Personal Loans

Personal Loans

How Do I Repay my Personal Loans?

When you are considering taking out a loan, it is a good idea to think about the repayment. This might sound a bit boring, but it is really important to make sure that you will be able to repay it so that you can know that you will manage. Therefore, there are a few steps that you should take before taking out the loan to check that you will be able to do this,

Calculate how much the Repayments Will be

To start with you need to work out how much the repayments will be. You need to find out from the lenders exactly how much you will be expected to repay and when. Do not try to guess this amount, get a precise figure because it is really important that you have exactly the right figures. You may be able to work it out using a calculator on the website of the lender too. Find out when you have to make the repayments as well as this is just as important.

Work out How Much Money you Have to Pay

Now you need to work out how much money you have available to pay. Look back at your bank statements and work out how much money you tend to get in each month and how much you pay out. Consider the day that you will need to repay the loan and whether you feel that you will have enough money on that day to repay the loan. Think about what other payments come out on that day. Also consider all of the other things that you will need to buy and whether you will have enough money to be able to afford them all. It is a good idea to separate your expenses into essentials and luxuries because you may be able to cut down on some spending in order to afford the payments. However, you will need to commit to doing this.

If it is Not Enough Decide What to do

If you do not have enough money to cover the repayments then you have a few choices. You could just forget the loan entirely. However, it is likely that you will not want to do this. Therefore, you could consider ways to make it more affordable, As suggested before you could cut back on your spending on luxury products. You could also compare prices on all of the things that you buy to make sure that you are not overpaying for anything. You could also think about whether it might be possible for you to earn a bit of extra money to help out. Perhaps sell things you own and no longer need, do some more hours in your job, take on some freelance work, do some online work or something like this. There are a lot of possibilities that you can consider.

Have a Backup Plan

It is really wise to have a back up plan as well. You need to consider what might happen if things do not quite work out and you have less money than you had imagined. You may need to find ways to spend even less or to earn even more. IT is good to have a list of ideas that you can work through so that you know that you will be able to cope even if you are in this situation. Even if you are confident that you will be able to repay the loan, it can be reassuring to have  aback up plan like this as you will have peace of mind then, knowing that there will be a solution.

Personal Loans

How do I Pick the Right Personal Loan?

There are lots of personal loans available for us to choose form, so it can feel rather daunting and be rather confusing knowing which one to choose. There are likely to be quite a few differences between the different types of loans and so it is good idea to know what those differences are and then you will be able to compare them and figure out which will be the best one for you.

Interest Rate

Many people will compare the interest rates of loans to try to figure out which will be the best for them. However, this might not be the vest way to do it. This is because some loans will have fixed fees as well as interest so the interest rate will not represent the full cost. Also, there are two ways of reporting interest rates. Ones is the APR which is the Annual Percentage Rate and the other is the AER which is the Annual Equivalent Rate which will include any fees and charges in it. Therefore, it may be better to find an alternative way to compare the costs of the loan than this.

Total Cost

It can be a good idea to think about the total cost of the loan then rather than comparing just the interest rate. You may find that the lender will have a calculator on their website whether you will be able to work this out. However, if you are not sure how to use it, you can always ask the lender directly and they should be able to tell you themselves.

Repayments

It is always important to make sure that you look into how much the repayments are. You need to think about whether you will be able to afford them, Find out form the lender what you will be repaying and then look at your personal financial situation to see whether that is something that you will be able to afford. IT is easy to think that you will be able to work it out in your head, but it is much better to write down all the figures. Note down how much you will be getting in each month and how much you normally pay out and then you will be able to calculate whether you will be able to afford the repayment as well as everything else that you need to pay.

Lender

It can also be good to do some research into the lender and what they are like. Some people want to use one that they have heard of but it is a good idea to think about whether this is a good idea as the reason you may have heard of them might be because there was a negative newspaper article about them or because they pay for advertising and neither reason is a good one to use them. You need to think about whether the lender is one that you will trust, perhaps by looking at reviews or talking to other people and see who they would recommend. Make sure that you think about what is important to you in a lender and then match this up with what the reviews and others are saying so that you know whether they match up or not. It is wise to take a look at the lenders websites so that you can get an idea of what they are like from there as well. Some people feel that the customer service is the most important thing to look at. This can be wise as if you need to contact them about anything, then you will hope that they will be helpful and polite. Therefore, it can be a good idea to contact them yourself and see what sort of response you get and that will allow you to be the judge.