15th Feb, 2016
Many would want to own a home, pay school fees for the children, drive a good car, take care of medical bills and sort out expenses and responsibilities that life throws at us without having to take up a loan.
The truth is, most of us got through university with the aid of student loans that most of us are still servicing.
The fact remains that loans are an important and convenient part of our lives. It would be quite dicey to get some of our responsibilities done without the need for a loan.
So, that loan you take up for that house or car, or even pay for your child’s education, it eventually does need to be paid back. This is where some people get stuck between a rock and a hard place-having taken a loan with no idea on how to go about repaying it.
Many people have ended up being auctioned or sued in court over unpaid loans. To avoid this, it’s good to know how to save yourself from that kind of embarrassment.
However, situations arise where one is unable to pay off a loan within the stipulated time. This can be through illness, loss of revenue or employment among other unforeseeable circumstances.
Here are a few tips on measures one can take to ensure that they repay that loan.
- Get flexible repayment terms
You probably took up this loan knowing that you could comfortably pay it off within a year. However, life throws you a few curve balls and you find yourself struggling to make those payments. Enquire if your bank offers an alternative repayment plan. Get an extended repayment plan where you probably pay a lesser amount within a longer period of time.
- Spend less
When servicing a loan, it’s wise to check your expenses. Some stuff is unnecessary and can only drain the already strained wallet. Stick to the important things and save the extravagance for post loan repayment.
- Budget
Budgeting will help get your finances back on track sooner rather than later. Since you have to cut back on your expenses as you service the loan, budgeting becomes your guiding angel of sorts to ensure you come out the other side unscathed.
- Understand your loan
Think it through. Have valid reasons why it is necessary to get a loan and how you will go about making payments. Understand the terms, read through the fine print and get to know the extra charges that come with the loan. Then come up with a repayment plan.
What is important is to make the loan repayments on time to avoid the penalties. Loans, when planned for are an advantage as one can get a lump sum and develop their future.
