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When someone passes away leaving debts behind, you might be wondering if you have any personal liability to pay them. If you have aging parents, for instance, you may be worried about having to assume responsibility for their mortgage payments, credit cards or other debts. If youâve asked yourself, âCan I inherit debt?â the answer is typically no, even though those debts donât automatically disappear. But there are situations in which you may have to deal with a loved oneâs creditors after theyâre gone.
How Debts Are Handled When Someone Passes Away
Debts, just like assets, are considered part of a personâs estate. When that person passes away, their estate is responsible for paying any and all remaining debts. The money to pay those debts comes from the asset side of the estate.
In terms of who is responsible for making sure the estateâs debts are paid, this is typically done by an executor. An executor performs a number of duties to wrap up a personâs estate after death, including:
- Getting a copy of the deceased personâs will if they had one and filing it with the probate court
- Notifying creditors and other entities of the personâs death (for example, the Social Security Administration would need to be notified so any Social Security benefits could be stopped)
- Completing an inventory of the deceased personâs assets and their value
- Liquidating those assets as needed to pay off any debts owed by the estate
- Distributing the remaining assets to the people or organizations named in the deceased personâs will if they had one or according to inheritance laws if they did not
In terms of debt repayment, executors are required to give notice to creditors who may have a claim against the estate. Creditors are then giving a certain window of time, according to state laws, in which to make a financial claim against the estateâs assets for repayment of debts.
If a creditor doesnât follow state guidelines for making a claim, then those debts wonât be paid from the estateâs assets. But if creditors are less than reputable, they may try to come after the deceased personâs spouse, children or other family members to collect whatâs owed.
Not all assets in an estate may be used to repay debts owed by a deceased person. Any assets that already have a named beneficiary, such as a life insurance policy, a 401(k), individual retirement account, payable on death accounts or annuity, would be transferred to that beneficiary automatically.
Can I Inherit Debt From My Parents?
This is an important question to ask if your parents are carrying high amounts of debt and youâre worried about having to pay those bills when they pass away. Again, the short answer is usually no. You generally donât inherit debts belonging to someone else the way you might inherit property or other assets from them. So even if a debt collector attempts to request payment from you, thereâd be no legal obligation to pay.
The catch is that any debts left outstanding would be deducted from the estateâs assets. If your parents were substantially in debt when they passed away, repaying them from the estate may leave little or no assets for you to inherit.
But you should know that you can inherit debt that you were already legally responsible for while your parents were alive. For instance, if you cosigned a loan with them or opened a joint credit card account or line of credit, those debts are legally yours just as much as they are your parents. So, once they pass away, youâd be solely responsible for repaying them.
And itâs also important to understand what responsibility you may have for covering long-term care costs incurred by your parents while they were alive. Many states have filial responsibility laws that require children to cover nursing home bills, though they arenât always enforced. Talking to your parents about long-term care planning can help you avoid situations where you may end up with an unexpected debt to pay.
Can I Inherit Debt From My Children?
The same rules that apply to inheriting debt from parents typically apply to inheriting debts from children. Any debts remaining would be paid using assets from their state.
Otherwise, unless you cosigned for the debt, then you wouldnât be obligated to pay. On the other hand, if you cosigned private student loans, a car loan or a mortgage for your adult child who then passed away, as cosigner youâd technically have a legal responsibility to pay them. Federal student loans are an exception.
If your parents took out a PLUS loan to pay for your higher education costs and something happens to you, the Department of Education can discharge that debt due to death. And vice versa, if your parents pass away then any PLUS loans they took out on your behalf could also be discharged.
Can I Inherit Debts From My Spouse?
When marriage and money mix, the lines on inherited debt can get a little blurred. The same basic rule that applies to other situations applies here: if you cosigned or took out a joint loan or line of credit together, then youâre both equally responsible for the debt. If one of you passes away, the surviving spouse would still have to pay.
But what about debts that are in one spouseâs name only? Thatâs where itâs important to understand how living in a community property state can affect your liability for marital debts. If you live in a community property state, debts incurred after the marriage by one spouse can be treated as a shared financial obligation. So if your spouse opened up a credit card or took out a business loan, then passed away you could still be responsible for paying it. On the other hand, debts incurred by either party before the marriage wouldnât be considered community debt.
Consider Getting Help If You Need It
If a parent, spouse, sibling or other family member passes away, it can be helpful to talk to an attorney if youâre being pressured by debt collectors to pay. An attorney who understands debt collection laws and estate planning can help you determine what your responsibilities are for repaying debts and how to handle creditors.
