In the last few years installment loans reached a high level of popularity because of the numerous benefits they offer and their lack of time-consuming hassle. In addition to that, the journey towards becoming debt-free became easier than you can imagine. Let’s talk about what happens if you choose the right online direct lender which better suits your needs and what you can do to pay off the loan in a smart way!
Find the suitable online direct lender
First of all, you need to find an online direct lender which offers something suitable to your financial needs. Why an online direct lender? Because apart from the fast services they provide; they also design, along with you, a flexible repayment schedule. This is a big, big plus! For example, a reputable online direct lender like Credit Cube offers installment loans that don’t even affect your credit rating, it takes only a few minutes to apply for a loan, the repayment schedule is tailored according to your needs and in case you decide to make a pre-payment, there will be no penalties involved. How amazing is that?
Choosing the right type of loan is equally important. As there are a lot of them, we’ll focus on the most popular and demanded type – installment loans. Unlike other options, installment loans are flexible enough to make you in charge of their repayment. What differentiates them from the others is that the principal and interest are paid according to a pay schedule agreed upon in advance between you and the direct lender. More than that, usually direct lenders who provide installment loans, like the one we gave as an example, do not charge extra fees for an early payoff!
Find a way to make extra-money
Before getting to the next steps, the challenge we’re about to tell you comes in quite handy. If you want to pay off your loan earlier or to double the payment, find a way to save or make more money! It’s quite easy if you cut off some of your expenses. For example, cook home instead of going out for dinner, smoke less or come up with a strict budget for your daily expenses. On the other hand, you can easily make some extra money by starting up a blog, write content as a freelancer or find something that you might enjoy! There are a lot of ideas!
Additional principle payment
If you manage to accomplish the above challenged, then this step will be effortless. The additional principle payment happens when you propose an extra payment to the monthly one. Even if you add $30 more to your monthly payment, over time you will definitely see a difference. This is a smart way to pay off your loan faster. Let’s say your monthly payment is somewhere around $250, imagine if you add $30 and make it $280 – after 12 months you’ll be with one payment ahead thanks to the extra $360! Of course, if things go really well or if during one month you managed to save more money than usual, go beyond that symbolic sum and add $100 or more.
Then again, we want to emphasize an important feature of an online direct lender in this case. Make sure you read their guidelines and policies, because some of them, like payday loans lenders, tend to carry pre-payment penalties. That’s why is better to keep it safe and go for an installment loan!
Schedule a bi-weekly payment
Let’s go back a little bit to the first and most important step – finding the suitable online direct lender. While you’re at it, do some research regarding the annual interest rate which is used to calculate your monthly payment. Also, try to share your input as much as you can when the amortization is being settled. Build your own table by hand, find a calculator and see how often and how much you’ll be able to pay. Being aware of your financial situation and possibilities will take you closer to a debt-free life. Bi-weekly payments are an extraordinary way to pay off your installment loan faster, as you’ll submit half the payments to your lender each week instead of the monthly payment. In this way, you’ll finish the repayment with several months earlier and less interest will accumulate.
Conclusion
To sum up, I think it’s pretty obvious why online direct lenders and installment loans became so popular lately. The times when you didn’t even dream of a debt-free life have passed, now it’s time to enjoy the perks of these borrowers and raise the bar even more in as many ways as you can!
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