How We Paid Off Over $45K of Debt in 11 Months

It seems pretty normal to me now but people still drop their jaws when I tell them we’ve paid over $45K on our loans in less than a year. We still have a year to go and most days I…

The post How We Paid Off Over $45K of Debt in 11 Months appeared first on Modern Frugality.

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Here Are The Best Student Loans of 2021

The best student loans can help you earn a college degree that will lead to higher earnings later in life. They also come with low interest rates and reasonable fees (or no fees), which will make it easier to keep costs down while you’re in school and once you’re in repayment mode.

For most people, federal student loans are the best deal. With federal student loans, you can qualify for low fixed interest rates and federal protections like deferment, forbearance, and income-driven repayment plans. To find out how much you can borrow with federal student loans, you should fill out a FAFSA form. Doing so can also help you determine if you qualify for any additional student aid, and if so, how much.

While federal student loans are usually the best deal for borrowers, many students need to turn to private student loans at some point during their college careers. This is often the case when federal student loan limits have been exhausted, or when federal student loans are no longer an option due to other circumstances. We’re providing the top 8 options, at least according to us, as well as a guide to help you get the best rate.

Most Important Factors When Applying for Student Loans

  • Start with a federal loan. Fill out a FAFSA form prior to applying for a private loan to make sure you’re getting all the benefits you can.
  • Compare loans across multiple lenders. Consider using a comparison company like Credible to do so.
  • Always read the fine print. Fees aren’t always boasted on the front of a lender’s website, so take time to learn about what you’re getting into.
  • Start paying as soon as you can to avoid getting crushed by compound interest.

Best Private Student Loans of 2021

Fortunately, there are many private student loan options that come with low interest rates and fair terms. The best student loans of 2021 come from the following private lenders and loan comparison companies:

  • Best for Flexibility
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  • Best Loan Comparison
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  • Best for Low Rates and Fees
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  • Best for No Fees
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  • Best Student Loans from a Major Bank
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  • Best Student Loans with No Cosigner Required
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  • Best for Fair Credit
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  • Best for Comprehensive Comparisons
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#1: College Ave — Best for Flexibility

College Ave offers private student loans for undergraduate and graduate students as well as parents who want to take out loans to help their kids get through college. Variable APRs as low as 3.70% are available for undergraduate students, but you can also opt for a fixed rate as low as 4.72% if you have excellent credit. College Ave offers some of the most flexible repayment options available today, letting you choose from interest-only payments, flat payments, and deferred payments depending on your needs. College Ave even lets you fill out your entire student loan application online, and they offer an array of helpful tools that can help you figure out how much you can afford to borrow, what your monthly payment will be, and more.

Qualify in Just 3 Minutes with College Ave

#2: Credible — Best Loan Comparison

Credible doesn’t offer its own student loans; instead, it serves as a loan aggregator and comparison site. This means that, when you check out student loans on Credible, you have the benefit of comparing multiple loan options in one place. Not only is this convenient, but comparing rates and terms is the best way to ensure you get a good deal. Credible even lets you get prequalified without a hard inquiry on your credit report, and you can see loan offers from up to nine student lenders at a time. Fixed interest rates start as low as 4.40% for borrowers with excellent credit, and variable rates start at 3.17% APR with autopay.

Compare Dozens of Rates at Once with Credible

#3: Sallie Mae — Best for Low Rates and Fees

Sallie Mae offers its own selection of private student loans for undergraduate students, graduate students, and parents. Interest rates offered can be surprisingly low, starting at 2.87% APR for variable rate loans and 4.74% for fixed-rate loans. Sallie Mae student loans also come without an origination fee or prepayment fees, as well as rate reductions for students who set up autopay. You can choose to start repaying your student loans while you’re in school or wait until you graduate as well. Overall, Sallie Mae offers some of the best “deals” for private student loans, and you can even complete the entire loan process online.

Get Access to Chegg Study FREE with Sallie Mae

#4: Discover — Best for No Fees

While Discover is well known for their excellent rewards credit cards and personal loan offerings, they also offer high-quality student loans with low rates and fees. Not only do Discover student loans come with low variable rates that start at 3.75%, but you won’t pay an application fee, an origination fee, or late fees. Discover student loans are available for undergraduate students, graduate students, professional students, and other lifelong learners. You can even earn rewards for having a 3.0 GPA or better when you apply for your loan, and Discover offers access to U.S. based student loan specialists who can answer all your questions before you apply.

Apply for a Loan with Discover

#5: Citizens Bank — Best Student Loans from a Major Bank

Citizens Bank offers their own flexible student loans for undergraduate students, graduate students, and parent borrowers. Students can borrow with or without a cosigner and multi-year approval is available. With multi-year approval you can apply for student funding one time and secure several years of college funding at once. This saves you from additional paperwork and subsequent hard inquiries on your credit report. Citizens Bank student loans come with variable rates as low as 2.83% APR for students with excellent credit, and you can make full payments or interest-only payments while you’re in school or wait until you graduate to begin repaying your loan. Also keep in mind that, like others on this list, Citizens Bank lets you apply for their student loans online and from the comfort of your home.

