Debt Management http://www.wisebread.com/taxonomy/term/7681/all en-US Refinance These 4 Common Debts Before Year Ends http://www.wisebread.com/refinance-these-4-common-debts-before-year-ends <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/refinance-these-4-common-debts-before-year-ends" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/calculator_pencil_math_82097885.jpg" alt="You should refinance 4 common debts before year end" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The year is almost over, which gets many people thinking about New Year's resolutions. Perhaps you are recalling the resolutions you made at the beginning of this year and getting down on yourself for not saving more money and paying off more debt. &quot;Next year,&quot; you promise yourself.</p> <p>But if you refinance these four loans, you can get a head start on your financial goals and even sail into the New Year with a little less financial burden on your shoulders. Here are the top loans you should refinance, as well as a few tips to decrease your debt burden altogether.</p> <h2>Credit Cards</h2> <p>Does your credit card debt seem like it never goes down, even when you throw extra money at it each month? It's the interest rate. There are two ways that you can refinance your credit card balance and save money each month. The first is to <a href="http://www.wisebread.com/best-lenders-for-personal-loans">refinance your debt</a> with a low interest personal loan, like one through<a href="https://sofi.com/wisebreadpl">SoFi</a> or<a href="http://prosper.evyy.net/c/27771/27132/994"> Prosper</a>.</p> <p>This works well for individuals that have <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt">high interest credit card debt</a>. A low-interest personal loan will allow you to pay off your credit card debt faster, but be aware that your monthly payments will be higher. This is because credit cards only require a minimum payment each month, which can be very low, depending on the debt. Keep in mind, however, that those low monthly minimum payments are what keep you in debt for so long. Therefore, when you switch the debt to a three- or five-year personal loan, you will be required to pay more each month.</p> <p>Another popular way to refinance credit card debt is to transfer it to a promotional <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">0% balance transfer card</a>. This will allow you to transfer your debt to a card that does not charge interest for the promotional period. To use this transfer to your advantage, divide the amount of debt you have by the number of promotional interest free months offered. For example, if you are transferring <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt">$10,000 of debt</a> on a card that offers 15 months of 0% interest, then be prepared to pay about $667 each month to avoid interest charges at the end of the promotion. Do not use this card to accumulate new debt.</p> <p>(See also: <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt">When Should You Transfer a Balance to Pay Off Debt</a>)</p> <h2>Mortgages</h2> <p>Mortgage rates remain historically low, but recent news shows that <a href="http://www.marketwatch.com/story/us-mortgage-rates-climb-to-post-brexit-high-2016-09-15">rates are slowly rising</a>. If you are still battling with a mortgage rate higher than 5% or are paying PMI, now is the time to refinance.</p> <p>Refinancing your mortgage can extend the life of your home loan, but it can also save you dramatically each year, especially if you are paying<a href="http://www.wisebread.com/what-is-private-mortgage-insurance-anyway">pesky PMI fees</a>. Research the cost to benefit ratio, knowing how much money you will save each month. Also research to know if a 15-year mortgage makes financial sense. In many cases, switching to a 15-year loan is riskier for your budget, but other times it can be a small monthly increase that will pay off big time in reduced interest payments.</p> <h2>Car Loans</h2> <p>Americans owe a lot on their car loans. USA Today reports, &quot;The total balance of all outstanding auto loans <a href="http://www.usatoday.com/story/money/cars/2016/09/06/car-loans-now-top-1-trillion-delinquency-rates-rise/89911210/">reached $1.027 trillion</a> between April 1 and June 30.&quot; If you secured your auto loan through a dealer, there is a good chance you are overpaying for your car loan. Contact your local credit union for rates, and don't forget to research online for the best rates.</p> <p>I have used two credit unions in the past to successfully secure an auto loan for less than 2.50%, and those credit unions did not have an actual building within 100 miles of me.</p> <h2>Student Loans</h2> <p>The burden of student loan debt is crippling millions of Americans. You don't need to live with your student loan forever. As long as you have good credit and are not in default with your loans, you have options. If you have federal student loans, then I strongly recommend looking into the <a href="http://www.wisebread.com/5-careers-that-offer-student-loan-forgiveness">forgiveness programs</a> available. It might mean taking a less than desirable job for a few years, but if that job forgives a large portion of your student debt, then it could be worth more to you than a higher paying job. Other options include income-sensitive repayment programs, such as <a href="http://www.wisebread.com/the-definitive-guide-to-pay-as-you-earn-a-great-student-loan-repayment-plan">PAYE and IBR</a>, which peg your monthly payments to your income level. Thus, if you're struggling to make a standard monthly payment, these programs set your monthly outlays at a more affordable level.</p> <p>If you are not eligible (or a fan) of the forgiveness programs, <a href="http://www.wisebread.com/should-you-refinance-your-student-loan">refinancing your student loans</a> is your next best option. Note that if you refinance your loans, you will be switching them over to a private lender. This means that if you have federal student loans, you will no longer be protected for federal loan repayment programs if you suddenly lose your job or face financial hardships.</p> <p>(See also: <a href="http://www.wisebread.com/5-ways-to-pay-off-your-student-debt-faster">5 Ways to Pay Off Your Student Loans Faster</a>)</p> <p><a href="http://sofi.com/wisebread">SoFi</a> is one company that offers student loan refinancing and also offers unemployment protection for borrowers that lose their job at no fault of their own. The company says, &quot;In fact, members who refinance with us save an average of $316 a month &mdash; and $17,208 total.&quot; Other notable companies to consider include:</p> <ul> <li><a href="https://www.earnest.com/">Earnest</a></li> <li><a href="https://commonbond.co/choose-your-loan?referrer=b75172e7076c5472bed5baec5e28309c&amp;referred">CommonBond</a></li> <li><a href="http://lendkey.7eer.net/c/27771/187810/3276">LendKey</a></li> </ul> <p>Refinancing these common debts can help you pay less each month, as well as less overall. Use these refinancing strategies to get out of debt faster and take control of your finances.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/refinance-these-4-common-debts-before-year-ends">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides Your Credit Score</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-happens-to-your-debt-after-you-die">What Happens to Your Debt After You Die?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-ignore-these-4-things-before-refinancing-your-student-loans">Don&#039;t Ignore These 4 Things Before Refinancing Your Student Loans</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-personal-finance-calculators-everyone-should-use">15 Personal Finance Calculators Everyone Should Use</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-surprising-ways-revolving-debt-helps-you">5 Surprising Ways Revolving Debt Helps You</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management car loans interest rates lenders loans mortgages new year's resolutions personal loans refinancing repayment programs student loans Mon, 26 Sep 2016 10:30:07 +0000 Ashley Eneriz 1798863 at http://www.wisebread.com 6 Scary Facts About Credit Card Debt http://www.wisebread.com/6-scary-facts-about-credit-card-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-scary-facts-about-credit-card-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_shocked_face_74060557.jpg" alt="Man learning scary facts about credit card debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We all know that credit card debt is the worst type of debt that you can carry. That's because of the high interest rates attached. If you don't pay off your credit cards in full each month, the debt you owe can quickly skyrocket.</p> <p>But even though credit card debt is scary, this hasn't stopped many consumers from racking up thousands of dollars of it.</p> <p>As fall arrives and Halloween looms, are you ready for a real scare &mdash; at least of the financial variety? Here are six facts about credit card debt that should spook consumers who don't pay off their card balances every month:</p> <h2>1. There's Too Much Credit Card Debt Out There</h2> <p>Credit card debt is like one of those unstoppable slashers from 1980s horror movies: It's hard to get rid of. That explains why, according to a report on consumer credit by the Federal Reserve, the total amount of revolving debt owed by U.S. consumers stood at a staggering $953.3 billion as of May of 2016.</p> <p>The Federal Reserve predicts that this debt, which is made up mostly of credit card debt, could hit $1 trillion by the end of the year &mdash; the highest this figure has ever been.</p> <h2>2. We're Not Paying Off Our Credit Card Debt as Quickly as We're Adding to It</h2> <p>Credit card website CardHub reported that during the first quarter of 2016, U.S. consumers paid off a total of $26.8 billion in credit card debt. That sounds impressive, right? Unfortunately, it's not. According to the report, that represents only 38% of the $71 billion in credit card debt that U.S. consumers added to their cards in 2015.</p> <p>In other words, American consumers as a whole are paying off far less of the new credit card debt that they are adding.</p> <h2>3. Too Many of Us Owe Thousands of Dollars in Credit Card Debt</h2> <p>That figure above is scary. But what's more frightening is the average amount of credit card debt that Americans owe. This figure is hard to pin down, because how high it is depends on whether you include consumers who use credit cards but don't carry a balance each month.</p> <p>But here are two particularly chilling credit card statistics: In July of 2016, CreditCards.com reported that the average U.S. household that has credit card debt owes $9,600. The average credit card that usually carries a balance has $7,494 on it as of July of this year.</p> <h2>4. Credit Card Interest Rates Are Still Far Too High</h2> <p>Credit card interest rates remain downright scary. According to Bankrate, the average variable interest rate on U.S. credit cards stood at 16.10% as of August 17 of this year. Even scarier are the penalty interest rates that credit card companies can charge you if you're late on paying your bill. Your interest rate could soar to 28% or higher.</p> <h2>5. It Can Take a Frighteningly Long Time to Pay Off Credit Card Debt</h2> <p>As anyone who has struggled with credit card debt knows, eliminating that debt takes plenty of patience. If you make only the minimum payment each month, it can take you a decade or more to pay off your debt. Consider these numbers provided by Bankrate: Say you owe $6,000 on a credit card with an interest rate of 18%. If your minimum payment is 4% of your monthly balance, it will take you 11 years and nine months to pay off that debt making only this required minimum monthly payment. You'll pay a total $9,474 to pay off that $6,000 debt. And this assumes that you won't add any new debt to your card during this time.</p> <h2>6. Making a Late Payment Will Haunt You</h2> <p>Paying your credit card bills late can have a frightening impact on your FICO credit score, the number lenders rely on to determine whether you qualify for loans and at what interest rate.</p> <p>If you are 30 days or more late on your credit card payments, your card provider can report your late payment to the three national credit bureaus of Experian, Equifax, and TransUnion. A single late payment will stay on your credit reports for seven years. It can also cause your credit score to fall by 100 points or more.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/6-scary-facts-about-credit-card-debt">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-dirty-secrets-of-credit-cards">The Dirty Secrets of Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-sobering-facts-about-credit-card-debt">5 Sobering Facts About Credit Card Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The 5 Best 0% Balance Transfer Credit Cards</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt">5 Ways to Pay Off High Interest Credit Card Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt">The Fastest Method to Eliminate Credit Card Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards Debt Management balances debt interest rates minimum payments overspending scary facts Wed, 21 Sep 2016 09:01:03 +0000 Dan Rafter 1796578 at http://www.wisebread.com 5 Surprising Ways Revolving Debt Helps You http://www.wisebread.com/5-surprising-ways-revolving-debt-helps-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-surprising-ways-revolving-debt-helps-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_happy_credit_card_49216544.jpg" alt="Woman learning surprising ways revolving debt helps you" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Debt can be good or bad, depending on how you use it. Different types of debt serve different purposes. We use installment loans like mortgages, car loans, and student loans to purchase homes, cars, and to get an education &mdash; but these aren't the only types of debt.