Loan Consolidation – Fast Paths http://fastpaths.com/ Sat, 24 Sep 2022 14:00:21 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://fastpaths.com/wp-content/uploads/2021/05/default.png Loan Consolidation – Fast Paths http://fastpaths.com/ 32 32 Will personal loans become more expensive in 2023? https://fastpaths.com/will-personal-loans-become-more-expensive-in-2023/ Sat, 24 Sep 2022 14:00:21 +0000 https://fastpaths.com/will-personal-loans-become-more-expensive-in-2023/ Image source: Getty Images There are reasons to think they might. Key points Personal loans allow you to borrow money for any purpose. Despite this flexibility, 2023 may not be the best time to pull one off. Borrowing in general could become more expensive in 2023, to stem rising inflation. If you need money, whether […]]]>

Image source: Getty Images

There are reasons to think they might.


Key points

  • Personal loans allow you to borrow money for any purpose.
  • Despite this flexibility, 2023 may not be the best time to pull one off.
  • Borrowing in general could become more expensive in 2023, to stem rising inflation.

If you need money, whether to cover home repairs, renovations or medical expenses, you might be inclined to turn to a personal loan. The advantage of personal loans is that you are not obligated to finance a specific asset, whereas with a mortgage, for example, you can only use the proceeds of your loan to finance the purchase of a house.

Personal loans also tend to offer the advantage of relatively affordable interest rates. And that’s important, because the lower the interest rate on your loan, the less money you spend when you borrow.

But while it’s easy to see the appeal of personal loans, they may not be your best borrowing option next year. Indeed, personal loan interest rates could rise, making these loans a less affordable route than usual.

Discover: These personal loans are the best for debt consolidation

More: Prequalify for a personal loan without affecting your credit score

Why Personal Loan Interest Rates Might Rise

There are different factors that determine the rate you get on a personal loan. One factor is your credit score, and it is an important factor.

Since personal loans are unsecured, that is, they are not tied to a specific asset, lenders rely on your creditworthiness as a borrower when disbursing this money. The higher your credit score, the less risk a lender thinks it takes. And lenders tend to reward low-risk borrowers with lower interest rates.

But another factor that goes into personal loan interest rates is general market conditions. And there are reasons to believe that borrowing will be more expensive across the board next year.

The Federal Reserve has aggressively raised interest rates in an effort to calm inflation and give consumers some much-needed relief. When rates rise, people tend to borrow less money, which could lead to lower spending. And while that might sound like a bad thing, we actually need to slow down spending a bit so that supply chains can catch up with demand and prices can come down.

But while higher borrowing rates can help slow the pace of inflation, they are likely to make life harder for consumers, including by leading to higher monthly loan payments. And so that’s a good reason to potentially avoid a personal loan next year. Signing one could mean paying a lot more interest than usual.

Other borrowing options to consider

Although personal loans can be quite affordable, next year you could pay more. And so, if you’re a homeowner, it pays to compare personal loan rates to home equity loan rates and see which option gives you the most competitive borrowing.

Many people are sitting on large amounts of equity in their homes since property values ​​are rising nationwide. And so if you’re in this boat, it’s worth seeing if a home equity loan will result in lower monthly payments than a personal loan.

On the other hand, if you don’t own a home, a personal loan could really become your most affordable bet in 2023 – even if you’re stuck with a higher rate through no fault of your own.

The Ascent’s Best Personal Loans for 2022

Our team of independent experts have pored over the fine print to find the select personal loans that offer competitive rates and low fees. Start by reviewing The Ascent’s best personal loans for 2022.

]]>
3 Big Student Loan Forgiveness Updates Borrowers Should Know https://fastpaths.com/3-big-student-loan-forgiveness-updates-borrowers-should-know/ Thu, 22 Sep 2022 14:23:22 +0000 https://fastpaths.com/3-big-student-loan-forgiveness-updates-borrowers-should-know/ FILE – President Joe Biden speaks on student loan forgiveness in the Roosevelt Room of the White … [+] House, Aug. 24, 2022, in Washington. Building on Biden’s student debt cancellation plan, House Democrats on Thursday, Sept. 15, proposed new legislation that would increase federal student aid, cut interest rates on loans and take d […]]]>

There have been several important new developments for student borrowers this week as the Biden administration begins to roll out various new student loan forgiveness initiatives. Here’s what you need to know.

Biden administration updates guidelines on applying for student loan forgiveness under temporary waiver

The Department of Education recently updated official guidelines for the PSLF Limited Waiver Initiative, a temporary scheme that relaxes the rules governing the Civil Service Loan Waiver Scheme. The waiver initiative can allow borrowers working in the public service to obtain significant retroactive credit for loan forgiveness for periods that otherwise might not have been taken into account in the 10 years of service required.

The PSLF limited waiver program expires on October 31, 2022, and advocates are growing increasingly concerned about the looming deadline. Many borrowers will need to submit applications or documents to qualify for the waiver. For example, borrowers with FFEL loans must consolidate those loans into a direct consolidation loan to qualify – a process that can take 30-60 days. And borrowers who have not certified their employment by submitting the completed PSLF Employment Certification Forms will also need to do so before the deadline.

The Ministry of Education has since clarified, however, that it is the submission of these application documents before the deadline which is critical – not the Processing of these documents by federal student aid officials.

“If you have FFEL, Perkins, or other types of loans that are not direct loans, your consolidation request must be submitted online through StudentAid.gov before 11:59 p.m. Eastern Time on October 31, 2022, so that you can take advantage of the limited PSLF waiver,” the Department of Education says in updated guidance.

