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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.
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®.
In borrowing, there are two types of debts, recourse and nonrecourse. Recourse debt holds the person borrowing money personally liable for the debt. If you default on a recourse loan, the lender will have license, or recourse, to go after your personal assets if the collateralâs value doesnât cover the remaining amount of the loan that is due. Recourse loans are often used to finance construction or invest in real estate. Hereâs what you need to know about recourse loans, how they work and how they differ from other types of loans.
What Is a Recourse Loan?
A recourse loan is a type of loan that allows the lender to go after any of a borrowerâs assets if that borrower defaults on the loan. The first choice of any lender is to seize the asset that is collateral for the loan. For example, if someone stops making payments on an auto loan, the lender would take back the car and sell it.
However, if someone defaults on a hard money loan, which is a type of recourse loan, the lender might seize the borrowerâs home or other assets. Then, the lender would sell it to recover the balance of the principal due. Recourse loans also allow lenders to garnish wages or access bank accounts if the full debt obligation isnât fulfilled.
Essentially, recourse loans help lenders recover their investments if borrowers fail to pay off their loans and the collateral value attached to those loans is not enough to cover the balance due.
How Recourse Loans Work
When a borrower takes out debt, he typically has several options. Most hard money loans are recourse loans. In other words, if the borrower fails to make payments, the lender can seize the borrowerâs other assets such as his home or car and sell it to recover the money borrowed for the loan.
Lenders can go after a borrowerâs other assets or take legal action against a borrower. Other assets that a lender can seize might include savings accounts and checking accounts. Depending on the situation, they may also be able to garnish a borrowerâs wages or take further legal action.
When a lender writes a loanâs terms and conditions, what types of assets the lender can pursue if a debtor fails to make debt payments are listed. If you are at risk of defaulting on your loan, you may want to look at the language in your loan to see what your lender might pursue and what your options are.
Recourse Loans vs. Nonrecourse Loans
Nonrecourse loans are also secured loans, but rather than being secured by all a personâs assets, nonrecourse loans are only secured by the asset involved as collateral. For example, a mortgage is typically a nonrecourse loan, because the lender will only go after the home if a borrower stops making payments. Similarly, most auto loans are nonrecourse loans, and the bank or lender will only be able to seize the car if the borrower stops making payments.
Nonrecourse loans are riskier for lenders because they will have fewer options for getting their money back. Therefore, most lenders will only offer nonrecourse loans to people with exceedingly high credit scores.
Types of Recourse Loans
There are several types of recourse loans that you should be aware of before taking on debt. Some of the most common recourse loans are:
- Hard money loans. Even if someone uses their hard money loan, also known as hard cash loan, to buy a property, these types of loans are typically recourse loans.
- Auto loans. Because cars depreciate, most auto loans are recourse loans to ensure the lender receive full debt payments.
Recourse Loans Pros and Cons
For borrowers, recourse loans have both pros and and at least one con. You should evaluate each before deciding to take out a recourse loan.
Although they may seem riskier upfront, recourse loans are still attractive to borrowers.
- Easier underwriting and approval. Because a recourse loan is less risky for lenders, the underwriting and approval process is more manageable for borrowers to navigate.
- Lower credit score. Itâs easier for people with lower credit scores to get approved for a recourse loan. This is because more collateral is available to the lender if the borrower defaults on the loan.
- Lower interest rate. Recourse loans typically have lower interest rates than nonrecourse loans.
The one major disadvantage of a recourse loan is the risk involved. With a recourse loan, the borrower is held personally liable. This means that if the borrower does default, more than just the loanâs collateral could be at stake.
Loans can be divided into two types, recourse loans and nonrecourse loans. Recourse loans, such as hard money loans, allow the lender to pursue more than what is listed as collateral in the loan agreement if a borrower defaults on the loan. Be sure to check your stateâs laws about determining when a loan is in default. While there are advantages to recourse loans, which are often used to finance construction, buy vehicles or invest in real estate, such as lower interest rates and a more straightforward approval process, they carry more risk than nonrecourse loans.
Tips on Borrowing
- Borrowing money from a lender is a significant commitment. Consider talking to a financial advisor before you take that step to be completely clear about how it will impact your finances. Finding a financial advisor doesnât have to be difficult. In just a few minutes our financial advisor search tool can help you find a professional in your area to work with. If youâre ready, get started now.
- For many people, taking out a mortgage is the biggest debt they incur. Our mortgage calculator will tell you how much your monthly payments will be, based on the principal, interest rate, type of mortgage and length of the term.
Photo credit: Â©iStock.com/aee_werawan, Â©iStock.com/PictureLake, Â©iStock.com/designer491
The post What Is a Recourse Loan? appeared first on SmartAsset Blog.
When it comes to excuses consumers give for their poor credit scores, banks and lenders have heard it all.Â
Maybe you lost your job and couldnât pay your student loan payment for a few months.Â Or perhaps you thought youâd gotten a deferment but were too busy job hunting to find out for sure.Â
Maybe you thought you paid your credit card bill but itâs actually sitting on your kitchen counter waiting for the mail.
Whatever the reason for your low credit score, one thing is for certain â lendersÂ donât care.
In fact, banks and other lenders lean on your credit score and other factors to determine whether they should approve you for a credit card or a loan â and thatâs about it. Your personal situation is never considered, nor should it be.
It would be wonderful if credit card companies understood that âlife happensâ and made special exceptions to help people out, but that’s not the world we live in.Â As most of us already know, thatâs not typically how credit works. Credit cards are backed by banks, and banks have rules for a reason.
Now, hereâs the good news: Credit cards can help rebuild your credit, earn cash back for each dollar you spend, make travel easier, and serve as an emergency fund if youâre stuck paying a huge bill at the last minute. This is true even if you have poor credit, although the selection of credit cards you can qualify for may be somewhat limited.Â
Keep reading to learn about the best credit cards for bad credit, how they work, and how you can get approved.
Best Cards for Bad Credit This Year
Before you give up on building credit, you should check out all the credit cards that are available to consumers who need some help. Our list of the best credit cards for bad credit includes some of the top offers with the lowest fees and fair terms.
- Total VisaÂ®
- Discover itÂ® Secured
- Credit One BankÂ® VisaÂ® Credit Card
- Secured MastercardÂ® from Capital OneÂ®
- MilestoneÂ® Gold MastercardÂ®
- Credit One BankÂ® Unsecured VisaÂ® with Cash Back Rewards
#1: Total VisaÂ®
The Total VisaÂ® is one of the easiest credit cards to get approved for in today’s market, and itâs easy to use all over the world since itâs a true Visa credit card. However, this card does come with high rates and fees since itâs available to consumers with poor credit or a limited credit history.
Processing your application will cost $89, which is extremely high when you consider the fact that most credit cards donât charge an application fee. Youâll also pay an initial annual fee of $75 and a $48 annual fee for each year thereafter.
Once you sign up, youâll be able to pick your preferred card design and your credit card payments will be reported to all three credit reporting agencies â Experian, Equifax, and TransUnion. This is the main benefit of this card since your on-time payments can easily help boost your credit score over time.Â
For the most part, the Total VisaÂ® is best for consumers who donât mind paying a few fees to access an unsecured line of credit. Since this card doesnât dole out rewards, however, there are few cardholder perks to look forward to.Â
- APR: 35.99% APR
- Fees: Application fee and annual fee
- Minimum Credit Score: Not specified
- Rewards: No
#2: Discover itÂ® Secured
While secured cards donât offer an unsecured line of credit like unsecured credit cards do, they are extremely easy to qualify for. The Discover itÂ® Secured may not be ideal for everyone, but it does offer a simple online application process and the ability to get approved with little to no credit history.
Keep in mind, however, that secured cards do work differently than traditional credit cards. With a secured credit card, youâre required to put down a cash deposit upfront as collateral. However, you will get your cash deposit back when you close your account in good standing.
Amazingly, the Discover itÂ® Secured lets you earn rewards with no annual fee. Youâll start by earning 2% back on up to $1,000 spent each quarter in dining and gas. Youâll also earn an unlimited 1% back on everything else you buy.
