A good way to pay off a personal loan is to make sure that you use it for what you really need it for. Be sure to save money each month to put into the loan and tell yourself that you will do whatever you can to pay it off in half the time. Also check that the interest rate is fixed so that the monthly instalment doesn't get you into trouble when the rate rises.
That is so true. I have been in a situation before where I took out a personal loan and only used about half for what it was intended for. The best word of advice is not to get the loan in the first place unless it is a true emergency.
I took out a personal loan in the past but the mode of payment was rather easy. You see, in my country, we have mandatory government benefits (i.e. social security, housing and health funds). The company takes out a portion of our salary every month and pay it to various government agencies. These payments are considered as contributions and if you become a member of these agencies for 2 years or more, you have the option to loan your contributions. After complying with the loan requirements and you've already received your loan, on your next salary you can start paying your loan. A small amount will be added in addition to the amount you regularly pay every month. This salary deduction system helps employees pay for their loans without hassle in a period of 2 or more years (depending on the amount loaned).
I think this is a great advice. For one to be able to pay his/her loan, he/she should see to it that a portion of his/her earnings is used for the payment of the loan. It takes a lot of sacrifice and discipline to be able to pay a loan and not taste penalties in the end. I currently have a personal loan right now, which is payable in 6 months time so I always see to it that whenever I receive my earnings from my freelancing, I immediately pay part of my loan so I could avoid additional charges.
The best thing you can do is to stay away from personal loans unless you need one to fund a major purchase. You have to work very hard to pay off the interest rates on these kinds of loans. Your best bet is to put all of your spare money toward the loan and get it paid off so that you can start using your money to build a savings account. At least you can build up that money and receive interest instead of paying it
Sometimes persons are in desperate situations and rely on the acquisition of a personal loan to bail them out. However, they are so eager to obtain the loan that they don't really take time out to understand the repayment rules, and then get into serious problems later on. I suggest that whenever a person is being granted a loan, they should take the time to thoroughly read through the agreement document. It may seem tedious a tedious task to go through the fine print like a detective. However, doing so may relieve them of future distress.
you also always need to look at the interest rate before you consider a loan. the rate could go up and leave you in a big mess!
The advantage of a loan is that you can have an instant source of money when you need to pay for an emergency such as hospital bills, house repairs, etc. However, it would be better if you won't need to take a loan and use money from your emergency fund instead. This way, you don't need to pay for the high interest that most loans have nowadays. This is also the reason why I encourage everyone I know to start their own emergency fund because having it largely decreases the chance of further financial debt due to the interest of loans. It may be hard to do when you have little to no savings but trust me, it's gonna be worth it in the end.
In my younger days in the first bank that hired me, some of my officemates were availing of the personal loan granted by our bank to the employees as a privilege. With 6% interest per annum, it is negligible unlike the usual usurious rate. However, some of the employees were getting the loan for no purpose at all with the reason that they just want to avail. I guess that is a very bad idea for it is a dent in the finances no matter how little the interest is.
Loans can be a very tricky area, because they always cost more than you borrow due to the interest rate. Unless it is for an urgent purchase, I would say that you should try to be patient and save up for the item that you're looking to buy instead, as it will cost you much less money in the long term. Also make sure you're getting the lowest possible interest rate so that you don't waste too much money, and then try to pay off a little extra each month - provided that you're not penalised for doing so.
It's all about spending purposefully, whether that's using your own hard cash or whether it's using the proceeds of a loan. If you do take out a loan, naturally there are additional considerations: repayment schedule, interest rates, opportunity costs and so on. But at the very least, use the loan constructively rather than destructively.
I say that if you cant get something cash then d not buy it! loans are terrible and you end up paying double what you borrowed which takes up so much time. it is tough to work and save but rather eat bread crumbs then work to pay a loan
If at all possible stay away from personal loans, if you can pay it off in 30 days that is like cash. But you do have to be good at purchasing only what you need. Most loans are for repairs to things that will break down at the least likely time that you have no money to repair the item.
You should also remember that the interest rate fluctuates in many countries and this brings the payment amount up which might get you into trouble. rather ask a friend or family member for a loan and pay them back the way you would the bank except without interest and rising rates. Only if you urgently need help! because it might ruin friendships too.
Other than a mortgage and a car loan, I will never take out another loan as long as I live. I agree with those who say if you can't pay cash for it, then you do not need it. It is so hard to pay off loans and they haunt you for a long time. I do not want to be in the debt trap any longer.
The good thing with personal loans is that one can negotiate the repayment plan. The hardest component of any loan to repay is not the interest. It is the principle. Interest is also calculated on the basis of reducing principal. One can save alot if he or she negotiates to pay the principle first in lumpsum instalments and the clearing the comparatively smaller interest later in one lump sum.
