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Great Tips and Advice for Managing Your Money

Any financially smart adult thinks of having an emergency fund as a necessity. Life is full of uncertainties, and you need to have a separate bank account intended to cover unforeseen expenses caused by unfortunate circumstances, such as an illness or loss of employment.

It’s crucial to have a financial buffer for you to survive your day-to-day life without relying on high-interest credit cards or loans when things get rough. Avoid adding on your debts when you're facing financial challenges. So, you need to have ready cash set aside for emergencies.

Perhaps you’ll ask: how much emergency fund should I have? To answer that question and other related queries concerning emergency funds, read this blog post below.

Timing is the Key

According to most personal finance gurus, your emergency fund should cover three months of living expenses at the minimum. In this way, you won’t have a hard time financially if you lose your job or have to pay for medical bills. emergency funds

However, the main problem with this idea is that not everyone has the same lifestyle, income, and financial circumstances. For example, if you have monthly expenses of $5,000, your emergency fund should have at least $15,000 to meet the three-month standard. That's a huge sum of cash for most people!

Also, if you have loans or credit card balances that you need to pay, it will be difficult for you to set aside that sum of money for your emergency fund. That’s why timing is the key when building a fund for future emergency expenses.

Make sure to pay your current debts first before you put much money on your savings account. For sure, you don’t want the interests on your debts to accumulate faster than the gains on your savings. So, find the right timing!

Start Saving Even If It’s Small

Even if you’re paying for your current debt obligations, it doesn’t mean that you shouldn’t start building your emergency fund. You can start setting aside a small amount of money for that purpose. Starting with a small savings is much better than nothing at all.

It's hard to know when emergency expenses come. That’s why if you’re receiving income every month, make sure to save some of it for you to have a buffer against unforeseen expenses in the future.

While debts prevent you from focusing heavily on building your emergency fund, saving money even at a small scale is a smart choice because it’s dangerous to not have savings. For example, you can open an emergency savings account that has $500 or $1,000. This amount of cash can already cover minor expenses, such as car repairs or paying for medicines.

In the time that you get rid of your debts, you can already begin increasing your deposits into your emergency savings account.

Put Money On Your Savings Fund Monthly

Since your goal is to build a three months worth of emergency fund or more, it’s a must to set aside money in your account once a month until you reach your goal. You can split your direct deposit or start an automatic transfer into your emergency fund every month. It’s preferable to save 10% of your monthly salary or net income into this separate savings account.

If you find it hard to slice that kind of percentage off your salary, you can choose to make a few adjustments to your monthly expenses. Even if you can’t save 10% of your paycheck, surely you can save cash if you spend less than you’re used to in a month.

  • Avoid spending too much on streaming or cable subscriptions.
  • Cut your electricity expenses by turning off the lights in the morning or using a programmable thermostat.
  • Plan your grocery list carefully to prevent overspending.
  • Minimize your expensive habit of going out to lunch or dinner.
  • Lessen your gas expenses.
  • Look for a more affordable home or car insurance.
  • Negotiate with your credit card issuer/s to reduce the interest rates on your credit cards.
  • Go for a debt consolidation loan to avail of a lower interest rate and pay your debts quickly.

Save Money into Your Emergency Fund Instantly

Setting aside cash into your emergency fund every month is a good thing. But if you want to build your emergency fund faster, you can deposit a large amount into it. Of course, that’s a wise choice if you can afford it.

If you’re receiving monthly, quarterly, or annual work bonuses, you can opt to put that money or some of it into your separate savings account. In this way, you can build a fund for future emergency expenses in no time.

Takeaway

Building an emergency fund is crucial for you to keep afloat in times of a financial crisis. If you lose your job or get ill, for instance, you can use the money from your emergency fund to cover important expenses. Read the tips mentioned above on how to create an emergency fund.

Author Bio:

Bree Diaz is a blogger who specializes in writing about personal and business finance management. She has ample knowledge about debt management and wealth building. In this article Bree answers the question of “how much emergency fund should i have” and how to build it, in a way that is easy for readers to understand. Bree is also an avid traveler and a hobbyist.

There’s always a starting point for everything, and it’s especially true when you’re just beginning to establish your credit. People with no credit are those who have never used a credit card or secured a loan or who buy things using their debit card or cash.

When you don’t have credit, it doesn’t automatically mean that you’re not worthy of obtaining a loan. Your situation is different from having a low credit score. Yes, both situations may give you a hard time borrowing money from lenders, but it’s much harder to borrow cash when your credit score is below average.

