Rental websites like Vrbo are giving hotels a run for their money. Since the emergence of rental websites, more and more travelers are opting to rent homes when they travel. This is good news for those with an investment property or second home. Renting out your home while away (or maybe your vacation home that you only visit a few times a year), is a great way to gain passive income to pay down debt, fund a home improvement project or save for retirement. In fact, if you live in or near a major city or in a location where popular events happen, you could even earn up to $100,000 renting your home. If your primary home or a vacation home is vacant during the week, here’s everything you need to know about renting your home, with insights from Bill Furlong, VP HomeAway, Americas. Why Rent Out Your Home?In the humblest of estimates, renting your home can provide a little extra cash on the side for savings, but when done right, partners could cover their monthly mortgage payments or even make enough money to pay off their home entirely. Potential EarningsAccording to a study in 2017, Vrbo discovered that their top partners were making over $110,000 renting out their homes1 with over 50% of Vrbo owners using their rental income to cover at least 75% of their mortgage payments.2 They found that the factors that most impacted a rental home’s potential earnings were the location of the rental, the number of beds and baths in the home and the frequency in which the house was on the market to rent. “The frequency with which you are willing to rent out your home is a major driver of rental income,” Furlong explained. To get an idea of you what can expect when renting your home, you can use a rent potential calculator that can give you a preliminary estimate of what you could earn before you list your home or optimize your current listing by comparing it to the local market. Financial Considerations Before You RentEven with the potential to earn enough money to retire early or pay off your mortgage, there are still a few financial aspects you should consider before you rent your home. Local RegulationsDepending on where you live, what type of home you own and how long you plan on renting, there might be legal restrictions for renting your home. If you’re considering renting your home the best thing to do is to check your local municipal or administrative code, usually found on your local government’s website. Some rental services even include a resource to check restrictions for short-term rentals. There’s also the cost of carrying an insurance policy, which is not required but highly recommended when renting your home. Many homeowners insurance policies don’t cover damage sustained as a result of short-term renting, although Furlong mentions that you can add on policies that roll into your existing coverage. “Carrying an insurance policy on your home that covers the activity of renting is very important,” Furlong said. “While damage to your home is highly unlikely, accidents do happen, and it’s never a bad idea to carry insurance for when they do.” There’s also start-up and recurring costs that you need to consider when renting your home. You might already have basic furnishings in your rental, like furniture and appliances, but you should also consider buying amenities that will enhance your guests’ stay (we’ll talk more on that later in the post) like Wi-Fi or cable box. Beyond your recurring mortgage payments, you should also expect monthly utility and internet expenses up front. Additionally, there’s the cost of cleaning fees and replacing certain amenities, like toiletries. Marketing Your Rental HomeThe most profitable rental owners know how to market their home. Even if you’re not living in a high-traffic vacation destination, there are other ways to get your rental on the market. Establishing a Listing AmountFirst, establish a listing amount for your rental. You’ll want to set a reasonable rate that’s competitive with local rentals and enough to make the effort of renting out your home financially worthwhile. Research the cost of comparable rentals in your area. Be sure to find those that have a similar location, number of beds and baths and other amenities. This will give you a better idea of what your home is worth. “By viewing the average nightly rates around your property, you can make more competitive decisions around your listing’s rate per night,” Furlong said. Lastly, if you live in a desirable vacation destination or location that’s popularity varies by season, decide if you want to set pricing based on factors like peak travel times and local events. “You don’t have to live in an expensive vacation spot to see a return on your rental,” Furlong explained. “Take advantage of peak travel times in your area. Does your city have a popular art fair, music festival or annual sporting event that draws visitors from out of town? That’s the perfect opportunity to market your home to travelers.” You’ll want to make sure that the amount you list your rental home also covers the cost of keeping your rental home on the market. If you’re still having trouble determining a listing amount, some rental service websites like Vrbo provide tools that estimate your property’s rental potential. Marking Your Rental HomeOnce you establish a listing amount, it’s time to spread the word about your rental home. The right marketing strategy and the use of Vrbo’s tools such as MarketMaker, can take an average listing to a fully booked vacation hot spot. “At a high level we encourage homeowners to focus on three key things when building their listing to attract the best travelers: headlines and descriptions, photos, and competitive rates,” Furlong advised. Set yourself apart from your competition by taking high-quality photos of your rental home. If you own a decent camera (like a DSLR) and know how to use it, you can take these yourself. If not, consider hiring a professional photographer. It might cost you some money out of pocket, but it’s worth it when you’re looking to attract renters. “Photos are a key deciding factor for many travelers looking for the perfect place to stay,” Furlong said. “Show off every room of your property with well-lit, clear photos that feature any unique amenities, special spaces or fabulous views.” The photos might initially attract renters but having a good headline and detailed description will make or break your listing. Be sure to include as much information as possible, including background information about yourself, the property and the surrounding area. Look up common FAQs that people might ask about your rental and answer them in your description. “Write a headline that will grab attention and tell potential guests what makes your property special,” Furlong said. “A great example is, ‘Stunning ocean view with a wraparound porch. Perfect for families!’” Lastly, stay competitive in your market by keeping an eye on local rental rates. Depending on if your rental is a seasonal vacation destination or close to larger-scale annual events, you may want to adjust your rates accordingly. “Research what rental rates other people are charging in your area and set your rates accordingly to make your rental competitive with the homes around you,” said Furlong said. Attracting and Maintaining RentersWhether you’re expecting overnight guests or travelers on an extended vacation, you can attract renters by providing amenities that set your rental apart. “When it comes to providing travelers with everything they expect from a stay in your home, simply imagine yourself in their shoes,” Furlong advised. “What would you need to have for an easy and enjoyable stay so that you come back with a five-star review and recommend the property to your friends?” Furlong suggested a few essentials to get started like fresh linens, quality cookware, enough plates, cups and utensils to accommodate the maximum number of guests your home can host and toilet paper and other basic amenities. “Small considerations like making sure your furniture is in good condition, the beds are comfortable, and the internet is easy to use can go a long way and help get you that five-star review,” Furlong said. Create a small hub by the entryway in your home or in your kitchen (somewhere that is easily noticed by guests) and leave information about the rental, passwords to the Wi-Fi, local attractions and contact numbers for emergency use. How Do You Get Started?If you want to make renting your home a reality, Vrbo can help get you started. Are you currently renting your home? Share your tips of the trade in the comments below! 1 Based on the annual rental income for the top 2% for rent by owner homes in the US in 2017. 2 Vrbo Vacation Rental Marketplace Report, June 2018, 754 owners surveyed. The post How to Make up to $100,000 by Renting Your Home appeared first on ZING Blog by Quicken Loans. from https://www.quickenloans.com/blog/make-100000-renting-home
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Many borrowers are having a hard time repaying their federal student loans — and the government and its collection agencies are having an even harder time recouping this outstanding debt. In the third quarter of last year, for example, less than 2% of federal loans in collections were recovered — just $2.6 billion out of $166 billion. Unfortunately for delinquent borrowers, however, the Department of Education (DoED) is increasingly leaning on one of its more feared methods of collection: Dreaded wage garnishment is on the rise. From July 2015 to September 2018 — the period reviewed in this study — debt collectors nabbed $2.3 billion in wage garnishments, according to DoED data. And after a dip in mid-2017, garnishments rose to a record high for the three-year period studied, hitting $230 million in the third quarter of 2018. Here’s a summary of the current state of student loan-related wage garnishment. Key findings Collection agencies added $171 billion of defaulted student loans to their inventory over the last three years for which data was available. During that timespan, the agencies reclaimed about $31 billion. Approximately 8% of that amount was recovered through wage garnishments. In the third quarter of last year, $230 million in owed funds were reclaimed through wage garnishment, an increase of almost $60 million from the same quarter of 2015 and the highest level in the three-year period. Meanwhile, about 75% of the reclaimed funds ($23 billion) were recovered through loan rehabilitation, which allows borrowers to expunge defaults from their credit histories. Approximately 14% was retrieved through loan consolidations, and 5% was recovered via voluntary payments. After accounting for the recouped debt, collection agencies still held $166 billion in outstanding (uncollected) defaulted loans as of late 2018 — a $100 billion increase from three years earlier. How much federal student loan debt is in collections?Although the time it takes for private student loans to enter collections varies by individual lender, there’s single rule when it comes to federal loans: Miss one payment and you’re officially delinquent. Fail to make a payment for at least 270 consecutive days, and now you’re in default. Once in default, a federal loan balance accelerates (or becomes due in full). Without arranging to make good on the debt, it could then land with a collection agency. The 18 private collection agencies contracted by the DoED took on $171 billion in defaulted student loans over the last three years for which data is available. !function(e,t,s,i){var n="InfogramEmbeds",o=e.getElementsByTagName("script")[0],d=/^http:/.test(e.location)?"http:":"https:";if(/^\/{2}/.test(i)&&(i=d+i),window[n]&&window[n].initialized)window[n].process&&window[n].process();else if(!e.getElementById(s)){var r=e.createElement("script");r.async=1,r.id=s,r.src=i,o.parentNode.insertBefore(r,o)}}(document,0,"infogram-async","https://e.infogram.com/js/dist/embed-loader-min.js"); How much loan debt facing collections is being recoupedWithin five days of