</p> <p>There's also revolving debt, such as a credit card or a home equity line of credit. This type of debt can be more dangerous because it lacks a fixed payment amount, and minimum payments are based on how much you utilize the line of credit. Despite the unpredictable nature of revolving debt, however, it can be surprisingly helpful. Here's how:</p> <h2>1. It's Available When You Need It</h2> <p>Life is unpredictable. Even when you're financially responsible with money, an emergency can pull the rug out from under you. Sometimes, there isn't enough cash in your account to handle the unexpected. Or maybe you have cash, but don't want to drain your savings. Revolving debt lets you pay off purchases over time, so that you can keep more cash in your wallet.</p> <p>Revolving debt is also convenient because you have immediate access to funds when you need it. This is different from an installment loan. You can apply for a loan when you need money for an unexpected expense, but it's not immediate. You have to submit an application and wait for an approval, which can take days. Plus, there's no guarantee the bank will approve the amount you need.</p> <h2>2. It Helps Build Creditworthiness</h2> <p>Whether you're looking to establish your credit history or rebuild your credit after a blunder, you have to use credit to improve your FICO score. Revolving debt can help in this regard.</p> <p>Several factors make up your credit score, including the types of credit accounts in your name. Some people only have one type of credit account, perhaps an installment loan like a mortgage or car loan. Making timely payments on these accounts help their credit scores, but they need other types of account to increase credibility and creditworthiness.</p> <p>Credit mix makes up approximately 10% of your credit score, so it's worth adding a revolving account if you don't already have one. What's surprising is that revolving debt can be a good thing on your credit report. If you have a revolving account and you manage this account well, other creditors and lenders will take notice. This builds their trust in you, which makes it easier for you to qualify for other types of accounts in the future.</p> <p>For revolving debt to be helpful, however, you have to pay your bills on time, and you shouldn't utilize too much of your available credit. Payment history makes up 35% of your credit score, and the amount you owe makes up 30% of your credit score.</p> <h2>3. It Protects Your Credit Score</h2> <p>If you're self-employed or an employee who gets paid once a month, a revolving account can keep your head above water until you receive a paycheck. Ideally, you should have a savings account for situations like this, but if you're in the process of growing your emergency cushion, using a credit card to tide you over and acquiring short-term revolving debt is the lesser of two evils. In this case, revolving debt can protect your credit &mdash; and you'll avoid late fees.</p> <p>If your creditors don't receive a payment after 30 days, they'll report the lateness to the credit bureaus. A single late payment can reduce your credit score by 50 to 100 points, depending on the type of account. Using a credit card and increasing your revolving debt can cause a slight decrease in your credit score, but your credit score will rebound as soon as you pay down the balance. On the other hand, a late payment can stay on your credit report for up to seven years, and it takes years to regain lost points.</p> <h2>4. You Have Flexibility of Use</h2> <p>Revolving debt is also helpful because there's flexibility of use. When you apply for an installment loan, you have to use funds for a specific purpose. For example, a mortgage loan can only be used to buy a house, and a student loan can only be used for educational purposes. Revolving debt can be used for any purpose, such as renovating your home, paying tuition, taking a vacation, etc.</p> <h2>5. You May Experience a Lower Interest Rate</h2> <p>The interest rate on your revolving debt could be lower than the interest rate on personal loans offered by banks, but only if you have good credit. If so, you'll pay less in interest charges over the life of the debt, and you can enjoy lower minimum payments.</p> <p>Make sure you shop around and compare rates. Some <a href="http://www.wisebread.com/5-best-credit-cards-with-0-apr-for-purchases?ref=internal">credit cards offer 0% interest</a> on balance transfers and purchases for the first six to 18 months, and then a low permanent APR after the introductory rate period.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/5-surprising-ways-revolving-debt-helps-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides Your Credit Score</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-why-credit-scores-and-reports-are-not-the-same">Here&#039;s Why Credit Scores and Reports Are Not the Same</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/never-borrow-money-for-these-5-buys">Never Borrow Money for These 5 Buys</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/best-of-personal-finance-credit-where-credit-is-due-edition">Best of Personal Finance: Credit Where Credit Is Due Edition</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/refinance-these-4-common-debts-before-year-ends">Refinance These 4 Common Debts Before Year Ends</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Debt Management borrowing money credit history credit score home equity line of credit interest rates loans revolving debt Tue, 20 Sep 2016 09:00:05 +0000 Mikey Rox 1794234 at http://www.wisebread.com 5 Signs It’s Time to See a Credit Counselor http://www.wisebread.com/5-signs-it-s-time-to-see-a-credit-counselor <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-signs-it-s-time-to-see-a-credit-counselor" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_stressed_money_80048959.jpg" alt="Man wondering if it&#039;s time to see a credit counselor" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>About 62% of Americans have <a href="http://www.marketwatch.com/story/most-americans-have-less-than-1000-in-savings-2015-10-06">less than $1,000</a> in their savings accounts, and one in every three Americans has <a href="http://time.com/money/4258451/retirement-savings-survey/">saved $0 for retirement</a>. One of the main culprits behind our inability to save is debt. Whether it's in the form of student loans, credit card balances, or home lines of equity, debt can snowball into a problem too big to handle on your own. Fortunately, credit counselors can be of help when you have trouble navigating the depths of debt yourself. Here are five warning signs that you might need a credit counselor, what will a counselor do for you, and how to choose one.</p> <h2>5 Warning Signs That You Need a Credit Counselor</h2> <p>Here are the telltale signs that you have taken on more debt than you can handle.</p> <h3>1. Living Paycheck to Paycheck</h3> <p>This is a big one. It's one thing to take on a loan, but another entirely for the loan to take on you! If you're consistently spending more than you make &mdash; month after month &mdash; to pay back debt, then an unexpected emergency expense could wreak havoc on your personal finances. Imagine if right now your water heater were to break, or your car suddenly needed a new transmission. Could you come up with the necessary hundreds of dollars to meet these expenses when you're living paycheck to paycheck? (See also: <a href="http://www.wisebread.com/where-to-turn-for-help-when-you-dont-have-an-emergency-fund?ref=seealso">Where to Turn for Help When You Don't Have an Emergency Fund</a>)</p> <h3>2. Making Too Many Late Payments</h3> <p>Paying a high APR on your credit card debt is bad. Paying a higher APR and a penalty fee many times out of the year is even worse. When you make a late payment in 2016, credit card issuers can charge you $27 for the first late payment and up to $37 for subsequent lapses within six months of the first one. Falling 60 days behind a payment would worsen your chances of paying back your credit card debt: A survey of 100 major U.S. credit cards found that the average APR for those falling 60 days behind payments was over 28% in recent years. Assuming that you have a card with a balance of $3,000 and a regular APR of 14.99%, you would pay an extra $403.80 in interest in a year with the higher 28.45% APR.</p> <p>Not too mention that making too many late payments also wreaks havoc on your credit rating as your payment history accounts for 35% of your credit score.</p> <h3>3. Fearing Debt Collectors</h3> <p>Of course, you have to work to make money. However, you'll have a hard time concentrating when you're constantly afraid to pick up the phone or check your mailbox fearing that debt collectors are trying to contact you. While the <a href="https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text">Fair Debt Collection Practices Act</a> limits the times and places that a debt collector can reach you, don't be surprised if unscrupulous ones still try to reach you at work or call you before 8 a.m. in your local time! (See also: <a href="http://www.wisebread.com/4-annoying-things-bill-collectors-cant-do-and-how-to-stop-them?ref=seealso">4 Annoying Things Bill Collectors Can't Do &mdash; And How to Stop Them</a>)</p> <h3>4. Not Contributing to Retirement Accounts</h3> <p>Consider this example: If you were to put away $400 every single month for 35 years in your retirement account with a 7% rate of annual return, you would have a total of $709,985 at the end of the 35-year period. If you were to start 20 years later saving on the same account, you would need to amp your savings to the tune of $2,200 per month to end up with a similar total balance ($709,985) at the end of the same 35-year period.</p> <h3>5. Having No Budget</h3> <p>Last but not least, having no clue about where your money is going is a clear signal that you need help with your finances. Whether you're intentionally or unintentionally refusing to map out your cash flow, you are just hoping that your debt monster will somehow go away. The harsh reality is that it won't and you need a credit counselor to help you figure out the damage &mdash; and the solution.</p> <h2>What Will a Credit Counselor Do for You?</h2> <p>The main objective of a credit counselor is to help you avoid bankruptcy by advising you on a series of financial issues, including money management, debt management, and budgeting. Even in the event that you were planning to file a Chapter 7 or Chapter 13 bankruptcy, you're legally required to obtain credit counseling before filing bankruptcy.</p> <p>A reputable credit counseling agency offers a wide range of services, including budget counseling, savings and debt management education, and debt management plan development. In a DMP, you deposit money every month into an account from a credit counseling agency, which will use the funds to pay your unsecured debts according to an agreed schedule between your creditors and the agency.</p> <p>The U.S. Trustee Program maintains a list of <a href="https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111">approved credit counseling agencies</a>, providing nonprofit budget and credit counseling services to individuals eligible to file for bankruptcy protection. Depending on the services that you require, the agency may provide them in-person, online, or over the phone. While a credit counseling agency may qualify for nonprofit status, be aware that services may not be free.</p> <h2>How to Choose a Credit Counselor</h2> <p>Here is a useful checklist on how to find the right credit counselor for your unique financial situation.</p> <h3>Look for Additional Lists</h3> <p>Besides the list from the U.S. Trustee Program, look for additional local candidates with credit counseling agencies affiliated with the <a href="http://www.nfcc.org">National Foundation for Credit Counseling</a> (NFCC) or the <a href="http://www.aiccca.org">Association of Independent Consumer Credit Counseling Agencies</a> (AICCCA). Make sure that the agency is licensed to offer services in your state.</p> <h3>Check for Consumer Complaints</h3> <p>To vet agencies for potential consumer complaints, check each one of your choices with the office of your <a href="http://www.naag.org/naag/attorneys-general/whos-my-ag.php">state Attorney Genera</a>l and <a href="https://www.usa.gov/state-consumer">state consumer protection agency</a>. Also, check for the rating, list of filed complaints, and list of customer reviews of any credit counseling agency with the <a href="http://www.bbb.org">Better Business Bureau</a>.</p> <h3>Request Initial Information</h3> <p>Requiring a fee for providing information or requesting details about your financial information at this point are two red flags. Also, you should be the one first requesting information, not receiving any unsolicited mailers, calls, or, even worse, spammy emails.</p> <h3>Inquire About Fees and Financial Aid</h3> <p>Credit counseling should be free or cost nearly nothing. Ask about setup fees and recurring monthly fees. Avoid companies that aren't willing to provide a quote in writing or refuse to help you if you can't pay those fees in full. Reputable credit counseling agencies offer at least some debt and money management workshops or educational materials at no cost. And if you can't afford a credit counselor &mdash; meaning, if it isn't basically free &mdash; avoid them altogether. Plenty offer free or extremely low-cost services, and the last thing you need is more expenses when you're trying to get out of debt.