For folks who are yet to build credit, there are ways for you to get a loan. If you want to know how you can do that, just read this blog article.

personal loans counting moneyChoose a Lender Who Specializes in No Credit Check Loans

Loan providers have different methods to assess your capability to pay back what you owe other than looking at your credit profile. For example, you can find lenders who do a different credit check from traditional lenders.

These non-traditional loan providers will assess your income status, bills payment history, and bank statements instead of checking your credit history.

If you want to try applying for a loan from a non-traditional lender, you can have many options on the internet. For instance, there are lending networks that have a pool of lenders you can choose from. Or, you can also go to a loan provider directly.

There are also instances that banks and credit unions allow people who have no credit to avail of their loans. Make sure to look for branches of such lending institutions in your locality if you need to get a no credit check loan. And, don’t forget to prepare the essential documents, such as your recent bank statements, tax returns, pay slips, and bills payment.

Look for a Co-Signer

Another option that you can take to borrow a sum of cash from a lender while you don’t have credit is having a co-signer. A family member, friend, or anyone you know can act as a co-signer for your loan application. You just have to ensure that the person who co-signs your loan has a good credit rating.

It’s also crucial that your co-signer understands the implications of taking this role. He/she should know that his/her credit score may get hurt if you fail to make payments on what you owe. Aside from damaging your co-signer’s credit score, it may also damage your relation to him/her if worse comes to worst.

As a borrower, you should take it as your responsibility to pay the loan on schedule to ensure that you don’t hurt your credit and your co-signer’s.

Apply for a Loan with Collateral

Having excellent credit is one of the primary qualifications when you apply for an unsecured loan. It’s easy for people with stellar credit scores to get such financing because having excellent credit means that they are good borrowers.

Borrowers with no credit scores, on the other hand, will really have a hard time getting approved for a loan without collateral. As such, it’s advised to go for a secured loan to borrow money. Lenders who provide this loan type allow borrowers to borrow cash when they put a valuable asset as security.

Here’s a list of assets that one can offer as collateral to get a secured loan:

  • Land or house
  • Vehicle
  • Insurance policies
  • Bond, stocks, or mutual funds
  • Gold, silver, and other valuable metals
  • Collector’s items

One of the benefits of a secured loan is that the interest rate is lower than an unsecured loan. But, you need to understand that defaulting on the loan may cause the lender to seize the asset you offered as collateral.

Consider Payday Alternative Loans

Payday alternatives loans are offered by credit unions to their members. This loan option allows you to borrow a small sum of cash with a short repayment period. This loan’s amount range goes from $150 to $1,000, with a loan term ranging from one to six months.

If you compare alternative payday loans to common payday loans, you’ll realize that the former has lower interest rates and fees than the latter. But, as mentioned earlier, you can only obtain this loan if you’re a member of a credit union. Credit unions require borrowers to be members for at least one month to avail of an alternative payday loan.

Apply for an Online Personal Loan

You can avail of an online personal loan even if you’re yet to establish your credit profile. Lenders of this loan type are not strict compared to major banking institutions. But, you still have to provide documents, such as a certificate of employment and proof of income before you can obtain this loan.

Takeaway

Don’t lose hope if you have no credit history because there’s still a chance that you can borrow money. For instance, you can go to a lender who specializes in non-traditional credit checks. If you want to learn more about the various ways to get a loan in this kind of financial situation, just review this article.

Author Bio:

Bree Diaz is a blogger who writes about personal and business financing. Her blog article topics revolve around business loans and e-transfer payday loans in Canada with FriendlyLender. Besides being a writer, Bree is also a businesswoman.

Student loan consolidation is the process of taking multiple outstanding loans and reorganizing them into a single loan, sometimes with a longer repayment period and therefore a lower monthly payment. If you’re in serious debt and ineligible for student loan forgiveness, consolidation could offer the solution you need.

student loan debtWhat is a student loan?

A student loan is financial assistance that’s specifically designed to help students pay for school-related fees. These loans cover the cost of such things as tuition, school supplies, books and living expenses.

Like other loans, this type of financial assistance is money that you borrow and pay back with interest. Unlike many other types of loans, however, student loans typically don’t require you to start repayment until after the education has been completed.

Student loans are offered by a variety of sources, including the federal government, banks and online lenders. Many of these sources also provide student loan consolidation.

What types of loans can be consolidated?

Both federal student loans and private loans can be consolidated, although consolidating through private lenders is typically known as refinancing.

Federal student loans are eligible for consolidation through the U.S. Department of Education, which offers a Direct Consolidation Loan that allows for the combining of multiple federal education loans into one loan at no cost. You can also consolidate your federal student loans with private lenders, although you’ll lose federal benefits in doing so.

