Taking out any kind of loan can be a necessity at times. Many people will get a mortgage when buying their first home, especially with the housing market’s price boom, or borrow money when they need a new car, have to make home repairs or for all manner of reasons.
While it can be a potential lifesaver at the time, when it comes to paying the amount back you can often wonder if it was worth it. Thankfully there are a range of methods you can use to make your loan repayments a lot more manageable.
Debt Consolidation Loan
One option for tackling any outstanding debt is to put it all in one place with a debt consolidation loan. Loan repayments, credit and store card debt can all be put in one place which makes working out your weekly repayments simple. It creates a more manageable single repayment, often over a longer period of time which can make it more affordable as well.
Super Balance Transfers
Certain credit cards offer super balance transfers which allow you to transfer money directly into your bank account at a low or even zero percent interest rate. This can then be used to make loan repayments without the added interest incurred elsewhere. However, sometimes these do still come with a fee so you will need to work out if it is more cost-effective or not. Be disciplined to make repayments so you don’t increase debt.
It may seem like a long shot but depending on the type of loan you’re making repayments on and when it was taken out, you may be able to claim back payment protection insurance (PPI) if it was mis-sold. This would certainly make repayments more manageable as what you reclaim could go towards paying off the loan as well as making the payments significantly smaller.
Make Early Repayments
If you’re lucky enough to have received a bonus or pay increase at work recently and are still paying off loans, making early repayments could be a good use of this extra money. Many allow you to make extra repayments which go towards paying off the loan sooner, which reduces the amount of interest paid and therefore the total amount. Some even allow you to pay off the whole thing in one go, but only if you’re in a good position to afford it.