Long-Term Loan Management Made Easy: 2 Tips to Know

October 29, 2020
Long-Term Loan Management

For anyone dealing with a long-term loan, knowing how to manage it properly is often overlooked because of the tunnel vision that comes with the idea of sourcing adequate funding. 

Whether it’s for a home, car, college tuition, or investment, the reality of dealing with a lengthier payback period presents itself when the idea of making repayments eases in. Compared to smaller examples (such as personal loans), long-term loans offer additional nuances that can significantly affect the overall experience of effectively dealing with them. 

Unfortunately, many South Africans put themselves at risk of racking up lifetimes of bad credit, which can jeopardize their financial futures. Fortunately, you won’t have to put yourself at risk of common mistakes that have put many in undesirable situations because it isn’t too late to learn about how you can manage your long-term loan.

The reality of long-term loans when it comes to costs

Many South Africans feel compelled to get long-term loans because of how reasonable they come off. They often have lower interest rates, and the amount they provide is more extensive—which seems like a clear winner. 

However, the truth about long-term loans is that the way they work and the longer-term they subject borrowers to acts as a sort of double-edged sword. 

Compared to standard loans with smaller principal amounts and shorter terms, long-term loans subject borrowers to additional months that require paying off extra costs. We’re talking about anywhere between a year to three years’ worth of additional admin fees, interest payments, and other expenses that bump up the cumulative figure. 

When you compare a 72-month loan to a 36-month loan, you’ll immediately notice that the former will cost a whole lot more than the latter. In some cases, even the cost difference between a short-term loan and a policy that’s twice as long can lead to mark-ups of as much as 40 to 50 percent! 

A few tips for better long-term loan management 

At this point, you’re probably dealing with a long-term loan and highly curious about making the repayment experience a much more bearable one in the long run. Although the exact solution for more effortless long-term loan management experiences is to pay it all off as quickly as possible, there are a few tips that can help you achieve just that: 

Tip #1: Avoid loan period extensions

During the repayment process, a lender may suddenly send you a message one day about a potential loan period extension that can “help” you manage your experience for a smoother turnout – this is primarily the situation that you want to avoid at all costs!

To the uninitiated, the idea of extending a long-term loan can be quite irresistible because it helps to bring down your repayments, free your schedule, and leave you some money to spare. However, the problem with extensions is that they will only cost you even more money in the long run and leave you with less cash to save!

Tip #2: Put more on top of your monthly repayments

One of the most effective ways to quickly settle a long-term loan before the final scheduled repayment date is to use as much spare money as possible to pay off your loan.

Apart from the fixed-fee monthly repayments that you make, paying additional money to your lender each due date will lead to an accumulation of extra payments that can shorten the payment period. For instance, using part of your Christmas bonus or your performance bonuses to pay off your loan on top of the amount you’ve set aside in your budget will help finish off the loan faster! 


Dealing with a long-term loan can easily present itself as a painstakingly-expensive process if you don’t learn how to manage your payments effectively. Nevertheless, having the right tips in mind can make a world of difference. Through this guide’s help and the two tips mentioned above, you’ll be able to cut down your payment terms and end your lengthy repayment period much sooner!

We’re an online loan provider in South Africa that provides personal loans for those needing a credit score boost with a quick and easy process. Check out our website to apply for a loan today!