Private student loans cannot be consolidated with federal student loans, but they can be refinanced and consolidated through private lenders.

These are some of the federal loans eligible for consolidation:

  • Subsidized Federal Stafford Loans.
  • Unsubsidized Federal Stafford Loans.
  • PLUS loans from the Federal Family Education Loan (FFEL) Program.
  • Supplemental Loans for Students.
  • Federal Perkins Loans.
  • Nursing Student Loans.
  • Nurse Faculty Loans.
  • Health Education Assistance Loans.
  • Health Professions Student Loans.
  • Loans for Disadvantaged Students.
  • Direct Subsidized Loans.
  • Direct Unsubsidized Loans.
  • Direct PLUS Loans.

Should I consolidate my loans?

If you need more cash in your pocket right now, consolidation can help by extending the life of your loan and thus trimming your monthly payments — although extending your repayment timeline will ultimately increase the amount you pay in interest.

You may also have access to a new repayment schedule (like an income-based repayment plan) that’s a little easier on your wallet.

Keep in mind that federal consolidation loans do not work like private loans — the interest rate you receive will be the weighted average of all of the loans you’re consolidating, meaning the main benefits are longer repayment periods and the convenience of having one monthly payment.

How to consolidate your student loans

There are two options for consolidating your student debt. The federal student loan consolidation option offered by the U.S. Department of Education is the Direct Consolidation Loan.

“With this option, any federal loans that you choose to consolidate are paid off and you are issued a Direct Consolidation Loan for the total combined balance,” says Jessica Ferastoaru, student loans specialist for Take Charge America.

You can complete the Direct Consolidation Loan application online. Once submitted, it may take 60 days for your application to process, says Ferastoaru.

“You should continue to make your regular payments on your loans, if payments are currently due, until your consolidation has been approved,” explains Ferastoaru. “Once approved, you will have one monthly payment due to the new servicer managing your Direct Consolidation Loan.”

Yet another option is a private loan refinance, meaning you combine your federal student loans or your private student loans, or some combination of both, with a private lender.

Private loan refinancing has some significant drawbacks to be aware of, however, including different eligibility criteria.

“You will need to meet certain income and credit score requirements to qualify,” says Ferastoaru. This means a co-signer may be required to qualify.

More importantly, it’s critical to understand that if you consolidate federal loans with a private lender, you’re no longer eligible for any federal programs, such as those that allow you to postpone payments when you’re unemployed. In addition, you will no longer be eligible for federal income-driven repayment options, loan forgiveness or any sort of loan discharge.

How can I get the best interest rate?

If you’re consolidating your student loans through the federal government, your overall interest rate will remain the same. This is because a Direct Consolidation Loan charges the weighted average of all loans you’re consolidating.

However, it’s a different story if you’re refinancing with a private lender. Interest rates are determined by the federal government and change each year on July 1, so it’s a good idea to shop around with lenders to see how they respond to rate fluctuation.

Improving your credit score will also help you get the best loan rates possible, says Katie Ross, education and development manager for American Consumer Credit Counseling.

“Having a good credit score is the key to getting the best interest rate with any loan,” says Ross. “A credit score of 750-plus is generally considered good, with 800 or higher considered exceptional. The higher your credit score, the better your interest rate when you apply for a loan.”

Additional things to consider

When is the right time to consolidate loans?

“The right time to consolidate will be different for every borrower,” says Ferastoaru. “If payments are affordable when you graduate college, there may not be any reason to consolidate your loans at that time. But if you need lower payments right after graduating from college, federal student loan consolidation may be a good option to consider.”

For those who may be considering a private loan refinance in order to obtain a lower interest rate, it may be best to wait to explore this option until you have a steady income and strong credit history in order to increase your chances of qualifying.

“If you’re not yet employed right after graduation, it will be difficult to qualify for a refinance without a co-signer,” says Ferastoaru.

What kind of terms do lenders offer?

With federal consolidation loans, you can choose from a variety of repayment plans, sometimes up to 30 years. No application or origination fees are allowed, and there are no prepayment penalties.

Private consolidation lenders, on the other hand, are not subject to those terms and may include variable rates and any number of fees. What’s more, some benefits of a federal consolidation loan, such as interest subsidies on deferred loans, are not available on private loans.

Bear in mind that not all consolidators are created equal. Some offer favorable terms like interest-rate reduction for making on-time payments or choosing automatic withdrawal. Others may offer repayment plans that better suit your financial situation.

FAQs on student loan consolidation

How is loan consolidation different from loan forgiveness?

Unlike student loan forgiveness, consolidation involves working with a lender that will pay off your existing balances. The lender will replace those loans with a new, consolidated loan and a new monthly payment.