#6: Ascent — Best Student Loans with No Cosigner Required

Ascent is another popular lender that offers private student loans to undergraduate and graduate students. Variable interest rates start at 3.31% whether you have a cosigner or not, and there are no application fees required to apply for a student loan either way. Terms are available for 5 to 15 years, and Ascent even offers cash rewards for student borrowers who graduate and meet certain terms. Also note that Ascent lets you earn money for each friend you refer who takes out a new student loan or refinances an existing loan.

Get a Loan in Minutes with Ascent

#7: Earnest — Best for Fair Credit

Earnest is another online lender that offers reasonable student loans for undergraduate and graduate students who need to borrow money for school. They also offer a free application process, a 9-month grace period after graduation, no origination fees or prepayment fees, and a .25% rate discount when you set up autopay. Earnest even lets you skip a payment once per year without a penalty, and there are no late payment fees. Variable rates start as low as 3.35%, and you may be able to qualify for a loan from Earnest with only “fair” credit. For their student loan refinancing products, for example, you need a minimum credit score of 650 to apply.

Learn Your Rate in Minutes with Earnest

#8: LendKey — Best for Comprehensive Comparisons

LendKey is an online lending marketplace that lets you compare student loan options across a broad range of loan providers, including credit unions. LendKey loans come with no application fees and variable APRs as low as 4.05%. They also have excellent reviews on Trustpilot and an easy application process that makes applying for a student loan online a breeze. You can apply for a loan from LendKey as an individual, but it’s possible you’ll get better rates with a cosigner on board. Either way, LendKey lets you see and compare a wide range of loan offers in one place and with only one application submitted.

Pay Zero Application Fees with LendKey!

How to Get the Best Student Loans

The lenders above offer some of the best student loans available today, but there’s more to getting a good loan than just choosing the right student loan company. The following tips can ensure you save money on your education and escape college with the smallest student loan burden possible.

Consider Federal Student Loans First

Like we mentioned already, federal student loans are almost always the best deal for borrowers who can qualify. Not only do federal loans come with low fixed interest rates, but they come with borrower protections like deferment and forbearance. Federal student loans also let you qualify for income-driven repayment plans like Pay As You Earn (PAYE) and Income Based Repayment (IBR) as well as Public Service Loan Forgiveness (PSLF).

Compare Multiple Lenders

If you have exhausted federal student loans and need to take out a private student loan, the best step you can take is comparing loans across multiple lenders. Some may be able to offer you a lower interest rate based on your credit score or available cosigner, and some lenders may offer payment plans that meet your needs better. If you only want to fill out a loan application once, it can make sense to compare multiple loan offers with a service like Credible.

Improve Your Credit Score

Private student loans are notoriously difficult to qualify for when your credit score is less than stellar or you don’t have a cosigner. With that in mind, you may want to spend some time improving your credit score before you apply. Since your payment history and the amounts you owe in relation to your credit limits are the two most important factors that make up your FICO score, make sure you’re paying all your bills early or on time and try to pay down debt to improve your credit utilization. Most experts say a utilization rate of 30% or less will help you achieve the highest credit score possible with other factors considered.

Check Your Credit Score for Free with Experian

Get a Quality Cosigner

If your credit score isn’t at least “very good,” or 740 or higher, you may want to see about getting a cosigner for your private student loan. A parent, family member, or close family friend who has excellent credit can help you qualify for a student loan with the best rates and terms available today. Just remember that your cosigner will be liable for your loan just as you are, meaning they will have to repay your loan if you default. With that in mind, you should only lean on a cosigner’s help if you plan to repay your loan amount in full.

Consider Variable and Fixed Interest Rates

While private student loans offer insanely low rates for borrowers with good credit, their variable rates tend to be lower. This is why you should always take the time to compare variable and fixed rates across multiple lenders to find the best deal. If you believe you can pay your student loans off in a few short years, a variable interest rate may help you save money. If you need a decade or longer to pay your student loans off, on the other hand, a low fixed interest rate may provide you with more peace of mind.

Check for Discounts

As you compare student loan providers, make sure to check for discounts that might apply to your situation. Many private student loan companies offer discounts if you set your loan up on automatic payments, for example. Some also offer discounts or rewards for good grades or for referring friends. It’s possible you could qualify for other discounts as well depending on the provider, but you’ll never know unless you check.

Beware of Fees

While the interest rate on your student loan plays a huge role in your long-term loan costs, don’t forget to check for additional fees. Some student loan companies charge application fees or prepayment penalties if you pay your loan off early, for example. Others charge origination fees that tack on a few additional percentage points to your loan amount right off the bat. If you can find a student loan with a low interest rate and no additional fees, you’ll be much better off. Since loan fees may not be prominently advertised on student loan provider websites, however, keep in mind that you may need to dig into their fine print to find them.