the first contact, collection agencies are required by the Fair Debt Collection Practices Act to provide borrowers with a validation notice that details: The debt amount The loan servicer Information about disputing the debtFrom 2015 to 2018, the government’s collection agencies retrieved about $31 billion, but debt collectors aren’t so successful in general. Although the dollar amount of recoveries has increased over the last three years, the percentage of outstanding debt that has been recovered quarterly dropped from about 3% to 2%. !function(e,t,s,i){var n="InfogramEmbeds",o=e.getElementsByTagName("script")[0],d=/^http:/.test(e.location)?"http:":"https:";if(/^\/{2}/.test(i)&&(i=d+i),window[n]&&window[n].initialized)window[n].process&&window[n].process();else if(!e.getElementById(s)){var r=e.createElement("script");r.async=1,r.id=s,r.src=i,o.parentNode.insertBefore(r,o)}}(document,0,"infogram-async","https://e.infogram.com/js/dist/embed-loader-min.js"); 91% of recouped money happens through cooperation with borrowersWhen a student loan borrower’s federal education debt enters default status (and is potentially placed with a collections agency), they have three ways to get their loans current again. They can: Rehabilitate: Make nine on-time loan payments of an agreed-upon amount over 10 months. Note that these payments — which could be as low as $5, depending on the borrower’s income — won’t stop wage garnishment or other collections actions until the debt is fully rehabilitated. Consolidate: Group your loans into one new loan and agree to repay the debt under an income-driven repayment plan, with monthly payments as low as $0. Alternatively, you could make three prompt, full payments and then consolidate. In the case of collections, you must first request to remove any existing wage garnishment before you can qualify for consolidation. Repay: Although it’s not possible for most borrowers in default, the easiest way to escape collections is to make a lump-sum payment.Of the two more realistic routes to escaping default and collections, rehabilitation takes six to seven months’ more time to complete than consolidation. Despite the long road to rehabilitation, however, it accounted for 74% of agencies’ debt recoveries — or $23 billion worth — during the 2015-18 period. The clear majority in favor of rehabilitation is likely due to the greater reward it carries: removing the record of a default from the borrower’s credit report. Consolidation, which doesn’t offer the same credit improvement, accounted for 14% of debt recoveries. Another 5.4% came from borrowers making voluntary payments to catch up on their debt. !function(e,t,s,i){var n="InfogramEmbeds",o=e.getElementsByTagName("script")[0],d=/^http:/.test(e.location)?"http:":"https:";if(/^\/{2}/.test(i)&&(i=d+i),window[n]&&window[n].initialized)window[n].process&&window[n].process();else if(!e.getElementById(s)){var r=e.createElement("script");r.async=1,r.id=s,r.src=i,o.parentNode.insertBefore(r,o)}}(document,0,"infogram-async","https://e.infogram.com/js/dist/embed-loader-min.js"); Involuntary wage garnishment is on the riseWhen a distressed borrower doesn’t rehabilitate, consolidate or otherwise catch up on their federal loan debt (or is slow to do so), it’s the agency who acts first. As empowered by the DoED, collection agencies could collect on your debt by withholding up to 15% of your income, as well as your tax refund, Social Security or other federally administered benefits. According to our three-year analysis, 8% of loans in default — or $2.3 billion worth — were recouped through these involuntary wage garnishments. Agencies appear to be recovering more and more debt via wage garnishment. Almost $230 million was retrieved through garnishment in the third quarter of 2018 — an increase of about $60 million from the third quarter of 2015, hitting the highest level for the three-year period. !function(e,t,s,i){var n="InfogramEmbeds",o=e.getElementsByTagName("script")[0],d=/^http:/.test(e.location)?"http:":"https:";if(/^\/{2}/.test(i)&&(i=d+i),window[n]&&window[n].initialized)window[n].process&&window[n].process();else if(!e.getElementById(s)){var r=e.createElement("script");r.async=1,r.id=s,r.src=i,o.parentNode.insertBefore(r,o)}}(document,0,"infogram-async","https://e.infogram.com/js/dist/embed-loader-min.js"); If your debt is in collections or could be soon …Almost 12% of America’s private and federal education debt is at least 90 days delinquent or in default, according to our student loan statistics. So if you find yourself on the precipice of a dire debt situation, at least know that you’re not alone. Here are some possible solutions for your debt troubles, based on the current status of your federal student loans: Delinquent: After missing a single payment, you should be alarmed enough to at least contact your loan servicer. You might look to switch repayment plans or apply for deferment or forbearance to reduce or pause your monthly payments. Default: Again, reach out to your servicer to resolve the default as soon as possible. More commonly, you’ll need a bigger fix, so start to consider your fit for rehabilitation and consolidation. Collections: If your servicer has passed your debt to a collection agency, you could agree to a voluntary repayment program to stave off involuntary collections. Keep in mind that wage garnishment would continue until you rehabilitate your debt — plus, consolidation isn’t possible until you’ve exited collections.For private student loans that are anywhere from past due to facing collections, consult your lender immediately. Their safety net might not be as wide as what’s offered by the DoED. Still, something as simple as an economic hardship forbearance program could allow you to pause your payments and get back on track. Applying these remedies can help you keep pace with your loan repayment. Then you can avoid becoming a statistic, as the DoED and its debt collectors ramp up their use of wage garnishment. Plus, once you’ve had a chance to catch your breath, you can start to explore permanent solutions for your student debt. Review your eligibility for student loan forgiveness for your federal loans. Also, keep student loan refinancing under consideration for your federal and private debt, since it’s generally the only way to reduce your interest rate, potentially saving you a bundle on your repayment. Methodology:Analysts reviewed quarterly data from the Department of Education related to defaulted federal student loan debts assigned to third-party private debt collectors. The data spans the third quarter of 2015 through the third quarter of 2018. The post Student Loan Defaulters Suffering More Wage Garnishment: Study appeared first on Student Loan Hero. from https://studentloanhero.com/featured/student-loan-defaulters-suffering-more-wage-garnishment-study/ It happens all the time. Someone who has just been hired, or hasn’t worked for a company for very long, makes more money than someone who has been there for many years and proven themselves to be a valuable employee. For instance, there are many instances where a male is going to earn more than a woman who has more training and experience. Have you found out that you are earning a lower salary than someone who is a more recent hire, or has less experience than you? Or does your company not pay fairly? If so, it may be time for you to look for ways to be able to do something about it. Don’t Blame Co-WorkersFirst of all, you need to remember that it is not your co-worker’s fault that they are being paid more than you are. Yes, you can be angry, but it is never a good idea to confront a co-worker about their salary. All it does is cause both of you to feel uncomfortable, and it causes a lot of anger in the workplace. Instead of being angry at them, use the fact that they are earning more as a reason to ask for a raise. One thing that you should never do is ask your co-workers what they earn. Unless you are making comparable salaries, someone is going to end up angry because they are being paid less than others. This can lead to conflict within the team, and a lack of productivity that is not going to help you get the raise you deserve. Learn About the Equal Pay ActIf you are a woman, it is important that you know about the Equal Pay Act. This act prohibits employers from paying women less than their male counterparts when they have the same amount of experience. If you are not a woman but are a minority, you may be eligible for some form of protection. If you think that you are being discriminated based on age, gender, or disability, the best thing to do is to contact the US Equal Employment Opportunity Commission (EOCC). Unfortunately, most other employees have no legislative coverage. If you are not in one of the above-mentioned groups, you will need to consider your situation and decide whether you should address the issue with your employer. Do Your ResearchBefore you walk into your boss’ office and ask for a raise, do some research as to what you should be earning, based on your training, experience, years with the company, geographic location, etc. If you do know for a fact that some of your co-workers are earning more than you, this is good information to be able to arm yourself with. Of course, as mentioned, it is not a good idea to ask co-workers about their salaries. Just because you shouldn’t ask co-workers about their salaries, it doesn’t mean that there aren’t other ways to find out. For instance, if you work for a university or a public company, some of the salaries are going to be public information. Or, there may be an association for your particular industry that offers surveys about salaries. It is a good idea to research salaries at least once annually. Consider Your ApproachOne of the most difficult things about asking for a raise is how to approach the situation in the first place. It is never a good idea to ask if the company is going through a transition period, as the money just isn’t going to be there. You also need to be able to gauge your employer’s mood. If you get them on a bad day, you aren’t likely to get what you ask for. When you do decide to approach your employer, don’t go in making demands. That isn’t going to get you anywhere. It is better to negotiate. Tell them why you feel that you deserve a raise, and have confidence in your own value. This is going to get you a lot further than just going in and saying you want a raise, or else. Negotiate for More ResponsibilityIt may be that you are being overlooked for a lot of big projects at work. If this is the case, instead of asking for a raise right away, try asking for more responsibility. “Ask to be put on the teams that are doing the big projects, or to do an extra project on your own. Ask if there are training opportunities, and if not, take outside courses and workshops to gain more skills and knowledge,” suggests training manager at IGotOffer. If you are given the opportunities you seek, don’t waste them. If you are getting training, take in every ounce of information possible. If you are given bigger projects to work on, show them what you are really made of. These are the things that are going to put you in the running for a raise, or even a promotion. Set a DeadlineWhat will you do if your employer says that they will give you a raise, but they never follow through on their promise? Or, what if the company just can’t afford to give you a raise at this time? You can only wait for so long before you are going to become even more disenchanted, and your work is going to suffer because you will stop caring. It is important to set a deadline for what you want. For instance, if you have been working at your company for more than a year without a raise, you may need to decide that if you do not receive a raise within the next six months, this may not be the company for you. Consider Your OptionsIf you are not getting the raise that you deserve, or other forms of compensation such as extra vacation time, a paid bonus, etc., it may be time to start considering