Consolidation involves changing the way you repay student loans rather than relieving you of the obligation to repay all the money you’ve borrowed. Student loan forgiveness is a process that erases financial obligation. Students who have entered careers in the military or other forms of public service, for instance, may be eligible to have their loans partially forgiven.

How is loan consolidation different from refinancing?

The difference between student loan consolidation and refinancing is subtle, and the terms are often used interchangeably. Both methods involve taking out a new loan to better manage multiple outstanding balances.

“In general, the term consolidation is used to describe the process of combining one or more federal student loans within the Direct Loan Program,” says Ferastoaru. “Combining one or more of your loans with a private lender is considered refinancing your loans, as you may qualify for a lower interest rate on your new private loan. With federal consolidation, you may qualify for more repayment options, but it is not a way to reduce your interest rate.”

Can I consolidate more than once?

Current law dictates that you can consolidate student loans only once. There are two exceptions:

  1. If you’ve since gone back to school and acquired new student loans.
  2. If an outstanding loan was excluded from your original consolidation.

Will consolidating my student loans hurt my credit?

If you’re consolidating student loans through what’s known as a debt consolidation loan, rather than through the Department of Education, then your credit score may drop initially, says Ross.

This is because any time you apply for new loans, it results in a hard inquiry on your credit. Too many hard inquiries will hurt your credit score,” Ross explains.

Over the long term, though, consolidating your loans may help your score if you make the payments on time every month. This is because payment history is one of the most significant factors in determining your credit score.

Completing a federal student loan consolidation, on the other hand, typically does not have a significant impact on your credit, says Ferastoaru. “Your previous loans are being paid off and you’re issued a new loan for the same amount, so your total amount of debt has not changed.”

The bottom line

There are many options when considering loan consolidation, so make sure to do your homework and investigate all the possibilities before applying.

But bear in mind that if you have federal student loans, consolidating through the U.S. Department of Education program may ultimately provide the best option over the long term, allowing you to remain eligible for income-driven repayment programs, loan forgiveness or loan discharge.

Blog Writer: Barry Bridges For Bankrate.

credit score picCredit score is one of the most important aspects of an American’s life today. Individuals who have good credit scores qualify for the best interest rates, thereby paying less finance charges on loans and credit cards. People can save a lot of money with low markup rates and that money can be used to pay off debts faster and invest elsewhere. Credit scores primarily depend on five factors:

  • Credit usage
  • Payment history
  • New credit inquiries
  • Age of credit accounts
  • Credit mix

People who file for bankruptcy observe a significant drop in their credit scores for obvious reasons. Similarly, paying your bills past the due date and maxing out your credit cards produces a similar effect. If your credit score is below 500, then applying for a loan is certainly a bad idea. Allow your score to surpass 700 before thinking about leasing a car or mortgaging a property. Here are five steps to help you improve your score efficiently:

1.   Start Paying your Bills on Time

Perhaps the sole reason for your dwindling scores is a habit of issuing late payments. Most late payments are subject to a surcharge, which means you are also losing more cash. You will have to establish a budget for your regular expenses, such as utility bills, internet, and T.V subscriptions. You must always keep enough money aside for paying your bills, so you are not fumbling for pennies when the time arrives. If you forget to submit your bills on time, set up reminders on your phone’s calendar. It may seem like too much extra work in the beginning, though you will eventually get the hang of it.

2.   Decrease your Credit Utilization

Credit cards are not your best friends, but merely an emergency fund. Do not consider them as a ticket to unlimited shopping sprees. Remember that it is not free money; you have to pay back every cent with interest later on. Primarily rely on your debit cards, and only turn to credit cards as a last resort. Your credit utilization must fall within 30% of your card’s spending limit.

3.   Do not Open or Close Credit Accounts

When your credit score is down in the dumps, do not close unused credit cards. This will increase your credit utilization ratio, thereby further deceasing your credit score. Do not apply for new credit either, as enquires too have a negative impact on the score. Managing existing credit cards shall be the only priority.

4.   Organize a Payment Plan to pay off Debt

credit repair with calculatorIf you are struggling with debt owed to multiple creditors, organize a reasonable payment plan to get out of the situation. Start by talking and negotiating with your creditors to set up an installment schedule that works well with your current income. Paying off secured and unsecured debts like utility fees, medical bills, student loans, mortgage, and pending credit card payments will readily improve your score.

5.   Always check your Credit Report for Errors

Sometimes a low credit score may seem unexpected, so you must go through your credit report to make sure. If you spot errors in your credit history, report them immediately. The entity in charge will make the requested corrections and recalculate your score.