</p> <h3>Verify Credentials and Remuneration of Counselors</h3> <p>Look for certifications through external organizations, such as the NFCC or the AICCCA. Credit counselors receiving kickbacks for you signing up for additional services or making contributions to the agency are indications that the counselors won't put your interest before theirs.</p> <h3>Look Beyond DMP</h3> <p>A DMP is just one of the many services offered by a credit counselor and should only be presented after an extensive review of your financial situation. Avoid agencies that push a DMP from the start. Even when evaluating a DMP, a serious credit counselor would still help you develop better budgeting and money management skills.</p> <h3>Request a Formal Written Agreement</h3> <p>Any verbal promises that aren't captured on paper are just empty promises. For example, promises from a counselor to lower or eliminate interest, finance, or late fees should be in writing. This will help you in case your creditors indicate that none of those promises actually happened.</p> <p>Also, be wary of agencies pressuring you to sign a contractual agreement right away, particularly when it's a DMP. Take your time to review the document and seek additional help in case you can't understand some of the clauses. Don't sign anything unless you fully understand the contract and are satisfied with its terms.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/5-signs-it-s-time-to-see-a-credit-counselor">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/retirement-on-the-installment-plan">Retirement on the installment plan</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-everyday-money-tasks-youve-been-doing-wrong">12 Everyday Money Tasks You&#039;ve Been Doing Wrong</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-best-money-management-tips-from-john-oliver">7 Best Money Management Tips From John Oliver</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-surprising-ways-revolving-debt-helps-you">5 Surprising Ways Revolving Debt Helps You</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-debt-collectors-dont-want-you-to-know">5 Things Debt Collectors Don&#039;t Want You to Know</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Debt Management Retirement credit counselor debt collectors dmp fees financial aid professional help warnings signs Fri, 16 Sep 2016 09:00:11 +0000 Damian Davila 1793877 at http://www.wisebread.com Student Loan Debt in Collections? Try These 5 Steps http://www.wisebread.com/student-loan-debt-in-collections-try-these-5-steps <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/student-loan-debt-in-collections-try-these-5-steps" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_stressed_bills_87593851.jpg" alt="Woman using 5 steps with student loan debt in collections" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We are all too familiar with the stats when it comes to student loan debt. American borrowers owe more than <a href="http://www.wisebread.com/5-sobering-facts-about-student-loan-debt">1.2 trillion in student loan debt</a>, and more than 70% of U.S. college graduates have student loans of some sort. This staggering amount of student loans has far surpassed credit card debt, which now stands firmly in second place behind mortgage debt as the largest source of U.S. debt.</p> <p>But the less-mentioned student loan debt problem is the rising default rate. According to the National Student Loan Data System, 12% of subsidized loans, and 25% of Family Federal Education Loans (FFEL), were in default in 2015.</p> <p>If you're in this situation, and your student loan is on the brink of default, here are five steps to handle student loan debt in collections.</p> <h2>1. Check Your Credit</h2> <p>If you haven't bothered to open up your student loan statement recently, it might be time to check your credit report. Many people don't realize that their student loans are actually in default and spend years thinking the loan must've magically disappeared, or the student loan fairy came and paid off the debt.</p> <p>Once your loan goes into default, it is handed over to a <a href="http://www.wisebread.com/account-in-collections-heres-how-to-fix-it">collection agency</a>. An account in collection significantly <a href="http://www.wisebread.com/the-5-things-with-the-biggest-impact-on-your-credit-score">affects your credit score</a>. While this might not matter to you now, if you're thinking about buying a house or a car or applying for a credit card, you might find yourself out of luck with a low credit score.</p> <p>It's easier than ever to check your credit fast and easy. There are loads of apps you can use, like <a href="http://www.dpbolvw.net/click-2822544-10809829-1284618439000">Credit Karma</a> and <a href="http://www.tkqlhce.com/click-2822544-12336153-1455123184000">Credit Sesame</a>, that will show your credit score and give you tips on how to better your score. You can also check your credit for free at <a href="https://www.annualcreditreport.com/index.action">AnnualCreditReport.com</a> &mdash; you'll receive your credit report, but will need to pay a small fee if you want to get your actual score.</p> <p>Also, many credit card companies now include your credit score on your monthly statement with some detail about your score.</p> <h2>2. Rehab Your Loan</h2> <p>The next step is to get your loan in a rehabilitation program. Contact the collection agency handling your loan and ask them how to enter the rehabilitation program.</p> <p>Rehabbing a loan is critical because once your student loan is in collections, there are many adverse consequences that extend beyond your credit score. Some collection agencies will garnish your wages to recoup the balance that is owed. Not only can your paychecks be tapped, but also your highly-coveted tax return money.</p> <p>Rehabbing a student loan is just like any other form of rehab &mdash; you've got to get super committed to the process to see results. Rehab brings your loan safely out of default, which will help repair your credit score. It's a process, so make sure you understand exactly what you need to do with each collection agency to bring your loan back to life.</p> <h2>3. Always Pay on Time</h2> <p>Once your loan is in rehab, paying on time will be your best ally in winning the war against student loan default. Rehab offers you a chance to get right with your loan, often through small monthly payments based on your income.</p> <p>The key to loan rehab is to make nine consecutive monthly payments on-time while in the program before your loan can be taken out of collections and sent to a new loan servicing company. At that point, your default status will be removed, and you'll also have access to programs like deferment and <a href="http://www.wisebread.com/what-is-student-loan-forbearance-anyway">forbearance</a>.</p> <h2>4. Get It in Writing</h2> <p>As with most things in life, getting something in writing is your best defense. The same goes for student loan rehabilitation. Once you've made your nine monthly on-time payments and your loan rehab is complete, kindly ask the collection agency for a nice letter stating that all related negative marks from your student loan record have vanished.</p> <p>Now, this is the tricky part. Collection agencies aren't known for their excitement over supplying a letter in writing, which again is why you need to ask in your nicest voice and use a lot of &quot;pretty pleases.&quot;</p> <p>This letter is worth its weight in gold to you, though. It is what you will send to the three main credit bureaus &mdash; Experian, TransUnion, and Equifax &mdash; to ensure that the marks are removed. Make sure that the letter includes your name, the name of the collection agency, the account number that the letter is referencing, and the date the loan rehabilitation process was completed.</p> <h2>5. Stay on Track</h2> <p>The last step may seem like an obvious one, but staying on track is the best way to keep your student loans out of collections. Once you've gone through all the work of rehabbing your loan, the last thing you want to do is undo that process by neglecting your student loan.</p> <p>Here are a few steps to stay on track:</p> <ul> <li>Select a new payment plan that works with your budget. There are countless payment plan options like <a href="http://www.wisebread.com/the-definitive-guide-to-pay-as-you-earn-a-great-student-loan-repayment-plan">Pay As You Earn</a>, which adjusts with your salary.<br /> &nbsp;</li> <li>Put your new student loan payments on auto-debit each month so that you make sure it's getting paid.<br /> &nbsp;</li> <li>Create a new monthly budget that includes your student loan payment and scrub through your bank statements to find ways to save money each month. There are lots of <a href="http://www.wisebread.com/7-apps-that-make-budgeting-fun-no-really">mobile apps</a> to help you.<br /> &nbsp;</li> <li>Regularly check your credit score to ensure that you're not missing any payments and that your credit score is improving.</li> </ul> <p>If your student loan debt is in collections, it's not the end of the world. It happens to thousands of people each year, so you're not alone. However, you'll want to make sure that you follow these steps, rehab your student loan, and find ways to make your student loan payments work in your budget.</p> <p><em>How are you doing with your student loans?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/shannah-game">Shannah Game</a> of <a href="http://www.wisebread.com/student-loan-debt-in-collections-try-these-5-steps">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-times-student-loan-refinancing-can-save-you-big">4 Times Student Loan Refinancing Can Save You Big</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-missed-a-student-loan-payment-now-what">You Missed a Student Loan Payment. Now What?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-happens-when-your-credit-card-debt-is-charged-off">What Happens When Your Credit Card Debt Is Charged Off?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-private-lenders-that-can-really-save-you-money-on-your-student-loans">3 Private Lenders That Can Really Save You Money on Your Student Loans</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/prioritize-these-5-bills-when-youre-short-on-cash">Prioritize These 5 Bills When You&#039;re Short on Cash</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Education & Training collections credit score forbearance past due paying bills rehab student loans Mon, 12 Sep 2016 10:00:12 +0000 Shannah Game 1788933 at http://www.wisebread.com Best Lenders for Personal Loans http://www.wisebread.com/best-lenders-for-personal-loans <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-lenders-for-personal-loans" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/45501888.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Personal loans are often not the first choice when faced with an unexpected expense or financial need, but because of the wide range of lenders available offering lower interest rates, they can sometimes be the least expensive. With the current surge of a variety of lenders online offering personal loans, it is possible to apply, qualify, and receive your loan faster than ever before. Choosing a good lender doesn&rsquo;t have to be complicated. Fortunately, there are many companies that have become popular and well-known among consumers for providing personal loans for all situations, including for those who have bad credit and need emergency funds. Here are the best lenders providing personal loans online.</p> <h2>SoFi</h2> <p><a href="https://sofi.com/wisebreadpl">SoFi</a> is a lender especially known for offering options for refinancing student loans, and is one of the only lenders to refinance both federal and private student loans. The APR for loans with SoFi are relatively low when compared to many of the other loan options available, and can range from 5.50% - 10.24% (fixed) and 4.05% - 8.30% (variable). SoFi also offers mortgage loans and refinancing as well as personal and parent loans or refinancing. You can borrow $5,000 to $100,000 and can pay back your loan in 3 - 7 years, without any origination fees. Further, SoFi provides career strategy services, invites to <a href="http://www.wisebread.com/could-happy-hour-help-you-better-manage-debt">SoFi events</a>, and tools to help manage your finances.</p> <h2>Lending Tree</h2> <p>One of the most popular providers of nearly any type of loan is <a href="https://www.lendingtree.com">Lending Tree</a>, which is often considered a pioneer in online lending. The company has facilitated more than 32 million loans since 1998 and through the years has become a leader in every type of loan a consumer could need from car loans to mortgages and personal loans for medical expenses. They currently offer personal loans of $1,000 to $35,000, for a term of one to five years, with fixed rates. These loans also do not require collateral, and you can pay the loan in monthly installments.</p> <h2>Kabbage</h2> <p><a href="http://www.kqzyfj.com/click-2822544-11145625-1452787774000">Kabbage</a>, a lender established in 2011, is one of the most popular online lenders for small businesses. If you are seeking a loan to get your business off the ground, Kabbage is one of the first lenders you should consider. Small business loans can be as much as $100,000 deposited into your bank account or even your PayPal account. You can ongoing access to your funds when you need it, in case you don&rsquo;t need to use the full amount at once. Kabbage loans are ideal especially if you haven&rsquo;t yet established any credit for your business. Whether you qualify for a loan is determined by a variety of business data, which includes not just the credit score but business volume and social media activity as well.