items that you no longer use. This can be anything really as long as it is in reasonable condition and there are plenty of places that you can choose to sell them. You can sell online or offline and it can be a good way to make some money. However, this will just make a lump sum of money and so you will need to do something else if you want a significant amount. It might be that you will need to work more hours, perhaps in your current job or in a second one in order to earn more. Asking for a pay rise or moving to a job that pays more may also be something that will benefit you. You may prefer to look for jobs online or odd jobs to earn every now and again. You will need to find something that will fit in with your lifestyle.