The Discover itÂ® Secured doesnât charge an application fee or an annual fee, although youâll need to come up with the cash for your initial deposit upfront. For the most part, this card is best for consumers who have little to no credit and want to build their credit history while earning rewards.
- APR: 24.74%
- Fees: No annual fee or monthly fees
- Minimum Credit Score: Not specified
- Rewards: Yes
#3: Credit One BankÂ® VisaÂ® Credit Card
The Credit One BankÂ® VisaÂ® Credit Card is another credit card for bad credit that lets you earn rewards on your everyday spending. Youâll earn a flat 1% cash back for every dollar you spend with this credit card, and since itâs unsecured, you donât have to put down a cash deposit to get started.
Other benefits include the fact you can get pre-qualified for this card online without a hard inquiry on your credit report â and that you get a free copy of your Experian credit score on your online account management page.
You may be required to pay an annual fee up to $95 for this card for the first year, but it depends on your creditworthiness. After that, your annual fee could be between $0 and $99.
- APR: 19.99% to 25.99%
- Fees: Annual fee up to $95 the first year depending on creditworthiness; after that $0 to $99
- Minimum Credit Score: Not specified
- Rewards: Yes
#4: Secured MastercardÂ® from Capital OneÂ®
The Secured MastercardÂ® from Capital OneÂ® is another secured credit card that extends a line of credit to consumers who can put down a cash deposit as collateral. This card is geared to people with bad credit or no credit history, so itâs easy to get approved for. One downside, however, is that your initial line of credit will likely be just $200 â and that doesn’t give you much to work with.Â
On the upside, this card doesnât charge an annual fee or any application fees. That makes it a good option if you donât want to pay any fees you wonât get back.
Youâll also get access to 24/7 customer service, $0 fraud liability, and other cardholder perks.
- APR: 26.49%
- Fees: No ongoing fees
- Minimum Credit Score: Not specified
- Rewards: No
#5: MilestoneÂ® Gold MastercardÂ®
The MilestoneÂ® Gold MastercardÂ® is an unsecured credit card that lets you get pre-qualified online without a hard inquiry on your credit report. You wonât earn any rewards on your purchases, but you do get benefits like the ability to select your cardâs design, chip and pin technology, and easy online account access.
You will have to pay a one-time fee of $25 to open your account, and thereâs an annual fee of $50 the first year and $99 for each year after that.
- APR: 24.90%
- Fees: Account opening fee and annual fees
- Minimum Credit Score: Not specified
- Rewards: No
#6: Credit One BankÂ® Unsecured VisaÂ® with Cash Back Rewards
The Credit One BankÂ® Unsecured VisaÂ® with Cash Back Rewards lets you earn 1% back on every purchase you make with no limits or exclusions. Thereâs no annual fee or application fee either, which makes this card a winner for consumers who donât want to get hit with a lot of out-of-pocket costs.
As a cardholder, youâll get free access to your Experian credit score, zero fraud liability, and access to a mobile app that makes tracking your purchases and rewards a breeze. You can also get pre-qualified online without a hard inquiry on your credit report.
- APR: 25.99%
- Fees: No annual fee or application fee
- Minimum Credit Score: Not specified
- Rewards: Yes
The Downside of Credit Cards with Bad Credit
While your odds of getting approved for one of the credit cards for bad credit listed above are high, you should be aware that there are plenty of pitfalls to be aware of. Here are the major downsides youâll find with these credit cards for bad credit and others comparable cards:
- Higher fees: While someone with excellent credit can shop around for credit cards without any fees, this isnât the case of you have bad credit. If your credit score is poor or you have a thin credit profile, you should expect to pay higher fees and more of them.
- Higher interest rates: While some credit cards come with 0% interest for a limited time or lower interest rates overall, consumers with poor credit typically have to pay the highest interest rates available today. Some credit cards for bad credit even come with APRs as high as 35%.
- No perks: Looking for cardholder benefits like cash back on purchases or points toward airfare or movie tickets? Youâll need to wait until your credit score climbs back into âgoodâ or âgreatâ territory. Even if you can find a card for applicants with bad credit that offers cash back, your rewards may not make up for the higher fees.
