Managing money becomes challenging when you can’t keep a track the ongoing loan repayments. It could lead to overpayment, late payment charges, default, decrease in credit rating, borrowing flagging, etc.
Moreover, borrowers that have recently availed loans without guarantor from direct lender or other options may incur more problems. Some of them may include instant closure, higher APRs, change in repayment duration, etc.
These issues could arise from the lender or the financial institution. Fortunately, a few easy and useful methods of keeping track of loan repayments can eradicate such circumstances. Therefore, they would help in improving the credit score, avoiding charges, and avail better APRs.
5 Ways to Keep Track of Loan Repayments
● Make it a Part of the Budget
The simplest method to keep track of existing loan repayments is by adding them into the budget as bills or expenses. Money managers that want to separate costs into essentials, miscellaneous, and requirements must make it a part of the first option.
Additionally, each loan’s last repayment date should become a part of the budget to stop scheduled deductions. Moreover, money managers can create a separate column of loan repayments under the essential category to avoid missing repayments.
While managing finances remember to remove the loan repayments from the budget in the upcoming cycles after its last withdrawal. It will help to predict additional savings, and scheduling early repayments for clearing the debt.
● Regularly Check Accounts
Reviewing account history would provide a clear idea of the ongoing loan repayments on loans and credit cards. Besides this, it would give a clear picture of the budget, monthly income, and savings.
The habit of continuously checking accounts helps avoid any false charges incurred by the bank or the lender. You can also view the last repayment dates, total sum, and open a savings account with the excess amount.
The additional interest on the savings account would help to recover faster from existing loans. Moreover, checking accounts can help avoid suspicious withdrawals, close unused credit cards, file a complaint against unknown transactions, etc.
● Use Auto-Debit Facility
Loan borrowers should know that the auto-debit facility allows deducting amounts from a linked account continuously. The facility is available through offline and online lenders for convenience, avoiding defaults and late payment fees, improving credit rating, etc.
Unfortunately, bad creditors with low sums in their account can incur charges if they fail to stop auto-debit before the due date. However, they can also resolve this problem by availing emergency, payday, bad credit, unsecured, or other loans into the same account.
Therefore, the facility provides enormous benefits and makes it easier for borrowers to sustain a long-term relationship with the lenders. Businesses avail the auto-debit facility to avoid the drawbacks associated by not using it.
Furthermore, auto-debit helps to learn about ongoing loan repayment amounts in a nutshell. Therefore, the borrowers can improvise their budget, become stress-free of repayment due dates, and manage their finances accordingly.
● Use an App
Going to a traditional bank can become a tedious task, especially when you regularly keep track of loan repayments. On the other hand, using an app, especially a bank, can ease this burden.
Moreover, the app makes it easier to access the account and in places with the network coverage. Additionally, the app provides detailed account activity of the user. Therefore, you can immediately report or inquire any discrepancies directly to the lender or bank.
Besides this, an app provides instant access to savings, checking, current, loan, and other linked accounts. It helps in money management, budget creation, opening new accounts, etc., in a few steps. Additionally, most recognized apps come with customer service representatives.
Therefore, even after losing the wallet, you can file an immediate complaint with a new phone or access the account through the internet. Unfortunately, delaying closure can lead to larger deductions, especially if the app is connected to other unencrypted accounts.
● Avail a Summary of Borrowing
A document containing recent loan activity is often referred to as a summary of borrowing. However, different lenders, banks, and financial institutions offer it under various names. It also covers loans for the last twelve months.
Borrowers must know that banks issue it under three circumstances. These include APR higher than a hundred per cent, less than twelve-month term, or the sum is lower than £1,000. The document displays forbearance, default closure, and missed closure of defaults if a person has missed more than three months payments.
To keep track of loan repayments, borrowers can also download or print account statements. The documents would contain the detailed activity of accounts in a specified duration. If the statement remains unavailable online, borrowers can visit the nearest branch, or ask the lender.
Besides these methods, borrowers can keep a journal, logbook or excel sheet. Another easy way is downloading monthly activity on a device. Keeping track of loan repayments helps to attain financial freedom, resist ongoing debts, and manage finances.
At times, borrowers have insufficient income to clear repayments. Tracking them helps to pre-inform the lenders. Therefore, the borrower can inform the lender in advance and even find a solution. As a result, the borrower can maintain credit rating and avoid late payment fees.