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If you have bad credit or you need money in a rush, you may be forced to deal with high-cost lending. Lenders like this charge high-interest rates because they know their customers have no other options and that they do not have financial discipline. If you are caught in a pricey loan situation, the tips below will help you get through it with minimal difficulties.
5 Rules Of Financial Discipline
Pay More than the Minimums
If you only make minimum payments on your loan, you are going to rack up a lot of interest charges. The sooner you pay down your balance, the more money you will save.
Ideally, you should try making double or even triple payments to cut your long term costs, but even $50 a month will help over time. Do whatever you can to reduce the schedule of the loan so you don’t have to pay an enormous interest rate.
Refinance the Loan
If you have a chance to secure a lower interest rate, do so. Most people who work with high cost lending do so because they have an emergency. Once you get past that emergency, you can focus on finding a good lender that will lower your over all loan costs.
If you have other debts that you are paying on, you might see this as a chance to go through loan consolidation. Then you can have a single payment to deal with every month.
Note that if you are going to refinance, it should be with a different lender. Your current lender will try to convince you to get lower monthly payments, which means he’s extending your loan even further. You’ll be paying it back for eternity by the time you are finished.