Meeting the deadlines for each of your payments allows you to repay your loan according to the established duration, avoid additional interest charges and maintain a good credit score. We are aware, however, that your situation may have changed since you took out your loan.
Our loan specialists offer you their best advice on what you should do if your loan payments no longer fit your budget.
1. Opt for loan insurance
Unable to know when an unexpected situation will arise. An unexpected drop in income could prevent you from making your payments on time. By choosing loan insurance, you can cover some, or even all, of your loan payments in the event of an unexpected job loss, or if you suffer an injury that prevents you from working.
Unfortunately, you cannot add insurance to your loan if you initially refused it. You could, however, add it to a new loan (contact your MoreFair Financial loan specialist for more information). If not, read on for more tips on how to more easily integrate your payments into your budget.
2. Choose a longer loan term
You can reduce the amount of your payments by choosing a longer loan term. You will of course pay a little more interest, but remember that missed payments can also increase your interest costs. Better choose a longer loan term for which it will be easier for you to manage payments.
Of course, once the details of your loan are fixed, it is generally no longer possible to modify the duration; it is therefore a proactive strategy. However, you can contact your loan specialist to find out about your options if you are concerned about the term of your loan.
3. Change the frequency of your payments
Did you know that biweekly and monthly payments are more affordable? In fact, when you pay every two weeks, you make two more payments per year, compared to biweekly payments. While this is a great way to lower interest costs and pay off your loan faster, it can also be a problem for your budget in the months when you have to take three payments out of your pocket. Ask your loan specialist about your payment options to see if this is right for you.
4. Opt for automatic payments
Do you tend to spend your payroll before paying all your bills? If this is your case, you may be advised to set up automatic payments. You can configure your payments so that they are collected on the day that suits you best (such as your pay day). You’ll never have to worry about forgotten or missed payments, and you won’t be able to spend your money until your loan payment is made. What could be more advantageous?
5. Do you own a house? Opt for a secured loan.
A secured loan is protected by the value of your home, which allows you to access a lower interest rate. And a lower rate means you could take advantage of lower payments. Do you already have an unsecured loan? Contact your MoreFair Financial branch to find out if you can convert your unsecured loan to a secured loan.
6. Stay in touch with your branch
It may seem embarrassing to let us know that you are unable to make a payment on time, but we understand that everyone has to deal with the unexpected. Are you facing an emergency or an unexpected expense that prevents you from making your payment on time?
Let us know so we can find a solution that will allow you to make your payments on time. It is best to contact us as soon as possible to avoid accruing interest, which will cause you to fall behind on your payment schedule.
7. Increase your income
Do you want to avoid changing the frequency of your payments or the duration of your loan? Try to increase your income so that your budget is less restricted. Ask for a raise, take a part-time job or rent an empty room in your home. Check out these 10 ways to earn extra income to help you pay off your loan faster.
8. Consolidate your debts
Does paying other bills put you in hot water? Perhaps you could take out a new loan and consolidate all of your debts into one monthly payment. A debt consolidation loan offers you a more manageable payment schedule and could save you thousands of dollars in interest.
Want to know the ultimate method to make sure your loan payments fit your budget? A few good money management habits, choosing the right loan options and helping your loan specialist (of course) are enough! It might take a few attempts to find the right balance, but we’ll walk you through the process to make sure your payment schedule is right for you.
Interested in a loan? Try our free loan quote! You get a loan quote online in minutes that will tell you how much you are entitled to and the amount of your potential payments. No obligation and no impact on your credit score.