As the holiday season comes to an end, there’s a whole new year ahead that calls to us to begin making plans. Whether you’re entering the new year as an adult with new financial responsibilities, or you’re in the workforce looking to make a major purchase, understanding the core of those purchases will be the key to making your money work for you and your future. This year, embrace the work smarter, not harder mindset, and make the right borrowing choices in the new year.
Navigating Student Loans
Thousands of students begin their post-secondary experience knowing they’re going to graduate with debts that they’ll need to start paying right away. Having a strategic plan in place when you apply for a student loan will be your foundation for managing the rest of your finances as you leave school. Put your payments on auto to avoid missing a deadline and paying unnecessary interest.
Like your monthly budget, auto-payments will hold you accountable and help avoid any temptation for spending. If your monthly payments are too much to handle against what your income is, you may be entitled to your payments capped at a certain percentage and an extended payment period — your federal student loan database will have detailed information on your current standing.
Considering Payday Loans
Finding yourself with interim cash shortages doesn’t have to become a weight on your shoulders — with the growing popularity of payday loans, borrowers have more options at their fingertips to find quick financial relief. Start by reaching out to a lender or two and explain your current situation — the right lender should be able to explain in detail the benefits of a payday loan for your precise situation and they should also be able to accommodate you with a quick turnaround and little-to-no red tape involved.
You’ll need to provide your current banking and employment status, but you shouldn’t have to submit an unreasonable amount of documentation. Rather than tangle yourself in the process of borrowing from traditional lenders, payday loans offer an efficient route to help you get back on your feet.
Understanding Car Loans
Before you step inside a dealership, you should have a clear picture of possible payment options and what finance rates you can afford. Understanding your credit score is the first step. While you’re likely to be approved for a car loan even with a low credit score, if you have solid credit your rates will likely be lower and more affordable.
Making Mortgage Payments
Your credit score is your golden ticket to an affordable mortgage rate — lenders will decide your rate and whether you even qualify, based on the strength of your credit. If your score is lower than average — which may be the case for young, first-time homebuyers — research your federal housing department for potential programs that may offer lower rates.
Incorporating your mortgage payments, property taxes, and homeowners’ insurance into your budget is essential — having a budget plan for your mortgage will be your guide to sustainably balancing your expenses against your current income. Lastly, conduct thorough research and make sure your plan is right for your particular financial situation.
Follow these tips, and you’ll be on track to better financial planning this new year.