</p> <h2>Avant</h2> <p>Your credit score still plays an important role in qualifying for personal loans, and if you&rsquo;ve had problems in the past or don&rsquo;t yet have credit established, it might be difficult getting approved for a personal loan. Those with bad credit often get stuck with predatory lending options such as payday loans, or even credit cards with high fees and outrageous interest rates. Although just recently established in 2012 and newer than other online lenders, <a href="http://www.kqzyfj.com/click-2822544-11789034-1427835327000">Avant</a> provides personal loans ranging from $1,000 to $35,000, even if you have less than perfect credit. Although the interest rate can range from 9.95% to 36.00%, Avant considers other factors besides just your credit score.</p> <h2>CircleBack Lending</h2> <p><a href="https://www.circlebacklending.com/">CircleBack Lending</a> provides a variety of loans from $3,001 to $35,000. There is an origination fee based on your credit that decreases the total amount of your loan. As an example, an A-B credit grade would have either a 36-month origination fee of 0.99% to 2.99% or a 60-month origination fee of 0.99% to 3.99%. Part of the process with CircleBack is requesting the loan amount and whether you want a term of 36 or 60 months. Then, CircleBack Investors review your request. Once an Investor commits to funding your request, the money is sent to your bank account. The interest rate or APR is based on the credit grade much like the origination fee. An A-B credit grade would have either a 36-month interest rate of 5.96% to 11.42%, a 36-month APR of 6.63% to 12.82%, a 60-month interest rate of 12.44% to 19.82%, or a 60-month APR of 12.88% to 20.78%.</p> <h2>Prosper</h2> <p><a href="http://prosper.evyy.net/c/27771/27132/994">Prosper Marketplace</a> works differently than other lenders and is categorized as a peer-to-peer lending company. Instead of borrowing money from a bank or company, Prosper loans are funded by other consumers or peers. You can borrow anywhere from $2,000 to $35,000, and qualify depending on your credit score, history, endorsements from friends, and even community affiliations. You can choose either three year or five year terms, with no pre-payment penalty. Although the APR can be as low as 5.99% for borrowers with the best Prosper Ratings, it varies and can be as high as 36.00% for first-time borrowers.</p> <h2>Upstart Loans</h2> <p><a href="https://www.upstart.com/?CJAID=12188828&amp;utm_source=CJ&amp;utm_medium=CPFL&amp;utm_content=2822544">Upstart Loans</a> is another peer-to-peer lending platform that allows you to borrow amounts from $3,000 to $35,000 for debt consolidation, refinancing student loans, to make a large purchase, or a number of other occasions you might need to borrow money. Your rates for borrowing are based on your FICO score as well as how long you have had credit, but unlike other lenders, Upstart also considers your education, area of study, and your job history, which, according to Upstart, has led to borrowers saving 27% compared to credit card rates. The interest rate varies from 4.66% - 29.99%, including the one-time origination fee that ranges from 1% - 6%. You can get an idea what your rate might be without it affecting your credit score.</p> <h2>Lending Club</h2> <p><a href="https://www.lendingclub.com/landing/partner.action?partnerID=87559&amp;utm_dept=INV&amp;utm_source=AFF&amp;utm_medium=CJ&amp;utm_content=Link&amp;utm_campaign=CJ_Inv2&amp;AID=10880284&amp;PID=3720452&amp;SID=227343FOF752865010">Lending Club</a> is considered a leader in peer-to-peer lending and is the largest online marketplace in the world connecting borrowers and investors. You can request a loan to pay for many different expenses including debt consolidation, starting a business, and moving or relocating expenses. This platform allows investors to earn money on loans they fund while borrowers pay down debt at lower interest rates than those that are offered by other lenders. Loans through Lending Club charge rates from 5.99% to 32.99%, with origination fees from 1% to 5%.<strong> </strong></p> <h2>PersonalLoans.com</h2> <p><a href="https://personalloans.com/?aid=10791&amp;cid=1311=052f9c191a6d466a9f38a217a34d7303">PersonalLoans.com</a> matches borrowers with lenders who are part of their network. You can often get the money you need in as quickly as one business day and pay it back anywhere from six months to 72 months. The APR for loans with PersonalLoans.com is typically 5.99% to 35.99%. For this lender, you fill out an application with the loan request, type of credit, and amount you need to borrow. If it is approved, you are redirected to the lender&rsquo;s loan agreement. You can request $500 to $35,000.<strong> </strong></p> <h2>Promise Financial</h2> <p><a href="http://promisefinancial.evyy.net/c/27771/245132/4106">Promise Financial</a> is known for providing funds for life events such as weddings, engagements, and other events that you might need a loan for. Promise Financial offers loans from $3,000 to $35,000 with APRs ranging from 6.99% - 29.99%. You can repay your loan in monthly installments over 36 months by setting up automatic electronic payments from your bank account or paying by check.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/christina-majaski">Christina Majaski</a> of <a href="http://www.wisebread.com/best-lenders-for-personal-loans">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The 5 Best 0% Balance Transfer Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps">How to Rebuild Your Credit in 8 Simple Steps</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards">The Best Low Interest Rate Credit Cards</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/refinance-these-4-common-debts-before-year-ends">Refinance These 4 Common Debts Before Year Ends</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-surprising-ways-to-negatively-affect-your-credit-score">10 Surprising Ways to Negatively Affect Your Credit Score</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management best personal loans Wed, 24 Aug 2016 10:30:07 +0000 Christina Majaski 1708326 at http://www.wisebread.com Don't Ignore These 4 Things Before Refinancing Your Student Loans http://www.wisebread.com/dont-ignore-these-4-things-before-refinancing-your-student-loans <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/dont-ignore-these-4-things-before-refinancing-your-student-loans" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/beautiful_woman_thinking_74303951.jpg" alt="Woman not ignoring things before refinancing student loans" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The average American with student loans has approximately $30,000 in debt, and makes a monthly payment of&nbsp;<a href="http://www.brookings.edu/research/papers/2014/06/19-typical-student-loan-debt-akers">nearly $250</a>. With interest rates sometimes reaching as high as 8%, many people struggle to bring down the balance. One popular solution is to&nbsp;<a href="http://www.wisebread.com/should-you-refinance-your-student-loan">refinance your loans</a>, getting a lower interest rate or lower monthly payment with a different repayment term. For some people, this can be an excellent way to make progress on eliminating their debt. For others, it can be a short-term option that ends up causing more problems later on.</p> <h2>What Is Refinancing?</h2> <p>If you have federal or private student loan debt at a high interest rate, you can refinance your debt by taking out a new loan from a&nbsp;<a href="http://www.wisebread.com/6-things-every-college-student-must-know-about-private-student-loans">private lender</a> to cover your entire current balance. You use that money to pay off your current debt, then make payments at a lower rate or different repayment term on the new loan.</p> <p>If you have high-interest debt, refinancing can be a way to save you thousands over the course of your loans. When you are researching your options, it is important to look at offers from multiple lenders to ensure you are getting the most competitive interest rate and terms. <a href="https://lendedu.com/">LendEDU</a> is a site that allows you to compare multiple offers in one place to get the most attractive loan that meets your needs.</p> <h2>4&nbsp;Factors to Consider Before Refinancing</h2> <p>While refinancing student loans is a good decision for many people, there are factors you need to consider before you sign any agreement.</p> <h3>1. Interest Rates</h3> <p>When refinancing your debt, you will have the option of choosing a variable or fixed interest rate. Variable rates as low as 2% are available. However, they can change every year and can go as high as 8% to 10%. While fixed rates are often slightly higher than the initial variable interest rate, (usually they are about 3%), that interest rate is guaranteed not to increase over the course of your debt. If you have a small amount you can pay off quickly, a variable rate can make sense. However, if you need five to 10 years to pay off your loans, a fixed rate is more secure.</p> <h3>2. Deferment Options</h3> <p>If you have federal student loans, you have the ability to defer your debt if you run into economic hardship, such as if you lose your job. When you refinance with a private lender, you may end up losing that benefit since some companies do not offer deferment options. Make sure you understand their policies regarding economic hardships to ensure you're prepared for the worst-case scenario.</p> <h3>3. Loan Terms</h3> <p>When you refinance, your monthly payment can be cut in half. While that looks great on paper and it frees up money in your budget, you actually will end up paying much more over the length of your loan. To get the payment so low, your repayment term is extended from the standard 10 years to 20 or more. Over the duration of your loan, you can end up paying thousands more in interest. If you opt for an extended repayment term, assess your budget every year. As you move up the corporate ladder and get a better salary, you can increase your monthly payments and pay the debt off more quickly, saving yourself money.</p> <h3>4. Prepayment Penalties</h3> <p>Some private lenders have prepayment penalties, meaning you will owe a fee if you pay off your new loan early. In some cases, the fee may be small, but for some companies, the cost might be prohibitive. Make sure you check if there are any prepayment penalties ahead of time.</p> <p>For some, refinancing student loans can be a great way to save money and pay down the debt faster. It can be a good strategy to get a lower interest rate or to get a more affordable monthly cost. By considering these four factors, you can ensure you are informed and empowered to make the best decision for you.</p> <p><em>Have you refinanced student loans? Has it worked out for you?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kat-tretina">Kat Tretina</a> of <a href="http://www.wisebread.com/dont-ignore-these-4-things-before-refinancing-your-student-loans">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-private-lenders-that-can-really-save-you-money-on-your-student-loans">3 Private Lenders That Can Really Save You Money on Your Student Loans</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/refinance-these-4-common-debts-before-year-ends">Refinance These 4 Common Debts Before Year Ends</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-times-student-loan-refinancing-can-save-you-big">4 Times Student Loan Refinancing Can Save You Big</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/cancel-student-loans-to-save-and-receive-an-interest-free-120-day-loan">Cancel Student Loans to Save — and Receive an Interest-Free 120-Day Loan</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-sobering-facts-about-student-loan-debt">5 Sobering Facts About Student Loan Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Education & Training deferment interest rates penalties private lenders refinancing repayment student loans terms Thu, 18 Aug 2016 10:00:16 +0000 Kat Tretina 1774333 at http://www.wisebread.com Want to Master Your Debt? Think Like a Maze Runner http://www.wisebread.com/want-to-master-your-debt-think-like-a-maze-runner <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/want-to-master-your-debt-think-like-a-maze-runner" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/friends_corn_maze_85631953.jpg" alt="Friends learning how to master debt like maze runners" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Have you ever been inside one of those massive corn mazes that are carved to look like a famous person or scene? When you were a kid did you collect books of mazes to solve, each more difficult than the last?</p> <p>Mazes can be challenging and fun. And working your way through a maze is very much like working your way out of debt.</p> <p>If you find that you're suffocating under a mountain of financial obligations, it's time to work toward becoming debt-free. And if you're an expert at solving mazes, you'll be able to apply some lessons to changing your lifestyle in order to achieve financial freedom.</p> <p>Here are nine ways that getting out of debt is like going through a complicated maze.</p> <h2>1. It Can Seem Hard at First</h2> <p>The farm that my family travels to each fall has a massive maze, with five sections. It is mind-bendingly complex, and I always start off wondering, &quot;How the heck am I gonna get through this thing?