The Bottom Line
Whether or not youâll inherit debt from your parents, child, spouse or anyone else largely hinges on whether you cosigned for that debt or live in a community property state in the case of married couples. If youâre concerned about inheriting debts, consider talking to your parents, children or spouse about how those financial obligations would be handled if they were to pass away. Likewise, you can also discuss what financial safety nets you have in place to clear any debts you may leave behind, such as life insurance.
Tips for Estate Planning
- Consider talking to a financial advisor about how to manage and pay off debts you owe or any debts you might inherit from someone else. If you donât have a financial advisor yet, finding one doesnât have to be difficult. SmartAssetâs financial advisor matching tool can help you connect with an advisor in your local area. It takes just a few minutes to get your personalized advisor recommendations online. If youâre ready, get started now.
- The Fair Debt Collection Practices Act caps the statute of limitations for unpaid debt collections at a maximum of six years, although most states specify a much shorter time frame. However, some debt collectors buy so-called zombie debts for pennies on the dollar and then â unscrupulously â try to collect on them. Hereâs how to deal with such operators.
Photo credit: Â©iStock.com/NiseriN, Â©iStock.com/AndreyPopov, Â©iStock.com/FatCamera
The post Can I Inherit Debt? appeared first on SmartAsset Blog.
The best renters insurance companies in Chicago, Illinois Best for Low Premiums: Lemonade Best Customer Service: State Farm Best for Add-On Coverage Options: Nationwide Best for Local Agent Network: Erie Insurance Best Coverage for High-Value Items: Country Financial Choosing your provider When choosing the best renters insurance in Chicago, itâs best to compare policies and […]
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Workplaces have always evolved with technology, trends, and research. The changing environment of our global economy and advances in technology mean organizations have to adapt to stay competitive. This also means employees should keep their eyes forward and focus on the skills that will keep them employed and open new career opportunities.Â
Looking into our immediate future, weâre seeing offices embrace telecommuting tools and implement flexible schedules to retain qualified employees and maintain social responsibility for the health and wellness of their teams.Â
With increasing reliance on technology, weâre also seeing a large shift towards prioritizing soft skills. Early adopters of artificial intelligence technology are reporting a 16 percent increase in the need for business leadership roles as the need for researchers drops and advanced technology fills the gap.Â
The best way to prepare for the office of the future is to set career goals and develop new skills, like how to run a productive meeting and collaborate within a team to increase productivity. Taking ownership of your skills and output can impress your manager and set you up for success when you negotiate your salary at your next performance review.Â
Read more about workplace trends and how to invest in your future below:
Sources: Global Workplace Analytics | NPR | CareerBuilder | SHRM | Gartner | Gensler | Lifesize | KFF | Cengage | Deloitte | IWG | World Economic Forum | Journal of Experimental Social Psychology
The post The Workplace of the Future: How to Prepare and Preserve Your Career appeared first on MintLife Blog.
With cold weather approaching, it’s time to take a couple days and get your home ready for the winter weather. To help you get started, here is a checklist with some of the most important tasks to get your house ready for the snow and cold.
Check for Leaks
In the winter, you want to make sure your home is a fortress. You don’t want any of your precious heat escaping, and you don’t want any of the winter weather getting in. To help you figure out your home’s leaky spots, you can hire a professional to do an energy audit on your home. This is a great option if you don’t have the time, or the desire to climb on your roof.
Windows: Swap out your screen windows for storm windows. During that process, check around your windows to make sure they are well sealed. To help identify small gaps, carefully hold a lit match or lighter a couple inches from the frame of the window. Move the flame around, always making sure it’s a safe distance from surfaces and fabrics, and watch for the flame to “dance.” If the flame moves, there is air movement in that spot. Use caulk to seal around the frame, or use a plastic window insulation kit to cover an entire window.
Heavy curtains will help keep more heat from escaping through your windows.
Doors: Replace your screen doors with storm doors. Again, check the seals during that process. If you can see any light around your doors, you have a significant gap for warm air to escape. Even if you can’t see any light, you still want to check the rubbery weather stripping around the door. If it’s brittle or cracking, it’s not doing its job. Installing a new weather stripping kit from a hardware store is a quick fix to make sure your doors are sealed.
Ducts: As time goes by, seals on duct work can come loose. Check your duct work to make sure your ducts aren’t letting any heat out into your attic, which can cause snow to melt and refreeze as ice dams on your roof.
Roof: Before winter arrives is a great time to check your roof for the season. Climb up (or at least get on a high ladder) and examine the shingles. Replace any that are missing or broken.
