Personal Loans

Manage Your Money to Pay Off Your Personal loans

If you have taken out lots of personal loans, you know how stressful it can be to have to spend most of your paycheck simply on interest every month. It seems like you’re paying hundreds of dollars each time a bill comes around, but you don’t seem to be coming anywhere closer to paying off your personal loans! The fact is, you’re not alone. A lot of people are trapped like you in situations where they can’t afford to plan for the future because they’re spending all of their money in the present.

Fortunately, you’re not stuck forever. While paying off your loans, personal and otherwise, takes time, patience and dedication, you can make a plan to get out of debt. Here are a few tips to consider.

Get Rid of Automatic Payments

You’re probably paying several companies each month without even realize it. Unless you constantly monitor your credit card statement or bank account (which most of us should but probably don’t), you probably haven’t noticed the automatic payments trickling away your money. A lot of items are automatically placed on your credit or bank card every month without you needing to approve them each time. Some of these items include:

  • Gym memberships
  • Online video services
  • Identity theft protection

There are other services you may subscribe to as well, but these are just a few. You should cancel as many of these services as possible. Get rid of all the ones you don’t need. Even though these are nice to have, you don’t need them. Getting out of debt is more important right now.

Pay Off Your Smallest Debts First

If you’re paying interest on a debt, you’re spending money you could be using to pay off a different debt. Interest payments are like spinning your wheels in the dirt: you’re using a lot of energy, but you’re not going anywhere. If you get rid of the source of the interest payment, you’ll be able to have a little bit more money to use to pay off your personal loans.

Make a list of all of your loans and order them from smallest to biggest. This can include student loans, credit card debt, personal loans, payday loans and so on. Then, make an effort to pay off the smallest loan first. Only pay the minimum amount possible on the other loans until the smallest debt is paid off. Then, identify your next smallest source of debt and pay that off, too. Continue to do this until all of your debt is gone. You can also use a debt consolidation service with low interest rates to just have one big loan to pay off.

By practicing this method of getting out of debt, you can use the money you would have spent on interest for your smaller debts and apply them to bigger debts. That’s basically like freeing up more of your money which you can use to get more and more out of debt each month. A unfocused effort of paying off your loans won’t get you anywhere, but focusing on one at a time will.

Try to Only Use Cash
Credit card debt is a trap many Americans find themselves trapped in. They start off using their credit cards with the intention of only using it for emergencies, or maybe they use a card and think they’ll simply pay the balance off at the end of every month. Unfortunately, what happens in most cases is people spend more with a credit card than they earn in cash during a month, so their credit card balance goes unpaid. Maybe a big expense like a car repair is suddenly needed. Maybe the reason for charging the card is more of a fun one like taking a vacation or trip. Maybe a bill wasn’t delivered months ago and now collections is calling. Even if the reason is good, you’re still stuck with credit card debt that usually has an interest rate that’s so high you can’t pay it off during a single month.

This is exactly how credit card companies want you to act. In fact, if you keep a balance on your credit card, your credit score will actually be higher than someone who pays off their credit card every month! This may sound ridiculous, but it’s how credit card companies make their money. They want you to have a balance so they can charge interest on your account.

There is a way around this, though. By paying only cash or by using only your debit card, you can make sure you never spend more money than you have. Instead of using a card, withdraw money from an ATM and make sure to use only that instead. Plan how much money you think you’ll need during a week and then withdraw only that amount. That way you’ll be forced to spend only the cash you actually have instead of money you don’t. You may realize very quickly that your spending habits have gone out of control, but that’s okay! Getting back into financial shape is a learning experience and a process. Try to put as much into your savings as possible. You can also check out some helpful resources on coping with debt if you’re feeling overwhelmed.

applying for a personal loan

Another way to avoid using credit cards and using cash only is to leave your credit card at home when you go out. Some people even freeze their credit cards in a block of ice and have to let it thaw every time they want to use it! This may seem extreme, but it gives them time to “cool off” when they’re tempted to make an impulse buy.

Paying off your personal loans takes planning, sacrifice and plain old discipline. Even though it will be hard and may take years, anyone can do it if they’re smart about it. Make a financial plan for you and your family and then resolve to stick to what you’ve decided you’ll do. The feeling of being debt free and in control of your finances is a much better feeling than the stress of wondering how you’re going to pay your bills every month. If you need help to make it to your next paycheck so you can start your journey to financial freedom, consider taking out temporary unsecured personal loans from We offer bad credit personal loans and are here to help people like yourself have the financial peace of mind you need and deserve.

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