other options. There are other companies out there that will value your experience and skills, and be willing to pay you the salary you truly deserve. Basically, if your current employer doesn’t see your value, find one who does. This article was written by Jane Hurst, and originally appeared on Glassdoor. The post What to Do About a Pay Gap at Your Workplace appeared first on Student Loan Hero. from https://studentloanhero.com/featured/what-to-do-about-a-pay-gap-at-your-workplace/ If you’ve bought a house recently, you’ve probably received a ton of mail warning you to protect your mortgage payments with life insurance. What those letters are usually selling is a specific type of life insurance – mortgage life insurance, also known as “mortgage protection insurance.” But mortgage life insurance is not the same as the more common term life insurance. Here’s what every homeowner should know when comparing the two types of insurance. What Is Mortgage Life Insurance? Don’t confuse mortgage life insurance with private mortgage insurance (PMI), which you may need to pay along with your mortgage if you put down less than 20% on your home. Mortgage life insurance pays off your mortgage balance if you die. It lasts for the same number of years as your mortgage, and you’d usually purchase the policy when you buy your home or soon after. Terms and conditions vary, but in most cases, if you were to die during the policy term, the lender would receive a payout (called a “death benefit”) for the amount you owe on your mortgage. As you make mortgage payments, and your balance goes down, the death benefit on the insurance policy goes down, too. ProMortgage Life Insurance Doesn’t Require a Medical ExamOne of the convenient things about mortgage life insurance is that it’s easy to get. Typically, no medical exam is required in the underwriting process. This is especially helpful for people with a pre-existing condition or an illness that either disqualifies them from other types of life insurance or pushes their life insurance rates to an unaffordable level. ConsMortgage Life Insurance Payout Usually Declines Over TimeFor many buyers, the mortgage life insurance payout amount declines over time because it’s tied to the mortgage balance which will decrease as the homeowner pays off the loan, reaching zero when the mortgage is paid off. If your policy has level premiums, the amount you pay every month does not change, even though the value of the policy goes down. Remember that the lender is the beneficiary of a mortgage life insurance policy, not a policyholder’s loved ones as with a term life insurance policy. Mortgage Life Insurance Usually Costs More Than Term Life InsuranceAnother downside is that because you don’t have to undergo a medical exam and the insurance underwriting process is less precise, the price of mortgage life insurance will usually be higher compared to that of a comparable term life insurance policy that is medically underwritten. Some Mortgage Life Insurance May Restrict Death BenefitsSome mortgage life insurance policies will pay a death benefit only if you die from an accident, similar to accidental death insurance. Generally, term life insurance has fewer exclusions on whether a policy will pay out death benefits – usually suicide within the first 2 years or an illness that was intentionally not disclosed in the application process. Mortgage Life Insurance Payouts Go to Lien Holders, Not Loved OnesA mortgage life insurance payout goes directly to the mortgage lien holder. The payout can only be used to pay off the mortgage. Your loved ones don’t get a chance to use the death benefit in a way that may be more important to them. What Is Term Life Insurance?Term life insurance provides protection for you and your family for a set period of time. The key characteristic of this type of life insurance is in its name — the “term” length of the policy. That’s the number of years the policy provides protection for your beneficiaries. Common term lengths are 10, 15, 20 or 30 years. If you were to pass away during your coverage term, your policy death benefit would go to the beneficiaries you designate. Pros of Term Life InsuranceTerm Life Insurance Coverage Is Personalized to Your Family’s NeedsTerm life insurance coverage offers flexibility and personalization that you can’t get from mortgage life insurance. You can decide how much financial protection is needed, instead of merely having an amount that covers your mortgage. Not sure how much that is? No problem. A life insurance calculator can look at your income, family structure and debts to help you determine the right policy for you. Term Life Insurance Is More Affordable Than Mortgage Life InsuranceAs we have mentioned before, term life insurance typically costs less than a comparable mortgage life insurance policy. For example, according to State Farm, a 30-year, $250,000 mortgage life insurance policy would start at about $66 per month for a 35-year-old man in excellent health. Or, that man could buy a 30-year, $250,000 Haven Term policy starting at $30 per month. Term Life Insurance Payout Goes to Your Loved Ones, Not Your LenderWith term life insurance, your beneficiaries decide how to spend the death benefit, rather than the money going to your mortgage lien holder, as it would with mortgage life insurance. Term Life Insurance Coverage Stays the SameUnlike with most mortgage life insurance, the death benefit from term life insurance doesn’t decrease over time. Cons of Term Life InsuranceTerm Life Insurance Usually Requires a Health Screening for ApprovalUnlike for mortgage life insurance, to get term life insurance, you will have to do a health screening, and in some cases, a medical exam. Having to undergo a medical exam doesn’t mean you won’t get a great price on term life insurance. Rather, it means the insurance company needs more information about you to give you an accurate rate. Why Your Home Needs Life Insurance ProtectionYour home is more than just four walls and a roof. Even if it’s a work in progress or a starter home that you plan to sell in a few years, protecting your investment is a must. If you died, you wouldn’t want your family to struggle with the house payment and risk losing the stability and financial benefits your home offers. Now that you know the pros and cons of mortgage life insurance and term life insurance, you can make an informed decision about coverage that protects one of your biggest financial assets and gives you peace of mind so you can enjoy your home. What questions do you have about mortgage life insurance and term life insurance? Let us know in the comments below. Tom Anderson is a writer at Haven Life. Haven Term is a Term Life Insurance Policy (ICC17DTC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111 and offered exclusively through Haven Life Insurance Agency, LLC. Policy and rider form numbers and features may vary by state and may not be available in all states. In NY, Haven Term is DTC-NY-1017. Our Agency license number in California is OK71922 and in Arkansas, 100139527. The post Mortgage Life Insurance vs. Term Life Insurance appeared first on ZING Blog by Quicken Loans. from https://www.quickenloans.com/blog/mortgage-life-insurance-vs-term-life-insurance How The Financial Planning Process Differs For Young Clients: Not Simpler But Different Complexities4/17/2019 The rise of the asset-under-management (AUM) model has driven a concomitant shift in financial advisors to focus increasingly on Baby Boomer retirees – for the same reason that Willie Sutton robbed banks: “That’s where the money is.” To the point that some in the industry have raised the question of whether the pendulum is swinging too far to retirees, and that it’s time to start doing more financial planning for next-generation clients as well. Except the challenge for most advisory firms is that it’s not profitable to do financial planning for younger clients, who simply don’t have sufficiently-sized investment accounts to generate enough AUM fees for the advisory firm to deliver the advice. For which advisory firms can adopt various “fee-for-service” models, from charging minimum fees based on a percentage of income, to flat monthly retainer fees. Except then the pressure is on the advisory firm to justify the value of the financial planning advice being given to clients for that fee, especially when they tend to have “simpler” financial needs in the first place. Yet the reality is that younger clients with fewer assets and lower net worth still experience the kinds of tumultuous life transitions that necessitate engaging a financial advisor in the first place. In fact, ironically, older retirees typically only experience a few major life transitions in the span of decades – retirement itself, a major change in health, and the death of a spouse – while it’s younger clients who actually experience a steady stream of major life transitions that may necessitate a financial advisor, from getting a new job, to going back to school, starting a business, getting married (or getting divorced!), having children, and more. And while younger clients may have less in the way of investments and assets, they still face substantial complexities when it comes to their cash flow itself, from how to transition from a dual-income household to a stay-at-home-parent (or back again) after the birth of a child or a decision to go back to school, merging finances during a marriage (or separating them again after a divorce), to adjusting spending while launching a business. Or simply engaging in strategies to increase income and job potential in the first place. Which means, in the end, while the focus of financial planning may shift for next-generation clients – from monitoring the health of their assets to monitoring the health of their income instead – arguably younger clients don’t really have “simpler” financial advice needs in the first place. Instead, they have a different set of complex financial advice needs… and an even greater need for the cyclical and ongoing financial planning process in the first place, because of the pace and frequency of the life transitions that impact their financial situation throughout their 20s, 30s, and 40s! from https://www.kitces.com/blog/next-generation-client-financial-planning-different-complex-not-simpler/ Private student loan requirements are worth knowing about. Federal student loans are usually a better choice, but they don’t always cover your full cost of attendance at school — so if you have a gap in funding after running through your federal aid, then private loans can save the day. But first, you’ll need to qualify. Private student loan requirements you’re likely to encounterAlthough specific criteria varies from lender to lender, these are the five most common factors private lenders consider before approving you for a loan. 1. Be enrolled in an eligible schoolPerhaps it goes without saying that you have to be a student to qualify for a student loan. But not every student automatically qualifies. For one thing, most lenders require that you be enrolled at least half time at your school. Secondly, you have to attend an eligible school. Most four-year colleges qualify, but two-year community colleges and trade schools aren’t always eligible for private student loans. That said, you might be able to find a private student loan designed specifically for community college or vocational students. Wells Fargo, for instance, offers career training loans for students attending two-year programs or trade schools. If you’re unsure whether your school qualifies, speak with the private lender about your options. You can also talk to your financial aid office for more information. 