SEE ALSO: Who Knew's How to Prepare Your House for Winter
Make Sure Your Heating Systems Work
Furnace: Before it gets too cold, have your heating system checked out by a professional. The first really chilly day of winter is not the time to figure out your heater isn’t working. Have a heating and air company come out, check the systems, and change the filters, and you’ll be ready for Old Man Winter when he arrives.
Water Heater: The end of fall is a great time to drain your water heater. This should get done once a year, so if you haven’t done it recently, make sure you do before you find you only have really cold water in your house.
Chimney: If you have a chimney, make sure you sweep it (or have it professionally swept) before lighting any fires for the season. Removing the excess soot, as well as the birds and animals that made their homes in chimneys throughout the year, will help prevent fires and smoke damage. Also, examine the damper to make sure it’s still looking good. If it’s bent or warped, warm air will be able to escape through the chimney.
Reverse Ceiling Fans: If you have ceiling fans, now is the time to reverse them. Putting them in reverse will help blow down warm air that would otherwise be stuck near the ceiling, which will likely mean you can turn your heat down a degree or two.
If your fan runs on a remote, there is likely a button on the remote to switch the direction. If your fan runs on a switch, look for a small toggle or switch on the fan motor to make the change.
Be Ready Outdoors
Gutters: Make sure your gutters are ready to handle the winter precipitation. Empty the fallen leaves and anything else that has gathered in the gutters. Make sure they are secure to the roof, and repair them as needed. Also, make sure the drain pipe from your gutters is long enough and directing winter rains and melting snow away from your home’s foundation.
Water Lines: Prevent burst pipes by turning off all exterior water lines or insulating the pipes. If you have a sprinkler or irrigation system, drain the lines to make sure no water is left to damage the underground lines.
RELATED: Domestic CEO's Fall and Winter Home Maintenance Checklist
Tools: Be ready to get yourself out of the house by making sure all your winter tools are in good working condition. Turn on the snow blower, visually check the shovels, and stock up on salt or deicers. Having everything in its place and ready to go will give you a good start on digging out from a big blizzard.
Prepare Your Safety Kits
Pantry: During the winter, it’s always a good idea to keep extra food supplies in your pantry in case a big storm prevents you from getting to the store. Boxed and canned foods are the best because they take no electricity to store (in case that goes out), and have a long shelf life. Stock your pantry with a week’s worth of pastas, canned fruits and vegetables, soups, rice, beans, and bottled water, and you’ll be ready if the big one hits your town.
Boxed and canned foods are the best food to keep in stock because they take no electricity to store (in case that goes out), and have a long shelf life.
Lights: If a winter storm takes out your electricity, make sure you are ready with flashlights and candles to light your home. Keep flashlights in every room, and teach your kids where they are in case they need to find them in the dark.
Heat: If you have a wood burning fireplace, keep a solid stash of wood ready in case your power goes out. If you are in an area prone to losing power, you may also want to invest in a generator to run your furnace a couple hours a day during power outages. A good stash of blankets and comforters will help you get through chilly days and cold nights.
Detectors: Winter means an increase of home fires and carbon monoxide leaks. Make sure you and your family are protected by replacing the batteries in your smoke and carbon monoxide detectors and testing them before winter hits.
All the tasks on this list are important to get done before the snow starts falling. If you don’t have the time to do them all, hire a trusted professional to help you knock a few off tasks off your list. You’ll be thankful that you have everything done and ready as soon as the first big storm hits.
I’m the Domestic CEO, helping you love your home.
Image courtesy of Shutterstock.
These are the steps that introduced me and my husband to what financial independence is and for that I am eternally grateful. But a lot of important considerations get looked over if you just find a list of the steps…
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This page may include affiliate links. Please see theÂ disclosure pageÂ for more information. Let’s face it, debt in the United States is a problem. From our national debt, student loan debt, and consumer debt. Debt in the United States is a problem on all levels. Why is that? I’m a firm believer that it starts with…
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Top 5 Debt Consolidation Loan Companies The specifics of your debt consolidation loan will depend on your creditworthiness at the time of your application. With that said, the following companies offer some of the best…
The post Debt Consolidation Loans for Bad Credit – Our Top 5 Picks appeared first on Crediful.
You’ve tried debt payoff strategies, balance transfers, consolidation, and evenÂ debt management; you’ve begged your creditors, liquidated your assets, and pestered your friends and families for any money they can afford, but after all of that, you still have more debt than you can handle.
Once you reach the end of your rope, the options that remain are not as forgiving asÂ debt managementÂ and they’ll do much more damage to yourÂ credit scoreÂ than debt payoff strategies. However, if you’ve tried other forms ofÂ debt reliefÂ and nothing seems to work, all that remains is to consider debt settlement and bankruptcy.
