Many of us have loans and they can be extremely useful. We can use loans to pay for things and then spread the cost so we can afford things that we would not normally be able to. This allows people to get a university education, buy a home or drive a car which can be extremely useful and can lead to a better financial future for different reasons. However, there are also some of us that have loans that we would like to repay. This could be because we want to borrow, perhaps to buy a home and feel that having another loan, perhaps an overdraft, will stop lenders being so interested in allowing a mortgage. It could be that you have had a loan from the likes of Omacl.co.uk a while and are ready to repay it as well. Whatever the reason, it is worth using a methodical approach to repaying it so that you know that you are prepared.
- Find out how much you owe – you need to
start by looking at how much you owe. It can actually be quite scary doing this
and it might be a big stumbling block. However, it needs to be done and so you
need to be brave and have a look. It doesn’t matter how much it is, it can all
be repaid eventually but you need to know so that you can come up with a
solution to repaying it all.
- Set a date to repay the loan– it is a
good idea to think about when you want to have the loan repaid by. It might be
that you have a particular date in mind, perhaps before you get married, have a
milestone birthday or something like that. Otherwise you may not be too sure,
but it is good to focus on a particular date. This is because you will be more
determined to stick to a plan to get it paid off and can get it done. If you
leave the date open then it could take you years or even decades longer to
repay it and this will mean that it will cost you a lot more than necessary.
- Pay off a chunk with savings – if you
have some savings then it can be a good idea to look at how much interest you
are getting on them. You need to then compare this with the interest that you
are paying on the loan. It is very likely that you will be paying more interest
on the loan that you are receiving in interest on your savings. This means that
you will be better off financially by paying off the loan (or some of the loan)
with the money that you have in the savings account. This can be a tricky thing
to do as saving money is not easy. We may have made sacrifices to put that
money in the savings account or it might be to pay for something specific. This
could mean that you will be very reluctant to part with the money. However, it
is important that you bear in mind what you will gain by using it to pay off
debt and note that you will be able to save the money again at some point
should you need to.
- Whittle it down bit by bit – you may need
to whittle away at the loan little by little if you do not have a chunk of
money that you can use to pay it off. This can be a manageable way to repay
without having to feel like you are paying out too much. You will need to work
out how much you will be able to afford to repay each time. It might be that
you normally have a little money left over each month that you can put towards
it. However, it might be that you will need to reduce your spending somewhere
or find a way to earn a bit more money so that you have enough to make those
- Find ways to pay off extra chunks – it
can be good to also see if you can find a way to pay off chunks as well. This
will allow you to reduce the amount that you owe more quickly. You will have to
think of some ways that you can get extra money to be able to do this. It could
be that you will be able to find some ways to earn some extra money, perhaps by
doing some overtime or some freelance work or even some online work. You might
be able to also reduce your spending in some areas so that you are able to free
up some money to pay a chunk off the loan as well. You might be able to sell
some things that you no longer need so that you can raise some money as well.
Many of us would like to boost our savings. It can give us a
real feeling of security to know that we have lots of money tucked away so if
there is an emergency where we suddenly need a lot of money it will be there
for us. However, it is not always that easy to find the money to put into an
account, or to find the motivation to save it rather than spend it. There are
things that you can do to make it easier.
Have a goal
It can really help with motivation if you have a clear aim with regards to your savings. You need to think about the reasons why you want more savings. Perhaps you have been in the situation where you needed money and did not have enough or you want to save up for something specific, you want enough to pay off some loans or you just want the peace of mind that you have some money behind you. All of these are great reasons for saving and you might have alternatives as well or instead. Note down what your reasoning is. This is important, writing it down as well as thinking it. Then you can put it somewhere where you will see it. Perhaps on a mirror, fridge or something like that so that you can see it frequently. It will be a constant reminder which means that you will never forget why you are working so hard to increase how much you are saving.
Target how much you will save
It is useful to think about how much you are going to save. You want to think about how much you want in total as well as how much you want to put in your savings account and how often. It might be that you want to just put a few pounds a week or that you want to put in a bigger chunk less often. At this point think about what you want to do without worrying about how you will achieve it. It is best to set the goal first and then work out how you will put it into practice once you have set it. If you try to work out how you will find the money first, it can make you feel negative about it and you might give up before you start.
Identify where the money will come from
Once you have the goal, then you will be able to think about how you are going to achieve it. You will need to find the money from somewhere and you will need to identify where. It might be that you tend to have money left over on payday anyway and you can use that. However, many of us are not in that situation. Therefore, you may need to think of things that you can do to make some money available. The first thing can be to think about whether you can reduce what you spend. Many people worry about this and do not want to change what they spend as they think that they will have to deprive themselves of things that they want or like. However, there are ways to save money without doing this. You could buy cheaper items, you could cut out buying things that you do not really use very much or buy certain things less often. By switching utility suppliers, cancelling a magazine subscription and gym membership you do not use and comparing food prices before you buy, you could find that you will save a significant amount of money. You could also make extra money by working more hours, selling things you own, renting out rooms or other things. It is good to think about ways that you can spend less and earn more and added together you should be able to free up some money that you will be able to put in your savings account.
Set up a direct debit
It can always be wise to set up a direct debit so that the money is paid into your account automatically. If you do not do this then there is either a chance that you might forget or you might think of an excuse not to do it. It is best to set it up so that the money is transferred when you get paid and then there will be the money there to do it. If you wait until later after you get paid, you could find that there will not be the money available to do it. You will then need to be careful during the month to make sure that you budget carefully so that you do not end up spending more money than you can afford. Regularly check your balance and make sure that you are aware of when your payments are due so that you can be sure that you do not spend the money on other things. It takes a bit of getting used to, but is worth it as you will always have enough money to manage and you will manage to save.