Repayments

How to Pay off your Car Loan Early

If you have borrowed money to buy a car, then you may wish that you could pay the loan off early. You may feel that the loan is hanging over you and that you would like to get rid of it or you may want to borrow more money and the loan is holding you back as your credit record is affected. Whatever the reason, it could be possible for you to pay the loan off early.

You will firstly need to look at the terms of the loan to see whether this is possible, If you cannot find them or cannot understand them, then talk to the customer services department and they will be able to let you know. There may be an early redemption fee or an administration fee so you will need to take that into consideration and check if there is one.

It is worth calculating what the remaining cost of your loan is by adding up the remaining interest payments. The compare that with any fees for paying it back early and see which is cheaper. It may be that it is cheaper to keep to the terms and continue paying the loan back as you are. If this is the case then you have to decide whether you think that it is worth paying extra in order to get rid of the debt.
In most cases it will be cheaper to pay the loan back early. It is worth also finding out how much in total you owe and whether you can make small overpayments as you have free money or whether you will need to pay it off in one lump sum. Then you will need to be able to work out a plan on how you will pay it back.

The first thing to consider is whether you have any savings. It is normally well worth using savings to repay debt because the rate of interest of savings tends to be less than the interest rate on loans. It is worth checking though and comparing. You may like to have savings to fall back on, but you will save money by paying off your loan and you could use this to quickly build your savings back up again.

If you do not have savings or do not have enough to cover the full loan amount then you will need to find other ways of getting the money together. There are lots of other options though. You could consider whether you have any items that you no longer need or use. These could be sold to earn some money. There are different ways of doing this such as a table top sale or car boot sale, an online auction, a social media site, local paper or other ways. The way you sell may depend on the type of item that you are selling and how expensive it is. Even if you have items you do not think are worth much, you could find that a sale will generate some extra money which could all add up and go towards paying off the car loan.

If you work, then you could try to earn more money from your job. You could see whether there is any overtime that you can do, ask for a pay rise or you could look for a better paid job. This could be the thing that makes the most significant difference to your income and could really help you to pay off the loan more quickly.

Small things do add up though so it is worth trying other things. If you can cut your spending, for example you will be able to put the money that you save towards paying off the loan. Most of us spend money on many things and there may be ways to buy cheaper items that will save you money or you could cut back on buying unnecessary items and save the money. To do this it could be best to make a note of all of the items that you are buying each month and think about if there is a way that you reduce the cost of each one or whether you could eliminate buying it altogether. This should help you to see where you can cut down and if you do start spending less you could find that you will be able to repay the loan pretty quickly.

Lending

How to Decide how much to Borrow

When you have decided that you will get a loan then it is really important, not only to get the right no credit check loans at the right price but also decide how much you should borrow. It is really important to get the amount that you borrow right as it could have a significant impact on the cost of the loan and possibly the term as well.

It can be tempting to think that you will borrow a little bit more than you need, perhaps so that you can treat yourselves or you will have a bit of money to fall back on if you need it in the future. Although this is completely understandable it is wise to not do this if you can help it. Borrowing money is expensive and if you borrow for a long time it can be incredibly expensive. It is worth calculating how much it will cost to borrow each £100 for the time that your loan lasts so that you can work out just how much it will cost you if you choose to have a bit extra.

It is therefore wise to carefully calculate how much money you need. You do not want to borrow too much because you will end up paying a lot for it. Therefore you need to find out how much you need as a bare minimum and use that. This could be less than you think, if you are very careful.

For example, if you are borrowing to pay for a car, you may think that you will need to borrow the full value of the car. However, you may be able to borrow less than this. Firstly, check to see whether you have any savings. You may feel that it is important to have savings to fall back on, but you will save a lot of money if you use these to pay with things rather than borrowing. It may not even take you that long to save up again, particularly if your loan repayments are smaller and you pay them for less time. If you look at how much in interest you are getting on your savings, chances are that it is a lot less than you will be paying for the loan. It is worth checking.

