America’s household debt has hit a record $14.6 trillion, so the good news is if you’re struggling with debt, you aren’t alone — most people do.
For the most part, people aren’t quite sure how to pay off their loans and debt. They might get in over their head and borrow too much or live above their means, which leads to them feeling suffocated by how much they owe.
Fortunately, King Cash has some tips for getting that debt paid off. Worry about those online loans no longer!
1. Budget in Advance
It sounds obvious, but setting up a budget in advance can really help with loan repayments. Use a loan repayment calculator to work out exactly how much you need to pay back each month, or even how much you can afford to pay to lower the total interest. Then, set aside some money each month and make sure you have it.
The key is making those payments a priority. They aren’t optional and missing the payments could incur late fees or give your credit score a hard hit, making it more difficult to borrow in the future.
2. Prioritize High-Interest First
The average APR for a loan is 9.09% but some fast loans in Canada are much higher (especially no credit check loans). This is because there’s less reassurance that you can pay the money back on time, as your track record isn’t great.
If you do end up with a high-interest loan due to this situation, you should make sure you prioritize paying that one back first. Otherwise, the interest will rack up and you’ll end up paying more over time.
Make the minimum payments on any other loan still but if you can afford to put more money towards your debt, this is where it should go.
3. Try Debt Consolidation
If you’re really struggling with multiple different payments and can’t keep track of them, how about trying out some debt consolidation?
Debt consolidation is where one company will use a lump sum to pay off your debt and then you pay them back in monthly installments. This works out better for people who can’t keep track of a bunch of different payments and end up missing some.
It also may work out at a better interest rate, if that’s something you’re struggling with on credit cards or personal loans. Overall though, it makes the loan repayment process much simpler.
You can contact some different companies for quotes and make sure the APR is reasonable for you. Remember to read all of the terms before signing up for anything like this.
4. Make Higher Payments Where Possible
Some people can’t afford to make higher payments, and that’s okay — just pay what you can. However, if you ever come into a little extra money and more disposable income, making higher payments is key.
It’s not just because you’ll pay the loan off quicker, but because you’ll end up paying more in general if you take longer. The interest will keep racking up whereas it obviously stops entirely when you pay the whole loan off.
5. Take on a Side Hustle
If you’re struggling to afford the payments each month, why not find a side hustle? There are many freelance jobs available that you can get more money from, including:
- Uber or Lyft driver
- Petsitter (using Rover or Wag)
- Freelance writer
- Virtual assistant
- Selling arts and crafts on Etsy
It’s easy to monetize your talents when you know how. Just remember to put money aside for taxes each month or you could end up struggling more when that season rolls around.
6. Let the Lender Know If You Can’t Pay
If there’s any month where you can’t make a payment, it’s essential that you don’t ignore the situation. Instead, contact the lender immediately and let them know that you can’t afford to pay.
They may be able to help you out by giving you an extension on the deadline or even deferring the loan for a month.
If you don’t contact them to find out your options, your credit score will take a hit and you’ll likely have some steep late fees tacked on. Ignoring the problem will only make things worse later, and some lenders can be understanding about needing to miss a payment — especially if you have a good track record of paying on time.
7. Don’t Take Out More Loans Than You Need
Never take out more loans than you need. Living above your means can be tempting, but if the money isn’t essential, then don’t take out a loan because remember — due to interest, you end up paying more back in the long run. The money isn’t free, and lenders have to make a profit or they wouldn’t be able to run their business.
When taking out a loan, consider if you really need it or if you could get the money from elsewhere.
Follow These Tips From King Cash
Follow these tips from King Cash and you’ll be debt-free before you know it. The road to paying off loans can be long and stressful but if you budget every month, ensure you have enough money to pay the loan off, prioritize high-interest loans, and immediately let the lender know if you have any trouble, then you’re on the right track.
Looking for a loan that can be with you in as little as a few hours? Check out our loans at Kingcash.ca. We’re reliable, trustworthy, and will work hard to get you what you need fast.