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Making Loan Payments When Times Get Tough

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When a financial crisis hits, making monthly loan payments may be stressful, and skipping payments may be too because the bill is still there, with interest.

But a mix of strategies - and reasons to stay on track - could help make it easier to approach your monthly payment and we’ve listed a few right here.

Rethink budgeting

Budgeting just sounds like punishment, but if you think about it, saving for something you really like is budgeting. You may not love your loan payment, but the funds did help you pay for something you wanted or needed, so consider it an expense you’re saving for. 

The right way to save up for your monthly payment is the one that works, so try a few methods. If you’re looking for ideas, we have some, such as this 50/30/20 “rule” or zero-based and reverse budgeting. You could also go old-school and use envelopes (if you’re cash-free, you can fill the envelopes with stand-ins).

Consider your payment due date

If the date your payment is due is making things difficult, see if you can change it. Marcus loan customers, for example, can change their payment due date up to three times. (Some things to know about the Marcus change-your-payment-due date policy: This feature is only available when you are not in any payment deferral period and have no past due amounts outstanding. It is not available during your final monthly payment period. When you request a due date change, we will tell you when the change will take effect. In some cases, we may not be able to make the change to your upcoming due date.) 

Look into AutoPay

Setting up automatic transfers from a checking account to a savings account is a tip we see a lot when researching savings strategies. It works because you just need to make the choice once. Customers with a personal loan from Marcus can use AutoPay the same way; you just have to set it up once and Marcus will transfer the funds from the linked account to make your monthly contribution, and the money won’t be withdrawn early.

Track your progress

Hard work can be a slog, but when you think of it in terms of progress . . . that’s like a whole other experience. Keep an eye on your progress with a count-down calendar or just by watching your loan balances shrink (you can do this with the Marcus app for Marcus and non-Marcus loans).

Remember the short-term and long-term rewards

Making loan payments is hard work that can pay off in at least two ways:

  • It could help you could qualify for a lower APR the next time you apply for credit, because payment history is important for credit scores.
  • You could earn a month off, interest free, if you have a loan from Marcus and are eligible for the On-Time Payment Reward. (Some things to know about the On-Time Payment Reward: After making 12 or more consecutive monthly payments in full and on time, you can defer one payment. We will not charge interest during the deferral, and we will extend your loan by one month (interest will accrue normally during this extra month). Your payments resume as usual the month after the deferral. Advance notice is required. See loan agreement for details.)

Ask for help

If things are really tight, please contact your lender and see if they could help. It could feel uncomfortable, and there are no guarantees, but your lender needs to know there is a problem before they can offer help.

Visit our Covid-19 Center to find tips on how to deal with volatility, stick with your goals and take care of your financial well-being.

This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this site were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions.