Tips for managing finances from the most effective and appropriate loans are important for you to know. The goal is so that you can organize or manage your finances well and be able to pay credit bills on time.
So, instead of being curious, let's just check out some tips for managing finances from the following loans.
10 Tips for Managing Finances from Loans Correctly
There are several tips for managing finances from loans that you should pay attention to so that you can put them into practice when you decide to borrow money from a bank or other financial institution, namely:
1. Determine the Specific Purpose of the Funds to be Borrowed
The first tip, you must determine the specific purpose of the funds you will borrow. For example, to open a business, education costs, house renovations and others.
With clear and specific goals, you can make wise decisions. Make sure you only borrow funds according to your needs so you can pay off your credit every month on time.
2. Evaluate Financial Ratios
If you already know the purpose of making a loan clearly, then make sure you pay attention to evaluating your financial ratios.
You need to know, ideally the amount of loan installments that must be paid should be no more than 30% to 40% of your monthly income. The aim is to ensure that monthly income can still be used for daily needs and to pay installments without any arrears later.
3. Use Loan Funds Effectively
As previously explained, the funds you borrow must be in accordance with your needs and not exceed 30% to 40% of your monthly income. If your loan is successfully approved, make sure you use the loan funds effectively only for the predetermined purpose, OK?
For example, if the purpose of borrowing funds is to open a business, then use the loan funds only to build the business. Starting from capital for producing goods, building rental, promotional costs and others.
That way, the loan funds will be right on target and you won't use them for anything else.
4. Manage Personal Finances and Loans Separately
When you get the loan funds, make sure to manage them separately from your personal finances, OK? The aim is to make it easier to track used and remaining funds.
Apart from that, you can also project whether funds will be in surplus or deficit. So, you can think about your next steps in anticipation.
Through separate management, personal funds will not be disturbed and you can still use them for your daily needs. Of course, the loan funds are fully used for the purposes you have set.
5. Record Every Expense
Recording every expense is very important because you can find out where the money went or what the money was used for. Through financial records, you can identify what needs to be reduced so that expenses do not increase too much.
To record expenses, now you don't need to do it on paper or in a notebook. Because technological sophistication has created various financial recording applications, such as Money Lover, Min, or Google Sheets to record every spending transaction you make. However, it is possible that if you are still comfortable using a notebook, you can still do it easily.
To keep your expense records neater, try to group each expense into several categories, such as transportation, food, entertainment or hobbies and others.
This method will make it easier for you to analyze and evaluate your finances regularly every month.
6. Pay Installments On Time
The next tip for managing finances from loans is to pay the installments on time every month. Avoid paying even one day late because it will lower your credit history or score, and of course there is a chance of getting a high penalty fine per day.
Therefore, pay your installments on time according to the nominal amount that must be paid each month. If you forget, set a reminder using a digital calendar regarding when to pay the installments. So, you won't miss the due date every month.
Also make sure you have prepared funds to pay the installments by implementing wise financial management, OK?
7. Look for Other Sources of Income
Looking for other sources of income can ease the financial burden because it has the opportunity to increase existing income. You can start by looking for side jobs according to your respective skills.
Later, you can use additional income from side jobs to increase installment costs or other financial goals. If used in installments, you can pay off the loan more quickly and reduce the amount of interest you have to pay per month.
Currently, there are many other sources of income that you can try, such as selling online, becoming a freelancer, dropshipper, part time private tutor, and others.
8. Avoid Adding Other Debt
If you still have installments, make sure to avoid adding to other debts. Because, this will only increase your financial burden and make it difficult for you to achieve your financial goals.
If debt continues to pile up, even exceeding your monthly income, you will have difficulty paying it off later. As a result, installments become arrears and the interest increases every day.
So that things like that don't happen, you can look for side jobs to earn additional income. That way, every time there is an urgent need, there is no need to add more debt.
Also prepare emergency savings for various unexpected situations that you never thought of before. So, you will not be burdened by large nominal debts and just focus on paying off the ongoing installments.
9. Consult with a Financial Planner
If you find it difficult to carry out financial planning, then immediately consult an expert. Because, financial experts will provide advice and strategic solutions regarding how to properly manage finances from loans for business or other needs.
So, if you need someone to help manage your finances, don't hesitate to contact a financial consultation, OK?
10. Don't Hesitate to Negotiate with Lenders
If the situation does not allow you to pay your installments on time, do not hesitate to negotiate with the lender. Who knows, the lender could provide relief or loan restructuring for you.
There are several negotiations that you can submit according to your individual conditions. For example, postponing payments for the current month because you are experiencing financial difficulties, or applying for a reduction in monthly installments with an extension of the term so that monthly installments can be lower (loan restructuring).
When negotiating with a lender, make sure to explain your situation honestly and politely, of course paying attention to the financing contract that was agreed upon at the beginning of the application. Next, offer a mutually beneficial solution, for example paying part of the outstanding amount first.
That is information regarding tips for managing finances from loans through banking or financial institutions for business, educational and other purposes that you can read in full. In essence, managing finances requires careful planning and appropriate allocation of funds so that you can still pay your monthly installments on time and still have funds for your daily needs.
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