- No balance transfers: If youâre looking for relief from other out-of-control credit card balances, look elsewhere. Credit cards for bad credit typically donât offer balance transfers. If they do, the terms make them cost-prohibitive.
- Low credit limits: Credit cards for bad credit tend to offer initial credit limits in the $300 to $500 range with the possibility of increasing to $2,000 after a year of on-time monthly payments. If you need to borrow a lot more than that, youâll have to consider other options.
- Security deposit requirement: Secured credit cards require you to put down a cash deposit to secure your line of credit. While this shouldnât necessarily be a deal-breaker â and it may be required if you canât get approved for an unsecured credit card â youâll need to come up with a few hundred dollars before you apply.
- Checking account requirement: Most new credit card accounts now require cardholders to pay bills online, which means youâll need a checking account. If youâre mostly âunbanked,â you may need to open a traditional bank account before you apply.
Benefits of Improving Your Credit Score
People with bad credit often consider their personal finances a lost cause. The road to better credit can seem long and stressful, and itâs sometimes easier to give up then it is to try to fix credit mistakes youâve made in the past.
But, there are some real advantages that come with having at least âgoodâ credit, which typically means any FICO score of 670 or above. Here are some of the real-life benefits better credit can mean for your life and your lifestyle:
- Higher credit limits: The higher your credit score goes, the more money banks are typically willing to lend. With good credit, youâll have a better chance at qualifying for a car loan, taking out a personal loan, or getting a credit card with a reasonable limit.
- Lower interest rates: A higher credit score tells lenders youâre not as risky as a borrower âa sign that typically translates into lower interest rates. When you pay a lower APR each time you borrow, you can save huge amounts of money on interest over time.
- Lower payments: Borrowing money with a lower interest rate typically means you can usually get lower payments all your loans, including a home loan or a car loan.
- Ability to shop around: When youâre an ideal candidate for a loan, you can shop around to get the best deals on credit cards, mortgages, personal loans, and more.
- Ability to help others: If your kid wants to buy a car but doesnât have any credit history, better credit puts you in the position to help him or her out. If your credit is poor, you wonât be in the position to help anyone.
- More options in life: Your credit score can also impact your ability to open a bank account or rent a new apartment. Since employers can request to see a modified version of your credit report before they hire you, excellent credit can also give you a leg up when it comes to beating out other candidates for a job.Â
In addition to the benefits listed above, most insurance companies now consider your credit score when you apply for coverage. For that reason, life, auto, and home insurance rates tend to be lower for people with higher credit scores.
This may seem unfair, but you have to remember that research has shown people with high credit scores tend to file fewer insurance claims.
How to Improve Your Credit: Slow and Steady
When you have a low credit score, there are two ways to handle it. If you don’t mind the consequences of poor credit enough to do anything about it, you can wait a decade until the bad marks age off your credit report. Depending on when your creditors give up and write off your debt, you may not even need to wait that long.
If you donât like the idea of letting your credit decay while you wait it out, you can also try to fix your past credit mistakes. This typically means paying off debt â and especially delinquent debts â but it can also mean applying for new loan products that are geared to people who need to repair their credit.
If you decide to take actionable steps to build credit fast, the credit cards on this page can help. Theyâll give you an opportunity to show the credit bureaus that youâve changed your ways.
Before you take steps to improve your credit score, however, keep in mind all the different factors used to determine your standing in the first place. The FICO scoring method considers the following factors when assigning your score:
- On-time payments: Paying all your bills on time, including credit cards, makes up 35% of your FICO score. For that reason, paying all your bills early or on time is absolutely essential.
- Outstanding debts: How much you owe matters, which is why paying off your credit cards each month or as often as possible helps your score. According to myFICO.com, the amounts you owe in relation to your credit limits make up another 30% of your FICO score.
- New credit: Apply for too many new cards or accounts at once can impact your score in a negative way. In fact, this determinant makes up another 10% of your FICO score.
