More of us are turning to short-term loans as it gets more difficult to make our income go further. This can then be made harder by unexpected expenses like emergency home repairs, or vet bills. Thankfully, quick loans UK can help you deal with an emergency, with an easy application and quick approval process. When applying for a loan, having a strategy in place to pay it off is advantageous – we’ll take a closer look at this below.
What is a short-Term Loan?
A short-term loan is different to other personal loans and as the name suggests, needs to be paid off over a shorter period of time, this can be anywhere from a couple of weeks, a month, or a year depending on the lender and type of loan you choose. A popular type of short-term loan is a payday loan, which is commonly used to help you out with an emergency if your income won’t stretch far enough to cover it. Because these loans need to be paid back in a short amount of time, having a strategy set out to help you is essential so you can benefit from the loan amount you need, whilst also having peace of mind that you can deal with the repayment terms and conditions. We’ll look at this in more detail below.
Tips for Paying off your Short-Term Loan
When applying for any type of loan, knowing that you can pay it off in full and on time is essential, especially when it comes to a short-term loan that requires payment over a short period. There are a few tips that can come in useful to help you manage these payments, so you can be successful in clearing your debt. Here are a few strategies to help:
Create a Budget
This is one of the first places to start when it comes to paying off a short-term loan. Get to know your income and outgoings to see how much you have left to dedicate to repaying your loan. By identifying how much you have left after your primary payments, like mortgage charges, car finance, and other essential costs, you will have a better idea of how much you can dedicate to paying down your debt.
Prioritize
Paying off debt should be classed as a priority, along with paying your other primary expenses like mortgage, rent, travel costs, and energy bills. This is because failing to pay your debt on time can have a detrimental impact on your finances and your credit score, making it difficult to be approved for additional finance in the future. Make sure you prioritise your loan payments and automate them so you’re less likely to forget to pay them.
Pay more than Required
If you can afford to, making extra payments in line with your budget means you can get rid of your debt more quickly. Look at cutting other unnecessary costs in your budget and put the money you save towards paying down your debt. This means your debt will be paid more quickly and you’ll reduce the interest you pay over the term of the loan.
Increase your Income
If you think you’re going to struggle to pay your loan in the time frame you’ve been given, you could look for ways to increase your income in the short term. Whilst you may not have time to simply get another job, look for other ways to bring in money to go towards your payments. For example, selling items you don’t need or use online, picking up a part-time job, or monetizing a hobby to bring in a bit of extra cash.
Motivation
And finally, staying motivated is just as important. Don’t get discouraged if you feel like your loan is not getting any smaller, keep chipping away at it and eventually you will see the benefit. Make a note of how much you need to pay off and keep updating it with each payment. Keep this in places that you can see it, like on your fridge or on your desk so you can stay motivated and up to date with how much is left to go.
