If you have bad credit and find yourself in a pinch, you might think that you can’t get a loan. While it is more challenging to get a loan with bad credit and even harder to get a good rate, you have options. Here is everything you need to know about what loans you can …
Collection accounts can be stressful, but you can bounce back. Learn how to handle collection accounts and improve your financial picture.
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Student loans are a big reason why so many people cannot get ahead financially.
With large monthly payments for years to come, many are finding it tough to get by.
And recent studies have shown the scary statistics of student loan debt as the fastest growing debt!
If you are struggling with your student loans, you are looking for help.
Fortunately, there are things you can do to pay off your student loans faster than you think.
And many of these things you can start doing today.
If you are willing to take action, you will begin to see the amount of student debt you owe drop.
And in some cases, you will even free up money every month.
Here are 12 creative ways to pay off student loans starting today.
12 Smart Tips To Pay Off Student Loans
Before you can try to use any of these tips to help you with your debt, you first have to know one thing.
Are your student loans federal student loans or private student loans?
This is important as there are different programs for each.
While this does make the job of paying off your debt a little harder, in the end, knowing this upfront will save you many headaches later on.
#1. Ask For Employer Help
One of the smartest options for how to tackle student loans is through your employer.
Many employers are now offering this as a benefit just like with retirement contributions and health insurance.
The most common way this works is each year you are employed, your employer will give you money to put towards your loans.
Another method is through matching contributions.
Here your employer will match what you pay, up to a certain amount.
Of course, each employer is different, so be sure to ask about the details.
And if you are negotiating a salary, try to work this option in to the deal.
While it would be great to have a larger salary, knowing that you have help with your student debt will take away a lot of stress.
#2. Public Service Forgiveness
If you are employed in the public sector, there are student loan forgiveness programs you can and should take advantage of.
Teaches, health care workers, police officers, and firefighters are examples.
Each program has its own requirements, so be sure to read through everything carefully.
Here is a short list of the most popular student loan forgiveness programs.
Note that many of these apply only to federal loans.
- Teacher Loan Forgiveness Program
- Public Service Loan Forgiveness:
- Perkins Loan cancellation and discharge
- John R. Justice Student Loan Repayment Program
- Faculty Loan Repayment Program (FLRP)
- Indian Health Services Loan Repayment Program
- National Health Service Corps
- National Institutes of Health (NIH) Loan Forgiveness
- NURSE Corps Loan Repayment Program
Additionally, each state has their own programs to help with student debt.
Here is a link to a breakdown by state for you to look into.
Be sure to research for other programs as well, as you may qualify for more than one.
#3. Consolidate Your Loans
If you have more than one student loan, you can consolidate them into one loan.
Doing this make repayments easier since you will only have one payment to make each month as opposed to many.
When it comes to saving money with consolidation loans, you have a few options.
You can choose to change the repayment period to a shorter or longer term.
A shorter repayment term means your monthly payment will be higher, but you will save on interest.
A longer repayment term means your monthly payment amount will be lower, but you will pay more interest in total.
Of course, there is a chance where you get a low interest rate that both shortens the period and saves on interest.
Your first choice should be to contact your lender to see if they are open to consolidation.
Even if they are, your next choice should be Credible.
They will give you free quotes from up to 10 lenders. This will allow you to compare the best offer for you.
Click the button below to see how much money you can save with Credible.
Another option is to refinance your student loan debt.
Doing this gets you a lower interest rate than you are paying now, saving you money.
As with consolidation, your first choice should be with your lender to see what they offer.
From there, check with Credible to make sure the offer is competitive.
The interest rate you qualify for depends on your credit score.
So make sure you have taken the steps to improve your credit first.
It’s easy to do, and something that can save you thousands in interest on your student loans.
#5. Pay Ahead
If you are still in school, consider making payments on your debt now.
Most student loans don’t start accruing interest until after you graduate.
By making payments now, you will have a smaller loan balance when interest starts accruing.
As a result, you will pay less interest in total.
Of course, you need to make sure you understand the terms of your loan.
In some cases, paying early like this will end any grace period after you graduate.
If you are not in school, you can still pre-pay.
Just make larger than the minimum payment. This will ensure you save money in interest.
#6. Pay Strategically
If you have a lot of loans, don’t just make one payment every month.
Take the time to review each loan.
What is the minimum monthly balance due? What is the total balance? What is the interest rate?
Knowing this information will help you to make a plan to reduce your student loan debt faster.