The guidelines also suggest that borrowers “use [online] PSLF Helper Tool before October 31, 2022, to generate a PSLF form that will ultimately be approved” to obtain credit for meeting the deadline. “[We] will keep a record if you complete all the steps in the [online] PSLF Help Tool by October 31, 2022, but you must still print, sign, have your employer(s) sign and submit the PSLF form to MOHELA, the PSLF repairer. Borrowers must submit all required documents before the deadline.

Congress Passes Legislation to Split Joint Spouse Consolidation Loans

Yesterday, the House passed the Joint Consolidation Loans Separation Act, 2021, which will allow borrowers who have spousal consolidation loans to separate them.

Spouse consolidation joint loans were offered until 2006. They allowed married borrowers who both had federal student loans to combine their loans into one consolidated loan. Both spouses were then legally responsible for the entire balance.

Spousal consolidation loans, however, have proven to be very problematic. Married borrowers who eventually divorced were still responsible for each other’s federal student loan debt because the joint loan could not be split under federal law. And spousal consolidation loans issued under the FFEL program could not be reconsolidated into a direct consolidation loan, blocking access to major student loan relief programs, including civil service loan forgiveness. (PSLF).

The bill, which already passed the Senate last summer, will allow borrowers with these types of loans to break them, paving the way for direct loan consolidation and access to federal programs. cancellation of student loans that were previously unavailable. The bill is now heading to President Biden’s office for his signature.

The next step is for the Department of Education to implement a procedure for borrowers to request the splitting of these spousal loans. Time is running out, as borrowers wishing to apply for the limited PSLF waiver must do so by October 31, 2022.

Republicans seek to sue Biden administration over student loan forgiveness

The Biden administration is working frantically to roll out the unique new student loan forgiveness initiative that will forgive up to $20,000 in federal student loan debt. The Department of Education estimates that 40 million borrowers in all 50 states will receive student loan forgiveness under the initiative, with up to 20 million becoming completely debt-free.

But Republican lawmakers, right-wing think tanks and attorneys general in red states are actively take steps to pursue legal action against the administration to try to stop the loan forgiveness initiative before it even started.

Earlier this month, a group of Republican governors wrote to President Biden, urging him to reverse course on enacting large-scale student loan forgiveness. “At a time when inflation is skyrocketing…your plan will encourage more student loans, incentivize higher tuition, and drive up inflation even further, negatively impacting all Americans,” they said. they wrote, arguing that Biden “lacks authority.” to largely cancel student debt.

But finding a plaintiff who has standing to bring such a lawsuit — that is, a person or entity who suffers a recognizable injury as a result of Biden’s new student loan forgiveness plan — could be tricky. prove difficult. And borrower advocacy groups argue that Biden’s plan rests on a solid legal footing.

The Biden administration has criticized the developments. “Let’s be clear on what they would try to do here,” a White House official said. said to Axios. “The same people who voted for a $2 trillion tax giveaway for the wealthy and got hundreds of thousands of dollars of their own small business debt forgiven would be trying to keep millions of working Americans out of middle class in mountains of debt.”

Still, a lawsuit — which could be filed within weeks if Republicans get a viable plaintiff — could disrupt Biden’s plans. If a federal court issues a nationwide injunction that suspends implementation of the initiative while the legal process unfolds, millions of borrowers could be left in limbo.

Further Reading on Student Loans

Millions of student borrowers to get payments back under Biden’s loan forgiveness initiative

When can borrowers expect student loan forgiveness under Biden’s new plan?

Student loan borrowers should note these critical dates for loan cancellation and repayment

Biden’s student loan forgiveness could be taxable in some states

]]>
HELOC and Home Equity Loan Rates September 19, 2022 | Expect increases after the Fed meeting https://fastpaths.com/heloc-and-home-equity-loan-rates-september-19-2022-expect-increases-after-the-fed-meeting/ Tue, 20 Sep 2022 01:36:30 +0000 https://fastpaths.com/heloc-and-home-equity-loan-rates-september-19-2022-expect-increases-after-the-fed-meeting/ Editorial independence We want to help you make more informed decisions. Certain links on this page – clearly marked – may direct you to a partner website and allow us to earn a referral commission. For more information, see How we make money. Key points to remember Home equity loan rates were little changed and […]]]>

We want to help you make more informed decisions. Certain links on this page – clearly marked – may direct you to a partner website and allow us to earn a referral commission. For more information, see How we make money.

Key points to remember

  • Home equity loan rates were little changed and home equity lines of credit (HELOC) rates were unchanged last week.
  • Rates are expected to rise after the Federal Reserve raised its benchmark short-term interest rate this week.
  • The impact of the Fed’s decision on HELOC rates will be direct, but the effect on home equity loan rates is less clear, experts say.

It’s about to get more expensive to borrow against the equity in your home.

And you can thank the Federal Reserve, which is expected to raise interest rates again next week in its continued effort to slow rising inflation.

Inflation has been stubbornly high for months. The last Consumer price index showed prices up 8.3% year-over-year in August, which was higher than expected. This will cause the Fed to keep its foot on the accelerator this week when it raises its benchmark short-term interest rate. The Fed is raising rates to calm demand and try to lower prices. When the Fed raises interest rates, banks also raise rates on products such as home equity loans and lines of credit.

