Loan Advice

Can Anyone Pay a Loan off early?

We often hear about people paying off their loans early or are advised that it could be a good thing to do. However, you may wonder whether this is something that anyone can do and whether you might be able to do it or not.

Some loans are far easier to pay back than others. For example if you have an overdraft or a credit card then you will be able to make repayments whenever you like for any amount of money. However, many loans have regular repayments and so you may think that you have to pay those and have no choice but to wait until the term of the loan is up before it is paid off. However, this is not always the case.

It is worth investigating to see whether you can pay your loan back early. Many loans will have this facility although there may be fees for doing so. They will often have an ‘early redemption fee’ and the amount that this is can vary greatly. It can be anything from a small administration charge or a month’s interest to a huge amount of money. It is therefore worth finding out and calculating whether it is worth doing. The way to calculate this is to work out how much you would pay if you continued as you are. So add up the interest payments as well as any fees or charges that you pay with it. Then calculate how much you would pay in total, in fees if you paid it back early. You will then be able to see whether you will save any money if you do pay it back early and how much you will save.

Of course, it is all very well calculating if it is worth paying a loan back early, but you will need the funds to be able to do this. You will need to be able to manage financially after you have paid extra money back on the loan. You may decide to pay a bot extra each month so that you can reduce the term of the loan or you may prefer to pay it back in a lump sum. Either way, you will need to find the money to be able to do this. If you have some savings, this could be a really good use for them because you will save more money in the long run, by not paying the interest on the loan, compared with what interest you will get on the savings. This will depend on the rates of the savings and loan interest but it is very likely that the loan interest will be higher than what you are getting on the savings. It is worth comparing them to see. If you do not have savings, then you will need to find a way to free up money in other ways.

You may be able to reduce your spending to free up money. Perhaps you will be able to switch suppliers, providers or retailers so that you buy the same things but at a cheaper price. This way you will not feel that you are making a significant change to your lifestyle; but you will be saving money. You may also want to consider buying less items. Many of us spend money of things which are not necessary and you may find that you will be able to cut back on some of these. It could be difficult but if you make sure that you keep your goal in mind and imagine how good it will feel to be free of the debt, this should help. You will have more money available once the debt is paid off as you will not be making repayments and so you can delay your spending until then. You could even consider trying to earn more money to pay it off even more quickly. Perhaps you could work more hours, ask for a pay rise or try to get a better paid job. You could do some freelance work, start a business, sell things or try monetising your hobbies so that you can earn more money and use it all to pay back the loan as quickly as possible.

Loan Advice

Should you Borrow Money to pay for your Hobby?

There are lots of ways of borrowing these days and it can be easy for many people to get a loan. This means that whether it is a mortgage, personal loan, overdraft or credit card, many people can get hold of money if they need. Although this can be very useful, there are circumstances when we tend to borrow money when it may not be necessary. It is wise to think hard about all types of borrowing to make sure that this is not happening.

Some people will borrow money for their hobby, for example. This could be considered to be unwise and it is worth thinking through the consequences before you do borrow money. Often we have quite inexpensive hobbies such as art and crafts, cooking and baking or reading and watching television. However, some hobbies can be really expensive such as foreign travel, collecting cars or buying fine art. Even a hobby that could seem to be affordable, could become really expensive if you buy a lot of things for it.

Borrowing money for luxuries like this is often seen as a bad thing. This is because when you borrow money you have to pay for the privilege. How much you pay will depend on who you borrow it from, what type of borrowing it is, how much you borrow and how long for. However, it is certain that you will end up paying more for the item, than if you paid with money that you already had. This means that you could end up paying more for the item than you would have paid for it, had that been the price when you bought it. If you pay on a credit card, there is no deadline for when you have to pay back everything that you owe, just a minimum repayment amount that you have to make. This means that you could end up accumulating interest on the borrowing for a really long time and it could be extremely expensive. It is not always easy to keep track of how much interest you have paid, so the reality of how much it cost you is often lost.

With all borrowing it is sensible to think hard before you go ahead. Calculate how much extra it will cost you and look at how much the repayments will be. Consider whether you will be able to afford those repayments or not and if you can, think about whether you will still struggle or if it will be easy to manage them. Imagine what might happen if your bills suddenly increase or your income decreases and how you will manage to pay all of your bills including these repayments. When you have calculated how much the item will cost in total, including the cost of the loan you can then decide whether you really think it is worth it. It may be better to wait and save up for the item, use money from a savings account or to not have it at all. It is up to you to decide whether you think that it will be worth it or not. It is always good to consider whether you might find being in debt stressful. Hobbies are supposed to be relaxing and fun, but if as a result of them, you feel stressed and worried, then maybe it is worth not paying out the money. A lot of satisfaction can come from being free of debt and form saving up to pay for things and so it is worth thinking about that as well.

