NEW YORK, March 1, 2023 (Newswire.com) - iQuanti: Putting things in the proper perspective can be liberating. Debt is an excellent example of this. As you sit down with your loan payment calculator, wondering how you got here, it would be helpful to know that you're not alone. According to Experian, the average American carries $96,371 in debt.
Of course, knowing those statistics won't help you make that next loan payment. The cost of living is rising, so making ends meet is becoming more challenging. Our goal in this article is to provide you with some tips on how to get loan payments out on time. Check out the list below to see what we came up with.
1. Review your budget
It's time to tighten the belt a bit regarding your finances. Review your monthly budget to look for unnecessary expenses you can cut back on. This will help you find the extra money to put toward making your loan payments on time. Additional expenses you may want to cut back on include eating takeout, unnecessary shopping, monthly subscriptions, or gym memberships.
2. Make a list of all your bills
Compile a list of all your bills with their due dates and incorporate them into a weekly or monthly budget. This will help you avoid difficult choices like paying your utility expenses versus making a loan payment. Having a list of your monthly bills will also help you visualize exactly where your money goes each time you get paid.
3. Pay bills with autopay
Creating a solid budget and calendaring your bill payment obligations are the necessary prerequisites for this step. Once those are in place, put your bill payments on autopay. This will ensure that loan payments go out on time. Just make sure there's always enough in your bank account to cover them when payments are sent out by your bank.
4. Build a reserve fund
You may have heard the suggestion to have a buffer of a few months' worth of funds to cover bill payments, but you don't know where the money will come from. It's okay to start small, whether it's $10 or $100 each paycheck. Save over time and let the reserve fund build until you reach your goal. It all starts with the first deposit into the fund.
5. Reduce credit card debt
High-interest credit card debt is a problem plaguing many Americans. In addition to avoiding credit card use, consider consolidating multiple high-interest credit card balances into one lower interest personal loan. That could give you a good way to create more bandwidth to pay other bills. It could also help alleviate some of the pressure you're feeling from the rising cost of consumer goods and services.
6. Negotiate with your lenders
Missing a payment because you think there are no other options will lower your credit score and make it more difficult to get new credit in the future. Contacting your lenders to negotiate a lower interest rate or refinance the debt is a better option. If you're having trouble paying the bill, make the call.
The Bottom Line
Times are tough. A fill-up at the gas pump and a trip to the grocery store can make it more challenging to keep up with, but you're not powerless. Tighten your budget, organize your bills, put payments on autopay, and start building a reserve fund. If you have high-interest credit card debt, try to eliminate it. When all else fails, call your lender. Rather than see borrowers default, many creditors are willing to negotiate better terms.
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Original Source: 6 Tips for Making Loan Payments on Time