A personal loan can be a lifesaver for various situations like emergencies, home renovations, unexpected expenses, and much-needed vacations. However, though it has many benefits, including helping you out of financial trouble when you need a hand, it comes with a commitment to pay it back through regular instalments.
Luckily, there are many ways to repay that loan easily - here are our top eight ways to do so.
1. Research lenders
Firstly, before applying for a loan, make sure you study your options carefully and make an informed decision. Take time to check if the loan conditions meet your requirements and compare the terms of different lenders, including fees, charges, interest rates, and early termination penalties.
2. Loan refinance
If your credit score was a bit average when you applied for your loan, you may have been paying higher fees and charges than others. However, if you have been making consistent repayments, there is a good chance that your credit rating has improved since you took out the loan. In this case, it may be worth considering refinancing at a more competitive rate. This could reduce your regular repayment amount and leave you with more money in your bank account each month.
3. Cut back your spending
As you begin the journey towards paying off your loan, it's important to be mindful of your spending habits. A good starting point is to analyse your monthly expenses and categorise each item as a "need" or a "want". While expenses like rent, mortgage, and utilities are essential, there might be a few things you can temporarily do without until you have paid off your loan. By being conscious of your spending choices, you can accelerate your journey towards financial freedom.
4. Prioritise and consolidate
It's important to prioritise loan repayments by developing a mindset that always allocates funds towards loan payments before spending on discretionary expenses. If you have multiple loans, consider consolidating them into a single loan to simplify your payments and potentially reduce your overall loan costs.
5. Turn your trash into treasure
As described in this blog post, there are many ways to convert old and unused items lying around your home into cash. You can easily sell them online through platforms like eBay or Facebook Marketplace, hold a garage sale, or even advertise them in your local classified. Don't underestimate the value of the things you or your family no longer use. You may be sitting on a little goldmine that you never even realised you had!
6. Set up an auto-pay direct debit
It is common for lenders to require an automatic direct debit to repay your loan. If your lender does not require it, make sure to set it up anyway. This will help you avoid missing any payment deadlines and incurring any late fees. With automatic payments, you can keep track of your repayments without any hassle. Just make sure you have enough funds in your bank account to avoid any issues.
7. Increase your payment frequency
If your loan conditions allow it, you could consider changing your repayment frequency from monthly to fortnightly or even weekly. By paying the monthly repayment amount every two weeks or weekly, you may be able to reduce the costs you pay over the life of the loan. Additionally, you'll end up paying slightly more each month because every month (except February) has more than four weeks in it. This approach will help you pay off the loan faster, which may in turn, boost your credit score.
8. Find another source of income
If you're struggling to pay off your personal loans, you could look for additional sources of income to ease the burden. You might consider taking up a side hustle, which could help you overcome a temporary cash crunch. For example, you could offer your services on websites that specialise in pet-sitting or dog-walking, or you could try driving for Uber or participating in paid research studies. If you're a digital nomad, there are even more opportunities available to you, such as freelancing, website development, and graphic design (with tools like Canva, which makes the process much simpler).
Consolidate or refinance?
If you're considering consolidating or refinancing your loans, or if you're in the early stages of searching for the right personal loan that fits your needs, we're here to help. Our cash loans of up to $5,000 can provide additional funds quickly and easily. Once your loan is approved, the money is generally in your bank account within a few hours. This means you can stop worrying about your financial situation and get back to your life.