Imagine being debt-free when you reach age 30. It’s totally possible if you follow smart financial habits. You’ll need a plan for paying off your debts and the dedication to follow through.
Here are some tips which can help you to achieve your goal:
- Don’t wait to build an emergency fund. This should be your top priority. It makes it less likely you’ll add new debts to the pile.
- Use a cash mindset to evaluate purchases. Try not to take out new loans or buy on credit when you do not have to.
- Need motivation? Try the Snowball Method. Pay off your smallest debts first, just to get rid of them. It can be encouraging seeing your list of debts shrinking.
- After your small debts are paid off, work on paying those with the highest interest rates. When you pay off debts early, you can save a lot of money.
- Look into debt consolidation to reduce high interest rates when possible.
With these tips on your side, hopefully you can pay off all your loans before age 30, building credit as you go. Stay tuned for more tips and tricks for paying back loans!
Want to Pay Back a Loan Early? Now You Can!
Paying off a loan early can make financial sense. The faster you pay off your loan, the less money you lose through interest. So long as the cost savings outweigh any prepayment penalty, it is a smart idea.
It can have psychological benefits too. Fewer debts can mean greater peace of mind.
Think you can’t afford to pay a loan off early? You might be surprised what you can accomplish with the right approach. Here are some tips and tricks which could help you to wipe away the debt:
- Anytime you earn some extra, unexpected money, put it straight toward paying off your loan. Make sure you mention it is for the principal of the loan.
- Did you qualify for a tax refund this year? Think about putting it toward paying off your loan.
- If you have a hard time remembering to make payments toward your debt, try setting up monthly reminders or automatic payments online.
- Ask your lender if you can make half your monthly minimum payment every other week instead of paying just once a month. You’ll scarcely notice it happening, but doing this will result in you making the equivalent of a full extra payment by the year’s end.
- Refinance if possible, or transfer your debt from a high interest account to a low interest account. This will save you money and help you pay your debt off early.
Paying a loan off early takes planning, dedication, and adaptability. But if you are committed and willing to make some changes to how you manage your debts, it may be possible.
Forget Rollovers. Try These Tips to Pay Back a Payday Loan
Need to pay back a payday loan, but want to avoid using rollover?
That’s a good decision, because the Consumer Financial Protection Bureau reports that rollover fees can cost you hundreds of dollars.
Here are some better, more affordable ideas for getting your loan repaid:
- Check if rollovers are automatic. If they are, try and disable them.
- Try consolidating your other debts. The money you save on interest could go toward paying off your payday loan.
- Look for other ways to spend less on your bills, groceries, and other everyday expenses. Use the money you save to pay off your loan.
- Perform overtime at work or take on a freelance gig if you can.
- If possible, take out a lower-interest loan somewhere else (i.e. a credit union) to use to pay off the payday loan.
- See if you can negotiate with the payday lender for more time—but not at the cost of high fees.
- Borrow money from an understanding friend or family member to pay the loan off.
Still need help paying off your loan? Before you resort to using rollovers, consider contacting a credit counsellor for assistance. A professional counsellor can give you other ideas, and may be able to help you in your negotiations with your lender.
When Failure to Pay Back a Loan Backfires: How to Survive?
We turn to payday loans when the unexpected looms. But what if the unexpected happens twice, and you can’t pay back your loan? Suddenly you find yourself with high interest and mounting fees.
Thankfully, there are steps you can take to keep payday loan debt from swallowing your life.
- First, know the laws which govern payday lenders in your state. Know your rights, and check if your lender is operating within legal parameters. You can contact a regulator if necessary.
- Work out an extended repayment plan with your lender if possible—without hefty rollover fees.
- Stop unauthorized deductions from your bank account.
- If you have authorized deductions, make sure you know what to expect.
- If it’s between paying your bills or paying off the loan, pay your bills. If you need to stop authorized deductions (also known as “continuous payment authority (CPA)”) to do so, talk to your bank.
- See what you can do to pay off the loan through budgeting changes. Need ideas? Please see “Forget Rollovers. Try These Tips to Pay Back a Payday Loan.”
- Talk to a credit counsellor for additional ideas and for help negotiating with the payday loan company and other creditors.
Whatever your financial situation, an overdue payday loan does not need to destroy your life. Try following the steps above. Hopefully, your finances will soon be back under control.
The Real Truth About How Paying Back Payday Loans Builds Credit
When you are thinking about taking out a payday loan, you may wonder what the effect will be on your credit. Will applying for the loan harm your credit? Will paying back the loan help it?
Firstly, it will reassure you to know that applying for a payday loan will not harm your credit so long as you apply through a site where a “soft” alternative credit check is used.
Secondly, paying back your payday loan can help you build credit in several ways:
- When you pay off your payday loan in time and on full, that information should be sent to the credit bureaus, giving your score a boost.
- A payday loan may prevent you from falling behind on your other existing debts during a crisis.
- When you follow responsible borrowing practices when taking out a payday loan, you learn good habits for the future. This too may have a long-term positive influence on your credit score.
Now you know how a payday loan could actually be beneficial for your credit.
Just make sure that you are taking out a loan you can afford to pay back, and that you have a financial plan to stay on track going forward.