Financial health can be intimidating once you consider everything involved—earnings, bills, accounts, and of course, personal loan payment plans. That last one, however, doesn’t need to be intimidating. In fact, if you use a personal loan payment calculator, create a budget, monitor your balance, and keep in contact with us, your experience will be smooth.
In this blog, we’re going to go over some tips that can help you manage your personal loan payment plan in a smart, effective way.
Understand Your Loan Terms
Before anything else, it’s important to have a firm understanding of the terms of your loan. When you understand the fine print, and everything it entails, you’ll be able to make informed decisions and get a loan that truly meshes with your financial situation. With that in mind, be sure to understand the following terms:
- Interest rate: This is the amount you’re paying to borrow the loaned money. It’s an additional cost to the amount being loaned.
- Payment schedule: This refers to the frequency of payments, including the dates on which they’re due, typically on a monthly basis.
- Loan duration: This is the total length of the repayment period of your loan.
- Fees and penalties: This refers to charges that are incurred as a result of late payments and other breaches of terms.
Understanding these basics is essential for a smooth personal loan payment process. If you borrow from Bay Country Financial, we take a borrow-first approach. Transparency is a strong priority for us, and we’ll help you secure a loan regardless of your credit.
Create a Budget
One of the best tools you can implement for paying off a loan properly is a well-structured budget. This requires you to take several details into account, including monthly income and expenses. For expense tracking, we recommend making a spreadsheet of your monthly bills, subscriptions, and similar payments. This helps you keep track of how much money you have remaining each pay period. This process will begin to give a clearer picture of where your money is going. More importantly, it will allow you to allocate a specific amount of money towards paying off a loan.
Set Up Automatic Payments
If you have confidence there will be enough money in your account every pay period—and you should if you add your signature to the agreement—automatic payments are a convenient, helpful way to ensure payments are always made on time. For some people, forgetfulness happens, and this is a great solution. It means you’ll:
- Avoid late fees as a result of missed payments
- Remain consistent and on-schedule
- Possibly qualify for discounts on interest rates as a result of your reliability
Make Extra Payments
A chance to pay off your loan more quickly than you anticipated is always welcome. It can even help you reduce your total interest costs. Here’s how you can make it happen:
- Make biweekly payments as opposed to monthly payments
- Round up each payment to the nearest $50 or $100 if possible
- Apply any unexpected funds—such as work bonuses—towards your loan
- Check if extra payments go directly toward the principal (this depends on the loan)
Remember: Even the smallest extra payments can add up over time!
Communicate With Us
Life happens. It can throw curveballs, and those curveballs can very well happen when you’re in the midst of paying off a loan. We understand that these unexpected events happen sometimes, and we want to be flexible with your terms should your situation change. That can only happen if you communicate with us and keep us in the know. We’ll do everything in our power to offer options like deferment, forbearance, or refinancing. This kind of proactive communication from you can be very helpful to your situation.
Monitor Your Credit and Loan Balance
The more in-the-know you are, the easier it will be to pay off your loan. Staying abreast of your credit and loan status will help you maintain control over your loan. Here are a few habits you can get into in order to achieve this:
- At least once a year, check your credit score. You can get a free report at sites like annualcreditreport.com.
- Keep an eye on your loan account to stay on top of your balance payment history and due dates.
- Utilize technology! Set recurring reminders so you won’t forget to check on the status of your loans and other pertinent financial information.
Make Your Personal Loan Payment a Breeze
Managing your loan payments doesn’t need to be a stressful ordeal. When you work with us at Bay Country Financial, we put in the work to prioritize you and make sure your financial goals are met, even if you have a bad credit score. As for your role, it’s all about good habits! When you understand your loan terms, set a thoughtful budget, implement auto pay, make extra payments when possible, and stay in communication with us, you’re putting yourself on the path to financial stability. To take charge of your personal loan payment plan, get in touch with us!
