A fiduciary deposit account is an account thatâs owned by one or more persons but managed by another. The owner is known as the principal, while the manager is known as the fiduciary. These accounts are sometimes used to handle estate or trust assets, among other purposes. Their legal status and their insurance coverage are determined by the Federal Deposit Insurance Corporation (FDIC). Hereâs what you need to know about this type of account.
Fiduciary Deposit Account, Defined
A fiduciary deposit account, also known as a principal account, is a deposit account that a person or other entity, acting as a fiduciary, establishes to benefit one or more persons who own the assets in the account, according to FDIC rules. The individual who opens the account doesnât have ownership of it nor any ownership interest.
Some examples of fiduciaries of these accounts are trustees, agents, nominees, custodians and guardians. Fiduciary accounts are used in various ways:
Uniform Transfers to Minors Act (UTMA) accounts
Uniform Gifts to Minors Act (UGMA) accounts
Decedent estate accounts
Real estate and other escrow accounts
Brokerage deposits
Accounts with a power of attorney
When FDIC Pass-Through Insurance Coverage Applies
All deposits managed by a fiduciary on behalf of the accountâs owner or owners are insured by the FDIC for the full $250,000 on a pass-through basis. This means that all the deposits are considered to be deposits made directly from the principal as long as three requirements are met:
The owner of the funds must be the principal and not the fiduciary who set up the account. The FDIC may review the fiduciary and ownerâs agreement on the account as well as state laws to confirm this.
The record of the insured depository institution (IDI) account must indicate the agency nature of the account. For example, the ownership of the account may read ABC Company as custodian, ABC for the benefit of (FBO) or Sally Rowe UTMA John Rowe, Jr.
The IDI, fiduciary and third-party records must show the ownersâ identities and the ownership interest(s) in the deposit account.
For example, letâs say XYZ Brokerage firm establishes an account for Sally Rowe at ABC Bank. In this example, Sally Rowe is the owner, or the principal, of the money in the account. This account would then be added with any other single accounts she owns at ABC Bank, which would be insured as a single account for up to $250,000.
If we assume Sally has more single ownership accounts at ABC Bank, she will not receive additional coverage because XYZ Brokerage firm opened the account for her. With a fiduciary account, coverage is provided as though the actual owner opened the account at the IDI, assuming all responsibilities are met.
Pass-through coverage is also possible if a guardian retains part of the interest paid by the IDI as a guardian fee.
When FDIC Pass-Through Insurance Coverage Doesnât Apply
If requirements of a fiduciary account are not met, the account will be insured under the fiduciary, not the intended principal. In this case, the fiduciary will own the deposits and the account will be categorized as a single account or corporate account. These deposits will then be combined with other deposits the fiduciary holds in the same ownership at the IDI where funds are held. The total sum will be insured up to $250,000.
For example, letâs say a customer of a deposit broker is assured by the guardian (fiduciary) that he or she will earn 5% on a deposit when the IDI is paying only 3%. The guardian would not be a guardian then; he or she would be a borrower with an independent responsibility to pay 5%. In this case, the deposits are no longer eligible for pass-through coverage for the principal. Instead, the deposits are now considered corporate deposits belonging to the guardian.
The Takeaway
A fiduciary deposit account is an account set up by someone for another person, who actually owns the money. The one who sets up the account and manages it is known as the fiduciary, while the owner of the money is known as a principal. This kind of arrangement is used to handle assets in trusts, escrow accounts, brokerage accounts and decedent estates, among other uses. Itâs important that these arrangements carefully follow all the FDICâs legal requirements, as well as applicable state regulations, to qualify as a fiduciary deposit account.
Estate Planning Tips
Consider talking to a financial advisor about your estate plans. Finding a financial advisor doesnât have to be hard. SmartAssetâs free financial advisor matching service can connect you with several in your area in minutes. If youâre ready, get started now.
