7 Steps for staying on top of your short term loan
Emergencies which require big pay outs at times when we just don’t have the funds happen to the most frugal of us.
Unfortunately, when that emergency shows up, many of us are too caught up with life to figure out how to find the best rates on loans, the right companies to borrow from, how to scale back on our expenditures and how to avoid falling into cascading debt cycles. We’ll we’ve got that sorted for you. We’re going to give you 7 steps for staying on top of your short term loan.
1. Know exactly how much you have borrowed
You may have chosen a short term loan due to the flexibility of the repayment period offered by some lenders as well as the chance to make sure you are out of debt quickly. But, make sure you understand the total amount you borrow. It’ll be easier knowing how much interest is incurred when forecasting your repayments. Being able to afford your repayments is important. Leave room in your disposable income to cover any unexpected expenses. So for example, if you earn £100 monthly. Don’t let your loan repayment equate to more than £25. This way if your income was reduced to £50, you will still be able to keep up with repayments.
2. Budget money for your repayments
Set up a budget using spreadsheet software like Excel. In the spreadsheet, list every single outgoing and all your incomings. Calculate the total amounts, what you have left over, or not left over as the case may be. Not only will the lender interested in this information, you’ll have it to hand for budgeting and forecasting your cash flow. Add the repayment amount of the short term loan to your calculations. With your budget you can make decisions on how much to borrow, whether or not you should set some money aside before you borrow or what expenditures you can do without.
3. Pay your loan back on time
Ok, it goes without saying. You’ve got to pay the loan back on time. Your budget will have given you a good idea on managing your money to make this possible. Set up a direct debit making sure the payment will reach the lender on the payment date agreed. Don’t incur extra interest or late payment fees making it harder for you to clear your debt or finance the day to day running of your life. And, if you really think you can’t meet a payment date, contact the lender as soon as possible.
4. Listen to budgeting advice given
There’s plenty of advice out there. Short term loan providers are usually very happy to give you advice when it comes to successfully paying back your loan, so ask questions and ask for advice managing your money. There also are plenty of websites with free independent resources to help you manage your debts well.
5. Remember you have a cooling-off period
All short term providers give you a cooling- off period which is usually around 14 days, so if you change your mind you can withdraw from the agreement and all you’ll need to pay is the interest on the credit that you have used. 14 days is enough time for you to realise whether you can continue comfortably with your repayments.
6. If you can pay off your loan quicker do it!
Most short term loan companies won’t penalise you for paying off your loan quicker so if you find you can afford to pay back earlier, then do it. You’ve got your budget. You know what money you have left over. Paying the short term loan off quicker will mean you have extra money to use on other costs. Once you have paid the loan, you could even start saving again.
7. Ask for help
If you are struggling to make a payment or need a few extra days then ask for help. Speak to your short term loan provider and explain your situation. There’s more chance you’ll get something sorted by talking it out rather than just missing a payment and hoping it goes away.
We all need financial support at some point but with the right advice, support and preparation we can stay on top of our debt.
Here are some useful sites:
http://www.moneysavingexpert.com/loans/
http://www.adviceguide.org.uk/england/debt_e.htm
https://www.moneyadviceservice.org.uk/en
http://www.jlmoney.co.uk/blog/
Call or fill in our online form, if you would like some free advice on getting a short term loan from JL Money today.