Got your loan in your pocket? Great! Now you’re on the road to better your financial health and reach those milestones you’ve been dreaming about! If you’re worried about the extra debt, don’t be. As long as you’re responsible with your loan (pay on time!), it can help you build your financial profile in the long run. Here’s what you need to do:
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Don’t Take on Too Much Additional Debt
This is a great tip no matter what kind of debt you take on. It’s crucial that you calculate your ability to pay off your loan and make sure you have a plan to come up with that money every time a payment is due. So don’t spread yourself too thin.
Also, if you take on too many lines of credit at the same time, not only does this also factor into how much you can afford to pay, but the multiple credit inquiries can lower your credit score.
Pay on Time
Regular on-time payments account for 35% of your FICO credit score. Auto-pay is a great way to ensure that that you pay on time every time your bill is due. With MoneyLion, you can get updates on your loan, set up automatic payments, and track your payment progress through the MoneyLion app.
Monitor Your Credit Score
It’s important to monitor your credit score as you borrow. Improvements help you save big money in interest down the road. And you want to know if your efforts are working! You should see that number slowly climb if you’re making your loan payments on time and aren’t taking on much in terms of additional debt. Patience is key and it won’t happen overnight — remember, credit-building is closer to a marathon than a sprint.
Consider Loan Consolidation
This option can be useful if you also have student loans. Instead of paying interest on multiple loans, loan consolidation lets you turn all those loans into one loan with one interest rate that you’ll pay back with one monthly payment!
If your loan goes into default, it can have a negative effect on your credit score. Consolidation can make your loans more manageable and lessen the chance of you missing a payment.
Consider a Balance Transfer
A balance transfer is when you move your debt to a different bank or credit card in order to lower your interest rates and help you pay off the loan faster. Make sure to read the fine print when you consider balance transfer offers from different providers.
Use Your MoneyLion Membership
Consider paying down a high-interest rate loan or credit card bill with these MoneyLion offerings.
Credit Builder Plus Loan: MoneyLion will loan you up to $1,000 for as low as 5.99% APR. Many MoneyLion members use this credit builder loan to pay back their high-interest debt.
Instacash: This feature allows you to borrow up to $250 at 0% APR until your next check deposit. Getting an Instacash cash advance is a great way to cover a loan or debt payment quickly without accruing more high interest.
Growing up and growing your credit are both challenging, but growing your credit doesn’t have to be daunting. Many financial institutions are there to see you through the process as you begin your credit journey. Let MoneyLion partner with you — MoneyLion can offer you tools to help you learn as you grow and manage your debt with ease.