If you have an agent, they may make decisions about your 401(k) account. Find out how much money youâll have in your account by the time you retire with our free 401(k) calculator.
The ultimate question: Could you and your friend make the perfect business duo? The answer may be more complicated than you think. You love spending time with your friend and the idea of becoming entrepreneurs together. Why not fulfill your dreams with each other? Companies like Airbnb and Ben & Jerryâs had success in this area â they all started from friendships.
But much more goes into starting a business with a friend. You may make great business partners, or you could wish you had taken your venture solo. Before making any financial decisions, analyze the pros and cons and ask hard questions. For example, will you equally invest? Who will take on which tasks and responsibilities? Sift through the easy and hard questions to see where your business friendship lies.
To help you and your friend make a confident and informed decision, skip to our flowchart or keep reading.
Questions to Ask Before Going Into Business With a Friend
Before jumping into your business plan, ask the hard questions. These can be tough to ask and answer, but they could save your friendship from a business relationship gone sour.
Question 1: Do You Share the Same Values?
Depending on your life stage and goals, your values could differ greatly from those of your potential business partner. You may appreciate living a relaxed lifestyle that gives you the financial freedom to do what you love, while others may value a fast-paced lifestyle filled with activities and long workdays. Differences in values could spark tension in your business relationship.
Ask yourself: Do you and your potential business friend have the same values? If so, great! If not, note your differences and if theyâre worth working through.
Question 2: Do You Share the Same Business Goal?
To make sure youâre on the same page, schedule a brainstorming session with your friend. Map out your one-month, six-month, one-year, and five-year goals for your startup. Is your goal to make a certain amount of revenue? To hire a certain number of full-time employees? Or to take your business idea global?
If you have the same intentions, move on to question three. If any of your goals contrast, there may be trouble in paradise. See if you can work through your differences before investing your time and money.
Question 3: Do Your Skills Complement Each Other?
You and your friend each have your own strengths For example, you may be good at time management while your friend is better at sales. For skills youâre both lacking, think about how youâll fill in the gaps. If you and your friendâs startup plan has a budget for hiring freelancers, or one of you has the dedication to learn something new, this may not be a concern. No matter what, especially if youâre bootstrapping your business idea, itâs essential to talk through it.
If you donât compliment each otherâs needed skills, who will step up and learn them?
Question 4: Do Your Career and Lifestyle Habits Align?
Depending on your business goals, this could be a make or break question for a professional partnership. For instance, one friend may be a morning person while the otherâs a night owl. One can take over morning meetings and emails while the otherâs responsible for evening website development and customer service.
If one friendâs lifestyle habits donât suit the other, it may be best to opt for other business opportunities. While starting a business could adjust your habits, itâs easy to fall back into old ones from time to time.
The Pros and Cons of Doing Business With Friends
Before entering any business arrangement, itâs reassuring to weigh the pros and cons. Could your new business idea benefit or hinder your future relationship and career?
Pros: You Have a Friend Through the Ups and Downs
Starting a business with a friend is similar to marriage â youâre there for each other through the good and bad. Whenever youâre having trouble, you know who you can go to for help. And youâll be able to do most tasks together. For example, approaching investors as a team vs. going solo could put your nerves at ease.
Cons: You Know the Same People
Instead of getting together for your weekly catch-ups, you could spend all day together! While this can be exciting, it can also be hard to leave work at work. When you both hang out with the same people, there may be little room to disconnect from each other and your business.
Pros: You Understand Each Otherâs Strengths and Weaknesses
You likely already know how each other operates and your strengths and weaknesses. Instead of learning the way a new business partner functions, you already have the upper hand. On day one, you and your partner could delegate tasks that fit everyoneâs strengths best.
Cons: Your Friendship Could Turn Strictly Business
Your current friendship can be hard to separate from your new work partnership. Taking your work too seriously could stiffen your current relationship. Even after your workâs done, âfriendâ time may slow down. To have the best of both worlds, over-communicate throughout your entrepreneurial adventures.
