When your loan repayment begins will depend entirely on what kind of loan you have. For some personal loans like personal installment loans, you may get up to 30 days or more before your first payment. But for some short-term cash options like payday loans, you may have to repay your loan within two weeks.
Typically, when you take out a loan your lender will provide you with a contract and set forth a repayment schedule. This is sometimes referred to as an amortization schedule. This is simply the schedule of payments that you’re required to make until the loan is paid in full. Oftentimes, with an amortization schedule, each payment goes toward a portion of your principal and a portion of the interest.
The important thing to remember is that each loan is different, and your repayment schedule will depend on your specific loan and the lender offering it. For instance, many student loans offer a grace period before repayment begins. Typically, after a student graduates from college, they have six months before they need to begin making payments.
Your repayment schedule and details are extremely important parts of your loan contract. Make sure you’re fully aware of when repayment begins, and how much each payment is. It’s also important to know how much interest you’re paying over the life of the loan, and what portion of your payments go toward interest versus principal.
Before you sign for that loan you’re considering, make sure you can afford each monthly payment. If you think that you may have a difficult time paying on time, or at all, then you should keep shopping for a loan that makes more sense for you.
Loan repayment and loan contracts can be rather confusing. In fact, some predatory lenders make these things intentionally confusing. If you feel like your lender may not be trustworthy, keep looking. Make sure to ask plenty of questions, read online customer reviews, and read the entire contract before signing. Stick to these rules when applying for a new loan and you can avoid falling victim to a predatory lender.