“The disappointing consumer price index further underscores why the Fed will remain aggressive in raising interest rates and that higher interest rates will last longer,” said Greg McBride, CFA, chief financial analyst at Bankrate, which, like NextAdvisor, is owned by Red Ventures. .

Fed officials have indicated they are committed to raising interest rates if necessary to bring prices down. So far this year, the central bank has raised its key rate four times, including two consecutive hikes of 75 basis points. Observers expect another 75 point rise this week. “We’re here for as long as it takes to bring inflation down,” Fed Vice Chairman Lael Brainard said in a statement. recent speech.

Because home equity loan rates are based on the cost to banks and other lenders of borrowing money, they will likely see an increase as a result of the Fed’s decision. For home equity lines of credit, the effect will be more direct – their variable rates are often based on an index that mirrors what the Fed is doing.

“HELOC rates in particular will be at the mercy of how much the Fed eventually needs to raise interest rates before inflation is brought under control,” McBride said.

Here are the average home equity loan and HELOC rates as of September 14, 2022:

Type of loan Price for this week Last week’s price Difference
$30,000 HELOC 6.51% 6.51% nothing
10-year $30,000 home equity loan 7.08% 7.06% + 0.02
Home equity loan of $30,000 over 15 years 7.04% 7.01% +0.03

How these rates are calculated

These rates come from a survey conducted by Bankrate, which, like NextAdvisor, is owned by Red Ventures. Averages are determined from a survey of the top 10 banks in the 10 major US markets.

How does the Federal Reserve affect home equity loans and HELOCs?

Home equity loans and HELOCs are similar in that you use the equity in your home — the difference between its value and what you owe on your mortgage and other home loans — as collateral to borrow money. ‘silver. This means that if you don’t repay, the lender can foreclose on your home.

How you borrow that money is very different.

Home Equity Loans

Home equity loans are usually simple: you borrow a set amount of money, get it all in one lump sum, and then pay it back in payments over a number of years at a fixed interest rate. Home equity loan rates are based on your credit risk and the cost to the lender of accessing needed cash.

The rate the Fed should raise is a short-term rate that affects what banks charge each other to borrow money. This hike will increase costs for banks, potentially leading to higher interest rates on products such as home equity loans.

HELOC

HELOCs are less straightforward. Your lender approves you for a line of credit, similar to a credit card, which is secured by the equity in your home. You have a limit on how much you can borrow at one time, but you can borrow, repay, and borrow more until your draw period ends. You will only pay interest on what you borrow, but the interest rate is usually variable and changes regularly based on market rates.

Many HELOCs have variable rates that follow the preferential ratewhich changes at the same time as the Fed’s benchmark rate.

Pro tip

When choosing between a home equity loan or a HELOC, consider whether you need the money all at once or will need to withdraw it over a period of time. A HELOC is more flexible if you don’t know exactly what you will need or when you will need it.

Home equity loans and HELOCs are becoming increasingly popular

Consumers are increasingly turning to home equity loans and HELOCs, and one of the main reasons is that other ways to turn your home equity into cash have become less attractive. Besides selling your home, the other great way to do this is through a cash refinance, but that doesn’t make as much sense in a time when mortgage rates are higher than they used to be. been since 2008.

Homeowners still have plenty of equity as house prices are still near record highs, despite a slowing housing market. And with the possibility of a looming recession, many are looking for ways to ensure they have financial options to fall back on during tough times.

“As economic uncertainty begins to set in, loans and home equity margins are a very powerful tool because they essentially allow you to take what would otherwise only be possible by selling your home or refinancing to a much higher rate, Nima Ghamsarico-founder and director of Blend, a fintech company.

While the uncertain future of the economy has some people thinking about the Great Recession, Ghamsari says there are several differences between today and yesterday when it comes to home equity loans – which have been one major drivers of the 2008 crash. Home values ​​are expected to remain high due to the limited supply of homes and lending standards are much higher as lenders check borrowers’ ability to pay and limit the amount of equity that you can use. Many lenders require a significant buffer as to the value of the home that can be borrowed.

“Home values ​​are safer and people put a buffer and they do things like check your financial situation,” Ghamsari says.

When should you consider tapping into your home equity?

Home equity loans and HELOCs have some specific advantages over other forms of debt. Because they are collateralized by property, they tend to have lower interest rates. HELOCs have particular appeal in cases where you’re unsure how much money you’ll need, and some owners keep one on hand to ensure they can access cash. if they need it. “It almost becomes like a second bank account for them in their pocket,” Ghamsari says.

The most common use of home equity loans and HELOCs is for home improvements – you borrow against your equity for something that should, at least somewhat, increase the value of your home.

Experts say you should be careful when considering home equity loans or HELOCs for certain uses. One of them is debt consolidation. This can be attractive, as the rates for home equity loans and HELOCs are lower than those for credit cards and personal loans. Some experts say there are other ways to consolidate debt — using a balance transfer credit card or cash refinance — that don’t involve as much risk.

]]>
Things you didn’t know you could do with a personal loan https://fastpaths.com/things-you-didnt-know-you-could-do-with-a-personal-loan/ Sun, 18 Sep 2022 05:13:18 +0000 https://fastpaths.com/things-you-didnt-know-you-could-do-with-a-personal-loan/ Personal loans are installment loans with fixed monthly payments. Although they generally require you to have a good credit score to qualify, they can be a great choice for consumers who need some flexibility in how they spend their money. Personal loans also tend to have lower annual percentage rates, or APRs, than traditional credit […]]]>

Personal loans are installment loans with fixed monthly payments. Although they generally require you to have a good credit score to qualify, they can be a great choice for consumers who need some flexibility in how they spend their money.

