There are many ways to be smart with our money. Investing, saving, buying what you need rather than what you want. Life has a funny way of throwing up all sorts of unexpected surprises though, doesn’t it? If you do need to take on debt, there are ways to be smart with debt too. Whether that’s over paying your mortgage repayments, or ensuring you can repay your credit card each month. When it comes to personal loans, you can be smart about how often you pay it, whether you overpay your repayment amounts or make occasional lump sum payments. This article will take a deep dive into how you can repay your personal loan quicker.
First things first – what’s your plan? If you don’t already have a budget, this is your first step before you get a personal loan. Already have a personal loan but don’t yet have a budget? It’s never too late, get your budget underway in case there is some additional cash at your disposal that you could use to service your debt repayments even sooner.
Secondly, set your financial goals so you can assess where you’re at now, and where you want to get to. How does your personal loan help you achieve those goals? Do you need to repay your personal loan more quickly to help you achieve those goals?
If you’ve completed your budget, you’ll have a good idea of whether you have any additional cash saved, or can reduce costs in one area in order to repay your personal loan faster. Please be aware of paying your personal loan off quicker at the expense of emptying out your savings or emergency expense account. Unexpected expenses will continue to come up, so it’s useful to maintain a buffer of available cash, so you don’t need to go into debt again. Let’s take a look at some of the upsides and downsides of repaying your personal loan early.
A lender like Nectar does not have early repayment penalties – if you suspect you do want to repay your personal loan more quickly, this is a key fee to confirm with your chosen lender.
A flexible lender like Nectar will allow you to make additional payments or larger payments whenever you like, with no penalties or fees. In fact, you can pay off your personal loan in full, at any time, without incurring any fees.
Credit scores are built on your credit history – regular payments of credit (such as personal loans and credit cards) and regular payments of bills such as phone, electricity and insurance, all help build a picture of you as a reliable borrower. Lenders like to be able to see reliable, predictable payment behaviour, as well as having enough income to service the lending you’re applying for. In short, early personal loan repayments won’t worsen your credit score, and may help to improve it if extra payments are regular.
Once you have your direct debit set up, it can be hard to keep track of how many personal loan repayments you have remaining, or how much you have to repay. Nectar makes this simple with a handy online dashboard that you log in to to view your account. Simply log in to your dashboard using the Login button at the top right hand corner of the Nectar website and navigate to the Loan Summary tab.
Your Loan Summary will let you see how many payments you’ve made, when your next payment is due and your outstanding balance. If you’re keen to make a final payment, and repay your personal loan balance in full, the Nectar dashboard allows you to see your balance by navigating to the Laon Summary tab and selecting ‘Request payoff quote’.
If you’re having trouble navigating the Nectar dashboard, you can also give us a call on 0800 855 888.
Unsure of whether to keep saving or repay your personal loan early? You can access free personal finance services or pay for professional personal finance advice.
With Nectar you can borrow unsecured up to $30,000, or as little as $2,000. Use our loan repayment calculator to find out how much you could get.
Do you need a great rate on a personal loan? We’d love to help with your personal loan requirements. Find out how much you could borrow and learn more about our personal loans. You can get started with Nectar and get a personalised loan quote online which will include your interest rate, maximum borrowing amount and repayment options. Borrow better, faster today!*
*Nectar’s lending criteria and responsible lending checks apply.
