Credit is very important in our economy. Without it, it could be difficult to buy a house, a car, or even a cell phone! Throughout our lives, we use our credit and credit score to take out loans from a variety of lenders for many reasons. If you’ve taken out a loan, you may be concerned about your debt. Whether it’s small or large, we all could use some help managing debt. Below, we share some tips on loan management:
Monitor Your Credit
Any individual who has borrowed money should monitor their credit regularly. Do you know your credit score? Do you know what your credit report says about your debt and payment habits? If you have multiple loans and accounts open, you should learn how that debt is affecting your credit rating. To manage it, keep an eye on your credit report and, if you have a healthy credit history, contact your lender to see if you can reduce your existing interest rates.
Lower Your Interest
Like we mentioned above, a simple way to manage your loans is to lower your interest rates. Find out if you can reduce your loan rates by seeing if you qualify for lower interest credit cards. You can even take out a personal loan to pay off a more expensive loan.
Consolidate Your Loans
As a method to reduce your debt, consider consolidating your loans. To do this, you can use a balance transfer credit card and commit to paying off your debt in one place. Many of these cards offer 0% APR, allowing you to save on interest if you pay off your debt in one place in a short period of time. Do this if you want to pay your debt off quickly!
Pay More Than The Minimum
What’s your minimum payment each month? If you have any extra funds after your bills are taken care of, you should consider applying it toward your existing debt. If your debt is bringing you extra stress each month, this might be your best option.
Avoid New Debt
While this might be self explanatory, it is important to avoid taking out new loans in order to manage your existing debt. If your short- and long-term goal is to cut down on the debt you carry, the key is to stop borrowing any more funds! If you find yourself in a bind, seek credit counseling or a financial advisor.