For example, you can pay the minimum on the larger debts and put extra money towards the smaller debt.
This will help you to get rid of your student loan fast and free money up for the remaining loans.
#7. Public Service Loan Forgiveness
As I mentioned earlier in this post, some public service jobs allow for loan forgiveness.
It works by having a full time job for a certain number of years.
After you meet those criteria, you student loan will be forgiven after a period of time.
Usually, the time frame is 10 years.
And during this time, you are making regular payments on your debt.
Also note that not all student loans qualify for loan forgiveness, so make sure yours is eligible.
If you don’t work in a public service job, you can still have your student loans forgiven.
For example, you can volunteer with Peace Corps or Americorps.
After you complete your term of service, you use the stipend towards your student loan debt.
While most people won’t be able to pay off their student loans this way, it is a way to pay off a few thousand dollars.
#8. Sign Up For Auto Pay
Many borrowers are finding it hard to make their monthly payments on time.
This is a serious issue for the private student loan companies since they use the monthly payments to run their business.
As a result, they started to offer discounts if you sign up for auto pay.
By signing up for this service, your lender will withdraw your monthly payment on the date you choose.
You benefit by earning a small discount in your interest rate, usually 0.25%
Another benefit is you are never late on a payment, which increases your credit score over time.
Finally, you never have to remember to make a payment, since it is made for you.
The issue though is many people don’t see the benefit in the 0.25% interest rate reduction.
Let’s say you have $50,000 in student loans at 5% interest and are repaying them for 20 years.
You would pay over $29,000 in interest.
With the 0.25% interest rate reduction, you will would pay a little more than $27,000 in interest.
By signing up for auto pay, you would save close to $2,000 in interest.
Be sure to reach out to your loan servicer to see if this option is available to you.
#9. Find Ways To Pay Extra
At the end of the day, the more money you can put towards your student loans, the sooner you will be debt free.
The challenge is to find out how to pay extra on your loans.
There are a few tricks I’ve used and others have used to help.
First is credit cards.
Sign up for a cash back credit card and use it for your everyday spending.
When you do this, you will earn cash back.
At the end of the year, use your cash back balance to pay your monthly statement.
Then take the money you would have paid your bill and put it towards your student loans.
For example, let’s say you have $1,000 in cash back and your monthly credit card bill is $1,500.
You would take your cash back balance and apply it towards your bill, leaving you with just a $500 payment.
You would then take the $1,000 from your bank account and pay your student loans instead.
Another option is to use Qoins.
This is an app that helps you pay down your student loans and other debt you have.
Simply create a free account and link your credit and debit cards.
When you make a purchase, Qoins will round up the total and transfer the difference to a savings account.
When your balance reaches a certain amount, Qoins will use the money and pay your student loan.
Qoins users have paid off over $4 million in student loan debt using their service.
And the average user pays an extra $600 a year on their debt.
Click on the button below to get started!
The best trick though is to use both, Qoins and a cash back credit card together.
Doing this gets you the best of both worlds.
Let’s look at an example.
You have $50,000 of student loan debt at 5% interest and are paying it back over 20 years.
If you only make the minimum payments, you will pay over $29,000 in interest over those 20 years.
But let’s say you use this strategy and earn $1,000 a year in cash back rewards and pay an extra $600 a year using Qoins.
You pay less than $16,000 in interest and have your student loan paid off 8 years early!
This is a simple trick that saves you close to $15,000 and you need to take advantage of it.
Of course, there are other things you can do as well to get rid of your student loans faster.
For example, take any windfalls like tax refunds and apply a portion of it towards your debt.
Sell things around your house and use the proceeds to pay down your debt.
The bottom line is, anything you can do to pay extra on your student loan debt will help you get rid of them.
#10. Pick A Different Repayment Plan
If your monthly payments are too high, the federal student loan repayment program offers different repayment plans.
While these won’t save you money, they will make the burden of paying your debt easier.
Some of the most popular repayment plans include:
- Income Based Repayment (IBR)
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
- Income Contingent Repayment (ICR)
While each one is different, they all work by adjusting your payment based on your income.
This allows you make your monthly payment and still have money left over to survive.
But these aren’t the only repayment plans.
Private lenders offer different types of loan assistance as well.
One of the most popular private student loan repayment plans is income driven repayment.
Here your monthly payment is based on your monthly income.
At the end of the day, your best option is to contact your lender and explain you need help making payments.
They will run through all the various programs to help you out.
