Financial Management 101 – 4 Tips to Better Manage Your Personal Loans
Editors note: this article is mostly for our audience in the United States, but it has some special relevance for our Canadian audience.
These days, it’s not uncommon for many of us to use a personal loan. After all, not only does it allow us to achieve a specific goal that we may not have been able to afford otherwise, such as financing a vacation or turning our dream wedding into a reality. But it can get us out of precarious financial situations too.
However, as readily available as the option might be – you can even get personal loans for bad credit online – they can be more than just a little challenging to manage. So to avoid any mistakes and oversights that can negatively affect your credit score, here are some tips that should allow you to manage your personal loans better.
- Make sure that the basics are sorted out
Securing a personal loan is one thing. Managing your repayments is another. So before anything else, make sure that you have the basics sorted out. From how much you’ve borrowed, the interest rate, as well as other additional charges and other fees to the amount of the money that you can pay monthly, time take on doing some number crunching will not only help you ensure that all of your payments are made on time. But also keep yourself from getting behind too.
- Monitor all of your expenses
When it comes to borrowing money, its good standard practice always to monitor all of your expenses. And this includes non-essential products or services that you can be without. After all, there may be a few areas that you can potentially cut down on. And this can make all the difference in keeping your expenditure at a minimum and making sure that your repayments are on time.
- Stick to your budget
Once you’ve created a checklist of all your expenses, the next step is to stick to your allotted budget. And while this might sound simple, it’s a lot more difficult than you might think. After all, it requires a considerable amount of self-control and discipline to stick to the necessities and avoid any non-essential expenditure. But in doing so, you’ll keep your expense at a minimum. And as a result, it will help you settle your loans quicker than you would have otherwise.
- Stay honest with the lender
In the event that you encounter any problems with the repayments for your loan, it’s better to be upfront with the lender rather than lie about your current financial situation. After all, being honest will allow you to discuss a solution, if not a more agreeable payment plan that you can afford. So always be transparent with your loan provider. It will save you from a lot of trouble.
Bonus Tip: Shop Around
If you’re stuck in a crappy loan, you may not necessarily need to take it. You can always shop around and see if you can get a better interest rate or better terms elsewhere. People usually start shopping by doing an internet search on the terms “loans Canada” or “loans in Chicago” or “loans near me”, or the like. This typically gives you a number of search results of places local to you. This is a good place to start.
Another good option would be to go to a loan marketplace. If you are in Canada we recommend smarter.loans, which is a nice little business in Toronto. They’ve got great customer service and a well designed site.
Wrapping It Up
Managing a personal loan is far more challenging than some might give it credit for. After all, a big part of it is staying disciplined and keeping your expenses at a minimum. But with the tips listed above, not only will you be able to avoid missing your payments. But you’ll also settle your existing loan fast as well.