Pros: You Feel Comfortable Communicating
You may have been friends for months, years, or even decades. Having a strong friendship foundation helps bolster your communication in the workplace. Plus, you most likely know how your friend may react to a situation gone wrong. Take note of your friends’ communication habits and foster them throughout your business relationship.
Cons: Itâs Easy to Let Emotions Get the Best of You
Be careful not to let your emotions dictate your business decisions. A situation could happen in your friend group that makes its way into the office. To avoid any personal matters in the workplace, come to an agreement â no drama. If situations arise, take some time off to clear your mind, rest, and come back more motivated and inspired.
Pros: You Get to Spend More Time With Each Other
You get to spend countless hours talking and doing business activities together. You could spend all day tackling business tasks and wrap up the workday chit-chatting about your lives. Itâs an amazing opportunity to spend more time with your friend without letting other responsibilities slip through the cracks.
Cons: Friendship Failure Could End in Financial and Business Failure
When tension builds in the workplace, it could damage your business outcomes. Not wanting to attend a meeting with your partner could halt business productivity, or worse, end it. To avoid losing profits on your friendship and investments, you should both outline an exit plan if things go wrong.
Tips for Starting a Business With Your Friend
Before toasting to your other half and investing in your passions, properly prepare yourself. Show up to your new business like you would a new job. Have your plan documented before building your business empire.
1. Nit-Pick Your Business Plan
Small issues could grow months or years after starting your business. To avoid future problems, talk through small and large inconsistencies with your partner. Having different lifestyle habits may not be an issue now, but could be difficult after a year of working together.
2. Communicate Often
About one third of projects lack proper communication. Avoid project or business failure by finding a communication method that works for you and your partner. Daily catch-up meetings or weekly email updates are a few examples. Make it enjoyable by sipping your favorite coffee or eating your lunch while playing catch up.
3. Establish and Honor Boundaries
Eliminate tension in the workplace by setting a rubric for working hours. Avoid talking about personal matters until you step away from your work tasks. If you and your partner need to establish additional boundaries, clearly outline them as they come up.
4. Make it Official With Contracts
Once youâve worked through any complications, put it all in writing. If things were to go wrong, documents and written statements can be referenced in court. To do this, contact a lawyer and draft up a business plan. Any business promises you make should be in writing for any miscommunications. Compensation rates, profit shares, investment contributions, and business accounts are a few things that should be listed on this document.
Before investing your time, energy, or money into your startup dreams, make sure youâre fully prepared. Could you and your friend be great business partners? Take our quiz below to find out. Donât forget to keep track of your budget and investments throughout the startup process.
Starting a Business With a Friend: 4 Things to Consider appeared first on MintLife Blog.
The best thing about scouring powder is its abrasive action. The worst is the harsh chemical smell. To get all the benefits without the caustic chemicals, use baking soda instead. In most instances, baking soda will work just as well as scouring powder.
Simply clean tiles
For an easy, natural tile cleaner, mix together ¼ cup baking soda and 1 gallon warm water. Scrub with a sponge or mop, then rinse. For tough stains, wait 10 to 15 before rinsing.
Love your grout again
Is there anything more satisfying than nice, clean grout? A simple paste of 3 parts baking soda and 1 part water is all you need. Make a new batch each time you plan to attack the space between your tiles.
Remove scuffs
To get rid of scuff marks left on vinyl flooring by dark-soled shoes, rub some baking soda into the spot with a wet rag. The marks will disappear.
Show off crystal-clean crystal
To clean your cut crystal, mix a teaspoon of baking soda with warm water, then dab it onto the crystal with a soft rag. Rinse with water, and buff with a dry, soft cloth.
Supercharge your detergent
To boost the power of your dishwasher detergent, sprinkle a little baking soda in the dishwasher every time you run it. It will also help fight foul odors before they start.