Personal loans also tend to have lower annual percentage rates, or APRs, than traditional credit cards. According to The latest data from the Federal Reservein May 2022, the average interest rate for a 24-month personal loan was 8.73% while the average APR for interest-bearing credit cards (for cardholders who carried a balance) was 16, 65%.

If you’re considering taking out a personal loan to cover medical bills, home repairs, or other expenses, Select provides a more detailed look below at what you can and cannot use to pay for a personal loan.

Subscribe to the Select newsletter!

Our top picks delivered to your inbox. Shopping recommendations that help you improve your life, delivered weekly. register here.

A few caveats about personal loans

What can personal loans be used for

Beginner personal loans

  • Annual Percentage Rate (APR)

  • Purpose of the loan

    Debt consolidation, credit card refinancing, marriage, moving or medical

  • Loan amounts

  • Terms

  • Credit needed

    FICO or Vantage score of 600 (but will accept applicants whose credit history is so poor that they have no credit score)

  • Assembly costs

    0% to 8% of target amount

  • Prepayment penalty

  • Late charge

    Greater of 5% of monthly amount past due or $15

LightStream Personal Loans

  • Annual Percentage Rate (APR)

    3.99% to 19.99%* when you sign up for autopay

  • Purpose of the loan

    Debt consolidation, renovation, car financing, medical expenses, marriage and more

  • Loan amounts

  • Terms

  • Credit needed

  • Assembly costs

  • Prepayment penalty

  • Late charge

Fees to know

There are several fees associated with personal loans that you should be aware of. For starters, you may encounter late fees if you don’t make your payment on time or prepayment penalty charges, intended to discourage borrowers from prepaying their loan, if you manage to repay your loan before the term of the loan term. ends.

Finally, there may be a an origination fee, or fee for making the loan, which is usually represented as a percentage of the loan and deducted from the original loan amount. Origination fees can vary from 1% to 5% and many lenders do not charge any origination fees, such as Marcus by Goldman Sachs Personal Loans and LightStreammentioned above.

Also select rated PenFed Personal Loans and Discover personal loans among the best personal lenders based on several factors, including no origination fees, no prepayment penalty fees, and the length of the approval process.

PenFed Personal Loans

  • Annual Percentage Rate (APR)

  • Purpose of the loan

    Debt consolidation, home improvement, medical bills, car financing and more

  • Loan amounts

  • Terms

  • Credit needed

  • Assembly costs

  • Prepayment penalty

  • Late charge

Discover personal loans

  • Annual Percentage Rate (APR)

  • Purpose of the loan

    Debt consolidation, home improvement, wedding or vacation

  • Loan amounts

  • Terms

    36, 48, 60, 72 and 84 months

  • Credit needed

  • Assembly costs

  • Prepayment penalty

  • Late charge

At the end of the line

There are very few things personal loans can’t pay for. However, it’s still important to check the fine print and terms of your loan, as using it for prohibited expenses could force you to pay it back immediately.

Check out Select’s in-depth coverage at personal finance, technology and tools, The well-being and more, and follow us on Facebook, instagram and Twitter to stay up to date.

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.

]]>
Molson Coors Beverage (NYSE:TAP), Coca-Cola (NYSE:KO), Constellation Brands (NYSE:STZ) – EXCLUSIVE: Early legalization, catalyst for consolidation: How cannabis companies are preparing https://fastpaths.com/molson-coors-beverage-nysetap-coca-cola-nyseko-constellation-brands-nysestz-exclusive-early-legalization-catalyst-for-consolidation-how-cannabis-companies-are-preparing/ Tue, 13 Sep 2022 20:56:54 +0000 https://fastpaths.com/molson-coors-beverage-nysetap-coca-cola-nyseko-constellation-brands-nysestz-exclusive-early-legalization-catalyst-for-consolidation-how-cannabis-companies-are-preparing/ The lack of access to conventional financial sources for cannabis businesses is the main problem facing cannabis entrepreneurs. Banks will not provide loans to cannabis business owners due to federal law. As a result, companies like Verano Holdings Corp. VRNOF and Cresco Labs Inc. CRLBF are now free to grab as much market share as […]]]>

The lack of access to conventional financial sources for cannabis businesses is the main problem facing cannabis entrepreneurs. Banks will not provide loans to cannabis business owners due to federal law.

As a result, companies like Verano Holdings Corp. VRNOF and Cresco Labs Inc. CRLBF are now free to grab as much market share as possible while positioning themselves as attractive acquisition targets for highly anticipated federal cannabis regulations.

Big tobacco companies like Philip Morris International Inc. PM have been exposed to cannabis for almost a decade, but haven’t made any real progress because the fledgling industry’s risk tolerance is still low.

In order to prepare for widespread adoption by adults, companies are making easier-to-consume products like drinks and gummies – something that could be of interest to drink brands like Coca-Cola Co KOand Constellation Brands, Inc. ZST.

Vivien Azermanaging director and senior research analyst for beverages and tobacco at Cowen, believes established brands will participate in the cannabis industry once regulations are in place.

“If you look at Coke and Pepsi, both companies have recently entered the alcohol industry — their risk tolerance for regulated products is starting to shift,” Azer told the conference. Benzinga Cannabis Capital Conference 2022 in Chicago on Tuesday. “If you had asked me five years ago if these companies would get involved in cannabis, I would have said no.”