Make Payments While You’re in School

Finally, no matter which loan you end up with, it makes a lot of sense to make payments while you’re still in school if you’re earning any kind of income. Even if you make interest-only payments while you attend college part-time or full-time, you can save yourself from paying thousands of dollars in additional interest payments later in life. Remember that compound interest can be a blessing or a curse. If you can keep interest at bay by making payments while you’re in school, you can squash compound interest and keep your loan balances from growing. If you let compound interest run its course, on the other hand, you may wind up owing more than you borrowed in the first place by the time you graduate school and start repayment.

What to Watch Out For

A private student loan may be exactly what you need in order to finish your degree and move up to the working world, but there are plenty of “gotchas” to be aware of. Consider all these factors as you apply for a new private student loan or refinance existing loans you have with a private lender.

  • Interest that accrues while you’re in school: Remember that subsidized loans may not accrue interest until you graduate from college and enter repayment mode, but that unsubsidized loans typically start accruing interest right away. Since private student loans are unsubsidized, you’ll need to be especially careful about ballooning interest and long-term loan costs.
  • Getting a cosigner: Make sure you only apply for a private student loan with a cosigner if you’re entirely sure you can repay your loan over the long haul. If you fail to keep up with your end of the bargain, you could destroy trust with that person and their credit score in one fell swoop.
  • You’ll lose out on some protections: Also remember that private student loans come with fewer protections than federal student loans. You won’t have the option for income-driven repayment plans with private loans, nor will you be able to qualify for federal deferment or forbearance. For this reason, private student loans are best for students who are confident in their ability to repay their loans on their chosen timeline.

In Summary: The Best Student Loans

Company Best Of…
College Ave Best for Flexibility
Credible Best for Loan Comparison
Sallie Mae Best for Low Rates and Fees
Discover Best for No Fees
Citizens Bank Best Student Loans from a Major Bank
Ascent Best Student Loans with No Cosigner Required
Earnest Best for Fair Credit
LendKey Best for Comprehensive Comparisons

The post Here Are The Best Student Loans of 2021 appeared first on Good Financial Cents®.

Source: goodfinancialcents.com

4 Practical Ways to Leave College Debt-Free

A college student looks down at her notebook and smiles because she'll leave college debt-free.

The following is a guest post by Lisa Bigelow, a content writer for Bold.

When it comes to paying for college, the anxiety about how to leave college debt-free starts early. And for thousands of grads who are buckling under the weight of monthly student loan payments that can cost as much as a mortgage, that worry can last for as long as 25 years.

According to EducationData.org and The College Board, the cost of a private school undergraduate education can exceed $200,000 over four years. Think you can avoid a $100k+ price tag by staying in-state? Think again—many public flagships can cost over $100,000 for residents seeking an undergraduate degree, including room and board. And with financial aid calculators returning eye-poppingly low awards, you’d better not get a second topping on your pizza.

In fact, you’d better hope that you can graduate on time.

The good news is that you can maintain financial health and get a great education at the same time. You won’t have to enroll as a full-time student and work 40 hours a week, either—each of the methods suggested are attainable for anyone who makes it a priority to leave college debt-free.

Here are four practical ways you can leave college debt-free (and still get that second pizza topping).

1. Cut the upfront sticker price

Don’t visit schools until you are certain you can afford them. Instead, prioritize the cost of attendance and how much you can afford to pay. Staying in-state is one easy way to do this. But if you have wanderlust and want to explore colleges outside state lines, an often-overlooked method of cutting the upfront cost is the regional tuition discount. Many US states participate in some form of tuition reciprocity or exchange programs. You can explore the full list of options at the National Association for Student Financial Aid Administrators website.

Let’s explore how this works. As a resident of a New England state, for example, you can study at another New England state’s public university at a greatly reduced cost if your home state’s public schools don’t offer the degree you want. So, for example, if you live in Maine but want to go to film school, you can attend the University of Rhode Island and major in film using the regional tuition discount.

Some universities offer different types of regional discounts and scholarships that appear somewhat arbitrary. The University of Louisville (in Kentucky) includes Connecticut in its regional scholars program. And at the University of Nebraska, out-of-state admitted applicants are eligible for several thousand dollars in renewable scholarship money if they meet modest academic standards.

If you already have your heart set on an expensive school and you’re not likely to qualify for reciprocity, financial help, or merit aid, live at home and complete your first two years at your local community college.

Here’s another fun fact: in some places, graduating from community college with a minimum GPA gives you automatic acceptance to the state flagship university.

2. Leverage dual enrollment and “testing out”

When you enroll in a four-year college it’s pretty likely that you’ll spend the first two years completing general education requirements and taking electives. Why not further reduce the cost of your education by completing some of those credits at your local community college, or by testing out?

Community college per-credit tuition is usually much cheaper than at four-year colleges, so take advantage of the lower rate in high school and over the summer after you’re enrolled in your four-year college.

But beware: you’ll probably need at least a C to transfer the credits, so read your institution’s rules first. Also, plan to take general education and low-level elective classes, because you’ll want to take courses in your major at your four-year school.

If you’ve been given the opportunity to take Advanced Placement courses, study hard for your year-end exams. Many colleges will accept a score of 3 or higher for credit, although some require at least a 4 (and others none at all). Take four or five AP classes in high school, score well on the exams, and guess what? You’ve just saved yourself a semester of tuition.