Author Bio

John Adams is a paralegal who writes about widespread legal and social issues. He helps readers overcome challenges and solve many personal problems the smart way, rather than the hard way. He aims to reach out to individuals who are unaware of their legal rights, and make the world a better place.

Financial planning is difficult when you’re single, but matters tend to get more complicated when you need to account for your partner, your kids, or both. Budgeting and making a savings plan isn’t always fun or easy, but it is necessary. Below, learn about a few steps you can take now to pave a smooth path for your family’s future.

Outline Your Goals

Everyone has life goals, so you’ll want to start by defining what these are for you as soon as possible. Perhaps you dream of owning a home, becoming debt-free, or retiring early. All of these dreams are attainable if you have a solid plan in place.

It’s easy to form a vague idea of your goals, but making them concrete is sometimes a challenge. If you don’t know where to start, Zen Habits suggests writing down ideas to help define what’s most important to you. This simple practice can be incredibly effective.  woman holding toddler

Learn How to Tackle Debt

For many families, debt is a major stumbling block on the path to success. If you’re dealing with student loans, credit card debt, personal loans, or a car loan, it can sometimes feel impossible to get out from under your payments.

There are numerous strategies for paying off debt, but the right one for you will depend on your individual situation. Forbes explains that the popular “snowball method,” which involves paying the smallest debts first regardless of interest, works great for some people.

However, you should always weigh other options to find the best one for you. Depending on the type of debt you have, it may make more sense to chip away at each debt equally or focus your attention on accounts with the highest interest rates first.

Seeking credit counseling from a reputable organization might be a good step if you don’t know where to start. In dire situations, you may also consider debt relief. However, this option can have major implications for your financial future. 

Start Saving for Specific Goals

A savings plan is just as important as your plan for handling debt. One of the easiest ways to start saving is to schedule recurring deposits to your savings account from your checking account. However, you might make more progress if you set specific goals.

Setting a savings goal starts with determining how much you need and knowing when you need it. For example, you may want to have $10,000 saved up for a down payment on a home within the next five years. With this basic information, you can determine how much of your income you need to save each month.

There are many savings strategies, but for many people, following the 50/30/20 rule works well. With this approach, you spend 50 percent of your income on needs, such as food and housing, and 30 percent of your income on wants, such as entertainment or hobbies. The remaining 20 percent then goes towards savings. Don’t forget the importance of creating an emergency fund.

Achieving Your Goals

When trying to achieve a specific financial goal, it helps to research everything that’s involved in making it a reality. For example, if you want to buy a house at some point down the road, it is important to understand your financing options. Each type of mortgage has its own credit requirements, interest rates, and down payment standards.

Generally speaking, you can choose between conventional financing and federally-backed loans, such as FHA loans. Conventional loans are more flexible and offer fixed or adjustable rates, but also require you to have more money for a down payment and a better credit score. FHA loans are a good option if you have limited money for a down payment and have a poor credit score. But there are still long-term costs, like annual mortgage insurance premiums.

Financial planning is one of the best things you can do to provide for your family. Keep in mind it’s not as simple as sitting down once and making a plan for the rest of your lives. A good financial plan is revisited often to ensure it still aligns with your current and future goals.

 

Blog contributor: Emma Grace Brown

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Customer Notice: Personal loans, title loans, and car loans have terms 6 months or longer. There are no early payoff penalties. We currently report to one of the 3 major credit bureaus, TransUnion. However, many factors affect your credit score. Therefore, we can't promise that your credit score will improve while having a loan with us.

Requirements: We are able to service Ohio residents only. Approval depends upon meeting legal, regulatory and underwriting requirements. America's Loan Company may, at its discretion, verify application information by using national databases, including but not limited to Teletrack and any of the national credit bureaus. America's Loan Company may take this information into consideration in the approval process. Due to state and verification requirements, not all applicants for loans may be eligible for approval by America's Loan Company. You may be required to submit additional documents due to state law and qualification criteria.

Products & Services: Products and services offered to customers may vary based on customer eligibility and applicable state and federal law. Actual loan amounts vary. The availability of loans and extensions may vary. Auto loans and secured personal loans are subject to minimum auto value requirements.

Further Personal Loan Disclosures: For qualified customers, America’s Loan Company offers bad credit personal loans with terms of 6 months to 5 years, with APR under 35.9%. As an example, you may borrow $1,500.00 over a 24 month period, with a $10.00 credit investigation fee, $100.00 loan origination fee, and $452.32 in interest, for a total payment of $2062.32, with an APR of 32.6514%, and monthly payments of $85.93.

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