Listen, borrowing money isn’t always ideal. But sometimes, you have to do it.
Sometimes, a line of credit is the only way you can pay the mechanic when your car breaks down unexpectedly, and car financing may be the only way to replace that beater with a new car. With a strategically used line of credit or personal loan, you can get fast cash to handle all of life’s little hiccups.
While borrowing money might be inevitable at some point in your life, that doesn’t mean you have to take a loan lying down. You can make small, subtle changes to your money management style to help you borrow with intention and repay your loan faster.
1. Compare Your Options
A critical step before you borrow money is comparison shopping. By comparing loans, you can track down the lenders that offer the most favorable terms for a borrower of your standing. Even a slightly lower interest rate can result in significant savings over the loan’s term.
2. Take Advantage of Financial Resources
Paying your loan back on time makes sense for everyone involved, including your lenders. They want you to repay what you owe according to the schedule they set. That’s why some online direct lenders and financial service providers like MoneyKey have partnered with SpringFour, a convenient self-service tool that makes it easy to search for free financial, employment, and mental health resources.
You can learn more at MoneyKey if you borrow an online loan with them. In a nutshell, this partnership means you can connect with local government and community-based organizations that help you reduce your monthly expenses while in repayment.
3. Update Your Budget
A budget is a helpful financial tool at any time, but it’s especially valuable when you’re repaying your loan. This spending plan gives you a bird’s eye view of your spending, so you know exactly where your money goes in a month. With this overview, you can spot unnecessary spending that doesn’t serve you right now. Once flagged, you can stop this spending and reroute the money you save towards your loan.
Can you free up more cash than your loan repayment? Check with your lender about their pre-payment plans. If there is no penalty for paying extra, you might be able to save money by paying your loan off early.
4. Prioritize Your Debt
Let’s face it—your latest loan may not be your only loan. Plenty of people juggle multiple credit products at the same time. And while you might be able to keep them in the air, it can feel like you’re going around in circles, not making headway.
Establishing an account priority can help you be more effective with your debt repayment. Choose between tackling your smallest balance or the account with the highest interest rate first. Both are valid, but studies show the balance method keeps people motivated and therefore more likely to stick with their debt payments.
5. Consider Debt Consolidation
Debt consolidation is another option when there are multiple accounts involved. By consolidating your debt, you can transfer all your debt to a single account. This approach can streamline your financial management by allowing you to monitor just one due date. However, it’s only beneficial if the consolidated account offers a more favorable interest rate. If needed, consider reaching out to debt relief specialists. The good news is that these experts are accessible no matter your location.
For example, suppose you’re based in San Diego; in that case, numerous debt relief companies in California are ready to offer guidance suited to your unique situation.
Borrowing money doesn’t have to come with a side helping of guilt. Follow these tips to help you borrow with intention.