Molson Coors Brewery FAUCETthe maker of Coors, Blue Moon, the Miller brand and others have announced a joint venture with Quebec-based HEXO, now known as Truss, to produce cannabis-infused drinks to put on dispensary shelves.

“We expect continued growth in the category,” the analyst said.

]]>
3 reasons to consider polished concrete for your kitchen – Royal Examiner https://fastpaths.com/3-reasons-to-consider-polished-concrete-for-your-kitchen-royal-examiner/ Mon, 12 Sep 2022 13:00:01 +0000 https://fastpaths.com/3-reasons-to-consider-polished-concrete-for-your-kitchen-royal-examiner/ As fall arrives this month, people will see beautiful bright red vines along paths, wooded areas, and even in the garden. Very pretty, but do not touch. Poison ivy is quite showy in the fall, especially with its dramatic reds against the yellow trees. But its vines and leaves are just as dangerous as ever. […]]]>

As fall arrives this month, people will see beautiful bright red vines along paths, wooded areas, and even in the garden.

Very pretty, but do not touch.

Poison ivy is quite showy in the fall, especially with its dramatic reds against the yellow trees. But its vines and leaves are just as dangerous as ever.

According to the American Academy of Dermatology, more than 10 million Americans will suffer from that familiar bumpy, blistering rash caused by poison ivy and sumac.

The itch reaction is a rash caused by contact with a substance called urushiol (you-ROO-shee-ol), found in the sap of poison ivy, poison ivy, and poison ivy. Urushiol is a colorless or slightly yellow oil that oozes from any part of the plant when cut or crushed, including the stem and leaves.

You don’t even have to touch the poisonous plants to develop the rash. Urushiol is difficult to destroy, easy to spread, and long-lived. Sticky and almost invisible, it can be worn on animal fur or even tools.

Your mower may spit out pieces of poison ivy. Inhaling them can be very dangerous. Wearing a mask and safety glasses can reduce your risk.

Once it touches the skin, the urushiol begins to bind within minutes. In 85% of people, a reaction will appear as a line or trail of rash (sometimes resembling insect bites) within 12 to 48 hours. The redness and swelling will be followed by blisters and severe itching.

Before the rash sets in, you have about five to 10 minutes to wash off the urushiol with cold water. If you think you have been exposed, immediately wash all exposed areas with cold running water as soon as you can reach a stream, lake, or garden hose. Soap is not necessary and may even spread the oil.

If you develop a rash, avoid scratching the blisters. The fluid in the blisters won’t spread the rash, but the urishiol can get under your fingernails and spread the poison. Your fingernails can also carry germs that can cause infection.


]]>
Liz Weston: Should you be tapping into your home equity as real estate values ​​rise? https://fastpaths.com/liz-weston-should-you-be-tapping-into-your-home-equity-as-real-estate-values-rise/ Mon, 05 Sep 2022 18:17:00 +0000 https://fastpaths.com/liz-weston-should-you-be-tapping-into-your-home-equity-as-real-estate-values-rise/ Soaring property values ​​mean many homeowners are inundated with equity – the difference between what they owe and what their homes are worth. The average price of a home has risen 42% since the start of the pandemic, and the average homeowner with a mortgage can now leverage more than $207,000 in equity, according to […]]]>

Soaring property values ​​mean many homeowners are inundated with equity – the difference between what they owe and what their homes are worth. The average price of a home has risen 42% since the start of the pandemic, and the average homeowner with a mortgage can now leverage more than $207,000 in equity, according to Black Knight Inc., a market analytics firm. mortgage and real estate data.

Spending this wealth can be tempting. Proceeds from home equity loans or lines of credit can fund home improvements, tuition, debt consolidation, new cars, vacations – anything the borrower wants.

More from Liz Weston

But just because something can be done doesn’t mean it should be done. One risk of such a loan should be fairly obvious: you are putting your home at risk. If you can’t make the payments, the lender could foreclose and force you out of your home.

Moreover, as we learned during the Great Recession of 2008-2009, house prices can go down as well as up. According to a 2011 report by CoreLogic, borrowers who dipped into their home equity were more likely to be “under water” — or owe more on their homes than they were worth — than those who didn’t. didn’t have home equity loans or lines of credit. real estate data company.

Other risks are less obvious but worth considering.

YOU MAY NEED YOUR CAPITAL LATER

Many Americans are not saving enough for retirement and may need to use their home equity to avoid a sharp decline in their standard of living. Some will do this by selling their home and downsizing, freeing up money to invest or supplement other retirement income.

Other retirees may turn to reverse mortgages. The most common type of reverse mortgage allows homeowners age 62 and older to convert the equity in their home into a sum of money, a series of monthly payments, or a line of credit that they can use as needed. The borrower does not have to repay the loan while living in the home, but the balance must be repaid when the borrower dies, sells, or moves out.

Another potential use of home equity is to pay for a retirement home or other long-term care. A semi-private room in a nursing home costs an average of $7,908 a month in 2021, according to Genworth, which provides long-term care insurance. Some people who don’t have long-term care insurance plan instead to borrow against their home equity to pay those bills.

Obviously, the more you owe on your home, the less equity you will have for other uses. In fact, a large mortgage could prevent you from getting a reverse mortgage. To qualify, you must either own your home or have substantial equity – at least 50% and possibly more.

