Top 5 Best Loan Tricks to Save Your Money
By Kate Marlin
It happens you need financial support. But how to overcome all financial difficulties if you have no extra money? You need to search for the best personal loan lender. And whatever your reason for getting one might be, and whatever form of loan you received, it's vital to learn a few tricks to help you save some bucks. Sounds like something you want to know? Here are some of the top 5 tips to help you get started:
#1 Prioritize Early Loan Repayments
Before a lender approves your loan application, you have to come to a payment term-length agreement. So if you find yourself in a position where you can comfortably pay off the loan before the agreed term frame, then it's said that you've made an early payment. While some lenders take advantage of this to charge you additional costs, others don't mind it and would gladly let you pay off without any penalty.
If your lender charges extra fees for early payoffs, then it's better to stick to your agreement terms. But if they don't, then it would be advantageous to you if you can organize lump sum payments. You make early payoffs and save hundreds of dollars you could have paid in form of interest. Ensure to compare personal loans and settle for one with the best terms.
#2 Increase the Frequency of Your Payments
Most loan lenders offer monthly payments to their borrowers, which is okay. But if you can manage to come up with cash either weekly or bi-weekly, then it's advisable to arrange with them so that you can be making your payments at that time. Yes, it might seem like you're paying the same amount at the end of every month, but when it comes to your annual repayment report, you would have made an extra payment. You get to pay off your loan early, without any financial burden. It's also an excellent way to save-up on interests.
#3 Set-up An Automatic Payment Method
This is especially doable when it comes to mortgage loans, personal and car loans. Setting up an automatic payment mode, will in a great way help in lowering your interest rate. With this option, you can rest easy knowing your payments will be made on time, even with your tight schedule. And your lender will be glad knowing the payments will be made on time. You just have to follow-up and see if this option applies to your current loans. But you should be using installments and not a credit card.
#4 Loan Refinancing and Consolidating
If you're currently enjoying a semi-good credit, then this is a great option to consider. You will not only get to lower your payment but also pay off your loan early, while saving-up big on interest. So if you are currently paying off multiple loans, then it's advisable to consolidate them into one. However, before taking this route, examine carefully your early payment fees and the additional fees that might arise as a result of your decision. But this shouldn't scare you as most of the time, the decision will be more adventitious to you than the lender.
As for refinancing, check out loans with better rates and calculate your options to see if using them to refinance your personal loan is the best option. Use online refinance mortgage calculators such as this one by Lowermybills to ensure you are making a smart financial decision. With the tool, you can run various scenarios to help you make a more informed decision.
Another option is the car title loan, based on the collateral of your car.
#5 Work on Your Credit Score
If you want to enjoy lower interest rates, then you should work on improving your credit score. You should, however, keep in mind that this doesn't come easy. You have to be patient and work on it gradually. And this means, handling it smartly from the beginning to secure good interest rates. But even if yours isn't as good as you would like it to be, there are various ways to improve it. And they include:
- Catch-up on your previous delaid payments, such as utility bills
- Delaying that old credit card closure date. This is because your credit score can significantly drop immediately you close it. So if you have plans of applying for a personal loan, car or mortgage loan, you should stay clear from any activity that will jeopardize your score.
- Work on lowering the money you owe in terms of credit. Remember the more transactions you make with your credit card, the lower your credit score gets.
Loans come in handy, especially in tough financial times. But even as you apply for one and wait for approval, you should be thinking of how to save as you make payments. From the above points, it's clear that there's so much you could do. From refinancing, making early payments to setting up an automatic payment method, there's no limit to how much money you can save. It's the dedication and tactics that matter. Choose the best one for you!
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