Debt settlement is a very good way to clear your debt. It’s one of the cheapest and most complete ways to eradicateÂ credit cardÂ debtÂ and can help with most other forms ofÂ unsecured debtÂ as well. Bankruptcy, on the other hand, is aÂ last resortÂ option for debtors who can’t meet thoseÂ monthly paymentsÂ and have exhausted all other possibilities.
But which option is right for you, should you be looking for aÂ debt settlement companyÂ or aÂ bankruptcy attorney?
Similarities Between Bankruptcy and Debt Settlement
Firstly, let’s look at the similarities between bankruptcy and debt settlement, which are actually few and far between. In fact, beyond the fact that they are bothÂ debt reliefÂ options that can clear your debt, there are very few similarities, with the main one being that they both impact yourÂ credit scoreÂ quite heavily.
A bankruptcy can stay on yourÂ credit reportÂ for up to 10 years and do a lot of damage when it is applied. It may take several years before you can successfully apply for loans and high credit lines again, and it will continue to impact your score for years to come.
Debt settlement is not quite as destructive, but it can reduce yourÂ credit scoreÂ in a similar way and last for up to 7 years. Accounts do not disappear in the same way as when you pay them in full, so future creditors will know that the accounts were settled for less than the balance and this may scare them away.
In both cases, you could lose a couple hundred points off yourÂ credit score, but it all depends on how high your score is to begin with, as well as how many accounts you have on yourÂ credit reportÂ and how extensive the settlement/bankruptcy process is.
Differences Between Bankruptcy and Debt Settlement
The main two types of bankruptcy are Chapter 7 and Chapter 13. The former liquidates assets and uses the funds generated from this liquidation to pay creditors. The latter creates aÂ repayment planÂ with a goal of repaying all debts within a fixed period of time using an installment plan that suits the filer.
Debt settlement, on the other hand, is more of a personal process, the goal of which is to offer a reduced settlement sum to creditors andÂ debt collectors, clearing the debts with aÂ lump sum paymentÂ that is significantly less than the balance.
Chapter 7 BankruptcyÂ andÂ Chapter 13 Bankruptcy
When people think of bankruptcy, it’s often a Chapter 7 that they have in mind. With aÂ Chapter 7 bankruptcy, all non-exempt assets will be sold, and the money then used to pay lenders. There are filing costs and it’s advised that you hire aÂ bankruptcy attorneyÂ to ensure the process runs smoothly.
Chapter 7 bankruptcyÂ is quick and complete, typically finishing in 6 months and clearing mostÂ unsecured debtsÂ in this time. There is noÂ repayment planÂ to follow and no lawsuits or wage garnishment to worry about.
Chapter 13, on the other hand, focuses on aÂ repayment planÂ that typically spans up to 5 years. The debts are not wiped clear but are instead restructured in a way that the debtor can handle. This method of bankruptcy is typically more expensive, but only worthwhile for debtors who can afford to repay their debts.
Filing for bankruptcy is not easy and there is no guarantee you will be successful. There are strictÂ bankruptcy lawsÂ to follow and theÂ bankruptcy courtÂ must determine that you have exhausted all other options and have no choice but to file.
Bankruptcy will require you to see aÂ credit counselor, which helps to ensure that you don’t make the same mistakes in the future. This can feel like a pointless and demeaning requirement, as many debtors understand the rights and wrongs and got into a mess because of uncontrollable circumstances and not reckless spending, but sessions are short, cheap, and shouldn’t cause much stress.
HowÂ Debt Settlement Works
The goal of debt settlement is to get creditors to agree to aÂ settlement offer. This can be performed by the debtor directly, but it’s often done with help from aÂ debt settlement company.
The debt specialist may request that you stop making payments on your debts every month. This has two big benefits:
1. More Money
You will have more money in your account every month, which means you’ll have more funds to go towards debtÂ settlement offers.Â
The idea of making largeÂ lump sum paymentsÂ can seem alien to someone who has a lot of debt. After all, if you’re struggling to make $400 debt payments every month on over $20,000 worth of debt, how can you ever hope to get the $5,000 to $15,000 you need to clear those debts in full?
But if you stop making all payments and instead move that money to a secured account, you’ll have $4,800 extra at the end of the year, which should be enough to start making those offers and getting those debts cleared.
2. Creditor Panic
Another aspect of the debt settlement process that confuses debtors is the idea that creditors would be willing to accept reduced offers. If you have a debt worth $20,000 and are paying large amounts of interest every month, why would they accept a lump sum and potentially take a loss overall?
