Using an Online Loan to Get Through the Holidays? 6 Ways to Think About Repayment

LOS ANGELES, December 11, 2020 (Newswire.com) - ​​It’s always nice to have a few extra dollars around the holidays. You can use it to buy extra presents for the children, take a week off with your spouse, or just pay some of those back bills that have been piling up. Starting the new year debt-free is a great feeling.

This year, with the financial unmanageability caused by Covid-19, there won’t be a whole lot of “extra” money available. Many folks will turn to lenders to get through the holidays with lodging and food. But before taking out money, make sure you have a repayment strategy in mind.

6 Ways to Think About Repayment

When taking out an instant online loan, there are several repayment options that might be available to you. Depending on which one makes sense for your needs, you can ask if lenders are willing to work with you on the following repayment structures:

• Standard Repayment: This is your basic fixed monthly payment. When negotiating this, keep in mind that longer terms will cost you more in interest payments, but shorter terms require higher monthly payments. Make sure you work within your budget.
• Extended Repayment: If your standard monthly payments are too high, reach out to the lender to extend the term of the loan and lower monthly payments. During the holidays, this has the added benefit of freeing up more available cash for spending.
• Graduated Repayment: Homeowners will often do this when buying a house that requires some upfront repairs. The early monthly payments are kept low, just enough to cover interest and a small principal payment. Payments are then increased periodically.
• Income-Contingent Repayment: This is a specialty arrangement from lenders. Loans are repaid at a rate based on the borrower’s income and the amount of the loan. The term is limited, and the final balance is written off as a loss if not paid in full. 
• Income-Sensitive Repayment: Similar to income-contingent, but monthly payments are set at a percentage of monthly gross income. The terms of these loans are typically shorter, and amounts tend to be smaller, making them great holiday loans.
• Settlement: If you haven’t made monthly payments in a few months, but have extra money to spend at the holidays, give yourself a gift and ask the lender for a settlement offer. You’ll pay only a percentage of the debt and the rest will be charged off.

Budgeting and Planning for the New Year

The holidays are a good time to reevaluate your financial situation and create a budget for 2021. If you find yourself cash-strapped this year, look for ways you can fine-tune your spending and decrease your overall debt in the next twelve months.

Open a savings account. Putting aside small amounts each pay period, even just $5 or $10, can help you build up a nice nest egg over time. Think of it as your “spare change” account. Keep your deposits small and try not to withdraw unless absolutely necessary.    

Notice: Information provided in this article is for informational purposes only. Consult your financial advisor about your financial circumstances.

Source: iQuanti, Inc.