How to Manage a Logbook loan
Congratulations on your loan approval! Now that you got the money, the next step is to manage it well to maximize its return and ensure that you will be able to pay it back smoothly. When most people apply for a logbook loan they already have an idea on how they will use the money. However, it is easy to get overwhelmed when it comes to the actual distribution and sticking to the repayment procedure.
When managed properly, a logbook loan is one of the best ways to relieve financial pressure. Whether for personal or business reason, logbook loans are the easiest way to cover down payment, handle a financial emergency or pay for a vacation etc.
Just because it’s quick and easy to get a logbook loan in Nairobi, it doesn’t mean it’s as easy to manage it. Here are a few tips for the next time you get your logbook loan approved.
1. Create a budget
If you have ever been afraid to look at your bank balance most likely you spent money on stuff you shouldn’t have or overspent on some. Doing the math in your head won’t cut it here, to avoid wrecking your good credit score, creating a budget is the first thing you do. Managing your logbook loan without a budget will leave you wondering where the money went since you cannot account for how much went where.
Creating a budget will help you track your spending, avoid confusion and maintain a good credit score. The first step when creating your budget is dividing your expenses into broad categories that are easier to track, for instance if you took a logbook loan for your SME, you can categorize into Pay Salary, Rent, and Purchase Raw Materials etc.
If you are new to budgeting there are plenty of sites with budget templates and guidance on how to create one like. There are also dozen desktop and mobile apps for financial management and bookkeeping.
2. Pay on time
After creating your budget you will realize how easy it is making payments on time. Making your payment on time is one of the ways to maintain a good credit score and avoid late fees and penalties. Having a good credit score can even reduce your interest rates.
If you have taken a logbook loan or are about to, a good way to ensure peace of mind is making an early payment. Paying ahead of your due date will give you a buffer against a late payment. Most loan providers have automated payment system to remind you earlier on about a due payment.
Do your best to pay on time always and watch your rates go down.
3. Pay a little extra each time if paying on installments
Be sure to check on your provider’s policies, if they allow paying more than the minimum required on each installment, it is a good way to manage your logbook loan. If you get extra cash flow, the first thought should be towards your debt, don’t make debt a thorn if you can settle it.
Paying more than required keeps you ahead of your loan terms as well as helping with credit score and low-interest rates. Paying more than the minimum will reduce the overall length of your payment plan
While this will save you money in the long run, it restores your financial independence even sooner.
4. Consolidate your loans
The good thing about Logbook loans is that you can take multiple against either personal vehicles or company cars. While this may come in handy when you need a certain amount of money, having many loans may be difficult to manage and pay back.
Consolidating your loans is a great way to simplify your debt repayment. Debt consolidation is when you take out a single, large loan that can be used to repay all of your other loans, instead of making payments to multiple lenders each month with different interest rates and requirements, you will be making a single payment to one provider.
With debt consolidation you might even get a new loan with lower interest rates than the average rates of the different loans. However, debt consolidation may mean repaying your debt faster than before so you need to make sure you will be able to make payments on the new loan.
5. Keep a close watch on your credit score
Credit scores can be sometime confusing especially now with so many different models and algorithms available. Your credit score is one of the most important number when it comes to lenders. We rarely give credit score the attention it deserve until you try applying for a loan and realize how much it’s ruined. Lenders use your Credit score to assess a borrower’s risk and their qualification for a loan.
Credit ratings also determines the kind of interest rates you will get on your loan. Bad credit score means higher interest rates compared to people with good credit score, that is, if you are approved to begin with.
How you manage your loan affects your credit rating, sticking to agreed installments and paying on time all contribute to an excellent credit score and lower rates on down payment. Higher ratings comes in handy when making big purchases like buying a house or a car. Avoid falling behind on your payments to marinating a good credit score.
Bottom line
If you were having a difficult time managing your logbook loan, you can now regain control of your financial situation. Managing a loan needs not be a hustle, especially logbook loans. Following the above steps and being disciplined with your finances will place you ahead of your financial situations and guarantee the success you seek.
Milhan Capital offers quick logbook loans in less than 12 hours to sort out any arising financial emergency while still retaining the use of vehicle. Applying for a logbook loan is as easy as following this link http://milhanaccesscapital.com/loan-products-kenya/ . You can also calculate how much you will repay at http://milhanaccesscapital.com/.