2. Meet age, education and citizenship requirementsAnother set of requirements relates to your age, education and citizenship status. To take out private student loans, you must be 18 years or older with a high school diploma or equivalent (such as a GED or home school certificate). Generally, you must also have a Social Security number and be a U.S. citizen or legal resident — someone who has been granted permission to permanently live and work in the United States. This requirement can be tricky for international students, but there’s a potential workaround: If you have a U.S. citizen or legal resident willing to cosign for you, then you might be eligible to take out private student loans as an international student. 3. Plan to use the loan for educational expensesPrivate student loans are intended to cover your costs of college, so you’ll need to use them for educational expenses. After you apply, the lender will communicate with your school’s financial aid office to verify your information. Then, the school must certify the amount you’re asking to borrow, confirming the cost of attendance and letting the lender know about any other aid you’ve already received. Once the school certifies your request, the lender will likely send the funds directly to your college. If there’s any money left over after covering your expenses, the school will return that amount to you. You can use this leftover money to pay for books or other related expenses. But note that these extra funds are still part of the loan that you’ll have to pay back with interest, so you’re better off returning the remainder to your lender right away if you don’t need it. Remember, any alternative way you might have to pay these expenses — be it with savings, scholarships, or income from a part-time job — will mean a lower student loan bill after graduation. 4. Meet credit and income criteriaIf you want to take out a federal student loan, you don’t have to worry about your credit score. But if you’re worried about how to get approved for a student loan from a private lender, know that you’ll face certain financial requirements. In particular, private lenders look at three main factors: Your credit history Your income Your debt-to-income ratioThey’ll want to make sure you don’t have a history of defaulting on loans, and they’ll also likely consider your credit score to see how reliable you are with debt in general. So how good does your credit need to be to get a student loan? That all depends on the lender. Although lenders don’t typically advertise a specific minimum, most look for a score in the mid 600s or higher. Below that level, you might not qualify for a loan at all. As your credit score moves up into the 700s and 800s, however, you might not only qualify, but also have access to the lowest interest rates. Note that besides just credit scores, many lenders also look for proof of steady income, along with a low ratio of pre-existing debts to your current salary. Basically, they want to make very sure you’ll be able to pay back the loan after you get it. 5. Be able to apply with a creditworthy cosigner if neededIf you’re a high school student, you might not have much of a credit history or income to speak of. But you don’t have to ask around about where to get a private student loan with bad credit; instead, you can apply with a cosigner. In fact, more than 92% of undergraduate loans were issued with a cosigner during the 2017-2018 school year, according to data firm MeasureOne. Your cosigner — often a parent or close relative — will share responsibility for your debt, but it’s up to you to have a conversation about repayment. If you’re paying back the loan, your cosigner doesn’t have to worry much. But if you can’t repay your debt, your cosigner will be just as much on the hook for the loan as you are. That being said, some private lenders offer cosigner release after months of on-time repayment. CommonBond, for example, offers cosigner release after 24 consecutive months of repayment. So if you’re making steady progress on your private student loans, your cosigner could eventually get their name cleared off the debt altogether. Finding a cosigner may prove difficult if no one is willing to take on the responsibility, but that doesn’t mean a private loan isn’t an option. Even though a cosigner is one of the common private student loan requirements, there are lenders out there that will approve students without one, as well as other options if no one will join you in applying for the loan. Shop around for the best rates on private student loansIf you meet all the above requirements, you could be eligible for a private student loan. But before choosing a lender, make sure to shop around for the best interest rates. Some lenders let you apply for a quick rate quote to see preliminary offers for a loan. The lower the interest rate you get, the more money you’ll save in the long run. You might also consider other factors, like repayment options and customer reviews. Check out the Better Business Bureau or a related site for people’s firsthand experiences with lenders. By doing your research, you can find the best lender for you and your family’s financial situation. A private student loan can help you cover the cost of your education, but failing to do your due diligence might leave you paying more in the future. Kristina Byas contributed to this report. Need a student loan? Here are our top student loan lenders of 2019! LenderVariable APREligibility 1 Important Disclosures for Ascent. Ascent DisclosuresBefore taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank. Ascent rates are effective as of 04/01/2019 and include a 0.25% discount applied when a borrower in repayment elects automatic debit payments via their personal checking account. Competitive rates calculated monthly at the time of loan approval. Ascent Tuition Cosigned Loan: Variable rate loans are based on a margin between 2.00% and 11.00% plus the 1-Month London Interbank Offered Rate (LIBOR), rounded to the nearest 1/100th of a percent. The current LIBOR is 2.491%, which may adjust monthly. Your interest rate may increase or decrease, based on LIBOR monthly changes, resulting in an APR range between 4.24% – 13.24%. Fixed rate loans have an APR range between 5.07% – 14.15%. For Ascent Tuition loan current rates and repayment examples visit www.AscentTuition.com/APR. Ascent Independent Non-Cosigned Loan: Variable rate loans are based on a margin between 4.00% and 12.50% plus the 1-Month London Interbank Offered Rate (LIBOR), rounded to the nearest 1/100th of a percent. The current LIBOR is 2.491%, which may adjust monthly. Your interest rate may increase or decrease, based on LIBOR monthly changes, resulting in an APR range between 5.88% – 13.16%. Fixed rate loans have an APR range between 6.69% – 13.45%. For Ascent Independent non-cosigned loan current rates and repayment examples visit www.AscentIndependent.com/APR. Payments may be deferred. Subject to lender discretion, forbearance and/or deferment options may be available for borrowers who are encountering financial distress. Making interest only or partial interest payments while in school will not reduce the principal balance of the loan. There are three (3) flexible in-school repayment options that include fully deferred, interest only and $25 minimum repayment. Flexible repayment plans may be offered up to a fifteen (15) year repayment term for a variable rate loan and ten (10) year repayment term for a fixed rate loan. Students must be enrolled at least half-time at an eligible school. Minimum loan amount is $2,000. Interest rate reduction of 0.25% for enrollment in automatic debit applies only when the borrower and/or cosigner signs up for automatic payments and the regularly scheduled, current amount due (including full, flat, or interest only payments, as applicable) is successfully deducted from the designated bank account each month. Interest rate reduction(s) will not apply during periods when no payment is due, including periods of In-School, Deferment, Grace or Forbearance. If you have two (2) returned payments for Nonsufficient Funds, we may cancel your automatic debit enrollment and you will lose the 0.25% interest rate reduction. You will then need to re-qualify and re-enroll in automatic debit payments to receive the 0.25% interest rate reduction. All applicants (individual and cosigner) are required to complete a brief online financial literacy course as part of the application process to be eligible for funding. Eligibility, loan amount and other loan terms are dependent on several factors, which may include: loan product, other financial aid, creditworthiness, school, program, graduation date, major, cost of attendance and other factors. Aggregate loan limits may apply. The cost of attendance is determined and certified by the educational institution. The legal age for entering into contracts is eighteen (18) years of age in every state except Alabama where it is nineteen (19) years old, Nebraska where it is nineteen (19) years old (only for wards of the state), and Mississippi and Puerto Rico where it is twenty-one (21) years old. 1% Cash Back Graduation Reward subject to terms and conditions. Click herefor details. In order to be eligible for the 1% Cash Back Graduation Reward, borrower must meet the following criteria after graduation: · The student borrower has graduated from the degree program that the loan was used to fund. · The student borrower may change majors and/or transfer to a different school, but must obtain the same level of degree (e.g. – undergraduate or graduate) · The graduation date is more than 90 days and less than five (5) years after the date of the loan’s first disbursement. · Any loan that the student has borrowed under the Ascent loan is not more than 30-days delinquent or in a default status as of the graduation date and until any Graduation Reward is paid. Students can apply to release their cosigner and continue with the loan in only their name after making the first 24 consecutive regularly scheduled full principal and interest payments on-time and meeting the other eligibility criteria to qualify for the loan without a cosigner.* Application times vary depending on the applicants ability to supply the necessary information for submission. 2 Important Disclosures for College Ave. CollegeAve DisclosuresCollege Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7% variable Annual Percentage Rate (“APR”): 96 monthly payments of $179.28 while in the repayment period, for a total amount of payments of $17,211.20. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. As certified by your school and less any other financial aid you might receive. Minimum $1,000.Information advertised valid as of 4/1/2019. Variable interest rates may increase after consummation. 3 Important Disclosures for Discover. Discover Disclosures At least a 3.0 GPA (or equivalent) qualifies for a one-time cash reward of 1% of the loan amount of each new Discover undergraduate and graduate student loan. Reward redemption period is limited. Please visit DiscoverStudentLoans.com/Rewardfor any applicable reward terms and conditions. View Terms and Conditions at DiscoverStudentLoans.com/AutoDebitReward. * The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers. 4 = Sallie Mae Disclaimer: Click herefor important information. Terms, conditions and limitations apply. 5 Important Disclosures for SunTrust. SunTrust DisclosuresBefore applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private. Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions. SunTrust Bank, Member FDIC. ©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved. Interest rates and APRs (Annual Percentage Rates) depend upon (a) the student’s and cosigner’s (if applicable) credit histories, (b) the repayment option and repayment term selected, (c) the requested loan amount and (d) other information provided on the online loan application. If approved, applicants will be notified of the rate applicable to your loan. Rates and terms effective for applications received on or after 3/1/2019. The current variable APRs for the program range from 4.251% APR to 13.250% APR and the current fixed APRs for the program range from 5.351% APR to 14.051% APR (the low APRs within these ranges assume a 7-year $10,000 loan, with two disbursements and no deferment; the high APRs within these ranges assume a 15-year $10,000 loan with two disbursements). The variable interest rate for each calendar month is calculated by adding the current One-month LIBOR index to your margin. LIBOR stands for London Interbank Offered Rate. The One-month LIBOR is published in the Money Rates section of The Wall Street Journal (Eastern Edition). The One-month LIBOR index is captured on the 25th day of the immediately preceding calendar month (or if the 25th is not a business day, the next business day thereafter), and is rounded up to the nearest 1/8th of one percent. The current One-month LIBOR index is 2.500% on 3/1/2019. The variable interest rate will increase or decrease if the One-month LIBOR index changes. The fixed rate assigned to a loan will never change except as required by law or if you request and qualify for the auto pay discount. Any applicant who applies for a loan the month of, the month prior to, or the month after the student’s graduation date, as stated on the application or certified by the school, will only be offered the Immediate Repayment option. The student must be enrolled at least half-time to be eligible for the partial interest, fully deferred and interest only repayment options unless the loan is being used for a past due balance and the student is out of school. With the Full Deferment option, payments may be deferred while the student is enrolled at least half-time at an approved school and during the six month grace period after graduation or dropping below half-time status, but the total initial deferment period, including the grace period, may not exceed 66 months from the first disbursement date. The Partial Interest Repayment option (paying $25 per month during in-school deferment) is only available on loans of $5,000 or more. For payment examples, see footnote 7. With the Immediate Repayment option, the first payment of principal and interest will be due approximately 30-60 calendar days after the final disbursement date and the minimum monthly payment is $50.00. There are no prepayment penalties. The 15-year term and Partial Interest Repayment option (paying $25 per month during in-school deferment) are only available for loan amounts of $5,000 or more. Making interest only or partial interest payments while in school deferment (including the grace period) will not reduce the principal balance of the loan. Payment examples within this footnote assume a 45-month deferment period, a six-month grace period before entering repayment and the Partial Interest Repayment option. 7-year term: $10,000 loan disbursed over two transactions with a 7-year repayment term (84 months) and 8.468% APR would result in a monthly principal and interest payment of $199.90. 10-year term: $10,000 loan disbursed over two transactions with a 10-year repayment term (120 months) and 8.938% APR would result in a monthly principal and interest payment of $162.92. 15-year term: $10,000 loan disbursed over two transactions with a 15-year repayment term (180 months) and 9.423% APR would result in a monthly principal and interest payment of $136.90. The 2% principal reduction is based on the total dollar amount of all disbursements made, excluding any amounts that are reduced, cancelled, or returned. To receive this principal reduction, it must be requested from the servicer, the student borrower must have earned a bachelor’s degree or higher and proof of such graduation (e.g. copy of diploma, final transcript or letter on school letterhead) must be provided to the servicer. This reward is available once during the life of the loan, regardless of whether the student receives more than one degree. Earn an interest rate reduction for making automatic payments of principal and interest from a bank account (“auto pay discount”). Earn a 0.25% interest rate reduction when you auto pay from any bank account and an extra 0.25% interest rate reduction when you auto pay from a SunTrust Bank checking, savings, or money market account. The auto pay discount will continue until (1) automatic deduction of payments is stopped (including during any deferment or forbearance) or (2) three automatic deductions are returned for insufficient funds during the life of the loan. The extra 0.25% interest rate reduction when you auto pay from a SunTrust Bank account will be applied after the first automatic payment is successfully deducted and will be removed for the reasons stated above. In the event the auto pay discount is removed, the loan will accrue interest at the rate stated in your Credit Agreement. The auto pay discount is not available when payments are deferred or when the loan is in forbearance, even if payments are being made. A cosigner may be released from the loan upon request to the servicer provided that the student borrower is a U.S. citizen or permanent resident alien, has met credit criteria and met either one of the following payment conditions: (a) the first 36 consecutive monthly principal and interest payments have been made on-time (received by the servicer within 10 calendar days after their due date) or (b) the loan has not had any late payments and has been prepaid prior to the end of the first 36 months of scheduled principal and interest payments in an amount equal to the first 36 months of scheduled principal and interest payments (based on the monthly payment amount in effect when you make the most recent payment). As an example, if you have made 30 months of consecutive on-time payments, and then, based on the monthly payment amount in effect on the due date of your 31st consecutive monthly payment, you pay a lump sum equal to 6 months of payments, you will have satisfied the payment condition. Cosigner release may not be available if a loan is in forbearance. If the student dies after any part of the loan has been disbursed, and the loan has not been charged off due to non-payment or bankruptcy, then the outstanding balance will be forgiven if the servicer is informed of the student’s death and receives acceptable proof of death. If the student becomes totally and permanently disabled after any part of the loan has been disbursed and the loan has not been charged off due to non-payment or bankruptcy, the loan will be forgiven upon the servicer’s receipt and approval of a completed discharge application. If the student borrower dies or becomes totally and permanently disabled prior to the full disbursement of the loan, and the loan is forgiven, all future disbursements will be cancelled. Loan forgiveness for student death or disability is available at any point throughout the life of the loan. 6 Important Disclosures for LendKey. LendKey DisclosuresAdditional terms and conditions apply. For more details see LendKey 7 Important Disclosures for CommonBond. CommonBond DisclosuresA government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down. Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled. Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan. If you are unable to pay your government loan, the government can refer your loan to a collection agency or sue you for the unpaid amount. In addition, the government has special powers to collect the loan, such as taking your tax refund and applying it to your loan balance. A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender. If you refinance your government loan, your new lender will use the proceeds of your new loan to pay off your government loan. Private student loan lenders do not have to honor any of the benefits that apply to government loans. Because your government loan will be gone after refinancing, you will lose any benefits that apply to that loan. If you are an active-duty service member, your new loan will not be eligible for service member benefits. Most importantly, once you refinance your government loan, you will not able to reinstate your government loan if you become dissatisfied with the terms of your private student loan. If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance. If you are a borrower with a secure job, emergency savings, strong credit and are unlikely to need any of the options available to distressed borrowers of government loans, a refinance of your government loans into a private student loan may be attractive to you. You should consider the costs and benefits of refinancing carefully before you refinance. If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount. Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers. 8 Important Disclosures for Citizens Bank. Citizens Bank Disclosures Undergraduate Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of March 1, 2019, the one-month LIBOR rate is 2.48%. Variable interest rates range from 4.45%-12.42% (4.45%-12.32% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 5.74%-12.19% (5.74% – 12.09% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co-signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan. Graduate Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of March 1, 2019, the one-month LIBOR rate is 2.48%. Variable interest rates range from 4.45% – 12.18% (4.45% – 11.82% APR) and will fluctuate over the term of your loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 5.74% – 11.95% (5.74% – 11.65% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co-signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. You will be presented with an Application Disclosure and an Approval Disclosure within the application process before you accept the terms and conditions of your loan. Citizens One Student Loan Eligibility: Borrowers must be enrolled at least half-time in a degree-granting program at an eligible institution. Borrowers must be a U.S. citizen or permanent resident or an international borrower/eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For borrowers who have not attained the age of majority in their state of residence, a co-signer is required. Citizens One reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Citizens One Student Loans private student loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens One Student Loans-participating school. Please Note: International Students are not eligible for the multi-year approval feature. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply. Borrowers whose loans were funded prior to reaching the age of majority may not be eligible for co-signer release. Note: co-signer release is not available on the Student Loan for Parents or Education Refinance Loan for Parents.The post 5 Common Requirements for Getting a Private Student Loan appeared first on Student Loan Hero. from https://studentloanhero.com/featured/private-student-loans-common-requirements-getting/ If you’re thinking about buying a house but don’t have enough money saved up for a 20% down payment, you will need to know a thing or two about private mortgage insurance. PMI as it is more commonly called, enables you to buy a home with a down payment as low as 3% with a conventional mortgage — helping a lot more people buy homes much sooner than they could if they had to save up for a larger down payment. The good news is, it’s often only a temporary part of your monthly mortgage payment. You have options to get rid of PMI, or reduce how much of it you pay monthly, or with time, patience and ontime monthly payments it will drop off on it’s own. We’ll discuss what PMI is and why you need it below. What exactly is private mortgage insurance?Private mortgage insurance, also called PMI, is a type of insurance that protects a lender in the event that you aren’t able to make payments on your loan and end up defaulting. But homebuyers benefit, too. PMI allows homebuyers to get conventional mortgage financing for homes with as little a 3% down, typically at a lower cost than other programs designed to help people with little cash for a down payment, like FHA loans. Your monthly payment usually includes principal, interest, taxes and insurance, also known as PITI. You’ll need to add PMI to your monthly payment if you want to be able to buy a home with less