Whether you’re - for whatever reason - finding it a bit of a struggle to make the monthly repayments you’ve been paying since the start of the loan, or you’re simply interested in reducing your loan repayment amounts to free up some cash, there are certainly ways you can do just that.
In this article, we’ll discuss what the best ways are for you to reduce your loan repayments and how you can go about putting it into action.
Option 1: Improve your credit score
Your credit score can dictate the interest rates that are offered to you so, as you can imagine, doing whatever is in your power to improve your credit score is an integral piece of the puzzle.
The first step is requesting your credit report from sources such as Equifax or Illion. This is free of charge and gives you an in-depth look at what the lenders will be looking at when you’re applying for a loan. Once you have this, carefully check through everything to make sure there aren’t any errors such as debts listed that you didn’t actually take out yourself and incorrect debt amounts or duplicated debts. Should you find any inaccuracies, contact the credit reporting body to get things amended.
Other more general ways to maintain a higher credit score include paying all bills and loan/debt repayments on time, considering whether you really need that new credit card/postpaid phone plan (each credit check reduces your score), as well as being vigilant with credit cards and not spending above your means.
Option 2: Include a residual payment at the end of the loan
A residual or balloon payment is a lump sum amount that you pay at the very end of your loan term. Including this will help to reduce how much your monthly repayments are, however it’s important to remember to calculate how much you need to put away into, say, a high-interest savings account each month in order to have it at hand when it comes time to pay.
Option 3: Opt for a longer loan term
Yes, a longer loan term means you’ll be paying a higher amount of interest. But for many people it’s an attractive and simple way to lower monthly repayment amounts and stay within their budget.
Option 4: Save up beforehand to have a larger deposit
The more you have to put into the car/boat/caravan/motorhome/camper trailer/commercial equipment initially, the lower the amount you need to borrow. Which in turn will reduce the amount you’ll be paying each month.
Option 5: Refinance at a better rate
Maybe emotions took over and you jumped into the first (high-interest) finance package that you found. Or you may have found a reasonable interest rate but since then rates have been dropping. Whatever the case may be, refinancing can make a huge positive impact on how much you’re paying each month.
When you speak with Stratton Finance, we can provide you with all the information you need to determine whether refinancing is suitable for you - from explaining any early exit fees and other charges of your existing financing product (this alone might render refinancing ineffective for you) to sourcing better deals and beyond.
What’s more, you can rest assured that your credit score won’t be affected if you choose to go with a loan we present to you - unlike the banks.
Pay lower monthly repayments with us
After more than two decades in the finance industry, you can bet we know how and where to find each and every one of our customers great interest rates. And with a massive network of lenders available at our fingertips, we’ll make sure you’re paying low repayments that fits your budget perfectly.
So if you’re ready to make a change for the better, give the friendly team of financing experts at Stratton Finance a call right now on 1300 787 288. If you’d prefer, you’re welcome to message us online via our contact page and someone will be in touch in two shakes of a lamb’s tail.
Disclaimer: Nothing in this article should be assumed as personal advice. You should consider whether the information is appropriate to your needs, and where appropriate, seek advice from a professional financial adviser.