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Taking on debt strategically and thoughtfully can help us reach certain goals and even build our credit scores. This is especially true of personal loans, which typically get used to fund large expenses, like a home renovation project, wedding, funeral or even a relocation to a new city.
But there’s always a risk that our circumstances could change and we can no longer afford to pay back our loan, or we just begin to fall behind on our monthly payments.
Before taking on any form of additional debt, it’s important to have a plan in place for how you’re going to pay back what you owe. So if you’re considering applying for a personal loan in the near future (or if you recently took out a loan), think about these steps to protect yourself from potentially falling behind on payments.
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Sign up for autopay
One of the simplest ways to avoid falling behind on loan payments is to put your bills on autopay. Autopay allows payments to be automatically deducted from your linked bank account and applied to your bill. This way, you don’t have to remember to manually transfer money to pay your bill each month.
Autopay can be especially useful when life gets busy and you may accidentally forget about paying your bill one month. Plus, many personal loan lenders actually give you an APR discount for using autopay to make your payments. SoFi, LightStream and Marcus by Goldman Sachs all offer a 0.25% APR rate reduction for using autopay. Even if 0.25% doesn’t sound like a lot, the money you save can really add up over the life of your loan.
SoFi Personal Loans
Annual Percentage Rate (APR)
5.74% to 21.28% when you sign up for autopay
Debt consolidation/refinancing, home improvement, relocation assistance or medical expenses