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Quick Tips to Help You Manage Debt Wisely

Most of us will need to borrow money at some point in our lives, whether it's for a car, student loans, a home or another life expense. There's nothing “wrong" with borrowing. The key is to borrow smarter by using the best lending tools in the right way while understanding how your borrowing habits impact your overall credit picture and opportunities.

Are you ready to borrow smarter? Here are three tips to help you manage debt wisely and maintain a healthy credit outlook:

#1: Get the full picture before you borrow

First, it's important to only borrow what you need to meet your goals. Before applying for a new loan or credit card, review your budget to determine what monthly payment you can comfortably afford. Then, do your research to find the best interest rate and terms available to you. Use a rate calculator to help you get an idea of your monthly loan cost and how long it will take you to repay. Taking these steps before you borrow will help you continue to use credit responsibly and keep debt under control. 

#2: Pay on time, every time

Juggling multiple loans and credit card payments each month can be overwhelming. Not only can missing a monthly payment mean late fees and interest charges, but it may also hurt your credit score. To help you stay organized, set up automatic bill payments and alerts for each of your loan payments. WPCU's Mobile and Online Banking makes it easy! Consolidating or refinancing your loans with a lower interest rate may make managing payments even easier.

#3: Find a plan that works for you

Paying your debt down — and eventually off — will free up more of your money to save or spend on other money goals. Here are a few ideas to help you speed up the debt repayment process:

  • Find opportunities to pay more — Look for “extras" you can eliminate from your budget to pay more than the monthly minimum.
  • Spread out payments — Making a half payment every two weeks may work better for your budget than one monthly payment. 
  • Focus on paying off one debt at a time — For example, paying down a loan or credit card with the highest interest rate first may help you save in the long run.

Get Ahead — and Stay Ahead — of Debt the Smart Way!

Wright-Patt Credit Union is here to help you borrow smarter throughout every important step of your financial journey. Stop by your local Member Center to talk with a Financial Coach about your debt goals and develop a personalized plan for your unique financial situation.