Ways to Pay Loans on Time

2007-10-15 12:53:47

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Now that you were able to get a loan, you will also need to manage it responsibly. To maintain a spotless credit record, you have to make sure that you pay loans on time. With today's modern technologies, paying your loans is almost effortless and fool-proof.

Paying Loans in Check or Cash

The most traditional way to pay loans is by sending checks or cash directly to your financial institution, either by mail or by going to the lender's office. However, you might find this a little tedious to do, especially if you are quite busy or are forgetful. And unless the return mail envelope is postage paid by the lender, you also need to place a stamp on it before mailing.

Fortunately, there are now several payment centers right in your community who are affiliated with your lender and can therefore accept your check or cash payments. These payment centers operate even after banking hours and on weekends for your convenience. However, payment centers also charge you a small fee for remitting your loan payments.

Paying Loans Through Direct Debits

Most lenders suggest a direct debit option if you have an existing checking or savings account. Before the payment period commences, you need to inform the lender of your correct bank account and routing numbers, and a good copy of one of your checks. This will enable the bank to debit the loan amortization amount every month from your bank account. Under this method, you should have sufficient balance in your account at all times. If you don't, you could risk getting an overdraft on your account, or your bank might reject the direct debit. In turn, this will delay loan payments which consequently cause a dent in your credit payment record.

Paying Loans Via Credit Cards

You can also use your credit card to pay loans, especially if you are having problems in coming up with the right bank account balance to cover your debts. However, paying loans through credit cards will only serve to extend your liabilities further, and under higher interest rates. Using your credit card should only serve as temporary solution if you cannot use any other method.

Paying Through Pay Pals

If you are transacting business through the web and have an active Pay Pals account, you can use this account to pay loans. Some lenders allow this method and you can easily pay loans right from your own home or office computer. You do have to make sure that your lender is accepting payments this way, and always confirm if the payment has been applied to your loan.

How to Decide

You need to consider a few things before choosing the payment method, such as the time and cost you spend for making your loan payments. Time is especially important because any delays can affect your credit rating negatively.

You should also confirm if the payment method is acceptable to your lender, especially if you are considering Pay Pals.


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