3. Take advantage of financial aid opportunities

After taking steps one and two, you probably have a good idea of what the leftover expense will be if you want to leave college debt-free. Your next job is to figure out how to cut that total even more by using financial aid. There are four types to consider.

The first is called need-based aid. This is what you’ll apply for when you complete your Free Application for Federal Student Aid. Known as the FAFSA, this is where you’ll enter detailed financial information, and you’ll need at least an hour the first time you complete this form. Hint: apply for aid as soon as the form opens in the fall. It is not a bottomless pot of money.

There is also medical-based financial aid. If you have a condition that could make employment difficult after graduating from college, you may be eligible, and qualifying is separate and apart from financial need and academic considerations.

The third type of aid relates to merit and is offered directly by colleges. Some schools automatically consider all accepted applicants for merit scholarships, which could relate to academics or community service or, in the case of recruited athletes, athletics. At other universities, you’ll need to submit a separate scholarship application after you’ve been admitted. Some merit awards are renewable for four years and others are only for one year.

If you didn’t get need-based or merit-based aid then you still may qualify for a private scholarship. Some require essays, some don’t, and some are offered by local community organizations such as rotary clubs, women’s organizations, and the like. Don’t turn your nose up at small-dollar awards, either, because they add up quickly and can cover budget-busting expenses such as travel and books.

4. Find easy money

Small-dollar awards really add up when you make finding easy money a priority. Consider using the following resources to help leave college debt-free:

  • Returns from micro-investing apps like Acorns
  • Tax return refunds
  • Browser add-ons that give you cashback for shopping online
  • Rewards credit cards (apply for a travel rewards credit card if you’re studying out of state)
  • Asking for money at the holidays and on your birthday
  • Working part-time by capitalizing on a special talent, such as tutoring, photography, or freelance writing

Leave College Debt-Free

Finally, if you have to take out a student loan, you may be able to have it forgiven if you agree to serve your community after graduation. The Peace Corps is one such way to serve, but if you have a specialized degree such as nursing, you can work in an underserved community and reap the rewards of loan forgiveness.


Lisa Bigelow writes for Bold and is an award-winning content creator, personal finance expert, and mom of three fantastic almost-adults. In addition to Credit.com, Lisa has contributed to The Tokenist, OnEntrepreneur, College Money Tips, Finovate, Finance Buzz, Life and Money by Citi, MagnifyMoney, Well + Good, Smarter With Gartner, and Popular Science. She lives with her family in Connecticut.

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How to Build Credit Without Student Loans

College graduates saddled with student loans may find this hard to believe, but there is one upside to having to pay back all that debt: It helps you build credit.

That may seem like a small consolation — particularly if the balances you owe are even average — but credit can be hard to come by. Of course, all hope isn’t lost for those who don’t have student loans.

Here are some ways to build credit without that kind of debt.

1. Get a Secured Credit Card

The Credit Card Accountability Responsibility and Disclosure (CARD) Act prohibits lenders from giving credit cards to anyone under 21 who doesn’t have a willing co-signer or a demonstrated ability to repay, but if you’re over that age or you have a source of income, you can apply for some entry-level plastic.

Secured credit cards — which require you to put down a deposit that serves as your credit line — are specifically designed to help people repair or build credit. These cards generally require a deposit to “secure” the limit of the credit card. (You can go here to learn more about the best secured credit cards in America.)

There are also student credit cards geared to young borrowers that could be worth considering. The better ones have low credit limits that can keep new borrowers out of trouble and tout rewards or alerts designed to build smart-spending habits.

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2. Become an Authorized User

If you can’t qualify for a credit card, you may want to see if a parent, guardian or family friend is willing to add you as an authorized user to one of their credit cards. Authorized users aren’t responsible for paying off an account, but will get credit (pun intended) for any good activity associated with it. Just be sure to have the primary cardholder check if the issuer reports authorized users to the major credit bureaus, since not all of them do so.

3. Take Out a Credit-Builder Loan

An alternative to starter credit cards, credit-builder loans, offered by some credit unions and banks to help people improve their credit, allow you to borrow a nominal amount (often $1,000 or less) and make payments for 12 to 24 months. The payments are deposited in an interest-bearing CD or savings account. These loans typically have relatively low interest rates and can help people with a thin credit history develop a more solid credit profile as long as on-time payments are reported to the three major credit reporting agencies. (Again, you may want to check this ahead of time.)

4. Apply for a Personal Loan

You may be able to qualify for a personal loan. These installment loans do not require collateral and typically have slightly higher interest rates than secured loans. A bank or credit union that you have a relationship with may be willing to extend financing, though you may be asked to get a co-signer.

5. Establish Good Habits

Of course, you’ll only build good credit if you use any financing you are able to obtain wisely. You can establish a good credit score over the long term by making all your payments on time, keeping debt levels lower than 30% (ideally 10%) of your total available credit limit(s), and adding a mix of credit accounts (revolving lines, like credit cards, and installment loans, like an auto loan) as your score and wallet can handle them.