SEE ALSO: Who Knew's 12 Dishwasher Tips and Tricks
Know this skillet saver
The teriyaki chicken you made for dinner was delicious, but the sweet sauce left terrible black burns on the bottom of your frying pan. To clean it, first sprinkle the pan with ¼ to ½ cup baking soda, and fill the pan halfway with water. Bring the water to a boil, and the burned pieces should start to release. When most of the pieces are removed, turn off the heat, dump the water, and wash as usual.
As the water boils, you may want to use a spatula to help the process along.
Get better-tasting coffee
The secret many of us miss: Make sure you clean your coffee maker regularly. Just add several tablespoons of baking soda to your pot, fill it with water, and run it as usual. Then repeat using only water.
Tackle tough appliances
If you haven’t had time to clean up and now there’s dried-on food stuck in the blades of your blender or food processor, bring baking soda to the rescue. Add 1 tablespoon baking soda along with 1 cup warm water to the bowl, put the lid on, and let it blend for 10 to 15 seconds. Wash as usual.
Perk up your plastic
Have plastic storage containers with lingering odors? Wash them with hot water plus 2 tablespoons baking soda.
I can’t even count how many times our boys have left something to fester in a water bottle or thermos! Simply fill the container with hot water and ½ cup baking soda, then let it sit overnight. In the morning, rinse well and it should be as good as new.
The brightest white cabinets
White kitchen cabinets can be beautiful, but they can also show grease, dust, and dirt more than their darker counterparts. To keep them looking their best, add water to a small amount of baking soda until it’s a runny paste. Scrub the mixture on the cabinets, and then rinse with warm water.
Simple step to a shiny sink
For a spectacularly shiny finish on a stainless steel or aluminum sink, rub a liberal amount of baking soda in a circular motion all over its surface with a damp sponge.
RELATED: Domestic CEO's How to Clean Your Sink
Disposal smarts
Instead of throwing away baking soda when it’s finished its 30-day stint in your fridge, dump it down the garbage disposal with running water. It will keep your disposal fresh, too!
Freshen rugs and upholstery
Sprinkle rugs, couches, and upholstered chairs with baking soda and let it sit an hour before you vacuum. It will keep them cleaner and fresher over the long haul.
Sprinkle some baking soda into the bag of your vacuum cleaner to keep it smelling fresh.
Save money on delicate detergents
Use this homemade solution: Dissolve 1 cup baking soda in 1 cup warm water. Add the solution directly to your standard washing machine, or add it to the soap dispenser of a front loader. The baking soda will clean your clothes without harming their delicate fibers.
All-Natural Fabric Softener: Just add ¼ to ½ cup baking soda to the wash cycle.
Erase wall marks
What’s the easiest way to remove crayon, pencil, ink, and furniture scuffs from painted surfaces? Sprinkle baking soda on a damp sponge, rub clean, and rinse.
Vinyl siding super-cleaner
From bird poop to tree sap to standard weather damage, vinyl siding can get very dirty. And while brand-name cleaners will no doubt get the job done, they tend to be costly and loaded with toxic chemicals. Instead, combine baking soda with enough water to form a paste, then scrub into your siding with a damp rag until the stains lift. Rinse off with a hose and, if necessary, repeat on stubborn stains.
Lift oil stains
Cleaning oil spots off the driveway is difficult, and the cleaners can be quite expensive. Instead, sprinkle baking soda over the stains, then rub with a wet scrub brush soaked with hot water. The baking soda breaks apart oil particles, so with a little elbow grease, you can have your driveway looking new in no time.
Clean battery leaks
If battery acid leaks inside the compartments of your appliances, there’s no need to throw them away. Simply take a few spoonfuls of baking soda and add water until it’s the consistency of toothpaste. Spread it on your battery terminals, let it sit for 15 minutes, and wipe clean. The acid should come off easily.