The truth is, if you keep makingÂ monthly payments, creditors will be reluctant to accept aÂ settled debtÂ offer. But as soon as you start missing those payments, the risk increases, and the creditor faces the very real possibility that they will need to sell that debt to aÂ collection agency. If you have a debt of $20,000, it may be sold for as little as $20 to $200, so if you come in with an offer of $10,000 before it reaches that point, they’ll snap your hand off!
Types of Debt
AÂ debt settlement programÂ works best when dealing withÂ credit cardÂ debt, but it can also help to clear loan debt,Â medical bills, and more. Providing it’s not government debt or secured debt, it will work.Â
With government debt, you need specific tax relief services, and, in most cases, there is no way to avoid it. With secured debt, the lender will simply take your asset as soon as you default.
Debt settlement companiesÂ may place some demanding restrictions on you, and in the short term, this will increase yourÂ total debtÂ and worsen yourÂ financial situation. In addition to requesting that you stop makingÂ monthly payments, they may ask that you place yourself on a budget, stop spending money on luxuries, stop acquiring new debt, and start putting every penny you have towards the settlement.
It can have aÂ negative impactÂ on your life, but the end goal is usually worth it, as you’ll beÂ debt-freeÂ within 5 years.
Pros andÂ Cons of Debt SettlementÂ and Bankruptcy
Neither of these processes are free or easy. With bankruptcy, you may pay up to $2,000 for Chapter 7 and $4,000 for Chapter 13 (including filing fees and legal fees) while debt settlement is charged as a fixed percentage of the debt or the money saved.Â
As mentioned already, both methods can also damage yourÂ credit score. But ultimately, they will clear your debts and the responsibilities that go with them. If you’ve been losing sleep because of your debt, this can feel like a godsendâa massive weight lifted off your shoulders.
It’s also worth noting thatÂ scamsÂ exist for both options, so whether you’reÂ filing bankruptcyÂ or choosing a debtÂ settlement plan, make sure you’re dealing with a reputable company/lawyer and are not being asked to pay unreasonable upfront fees. ReputableÂ debt settlement companiesÂ will provide you with aÂ free consultationÂ in the first instance, and you can use the NACBA directory to find a suitable lawyer.
Bankruptcy and Debt Settlement: The End Goal
For all the ways that these two options differ, there is one important similarity: They give you a chance to make aÂ fresh start. You can never underestimate the benefits of this, even if it comes with a reducedÂ credit scoreÂ and a derogatory mark that will remain on yourÂ credit reportÂ for years to come.
If you’re heavily in debt, it can feel like your money isn’t your own, your life isn’t secure, and your future is not certain. With bankruptcy and debt settlement, yourÂ credit scoreÂ and finances may suffer temporarily, but it gives you a chance to wipe the slate clean and start again.
What’s more, this process may take several years to complete and in the case of bankruptcy, it comes withÂ credit counseling. Once you make it through all of this, you’ll be more knowledgeable about debt, you’ll have a better grip on your finances, and your impulse control.Â
And even if you don’t, you’ll be forced to adopt a little restraint after the process ends as yourÂ credit scoreÂ will be too low for you to apply for newÂ personalÂ loansÂ and high limitÂ cards.
Other Options for Last DitchÂ Debt Relief
Many debtors preparing for debt settlement or bankruptcy may actually have more options than they think. For instance, bankruptcy is often seen as a get-out-of-jail-free card, an easy escape that you can use to your advantage whenever you have debts you don’t want to pay.
But that’s simply not the case and unless you have tried all other options and can prove that none of them have worked, your case may be thrown out. If that happens, you’ll waste money on legal and filing fees and will be sent back to the drawing board.
So, regardless of theÂ amount of debtÂ you have, make sure you’ve looked into the followingÂ debt reliefÂ options before you focus on debt settlement or bankruptcy.Â
AÂ debt consolidationÂ loanÂ is provided by a specialized lender. They pay off all your existing debts and give you a single large loan in return, one that has a lowerÂ interest rateÂ and a lowerÂ monthly payment.Â
Your debt-to-income ratio will improve, and you’ll have more money in your pocket at the end of the month. However, in exchange, you’ll be given a much longer-term, which means you’ll pay more interest over the life of the loan.
AÂ Debt ManagementÂ Plan
Debt managementÂ combinesÂ counseling servicesÂ withÂ debt consolidation. AÂ debt managementÂ planÂ requires you to continue making yourÂ monthly payment, only this will go to theÂ debt managementÂ company and not directly to the creditors. They will then distribute the money to your creditors.
You’ll be given aÂ monthly paymentÂ that you can manage, along with the budgeting advice you need to keep meeting those payments. In exchange, however, you’ll be asked to close all but oneÂ credit cardÂ (which can hurt yourÂ credit score) and if you miss a payment then your creditors may back out of the agreement.