You can track your progress by viewing your two free credit scores each month on Credit.com. If you make a misstep, you may be able to fix your credit by disputing errors on your credit report, identifying your particular credit score killers and coming up with a game plan to address them.

More on Credit Reports & Credit Scores:

  • The Credit.com Credit Reports Learning Center
  • What’s a Good Credit Score?
  • How to Get Your Free Annual Credit Report

Image: LifesizeImages

The post How to Build Credit Without Student Loans appeared first on Credit.com.

Source: credit.com

10 Things You Need to Know before Buying a Car

Buying a new or used car can be an intimidating experience. Many car salespeople may pressure you to leave the lot with a purchased vehicle, so it’s crucial you’re armed with information about the cars you are interested in, the budget you can afford, and the value of your trade-in—if you have one. With these details, you have all the tools you need to negotiate properly.

Here are 10 tips and strategies for making sure you get the best-quality vehicle at the lowest price.

1. Think about Financing

Prior to visiting any dealership, have a sense of what kind of deposit you can put down and what monthly payment you can afford. It also helps to do some research on available auto loans to get a sense of what you qualify for. Or try a service like AutoGravity, which allows you to select rates and terms that fit your budget and then obtain offers from lenders.

2. Check Your Credit Score

Knowing your credit score can be helpful as well. Justin Lavelle, chief communications officer for BeenVerified, says, “Having a good idea of your credit report and credit score and the interest rates available can help you negotiate a good deal and save hundreds, if not thousands, of dollars.”

3. Shop Around

Research the cars you might be interested in before you head to a dealership, rather than going in unprepared. To determine what kind of car you want, use resources like US News Best Cars, where you can search anything from “best cars for families” to “best used cars under 10k.” Another resource is Autotrader, which can be used to search new and used cars in your area by make, model, price, body style, and more.

4. Compare Prices

Lavelle also stresses getting detailed pricing info in advance: “Price the car at different dealerships and use online services to get invoice and deal pricing.” A reliable tool is Kelley Blue Book. Use the site’s car value tool to find out the MSRP and the dealer invoice of a car as well as a range of prices you can expect to see at dealerships. TrueCar is also helpful to use. You can search for and request pricing on any make, model, or year of car. You may get a slew of phone calls, emails, and texts from dealers immediately after, but having information from different dealerships can help you negotiate prices. You should also visit dealer sites to look for rebate offers.

5. Research Your Trade-In’s Value

If you have a trade-in, don’t wait for the salesperson to tell you what it’s worth. On Kelley Blue Book, you can get a sense of the value ahead of time so you know if you’re receiving a good offer. Or try the Kelley Blue Book Instant Cash Offer feature, where dealers will give you a guaranteed price for a trade, eliminating complicated haggling at the dealership. 

6. Test Drive Potential Purchases

You may want to pass on the test drive if you’re familiar with a particular make and model, but Lavelle recommends taking the time to do it anyway. “It is a good idea to inspect the car and give it a good test drive just to make sure all is working and there are no noticeable squeaks, rattles, or shimmies that could cause you headaches after your purchase,” he says.

7. Look at Car Histories

Before selecting dealerships to visit, search for consumer reviews so you can avoid having a bad experience. However, Lavelle warns that just because a car sits on a reputable, well-reviewed lot does not necessarily mean that the car is issue-free. So he recommends digging deeper, especially for used cars. “Services like CARFAX represent that they can tell you about the car’s life from first purchase forward, so that might be a good place to start,” he says. He also recommends checking the title, which you can do online via the DMV.

8. Find Repair Records

In addition to checking the repair history on the specific car you are interested in, Autotrader suggests looking up the repair record of the make and model. “Check J.D. Power and Consumer Reports reliability ratings to see if the vehicle you’re considering is known to be a reliable one,” the site states. It also recommend Internet forums and word of mouth.

9. Spring for an Inspection

Autotrader also suggests telling the seller you require an inspection from a mechanic before purchase to ensure there aren’t any problems. “While a mechanic may charge $100 or more for such an inspection, it can be worth it if it saves you from thousands of dollars in potential repairs,” it recommends. Some sellers may try to dismiss a mechanic’s inspection. Don’t give in—the seller could be covering up a serious issue with the car. Insist an inspection is done, or rethink your purchase.

10. Know Your Rights

For any new or used car, take the time to get familiar with the warranty package and return policies. Do you need to supplement the warranty? Are you familiar with the lemon law in your state?

Shopping for a car can be frightening, but with the right research and preparation, you won’t have any regrets. Use the tips and resources above, and snag a free credit report from Credit.com so you know what kind of financing you can expect.

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Can I Get a Car Loan If I Have No Credit?

buy a car with no credit

Yes, lenders have auto loans for people with no credit, but getting one is not guaranteed. It will depend on the lender’s flexibility, the down payment you can afford, and the kind of car you want to buy. It may even depend on how you ask.

Phil Reed, senior consumer advice editor for the consumer auto site Edmunds has some good advice on how to get a car loan with no credit. He says a surprising number of people simply walk into a dealership and say, “Hi, I have no credit, and I want to buy a car.” He doesn’t recommend this approach. Instead, he offers these five tips for people who need a no-credit car loan.

