You had your doubts, but one of the lenders offering bad credit loans approved your loan application. Now it’s time to turn your attention to managing the loan to the best of your ability. Here are five tips that will help keep you on track and cultivate a lot of good will with the lender.
The Loan Payment is Now a Priority
You already have priority line items in your household budget. They include things like housing, utilities, and food. Those are the things that you make sure are covered before you spend any money on things that you consider non-essentials.
Your loan payment joins those other priority items. Before you spend money eating out, buying clothing that you want but don’t really need, or otherwise treating yourself, the loan payment is made right along with the other essentials. Along with ensuring that you’re honoring the loan terms and conditions, this approach will help you avoid late fees and other budget-complicating events.
When Possible Pay a Little More
Did you know that many lenders are fine if you want to add a few extra dollars to the usual installment payment? This allows you over time to pay off the loan a little sooner. Depending on the loan terms and conditions, that means you could end up paying less interest over the life of the loan.
Make An Extra Payment Now and Then
Along with adding a few more dollars to those monthly payments, consider making an extra payment if you find yourself with money that you don’t need for other purposes. This doesn’t have to take place every month. For example, consider setting a goal to make an extra payment every quarter. By the end of the year, the overall loan balance could be considerably lower than you originally planned.
Communicate With the Lender
While you hope that nothing gets in the way of making those payments on time, don’t hesitate to contact the lender if something unexpected happens. For example, there’s an error with your paycheck and it will take several days to correct the problem. Take a proactive approach and contact the lender as soon as possible. Even if you may still be able to pull together enough funds to make the payment on time, your proactive approach will be appreciated. Under these types of circumstances, some lenders may even waive any late fees because you notified them in advance.
Track Your Account History Online
Many lenders supply online access to their clients. Once your access is set up, it’s possible to remit your payments electronically, know when they are received, and even confirm that the payments were applied to the outstanding balance. Get into the habit of tracking the account activity so you know when your obligation for the month is settled.
A side benefit of using the online interface is that you have the comfort of looking at the progress made with the loan in recent months. When things seem a little tight and it seems as if your money is going out as fast as it comes in, the account detail serves as a tangible reminder that you are accomplishing something that will ultimately benefit you in the future.
The loan ultimately helps you in more than one way. Working with a lender who regularly reports to the major credit bureaus will have a positive effect on your credit score. It also cultivates a positive reputation with the lender. If you should need some type of financing in the future, there’s an excellent chance that the same lender will be happy to approve your next application.
Photo Credit: James Thompson
What happened to the most important rule of them all???? Pay on time! Or your credit score will suffer.