&quot; But inevitably, I do make it out unscathed.</p> <p>All big adventures seem daunting in the beginning, and the process of getting out of debt can certainly fill you with self doubt. The key is to take your time, focus on smaller and achievable goals, and not get discouraged by the bigger picture.</p> <h2>2. There's Always a Way Out</h2> <p>Every maze, no matter how big or crazy, has a way out. You may think that there's no way to escape, but there always is. No one is playing a trick on you and building a maze with no solution. Similarly, when you are fighting to get out of debt, you need to be aware that it's always possible to eliminate what you owe. Nothing is hopeless.</p> <h2>3. There's More Than One Path</h2> <p>There are no rules about how you get through a maze. The only thing that matters is that you make it out. Likewise, the journey toward financial freedom isn't laid out with specific directions. Sure, there are <a href="http://www.wisebread.com/snowballs-or-avalanches-which-debt-reduction-strategy-is-best-for-you">debt reduction plans</a> that offer detailed steps to follow, but if you deviate from that, it's not the end of the world, as long as you are making progress.</p> <h2>4. You May Want to Give Up</h2> <p>My wife and I once got stuck in a large hedge maze, and couldn't find our way out. Exhausted and angry at one another, we very nearly called it quits and called for someone to rescue us. But we persevered, and methodically made our way through. It took longer than expected, but we escaped.</p> <p>Getting out of debt can be like this. There will be moments when you feel like you're not making any progress. There will be times when you want to just quit and go back to your bad borrowing ways. Ultimately, you will realize that moving forward is the only way to go, even if it takes more time than you planned.</p> <h2>5. You'll Make Mistakes</h2> <p>You may think you are on the right track, but you'll make a wrong turn and end up back near where you started. You will hit dead ends. You may even have to start over from the very beginning.</p> <p>When you're trying to get out of debt, you may not make the best decisions at every key moment along the way. You might overspend on an item, or fail to pay a bill on time. But that's okay, as long as you keep trying to get on the right path. Eventually, you will find yourself heading in the correct direction and closer to your goals.</p> <h2>6. There Will Be Unexpected Obstacles</h2> <p>Some of the trickiest mazes have rough terrain, tree branches, puddles, and maybe even the occasional Minotaur. Your journey to being debt-free will be filled with challenges you can't predict. You may be on the right track, only to lose your job or face an unexpected medical expense. Don't get discouraged!</p> <h2>7. Success Comes Easier When You Have Help</h2> <p>Navigating through a tough labyrinth is easier if you have a buddy. One of you can look at the map, while the other looks for clues. You can communicate about which paths you've already taken, and which way might lead to a dead end.</p> <p>The same goes for getting out of debt. A partner can keep you from overspending on unnecessary items. A friend or family member can remind you about bills to be paid. They can also boost your spirits when the going gets tough. Don't go it alone!</p> <h2>8. You Might Enjoy the Challenge</h2> <p>People love mazes because they like a mental test. The challenge itself can be enjoyable for them. Reducing your debt can feel the same way. You'll make changes to your lifestyle that will be hard, but over time, you may find that you enjoy the tough work of seeing your obligations decrease. The actual process of saving, paying down debt, developing discipline, and achieving financial freedom can be satisfying in and of itself.</p> <h2>9. You'll Feel Great at the End</h2> <p>It's always a wonderful feeling when you complete a hard task. The sense of accomplishment is often unparalleled. Whether it's making your way through a dense and convoluted maze, or working like crazy to get out from under a mountain of debt, you'll want to raise your arms in triumph when it's all over. It's a downright super mixture of sheer joy, relief, and pride from knowing you worked toward a goal and got it done.</p> <p><em>What navigation tricks have you helped escape your debt?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/want-to-master-your-debt-think-like-a-maze-runner">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/create-a-reverse-bucket-list-to-improve-your-money-management">Create a Reverse Bucket List to Improve Your Money Management</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">7 Money Moves to Make as Soon as You Conquer Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/oops-i-maxed-out-my-credit-cards-now-what">Oops — I Maxed Out My Credit Cards. Now What?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-dont-ever-stop">5-Day Debt Reduction Plan: Don&#039;t Ever Stop</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/account-in-collections-heres-how-to-fix-it">Account in Collections? Here&#039;s How to Fix It</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management accomplishments advice challenges mazes obstacles owing money strategy Tue, 16 Aug 2016 10:00:17 +0000 Tim Lemke 1773243 at http://www.wisebread.com 5 Ways to Prevent a Debt Spiral http://www.wisebread.com/5-ways-to-prevent-a-debt-spiral <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-ways-to-prevent-a-debt-spiral" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/tablet_credit_card_92649335.jpg" alt="Woman learning ways to prevent debt from spiraling" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Do you dread opening that credit card statement each month? You're not alone.</p> <p>The big challenge with <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">credit card debt</a> is that it grows quickly thanks to the high interest rates attached to it &mdash; rates as high as 21%. If you carry a balance on your credit cards each month, this can mean that your debt can quickly spiral out of control.</p> <p>But there are steps that you can take to keep your credit card debt from becoming overwhelming. Here are five moves that can help keep that credit card debt under control while you gradually pay it down.</p> <h2>1. Pay More Than the Minimum</h2> <p>The best move when dealing with high credit card debt? Always pay more than your required minimum monthly payment. Otherwise, your debt will continue to grow, thanks to those high interest rates. (See also: <a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=article">Credit Cards with Low Interest Rates</a>)</p> <p>Paying more than the minimum will greatly reduce both the time it takes you to <a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">pay off that debt</a> and the interest that you'll pay on it. Even if you can only pay $100 or $50 more each month, do it.</p> <h2>2. Stop Spending</h2> <p>This is an obvious one, but if you want to keep your debt from spiraling, stop adding to it. Move to spending cash until you can reduce your credit card debt. It's tempting to pull out your plastic to pay for that new computer or video game. But instead, save up the money first and <em>then</em> make your purchase. Remember, every time you make a purchase with your credit card, you are making it even more difficult to pay down that debt.</p> <h2>3. Make a Plan</h2> <p>You'll struggle to control your credit card debt if you don't first draft a plan to deal with it. One option? Target the credit card with the lowest amount of debt. Make extra payments each month on that card until it's paid off. You can then move on to the card with the next highest amount of debt, making extra payments on it.</p> <p>Or, if you prefer, follow the same strategy but start with the card with the highest interest rate, making extra payments on it each month until its balance hits zero. Then move on to the card with the next highest interest rate. (See also: <a href="http://www.wisebread.com/snowballs-or-avalanches-which-debt-reduction-strategy-is-best-for-you?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=article">Snowballs or Avalanches: Which Debt Reduction Strategy Is Best for You?</a>)</p> <p>Finally, if you can commit to a certain time frame to pay off your debt, a <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">balance transfer is a great tool</a> for getting rid of debt. Just <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">choose your balance transfer credit cards</a> wisely.</p> <p>Make sure to not close the cards that you pay off. Doing that will actually cause your FICO credit score to fall. Instead, keep the cards open but only use them for purchases that you can pay off in full each month.</p> <h2>4. Cut Unnecessary Expenses</h2> <p>If your <a href="http://www.wisebread.com/oops-i-maxed-out-my-credit-cards-now-what?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">credit card debt is out of control</a>, you need to make paying it down a priority. One way to do this is to free up extra money each month by cutting down on unnecessary expenses. This could mean reducing the number of times you eat out each month and using those extra dollars on your monthly credit card payments. It could mean ending a gym membership. You can exercise without belonging to a gym, after all.</p> <p>Just make sure that when you reduce an unnecessary monthly expense that you use this money to whittle down your credit card debt.</p> <h2>5. Tackle the Reasons Behind Your Credit Card Debt</h2> <p>The final step in controlling your credit card debt might be the most difficult: You need to determine why you ran up so much debt. What were the reasons behind your excessive debt?</p> <p>If you don't figure out why you abused your cards, you run the risk of running up your credit card debt again after you pay it off. If you want to keep your credit card debt from ever spiraling out of control again, you need to take a close look at your negative spending habits and change them &mdash; permanently.</p> <p><em>How do you keep your credit card debt from spiraling?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-ways-to-prevent-a-debt-spiral">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off">5-Day Debt Reduction Plan: Pay It Off</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-debt-reduction-mistakes-even-smart-people-make">8 Debt Reduction Mistakes Even Smart People Make</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-simple-way-to-decide-which-credit-card-to-pay-off-first">The Simple Way to Decide Which Credit Card to Pay Off First</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-manage-your-debt-in-10-minutes-a-week">How to Manage Your Debt in 10 Minutes a Week</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-reasons-your-debt-isnt-diminishing">12 Reasons Your Debt Isn&#039;t Diminishing</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management avalanche method interest rates monthly payments saving money snowball method Thu, 11 Aug 2016 09:00:04 +0000 Dan Rafter 1769336 at http://www.wisebread.com What Happens to Your Debt After You Die? http://www.wisebread.com/what-happens-to-your-debt-after-you-die <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-happens-to-your-debt-after-you-die" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/hands_drawing_cash_32706966.jpg" alt="Finding out what happens to debt after you die" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>&quot;In this world nothing can be said to be certain, except death and taxes,&quot; wrote Benjamin Franklin back in 1789. However, more and more Americans are including &quot;debt&quot; in that famous quote. In 2015, one poll found that 21% of Americans believed that they would be in debt forever, up from 9% in 2013 and 18% in 2014. But what happens to that debt when you die? The answers may surprise you.</p> <h2>First &mdash; What Is an Estate?</h2> <p>Your estate includes all of your assets, including real estate, investments, insurance, and any other assets or entitlements. Since your debts and liabilities are also part of your estate, qualifying assets are liquidated upon your death to cover your debts before your beneficiaries can see any funds.</p> <p>Establishing a clear will is key to ensuring your estate is managed as you wish. Even when a will is available, executing an estate and administering a will is serious business. So, it's best to hire a legal professional to cross all t's and dot all i's. (See also: <a href="http://www.wisebread.com/dont-get-screwed-3-surprising-times-when-you-need-a-lawyer?ref=seealso">Don't Get Screwed: 3 Surprising Times When You Need a Lawyer</a>)</p> <p>So, what happens to the debts in your estate?</p> <h2>Credit Card Debt</h2> <p>Recent estimates put average American household credit card debt at $15,762, for those households with credit card debt. But unless your family or friends co-signed a credit card with you, they're all off the hook in the event that you pass away and your estate is too small to cover it. Even when your spouse is an authorized user on your credit card account, they won't be responsible for paying if they didn't cosign at the time of application.