Managing my loan
After you’ve been approved for a loan and received the money you need, it’s a good time to review your loan paperwork. Make sure you know the details of your loan, and as you review, take the opportunity to think about managing your loan over the next several months or years. Loan payments give you the opportunity to demonstrate positive debt repayment habits (paying on time, every time), and improve your credit history. And the more you understand how your loan works, the more likely you are to stay on top of loan repayment and build up that credit report.
How to stay in control of your loan: 5 simple steps
Step 1 - Know your loan details: term, payment amount and payment frequency
As you go through your loan documents, do a mental check to make sure you’re familiar with all your loan details. Your loan term is the maximum length of time you can take to pay off your loan. It’s typically measured in months; at Fairstone, unsecured personal loan terms range from 6-60 months. With Fairstone’s unsecured personal loans, you can pay back your loan any time without penalty or fee. The repayment term on secured personal loans ranges from 6-120 months; on secured personal loans (or “home equity loans”), there may be a fee for early loan repayment – if you’re unsure which applies to your loan, make sure you consult your local Lending Specialist.
You’ll also want to confirm your loan payment amount and loan payment frequency. These should be clearly indicated in your loan documents, and tell you how much you have to pay and how often. Loan payments may be monthly, semi-monthly (twice per month), or bi-weekly (every other week).
Step 2 - Choose the right payment option for you
Now that you know your loan details, consider if you want to change any of them. If you’ve realized you can afford bi-weekly payments instead of semi-monthly, for example, or want to switch from semi-monthly to monthly payments to simplify your debt repayment schedule, this is the time to make the change. Give your Lending Specialist a call or visit your branch to discuss your loan payment options.
Wondering what difference the payment options make? Read this article to learn how you can pay off your loan faster with a biweekly payment schedule.
Step 3 – Confirm your loan payment method
Once you’ve confirmed how much you’ll be paying and how often, double-check which payment method you chose to make sure it’s convenient for you. Whichever method you’ve chosen, make sure this is a long-term solution. For example, if you said you’d pay cash or debit in person, take a look at your branch’s hours. Is it feasible for you to make the trip there on a bi-weekly, semi-monthly or monthly basis? Or would automated payments, which come right from your bank account on a pre-set date, be a better option? Maybe you’d like to make loan payments from multiple bank accounts? Online account management allows you to add multiple payment sources to your account. Whichever route you choose, as long as it’s the right one for your situation, you’ll be well on your way to good loan management.
Step 4 – Track your payments
Once you’ve gotten into the groove of making loan payments, it’s a good idea to track your payments to ensure they’re on schedule. Whether you’ve set up automated payments using AutoPay or you’ve created scheduled payments through your bank or credit union, going into your account every now and then to ensure everything is on track will help you stay in control of your loan. Plus, you’ll be able to celebrate milestones as your loan balance decreases and your interest payments go down.
If you’re tracking your loan payments and notice one was skipped – whether it bounced, there was a system error, or you just forgot – don’t panic. Call your Lending Specialist or visit your local branch right away; finding a quick resolution will minimize any impact to your interest rate, or your credit history. Want to know more about managing late payments? Read this blog.
Wondering where you can go to see loan balance details and payment frequency, other than your bank account? Try our online account management system. You can view your loan balance and previous payments, and make changes to your account. Click here to find out how an online account can hep you manage your loan.
Step 5 – stay connected with us. Join our customer newsletter!
Every month, we share tips to help you stay in control of your loan, and stay on top of what’s new at Fairstone. We even share information about our year-round promotions (there are some awesome prizes involved). Interested in signing up? Contact your local Lending Specialist, and they’ll be happy to add you to our customer email list.
It’s a good idea to return to each of these loan management steps once a year. Review your loan term, payment amount and payment options to see if there’s an opportunity to make a change that will benefit you. The closer you manage your loan, the more likely you are to pay it off early (and absolutely to pay it off within the loan term). As you stay on top of debt repayments, you can improve your credit history over time and have a positive impact on your credit score. In the future, this can open you up to more credit options and lower interest rates.
Considering a loan?
If you’re reading this to proactively understand how you can manage a loan in the future, good for you!
Why not try our free loan quote? In just a few minutes, we’ll tell you how much money you could qualify for and what your payments might be. No obligation and no impact to your credit score.