How to Repay your Personal Loan QuicklyHow to Repay your Personal Loan Quickly

If you have a personal loan then you may be toying with the idea of repaying it early. This will usually mean that the total cost of the loan will be less, but if you are doing it for financial reasons it is wise to check carefully. This is because the lender might have an early redemption fee. This is a charge that they make to those that repay early. It can just be a small admin fee, but sometime sit is much larger, this is to cover the interest that they will lose if you repay early or possibly to reduce the temptation for you to switch to another lender. If you look into this and still decide that you would like to repay early, then you will need to come up with a plan on how you will afford it.

Use savings

If you have savings then you will need to think about whether it will be a good idea to use these to pay off the loan and it is also worth looking at investments with the same question as well. To check this out you need to firstly calculate how much you are paying on the loan in total including interest and any fees. Then work out how much you are getting back as a result of having money saved or invested. Once you add these up, you will be able to work out whether you will be better off by keeping the money saved and collecting the return on that or by using it to repay the loan via your payday lender. It is most likely that savings will have a lower interest rate than you are paying on your loan and so financially it will make sense to use them to repay the loan. With investments it is very possible that the return that you are getting is higher than you are paying out on the loan. Even if it is not, you may want to hold on to them in the hope that they increase in value in the future. This is because the value of investments fluctuates and it is best to have them for a significant period of time before selling them. It might be wise to take the advice from an expert such as an independent financial advisor on this.

It can be difficult to part with savings and investments though. This could be for a number of reasons such as the fact that you might be saving up for a certain thing and really want to buy that rather than repaying a loan or that you like having the money there for security to know you have a backup. You may also feel that you have worked really hard to save up (and there is no denying that it is hard work) and that you therefore do not want to spend the money but keep it.

Spend less

If you do not have any savings, enough savings or do not want to part with your savings, then you will need to find an alternative way to get the money that you need. One way to do this is to spend less on other things. For some people this will be easier than for others as it will depend on how much money you have and what you currently spend it on. If you spend it on necessities such as rent, utilities, food and transport to work, then you will need to continue paying for all of those things. It may be possible though, to reduce how much you are spending on some of these things though by switching to alternative retailers or suppliers that are cheaper. However, cutting back on luxury items is where you are likely to be able to free up the most money. You will be able to manage without these much more easily as they are not something that you have to buy. That is not to say that it will be easy as we enjoy luxury items and they can add value to our lives. Therefore, you will have to decide what you are prepared to cut down on or go without in order to be able to repay your loan.

Earn more

Earning more money is an option which is attractive to many people, especially those that do not want to spend less on luxuries or those that do not buy luxuries anyway. Of course, this is not an easy option as it takes up time and you may not have much time available. It may also take you away form your family or your hobbies. It can be really helpful though and it is possible to find all sorts of opportunities to earn extra, both online and offline so it could be well worth investigating the option.

It is Worth Saving up Before Having Children?It is Worth Saving up Before Having Children?

Many of us will carefully plan a family and will look at many aspects of our lives to make sure that they are in order before we start. One of these could be finances and it is worth having a think about whether you feel that you will be able to cope financially if you do decide to have a family. There are different things that you can do including saving up some money and it is worth thinking about which might be the most appropriate for you to do.

Pay off loans

It can be wise to start by concentrating on the money that you owe rather than thinking too much about saving money. This is because if you owe money, you will be paying interest out each month for that. This can add up to be very expensive and you will be paying out a lot more money than you will be gaining on interest on any savings that you have. Some loans may not be as expensive to repay as others and some may be for large amounts of money that you could not repay in the short term. However, this is about thinking about how much you owe and what you might be able to repay. If you look at what you have you will be able to decide. For example, if you have a mortgage then the interest is likely to be relatively low compared to other sources of borrowing and it is likely that you will have a long way to go until it is repaid. However, if you have a credit card, store card or overdraft the interest rate will be a lot higher and the amount you owe smaller. These are the sorts of loans that you might be able to repay.

Save up money

Saving up some money can be wise as it is likely that there will be a lot of things that you will need to pay for. It is best to think about loans first though and think about clearing the ones that you can. Once you have done this, then you will need to consider whether it is better to overpay other loans that you have or to get some savings. Usually overpaying will be financially better, but that can depend on whether there is an early redemption fee (which is a charge for repaying early) as these can be really high. If this is the case then it could be really worthwhile to save up instead and if you have no loans then saving is a great idea as well. It will help you to pay for the extra things you need to buy such as car seats, high chairs, cots and all those items and it may even help to cover any lost income that you may have as a result of one of you being on maternity or paternity leave or perhaps both of you having that. However, you will find that eventually those savings will run out so you will need to make sure that you have a plan for when that happens.

Improve income prospects

It is really worth thinking hard about where your income will come form once the children come along. If only one of you works or you both work part-time then you may be able to easily carry on as you are. However, if you both work full time, then you may want one to give up work to look after the children. If you both want to work as you were before then you will need to pay for the child to be cared for by someone else and that will cost extra money. It is well worth taking a look at your current situation and how things might change and calculating what you will need to do.

Downsize

It could be worth considering whether downsizing might help you. It might seem silly o be thinking of expanding your family but reducing your home size, but the reason is the cost. A smaller property is not only cheaper to buy or rent but also cheaper to heat, insure and tax. Maintenance is also cheaper and so it can be worth thinking about. You will need room for you all, of course, but if you are in a very big property, this could be a big help for you.

These are just a few ideas as to what you might want to do in order to prepare financially for having children. Some people would rather not plan and see how things work out or perhaps a family comes that they have not planned is they have to just work it out. Because people manage without planning it may feel that this is acceptable and of course you will find a way. However, if you do plan and try to sort out your finances first it will mean that you will have a far less stressful time as the children are growing up.