7 Ways to Be Ready for Student and Personal Loan Repayment – Part 1
One of the most important moments of anyone’s life, is when they take their first personal loan. This marks a moment in which a person can finally say they are financially responsible for their lives and when all their efforts in life (studying, finding a job and such) show their rewards. However, the moment one gets their first personal loan also marks another important moment: The start of financial responsibility.
In many cases, personal loan lenders and banks not only offer some nice personal loan terms and interest rates, they also provide borrowers with a few weeks or months of grace period for them to start repaying their personal loans. This of course, depends entirely on what the personal loan is used for. For example, if used for educational purposes, banks can give borrowers a grace period that is longer than if they use that personal loan for simple shopping.
However, ever since the introduction of this measure, a lot of people who get their first personal loan have started to default on their payments. The reason for this is that, since they never had any financial responsibility, many borrowers start to feel that the grace period given to them by the banks if more like a vacation, when they should use it to plan carefully how they will start repaying their personal loans.
All that considered, here are the first out of seven steps that you should follow during that grace period to be optimally prepared to repay your personal loans.
1. Track down all the personal loans you have:
Since anyone is entitled to take any number of personal loans they want, you might already have a few of them, perhaps each of them from a different bank or lender, including federal loans as well. The first thing you should do in these instances is to go to use your bank’s database to performa query to find out every single one of your personal loan amounts to have them in check and organized.
If however, you also have private personal loans (usually given out by friends and family members), these will be trickier to track down. thankfully, since these personal loans are usually given by people close to you, it should be quite easy for you to try contacting them for the specifics on each personal loans.
2. Contact your loan provider:
Planning your personal loan payments since the very beginning has one great advantage: It lets you program your payments and, if you see you won’t be able to reach a deadline, to then talk to your personal loan providers to arrange other payment days and conditions.
3. Plan and budget your personal loan repayments:
The most important part of any personal loan budget is to understand that the grace period needs to be used to put your act together and plan your next few months or years of repayments accordingly. Naturally, a correct planning and budgeting will include all money coming in and going out, including salaries, rent, car and insurance payments, food, entertainment and such. Once all these are factored, you should also include your personal loan payments in the equation.
Another very important part of the planning stage is to (if possible) start putting aside a few funds every month before you have to start repaying your personal loans. With this money you can have a small amount that you can use to pay the first couple of personal loan installments and give yourself a breath on this period.
There you go. Tune in for our next entry, where we will show you the last four steps you need to be ready for repaying all your personal loans.