Balance Transfer Card
If all your debts are tied intoÂ credit cards, you can use a balance transferÂ credit cardÂ to make everything more manageable. With a balance transferÂ credit card, you move one or more debts onto a new card, one that offers a 0% APR for a fixed period.Â
The idea is that you continue making yourÂ monthly payment, only because there is no interest, all the money goes towards the principal.
Home Equity Loans
If you have built substantial equity in your home then you can look into home equity loans and lines of credit. These are secured loans, which means there is a risk ofÂ repossessionÂ if you fail to keep up your payments, but for this, you’ll get a greatly reducedÂ interest rateÂ and a sum large enough to clear your debts.
Bottom Line: The Best Option
Debt settlement and bankruptcy are both considered to beÂ last resortÂ debt-reliefÂ options, but they couldn’t be more different from one another. Generally speaking, we would always recommend debt settlement first, especially if you have a lot of money tied up inÂ credit cardÂ debt.
If not, and you can’t bear the idea of spending several months ignoring your creditors, missing payments, and accumulatingÂ late fees, it might be time to consider bankruptcy. In any case, make sure you exhaust all other possibilities first.
Debt Settlement vs Bankruptcy: Which is Best? is a post from Pocket Your Dollars.
Refinancing your student loans can make good financial sense, and thatâs especially true if your current loans are stuck at a high-interest rate. With a new loan at a lower APR, you could save a bundle of money on interest each month and ultimately pay your student debt off faster. Consolidating several loans into one new one can also simplify your financial life and make keeping up with bills a lot easier.
College Ave and Earnest topped our list, but since student loan refinancing is an incredibly competitive space, youâll also want to spend time comparing student loan companies to see who offers the best deal. Many lenders in this space offer incredibly low APRs, flexible payment options, borrower incentives, and more. This means itâs more important than ever to shop around so you wind up with the best student loan for your needs.
What You Should Know About Refinancing Federal Student Loans with a Private Lender
The lenders on this list can help you consolidate and refinance both federal student loans and private student loans. However, there are a few details to be aware of before you refinance federal loans with a private lender.
Switching federal loans to private means giving up federal protections like deferment and forbearance. You also give up your chance to qualify for income-driven repayment plans like Pay As You Earn (PAYE) or Income Based Repayment (IBR). Income-driven repayment plans let you pay a percentage of your discretionary income for 20 to 25 years before ultimately forgiving your remaining loan balances, so this perk isnât one you should give up without careful thought and consideration.
Best Student Loan Refinancing Companies of 2021
As you start your search to find the best student loan for your lifestyle, take the time to compare lenders and all they offer their customers. While there are a ton of reputable companies offering high-quality student loan refinancing products on the market today, there are also companies you should probably steer clear of.
To make your search easier, we took the time to compare most of the top lenders in this space in terms of interest rates offered, fees, borrower benefits, and more. The following student loan companies are the cream of the crop, so you should start your search here.
Our Top Picks:
- Splash Financial
- College Ave
- Wells Fargo
- PenFed Credit Union
Student Loan Refinancing Company Reviews
1. Splash Financial
Splash Financial may be a newer company in the student loan refinancing space, but their offerings are competitive. This company lets you check your rate online without a hard inquiry on your credit report, and their variable rates currently start at just 2.25% APR.
Not only are interest rates offered by Splash Financial industry-leading, but the company has a 95% customer satisfaction rate so far. Their cutting-edge technology also lets you apply for your loan and complete the loan process online, meaning less hassle and stress for you as the borrower.
Check Out Splash Financialâs Low Rates
2. College Ave
College Ave offers student loan refinancing products that can be tailored to your needs. They offer low fixed and variable interest rates, for example, and youâll never pay an application fee or an origination fee. You can even qualify for a discount if you set your loan up on autopay, and a wide range of repayment schedules are available.
College Ave also offers a wide range of online calculators and tools that can help you figure out how much student loan refinancing could help you save and whether the move would be worth it in the end. Considering their low variable rates start at just 2.74% APR, thereâs a good chance you could save money by refinancing if you have excellent credit or a cosigner with great credit.
Get Started with College Ave
Earnest is another online lender that focuses most of its efforts on offering high-quality student loans. This company lets you consolidate debt at a lower interest rate than you might find elsewhere, and you get the option to pick a monthly payment and repayment period that works with your budget and your lifestyle.
While youâll need excellent credit to qualify for the lowest interest rates, loans from Earnest come with variable APRs starting at 1.81% and low fixed rates starting at just 3.45%. To qualify for student loan refinancing with Earnest, youâll need a minimum credit score of 650 and a strong employment and income history. You also need to be current on all your bills and cannot have a bankruptcy on your credit profile.