1. Get Pre-Approved

If you have no credit or a thin credit profile, you should try to get preapproved for a loan before heading to the dealership. This will let you compare rates with any loan the dealer may offer. It may also give you a bargaining chip when negotiating the final deal.

If you have a relationship with a bank or credit union, you should start looking for financing there. Reed recommends making an appointment to meet with your bank’s loan officer in person.

“Make a case for yourself,” he says. That means bringing your pay stubs and bank account records with you. You should also check your credit reports, if they exist, and credit scores. You want to know as much about your credit profile as a lender would. If you don’t know your credit score, don’t worry—you can check your credit score for free every month on Credit.com.

If you can’t get a loan from your financial institution, you may be able to find a no-credit auto loan online. Just make sure it’s from a reputable lender. Credit.com can also help you find auto loan offers from trustworthy lending institutions.

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2. Negotiate a Good Price

A dealership could beat the offer you get from your bank or credit union. However, if you know you’re already approved for a loan, you can focus on comparing rates and prices instead of worrying about financing.

Reed says that it’s important to be wary. You don’t want to feel so indebted to the dealer for “giving” you a loan that you fail to negotiate the price of the car. And if the dealer’s financing isn’t better than the bank’s, at least you still have an approval in your pocket.

Having a good down payment or trade-in can also help your case. A trade-in would reduce the amount you’ll need to borrow, and a larger down payment would show the lender some commitment on your part. Edmunds recommends putting at least 10% down on a used car, so start saving now.

3. Choose the Right Car

Be sure the car you’re buying is affordable for you, even if it’s not the car you’d choose if you had more money and better credit. “If you have no credit, it’s not the time to get your dream car,” Reed says. “You have to choose the right car and the right amount [to borrow].”

You want reliable transportation you can afford. Making regular, on-time payments won’t just pay down your load, it will also build your credit, so don’t get a loan that requires higher payments than you can comfortably make.

Sites like Kelley Blue Book, Cars.com, and Edmunds can help you find information on the cars that match your budget. When you’re at the car dealership, remember your budget and don’t spring for optional add-ons you don’t really need.

4. Don’t Let Interest Rates Scare You Off

Reed cautions that when you get a loan with no credit, the interest rates you’re offered may seem appallingly high, but that’s part of the cost of having no credit history.

When you don’t have a credit score, lenders can’t assess how big of a risk they’re taking by giving you a loan. To protect the money they’re lending, they will likely treat you as a high-risk borrower, which means the loan will have a higher interest rate.

As you make payments, you’ll establish a pattern of reliably paying back money. Over time, you can improve your interest rate by refinancing. Reed says that, according to a dealership employee, a customer once lowered his interest rate from 13% to 2% in two years’ time by improving his credit and refinancing.

5. Give Yourself Some Credit, Not a Cosigner

Reed advises against cosigning—a process that involves checking someone else’s credit and using that score to qualify for a loan. It might get you a lower rate and help you get approved, but Reed says that if you bite the bullet and pay a higher interest rate rather than get a cosigner, you’ll have the opportunity to build credit.

In addition, having a cosigner will tie that person’s credit to yours, and the way you repay your car loan will influence their credit. Reed says if you’re going to do it, do it only as a last resort, and make sure the cosigner is a relative.

Bottom line, though, as Reed explains, “It’s asking a lot.” It’s better to finance the car yourself, pay on time, and build your credit. That way, the next time you need a loan, you won’t have to worry about whether you’ll qualify.

Good credit doesn’t just help you get reliable transportation: good credit can make a huge difference in improving your financial security and the peace of mind that comes with it. Start tracking your credit for free today at Credit.com. Your new car will get you moving around town, but your new credit score will get you moving up in the world.

Image: iStock

The post Can I Get a Car Loan If I Have No Credit? appeared first on Credit.com.

Source: credit.com

Help, I Need to Get the Cosigner Off My Car Loan!

how to get a cosigner off a car loan

We’ve had many readers write in after a divorce and ask how to split their assets with an ex-spouse. One of the most common questions is how to remove an ex or another cosigner from a car loan and title. Here’s how to go about it.

What’s the Role of a Cosigner?

It can be challenging to remove a cosigner from a loan. To gain a better understanding of why, let’s look at why a cosigner is used at all. Essentially, a cosigner is needed when the borrowers own credit and/or income isn’t enough to qualify for the loan by himself or herself. The cosigner, presumably, has stronger credit and income, and is required by the lender or creditor to help guarantee that the loan will be repaid.

Loans involving a cosigner include a cosigners notice. The notice asks that the cosigner guarantee the debt. This means that if the original borrower fails to make payments on the debt, then the cosigner becomes responsible for the balance. The cosigner then is obligated to make payments until the debt is paid when the borrower can’t.

Co-signing a loan is risky for the cosigner, because it can affect the cosigner’s credit if the borrower doesn’t satisfy the debt and the cosigner has to take over. The debt can ultimately affect the cosigner’s credit scores and access to revolving credit, such as credit cards.