#11. Apply For Deferment Or Forbearance
Another option that will help with the burden of student loans is deferment and forbearance.
They both work by allowing you to pause or reduce your monthly payments for a period of time.
People who apply for these programs are going through a financial hardship and need help.
Some examples include unemployment, high medical expenses, military deployment, changing jobs, and more.
To apply for these programs, you need to reach out to your student loan provider.
#12. Student Loan Discharge
Finally, there are circumstances where you have your student debt discharged.
For example, death or total and permanent disability are two situations.
But there are others.
If your school closed while you were attending and you were unable to complete your degree, you can apply for discharge.
The same is true if you drop of college.
The catch in both scenarios is you need to apply within 90 days of the event happening.
You can read more about this here.
How To Pay Off Student Loans In 5 Years
If you have to know how to pay off your student loans in 5 years, here is your plan.
I’ll use the average student loan amount of $32,731 at an interest rate of 4%.
On a 10 year repayment plan, the monthly payment is $331 and you will pay $7,035 in interest.
In order to pay off the debt in 5 years, you need to pay an extra $275 a month.
This will save us $3,621 in interest and free up the $331 we were putting towards our debt for the next 5 years.
So how do we do this?
Let’s assume there are no forgiveness programs that we qualify for and we are not interested in refinancing.
If we sign up for Qoins, we can expect to pay an additional $600 a year or $50 a month.
That leaves us with $225 to come up with.
If we review our budget, we see we can make a few small sacrifices and free up another $50 a month.
That means we still need $175 a month.
Here is where side gigs come into play.
Understand I am not suggesting you work a second job.
But you could do some smaller gigs here and there to come up with the money.
For example, you could take surveys. This would get you close to $100 a month.
You could deliver meals on the weekends for another $100 a month.
Just these options will cover your additional payment and have you debt free in 5 years.
The choice is yours.
There is not magic bullet that will work for everyone.
Read through the list again and try everything that applies to you, and then start taking action.
With a little work, you should be able to pay off your debt in 5 years.
There are many things you can do to lower the weight of your student loans.
There is no magic bullet that will wipe out your debt overnight.
However these tips show you how to pay off your student loans and save money.
By far the best option is to use free money to put towards your debt.
This includes having your employer help pay off your loans, qualifying for a forgiveness program, or using credit card rewards.
Aside from that, refinancing is your next best option.
Using these tricks will save you thousands in interest and allow you to pay off your student loans early.
At the end of the day, taking action is the only way you will get rid of your student loans.
Reading this post was your first step.
Now it is time to take the next step and start applying this information so you can pay off your student loans.
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In the last year, over 83 million people have taken out personal loans to finance everything from cars to general bills. Thousands of reasons may compel someone to take out a loan.
But what are the personal loan requirements for someone to get this funding? Use this guide to learn how to qualify for money you need when your bank account is running low.
Good Credit Score
If you’re not familiar with what a credit score is, then it’s a number used to determine your creditworthiness or ability to pay back borrowed money.
This number is calculated by major credit reporting bureaus who receive data about how much money you borrow and if you’re paying it back on time. A good credit score will allow you to rent, borrow money, and even get a job.
Keep your credit score above 650 to qualify for excellent rates.
Pay Your Bills On Time
Staying current on all bills and financial obligations will ensure your credit score continues to rise. If possible, try and pay a little extra every month.
If you have student loans, car payments, or a mortgage, then make sure you are making payments in the full amounts every due date. Failing to do so will hurt your credit score and result in interest and fees.
Job Stability is Crucial for Personal Loan Requirements
A lending institution wants to see a steady income over the course of a few years. They want to know if you will be able to pay all debts for the term of the loan.
Having the same job with regular wage increases is a great way to show you are a dependable person who has the potential to make more money.
Even if a person has a great job, “job hopping” may scare off a lender. Stay at your current place of employment for a few years to have the longevity required.
Do Some Shopping
Every institution will have different rates, conditions, and terms depending on your credit score and situation. If you want to take out a large amount, the terms will be vastly different than a smaller amount.
As you shop around for the best rates, take the time to get prequalified for a loan. This process will take a deeper look into your financial history to help you figure out how much money you could get.
An institution may ask for some of the following information:
- Current address
- Social security number
This information will be used to run a light credit check on you (it won’t affect your score). You can learn more from captaincash.ca about this process.