So it is not easy to say whether borrowing money for a hobby is right or wrong. However, it is important to be aware of the consequences before you borrow money. Think both about how good it will be to have the money and pay for your hobby, but also about how it will feel to be in debt, how much dearer the things will be and how you will manage the repayments. Also consider what might happen if you are short of money and cannot manage the repayments. This could happen if your income decreases or stops for some reason or your spending increases, due to higher bills or needing certain new items.

Student Loans

Are You a Student Thinking About a Payday Loan? Answer These 3 Questions To See if it’s Best for You!

Most people think that students lead carefree days filled with fun. But today’s students are often quite hardworking and helping make their own academic dreams come true. Sometimes unexpected bills come up, a great solution some turn to is a payday loan. Payday loans give you money until your paycheck comes in. So it’s best to help you out of a bit of a tight spot. Let’s discuss payday loans, to see if they are the right choice for you if you’re a student. Just answer the following questions in our self-quiz!

A payday loan is an excellent option, it’s important to use it properly. Students are often quite hard working and have excellent work ethic. Today’s students are often paying their own way through school and this can be challenging. So unexpected bills can arise sometimes. The option of taking out a payday loan can provide tremendous relief to any student. It’s important to realize how they can help you.

1. I’m in school but I also…..

a) Work full-time
b) Work part-time
c) Work when I can
d) Play sports

Do you know what the correct answer is? Well, it could be a, b or c. It’s great that you play sports while in school, but in order to get a payday loan, you need to give the creditor confidence that you can pay the money back. Keep in mind that either a, b or c could be correct, as long as you’ve looked at your budget and realize that you will have the money to pay the loan back coming in by the due date. If you have any questions about this, ask the company that gives the payday loans.

2. I need a payday loan for….

a) Holiday gifts for my family
b) Spring break vacation with my friends
c) Dental work not covered by my insurance
d) Don’t ask! I just need it!

Students can obtain payday loans for many reasons. A payday loan can give you money, when you’re waiting for your paycheck to come in. It can help stretch your budget just a little further. Yes, it’s a great choice if you want to buy holiday gifts for your family and don’t quite have the money. Because we all should show our loved ones that we care. It’s also critical if you need dental work not covered by your insurance, it can keep you from being in pain for a longer time because you don’t have the money. Answers B and D are something to think about, because that’s a bit more about splurging and spending money on something you more want and don’t quite need. Now, if you’d planned to go to spring break and only needed a little more to pay off the trip, then a payday loan could be a great option.

3. If I’m having problems paying my payday loan I’ll….

a) Call my parents and family, ask them for help and advice
b) Contact the payday loan company and explain the situation
c) Go to my boss and ask for more hours at work
d) Hide under my bed

Now, no one likes to think about taking on a loan they can’t afford! But it happens to some. That’s why it’s important to think about how you plan to pay it back, even before you agree to the loan. Answer C is a great option, because if you are working more hours, then you’ll earn more money to pay back the money. You may be able to try Answer A, asking your parents and family, they may be able to help you. One very important thing to do is Answer B, to contact the payday loan company and explain the situation. Even if you are still trying to figure it out, or you went to your boss to ask for more hours (Answer C) but you haven’t worked them yet, it’s important to keep the company informed of what you’re doing. The worst thing to do is to hide under the bed!

While students were not the original audience for payday loans, they are certainly utilizing them as a budget tool. If you’ve used payday loans, then you realize just how helpful they can be. They can make the difference between having the money for a plane ticket home to visit your family at winter break or staying in the dorms through the holiday season. Or it can help you buy a great suit for that important job interview or internship. It’s important that you use them wisely, just the same way you would a credit card or even a loan from a parent.
Don’t miss out on the helpful opportunities that payday loans can offer you. Especially if you are working through school and there are times when you need a little help between paychecks, that micro loan can make a huge impact. When you start a new class and realize that a textbook you must have costs $200 and you can’t buy a used copy, it’s time for a payday loan. Payday loans can give you a huge sigh of relief sometimes.
Your student days are going to fly by. Enjoy them while they are here and make the most of them. Aren’t you glad there are payday loans here to help?