</p> <p>However, your survivors shouldn't be surprised if debt collectors <em>still </em>try to get a spouse or child to pay for the debt. The federal <a href="https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text">Fair Debt Collection Practices Act</a> (FDCPA) prohibits debt collectors from using abusive, unfair, or deceptive practices to try to collect a debt. Let your spouse, children, and beneficiaries know that they can <a href="https://www.ftccomplaintassistant.gov/#&amp;panel1-1">file a complaint</a> against abusive debt collectors with the Federal Trade Commission (FTC). (See also: <a href="http://www.wisebread.com/4-annoying-things-bill-collectors-cant-do-and-how-to-stop-them?ref=seealso">4 Annoying Things Bill Collectors Can't Do &mdash; And How to Stop Them</a>)</p> <p>Of course, you and your family still need to refrain from tricky tactics, such as taking a $20,000 cash advance days before a death, or continuing to use the authorized credit card after the primary cardholder has died, that could provide a credit card company recourse to legally pass on the debt to the surviving relatives.</p> <h2>Mortgage</h2> <p>There are three main scenarios to consider with a mortgage.</p> <p>In the first, you were either required by the company issuing your mortgage or decided that it was a good idea to buy life insurance for the remaining balance of the mortgage. In this scenario, your death benefit clears the mortgage and the property goes to the beneficiary listed on the will or to the surviving property owner.</p> <p>In the second, there is no life insurance, and you and your spouse were &quot;tenants in common,&quot; meaning that each of you owned a stated share of the property. To be eligible to receive their share of the property, your spouse would need to first check that there is enough money in your estate to clear your debts and thus no need to sell the property to cover them. If there is enough money in your estate, your spouse would receive your share and take over the mortgage, if applicable.</p> <p>Finally, there are scenarios in which there was no life insurance and you and your spouse were &quot;joint tenants,&quot; meaning that both of you owned the entire property. In this scenario, upon your death the whole property passes automatically to your spouse. But again, the estate must clear any property-related debt first.</p> <h2>Student Loans</h2> <p>Besides credit card debt, student loans are another type of liability that is rapidly increasing among Americans. According to one estimate, the <a href="http://www.cbsnews.com/news/congrats-class-of-2016-youre-the-most-indebted-yet/">average student loan</a> for a Class of 2016 graduate is $37,173!</p> <p>In the event of your death, your federal student loans, including direct loans, Federal Family Education Loan (FFEL) Program Loans, and Perkins Loans, <a href="https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation#death-discharge">will be discharged</a>. Additionally, Direct PLUS loans are discharged in the event that the parent or student on whose behalf the loan was obtained passes away.</p> <p>But private loans are another matter, and your estate may be responsible for covering any balance. And if anybody co-signed a private loan with you, they'd be on the hook for payment.</p> <p>To learn more about what would happen to your liabilities upon your death, consult a lawyer.</p> <p><em>Have you ever take on debts from somebody that passed away? Share your experience in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/what-happens-to-your-debt-after-you-die">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/refinance-these-4-common-debts-before-year-ends">Refinance These 4 Common Debts Before Year Ends</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/prioritize-these-5-bills-when-youre-short-on-cash">Prioritize These 5 Bills When You&#039;re Short on Cash</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-personal-finance-calculators-everyone-should-use">15 Personal Finance Calculators Everyone Should Use</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-it-ever-okay-to-cosign-a-loan">Is It Ever Okay to Cosign a Loan?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-paying-off-student-loans-early-can-boost-your-finances">7 Ways Paying Off Student Loans Early Can Boost Your Finances</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management beneficiaries death estate planning federal trade commission loans mortgages spouses student loans survivors Thu, 28 Jul 2016 10:30:09 +0000 Damian Davila 1760584 at http://www.wisebread.com All the Ways Minimum Payments Are Evil http://www.wisebread.com/all-the-ways-minimum-payments-are-evil <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/all-the-ways-minimum-payments-are-evil" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_laptop_credit_card_88164697.jpg" alt="Man learning ways minimum payments are evil" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Anyone who has a credit card is familiar with minimum payments. Most credit cards don't require cardholders to pay off their balances in full every month, but they <em>do</em> require cardholders to pay some minimum amount. This can be as low as 2% to 3% of the outstanding balance, or a minimum of $25 or $35 &mdash; whichever is higher.</p> <p>While paying the minimum technically keeps your account in good standing, there are negative consequences to this decision. Here are five reasons why minimum payments are evil and should be avoided.</p> <h2>They Keep You in Debt</h2> <p>Minimum payments may keep your credit card bills affordable, but you have to consider the big picture. In the end, minimum payments don't benefit your bottom line &mdash; they benefit your credit card company.</p> <p>The truth is, minimum payments are a sneaky trick designed to keep you a slave to credit card debt. The longer you keep a balance on your cards, the more money your creditors earns off you. If you only pay your minimums every month, you'll carry your balances for years to come. For example, if you have a credit card with a $2,000 balance and 17% interest rate, and you only make minimum payments each month (2% of your balance), it will take you <em>over 21 years</em> to pay it off. You'd have paid over $3500 in interest alone &mdash; and that's if you don't put additional purchases on the card.</p> <p>That may seem like a shock, but that's exactly why the minimum payment schedule was designed. Because they're taking a <em>percentage</em> of your balance, every month, the minimum payment required goes down. That does two things &mdash; encourages you to pay <em>less</em> so that you keep the balance longer, and it also tricks you into thinking that you're actually making progress paying off your debt. If you see that your payments are getting lower, you feel like your debt is getting smaller too. But you're actually hardly chipping away at the debt at all.</p> <p>If on the other hand, you pay $50 per month, it will take you five years to pay it off, with about $970 in interest. That's a huge difference compared to 21 years and $3500 in interest. Every little bit of extra you can put into your credit card debt will significantly cut down on your repayment time.</p> <p>If you can make reasonable plan and keep to your budget, a <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">balance transfer will put a pause on interest payments</a> and help you <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">pay off debt faster</a>.</p> <h2>Purchases Become More Expensive</h2> <p>Credit cards might be convenient, but they're also costly &mdash; and unfortunately, if you carry a balance from month-to-month and only make the minimum payment, you end up spending much more for every purchase made with the card. And once you leave a balance on your card, the grace period disappears and you immediately start accruing interest the moment you make your purchase. Grace periods are only active if there is no outstanding balance. (See also: <a href="http://www.wisebread.com/everything-you-didn-t-understand-about-credit-card-interest-grace-periods-and-penalty-aprs?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=cc_article">Everything You Didn't Know About Credit Card Interest and Grace Periods</a>)</p> <p>If you have to make a large purchase, you can get a card with a <a href="http://www.wisebread.com/5-best-credit-cards-with-0-apr-for-purchases?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">0% introductory APR on purchases</a>. For a certain period, no interest is charged on your outstanding balance. This gives you time to pay off the purchase without interest. However, once the intro period is over, the regular APR will kick in. It's important to only use that opportunity if you know you can pay off the balance during the introductory APR time period.</p> <h2>Your Credit Score Can Suffer</h2> <p>In my younger days, I thought as long as I paid my minimum payments on time, my credit score was protected. I was young and dumb and didn't realize how other factors impact credit scoring.</p> <p>Paying only the minimum may not have a direct negative impact on your score, but it doesn't exactly help it, either. A high credit card balance can result in a higher <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">credit utilization ratio</a>, which is the percentage of outstanding debt in comparison to your available credit line. Credit utilization is the second biggest factor making up your credit score, and if your credit card balances exceed 30% of your available credit, your score will take a hit.</p> <p>You can lower your credit utilization ratio &mdash; and subsequently improve your credit score &mdash; by paying more than your minimums every month. Minimum payments are just that &mdash; minimums. Even if you only double or triple your minimum, this will chip away at what you owe and reduce how much you pay in interest significantly.</p> <h2>It Affects Other Areas of Your Financial Life</h2> <p>Paying only the minimum might not seem like a big deal, until you realize how this decision can impact other areas of your financial life. If you're only making your minimum and carrying a high balance on a credit card &mdash; resulting in a lower credit score &mdash; this affects the ability to get other types of financing. If you apply for a mortgage or an auto loan, lenders will take one look at your high balances and low score and consider you a risky applicant. There's a chance you won't qualify for some loans, or the bank might not offer favorable terms.</p> <h2>Minimum Payments Can Increase</h2> <p>Another problem with minimum payments is that they aren't carved in stone. Credit cards are a revolving type of credit account. As your balance goes up, so does the amount you owe. Your minimum payments might be manageable today. But if you continue to charge to your account and don't make any efforts to significantly decrease the balance, your minimum payments can increase. If you're already struggling with your budget just to meet the minimum payments, the most important thing is to sit down and make a <a href="http://www.wisebread.com/5-day-debt-reduction-plan-stop-waiting-for-tomorrow?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">debt repayment plan</a>. Otherwise, you'll be stuck in this cycle of debt for generations.</p> <p><em>Do you pay the minimums on your credit cards?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/all-the-ways-minimum-payments-are-evil">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-surprising-ways-revolving-debt-helps-you">5 Surprising Ways Revolving Debt Helps You</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-scary-facts-about-credit-card-debt">6 Scary Facts About Credit Card Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-dirty-secrets-of-credit-cards">The Dirty Secrets of Credit Cards</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/avoid-these-5-common-mistakes-while-rebuilding-your-credit">Avoid These 5 Common Mistakes While Rebuilding Your Credit</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/best-of-personal-finance-credit-where-credit-is-due-edition">Best of Personal Finance: Credit Where Credit Is Due Edition</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management APR credit score credit utilization ratio interest rates minimum payments Fri, 22 Jul 2016 09:00:05 +0000 Mikey Rox 1756968 at http://www.wisebread.com 7 Money Moves to Make as Soon as You Conquer Debt http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-money-moves-to-make-as-soon-as-you-conquer-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_happy_sunset_79384959.jpg" alt="Woman making moves after conquering debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Congratulations &mdash; you're debt free! Now what?</p> <p>The road to debt elimination was long and treacherous, but just because the black cloud of lingering bills is no longer hanging over your head, that doesn't mean your financial house is in order. It's in better shape, sure, but you've still got a ways to go. To continue working toward that goal, here are a few smart moves you should make as soon as you get out of the red:</p> <h2>1. Rearrange and Trim Your Budget</h2> <p>Your top priority when getting out of debt is to not get back into debt. To accomplish that, you'll need to make changes to your spending and savings habits. You'll also need to revisit your budget and rearrange your priorities. Now that you don't have credit card or loan payments bleeding you dry every month, you'll have more disposable income &mdash; and you need to decide what you'll do with it to improve your quality of life and set yourself up for the future. Cut out anything that's unnecessary: Maybe it's the cable that you don't watch much of, the gym membership you don't use, or subscriptions to services you can live without. Whatever is it, cut the fat and don't look back.</p> <h2>2. Get Back to Building Your Emergency Fund</h2> <p>If you've been digging yourself out of a negative-money pit, chances are you don't have much of an emergency fund &mdash; and that needs to change ASAP. Building an emergency fund is the best way to avoid a potential debt scenario in the future. You'll be able to draw from that account to pay off life's little surprises in full, so you're not constantly treading water every time something unexpected happens.