Must-try for musty books
Place the books in a paper grocery bag with an open box of baking soda. Fold over the bag, staple it shut, and let it sit for a week or two. Your books should smell considerably better when you take them out.
Refresh suitcases
Is your suitcase a bit musty? The night before packing, pour a cup of baking soda in it, close it, and shake. In the morning, vacuum up the baking soda and the smell should be gone.
Get gloves on more easily
Sprinkle a little baking soda into each of your latex gloves, and they’ll stick less when you’re putting them on and taking them off.
If you have kids, you’ve had to clean up vomit. Baking soda can make the job a little less gross if you sprinkle some on top as soon as possible. It will soak up some of the mess and make the smell easier to deal with when you have to go at it with the paper towels.
It seems pretty normal to me now but people still drop their jaws when I tell them weâve 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.
This page may include affiliate links. Please see the disclosure page for more information. The debt snowball has helped pay off millions in debt and one man has made it an incredibly popular debt elimination technique. Have you ever heard of Dave Ramsey? If so, your mental image is probably of a bald man cutting up credit…
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When you owe a large amount of debt, you run the risk of becoming a target for untrustworthy creditors and debt collectors. Both the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices…
The post Re-aging Debt and Illegal Debt Collection Practices appeared first on Crediful.
Letâs face it: The worst thing about having to go to the hospital to receive medical treatment is being slammed with a huge bill afterwards. Sometimes, these medical bills are so expensive that you simply donât have the means to pull it off right away, especially without health insurance. While we may find it easier in the short term to pretend that our unpaid medical bills donât exist, avoiding the problem could only make it worse. Many medical providers are aware of this, which is why there are ways that you can negotiate your medical debt when you are unable to pay in full. In this article, we will discuss the different ways you can go about taking care of those medical expenses so that they donât stack up later and wreak havoc on your credit.
Negotiate for insurance rates
Without health insurance, youâll most likely be charged a much steeper price. If you want to negotiate your medical bills, one thing you can do is research what the fair market value is for whatever treatments you received. Usually, this is the price that insurance companies have to pay medical providers, and most of the time, itâs a lot cheaper.
Once youâve found the dollar amount youâd like to ask for, you will need to get in touch with the billing department. If the person on the phone turns you down, ask to speak to their supervisor. Itâs important to remain calm and polite while doing this but be persistent. Continue to ask to speak to a higher ranking individual until you reach someone who agrees to make a deal with you.
Pay it in cash
Cash payments are hard to turn down in most cases. if you want to negotiate a lower price on medical bills, you can offer to make a cash payment. Call your medical provider or the billing department and ask them if they would be willing to knock down the price of your bills if you were to pay in cash. Explain to them that if they canât offer you any other sort of financial assistance, then this is another route you can take.
Not only will this save them money on credit card fees and hours worked by office employees, but it will also save time spent on processing paperwork. This is a smart offer to make, as instant cash payments as opposed to electronic payments are a lot harder to say no to for any business or institution.
Ask for a payment plan
Thereâs a good chance that even after youâve asked for a lower price and offered to pay in cash, your medical provider will be unwilling to give you a deal. When this happens, there is still one more thing you can try. Before readily handing over your credit card, ask them if you can make payments on your bill. Most companies will allow you to do this and are used to working with people who are unable to pay their bills in full. Be honest about how much you are able to pay at a time.
Itâs likely that they will try to negotiate a higher payment amount, but politely tell them that itâs not feasible for you. Most of the time, they will be understanding and take whatever payment they can get. If youâre struggling financially, making small payments on your medical bills is the best way to go to keep your credit score in tact. As long as you are making payments on your bills, the companies will not report you to the credit bureaus.
Take precautionary measures
A lot of medical providers and medical facilities have programs that offer financial assistance, but you are going to have to ask them for it. Be transparent at the time of or even before your medical treatment occurs. If the treatment you are seeking is not a medical emergency, ask ahead of time if there is a cheaper option or if you can get a discount. If you donât have health insurance, this needs to be explained as early on as possible. Let your doctor know if you are living off of low income or if you are in the midst of some other type of financial hardship that is keeping you from being able to pay for service.