Before co-signing a loan, a cosigner should be sure that he/she is able to comfortably take on the monthly payments if it comes to that. The cosigner should also make sure he/she doesn’t need to get a loan of his/her own over the course of the cosigned loans terms.  Cosigning on the borrower’s debt will affect the cosigner’s overall credit utilization and ability to secure other credit opportunities in the meantime.

Now that you know the role of a co-signer let’s look at what you can do to remove them from a car loan if needed.

Refinance the Car Loan to Get the Cosigner Off

You may be able to refinance a car loan in your own name to get your cosigner off the loan. In essence, you’ll buy the car from your ex-spouse and go through the car buying process again.

The spouse who is responsible for the car loan payments, the primary signer, should ideally assume credit liability for the loan. It’s a also good idea to go through this process right away, regardless of what your divorce decree states.

Divorce decrees (or court orders) don’t release either person from his/her obligations under the original contract of the loan. That means that if you and your ex-spouse have a joint account, like a car loan, and if the spouse who is supposed to pay doesn’t, the negative credit history will end up on both of your credit reports, and those late payments will damage both of your credit ratings. In fact, the other person may not know about the unpaid account until a collection agency calls.

Removing your ex from the car’s title, if the car already paid for, is similar and requires working with the Department of Motor Vehicles (DMV). You’ll both need to sign a change of title/vehicle ownership form and return it for processing. You can check online or call your state’s DMV for details and forms.

In some states you can file a transfer of title between family members, if the divorce has not been finalized yet. A transfer of title lets you avoid getting any needed inspections or certifications and paying taxes on the vehicle based on the purchase price. (If you live in the state of California, for example, research changing vehicle ownership versus transferring a car title.)

See if You Have a Cosigner Release Option

Some car loans include conditions that remove the cosigner’s obligation after a specified number of on-time payments are made by the primary borrower.

If you’re unsure if this is an option, talk to the lender and check any loan documents you have. The cosigner release option is probably one of the easiest methods of taking a co-signers name off a car loan.

Pay Off the Loan

Another option to get a cosigner off a car loan is to pay off the loan either directly or by selling the car. If you sell the car, you can use the money to pay off the loan. With luck, the sale value of the car will be sufficient to cover the remainder of the loan.

Be aware that if you are the cosigner, and the primary borrower fails to make payments, you can likely seize the asset and sell it.

This article was originally published February 20, 2013, and has since been updated by another author.

Image: iStockphoto

The post Help, I Need to Get the Cosigner Off My Car Loan! appeared first on Credit.com.

Source: credit.com

How Long Does It Take To Buy A House?

How long does it take to buy a house? The answer is: it depends. You can buy a house in a matter of weeks or it can take you anywhere from 4 to 6 months. The question is how ready are you? It can take a long time, and that’s just learning about various mortgage options or improving your credit score.

So understanding the various factors involved in buying a house can give you an estimate of how long it will take you to buy the house

Check out now: 5 Signs You Are Not Ready To Buy A House

How long does it take to buy a house? A step-by-step guide.

It can take a homebuyer a few weeks to several months to complete the home buying process. But when determining how long it will take you to buy a house, you first have to find out if you will be pre-approved for a mortgage. There is no sense of shopping for a house to then realize you can’t afford it.

If you are interested in comparing the best mortgage rates through LendingTree click here. It’s completely free.

I. How long does it take to get a pre-approved mortgage letter in order to buy a house?

If you’re serious about buying a house, it’s important to get pre-approved for a mortgage. So when it’s time to make an offer, the seller will know you’re serious. If you don’t have one handy, the seller will likely move to the next buyer.

Getting pre-approved for a mortgage in order to buy a house can take longer. That is because you have to make sure your financial situation is in shape. For example, your income-to-debt ratio, your down payment, and your credit score must be good. That’s exactly what a mortgage lender will look at.

Even when these things are in order, shopping and comparing mortgage rates and fees can take several weeks.

Let’s take a look on how long it will take you to get these things in shape before buying a house.

Click here to compare mortgage rates through LendingTree. It’s completely FREE.

A. How good is your credit score?

A low credit score can make buying a house take longer, because it can take months to a year to improve a bad credit score.

A conventional loan will usually require a 640+ credit score.

In fact, your credit score is the number 1 item mortgage lenders look at to decide whether to offer you a mortgage. And if it is not where it’s supposed to be, you might get rejected.

Luckily for you there are other ways to get a loan with much lower credit score: FHA loans.

FHA loans only require a credit score of 580 with 3.5% down payment. You may get qualified with a 500 credit score, but you’ll have to come with a 10% down payment.

So before you get into the fun part of shopping for a mortgage or visiting homes, it’s best to know what your credit score is and take steps to improve it.

You can get a free credit score at Credit Sesame.

B. Fix errors on your credit report.

Fixing errors on your credit report in order to get pre-approved for a loan in order to buy a house can take 30 days.

According to Transunion, “most investigations are completed within 2 weeks, but some may take up 30 days.”