</p> <p>&quot;I recommend having an emergency fund saved up equal to six months' worth of expenses,&quot; says financial planner Russell Robertson of Alidade Wealth Partners in Atlanta, GA. &quot;This will give you time to get back on your feet if something unforeseen happens without completely disrupting everything in your life.&quot;</p> <h2>3. Check in on Your Credit Situation</h2> <p>Brace yourself. If you've been battling debt for an extended period of time &mdash; especially if you've only being sending in minimum payments &mdash; your credit situation is likely less than ideal. The good news, however, is that you're in the clear now (debt-wise, anyway), and this is the best time to <a href="http://www.wisebread.com/what-does-your-credit-score-mean-good-bad-or-excellent?ref=internal">start rebuilding your credit</a>.</p> <p>Having a solid credit score puts you in a strong position when you need to finance a purchase, like a house or car, or apply for a new line of credit. It's always a good idea to know where you stand with credit and take steps to improve it.</p> <h2>4. Max Out Your Matching-Dollar Opportunities for Retirement</h2> <p>Like your emergency fund, contributions to your 401K and IRA were probably low (or perhaps even nonexistent) while you concentrated on paying down your debt. With more funds freed up now, it's important to start concentrating on your future &mdash; especially your retirement goals &mdash; and that includes maxing out dollar-matching opportunities to take full advantage of free money.</p> <p>&quot;401K plans in 2016 have a contribution limit of $18,000 a year, plus an extra $6,000 for people over 50, so with no debt to pay, you might have the opportunity to reach that limit now,&quot; says financial planner and investment adviser Jaycob Arbogast of Arbogast Advisers. &quot;Similarly, an IRA has a $5,500 limit for people under 50 and a $6,500 limit for people 50-plus, so maxing out those plans might be a good idea too. For example, with a 6% return, adding an extra $5,000 each year to your retirement savings from age 50 to 60 could add an additional $65,000 to your retirement savings. That's a great boost that someone in debt might not be able to maintain.&quot;</p> <h2>5. Start Investing With Long-Term Returns in Mind</h2> <p>Personally, I recommend investing in real estate, but what you invest in is up to you, so long as you're investing. Outside of your emergency fund, your money should never sit in a savings account earning fractions of pennies. Instead, you'll be better off putting that money in places that promise bigger returns over the long term, so you can meet your savings goals sooner and continue making more investments for (hopefully) a more prosperous life.</p> <p>Alternatively, Robertson recommends the stock market.</p> <p>&quot;If your budget still has room for more saving, put that money to work by investing in the markets,&quot; he advises. &quot;Exchange-traded funds (ETFs) are a great way to get diversified, low-cost exposure, and many online brokerages will offer commission-free ETF options as well.&quot;</p> <h2>6. Put Money Back Into the Investments You Already Have &mdash; Like Your Home</h2> <p>For many people, their homes are their biggest investments. To ensure that investment pays off the way you want and need it to, you have to maintain it. Thus, when you've paid off your debt, start thinking about home improvement projects that will increase value. Just be careful that you're not taking on projects that cost more than the house is worth. The last thing you need is to dump your savings into your home if the project doesn't enhance the house enough to make it worthwhile in the long run.</p> <h2>7. Open a Money Market Account for Higher Interest on Savings</h2> <p>If you have a substantial amount of savings in your emergency fund &mdash; and you should &mdash; that money shouldn't be in a traditional savings account. Contact your bank, or research others, to find savings accounts that offer the best interest rates, like money market accounts or high yield savings. Bottom line, there's absolutely no reason you shouldn't be getting the most bank for your buck, especially where savings are concerned.</p> <p>Robertson agrees, and in this particular case, rescinds his recommendation to invest in stocks.</p> <p>&quot;If there is something specific you are saving up for &mdash; a celebratory trip to Europe? A wedding? &mdash; within the next two to three years, I would recommend keeping that money out of the stock market,&quot; he says. &quot;Instead, consider a money market account or CD from an online bank. In many cases you can get close to 1% interest right now on cash that is still guaranteed up to FDIC limits (currently $250,000). In fact, this is a good idea for that emergency fund as well &mdash; something that earns interest and is separate from your everyday checking account.&quot;</p> <p><em>What else should the newly debt-free do with their money?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-before-you-start-investing">8 Money Moves to Make Before You Start Investing</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-biggest-myths-about-investing">The 10 Biggest Myths About Investing</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-pay-down-debt-first-or-invest">Should You Pay Down Debt First or Invest?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-reasons-you-shouldnt-invest-like-warren-buffett">7 Reasons You Shouldn&#039;t Invest Like Warren Buffett</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-important-things-to-know-about-your-401k-and-ira-in-2016">5 Important Things to Know About Your 401K and IRA in 2016</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Debt Management Investment 401k advice credit score emergency funds ETFs home improvements IRA money moves retirement stock market Fri, 15 Jul 2016 09:00:17 +0000 Mikey Rox 1752364 at http://www.wisebread.com The Key to Debt Reduction May Be a Simple Picture http://www.wisebread.com/the-key-to-debt-reduction-may-be-a-simple-picture <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-key-to-debt-reduction-may-be-a-simple-picture" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_art_drawing_92715063.jpg" alt="Woman using simple picture to reduce debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you do a quick Google search for &quot;debt art,&quot; you'll be either confused or underwhelmed. It's likely you'll find articles on artists accumulating or <a href="http://www.wisebread.com/5-things-debt-collectors-dont-want-you-to-know" target="_blank">dealing with debt</a>. But, there is another type of debt art that you need to know about. Not only can it help you pay off debt more quickly, or reach a financial goal, but it can brighten up your environment with something that represents a real personal success story.</p> <h2>First Thing's First &mdash; What Is Debt Art?</h2> <p>Quite simply, debt art is a piece of art that helps you reach a financial goal in a creative way. Whatever the goal is, be it eliminating credit card debt, a student loan, saving for a vacation, or paying back taxes, debt art removes the hard-edged numbers and spreadsheets and instead lets you visualize, and track, your progress.</p> <h2>How to Create Debt Art</h2> <p>It may sound corny, but the only limit to debt art is your imagination. Of course, people with more artistic flair can really go to town on it, but all you really need to do is find a fun way to track your progress. It's also good to have the debt art in a prime location in your home or office, so that you are reminded daily of your development.</p> <p>The simplest solution is a series of squares that you color in. Each square can represent a set amount that you are putting towards your goal &mdash; say, $50 per square. You want to save $1,000 for a vacation, so you create 20 squares that need to be colored in. As you save each $50, you color in a square. When every square is filled in, congratulations! Debt art has helped you reach your goal.</p> <p>Of course, that's not very interesting. Some people have taken debt art to much more creative extremes. Take, for example, Amy Jones. On her blog, <a href="http://mapyourprogress.com/blog/how-i-paid-off-more-than-26000-in-debt-by-coloring-this-in/">Map Your Progress</a>, she outlines a truly wonderful piece of art that helped her reduce her debts by $26,000!</p> <p>The art was not difficult to create. As you can see, it's a series of swirls, arranged in a kind of floral pattern. At first, the lack of color on the poster looks overwhelming. The goal, to have every $100 swirl filled in, looks like an impossible task.</p> <p>However, slowly but surely, Amy colored in those swirls. The sense of achievement, and the visual indication of reaching a goal, was powerful enough to keep her going. &quot;Coloring in those swirls month after month helped me feel like I was doing something, &quot;she said. &quot;It helped me see that I was making progress toward my goal of zeroing out my credit cards.&quot;</p> <h2>Why Debt Art Works So Well</h2> <p>It's all about breaking down something insurmountable into something very achievable. If you look at a debt like $5,000, it can seem incredibly overwhelming. So much so, that it's easier to forget it, ignore it, or hope it goes away.</p> <p>But, when you split up that $5,000 into more manageable chunks, it suddenly doesn't feel as tough. Instead of $5,000, you're looking at a picture of 200 circles, each one representing $25. How easy is it to color in one of those $25 circles? One leads to two, and three, and before you know it, you've made a $200 dent in that debt.</p> <p>The ability to track progress based on these much more achievable goals means that it's easy to see and make progress quickly. The great thing is, you can customize it to something you believe will work for you. If $25 chunks are too big, try $10, or even $5. You might like the feeling of coloring in several $5 chunks in one day, or week, over one $50 chunk. But as you see the black and white canvas become a rainbow of colors, you are spurred on to achieve your financial goal.</p> <h2>Ideas for Your Own Debt Art</h2> <p>You don't have to have artistic abilities or flair to create something that will be both fun to look at, and easy to track. Here are some ideas to get you started:</p> <ul> <li><strong>Bricks in a Wall</strong> &mdash; You can print out a simple brick pattern from a Google search, and then use it to create a building or tower. Each brick can represent a specific sum of money.<br /> &nbsp;</li> <li><strong>Legos</strong> &mdash; Here, you don't need to draw anything. And you can approach this piece of debt art in two ways. Either build something up, or knock it down. Each Lego brick can represent a sum of money, and you can either add to a tower, or remove a brick (perhaps revealing something behind it&hellip;an image of something you're saving for is one fun example).<br /> &nbsp;</li> <li><strong>Circles</strong> &mdash; Draw a series of circles until you have covered the page. You could have different sized circles for different amounts (big circles = $50, small circles = $20). When all the circles are filled in, you have reached your goal.<br /> &nbsp;</li> <li><strong>Coloring Books</strong> &mdash; If you really feel put off by the idea of creating your own art, why not find a coloring page from a book and have it enlarged? These <a href="http://amzn.to/29IGiYh">adult coloring books</a> are all the rage right now. Find a pattern that easily translates to something that can be used to track finances, and print it out poster-sized.<br /> &nbsp;</li> <li><strong>Ask the Kids </strong>&mdash; Kids of all ages love creating and coloring. If you want something that you can have as a keepsake after, ask the kids to draw something that you can fill in every week. Maybe they will draw a bunch of happy faces, cats, trucks, or fruit. They can help you color it in, too, giving you something that has meaning beyond the monetary success story.<br /> &nbsp;</li> <li><strong>Use Amy's Debt Art Maps</strong> &mdash; Amy has some available for <a href="http://mapyourprogress.com/fancy-prints/">purchase at her site</a>. They come in a variety of sizes and shapes.</li> </ul> <p><em>Have you used art to motivate you to reach a goal?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/the-key-to-debt-reduction-may-be-a-simple-picture">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-prevent-a-debt-spiral">5 Ways to Prevent a Debt Spiral</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off">5-Day Debt Reduction Plan: Pay It Off</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-financial-decisions-youll-never-regret">8 Financial Decisions You&#039;ll Never Regret</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-live-on-12-000-a-year">How to live on $12,000 a year</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/try-these-6-money-saving-challenges-now">Try These 6 Money-Saving Challenges Now</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management coloring creativity debt art drawing goals saving money Tue, 12 Jul 2016 10:30:07 +0000 Paul Michael 1749902 at http://www.wisebread.com Avoid These 5 Common Mistakes While Rebuilding Your Credit http://www.wisebread.com/avoid-these-5-common-mistakes-while-rebuilding-your-credit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/avoid-these-5-common-mistakes-while-rebuilding-your-credit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/holding_credit_cards_79349747.jpg" alt="Learning to avoid common mistakes while rebuilding credit" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know your three-digit credit score is terrible. And this makes it difficult to qualify for auto loans, a mortgage, or credit cards. Even if you do qualify, you're hit with sky-high interest rates.