Refinance and Save with Earnest
Also make sure to check out student loan refinancing company SoFi as you continue your search. This online lender offers some of the best student loan refinancing products available today, including loans with no application fee, origination fee, or hidden fees.
SoFi lets you apply for and complete the entire loan process online, and they offer live customer support 7 days a week. You can also check your rate online without a hard inquiry on your credit report, which makes it easier to see how much you could save before you commit.
Get Pre-Approved with SoFi in Less than 2 Minutes
Commonbond is another online student lender who lets you check your rate online without a hard inquiry on your credit report. With student loan refinancing from Commonbond, you could easily save thousands of dollars on interest with a new fixed interest rate as low as 3.21%. Repayment terms are offered for 5 to 20 years as well, letting you choose a new monthly payment and repayment timeline that works for your needs.
You can apply for your new loan online and note that these loans donât come with an origination fee or any prepayment penalties. Your loan could also qualify for forbearance, which means having up to 24 months without payments during times of financial hardship.
Apply Online with Commonbond
LendKey offers private student loans and flexible student loan refinancing options to serve a variety of needs. You can repay your loan between 5 and 20 years, and their refinance loans donât charge an origination fee.
You can use this companyâs online interface to check your rate without a hard inquiry on your credit report, and variable APRs start at just 2.01% for graduates with excellent credit. LendKey loans also receive 9.3 out of 10 possible stars in recent reviews, meaning their customers are mostly happy with their decision to go with this company.
Save Thousands by Refinancing with LendKey
7. Wells Fargo
While Wells Fargo is mostly popular for their banking products, home mortgage products, and personal loans, this bank also offers student loan refinancing products. These loans let you consolidate student debts into a new loan with a low variable or fixed interest rate, and you can even score a discount for setting your loan up on autopay.
Terms for Wells Fargo loans are available anywhere from 5 to 20 years, meaning you can choose a repayment schedule and monthly payment that suits your needs. Wells Fargo also lets you check your rate online without a hard inquiry on your credit report.
Get Started with Wells Fargo
8. PenFed Credit Union
PenFed Credit Union offers unique student loan products powered by Purefy. You might be able to qualify for a lower interest rate that could lead to enormous interest savings over time, and PenFed lets you choose a repayment term and monthly payment that fits with your budget and lifestyle.
You can apply for student loan refinancing on your own, but PenFed Credit Union also allows cosigners. Low fixed interest rates start at just 3.48% APR, and you can check your rate online without a hard inquiry on your credit report.
Learn More about PenFed Credit Union
What To Look For When Refinancing
If you decide you want to refinance your student loans, youâll be happy to know the refinancing market is more robust than ever. A variety of lenders offer insanely attractive loan options for those who can qualify, although you should know that student loan companies tend to be very finicky about your credit score. Some also wonât let you refinance if you didnât graduate from college, or even if you graduated from an âunapprovedâ school.
While you should be aware of any lender-specific eligibility requirements before you apply with any student loan company, there are plenty of other factors to look out for. Hereâs everything you should look for in a student loan refinancing company before you decide to trust them with your loans.
Low Interest Rate
Obviously, the main reason youâre probably thinking of refinancing your loans is the potential to save money on interest. Lenders who offer the lowest rates available today can potentially help you save more, although itâs important to consider that you may not qualify for the lowest rates available if you donât have excellent credit.
Also consider that most lenders will offer better rates and loan terms if you have a cosigner with better credit than you have. This is especially true if your credit isnât great, so make sure to ask family members if theyâre willing to cosign on your new student loan if you hope to get the best rate. Just remember that your cosigner will be jointly liable for repayment, meaning you could quickly damage your relationship if you default on your loan and leave them holding the bag.
Low Fees or No Fees
Student loans are like any other loan in the fact that some charge higher fees or more fees than others. Since many student loans come with an application fee or an origination fee, youâll want to look for lenders that donât charge these fees. Also check for hidden fees like prepayment penalties.
Some student loan companies let you qualify for discounts, the most popular of which is a discount for using autopay. If youâre able and willing to set up automatic payments on your credit card, you could save .25% or .50% off your interest rate depending on the lender you go with.
Rate Check Option
Many of the top student loan refinancing companies on this list make it possible to check your interest rate online without a hard inquiry on your credit report. This is a huge benefit since knowing your rate can help you figure out if refinancing is even worth it before you take the time to fill out a full loan application.