Again, we recommend you get a free credit report at Credit Sesame. A credit report will give you a detail analysis of your credit history, how much debt you owe, and how creditworthy you are, etc. If there are any errors or inaccuracies, fix them immediately so there’s no surprise when you’re actually applying for a mortgage.

The best way to do that is by filing a Transunion dispute or Equifax dispute.

C. Do you have a down payment for the house?

How long it will take you to buy a house will also depend on whether or not you already have money saved up for a down payment.

Unless you’re going to buy the house with outright cash, you’ll need a down payment. And saving for a down payment can take a long time. Depending on your income and expenses, saving for a down payment on a house can take years.

Assuming, for example, you want to buy a house that will cost you $450,000, and you’re using a conventional loan to finance the house. With a 20% down payment, you will need to come up with $90,000.

Let’s say again, because of other monthly expenses, you can only save $1500 a month for the down payment.

You see how long it will take you to save for a down payment to buy the house? 5 years. And that doesn’t even take into account other upfront costs of buying a house, such as closing cost.

While it’s possible to get a mortgage with a down payment as low as 3.5% of the home purchase price, it’s advisable to put at least 20% down. The reason is because you will avoid paying private mortgage insurance (PMI), which protects the lenders in case you default on your mortgage.

Home buyers with a down payment below 20% are usually charged with PMI.

Another reason for a larger down payment is that it reduces the cost of the mortgage, grows equity much faster, and saves you on interest over the life of the loan.

As you can see, it can take you as much as 5 years from the time you’re thinking about buying the house to the time you’re actually ready to start the process.

But once you have taken care the things above, buying a house can go a lot faster.

II. How long does it take to find a real estate agent?

Average time: 1 day to a month

Once you have been pre-approved for a mortgage, the next step is to find an experienced real estate agent. Finding a good real estate agent can take a day to a month. Websites such as Zillow and Redfin list real estate agents you can use.

III. Shopping for a home.

Average time: a few weeks to a few months

With the help of a real estate agent and your own due diligence, finding a home can can go faster or take longer depending on available homes, the season and your desired location.

But experts say on average it can take a minimum of three weeks to a few months.

IV. Making an offer, negotiation, and inspection.

Average time: 1 to 10 days

Once you have found the home of your dream, the next step is to make an offer. You and the seller can go back and forth negotiating the price.

Once your offer has been accepted, you and the seller sign something called a purchase agreement. Then, the next step is to hire a professional to inspect the home for defects. Depending on your state, a home inspection must be completed within 10 days. And if the inspection finds some defects in the house, that could delay the process.

V. How long does it take to close on a house?

Average time: 30 to 45 days.

Once the inspection is done, your lender will need to officially approve you for the loan. And depending on the lender, it can also affect how long it takes to buy a house. You may need to provide additional documents. But the lender will need to assess the home for its value. And depending on the program (whether it’s conventional loan or FHA loan) it can take anywhere from 30 to 45 days to close on a home.

Bottom line

When asking yourself this question: “how long does it take to buy a house?” The answer is : it depends. If you have your credit score, your down payment, your other finances under control, you can buy your house in two months or less. But if you have to save for a down payment, fix errors on your credit report, raise your credit score, the whole home buying process can take years.

Click here to compare mortgage rates through LendingTree. It’s completely FREE

Still wondering how long it takes to buy a house? Read the following articles:

  • 5 Signs You’re Not Ready To Buy A House
  • 10 First Time Home Buyer Mistakes To Avoid
  • 3 Signs You’re Not Ready to Refinance Your Mortgage
  • The Biggest Mistakes Millennials Make When Buying a House
  • 7 Signs You’re Ready To Buy A House

Work with the Right Financial Advisor

You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc). So, find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.

The post How Long Does It Take To Buy A House? appeared first on GrowthRapidly.

Source: growthrapidly.com

The Best Student Loan Companies For Refinancing

Refinancing your student loans can make good financial sense, and that’s 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, you’ll 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 it’s 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 isn’t 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:

  1. Splash Financial
  2. College Ave
  3. Earnest
  4. SoFi
  5. CommonBond
  6. LendKey
  7. Wells Fargo
  8. 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 Financial’s 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 you’ll 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, there’s 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

3. Earnest

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 you’ll 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, you’ll 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

4. SoFi

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

5. Commonbond

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 don’t 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

6. LendKey

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 don’t charge an origination fee.

You can use this company’s 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, you’ll 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 won’t let you refinance if you didn’t graduate from college, or even if you graduated from an “unapproved” 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. Here’s 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 you’re 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 it’s important to consider that you may not qualify for the lowest rates available if you don’t have excellent credit.

Cosigner Requirements

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 isn’t great, so make sure to ask family members if they’re 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, you’ll want to look for lenders that don’t charge these fees. Also check for hidden fees like prepayment penalties.

Discounts Available

Some student loan companies let you qualify for discounts, the most popular of which is a discount for using autopay. If you’re 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. You’ll want to make sure refinancing aligns with your long-term financial goals and your monthly budget, and it’s 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 you’ll 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 that’s 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 you’re 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 Cents®.

Source: goodfinancialcents.com