How to Manage Your Personal Loan
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Build your budget
Set up automatic payments
Communicate with your lender
Be strategic about extra payments
Watch for refinancing opportunities
Weigh the pros and cons of paying the loan off early
What is the smartest way to pay off loans?
Two smart ways to pay off loans and other debts are the debt avalanche method and debt snowball method. With the avalanche method, you put any extra payments toward your debt with the higher interest rate, then repeat with the balance that has the next-highest interest rate until you’ve paid off your debt. The snowball method focuses your surplus funds on the smallest bill, then you work your way up until you’ve paid off your largest debt.
Is it worth paying off a personal loan early?
Paying off a personal loan early could be worth it because you’ll save money on interest, but it may not be the best choice if you have debts with higher APRs.
How can you get out of a personal loan you can’t afford?
If you can’t afford your personal loan, contact your lender and ask if they offer relief programs that let you reduce or skip payments. You could also seek nonprofit credit counseling to help determine how to manage your debt in the long term.
Article sources
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