Flexible Repayment Plan
Also make sure any lender you go with offers some flexibility in your repayment plan and your monthly payment. Youâll want to make sure refinancing aligns with your long-term financial goals and your monthly budget, and itâs crucial to choose a new loan with a monthly payment you can live with.
Most lenders in this space offer repayment timelines of up to 20 years, which means you could spread your payments over several decades to get a monthly payment that makes sense with your income. Keep in mind, however, that youâll pay more interest over the life of your loan when you take a long time to pay it off, so you may want to consider prioritizing a faster payment plan.
The Bottom Line
Student loan refinancing may not sound like a lot of fun. However, taking the time to consider all your loan options could easily save you thousands of dollars. This is especially true if you have a lot of debt at a high interest rate. By consolidating all your student loans into a new one with a lower APR, you could make loan repayment easier with a single payment and save a ton of money that would otherwise go to straight to interest without helping you pay off your loans.
The first step of the loan process is the hardest, however, and thatâs choosing a student loan refinancing company that you trust. The lenders on this list are highly rated, but they also offer some of the best loan products on the market today.
- Work with College Ave, our top pick, to refinance your student loan.
Start your search here and youâre bound to wind up with a student loan you can live with. At the very least, you’ll have a better idea of the loans that are available and how much you might save if you decide to refinance later on.
The post The Best Student Loan Companies For Refinancing appeared first on Good Financial CentsÂ®.
The post The Chilling Truth About Debt Settlement Programs appeared first on Penny Pinchin' Mom.
Debt is a very touchy subject for most people. Feeling the stress of overwhelming monthly payments, many people just look for what seems to be the easiest way out. This is when the salesmen tend to strike. Â The reason is a good deal of your financial information can be considered public knowledge.
Every day, many in debt get phone calls from high energy salesmen talking about the miraculous debt settlement concept. So, I’m going to start by saying, one great lesson we all learn young in life is, âIf it sounds too good to be true, it probably is!â
I made this mistake myself. Â I was so far in debt that I was drowning. In an act of desperation, I used a debt settlement company. Â Turns out, they did nothing to help me. It only made the situation much worse.
Here are a few chilling facts that you should know about debt settlement programs. Â These may just prove that the concept is too good to be true!
Fact #1: You May Be Sued For Not Paying Debts Even As You Make Payments
Did you know the payments you make may not go to your lenders? Â Yep! Â When working with a debt settlement company, your payments are not sent in on a monthly basis. Â Instead, these companies hold the funds from your payments. In most cases, the money is held in special purpose savings accounts until it has reached enough to pay off a debt. Once one debt is paid off, the savings process is started for the next.
Therefore, the last lender or two may wait 3, 4 or even 5 years before they see the next payment. The truth is, if you look at it from their perspective, it’s cheaper to take you to court. They will get the money faster through a settlement because they can garnish your wages. Also, in many cases, you will have to pay the court costs as well!
Fact #2: Your Credit Will Be Destroyed
While talking to a debt settlement agent, you will find that their last interest is in your credit score. Also, if you bring up the topic, they may try to downplay the effects of debt settlement on consumer credit scores. With that said, I’m not going to downplay it at all for you! Here is the truth…Because lenders are not being paid for long periods of time, your debts will be charged off.
One collections agency will sell it to the next and each time, it will damage your credit score! This is why I generally advise against this option if the consumer has good or excellent credit scores. The effects of credit card debt settlement programs will not pass in 6 months either! They will last throughout the term of your settlement and at least a year and a half to 2 years afterwords.
Fact #3: Debt Settlement Costs Thousands Of Dollars In Most Cases
The truth is, if you are going to settle your debts, with a little bit of online research, you can do it on your own. However, when you higher a debt settlement company, chances are, you will pay a percentage of the total amount owed, somewhere around 15%. That means if you have the minimum amount of debt that most companies accept, $10,000.00, your fee will be $1,500.00 minimum in most cases.
This does not include the cost of a special purpose savings account which, usually runs about $25 per month. Add in the cost of paying an attorney when you get taken to curt and, you will now find yourself paying just as much as you did before you hired the debt settlement company in the first place!
Every Dark Cloud Has A Silver Lining
Although debt settlement may not be the option for most, always remember, there is an option for you. As a matter of fact, I recently wrote an article that included a few great options called DIY Alternatives To Debt Consolidation. Trust me, those alternatives only begin to touch the tip of the iceberg when it comes to great, legitimate ways to get out of debt!
This article was written by Joshua Rodriguez, proud owner and founder of CNA Finance and avid personal finance journalist. Join the discussion about this article on facebook and Google+!
The post The Chilling Truth About Debt Settlement Programs appeared first on Penny Pinchin' Mom.