“Dream big, aim high and pay your
bills on time.”
The bill is one thing that never runs
out. It just keeps piling up especially if we are not financially responsible
for it. On-time payments and repayments are a simple concept, but they are
factors in building good credit so make
sure you don’t pay late on your loans and bills.
This extraordinary situation has put almost every
one of us in a bad financial shape and you may be tempted to put off your bills payments
and loan repayments for a few days. Before
you put them off, think first of the consequences of doing so. You
can rationalize a late fee, learn to live with a penalty rate increase, or
choose to suffer the credit score damage, but those will make your life miserable and
terrifying in the long run. It will affect not just your credit score but your
life in general so think about the benefits of making your payment on time.
On-Time Payments and repayments means good credit score
A credit score is a number between 300–850. Higher score means good credit
history and the better a borrower looks to the lender. A credit
score is based on credit history: number of open accounts, total levels
of debt, payment and repayment history, and other factors. Make sure you have a
good credit standing so the lender will approved the loan and sometimes at a
lower interest rate. A delinquent account, may mean higher charges to the
borrower.
Avoid penalties and Late
Fees
You can be charged a late fee just minutes
after your payment is due. Avoid expensive late fees by sending your payment on
time. Don’t even wait for the due date to settle your payment because you might
miss the payment cut off time.
Using a simple mortgage calculator can help
you in your goal of paying on time. This
free tool can be used to figure your monthly payments for a given loan amount
and the result shows the accurate principal and interest payments on a
fixed-rate loan.
The calculator is so easy to use. Just fill
in the following Loan Information and click calculate button once done.
Home Price – The original amount of the
house before down payment
Down Payment – When making down payments
always make sure it’s at least 20% of the home price to avoid paying for
insurances and other charges or fees.
Home Loan Amount – No need to fill in this
portion as it is automatically calculated by deducting the down payment from
the home price.
Annual interest rate – If you happen to
forget about it, you can always check through your lender.
Loan Term – the length of your loan in
years, where 30 years is the maximum.
You can actually use this
to compute other loans such as car, student, credit card etc., to figure out
your monthly payments and how much interest you accumulate over time. You will
see from the result that if you maximize your loan term - which is 30 years –
the total amount of your monthly payments after the duration of the loan is
almost twice your loan amount and the interest you accumulated for 30 years is
almost equal to the amount of loan. What more if you are always late on your
loan or mortgage payments? Imagine how much interest your lender might add due
to late payments, on top of the penalties and other charges.
Paying on time makes a lot of difference,
not just being debt-free in the future but living risk-free every day. No
matter how hard your financial situation may be, make sure to set aside a few
wants and learn to prioritize your bills and loans. If you really can’t pay on
time, talk to your lender as they might give you consideration like waiving the
charges and penalties.
