No-bones about it; high risk personal loans with guaranteed approval from direct lenders have changed the game when it comes to accessing funds quickly.
Unfortunately, even with this newfound financial freedom, many borrowers still struggle to make their payments on time. Maybe because they have unexpected expenses or experience difficulty budgeting. Whatever the reason, there are steps you can take to ensure timely loan repayment.
Here are six time-tested tips and strategies to help you plan and make your high-risk personal loan repayments on time.
Always Prioritize Loan Payments Above Other Expenses
When allocating funds from each paycheck, make sure that loan repayment is at the top of the list. This will ensure that payments are made on time and in full, improving your creditworthiness and avoiding any unnecessary late fees or penalties. Additionally, staying on top of loan payments can also provide peace of mind and reduce stress related to financial obligations.
Break Down Payments
Despite creating a budget and setting aside a certain amount for loan repayment, it can still be difficult to keep up with the payments. That’s why it’s important to consider breaking down those payments into smaller, biweekly installments if you receive paychecks on that schedule. This can help you chip away at your debt more quickly and prevent exhausting all your funds in one lump sum payment.
Make Extra Payments When You Can
There are some months where you may have a little extra disposable income or wiggle room in your budget. When this happens, consider making an extra payment toward your high-risk personal loan. This can not only help you pay off the loan quicker, but it can also cut down on the amount of interest accrued over time. It also helps reduce your monthly payments, making it easier for you to stay on track with future payments.
Consider Adding a Secondary Stream of Income
As we mentioned before, one of the reasons borrower’s defaults on high-risk personal loans is because they do not have enough funds to make their payments. One solution for this issue is to consider adding a secondary stream of income.
This could come in the form of a part-time job, freelance gig, or even starting a small business. Some examples could include tutoring, babysitting, pet sitting, selling handmade products, or offering services such as landscaping or house cleaning. These side hustles can not only generate extra income to help pay off your loan early, but they also offer an opportunity for personal, professional and financial growth.
Consider Setting up Automatic Payments with Your Lender
This may not seem like a groundbreaking tip but setting up automatic payments with your lender can make all the difference in ensuring timely loan repayment. Not only does it eliminate any potential oversight or forgetfulness in manual payments, but it also allows borrowers to set and stick to a budget.
By pre-determining the payment amount and date each month, borrowers can avoid overspending their funds and ensure they have enough to cover their loan payment. It also shows lenders that the borrower is responsible and proactive in managing their debt obligations.
Contact Your Lender If You Anticipate Any Kind of Difficulty Making a Payment
Lastly, always remember to contact your lender if you anticipate any kind of difficulty making a payment. By reaching out to your lender and discussing potential options, such as deferment or refinancing, you can work together to find a solution and keep your loan on track.
Ignoring payments or avoiding communication with the hope that the issues will go away can result in late fees, damage to your credit score, and aggravation for both parties involved. So, don’t hesitate to contact your lender if difficulties arise.
By following these steps, borrowers can feel confident in their ability to make timely loan payments and avoid any negative consequences from defaulting on their loans.
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