</p> <p>Still, you <em>can&nbsp;</em><a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">rebuild your credit score</a>. It just takes time. Pay your bills on time every month. Pay off as much credit card debt as you can. Eventually, your score will rise.</p> <p>Just avoid these five common mistakes that consumers often make when rebuilding their credit.</p> <h2>1. Closing Paid-Off Credit Cards</h2> <p>Paying off a credit card is cause for celebration. Just don't cancel that card once you hit a zero balance. If you do, your credit score will take a hit. This is because of something called your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">credit-utilization ratio</a>. Basically, your credit score will fall if you use too much of your available credit.</p> <p>Here's an example. Say you have $10,000 worth of credit card debt and three open credit card accounts with a total available credit limit of $15,000. This gives you a credit utilization ratio of 67%. If you pay off one of the cards and bring your debt down to $7,000, your credit utilization ratio falls to 47%. This will boost your credit score. However, if you close that credit card account and lose that available credit (say it was $5,000), your total available credit will drop to $10,000, and your credit utilization ratio jumps to 70%, even higher than when you had $10k of debt but three open accounts.</p> <p>The better move? Keep that paid-off card open, just make sure to avoid running up its balance again.</p> <h2>2. Missing a Payment, Even Once</h2> <p>When rebuilding your credit score, your most important job is to make your monthly payments on time <em>every</em> month. Late or missed payments can send your credit score falling by 100 points. These financial missteps will stay on your credit report for seven years, too.</p> <p>So don't forget to send in that car or credit card payment on time. And if you do miss your due date? Send your payment as quickly as possible. Lenders won't report a payment as missed to the three national credit bureaus until it is 30 days or more past the due date. So even if you missed the official due date, you can still spare your credit score.</p> <h2>3. Swearing Off Credit Cards Forever</h2> <p>It's tempting when you're trying to rebuild your credit to swear off credit cards completely. After all, it's often credit card debt that has gotten consumers into credit score problems. But using a credit card responsibly is actually one way to help improve a credit score. Your score will rise if you pay your credit card bill on time each month. Not using credit cards at all can actually hurt your score.</p> <p>The key, though, is to never charge more than you can afford to pay off in full each month. If you charge too much, you'll simply increase the amount of credit card debt you carry from month to month. This will increase your credit-utilization ratio, thus hurting your score. So do use your card. Just don't use it so much that you have to carry a balance.</p> <p>If you find that you're having trouble getting approved for a credit card because of your bad credit, look for <a href="http://www.wisebread.com/the-5-best-secured-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">secured credit cards</a> which often do not require a credit check.</p> <h2>4. Looking for a Quick Solution</h2> <p>Rebuilding a weak credit score takes time &mdash; lots of it. It might take a year or more of making on-time payments and whittling down your credit card debt to improve your score enough to make you a good risk in the eyes of lenders. Don't make the mistake of trying to rush this process. Many companies claim that they can instantly boost your credit score. Unless there are errors on your credit reports, they can't. There is no quick way to raise an ailing credit score. Any company that tells you otherwise is lying.</p> <h2>5. Not Ordering Your Three Credit Reports</h2> <p>The three national credit bureaus of TransUnion, Equifax, and Experian each maintain a credit report on you. These reports list all the open credit accounts in your name and any missed or late payments in the last seven years. They also list any negative judgments such as foreclosures and bankruptcies in the last seven to 10 years.</p> <p>You are entitled to one free copy of each these reports every year from AnnualCreditReport.com. When rebuilding your credit, it's important to order these reports and to study them. Look for errors. One report might say that you missed a car payment last year that you know you paid on time. Correcting that error could provide an <a href="http://www.wisebread.com/7-ways-to-increase-your-credit-score-quickly?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">immediate boost to your credit score</a>.</p> <p><em>Have you improved your credit? What steps did you take?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/avoid-these-5-common-mistakes-while-rebuilding-your-credit">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/building-a-credit-history">Building a Credit History</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score">This One Ratio Is the Key to a Good Credit Score</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/stop-dont-cut-up-your-credit-cards">Stop! Don&#039;t Cut Up Your Credit Cards</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-credit-card-truths-you-wish-you-could-tell-your-younger-self">10 Credit Card Truths You Wish You Could Tell Your Younger Self</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/your-bad-credit-isnt-the-end-of-the-world">Your Bad Credit Isn&#039;t the End of the World</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards Debt Management credit history credit reports credit score credit utilization ratio debt paying bills rebuilding credit Fri, 08 Jul 2016 10:30:10 +0000 Dan Rafter 1747445 at http://www.wisebread.com 5 Careers That Offer Student Loan Forgiveness http://www.wisebread.com/5-careers-that-offer-student-loan-forgiveness <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-careers-that-offer-student-loan-forgiveness" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_69856403_XLARGE.jpg" alt="looking for a job with student loan forgiveness" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you are like millions of other graduates, you might've experienced sticker shock when you received your first student loan bill after graduation. While taking out a student loan to complete your degree seemed like a good plan at the time, you might be having some regrets when faced with the monthly payments.</p> <p>Thankfully, there are a lot of careers that offer student loan forgiveness. Look into one of these fields to kiss your student debt goodbye.</p> <h2>1. Public Service</h2> <p>Federal Perkins loans can be forgiven if an individual qualifies through full-time employment and has not consolidated their loans. The loan forgiveness is not based on what job you do, but who you work for.<a href="https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service"> Qualifying employers</a> include:</p> <ul> <li>Government organizations at any level (federal, state, local, or tribal);</li> <li>Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code;</li> <li>Full-time positions at AmeriCorps and Peace Corps.</li> </ul> <h2>2. Doctor</h2> <p>It is hard to feel like a successful doctor when the majority of your paycheck goes to your student loan repayment. Thankfully, you can find a list of scholarships and Federal loan forgiveness programs through the&nbsp;<a href="https://services.aamc.org/fed_loan_pub/index.cfm?fuseaction=public.welcome&amp;CFID=1&amp;CFTOKEN=D3ADCE60-B544-6679-82EB218E8D3F6455">Associations of American Medical Colleges</a>.</p> <p>Many of the loan forgiveness programs for doctors require employment in a Health Profession Shortage Areas (HPSA) or a Medically Underserved Area.</p> <p>The&nbsp;<a href="https://www.lrp.nih.gov/">National Institutes of Health (NIH)</a> offers up to $35,000 per year in loan repayment for highly qualified health professionals going into biomedical or biobehavioral research careers.</p> <p>You can also take your stethoscope overseas and qualify for loan forgiveness through the military service. The&nbsp;<a href="http://www.navy.com/careers/healthcare/medicine.html#ft-education-opportunities">Navy Financial Assistance Program</a> offers tuition coverage for current medical students, as well as student loan forgiveness or grants for those with their medical degree.</p> <p>See:&nbsp;<a href="http://www.wisebread.com/8-tax-tricks-to-try-if-youre-stuck-with-student-loans?ref=seealso">8 Tax Tricks to Try if You're Stuck With Student Loans</a></p> <h2>3. Teacher</h2> <p>Teaching is a calling, and many people feel the call to instruct the next generation. So it's only fair that the government helps lighten the debt load of those devoted to teach. Teachers can gain loan forgiveness through the same public service loan forgiveness programs mentioned above.</p> <p>Teachers also can qualify for the Federal Teacher Cancellation for Perkins Loans. For teachers with a Perkins loan, 15% of your loan can be canceled when you teach for one year in a low-income area. If you teach for five years, your full loan will be forgiven.</p> <p>Be sure to check with your state to see what special teacher loan repayment programs there are. Here are just a few:</p> <ul> <li><strong>California:</strong> <a href="http://www.csac.ca.gov/doc.asp?id=111">APLE</a></li> <li><strong>Maine:</strong> <a href="http://www.famemaine.com/files/Pages/education/borrowers/Maine_Loan_Programs.aspx">Educators for Maine</a></li> <li><strong>Iowa:</strong> <a href="http://www.iowacollegeaid.gov/content/iowa-teacher-loan-forgiveness-program">Teach Iowa Scholar Program</a></li> <li><strong>New York:</strong> <a href="http://www.teachnycprograms.net/">Teach NYC </a></li> <li><strong>Texas:</strong> <a href="http://www.hhloans.com/index.cfm?objectid=a85b6795-9731-b000-c93ca1848b604db8">Teach for Texas</a></li> <li><strong>Mississippi:</strong> <a href="http://riseupms.com/state-aid/mtlr/">Mississippi Teacher Loan Repayment Program</a></li> </ul> <h2>4. Lawyer</h2> <p>Tempted by earning big figures down the road, many potential lawyers take on huge amounts of debt to make their career dream come true. Luckily, there are a few student loan forgiveness programs available just for lawyers.</p> <ul> <li><strong>Attorney Student Loan Repayment Program</strong>: In order to retain lawyers in the field, current employees are able to apply for the assistance program. Only certain loans apply, and current employees must have at least $10,000 in federal loan debt to qualify. To see which loans qualify, visit&nbsp;<a href="https://www.justice.gov/oarm/frequently-asked-questions-0#c">Justice.gov</a> for more information.</li> <li><strong>John R. Justice Student Loan Repayment Program</strong>: For lawyers working in the public sector, the&nbsp;<a href="https://www.bja.gov/Funding/JRJStateAgencies.pdf">John R. Justice Student Loan Repayment Program</a> offers $10,000 to $60,000 in loan forgiveness to eligible lawyers working as public defenders.</li> <li><strong>Herbert S. Garten Loan Repayment Assistance Program</strong>: This program awards 70 attorneys up to $5,600 in award money each year for student loan debt. This award comes with more strings than the other two. Eligible candidates must be employed by one of the&nbsp;<a href="http://www.lsc.gov/grants-grantee-resources/our-grantees">program's grantees</a> and have at least $75,000 in outstanding loan debt.</li> </ul> <h2>5. Dentist</h2> <p>Future dentists, here is something to smile about. You can also qualify for loan forgiveness on either the national or state level.</p> <p>National programs include service with the military. The Army offers the&nbsp;<a href="http://www.goarmy.com/amedd/dental/corps_benefits.jsp">Active Duty Health Profession Loan Repayment Program</a> (ADHPLRP) and the Healthcare Professionals Loan Repayment Program (HPLR). The Airforce offers Air Force Active Duty Health Professions Repayment Program (ADHPLRP). All of these programs offer up to $40,000 to $50,000 in debt repayment per year. Research each individual program to know about maximum caps, eligibility criteria, and other benefits.</p> <p>And the&nbsp;<a href="http://www.ada.org/~/media/ADA/Education%20and%20Careers/Files/dental-student-loan-repayment-resource.pdf">American Dental Association</a> has a full list of state-level programs that offer loan forgiveness.</p> <h2>Finding and Qualifying for Student Loan Forgiveness Programs</h2> <p>It's important to note that many of these careers cannot grant student loan forgiveness if your loan does not qualify. This means that if your loan is in default or in a grace period, or you are still attending school, companies may not be able to make qualified loan payments. Also, most student loan forgiveness programs are for federal loans only, and private student loans will not be forgiven. Finally, inquire with your college or university's financial aid department for more available loan forgiveness programs.</p> <p><em>Are you planning on using loan forgiveness for your student loans? Share with us!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/5-careers-that-offer-student-loan-forgiveness">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. 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