Instant loans are a great way to create opportunities when you need them most. Whether you’re one of the 41% of Canadians who needs a loan to get a car, you’re working to consolidate your debts, or you’re trying to get things done during a medical emergency, a little extra cash can go a long way.
Of course, after the initial excited rush of being able to do everything you need, you’re left to deal with the loan repayment. How do you make sure you manage your budget and bills accordingly?
If you’re worried about repaying your loan, we’ve got you covered. We believe a short term loan could be your best decision—provided that you’re responsible enough to manage it. Here are a few key tips you should know when it comes to repaying your loan on time.
Borrow Only What You Can Afford to Repay
First things first: we encourage all of our clients to borrow responsibly. Instant loans are a way to help you get through difficult times, but the interest rate you’ll receive will be higher than the one you’d get from a local bank.
For many people, this service is still the right solution when they need fast help. However, it’s still important to borrow no more than you can afford to repay.
As a general rule of thumb, experts suggest a debt-to-income ratio of no more than 35%. If you’re already carrying significant debts and have a larger debt-to-income ratio, make sure to consider alternative options first.
Adjust Your Budget
If getting quick cash now is the right call for you, make sure to adjust your budget accordingly. Doing so can help you understand where your money is coming from, where it goes, and when you’ll need to pay your bills. It can also help you establish financial goals and spending limits while saving more money.
If you haven’t already created a personal budget, or if you need to revamp an old one, try starting with a simple budget planner.
Once you’ve set up your new budget, be sure to stick with it! As needed, consider setting up automatic bill payments from your bank. This ensures that you don’t spend money that should go toward your loan payments by accident, and it also can save you from forgetting the date and racking up unnecessary fees.
Pay More Than the Minimum When Possible
The best online loans will give you several months to pay the money back, often under a year. With Tekaloan, most of our repayment terms range from three to five months.
However, you can save on interest payments by paying more than the minimum each month. Larger payments also allow you to pay off your loan faster, making it one less item on your financial checklist.
Paying more can be as simple as rounding up your monthly payments to a higher dollar amount. It may also mean paying more often—such as once a week instead of once a month—or putting more of your income or savings toward the payments.
Find Ways Cut Costs or Save More Money
If you’re hoping to repay your online loans faster, one of the best methods is to cut costs or save more money. Because your loan repayment term will often be only a few months, you won’t need to make permanent life changes, but a few smaller shifts can be helpful.
Noticing any unnecessary costs in your budget? If you can shave down on these costs, you’ll walk away with a little more cash to put toward your loan repayment.
Cutting costs can be as easy as making meals at home instead of spending money buying lunch at work. You may want to cut the cord when it comes to cable, or watch movies at home instead of going to the theater. You might even challenge yourself to a no-spend month to freeze unnecessary purchases for a while.
Save More Money
Though extreme changes like finding a new job can help you save more money, short-term changes can help as well.
Consider taking more overtime hours or working a few extra shifts, or pick up a side hustle to make a bit of extra cash. Selling old or unwanted possessions can also be a great way to clear out your home while working toward loan repayment. Don’t forget to put any sudden windfalls you get—like a tax refund, a work bonus, or a debt repayment from a friend—toward your loan payments instead of splurging.
Contact Your Lender
If you’ve made an impulse decision to take out a quick loan in 24 hours, don’t feel like you’re on your own if you run into trouble! Missed payments can incur hefty fines and fees, so reach out to your lender to see what they can do to help.
Reputable lenders will always allow you to refinance or apply for a payment deferral. Deferrals must always be done in advance; our policy requires at least 48 hours’ notice. If granted, your payment will defer to the end of your contract, allowing you to skip your current payment.
Repay Your Instant Loan With Confidence
At Tekaloan, we want you to be confident about your ability to repay your loan. Though getting your finances in order can take effort, creating a budget, sticking to your plan, and saving some extra cash can help you repay on time or even faster. Be sure to follow the steps above as you work to repay your loan!
If you still have questions about the application or repayment process, we encourage you to check out our frequently asked questions or reach out to us. To get started with a loan, apply here.