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For this blog, we’ve teamed up with our partners at Fairstone.
Borrowing money is a big decision. Whether you’re using a loan to cover an unexpected expense, consolidate debt or another reason entirely, you want to be sure you can stay on top of payments. Closely managing your loan ensures your credit stays on track and that your loan is paid off in time. Plus, regular on-time payments will save you money on interest.
Our partners at Fairstone shared 6 tips that can help you stay in control of your loan, and ultimately pay off your loan faster.
Choose bi-weekly payments
A bi-weekly schedule requires more frequent payments than other payment options. You’ll make 2 additional payments a year compared to a semi-monthly schedule. These additional payments will help you pay down your loan balance quicker, and the regular payment schedule will keep you on track and less likely to forget or miss payments.
Tip: Many companies will allow you to choose a payment date that works for you. We recommend aligning your loan payments with your payday.
Make extra payments whenever possible
Try to put any extra money towards your loan. While new clothes or a night out with friends is tempting, additional payments will save you interest and help you pay off your loan faster. And while it’s also tempting to invest any extra money you have, consider that your investments may not be making as much interest as you’re being charged.
Just make sure to review the terms of your loan – you may be penalized for paying off your loan early. Luckily, Fairstone allows you to pay off unsecured loans at any time without penalty.
Set up payment reminders or recurring payments
Making every payment on time can be easier said than done. With multiple bills to manage and a hectic schedule, it’s easy to forget a payment every once in a while. Set a reminder on your phone for the day your payment is due (or even set it for a few days before). You can also highlight or circle the days on your calendar to help you remember. If you don’t want to worry about remembering your payments at all, set up recurring payments through your bank account, or with your lender – the money will come out on the day you choose. You can relax knowing your payments are always being made on time.
Understand payment processing times
Sometimes payments can take a few days to process. Check with your lender ahead of time to see how many days in advance they recommend making your payments. By giving your payments extra time, you’ll avoid any accidental missed or late payments. You’ll also save yourself from late payment fees and added interest.
Keep your statements and loan documents in one folder
Organization is the key to staying on top of your payments and in control of your loan. Keep all your loan documents in one place. This will allow you to easily access important information such as your loan amount, loan balance, term, and interest rate.
Try to lower your interest rate – consider a secured loan
Are you a homeowner? Consider applying for a secured loan. Secured loans generally give you access to lower interest rates. A lower interest rate means you’ll pay less in interest, making your overall repayment amount lower and potentially a lot more manageable in the long run.
While borrowing money can be intimidating, it is possible to stay in control of your loan. Just remember to always communicate your situation to your lender, especially if you know you can’t make a payment. They should be able to help you find a solution to get back on track.
Looking for more tips for staying in control of your loan? Fairstone’s blog is packed with articles and tips about borrowing money. Interested in a loan quote? Visit Fairstone.ca, enter a loan amount & tell us a few personal details – it's that simple!