Get the Funding You Need
Whatever your reasons for a personal loan, get the funding you need by having the right qualifications. Personal loan requirements are in place to make sure you don’t borrow more money than you can payback.
Don’t let your empty bank account be the only reason you couldn’t pay for the things you need.
For more articles about personal finance, please keep scrolling our blog.
The post Personal Loan Requirements: How to Qualify for a Personal Loan appeared first on brokeGIRLrich.
There might come a time when the roles are reversed and you will have to help care for your parents. It could mean financial support if they didn’t save enough for retirement. Or caregiving if a health issue leaves them unable to care for themselves. They might even become victims of fraud as they age and become more vulnerable.
Regardless of the reason, you need to be prepared. You’ll want to make sure that all the proper legal documents are in place. This will allow you to make financial and health care decisions and deal with emergencies if they arise.
Why You Need to Talk to Parents about Their Finances
According to a survey by GOBankingRates, 73% of adult children haven’t had detailed conversations with their parents about their parents’ finances. But being able to help your parents start with these conversations.
More than half said they don’t think these conversations need to happen until their parents retire, start to have health issues, show signs they need help, or actually ask for help. And 22% said they don’t think they should ever discuss their parents’ finances because it’s none of their business.
It’s understandable why adult children are reluctant to talk to their parents about their parents’ finances. After all, money can be a taboo topic. But older adults are facing a host of issues that could force their children to become actively involved in their financial lives.
For example, almost half of adults ages 56 to 72 haven’t saved anything for retirement, according to an Insured Retirement Institute study. Although most parents don’t want to be a burden on their kids, they might have no choice but to ask for some financial support from their children.
Also, the risk of developing chronic health conditions increases as people age – which could lead to increased medical costs and a need for support from family members.
As people age, they’re more likely to need long-term care. In fact, most Americans turning 65 will need long-term care at some point, according to the Department of Health and Human Services.
All of this means that a growing number of children might have to help provide support for their parents but might not be prepared to do so if they haven’t had essential financial conversations.
Waiting to talk to your parents until they’re having problems can leave you with fewer options to help them. Conversations will be more emotionally charged. And it might be impossible to gain access to parents’ accounts or make health care decisions for them without lengthy, expensive court proceedings.
How to Start the Conversation
You may be feeling like your parents will think you’re being nosy or greedy. Or you might be worried that they’ll get mad and your relationship will be damaged.
Most likely, your parents won’t think any of those things. Let them know you want to talk to them because you’re looking out for their best interests. If you approach the conversation out of love and respect and use one of these strategies, they may start talking.
Ask for advice: If you’re young and just starting out, a natural way to get a conversation started with your parents is to ask for advice about your financial situation. The goal is to get your parents to open up about the financial and estate planning they have done.
Ask about ‘what if’ scenarios: A key reason to talk to your parents about their finances is to be prepared for emergencies. You could ask how their bills would be paid if, say, they were in the hospital for awhile. This could lead to a conversation about making sure there’s a system in place to handle emergency situations.
Use a story: Tell your parents about someone you know who has had to get involved with their parents’ financial lives.
For example, maybe you have a friend whose parent died without a will. This could lead to discussions about the importance of having a will and other legal documents such as power of attorney.
Don’t make the conversation about money: If money is a taboo topic in your family, don’t start the conversation by asking about details of their finances. Instead, try to get your parents talking about big-picture topics, such as what they hope their retirement will be like.
Take a direct approach: No need to beat around the bush if you have a good relationship with your parents and money isn’t a taboo topic.
You could simply say, “Mom and Dad, you took good care of me while I was growing up. I want to be able to do the same if you ever need help from me. Yes, I understand that your finances might not be any of my business right now. But if something were to happen to you, it might become my business. That’s why I’d like to get some information from you.”
Make Siblings Part of the Conversation
Before you start talking to your parents, you should talk to your siblings. Why? You don’t want your siblings to resent you or think you have ulterior motives.
Call a family meeting to let your siblings know that you think it’s important to have a conversation with your parents about their finances. You can discuss whether one or all of you will be part of the conversation. You also should decide how to start the conversation and when to do it.
A word of caution: A holiday meal is not the right time to start talking to parents about their finances.
There could be people there who don’t need to be a part of the conversation. If someone has had too much wine, the conversation could go downhill real fast. And some family gatherings are tense already. So the last thing you want to do is start talking about money to turn up the tension.
Instead, try to find a neutral time where tensions won’t be as high.