It may also be worth seeing whether you can find money elsewhere to use instead of borrowing. Perhaps you could sell things that you own and no longer need, do some extra work perhaps overtime or an extra job and earn the money that you need. It may seem rather extreme, but if you calculate how much it will cost you to borrow the money you may decide that it will be worth it. It can sometimes be difficult to weigh up the costs against the pleasure of having new items, but it is worth considering the repayments and the time it takes to repay as well as the cost and thinking about whether it really is worth it. If you do still think so then you need to make sure that you borrow the minimum amount possible so that you keep the costs to a minimum. Also try to find the cheapest loan so that you do not pay more interest than necessary.

It is good to think about whether you really need the money right away or whether you can manage to wait until you have time to save some up. This could allow you to borrow less or not to borrow at all. If you can borrow less then you will save money and you will save even more money if you do not have to borrow anything at all. Borrowing should only be done for emergencies that you will not be able to afford otherwise. If you borrow unnecessarily then it will cost you a lot of money and you may not even really need the money. Make sure that you think hard about why you are borrowing, whether you really need to and how much you need. Calculating the costs and the repayment amounts should help you to decide whether you think that it is really worth the extra cost or whether you can wait and save up or go without so that you can save the money.

Advice

The Best Times to Borrow Money

If you are considering getting a loan, then you may wonder whether it is a good time to borrow money. There are many factors that you should consider when borrowing and some of these may be linked to getting the timing right.

Good timing can mean that you borrow when the economy is in the right state as well as when the time is right for you and it is worth knowing when this time is so that you can make sure you are making a sensible decision. As a mortgage is a long term commitment of normally twenty five years, the current state of the economy may not make a huge difference, whereas a short term loan may not be so effected, although it may be cheaper to delay and get one later if you think interest rates will fall in the future. However, predicting what may happen in the future could make a difference, but is hard to do. If interest rates are low, then chances are that they will rise and mortgage repayments will go up. If rates are high then they may fall and repayments go down. Uncertainty in the economy, can sometimes have an effect on salaries, prices and things like that, which will have an effect on how well you can afford your mortgage repayments. Big economy changes such as leaving the EU, changes of government economic policy, world recessions and other world economic changes can also be a factor and some are more predictable than others.

It is easier to look at your personal circumstances to work out whether the time is right to borrow. You will need to start by making sure that you will be able to afford the repayments at the moment. It is important that you do not guess but that you actually consider how much money you have at the end of each month and whether that is enough to cover the repayments. Make sure that you actually calculate what you income is and how much you spend and see how much is left; working out whether that will be enough to cover the repayments. Do not just look at the last few months, but think about whether there are any months which are extra expensive, perhaps when you have insurance to pay, gifts to buy or things like that. You may be able to manage if you save money towards these things, but you will need to be organised and put a plan in place to ensure that you are prepared.

It is also important to imagine what may happen in the future with regards to your income and your expenditure. Think about whether you might get a reduction in income, perhaps losing your job, having to give up work or losing the income from other household members. This could have a huge impact on your ability to make the repayments. If you have some savings to fall back on, this could help but they will not last long and whether that will be enough will depend on how much you owe and how long you have a reduced income. Your spending may go up if you have significant life changes, perhaps if you have children, move to a larger home, move in with a partner, become a full time carer or whatever. This will not be significant for a short term loan but could have a massive effect on a long term loan.

So it is very important to make sure that it is the right time to borrow. Your personal circumstances are easier to predict than the general economy and so it is worth considering whether things may happen which will affect your chances of being able to make the repayments on your loan. The longer the term on the loan, the more likely things could have an impact on your repayment ability. It is worth making sure that you are confident that you will be able to make all of the required repayments without it having a significant impact on your life. Missing repayments can not only be stressful and expensive but it could mean that anything that you use as collateral, such as a car or home could be taking by the lender and sold or they could take you to court for the money.