Have you found yourself in a bind with your funds thanks to unexpected life expenses like surgery or due to some less than reputable loan services? You’re not alone in your worries. If you look at global statistics, a staggering collective debt comes in at a whopping $303 trillion (USD). A bottom-line number of twelve digits hangs over our heads, and many of us are not equipped with the knowledge nor the tools we need to tackle our own individual loans and debts. So let’s talk about how people end up in these situations, and more importantly, how they get out of them.
A common problem for many adults
It may come as no surprise to you that, according to information in this article, at least half of the participants admitted to worrying about their financial situation several times a week. For those of us who have survived the toughest of times with family or on our own, it can even be a daily concern. Even if you’re making enough to cover your regular bills, monthly or bi-weekly loan payments can dig into your pockets and leave you feeling stretched thin for the rest of your pay period. The good news is that there is a solution available at your fingertips to get your money on firm footing and solidify your savings again despite your expenses.
In this article, we’ll touch on several important aspects to keep in mind as you navigate your way through the process of refinancing a loan, from understanding what it is and how it works, to how it can help you.
There have been moments in my young adulthood when I have wondered if I would ever be one of those people who can buy something nice, and then keep it forever. It seemed like anytime I had something worth having, usually something I saved up for, an unexpected and unrelated expense would appear. I would have to decide between treating myself to this item I had been wanting and saving up to get, or taking care of an expensive problem before it became any more expensive. When this cycle repeats over and over you may wonder if you can ever climb out of your financial grave. Start by taking a look at your recurring costs, both purchases as well as payments.
Start the process with small steps
Something as simple as sitting down with a pad of paper and a pen to write out everything you know you pay monthly can give you some incredible insight into your spending. Seeing where you are spending and where you can cut back, like eating out or buying new devices when you could wait a little longer, and perhaps get a free upgrade later, can help put things in a much better perspective.
Making payments on a loan should feel like chipping away towards an achievable end goal. You should never feel stuck in a loan that was only meant to help you, for things such as buying a car or consolidating other debts. Calling your bank or loan holder only to get a recording or an agent that offers no help whatsoever can be maddening. Needing questions answered shouldn’t be cause for distress, wondering how you’ll get the information you need regarding your line of credit or current loan.
From poor rates you had no choice but to take because the matter was pressing, or shady rates that no one bothered explaining to you because you didn’t know which questions to ask, regardless of how you found yourself in a tough situation you should always be able to get friendly and helpful advice.
Talk to real people and get real solutions
Being transferred from one agent to another, getting lost in automated menus, leaving messages, and praying for a callback, there’s not a single step in that process that anyone would want to put up with just so they can find out if they have better options available to them. The truth is always that you do indeed have options that revolve around a few small variables. Taking into consideration your debt to income-ratio, your credit score, and your current work status, professionals who want to actively assist you can help you flesh out a path for your payments that will work best for your lifestyle and needs. No more anxiety from simply staring at your balance on a monthly statement.
As you explore new loan options, be it to consolidate multiple debts or just to obtain new interest rates, there are a few important things to keep in mind. You might be searching for lower interest rates, and it’s possible to find exactly that. What you should remember to consider, however, is the loan term, or its duration. How long do you have to pay it off? If the loan has a longer term then you may not find yourself saving any money whatsoever.
On the other hand, if you simply need a short-term solution, this may be a viable choice for you. Say you have a lull in your job, something like a slow season or a temporary halt in production or orders to fill. For a few months, your budget is going to need to tighten up. A case such as this might be an excellent reason to change to a loan with a longer term but lower rates. During the time you need it, the payments will be smaller, and when you’re back to normal monetarily, you can discuss new options with your lender.
Ask questions, read the fine print
Another important detail to keep in mind is to read the fine print. A new loan will come with new rules, and if it is offered by a different company than you’ve worked with before then it’s only sensible to see what they expect and include in their loans. Often times this is where less honest financial institutions will hide details such as additional fees for early payments, as this makes up for the money they would lose out on by you not paying any earned interest. Don’t let yourself get snared by legal jargon and backward policies that serve the lender but not the loan holder. Put your faith and finances in the hands of people who genuinely care and have the knowledge of how to navigate these things efficiently.
Looking into refinansiering, or refinancing your loan, doesn’t have to be a miserable and lengthy process. You can try looking online by yourself, scrolling through ads and irrelevant suggestions, click through the unhelpful menus of spammy websites claiming great service at greater prices. I’d wager you’ll tire of it after a few days of trying to make time to do your research while working and living your life. Everyone has different schedules, energy levels, and mental focus, and undoubtedly, no one would ever want to waste all three on trying to fix their finances alone.
Being selective can save you in the long run
Of all the things you should consider in your search, beyond the fact that getting help from an expert will save you much grief, make it a point to look into the reputation of the lenders you’re eligible to get loans from. Your credit score and history, as well as your current financial standing, are all weighed before a lender makes you an offer. Jumping the gun here, just because one of them has incredible rates, or the exact loan term you’re looking for, can still land you in a mess.
Looking at the reviews from actual people regarding the transparency of these companies’ policies, the quality of their services, and how helpful they are not only during the loan application and approval process but also in the time after when most of us finally come up with questions to ask, you can form an opinion of how well they would work for you. Will their loan agents be able to answer your questions and guide you the entire duration of your loan? Do their payment policies align with how your finances are structured? Are they respected and trusted in the community?
Reputation means something for a reason
Many of us grew up with catchy jingles on TV that we’ll likely remember forever, but as soon as we had grown up we learned quickly that being a memorable brand, or a popular company, does not always ensure that their services offered or products sold are of any better quality than their competitor. It means they funnel tons of their money into advertising and marketing, sometimes to gain more traffic just to make up for the money they’re losing due to poor quality and assistance. Kind of like those drive-thru meal toys from our childhood that later gets recalled because it was made with unsafe materials, don’t let the buzz mislead you. Do your own research, talk to real people like friends, peers, and family, check forums, get opinions, and be confident in the decision when you make it.
Should you decide to jump right in and find a lender right away but still feel uncertain about the rates or duration, consider putting some additional work into your credit score. Just a few extra months of careful payment scheduling can bump your score dramatically. You can even get a boost in your score if you pay for recurring services like streaming, so get creative and make sure you’re maximizing your funds as much as possible. Make your money work for you so you can keep more of it, more often.