What to Do if You're Struggling to Repay Online Loans
LOS ANGELES, January 27, 2021 (Newswire.com) - Online loans are quick, easy ways to get the money you need fast. Some lenders even offer same day online loans — but even the most attractive loan needs to be repaid.
If you've taken out an online loan and are struggling to make payments, there are strategies you can use to get back on track.
Automate the Minimum Payment
It will benefit your long-term paydown strategy and your credit score to make small payments each month. Late or missed payments can be avoided by setting up autopay for the minimum amount due on your loan. You can choose to make additional payments on top, but this safeguard makes sure you hit the bare minimum and don't miss a payment entirely.
Pay Extra on Principal, Not Interest
Make sure that any payments above and beyond your amount due are applied to your principal balance, not interest. You can talk with your lender if you can't easily see online where payments are applied.
By making sure the payments are going towards the principal, you'll be able to pay off the loan faster and not merely tread water by paying the interest that accrues each month.
Consolidate Multiple Loans
If you've ever missed a payment because you were trying to manage too many accounts, consolidation can be a great option. With loan consolidation, you'll use a new loan to pay down all of your existing balances, essentially rolling all of your current balances into a single loan.
Consolidation means you'll only be accountable to a single lender, and you can make one larger payment rather than multiple smaller ones. Before you choose this route, check your existing loans to confirm they don't have an early repayment penalty.
Consult With a Professional
If you're in deep and can't figure out the best way to repay debts, consider consulting with a professional like a financial planner or credit counselor. An outside point of view can shed light and help you create a payment plan you may not have been able to come up with on your own.
A counselor or planner can offer assistance to help you prioritize how to pay off debt and work with your lenders to lower payments and avoid penalties. Ensure the professional you choose is honest, reputable, and won't try to scheme you into yet another financial product you don't need.
Increase Your Income
Consider starting a side hustle or picking up a part-time job and promise to use all of the income to put towards your online loans. Only $100 a month can make a big dent in how much you'll owe over the long term.
Call Your Lender
Your lender may be able to provide assistance or offer a delayed or deferred payment in your time of need, but you'll need to speak with them directly to assess your options. The worst thing you can do is to continue to miss payments for months before reaching out.
Not being able to repay loans is a challenging situation to be in, but there are ways to help yourself out of it over time by using your resources, being smart about spending, and working to increase your income.
Notice: Information provided in this article is for informational purposes only. Consult your financial advisor about your financial circumstances.
Source: iQuanti, Inc.