5 Smart Tips to Manage Your Personal Loan Payments Responsibly

    A personal loan is more than just debt. When you use it for the right reasons, the money you owe from a lender can help you meet your goals,  such as getting a car, renovating your home, financing your business, or funding your children’s education.

    On the other hand, if you fail to manage your loan and make your monthly repayments beyond the due date, you’ll be in a difficult situation like getting drown in debt. More than that, you’ll have a bad credit history that will make it difficult for you to qualify for other loans in the future. 

    If you don’t want to be in trouble because of your loans, you must start planning on how to pay off your debt responsibly and avoid the costly consequences of mishandling your credits. With that said, here are some smart tips on how to manage your personal loan. 

    Understand the Terms and Conditions of Your Personal Loan

    Reading the fine print that comes with your personal loan is a must-do. It is an arrangement between you and the lender that contains the terms and conditions of your loan. In case you missed essential information about the money you owe, it could lead to consequences like paying extra fees. 

    With that, it is necessary to read the guidelines of your personal loan no matter how hectic your schedules are. When reading the loan agreement, you should look closely for these critical details:

    • The exact date when your monthly payments will start as well as the due date
    • The repayment terms
    • The penalties and additional interest fees for missed payments
    • The charges you’ll be paying
    • Whether or not the bank will charge a prepayment fee if you repay your personal loan earlier than the maturity date
    • The computation of your monthly payments
    • The circumstances when a borrower defaults on a loan     

    Ultimately, you can manage your personal loan responsibly if you know all the necessary information about the transaction made between you and the lender. If you don’t want to stress yourself, later on, you should make time to understand your loan and save yourself from penalty fees and surcharges.  

    Know Your Budget

    To know what you’ll have left after making a personal loan is an essential step to making mindful repayments every month. Usually, you would want to do this before applying for a loan. In the worst-case scenario, you will have to take on more debt to pay for your personal loan if you got it without a clear picture of its impact on your monthly expenses. 

    Concerning this, you can use Creditninja’s calculator to help you calculate examples of the monthly repayment amounts that you might need to make before applying for a loan. By doing so, you can make sure that getting a personal loan at this instance is a good decision and will not bring your monthly budget upside down. 

    Plan a Repayment Strategy

    Managing your personal loans responsibly begins with a great plan, especially when you have multiple debts that should be taken care of, such as a house or car loans, and credit cards. 

    The first thing you need to do is to look into how much you owe the lender or bank, your monthly amortizations, loan interest rates, and the loan term. Also, you should list down the due dates of your debts. 

    Through these pieces of information, you will get to decide which of your loans need to be prioritized. Nevertheless, the debt that will get paid off first will depend on the strategy you will use. It could be the loan with the earliest due date, the one with the lowest balance, or those with the highest interest rate. 

    Avoid Overdue

    While it’s pretty obvious, paying your monthly installment beyond the given date may cost you more in the long run. The bank or lender may charge additional interest fees for late payments. Hence, if you don’t want to be in trouble, be attentive on your due dates, and make your monthly payment on time. 

    Find Ways to Get Extra Income

    When your income is still not enough to cover all your expenses even after you tweak your budget and remove the allocations for your “wants,” perhaps it’s time you should find ways to get an extra income.  

    You may consider getting a part-time job, side business, and the likes. It is just a simple sacrifice compared to the additional interests you’ll be paying because of failing your monthly loan repayments.


    Getting a personal loan can help finance your short-term goals. However, it would be best if you had a concrete plan on how to make your monthly repayments on time to avoid getting buried in debt. With that in mind, the actionable tips mentioned above are just some of the things you can do to manage your personal loans and maintain a clean credit history. 


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