Negosentro | 5 Tips for Making Your Loan Payment on Time Every Time | Loans can be extremely helpful when you need money for a large purchase. You might consider a home loan to buy a house, a personal loan to help cover an unexpected cost that popped up, a student loan to pay off your own or your child’s tuition, or an auto loan to purchase a new vehicle. The list of available loan options is long, and at one time or another, many of us will open one at some point in our lives. Loans are a great way to bridge a financial gap, and being able to pay the loan off over time can give us many opportunities in life that we may not have available to us otherwise.
The trick to getting the most value out of any loan is making sure you make your loan payments on time and in full. Over the course of the loan term, this will help you repay the entirety of the loan on schedule as agreed when you signed the paperwork. This is important not only to your lender but also to your financial situation and standing. Let’s take a quick look at why it matters if you make a loan payment as scheduled, and then we’ll help you with a plan to get your payments on track.
What Happens When Your Payment Is Late?
When you make a late payment on a loan or bill or miss a payment altogether, this reflects poorly on your credit score. That can make it more difficult to get loans in the future and can make it difficult to open credit cards or bank accounts. It may also affect other areas of your life, such as applying for jobs that check credit scores before deciding who to interview. You can also incur late fees and increased interest rates on your loan as a penalty for being late with your payments.
On-time loan payments can help keep your credit score healthy and avoid extra costs on loans, making it a worthwhile goal. So how do you ensure your payments are made on time? Read on for five tips for making your loan payments on time every time.
1. Make a List of Your Monthly Costs
The first important step in ensuring you make a loan payment on time is to make a list of all your costs each month. This will include everything you pay for, from buying groceries to paying for utilities to making your mortgage or rent payment. If you don’t know what bills are due and when, how can you even begin to make sure you are paying them on time?
Focus on the upcoming month first, and list each payment you expect to make. Include the vendor or lending institution, the amount due, and the due date. For our purposes, list the exact amount due on your loans or debt repayment, even if you usually pay extra each month. Organize the list by starting with the earliest due date and ending with the latest in the month.
If you are unsure about what you pay for each month, start by reviewing your credit report. You can get a free credit report every year at annualcreditreport.com. You can also review your credit and debit card statements to see what bills are automatically being paid each month.
Once you have one month of budgeting created, you can then easily translate that into the following month and keep it updated each month. With an easy way to see what payments are coming due and when and how much they’ll cost, you can see the best path for making your loan payments when they’re due. It might mean moving around costs with more flexible due dates. You may even find there are services you’ve been paying for that you no longer need and potentially save money by canceling those, freeing up more money for your loan payments.
2. Create Calendar Reminders for Your Payment Due Dates
Once you have your financial budget created, you can use those due dates to create calendar reminders on your cell phone, watch, computer, or whichever digital device you use most frequently so that you see the reminders pop up. Set calendar reminders to give yourself ample time to make the payments before they are due. Remember, some payments take a couple of business days to process.
Making payments early also looks great on your credit report and can lead to paying off loans and credit card debts early, which also means less interest is paid over the course of the loan. This is a win-win.
3. Sign Up for Online Payment Reminders
Many online payment systems available with lenders and service providers now offer a feature that sends payment reminders. Through this service, the lender emails or texts you a reminder as your payment due date approaches. When considering opening mortgage loans and such, consider using a lender that offers online payment systems with features such as calendar reminders, apps that can be downloaded to your cell phone with 24/7 access to bill pay, online statements, and other helpful features to manage your loan.
4. Pick Payment Due Dates When Available
Many lenders offer the ability to pick your due date. This can be helpful to ensure all your bills aren’t coming due at the same time. You can also coordinate due dates with your paycheck schedule to make sure you have enough money when the bill is due each month.
5. Use Automatic Payments
Many online payment systems also offer the ability to set up automatic payments. This way, the lending institution will deduct the monthly amount due from your account of choice on a set due date. You can add information for the bank account, debit card, or credit card that you prefer to make payments from and set a date to pull the money from the account. The lender does the hard work for you. Automatic payments are a foolproof way to ensure you make a loan payment on time every time.
Taking advantage of the above tips can make for a healthy financial future for you for years to come. With payments being made on time each month, your credit score will increase and your future loans will be that much easier to obtain when needed.
In Washington State, Solarity Credit Union offers home loans, mortgage refinancing, RV loans, and more. Their excellent customer service and online banking options can help you borrow the money you need and then make your loan payment on time every month.