YOU ARE DEEPLY IN DEBT

Using the equity in your home to pay off much higher rate debt, like credit cards, might seem like a smart move. After all, home equity loans and lines of credit tend to have much lower interest rates.

If you end up declaring bankruptcy, your unsecured debts, such as credit cards, personal loans, and medical bills, will usually be wiped out. Debts secured by your home, such as mortgages and home equity loans, are generally not.

Before using the equity in your home to consolidate other debts, consider speaking with a nonprofit credit counseling agency and a bankruptcy attorney to learn about your options.

WHAT YOU BUY WILL NOT SURVIVE DEBT

It’s rarely, if ever, a good idea to borrow money for pure consumption, like vacations or electronics. Ideally, we should only borrow money for purchases that will increase our wealth: a mortgage to buy a home that will appreciate, for example, or a student loan that will result in higher incomes for life.

If you’re considering borrowing your home’s equity to pay for something that won’t increase in value, at least make sure you’re not making payments long after its useful life is over. If you’re using the equity in your home to buy a vehicle, consider limiting the loan term to five years so you don’t have to deal with large repair bills while paying off the loan.

Home equity loans typically have fixed interest rates and a fixed repayment term ranging from five to 30 years. The typical home equity line of credit, on the other hand, has variable rates and a 30-year term: a 10-year “withdrawal” period, during which you can borrow money, followed by a 20 year repayment. You’re usually only required to pay interest on your debt during the drawdown period, which means your payments could increase significantly after 10 years when you start paying back the principal.

This leads to one final piece of advice: with interest rates on the rise, only consider using a HELOC if you can pay off the balance quickly enough. If you need a few years to pay off what you borrow, getting a fixed interest rate with a home equity loan may be the best way to tap into the equity now.

_____________________________________

This column was provided to The Associated Press by personal finance website NerdWallet. Liz Weston is a NerdWallet columnist, certified financial planner, and author of “Your Credit Score.” Email: lweston@nerdwallet.com. Twitter: @lizweston.

]]>
4 steps to lower your credit card interest rate https://fastpaths.com/4-steps-to-lower-your-credit-card-interest-rate/ Fri, 02 Sep 2022 21:13:07 +0000 https://fastpaths.com/4-steps-to-lower-your-credit-card-interest-rate/ If you haven’t paid off all of your credit cards each month, you’re not alone. According to the Federal Reserve Bank of New York, US household credit card debt increased by $100 billion between the second quarter of 2021 and the second quarter of 2022. Depending on how much debt you owe, you might not […]]]>

If you haven’t paid off all of your credit cards each month, you’re not alone. According to the Federal Reserve Bank of New York, US household credit card debt increased by $100 billion between the second quarter of 2021 and the second quarter of 2022.

Depending on how much debt you owe, you might not feel confident about getting out of it. However, learning how to negotiate credit card debt can provide you with a way to get relief.

Why should you negotiate credit card debt?

Negotiation can help you get out of debt faster. However, you won’t always be successful, and negotiation shouldn’t be your first course of action.

Consumers often consider negotiating after their debt has been assigned to a collection agency or after the creditor has hired a service provider to handle the communication, says Daryl Holman Jr., founder of debt elimination startup Revival. . “There are hardship plans that can arise before this stage, but the best thing for borrowers is to make their payments on time if they have the ability to do so.”

If you are unable to make your payments on time, but your debt has not yet been collected, negotiating with your credit card company is a much better option than completely ignoring the debt.

“If you have an account with a large balance that is already overdue, a large amount of money in the bank, and negotiation skills, it may be a good idea to negotiate a (lump sum) credit card debt settlement,” explains Leslie Tayne. , financial lawyer and managing director of Tayne Law Group in New York.

Understanding your options when negotiating credit card debt can help you reach a manageable deal. Note that if you have had credit card debt, go to a collection agency, you can negotiate with the collection agents.

What are your options?

When negotiating with credit card companies, you can look for a lump sum settlement, a hardship agreement, or a relief agreement.

Lump sum payment

This option obliges debtors to make a bulk payment in advance for an amount less than the debt owed. Once creditors receive lump sum payments, you can expect the account to be listed as paid in full on your credit report.

“A lump sum settlement is the best route for you because you’ll usually get the best deal from your creditor,” Tayne says. “Plus, your debt will be gone.”

Keep in mind that settling your debt for less than you owe will hurt your credit score, although settling is always better than having it written off your credit report.

Hardship Agreement

Hardship plans are also called forbearance and can provide temporary relief to borrowers in need. For example, your creditor could reduce your minimum payment amount or interest rate or stop late fees, according to credit bureau Experian. However, unlike a lump sum settlement, you will still have to repay your total outstanding balance. After the hardship period ends, your regular account terms will return.

Training Agreement

Advantages and disadvantages of negotiating credit card debt

Advantages

  • Can provide financial assistance. Depending on the option you pursue, you may be able to reduce your debt, reduce interest and/or lower fees.
  • Potentially slows bankruptcy. Negotiating your credit card debt can save you from having to declare bankruptcy. If creditors come to an agreement with you, they can avoid not receiving a refund if you go bankrupt.
  • Mental and emotional relief. Dealing with creditors can be stressful. In addition to receiving financial help, negotiating your debt can ease fears of being sued or facing other consequences.