than a 20% down payment. The higher your down payment, the lower your monthly mortgage insurance. Lenders charge you more for a lower down payment because the risk of default is higher. How much does PMI cost?The amount you pay each month is generally determined by your credit score and your down payment. The better your credit score, the lower your payment. But credit scores are not the only component of your private mortgage insurance payment. A number of other factors will increase or decrease how much you pay. Down payment: Every 5% you put down affects the rate you pay. As a general rule of thumb, the more you put down, the lower the PMI rate will be. State you live in: Different states have different risk grades, resulting in higher or lower PMI premiums. Debt-to-income ratio: Your debt-to-income (DTI) ratio is a measure of how much debt you have compared to your pre-tax income. While conventional programs offered by Fannie Mae and Freddie Mac may allow for a DTI ratio as high a 50%, many PMI companies will require a higher credit score of at least 720. Type of property: Condominiums and manufactured homes may require more expensive PMI. Type of occupancy: Primary residences will always get the best rates, while second homes are slightly more expensive. Number of borrowers: PMI insurers consider two borrowers safer than one, so couple borrowers get slightly better rates than single borrowers. Fixed rate vs. ARM: A fixed rate features a payment that never changes during the life of the loan, versus an adjustable rate mortgage (ARM) that will adjust after the initial fixed rate period ends. Because of the risk the payment could become unaffordable when the ARM eventually adjusts, PMI companies charge slightly higher rates. Number of units: Properties with more than one unit are considered higher risk to a lender, so PMI companies also mark up the mortgage insurance if you purchase a property with two to four units. Detached or attached property: A property that is attached has slightly higher rates, since there is always the risk of your attached neighbor doing something that could damage your home. Special programs: First-time homebuyer programs actually offer cheaper mortgage insurance rates than other conventional loan programs. However, the premiums are still impacted by credit scores, so even if the rate is lower for the first time homebuyer program, your payment may still be high because of a low credit score. Private mortgage insurance vs. FHA loan mortgage insurancePMI usually ends up being cheaper than the mortgage insurance premiums you pay for an FHA loan. That loan program includes two types: one paid monthly, and one larger upfront payment that is usually financed into the loan. Below is a table that shows the costs of private mortgage insurance for a $200,000 conventional loan with 3% down, versus an FHA loan with 3.5% down, and how the cost changes the lower your credit score is.
As you can see above, once your score drops below 700, the insurance premium for the FHA loan is cheaper than the monthly amount for PMI. The $3,500 is financed top of the loan amount, and is included in the calculations of the monthly payment listed above. Where did mortgage insurance come from?Imagine if you had to make a 50% down payment on a house, and had to pay the entire balance off in five years. If you were house hunting in the early 1900s, those were normal terms, and they kept many people renting for most of their lives. In 1934, the Federal Housing Administration was created to allow for lower down payments by providing insurance to the lenders that made them. The new FHA loan program also eventually extended the time to pay a mortgage off to 30 years. The private mortgage market eventually adopted both of those innovations. In 1957, the first private mortgage insurance company opened, giving borrowers a cheaper alternative to the expensive government mortgage insurance premium. If weren’t for private mortgage insurance, or mortgage insurance at all for that matter, many people would spend most of their lives saving for a down payment, or just scrap homeownership altogether and stay renters. Options to pay private mortgage insuranceOne of the benefits of PMI besides the potential for lower monthly payments, is the variety of payment options. If you have a seller that is contributing toward your closing costs, you may be able to use the concession toward getting a lower premium for your PMI. Below are some more creative options besides the traditional monthly options discussed so far. Single premiumThis allows you to pay the entire premium in one lump sum, rather than paying it monthly. If your purchase contract calls for the seller to pay some of your closing costs, this can be a great way to end up with a monthly payment with no mortgage insurance. Lender-paid mortgage insuranceThis may be a good option if you have a very high credit score, as it absorbs the costs of the mortgage insurance with an increase to your rate. The higher your credit score, the less the markup is to your interest rate, but the obvious drawback is you end up with a higher rate for the life of your loan. Split premium mortgage insuranceThis is a combination of monthly paid and lump sum, and allows you to pick and choose the best combination based on how much money you can contribute toward the lump sum. While you may not get the benefit of a full mortgage insurance buyout like you would have with the borrower single premium financed, you could end up with a lower premium that you would have with normal borrower paid monthly premiums. How to cancel private mortgage insuranceThe beauty of private mortgage insurance is that you only need it while you have less than 20% equity. There are three ways you can get rid of or lower your PMI. Wait until your payments get you to 22% equityPMI automatically drops off of your payment once you’ve paid your principal down to 78% of the original sales price or appraised value. There’s nothing you have to do because lenders are required by law to remove once you reach that payment milestone. Request an appraisal to prove you have 20% equityHouse prices have risen the past five years, so there is always the chance that your value may have risen enough to justify the lender canceling your PMI. You’ll likely need to foot the bill for the appraisal, but if it comes in showing you have enough equity to remove your PMI, it will be worth the expense. Refinance and pay down your principalYou can always pay down the principal with a full refinance to 80% of the value of your home, and you will no longer have to pay mortgage insurance. If you’re right on the brink of having 20% equity, it may be worth the extra money to do a full refinance so you can permanently remove mortgage insurance from your monthly payment. Ways to avoid PMIPMI is something that you want to avoid for a number of reasons, if you can. The cost can range from .15% to 1.95% of your loan amount every year depending on the factors outlined above. One other drawback to PMI is that the Tax Cuts and Job Act (TCJA) removed the deductibility of private mortgage insurance premiums, which means you can’t write it off like your mortgage interest. This removes the tax benefit to homeowners, making it a sunk cost that only benefits the investor who holds your mortgage in the event that you default. If 20% is just in the cards for you to save up in your checking and savings, there are other options to consider to avoid PMI. Get a gift from a family memberIf you’re short the 20% down payment from your own resources, you can get a gift from a family member for the full amount of the down payment, or just a portion of it. Your family member will have to provide documentation of the funds they are gifting you, and provide a gift letter confirming all the funds are a gift. Take out a 401(k) loanDepending on how long you’ve been at your job and how much you have vested, you may be able to take out a loan against your 401(k) for all or a portion of your down payment. Lenders don’t consider a 401k loan as a monthly debt, so even it won’t hurt your debt-to-income ratio like other types of loans would. Sell an assetMaybe you’re into classic cars and have one you could sell, or you’ve finally decided to trade in the RV for a house without wheels. You can sell an asset and use the proceeds to make your down payment. You’ll have to prove your ownership, and keep all the paperwork related to the sale, including the bill of sale, copy of the title showing ownership transferring to the buyer, and deposits of the funds into your accounts. You’ll also need to verify the value of the asset with some third party valuation source, like a Kelley Blue book for cars. Can a PMI company decline my loan?Although it is very rare, there are cases where a PMI company could decline your loan. Fortunately, just like mortgage lenders, there are many private mortgage insurance companies to choose from, and some may have more liberal underwriting guidelines than others. The one factor that has become an issue in recent years for borrowers is the increase in the minimum score requirement for DTIs over 45%. Many PMI companies now require at least a 700 score if the DTI exceeds 45%, so you could end up with a declined loan for your PMI, even if your lender has approved your loan. In many cases, a different PMI company may be willing to do the loan, but chances are the premiums will be higher to compensate for the extra risk the PMI company is taking on by approving a higher DTI. If all else fails, you can always switch to an FHA loan, which allows for higher DTIs with lower credit scores, and no markup for score at all. The bottom linePrivate mortgage insurance may seem like just another expense in a long line of costs associated with buying or refinancing a home. For anyone trying to purchase a home with less than 20% who has good credit scores, PMI is a very cost-effective way to keep your monthly payment as low as possible. The post PMI Explained: What Private Mortgage Insurance is and Why You Need It appeared first on Student Loan Hero. from https://studentloanhero.com/featured/private-mortgage-insurance-guide/ If you’re reading this Monday afternoon, this is one last friendly reminder for those of you who haven’t filed your tax return to get on it. Maybe you can even get on the news while you’re lined up at the post office. It’s always funny to me that something as mundane as mailing a tax return is something someone thinks makes good TV. From an economic perspective, most of the talk last week was focused around Brexit and trade deals, but before we get there, let’s look at some data on home prices and inflation, among other reports. Headline NewsQuicken Loans Home Price Perception Index (HPPI)There was an increase in discord between homeowners and appraisers in March when actual appraisals came in 0.78% below homeowner estimates as compared to a gap of just 0.5% in February. Looking at the country’s regional data, homeowners in the Midwest inflated their value estimates by 0.9%. Other regions were pretty close together with homeowners in the Northeast, South and West overvaluing their homes by 0.78%, 0.76% and 0.7%, respectively. At the metropolitan level, Boston homeowners continue to have the hottest market when comparing their best guesses to actual appraised values. In Boston, values are coming in 2.23% above estimates. Meanwhile, homeowners in the Windy City are on the other side of things, overvaluing properties by 1.94%. Meanwhile, LA homeowners are near the same page, overestimating property values by just 0.03%. Quicken Loans Home Value Index (HVI)Home values were down 0.2% in March, but they’re still up 3.37% on the year, meaning there’s an uptick in equity for homeowners even if it’s accruing at a slower rate. Home values were down 1.45% in the South, but they’ve gone up 2.31% annually. Meanwhile, in the Northeast, values are up 3.65% on the year despite being down 0.19% on the month. Values in the Midwest were up 0.68% in March and 4.11% since the