- Credit mix: Having a variety of open accounts impresses the credit bureau algorithm Gods. If all you have are personal loans right now, mixing in a credit card can help. If you already have four or five credit cards, it may be wise to back off a little.
- Length of credit history: The length of your credit history also plays a role in your score. The longer your credit history, the better off you are.
If you want to improve your credit score, consider all the factors above and how you can change your behavior to score higher in each category. Itâs pretty easy to see how paying all your bills early or on time and paying off debt could make a big positive impact on your credit score when you consider that these two factors alone make up 65% of your FICO score.
If you want a way to track your progress, also look into an app likeÂ Credit Karma, one of my favorite tools. This app lets you monitor your credit progress over time and even receive notifications when your score has changed. Best of all, itâs free.
Should You Use a Credit Card to Rebuild Your Credit Score?
If youâre on the fence about picking up a credit card for bad credit, your first step should be thinking over your goals. What exactly are you trying to accomplish?
If youâre looking for spending power, the cards on this list probably wonât help. Some are secured cards, meaning you need a cash deposit to put down as collateral. Others offer low credit limits and high fees and interest rates, making them costly to use over the long-term.
If you really want to start over from scratch and repair credit mistakes made in the past, on the other hand, one of these cards may be exactly what you need. If youâre determined to improve your score, they can speed things along.
You may pay higher fees and interest rates along the way, but itâs important to remember that none of the cards on this list need to be your top card forever. Ideally, youâll use a credit card for poor credit to rebuild your credit and boost your score. Once youâve reached your goal, you can upgrade to a new card with better benefits and terms.
Before you make any big financial decision, it’s crucial to learn how it may affect your credit score. If youâre looking to refinance, itâs natural to wonder if it might hurt your credit.
Typically, your credit health will not be strongly affected by refinancing, but the answer isnât always black and white. Whether youâre still considering your options or already made your choice, weâve outlined what you need to know about refinancing below.
What Is Refinancing?
Refinancing is defined by taking on a new loan to pay off the balance of your existing loan balance. How you approach a refinancing decision depends on whether itâs for a home, car, student loan, or personal loan. Since refinancing is essentially replacing an existing debt obligation with another debt obligation under different terms, itâs not a decision to take lightly.
If youâre worried about how refinancing will affect your credit health, remember that there are multiple factors that play into whether or not it hurts your credit score, but the top three factors are:
1) Having a Solid Credit Score
You wonât be in a strong position to negotiate refinancing terms without decent credit.
2) Earning Sufficient Income
If you canât prove that you can keep up with loan payments after refinancing, it wonât be possible.
3) Proving Sufficient Equity
Youâll also need to provide assurance that the payments will still be made if your income canât cover the cost. Itâs recommended that you should have at least a 20 percent equity in a property when refinancing a home.
How Does Refinancing Hurt Your Credit?
Refinancing might seem like a good option, but exactly how does refinancing hurt your credit? In short, refinancing may temporarily lower your credit score. As a reminder, the main loan-related factors that affect credit scores are credit inquiries and changes to loan balances and terms.
Whenever you refinance, lenders run a hard credit inquiry to verify your credit score. Hard credit inquiries typically lower your credit scores by a few points. Try to avoid incurring several new inquiries by using smart rate shopping tactics. It also helps to get all your applications in during a 14â45 day window.
Keep in mind that credit inquiries made during a 14â45 day period could count as one inquiry when your scores are calculated, depending on the type of loan and its scoring model. Regardless, your credit wonât be permanently damaged because the impact of a hard inquiry on your credit decreases over time anyway.
Changes to Loan Balances and Terms
How much your credit score is impacted by changes to loan balances and terms depends on whether your refinanced loan is reported to the credit bureaus. Lenders may report it as the same loan with changes or as an entirely new loan with a new open date.
If your loan from refinancing is reported as a new loan, your credit score could be more prominently affected. This is because a new or recent open date usually means that it is a new credit obligation, therefore influencing the score more than if the terms of the existing loan are simply changed.
How Do Common Types of Refinancing Affect Your Credit?