The inconvenients

  • Tax implications. When you pay less than you owe under a lump sum agreement, the Internal Revenue Service treats any forgiven debt as taxable income. That could result in a higher tax bill for that filler year, Tayne says. Make sure you are financially ready for this.
  • Credit implications. When your credit report shows that a credit account is settled, it will negatively affect your credit score. However, this is not as bad as having the account listed as unpaid. Some creditors will close the account when you negotiate, according to Experian, and this can negatively impact your score.

How to negotiate your debt

There are a few steps to keep in mind when preparing for your negotiations with your credit card company.

1. Check the debt

Make sure you know how much you owe your credit card issuers before developing a negotiation plan. Typically, issuers sell outstanding debts to collection companies when they’re six months overdue, so you may not be able to negotiate with credit card companies on older items.

Once you’ve taken stock of your debt, move on to step two.

2. Choose an option

Explore the different options based on your financial situation and goals. A lump sum settlement may get you the best deal, but a hardship agreement may be a better choice if you only need temporary relief.

Also, it helps to have a list of terms you would like to apply. For example, you can request that your settled debt be shown as fully paid on your credit report, even if you settle it. The creditor may not agree, but it will help your credit if they do.

3. Contact your creditor

You can start by talking to a customer service representative from your credit card company. Throughout the negotiation, be polite, but stick to the terms that work for you. If you fail on your first call, don’t be discouraged. Call again and speak to another representative or supervisor who can provide decisive recourse.

4. Ask questions

During the negotiation, make sure you understand what you are required to do and what the creditor promises to do if you meet the terms of the agreement. If you don’t know what something in the agreement means, you should ask for an explanation. Some questions to ask might include:

  • How long will the process take?
  • How will the status of the account be reported to the credit bureaus once the terms of the agreement have been met?
  • When can I expect the written agreement?

5. Get everything in writing

Make sure you get all the terms you want in writing before agreeing to a deal, says Scott Glatstian, attorney at Rosenblum Law. If the creditor has agreed to declare the account as fully paid, for example, this should be clearly stated in the agreement.

What to do if you need help negotiating your credit card debt

If you don’t feel comfortable negotiating your credit card debt on your own, there are other options.

For-profit debt settlement

The company will likely ask you to stop payments to the creditor altogether in hopes of getting a lump sum settlement. However, creditors could simply refuse to deal with the settlement company, according to the Consumer Financial Protection Bureau.
. In this scenario, you’ve racked up more late fees and penalties on the account and taken hits to your credit, and you still owe the debt.

Non-profit credit counseling

According to the NFCC, counseling is often offered free or at low cost. Counselors can help you not only with the credit card debt in question, but also with budgeting and other ways to stay on track financially.

Alternatives to negotiating with your credit card company

Depending on your situation, an alternative approach might be more appropriate. Some options include:

  • Debt consolidation loans. A debt consolidation loan simplifies paying off your debts by combining two or more accounts into one loan. You are left with a due date, interest rate, and minimum payment to track each month. You may also be able to get a lower interest rate on a debt consolidation loan than a credit card.
  • Balance transfer credit cards. A balance transfer credit card can be an alternative to negotiating credit card debt if a high interest rate is causing your problems. Eligible borrowers can choose a card with a lower interest rate or a promotional 0% APR and transfer all or part of their credit card debt to it. If you are using a 0% introductory APR, make sure you make payments on time and pay the full balance before the end of the introductory period.

]]>
Five Ways Student Borrowers Can Prepare to Apply for a Forgiveness https://fastpaths.com/five-ways-student-borrowers-can-prepare-to-apply-for-a-forgiveness/ Thu, 01 Sep 2022 14:25:00 +0000 https://fastpaths.com/five-ways-student-borrowers-can-prepare-to-apply-for-a-forgiveness/ In a few weeks, the Biden administration is expected to unveil applications allowing student borrowers to enroll for up to $20,000 in loan forgiveness. As part of the effort announced last week, some borrowers will be able to apply for up to $10,000 in forgiveness, and double that amount for Pell Grant recipients. Administration announces […]]]>

In a few weeks, the Biden administration is expected to unveil applications allowing student borrowers to enroll for up to $20,000 in loan forgiveness.

As part of the effort announced last week, some borrowers will be able to apply for up to $10,000 in forgiveness, and double that amount for Pell Grant recipients.

Administration announces up to 43 million borrowers could see under the broad program, and the vast majority of these borrowers earn less than $75,000 a year.

Applications should drop by early Octoberand borrowers will have a short window to apply if they want to see the relief take effect before the end of the year.

Here are some key steps student borrowers can take now to prepare for the application process.

Log in to your student aid account

It’s been a long time since many student borrowers had to pay off their debt, and some new borrowers have yet to do so thanks to a pandemic repayment freeze that’s been going on for years and is set to expire in the coming months.

One of the first things experts have urged borrowers to do in the coming weeks is to log into their account at StudentAid.gov. There, borrowers will be able to see a breakdown of their federal loan and grant information as well as track and manage their federal loans.

“Some borrowers, depending on when they were registered, may have to create an FSA first [Federal Student Aid] ID to log into that student aid account,” said Rachel Gentry, director of government relations at the National Association of Student Financial Aid Administrators. “Some borrowers already have this ID when they were students.”

Gentry stressed that borrowers should now ensure “that their contact information is up to date” with their loan officers and the Department of Education in their StudentAid.gov account.

The agency said around 8 million borrowers could be eligible for automatic relief if their “relevant income data is already available” in the office. But borrowers will also be able to apply for a discount by early October if the agency does not have this income data.

Borrowers who continued to make payments during the pandemic may also be eligible for a partial refund.