same time in 2018. The largest monthly value increase was seen in the South where home values rose 0.79%, but they’re only up 2.79% on the year. MBA Mortgage ApplicationsApplications were down 11% on the refinance side, and this was a major contributor to overall mortgage applications being down 5.6%. The average rate on a 30-year fixed rate is up four basis points to 4.4% last week. Purchase applications were up 1% on the week and have risen 13% on the year. Consumer Price Index (CPI)Inflation on the consumer side was up 0.4% in March and has risen 1.9% on the year. When taking out food and energy and leaving only core categories, prices were only up 0.1% but had risen 2% annually. The cost of housing and medical care were both up 0.3% on the month and have risen 2.9% and 1.7% annually, respectively. Digging further into the housing numbers, rents were up 0.4% and have gone up 3.7% on the year according to this index. Meanwhile, the equivalent rent that homeowners would pay for a similar space was up 0.3% and 3.3% annually. On the medical care side, physician services were down 0.4%, but hospital services were up 0.3% and have risen 1.8% annually. Energy prices were up 3.5% on the month, but are still down 0.4% on the year. In particular, gasoline was up 6.5% in March, but it has still fallen 0.6% since 2018. Meanwhile, food prices were up 0.3% and up 2.1% annually. The price for wireless services was down 0.1% and internet costs were down 1.1%. Meanwhile, the price of new vehicles was up 0.4% while used vehicle prices were down by an equal amount. Jobless ClaimsInitial jobless claims were down 8,000 on the week to come in at 196,000. The 4-week average was down 7,000, coming in at 207,000. On the continuing claims side, these were down 13,000 to come in at 1.713 million. Meanwhile, the 4-week moving average was down 11,000 to about 1.735 million. Producer Price Index (PPI)Prices for producers of goods and services were up 0.6% on the month and have risen 2.2% on the year. When food and energy were taken out, prices were only up 0.3% in March and 2.4% annually. Finally, when trade services were further removed, prices were flat and inflation on the producer’s side has gone up an even 2%. There was a 16% rise in the cost of gasoline, which helped energy prices go up 5.4%. Meanwhile, higher vegetable prices pushed the cost of food up 0.3%. Meanwhile, trade services and the wholesale and retail sector were up 1.1%, balanced against a 0.8% drop in the cost of transportation services. Meanwhile, prices for services were up 0.3%. Other highlighted categories included finished goods with a 1.4% rise as a 3.4% uptick in cigarette prices offsets a small decline in the price for computers and vehicles. Meanwhile, finished service prices were up 0.3%. Consumer SentimentConsumer sentiment was down 1.5 points in a preliminary reading for April to come in at 96.9. This is blamed on a three-point dip in expectations to 85.8. This is the lowest reading for this metric since the aftermath of the government shutdown in February. The effects of the dip in expectations were somewhat mitigated by a 0.9% increase in the assessment of current conditions to 114.2. It marks the best number in this category since December. Consumers are still expecting inflation to remain low. Over the next year, predictions were down 0.1% to 2.4%, while the longer-term five-year outlook had expectations falling 0.2% to 2.3%. Mortgage RatesAfter weeks of being lower or unchanged, mortgage rates began to rise a bit last week. When compared to the same time a year ago, it’s still a great time to get a home or refinance your current one. Think about locking your rate today. The average rate for a 30-year-fixed mortgage with 0.5 points in fees rose four basis points last week to 4.12%. Still, a year ago at this time, the rate was 4.42%. Meanwhile, looking at shorter terms, the average rate for a 15-year fixed mortgage with 0.4 points was also up by four basis points to come in at 3.6%. Last year at this time, the rate was 3.87%. The rate for a 5-year treasury-indexed, hybrid adjustable rate mortgage (ARM) was up a sizable 14 basis points to 3.8% with 0.4 points. It’s up from 3.61% last year. Stock MarketThere were some big bank earnings for J.P. Morgan that had investors hopeful about the economy, even as the Brexit deadline has been extended to October 31. The European Union also gave the go-ahead for trade negotiations with the U.S., opening up another battle on the trade front. The Dow Jones Industrial Average was up 269.25 points to 26,412.3 on Friday, down 0.05% on the week. Meanwhile, the S&P 500 was up 0.11% on the week, closing at 2,907.41, up 19.09 points on the day. Finally, the Nasdaq finished the week at 7,984.16, up 0.57% on the week and 36.8 points on the day. The Week AheadTuesday, April 16 Industrial Production (9:15 a.m. ET) – The Federal Reserve’s monthly index of industrial production – and the related capacity indexes and capacity utilization rates – covers manufacturing, mining, and electric and gas utilities. Housing Market Index (10:00 a.m. ET) – The National Association of Home Builders produces a housing market index based on a survey in which respondents from the organization are asked to rate the general economy and housing market conditions. The index is a weighted average of separate diffusion indexes, including present sales of new homes, sales of new homes expected in the next six months and traffic of prospective buyers in new homes. Wednesday, April 17 MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications to mortgage lenders. This is a leading indicator for single-family home sales and housing construction. International Trade (8:30 a.m. ET) – International trade is composed of merchandise (tangible goods) and services. It’s available by export, import and trade balance for six principal end-use commodity categories and for more than 100 principal Standard International Trade Classification system commodity groupings. Thursday, April 18 Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals filing for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The 4-week moving average of new claims smooths out weekly volatility. Retail Sales (8:30 a.m. ET) – Retail sales measure total receipts from stores selling merchandise and related services to final consumers. Sales are measured by retail and food service stores. Data is collected from the Monthly Retail Trade Survey conducted by the U.S. Census Bureau. Friday, April 19 Housing Starts (8:30 a.m. ET) – A housing start is registered when the construction of a new residential building begins. The start of construction is defined as the beginning of excavation of the foundation for the building. We get retail sales and plenty of housing data among other reports next week. It’ll all be covered in Market Update next Monday. We get that this isn’t always the most interesting reading for your Monday afternoon. Fortunately, we’ve got plenty of other home, money and lifestyle content to share with you if you subscribe to the Zing Blog below. Here in Michigan, it’s been a chilly start to the spring for the most part. If you need a little sunshine in your life, maybe this article on sunrooms will at least have you thinking about warmer weather. Have a great week! The post Inflation Moves Even Higher as Home Prices Dip – Market Update appeared first on ZING Blog by Quicken Loans. from https://www.quickenloans.com/blog/inflation-moves-even-higher-home-prices-dip-market-update Tax season is the perfect time to sort through your paperwork to make “keep” and “shred” piles. But when it comes to mortgage documents, which do you keep, and for how long? And which can you safely toss? IRS Could Ask for ProofAs a rule of thumb, you should keep all of the contract papers detailing your home purchase and original loan for the life of the loan. And sometimes longer. Since home loans can have tax implications, the IRS provides guidelines on what paperwork you need to keep and for how long. You could be required to produce records that prove income, deductions or credit claimed for at least three years from the date of a return. If you failed to file a tax return in any given year, there is no statute of limitations. In that case, the IRS recommends you keep documents related to those records indefinitely. You also should keep records of any major home improvements, such as a remodel or addition, and records of expenses incurred while buying and selling, such as legal fees and agent commissions, to calculate capital gains. A capital gain is a profit that results from the sale of an asset that amounts to more than the purchase cost. Any improvements you’ve made on your house, as well as expenses when selling it, are added to the original purchase price. The difference between the sale price and the original price is the capital gain. Keeping records of these expenses can help lower your capital gains tax. Other paperwork associated with the loan, such as refinancing agreements, should be kept for at least three years, although some real estate professionals recommend keeping this paperwork for up to 10 years. That’s because you might want to refer to it if your monthly mortgage statements seem inaccurate or if there’s a sudden, unexpected change in your monthly interest rate, for instance. You’ll need to keep monthly statements, such as those detailing paid monthly mortgage loan fees, only as long as you feel necessary – perhaps a few months – to ensure the payments were credited to your account. Three Keepers Tied to Your MortgageThese documents should be kept in a safe place while you still own the home: DeedThe U.S. government recommends that you hang on to any deeds as long as you own the property. But if you’ve paid off your mortgage, and the deed to your property has been recorded in land records, the documents can be tossed. That’s because most municipalities have copies of these documents available online. Even so, your personal copy is the quickest way to prove that you are, in fact, the owner of your home. Before discarding these papers, make sure you have a document labeled “release” or “certificate of satisfaction.” You can verify this with the title company that handled your closing. Mortgage (or Deed of Trust) and Promissory NoteMuch like your deed, you’ll want to keep these documents for at least as long as you own the property. In the old days, homeowners had “note burning” parties at which they torched their mortgages to celebrate paying them off. While that may have been fun, these documents are still incredibly important, and you’re much better off filing them in a storage cabinet. Closing DisclosureConsumers should hold on to the Closing Disclosure for at least a year after closing on their mortgage. The disclosure details the fees you paid to the lender and third parties, as well as whether or not you paid discount points. Under some circumstances, you can deduct discount points from income taxes, but you’ll need to keep the Closing Disclosure for as long as you use the deduction. Three to Keep Even if You Don’t Have a MortgageEven if you’re not signing a mortgage, there is paperwork you should keep until it’s no longer needed: Purchase Contract and Seller DisclosuresIf any undisclosed problems crop up with your home during your first two or three years of ownership, you may want to refer to the contract and disclosure documents to prove that the seller didn’t mention the problems. Keep these documents until you’re confident you’re past the point when undisclosed issues will emerge. Home WarrantyIf you have a home warranty, keep a copy until it’s expired (they’re often annual contracts that would need to be renewed). Checking through this paperwork is the fastest and easiest way to know what’s covered. Home Inspection ReportYou should keep the home inspection report for two to three years, since it’s likely to convey information about the ages and conditions of systems and appliances, among other things. For example, the home inspector may have estimated