Repayment of a payday loan or installment loan can sometimes exceed the capacity of many people, even if it is a free payday payday at no cost. Sometimes this is because of an unreasonable commitment that far exceeds the borrower’s financial capacity, but often the main culprit is the inefficient management of a household budget and excessive wastefulness that can cause problems with raising the right amount. In this connection, can proper budgeting and saving help avoid additional costs of loan defaults, and even contribute to its early repayment and reduction of expenses?
Each borrower has the right to return the loan earlier than indicated in the contract. What’s more, the Consumer Credit Act also says that in such a situation he is entitled to reimbursement of part of the cost of the loan for the unused time of disposing of money. The reduction in costs should be proportional to the number of days that divides the actual repayment from the planned repayment. So it’s worth saving and scrupulously collecting the required amount, because – as they say – money gives birth to money, and earlier repayment will bring more money.
This solution is quite risky and usually this type of solution is not recommended, but in some cases it may work. If you took out a quick loan not because of low creditworthiness, but because of its simplicity and availability of cash on the same day, you can think about asking the bank for a cash loan. It is best to do it as soon as possible when the interest for the loan has not yet accumulated. We are able to repay the loan much faster, so the commission amount will be significantly reduced, and the loan taken out for repayment can be repaid in monthly installments with a low interest rate (check the difference in the article “Loan and bank loan – cost comparison”).
Not only the payday loan but also the installment loan can be paid off earlier. In the latter case, however, it is much more difficult, because it can be difficult to collect a large amount before. However, installments can be overpaid if you can save a smaller or larger amount in a given month. This will not shorten the funding period, but it will allow you to make smaller payments before the loan is repaid, so it will relieve your home budget and even increase your savings. Usually, you can overpay the installment without informing the company, and the additional amount should be credited to the client’s personal account and should systematically reduce the total amount to be repaid (which can be tracked on a regular basis). However, it is better to inform the company in advance about your intentions.