Bad Credit Loans Blog

Great Tips and Advice for Managing Your Money

During this time in year, January to March, we get quite a few customers asking for 10 day payoff quotes.  As people start to receive their income tax refunds, they attempt to pay their Personal Loans in full.  At first this may seem like a great idea.  But, what we witness quite often is that, in the long run, it does not give the desired result of not staying in debt.  Here are some points to consider if you are planning to use a large chunk of your tax refunds to pay on a large debt.

broken piggy bank 400 wideEarly Payoff - Pros  - Save On Interest

One benefit of paying a Personal Loan in full early is that you s

ave on interest.  The loans through America’s Loan Company are amortized.  So, every payment over the term of our Bad Credit Loans carries a portion towards principal and interest.  Most of the interest is paid at the beginning of the loan.  Therefore, the earlier a loan is paid off the more one saves on interest.

Early Payoff - Pros  - Get Rid Of Monthly Burden

Another benefit of paying a Bad Credit Loan in full early is the freedom of not having that debt.  Not having to spend $100.00 a month on a debt, for instance, is $100.00 a month that could be put in a savings account or used towards emergencies.  Less debt allows more breathing room financially, if one is disciplined enough to engage in saving money. in an account.

Early Payoff – Cons – Leaving Yourself Too Short

But, paying off a Personal Loan early can result in having to borrow again a few short months down the road.  It is no unusual for customers to leave themselves too short in “emergency funds” after paying a debt in full early.  So, there may be enjoyment in not having to pay on a debt for a few months.  However, when another unexpected expense occurs, like car or house repairs etc., one may find himself with little in the “emergency fund” coffers.  This results in having to borrow more funds.

Early Payoff - Our suggestion

Our suggestion is to make sure you have an adequate amount of “emergency funds” in a bank account or under your bed.  Take a deep breath and start cranking down some numbers.  Figure out based on past years how much money would be adequate to have for emergencies.  That may mean that you can’t payoff a debt in full right away.  But you can start making extra payments.  This by itself should save you money on the interest in the end.  For instance, if the payoff on a Personal Loan is $4000.00, paying just $2000 will shorten the term of your debt and save on interest.  Also paying a little extra with each payment should have the same result.  A more measured approach to paying a debt in full, with a little patience, in our opinion, may reduce the need borrow more money sooner as compared to later.

Early Payoff or Not, We Appreciate Our Customers

Don’t get us wrong.  America's Loan Company welcomes the opportunity to help Ohio residents with any Personal Loan needs.  Our point here is that making a big payoff payment on a Personal Loan may be counter productive.   It may be better to make extra payments little by little.  Thank you for choosing us as your lender.

2/27/18

In Ohio not all Personal Loans for people with bad credit are created equal. 

Get A QuoteOhio consumers should always ask lenders for both monthly payment quotes and quiotes on total fees paid on the loan amount that they intend to borrow.  In our experience, once we approve applicants for a Bad Credit Personal Loan, it is not unusual for applicants to just want to come in and sign a contract before they even know what the monthy payments will be. 

Get A Quote:

America's Loan Company will always give loan applicants a quote on their Personal Loans.  But, it is a little scary when we think of how many Ohio residents apply for Personal Loans with other companies, never get a quote before signing a contract, and end up with debts too expensive to pay.  This has the potential of leading to ugly experiences like circles of debt, lawsuits, wage garnishments, repossessions, Etc..

Due to the different licenses offered under the state of Ohio, non-bank lenders can offer loans with the same name, like Personal Loans, and yet charge vastly different amounts.   Companies that offer Bad Credit Personal Loans in Ohio my operate under a CSO or Credit Services Organization, Small Loan, Second Mortgage Loan, or Ohio Consumer Installment Loan, licenses, to name some.  All of which allow lenders to charge different fee amounts.  So, asking for a quote before giving your John Hackock will give the best protection against getting into a loan you can't repay. 

Shop Around:

Consumers should always remember that they are not obligated to sign a contract.  Don't be afraid to shop around for lenders who charge lesser fees.  This may require patience.  But, a little patience and shopping around will most likely save a bundle in fees, not counting with less stress and headaches associated with not being able to pay a debt.

 

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