Refinancing could help you pay off your loans quicker, which could actually improve your credit. However, there are multiple factors to keep in mind when refinancing different types of loans.
Refinancing a Mortgage
Refinancing a mortgage has the biggest potential impact on your credit health, and it can definitely affect your FICO score. How can you prevent refinancing from hurting your credit too much? Try concentrating your credit inquiries when you shop mortgage rates to a 14â45 day window â this will help prevent multiple hard inquiries. Also, you can work with your lenders to avoid having them all run your credit, which could risk lowering your credit score.
If youâre unsure about when to refinance your mortgage, do your research to capitalize on the best timing. For example, refinancing your mortgage while rates are low could be a viable option for you â but it depends on your situation. Keep in mind that losing your record of paying an old mortgage on time could be harmful to your credit score. A cash-out refinance could be detrimental, too.
Refinancing an Auto Loan
As you figure out if refinancing your auto loan is worth it, be sure to do your due diligence. When refinancing an auto loan, youâre taking out a second loan to pay off your existing car debt. In some cases, refinancing a car loan could be a wise move that could reduce your interest rate or monthly payments. For example, if youâre dealing with an upside-down auto loan, you might consider refinancing.
However, there are many factors to consider before making an auto loan refinancing decision. If the loan with a lower monthly payment has a longer term agreement, will you be comfortable with that? After all, the longer it takes to pay off your car, the more likely it is to depreciate in value.
Refinancing Student Loans
When it comes to student loan refinancing, a lower interest rate could lead to major savings. Whether youâve built up your own strong credit history or benefit from a cosigner, refinancing can be rewarding.
Usually, you can refinance both your federal and private student loans. Generally speaking, refinancing your student loans shouldnât be detrimental in the grand scheme of your financial future. However, be aware that refinancing from a federal loan to a private loan will have an impact on the repayment options available to you. Since federal loans can offer significantly better repayment options than private loans, keep that in mind before making your decision.
|If the cost of borrowing is low, securing a lower interest rate is possible||Credit scores can drop due to credit checks from lenders|
|If your credit score greatly improved, you can refinance to get a better rate||Credit history can be negatively affected by closing a previous loan to refinance|
|Refinancing a loan can help you lower expenses in both the short term and long term||Refinancing can involve fees, so be sure to do a cost-benefit analysis|
How to Prevent Refinancing from Hurting Your Credit
By planning ahead, you can put yourself in a position to not let refinancing negatively affect your credit and overall financial health.
Try to prepare by reading your credit reports closely, making sure there are no errors that could keep your credit application from being approved at the best possible rate. Stay one step ahead of any errors so you still have time to dispute them. As long as you take preventative measures in the refinancing process to save yourself time and money, you shouldnât find yourself struggling with the refinancing.
If refinancing makes sense for your situation, you shouldnât be concerned about it hurting your credit. It might not be the most ideal situation, but itâs extremely common and typically relatively easy for your credit score to bounce back.
If you notice that your new loan from refinancing causes alarming changes when you check your credit score, be sure to reach out to your creditor or consider filing a dispute. As long as youâre prioritizing your overall financial health through smart decision making and budgeting, refinancing shouldnât adversely hurt your credit in the long run.
The post Does Refinancing Hurt Your Credit? appeared first on MintLife Blog.
College is expensive and everyone knows that.
Between paying for tuition, parking, textbooks, extra fees, and everything else, you also have basic living expenses to pay for as well.
All of these costs are either brand new or somewhat new to you most likely as well, so you might not even know how to survive on a budget, let alone a college budget.
Don’t worry, though, surviving on a college budget is possible. Learning how to save money in college is possible!
Related post: How I Paid Off $40,000 In Student Loans In 7 Months
Whether you are trying to survive the whole year off of what you made over the summer or if you have a steady job throughout the school year, there are ways to budget your money and not fall into any extra debt. Plus, you can still enjoy your college years on a low budget as well!
Below are my tips on how to survive on a college budget.
Use your student ID.
Your student ID is good at many places beyond just your college campus. Before you buy anything, I highly recommend seeing if a company offers a student discount.
