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You can also repay all (or part) of the loan early to save money on interest.
Here, we look at:
6 ways to manage your loan repayments
Treat your repayments like any other bill and account for them in your budget. This can help you avoid running out of money before you get paid.
Arranging for your loan repayments to come out of your bank account automatically can help make sure they're always made on time. If you set up a Direct Debit, you won’t have to worry about forgetting to pay.
Make sure you have enough money in your current account to cover any loan repayments. If you’re an HSBC customer, you can set up text alerts when your balance drops below a certain amount.
Explore: Online money management tools
Your lender may have an app to make accessing your accounts easy, no matter where you are.
If you’re an HSBC customer, you can download the HSBC UK Mobile Banking app to check your balance and track payments on the go. Device restrictions apply.
If circumstances change and you fall behind on debt repayments, contact your lender as soon as possible. They’ll be able to work with you to help you find a solution. The further you fall behind, the harder it will be to get back on track, so it’s important to address the issue as soon as possible.
If you miss a payment or default on your loan, it can impact your credit score. This can make it more difficult for you to borrow in the future.
If you think it’s a long-term issue, ask for some breathing space while you seek independent help. Organisations, such as Citizens Advice and StepChange offer free confidential support and advice.
If you’re an HSBC customer, you can get in touch with us to talk about your options.
If you have some extra cash left over at the end of the month, you could overpay your loan. This can help you get out of debt.
However, depending on the type of personal loan you have, there may be an early repayment charge (ERC). If this is the case, consider whether the money you would save in interest by repaying early is greater than any charges.
If you have an HSBC Personal Loan, you can make as many overpayments as you like, without facing any fees or charges.
A lender must allow you to repay a loan early in full. However, they can issue an early repayment charge. Some loan providers may also charge additional fees. It's important to check the terms and conditions of the loan before you make an early settlement.
You can pay off your mortgage earlier than planned if you can afford to, reducing how much interest you pay and saving you money. You can either make a regular overpayment or make a lump sum payment.
There’s no penalty for clearing your student loan early. You can either make extra student loan payments or pay it off in full.
It can be a weight off your shoulders, but you should check when the loan will be written off before doing so. It might also make sense to think about any other debts you have first before paying off your student loan.
Paying off your loan early can save you money on interest. However, if there are fees or early repayment charges, it may end up costing you more.
If you were to pay off your loan, could you still afford your everyday expenses and other bills and have some savings left over as an emergency fund?
Credit cards typically carry higher interest rates than personal loans. A cost-effective option could be to pay off expensive debts first – as they’re charging you the most to borrow the money. You’ll still need to meet the minimum repayments on all your debts.
Explore: Should you save or repay debts?
Making regular loan repayments for the term of the loan can help improve your credit score, as it shows you’ve got your finances under control.
Paying off a loan early means you'll no longer have a record of making these regular payments each month. In some cases, paying off a loan early may result in a temporary and minor dip in your credit score. However, it could still be worthwhile trying to repay your loan early.
If you have an HSBC Personal Loan, you can repay all, or part, of the loan early with no early repayment charge. However, interest will still be payable.
If you repay your loan in full, we’ll calculate the reduced interest amount based on the rate that applies to your loan from the date it was issued until 28 days after you notify us. Plus, an additional month if your loan term is longer than 12 months. This means you won't have to pay the full interest amount on your loan.
For example, if the loan is for 36 months and you give us notice on 1 September that you want to repay the loan on 14 September, the amount required to repay the loan will include interest up to 29 October. So, 28 Days from the day you gave us notice plus that extra month.
How to close your HSBC Personal Loan using mobile or online banking.
If you repay part of the loan early, your monthly repayments will stay the same, but you may repay the loan quicker and reduce the amount of interest you have to pay in total.
You can do this by making a transfer online or through our mobile banking app. You can also contact us or visit one of our branches.
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