Bad times never come knocking on your door. Emergencies arrive unannounced and you ought to be always prepared to face them without a halt.
Some of the hardest hits in life could be financial ones, for they could be stressful and cause irreparable damage to your mental health. However you do not have a choice but to act financially prudent and stay afloat with the help of small loans or funding sources.
Borrowing with poor credit health could be easier than said. You need to make deliberate efforts to be able to afford a loan. Most of us are indebted by the time we start working for bread. It is commonplace to have a student loan, auto loan, personal loan, fuel card and a few more cards. Some of you may even hold mortgage along. In face of high debt to income ratio, managing an additional loan could be a hard task.
Here is a quick check list to help you repay your loans on time:
1. Do not borrow more than needed
Despite low loan eligibility, using collateral or guarantor you could be offered more than what you need. Always be firm and borrow strictly for loan requirement. In fact it is advisable to borrow small loans as gap fill loans.
2. Assess your credit situation
Before you borrow loans pull out your credit report and assess your credit situation. You may also consider using tips of a professional loan advisor to know what types of loans are the best suited to your credit profile.
3. Compare and choose
Always compare available deals on different parameters before accepting the papers. Do not overlook any factor and make sure you sign a transparent deal. Ensure that there is no hidden fee or charges attached.
4. Opt for affordable instalments
It is important to borrow a loan on affordable instalment plan. While it is important to not opt for a longer loan just because of smaller instalments, it is significant to prefer affordable instalment irrespective of duration. For, easy instalments ensure timely repayments every time. You need not be wary of temporary cash hassles during the loan term.
5. Budget your expenses
With high debt to income ratio, it is important to work for timely repayments every day. You need to budget your expenses. You can consider delaying your outflows so as to save more funds for your current plans.
6. Save and save more
A new good habit is better than mending the bad done by old habits. Besides working on your loan repayments, you need to learn to save and save more every day. Whether it calls for cutting down your lifestyle expenses or shopping on lists, you need to be pro active to save every day, every hour.
7. Build a reserve fund
As you learn to manage your finances in a better manner, you must learn to build a reserve fund for emergency. Every month you must keep aside a set amount or percentage of savings for this fund. The amount can be used later on for loan prepayment or during a financial glitch.
Following these simple tips in mind, you can improve your credit rating by repaying your loans on time.