Your student ID can be used to save money at restaurants, clothing stores, electronics (such as laptops!), at the movies, and more. You may receive a discount, free items, and more all just by flashing your student ID.
After all, you are paying to go to college and you are paying a lot. You might as well reap one benefit of paying all of those high college costs.
Make extra money.
You may need to look into making extra money if you just don’t have enough to survive on. I am a firm believer in making extra money and I think extra time can be wisely spent doing this.
Some online side gigs with flexible schedules include:
- Blogging is how I make a living and just a few years ago I never thought it would be possible. I made over $150,000 last year by blogging and will make more than that in 2015. You can create your own blog here with my easy-to-use tutorial. You can start your blog for as low as $3.49 per month plus you get a free domain if you sign-up through my tutorial.
- Survey companies I recommend include Survey Junkie, American Consumer Opinion, Product Report Card, Pinecone Research, Opinion Outpost, and Harris Poll Online. They’re free to join and free to use! It’s best to sign up for as many as you can because that way you can receive the most surveys and make the most money.
- InboxDollars is an online rewards website I recommend. You can earn cash by taking surveys, playing games, shopping online, searching the web, redeeming coupons, and more. Also, by signing up through my link, you will receive $5.00 for free!
- Swagbucks is something I don’t use as much, but I do earn Amazon gift cards with very little work. Swagbucks is just like using Google to do your online searches, except you get rewarded points called “SB” for the things you do through their website. Then, when you have enough points, you can redeem them for cash, gift cards, and more. You’ll receive a free $5 bonus just for signing up today!
- Check out 75 Ways To Make Extra Money for more ideas.
- Read Best Online Jobs For College Students
Use coupons to stay on a college budget.
Just like with the above, you may want to start using coupons.
By doing so, you can save money on nearly everything. You can find coupons in newspapers, online, and in the mail. They are everywhere so you should have no problem finding them and saving money today.
Related post: How To Live On One Income
Learn how to correctly use a credit card or don’t have one at all.
Many college students fall into credit card debt, but I don’t want you to be one of them.
Many college students will start relying on their credit cards in order to get them through their low college budget, but this can lead to thousands of dollars of credit card debt which will eventually seem impossible to get out of due to significant interest charges that keep building up.
In order to never get into this situation, you should avoid credit cards at all costs if you think you will rely on them too heavily.
You should think long and hard about whether you should have one or not. Just because many others have them doesn’t mean they know what they’re doing! However, if you think you will be good at using them, then there are many advantages of doing so.
Related post: Credit Card Mistakes That Can Lead To Debt
Only take out what you need in student loans.
Many students take out the full amount in student loans that they are approved for even if they only need half.
This is a HUGE mistake. You should only take out what you truly need, as you will need to pay back your student loans one day and you will most likely regret it later.
I know someone who would take out the max amount each semester and buy timeshares, go on expensive vacations, and more. It was a huge waste of money and I’m still not even sure why they thought it was a good idea.
Just think about it – If you take out an extra $2,000 a semester, that means you will most likely take out almost $20,000 over the time period that you are in college.
Do you really want to owe THAT much more in student loans?
Skip having a car.
Most campuses have everything you need in order to survive – food, stores, and jobs. In many cases, you do not need to have a car whatsoever.
By foregoing a car, you may save money on monthly payments, maintenance costs, car insurance, gas, and more.
Related post: Should We Get Rid Of A Car And Just Have One?
Eat out less.
Now, I’m not saying you should stop eating out entirely if you are trying to survive on a college budget. I know how it is to be in college and to want to hang out with everyone. These are your college years after all.
However, you should try to eat in as much as you can, make your own meals, and try to eat out only during happy hours or when food is cheaper, such as during lunch time. Eating out can ruin your college budget!
Have a roommate.
The more people you live with, generally the less you will pay when it comes to rent and utilities. If you are living on your own, then you may want to find roommates so that you can split the costs with them.
This will help you to lower your college budget and you may even find some awesome friends.
Related post: What I Learned Having Roommates
What college budget tips do you have?
The post Learning How To Survive On A College Budget appeared first on Making Sense Of Cents.