What to Know About Your Parents’ Finances
The more details you can gather about your finances, the better. If they’re reluctant to talk, at least try to get a sense of where they stand financially. This will help give you an idea of whether you can expect them to ask you for support as they age.
If they’re willing to share information, start by finding out how they pay their bills. Are they using automatic bill pay or writing checks each month? If it’s the latter, encourage them to set up automatic payments. This way their bills will continue to be paid, even if something were to happen to them.
Then dig a little deeper. If possible get the following information:
- Sources of income
- Where your parents bank and the types of accounts they have
- What types of debt they have
- Type of insurance policies they have and where the policies are stored
- Types of investment accounts they have
- Real estate they own
- Monthly bills that must be paid
- Names and contact information for financial professionals they work with
Other useful information would be:
- Social Security numbers
- usernames and passwords
- medical conditions and history
This will all be necessary if you become a caregiver for a parent.
Even if your parents aren’t ready to talk just yet, at least ask them to make a list of the accounts, insurance policies, and legal documents they have. Ask them to tell you where you could find that list in case of an emergency.
If they are open to this, consider something like the ICE Binder from Smart Money Mamas. It’s a workbook that walks you through everything you’ll need your loved ones to know after you pass. Your parents need one… and you do too.
Make Sure They Have Essential Legal Documents
Even if your parents are reluctant to talk about their finances, at least try to find out whether they have estate planning documents such as:
- a will
- power of attorney
- advance directive
A will spells out who gets what when they die. If they die without one, state law will determine how their assets are distributed.
Even more important than a will, though, are the power of attorney and advance directive documents.
A power of attorney document allows your parents to name someone (or more than one person) to make financial decisions for them if they can’t. Power of attorney is perhaps the most critical document to get right. Unfortunately, it can be confusing because there are a handful of different types and each state has slightly different laws.
An advance directive – also called a living will – spells out what sort of end-of-life medical support they would or would not want. It also allows them to name a health care proxy to make medical decisions for them if they can’t.
They must be competent to sign these documents. If something were to happen to your parents before they can sign, you would have to go through the courts and be appointed by a judge to make these decisions for them.
If your parents may be reluctant to hand over these powers to you right now. If that’s the case, let them know that you don’t have any power unless you have the actual documents in hand. They can keep the documents with them, just be sure you know how to find them in an emergency.
Discuss Long-Term Care
As you gather details from your parents about their finances, find out whether they have a plan to pay for long-term care.
More than half of adults turning age 65 today will develop a disability that requires them to get long-term care, according to the U.S. Department of Health and Human Services.
The cost currently ranges from about $4,000 a month for care from a home health aid or in an assisted living facility to more than $8,000 a month for care in a skilled nursing facility, according to the Genworth Cost of Care Survey.
They can find a long-term care insurance broker through the American Association for Long-Term Care website. Or they can find a financial planner through the Financial Planning Association’s member directory at PlannerSearch.org to create a plan for paying for care.
Protect Parents from Scams
Even if your parents don’t need financial or caregiving support, you still might have to get involved with their finances as they age.
To help protect them, you can take the following steps:
Alert them to scam red flags. Tell them to never wire money or provide their personal information to unsolicited callers. Remind them if it’s too good to be true it is. Such as limited-time offers to get in on money-making opportunities and offers of high-return investments with no risk.
Also, make sure they understand that government agencies such as the IRS, Medicare, or Social Security Administration don’t make phone calls. Government agencies communicate by mail, not phone calls or email. If they get a call from the government suggest that they call you before handing over any money.
Give them a script they can use to hang up on unwanted calls so they don’t feel like they’re being impolite. For example, “I’m sorry. I have a visitor right now.”
Help them avoid telemarketing calls by registering their home and mobile numbers for free with the National Do Not Call Registry at donotcall.gov.
Help them monitor their financial accounts by encouraging them to set up online access so they can check accounts regularly rather than waiting to get a statement once a month.
Also, encourage them to set up alerts on their bank accounts. This can help them spot fraudulent charges quickly.
Help them check their credit reports for lines of credit they didn’t open. This could be a sign that they’re victims of identity theft. They can get free copies of their credit reports at AnnualCreditReport.com.
Remember, the goal is to look out for your parents’ best interests.
It might take time before they feel comfortable sharing information with you. Don’t get frustrated. Be patient and keep trying different approaches until you find the one that works.
This guide was created in partnership with Carefull, a new company building digital services for financial caregivers- those responsible for the day-to-day financial well-being of a loved one.