the age of the roof, which gives you an idea of when it will need to be replaced. How to Keep Your Records SafeOnline or cloud-based records can be hacked, and hard drives can fail. We recommend you keep important real estate records in a locked fireproof cabinet or safe deposit box. Make sure to tell any other party named on your mortgage where the files are and how to access them. If you’re still feeling overwhelmed by documentation, talk to your tax advisor and a Home Loan Expert before heading to the shredder. The post How Long Should You Keep Your Mortgage Documents? appeared first on ZING Blog by Quicken Loans. from https://www.quickenloans.com/blog/how-long-should-you-keep-your-mortgage-documents If you default on student loans, credit repair is possible. The world isn’t over — you’ll still be able to borrow money again in the future, so long as you take the steps necessary to repair your credit. These steps include getting out of default, paying your bills on time, working away at your debt and eventually applying for credit (as needed) to improve your debt-to-credit ratio. We won’t lie: This can be a lengthy process. But once you get started, you could see your score start to rise in just a matter of a few months. Default on Your Student Loan? Credit Repair May Be NeededCredit scores range from 300 to 850. This score is calculated by examining a person’s current debt, the type and number of accounts they have open, their credit history, credit utilization, and payment history. As you know, student loan default can have a big impact on that credit score. If your payment is missed or late for a given period of time, or if you stop making payments completely, student loan default can be the result. Your credit score and report will reflect a poor payment history, and when it comes time to finance a car, apply for an apartment, or do anything else that will require a peek at your credit score, you’ll look risky to lenders and creditors. How to Recover From Defaulted Student Loans Step 1: Getting Out of DefaultIn order to repair your credit, you need to get out of student loan default first. When you default on your loan, it can be sent to collections, at which point you will be notified, usually by mail. If you receive such a notice, the first step is to call the phone number on the letter sent to you to learn about your options. Typically, you have three possibilities in this scenario: Pay Your Loans Off: The simplest way to get out of student loan default is to pay off your loan in full. This is obviously easier said than done, as the average student loan balance is in the tens of thousands of dollars. However, if you have a family member who can help you out by loaning you money at a lower interest rate, let’s say, then this might be a reasonable option. A sudden windfall, like an inheritance, could also suddenly make this a viable option. Rehabilitate Your Loans: You might be able to work with your loan servicer or collections agency on a plan to make a series of affordable monthly payments. When you call, explain that you want to get out of default and can only pay a certain amount each month. The benefit of loan rehabilitation is that, as long as you make your monthly payments on time for that given period of time, you will most likely be able to remove the default status from your credit report. Consolidate Your Loans: If you have several federal student loans, you can choose to consolidate them into one, which will count as a payment and bring you out of default. In order to qualify for consolidation (and note, this is for federal rather than private student loans), you have two choices: You can make three on-time payments before applying for the federal Direct Consolidation loan, or you can apply for an income-driven repayment plan, which will set your monthly payments on the new loan at a portion of your disposable income to make repayment more affordable. Step 2: Pay Off Other DebtsYour credit utilization makes up 30% of your credit score, so if you have other debts, like credit cards or a car loan, your next step should be to lower those balances once your student loans are under control. If your credit card interest rates are well above your student loan interest rates, it would be wise to focus on paying those as quickly as possible, since mathematically speaking, paying off the debt with the higher interest rate first will save the most money over time. Additionally, if your credit cards are maxed out, it will not reflect well on your credit score. You need to have as much “space” — that is, available credit — as possible. Consider opening a new line of credit in addition to paying down your loans so you can increase your credit utilization. (Just don’t rack up any new debt). Step 3: Pay All Your Bills On TimeIf you struggle with your other bills, like your phone bill or your mortgage, it’s time to sit down and take a long hard look at your finances to ensure you always pay your bills on time. It’s more important than you might think: Your payment history is the most significant factor of your score, at 35%. This is one of the many reasons people turn to secured credit cards to raise their credit score after student loan default. By paying a deposit, you’ll receive a credit card equal to the amount of the deposit (or maybe more, depending on the creditor). Every month that you pay your bill on time, the lender will report it to the credit bureaus. As a result, your payment history will improve and so will your credit score. However, if you’re late on a payment, it will have a negative impact on your credit, so be sure to pay your bills on time, every time, and your credit score will improve as time passes. Step 4: Rinse, Repeat, and Be PatientUnfortunately, building up your credit is not often an easy or quick process. You have to consistently pay your bills on time, maintain low credit card balances, and periodically open new lines of credit (that you don’t max out) to keep pushing your score higher. If you do all of these things and are patient, you will be well on your way to repairing your credit after student loan default. Many people have done it before you, and although going into default is never a good thing, you definitely have options for having financial success in the future. Kristina Byas contributed to this report. Interested in refinancing student loans? Here are the top 6 lenders of 2019! LenderVariable APREligible Degrees Check out the testimonials and our in-depth reviews! 1 Important Disclosures for SoFi. SoFi Disclosures Student loan Refinance:Fixed rates from 3.890% APR to 8.074% APR (with AutoPay). Variable rates from 2.500% APR to 7.115% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.500% APR assumes current 1 month LIBOR rate of 2.50% plus 0.00% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. See eligibility details. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org) 2 Important Disclosures for Earnest. Earnest DisclosuresTo qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application. Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.54% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of March 18, 2019, and are subject to change based on market conditions and borrower eligibility. Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance. The information provided on this page is updated as of 0318/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at [email protected], or call 888-601-2801 for more information on ourstudent loan refinance product. © 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America. 3 Important Disclosures for Laurel Road. Laurel Road DisclosuresFIXED APR Fixed rate options consist of a range from 3.75% per year to 5.80% per year for a 5-year term, 4.25% per year to 6.25% per year for a 7-year term, 4.55% per year to 6.65% per year for a 10-year term, 4.85% per year to 7.05% per year for a 15-year term, or 5.30% per year to 7.27% per year for a 20-year term, with no origination fees. The fixed interest rate will apply until the loan is paid in full (whether before or after default, and whether before or after the scheduled maturity date of the loan). The monthly payment for a sample $10,000 loan at a range of 3.75% per year to 5.80% per year for a 5-year term would be from $183.04 to $192.40. The monthly payment for a sample $10,000 loan at a range of 4.25% per year to 6.25% per year for a 7-year term would be from $137.84 to $147.29. The monthly payment for a sample $10,000 loan at a range of 4.55% per year to 6.65% per year for a 10-year term would be from $103.88 to $114.31. The monthly payment for a sample $10,000 loan at a range of 4.85% per year to 7.05% per year for a 15-year term would be from $78.30 to $90.16. The monthly payment for a sample $10,000 loan at a range of 5.30% per year to 7.27% per year for a 20-year term would be from $67.66 to $79.16. However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account. VARIABLE APR Variable rate options consist of a range from 2.75% per year to 6.30% per year for a 5-year term, 4.00% per year to 6.35% per year for a 7-year term, 4.25% per year to 6.40% per year for a 10-year term, 4.50% per year to 6.65% per year for a 15-year term, or 4.75% per year to 6.90% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.25% to 3.80% for the 5-year term loan, 1.50% to 3.85% for the 7-year term loan, 1.75% to 3.90% for the 10-year term loan, 2.00% to 4.15% for the 15-year term loan, and 2.25% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 2.75% per year to 6.30% per year for a 5-year term would be from $178.58 to $194.73. The monthly payment for a sample $10,000 loan at a range of 4.00% per year to 6.35% per year for a 7-year term would be from $136.69 to $147.77. The monthly payment for a sample $10,000 loan at a range of 4.25% per year to 6.40% per year for a 10-year term would be from $102.44 to $113.04. The monthly payment for a sample $10,000 loan at a range of 4.50% per year to 6.65% per year for a 15-year term would be from $76.50 to $87.94. The monthly payment for a sample $10,000 loan at a range of 4.75% per year to 6.90% per year for a 20-year term would be from $64.62 to $76.93. However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account. All credit products are subject to credit approval. Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com. 4 Important Disclosures for LendKey. LendKey DisclosuresRefinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution. 5 Important Disclosures for CommonBond. CommonBond DisclosuresOffered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.49% effective March 10, 2019. 6 Important Disclosures for Citizens Bank. Citizens Bank Disclosures Education Refinance Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of April 1, 2019, the one-month LIBOR rate is 2.50%. Variable interest rates range from 3.00% – 9.74% (3.00% – 9.74% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 3.89% – 9.99% (3.89% – 9.99% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision at http://www.citizensbank.com/EdRefinance, including Should I Refinance My Student Loans?and our FAQs. Should I Refinance My Student Loans?includes a comparison of federal and private student loan benefits that we encourage the borrower to review. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled. Applicants with an Associate’s degree or with no degree must have made at least 12 qualifying payments after leaving school. Qualifying payments are the most recent on time and consecutive payments of principal and interest on the loans being refinanced. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply. Borrowers whose loans were funded prior to reaching the age of majority may not be eligible for co-signer release. Note: co-signer release is not available on the Student Loan for Parents or Education Refinance Loan for Parents.The post How to Repair Your Credit After Student Loan Default appeared first on Student Loan Hero. from https://studentloanhero.com/featured/student-loan-default-repair-credit/ |