Category: Loans

What to do if you are Struggling with Loan Repayments

Loan repayments are really important. There are big consequences if you do not make them on time. You will often have to pay a fee and you could even have your interest rate raised. You may find that things go to court and you have items repossessed for sale to cover the missing repayments or that you go to court. If you have items as collateral such as a home or car, these may be repossessed. It can also be an extremely stressful time and it is best to avoid getting into this situation if you can. There are some tips below on things that you can try.

The best thing to start with doing is to speak to your lender and be honest with them. Explain that it is a struggle to make the repayments and they may be able to renegotiate the loan to allow you to make smaller repayments over a longer time period or give you a repayment holiday. Many lenders will negotiate like this as they would rather the loan was paid back and if they extend the term of the loan they will make more money out of the loan by the time that it is all paid off. This of course means that the loan will be more expensive for you but it could help you out of a tight spot and it may be possible to negotiate to pay more back once you get yourself settled financially again.

Another thing to do is to look at your financial situation. Consider what is happening and why you are finding things hard. It is worth looking at your income sources and seeing whether you can improve these. See if you can get a pay rise work some overtime or even change jobs to one that is better paid so that you can manage better. You may also benefit from looking at opportunities to make extra money from home. There are freelance opportunities, you could sell things or earn online. It is worth taking a look at trusted money forums to find out where reliable sites are where you can do this. It can be fun looking for ways to make money and once you start doing it, it can be quite an addictive hobby. You might find that you spend more time doing this than using other forms of entertainment.

It is also beneficial to consider whether you can reduce how much you are spending. It may be that there are things that you are spending money on that might not be necessary. This could be things such as nights out, alcohol, clothing and accessories, luxury foods, eating out, holidays, expensive phone and TV packages and you may even be overpaying on your utilities which you could compare and get cheaper. It is worth looking through your bank statements and the things that you are buying and seeing whether you can save any money. It may not be so hard as you think. Use comparison websites to help you and you could find that just a few phone calls will end up saving you a lot of money. Saving money can be good fun once you start seeing the difference that it makes. By just looking at the prices of things that you are buying and substituting with cheaper items, you can end up saving loads of money and you may notice no difference.

Cutting back and working more hours can be really hard. However, if you have a loan then you have committed to making the repayments and you will have to find a way to do it. Earning more can take up time but it can be easier as you do not have to make changes to your spending. However, if you have family commitment or find you need your leisure time to unwind from work, then you might find it easier to look into ways of cutting down your spending instead. The stress of money worries can make it difficult for you to think straight but it is worth trying to take some time to decide which course of action will suit you the best. As tempting as it is to ignore what is happening, this should not be done as it will only lead to trouble.