When you need money and you think it may be time to take out a loan, it’s okay to think about paying off that loan first. How much will it be? How often should you pay them? And of course, is there any way to reduce them?
In this article, our partners answer the most common questions about loan payments and give you the information you need to keep your loan under control.
What are my payment options? What can I do to find the option that works best for me?
Generally, lenders offer you three payment options for your loan. When it comes to choosing your own, you need to consider factors like how often you pay and how you prefer to settle your current bills. Depending on your preferences, you might come to the conclusion that one of these options is more suitable for you:
- Monthly payments: you make one payment per month, on the same date, which represents 12 payments per year. This option is great for people who are paid once a month or who like to have a predictable payment schedule, as payment will be made monthly on the same date.
- Two payments per month: you make two payments per month, one in the middle of the month, and the second at the end. This represents 24 payments per year in total. This option may be suitable for you if you prefer to make smaller payments more frequently, on the same dates each month.
- Bi-weekly payments: You make a payment every other week, for a total of 26 per year. Not only is this option suitable for people who are paid every two weeks, but it saves over time by reducing the interest paid. Learn how biweekly payments reduce the interest you pay here.
How much will my payments be?
You can use a generic loan calculator to estimate the amount of your loan payments, but it is best to go directly to your lender. Not all lenders agree to produce estimates, but luckily you can go to Fairstone.ca for a no-obligation loan quote. You will find out the potential amount of your loan payments by entering the amount you wish to borrow. And guess what? It’s free and has no impact on your credit score.
Your interest rate is determined by several factors, including the type of loan you choose, the amount of the loan, and your credit history. Not sure how interest rates are determined? You can find more information on interest rates on this web page.
You can reduce your interest costs by opting for a shorter loan term and payments every two weeks. In addition, any additional payments you make on your loan will reduce interest costs. If you want to prepay or make additional payments, it is important to check with your lender about prepayment penalties. Fortunately, unsecured loans have no prepayment penalties.
What can I do to keep my loan payments under control?
If your lender offers this option, automatic payments can help you stay in control of your loan payments. Once you have established your payment schedule, they will be drawn from your bank account regularly, without your having to intervene. With automatic payments, there’s no risk of missing a payment and having to pay late payment penalties or additional interest charges.
One of the key factors when thinking about getting a loan is its affordability. It is important to make sure you get a loan that suits you and the amount meets your needs and your budget. Sure, it can be beneficial to explore your options online, but perhaps it would be even more beneficial to sit down with a specialist to review your financial situation and understand the loan options available to you. you. You can get both a free no-obligation quote and a meeting with a knowledgeable loan specialist at a branch near you.