“Quantcast”/
3 Stress-Free Practices Parents Can Do When Paying Off Loans | Edukasyon.ph
Grown-up Guide

3 Stress-Free Practices Parents Can Do When Paying Off Loans

The only interests you should not be having are interests from overdue loans.

Sending your children to school is an everyday challenge of allocating budget for school fees, allowance, and everything in between. When the going gets tough, the tough parent that you are gets going and tries to make ends meet. Often times, getting a loan is the easiest way to stretch the budget and cover expenses while waiting for the next payday (please. come. faster.)

While loans are ~lifesavers~ when the pocket’s tight, it’s important to remember that a loan is a loan. Your commitment to pay it back should be a #priority. Since money doesn’t just fall off of trees, you should aim to bring your A+ budgeting skills to the table especially when it’s time to pay the dues.

Here are 3 healthy loan repayment practices you should start doing now:

 

Do pay on time.

There’s a reason why you are constantly being reminded to come on time— in school, office, etc. Being punctual is a good habit to develop and keep. When it comes to paying off a loan, it’s a must to pay on time to avoid acquiring interests on interests (read: you already have interest rate from borrowing money).

Not only that, it also boosts your credibility as a debtor should you need to get another loan. NO ONE wants to lend someone who doesn’t pay their dues anyway.

What you should start doing:

Mark your calendar a week or two before the due date. Remember that other than actually paying off the loan, aim to pay it off ahead of time!

 

Don’t pay off a loan with another loan.

Loans are meant to help you through an immediate financial need, not be a source of money. That means, when trying to find ways to shell out money, the last thing you want to do is to get another loan.  

Paying off a loan with another one isn’t wise per se because there’s a high risk that you can get caught up with piled up interest rates considering the time you have to pay both debts. Be wise with your payment options. And avoid the loan sharks!

What you should start doing:

Prioritize! Set aside money to pay off your loan every payday.

 

Do choose a co-maker wisely.

Money lenders such as banks and other financial institutions aren’t doing charity. Before every loan application is approved, loan officers carefully assess the debtor’s ability to pay off a loan. While they can always decide in good faith, they need safety blankets for worst-case scenarios too. Their safety blankets are the co-makers!

A co-maker is someone who promises to pay a debtor’s loan if he/she fails to do so. Simply put, they’re the ones money lenders can run after! So, whenever you get a loan, make sure your co-maker is someone #trustworthy or else… it isn’t going to look good for the both of you (read: we’re talking lawsuits here). On the contrary, choosing the right co-maker can do you real good! Specifically, it can increase your chance of loan approval and get a higher loan amount.

What you should start doing:

Whenever you ask someone to be your co-maker, make sure you really know the person and that person knows exactly what he/she’s getting into. Sit down with them and talk this through. #important

 

Financial freedom a.k.a. living without debts is everybody’s #goal. But while you’re still grinding your way from one expense to another, you can start by being a responsible debtor and keeping these three tips in mind!

Want to learn more about handling your finances? Check out more articles on financial literacy and more in the  Grown-up Guide blog section at Edukasyon.ph now!

Tags: