An installment loan can come in handy in several situations. You can use it to cover an emergency expense, like a car repair or medical bill. It may also help you meet a short-term financial goal, such as new furniture or a vacation. No matter what you decide to do with your installment loan, it’s your responsibility to pay it back. As you embark on your repayment journey, put these tips into practice to help you effectively manage your balance.
Factor it into your budget
A budget is a spending plan that places your income and expenses into context to help you formulate an achievable repayment strategy. By creating one you can realistically follow, you can ensure you have enough money to pay off your installment loan. There are many types of budgets out there, such as the zero-based budget, the pay yourself first budget, the 50/30/20 budget, or the envelope budget. Once you choose the right budget for your unique situation, be sure you account for your installment loan payments within it.
Set up reminders
If you lead a busy life, it can be easy to forget about your installment loan. Since doing so can add on late fees and negatively impact your credit score, it’s a good idea to set up calendar reminders on your phone or email so that you’re always aware of when your payments are due. Reminders can help you stick to your repayment schedule and pay off your loan as you planned to.
Sign up for autopay
Fortunately, many lenders offer autopay for installment loans. This means that as long as you enroll, you can set up recurring payments that will automatically be deducted from a bank account or debit card of your choice. This is a great strategy if you really want to “set it and forget it.”
Ask for help
In you run into difficulty making payments, talk to your lender or loan servicer right away. They may have assistance programs available. It’s important to do this early to minimize the consequences of becoming past due, like late fees and credit reporting. Lenders may also have free tools to help you become a savvy borrower.
Increase your income or reduce your expenses
At some point, you might find that you don’t have enough money to pay off your installment loan. If this is the case, consider a side hustle or part-time job to boost your income. You can also lower or even eliminate expenses such as cable television or a gym membership that you no longer use. When you increase your income and/or reduce your expenses, you’ll have more cash to put toward your loan.
While paying off an installment loan may seem daunting, it’s certainly feasible. As long as you follow the tips mentioned above and prioritize your payments every month, you’ll be in a better position to do it. Once you repay one installment loan, you’ll be able to pay off others with confidence. Best of luck!
About OneMain Financial
OneMain Financial is the leader in offering nonprime customers responsible access to credit and is dedicated to improving the financial well-being of hardworking Americans.
Name: Michael Bertini
Job Title: Consultant