More details are expected to be released on the plan in the coming weeks, but borrowers can also sign up for updates on the main ministry website.

Find out what loans you have

President Biden’s forgiveness plan is unlikely to relieve debt from private loans, experts say, although there are questions about whether borrowers with certain loans issued by private lenders may see relief.

In In particular, experts are awaiting more information on how the department will handle loans from the Federal Family Education Loan Program (FFELP).

The FFELP loans “were issued by private and public lenders, but were guaranteed by the federal government,” Gentry explained. “So that means if any of those borrowers were to default on their loan, the government would pay the private, non-federal entities that are the lenders a substitute to kind of make up for their losses.”

“When we moved to 100% direct lending just over a decade ago, some of those [FFELP] the portfolios of the lenders were purchased by the federal government … so the loans that were purchased at that time essentially became like federal loans,” she continued.

However, Gentry said some of the commercially held FFELP loans are still owned by private and public lenders.

“We are still waiting for more information on what the people who hold commercial [FFELP] loans will have to do to access the discount, if there will be a way for them to not have to take action to receive the discount or if they will have to consolidate,” she said.

Check your income eligibility

Eligibility for relief extends to borrowers with incomes below $125,000 for individuals and $250,000 for married couples and heads of households.

Experts say the amount will be based on income earned in 2020 and 2021, so borrowers may need to have this information.

“Borrowers should make sure they have access to these tax returns so they can get an idea of ​​their reported income in those years,” said Katharine Meyer, a fellow at the Brookings Institution’s Brown Center on Education Policy. .

“My reading of the policy is going to be based on the lower of those two, so they should know which of their household incomes was lower in those two years,” she said.

Meyer also said borrowers shouldn’t worry too much about the tax implications of this forgiveness program, noting “a tax exemption for debt forgiven at this time that extends through the end of 2025.”

However, questions have been raised about borrowers who may have to pay state taxes on the relief depending on where they live.

Become familiar with other programs

Many borrowers may participate in a Federal Income-Based Repayment Plan and may be eligible for Public Service Loan Forgiveness (PSLF).

The Department of Education currently lists four income-oriented repayment plans online that have varying durations and pay thresholds depending on factors such as level of higher education attained and income.

Under the current PSLF program, borrowers in government jobs or working in nonprofit organizations could be eligible for forgiveness after 120 eligible monthly payments or a decade of consistent repayment.

Experts have urged borrowers to act quickly to apply for this program before the October deadline.

“One potential area of ​​confusion that borrowers are going to face in the coming months is the dual deadlines for submitting a potential forgiveness and the process for applying for a temporary waiver from the Public Service Loan Forgiveness Scheme,” said Mayer. “This program has a deadline at the end of October 31.”

That delay is significant, Meyers said, because of the Department of Education’s temporary relaxation of eligibility requirements. for the PSLF program which is set to expire.

“It’s things like counting past payments that haven’t been made under an income-driven repayment plan toward forgiveness,” she said.

“Many people may need to consolidate their loans to qualify for this program,” she added. “This consolidation should not affect the eligibility of these loans to then be forgiven each time this process is rolled out. But I could see how confused a lot of borrowers would be about this.

Prepare this budget

Borrowers will have until the end of next year to apply for the broader discount scheme announced last week. But they are advised to apply before November 15 if they want to see the relief take effect before the end of the year – when the current pandemic refund freeze will expire.

The moratorium, which also applies to accrued interest, was extended last week until December 31, marking the seventh time the pause has been renewed since it was first enacted in March 2020.

However, the Biden administration has made it clear that it is not aiming for an eighth extension, meaning many borrowers will likely have to prepare to make regular payments for the first time in years.

A report published by the Education Data Initiative earlier this year put the average monthly student loan payment at around $460. But borrowers can pay more or less depending on their payment plan.

For example, the Department of Education notes on its website that some borrowers may qualify for zero dollar payments if they make less than a certain amount.

“If you’re having financial difficulty and expect to encounter financial hardship, you can explore your options with a loan servicer,” says student loan expert Mark Kantrowitz. “Don’t wait until December 31 to call the loan officer.

]]>
State leaders: respect the deadline; Apply now for the Civil Service Loan Forgiveness Scheme https://fastpaths.com/state-leaders-respect-the-deadline-apply-now-for-the-civil-service-loan-forgiveness-scheme/ Tue, 30 Aug 2022 12:22:59 +0000 https://fastpaths.com/state-leaders-respect-the-deadline-apply-now-for-the-civil-service-loan-forgiveness-scheme/ By Antonio Ray Harvey | California Black Media (CBM) – California Attorney General (AG) Rob Bonta is urging Californians to take advantage of recent changes to the Public Service Loan Forgiveness (PSLF) and Temporary Expanded Public Service Loan Forgiveness (TEPSLF) programs. Bonta’s announcement coincides with a CNBC survey that reports that 31% of black women […]]]>

By Antonio Ray Harvey | California Black Media

(CBM) – California Attorney General (AG) Rob Bonta is urging Californians to take advantage of recent changes to the Public Service Loan Forgiveness (PSLF) and Temporary Expanded Public Service Loan Forgiveness (TEPSLF) programs.

Bonta’s announcement coincides with a CNBC survey that reports that 31% of black women are disproportionately affected by student debt. Additionally, four years after graduation, 48% of black students owe an average of 12.5% ​​more than they borrowed, according to the Educational Data Initiative (EDI).

]]>