Inglewood Money

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How to Create and Stick to a Budget When Repaying a Loan

Paying off a loan of any size can be a daunting experience. Even if you’re confident in your financial situation, the thought of the possible consequences for defaulting is always in the back of your mind and keeps nagging you. And when you consider that one incident is often all it takes to put you in a situation where you suddenly can’t repay any part of the loan anymore, it’s easy to see how this can be a worrying place to be in.

It’s not impossible to get rid of that burden if you have a plan and are responsible enough to stick to it though. And with the help of modern technology, paying off your loan can be an even easier experience. Of course, you shouldn’t take this as a hint to be as careless as you want to be with your money. Quite the opposite – you should try to learn a thing or two from the experience of having to repay a loan.

Organize Your Expenses from Top to Bottom

You should start by organizing every regular expense you have, and sorting them from large to small. Take a look at the things at the top of the list – is there anything that you can do without? For example, if you spend a lot of money every month on things like cigarettes or partying, it might be time to cut back for a few months until your debt is paid off. This is often one of the easier types of expenses to reduce, so if you have anything like that on your list, you should start there.

Don’t ignore things lower on the totem pole either. Smaller expenses can still add up quite fast, especially if you’re not careful. How many monthly subscriptions do you have for services like Netflix and Spotify, for example? Many people keep paying for those without even using them on a regular basis, only to end up wondering where their money keeps sinking every month.

Track Spending with an App

One of the easiest ways you can take advantage of modern tech to improve your spending and save more money when paying off a loan is to get an app for tracking your spending. There are plenty of those on the market today, and many are even offered completely free of charge. You don’t have to go into extreme detail when recording your expenses, but you should still measure things in a way that allows you to easily recall what each entry refers to later on.

Many people fall for the trap of thinking that this is useless because they know how to keep track of their own expenses well enough. However, a good budgeting app can reveal some surprising insights into your spending habits, and might alert you to things that you were not originally aware of.

Make Sure Your Whole Family Is on Board

Paying off a loan is hard enough when you’re on your own and want money now, but sometimes you also have to account for other people’s behavior in your calculations too. In that case, make sure that your whole family is on the same page with regards to paying off that debt. Don’t exclude the kids either – in fact, now might be a good time to teach them some useful facts about personal finances, loans and other points.

Of course, don’t try to overload their heads with negative thoughts like what might happen if you fail to repay. Rather, focus on the positive aspects of the situation and the fact that you live in a society where you can take out a loan when you’re short on cash to help ends meet.

Prioritize Repaying the Loan When You Can

This might sound simple and even redundant, but for many people, it’s a reminder they should wake up to every day. Don’t make the mistake of getting careless if you see your financial situation improving. This is not a rare occurrence at all, unfortunately. Just because you’ve managed to make all your payments on time the last few months doesn’t mean that it’s okay to get careless now. Quite on the contrary – you should stick to your responsible attitude all the way until the loan is paid off in full.

If you follow these points and are in the right state of mind, few things can stop you from paying off your loan save for a stroke of bad luck. And even those occurrences can often be dealt with, as long as you’re prepared and you have a good attitude about the situation. And once you’re done paying off every last cent, you’ll have a newfound peace of mind, and even better confidence in dealing with financial problems in the future.

Taking Proper Advantage of VA Loans

VA loans have been around for quite a while, but unfortunately, not every veteran has learned to take advantage of them correctly. Which is not a good thing at all, given all the potential benefits these loans hold for the average eligible person. It’s in your best interest to familiarize yourself with the way they work, and to do your best to use them actively if you’re in a situation where extra money can come in handy.

This can allow you to take control of your financial life much more effectively than with other tools available on the financial market. VA loans can make your situation much more bearable if you’re in urgent need of money. Let’s take a look at some of the more important points that you should be aware of.

Skip the Down Payment

A great benefit of VA loans is that they can allow you to completely forego the down payment for various types of larger purchases. This can even include a new home! Of course, that won’t reduce the overall price of the purchase, it just means that you won’t need to have any cash upfront in order to get started. This can make things significantly better for you in most cases. It can not only allow you to purchase certain things faster than other people in your age group, but it can also open up the doors to various new opportunities on the consumer market.

After all, when you don’t have to think of a down payment, you can easily start scaling up your expenses without taking a financial hit. Of course, there’s a limit to everything, and you should be careful not to go overboard with this.

Get Qualified More Easily

It’s also generally easier to get qualified for a VA loan as opposed to a regular one. Even credit score issues don’t have to be that problematic when you’re eligible for a loan of this type. Most scary-looking blemishes on your record will be gone after a shorter period compared to what others have to deal with, and you’ll be able to get back on your feet faster and without that much effort.

Keep in mind that certain credit issues will not be ignored that easily by institutions though, so you may have to wait a bit longer before taking out your VA loan. If you’ve had to deal with bankruptcy in your past for example, this can significantly change the game. Make sure that you get a consultation that covers these details in depth before committing to anything that would require the financing provided by your loan.

Easier Refinancing

Speaking of qualifying, it’s also easier to get refinancing deals when you’re working with VA loans and not regular ones. You don’t have to qualify all over again, as is common with other types of loans on the market, and you’ll be able to enjoy more financial freedom as a result. You can even use refinancing deals to spend the money in any way you can think of, which is a rare benefit that’s often not available to other people dealing with loan refinancing.

Take advantage of this wisely though, as it can put you in an uncomfortable position if you’re careless with how you’re spending the money you’re taking out. After all, no matter how great a VA loan’s conditions may be, in the end it’s still a loan, and still something you have to take care of in a responsible manner.

Tax and Misc. Benefits

Last but not least, you can also count on some great tax benefits when taking out a VA loan. For example, most veterans with a VA purchase loan can often claim deductions on things like the interest on their mortgage, origination fees, and more. It’s best to consult an accountant before making any assumptions in this regard though, as you don’t want to be hit by an unpleasant surprise. In most cases though, if there are any surprises involved in the deal at all, they tend to be positive ones.

VA loans often don’t have any early repayment penalties as well. This is a problem that many borrowers have to deal with when they suddenly find themselves in an unexpectedly better financial situation. You can take a significant financial hit as a result of those fees if you didn’t read the fine print carefully. That’s one less problem for veterans to worry about though, and another great point in favor of VA loans. Keep in mind that there might be some exclusions. This is not a universal rule and not something you should count on by default – consult the institution you’re borrowing from to ensure that you don’t find yourself in a sticky situation later on.