If you are successful in negotiating your medical bills, you might want to get it in writing so that you have proof. In some cases, you may even want to make your request in writing so that you have it on record in case anything goes wrong later. Once a deal has been agreed upon by both you and the medical provider or billing department, type up a summary of the conversation including key details of who you spoke to and the prices that were negotiated.
Other options for paying bills
There is no one-size-fits-all way of clearing your medical bills once and for all. Some people have insurance, some can afford to pay in full, and some are going to have to negotiate a lower price. If you have already tried negotiating medical bills and were unsuccessful, there are other options to explore. Here are some other ways you can go about paying your medical bills:
Medical credit cards: Thereâs no guarantee that your medical provider will accept a payment plan. However, most of the time, they will accept payment with the use of a medical credit card. If you have no other choice, ask your doctorâs office about how you can apply for a medical credit card. Usually, you are able to apply at the office right then and there. Most medical credit cards offer zero interest for up to 12 months. If you can manage to pay off the medical debt within that timeframe, then perhaps a medical credit card is a good choice for you. Be wary of this if you already have poor credit.
Personal loan: If youâve already been through all of your other options and were unable to make something work, it might be time to look at taking out a type of unsecured credit, such as a personal loan. If you have a significant amount of medical debt looming over your head, this might be a good idea as you can usually take out anywhere from $1,000 to $100,000. Once again, if you donât have a good history with using credit, seriously consider the pros and cons of doing this.
Interest free credit card: If you donât end up qualifying for a payment plan or a medical credit card, you can use a 0% interest credit card to pay the tab as long as you have good or outstanding credit.
Hire a medical bill advocate: If you feel overwhelmed by the task of reading through your medical bills and looking for errors, you can hire a professional to do it for you. Medical bill advocates are familiar with common procedures and the prices of treatments. If you have been wrongfully charged or overcharged, a medical bill advocate will be able to find this right away. Aside from pinpointing any errors, experts in medical bills will also do the negotiating for you.
Final Thoughts
If you are feeling overwhelmed by a large medical bill, remember that you have several options for taking care of it. It might be tempting to ignore the bill altogether but doing this could really damage your credit. Being honest with your medical provider from the beginning can prevent you from having to deal with extra costs. However, sometimes medical bills are ineveitable and we have to pay them. Consider payment plans or a medical credit card, but whatever you do, donât let your unpaid medical bills be a show stopper!
How to Negotiate Your Medical Debt is a post from Pocket Your Dollars.
Refinancing your student loans can make good financial sense, and thatâs especially true if your current loans are stuck at a high-interest rate. With a new loan at a lower APR, you could save a bundle of money on interest each month and ultimately pay your student debt off faster. Consolidating several loans into one new one can also simplify your financial life and make keeping up with bills a lot easier.
College Ave and Earnest topped our list, but since student loan refinancing is an incredibly competitive space, youâll also want to spend time comparing student loan companies to see who offers the best deal. Many lenders in this space offer incredibly low APRs, flexible payment options, borrower incentives, and more. This means itâs more important than ever to shop around so you wind up with the best student loan for your needs.
Compare rates from dozens of loan providers with Credible
What You Should Know About Refinancing Federal Student Loans with a Private Lender
The lenders on this list can help you consolidate and refinance both federal student loans and private student loans. However, there are a few details to be aware of before you refinance federal loans with a private lender.
Switching federal loans to private means giving up federal protections like deferment and forbearance. You also give up your chance to qualify for income-driven repayment plans like Pay As You Earn (PAYE) or Income Based Repayment (IBR). Income-driven repayment plans let you pay a percentage of your discretionary income for 20 to 25 years before ultimately forgiving your remaining loan balances, so this perk isnât one you should give up without careful thought and consideration.
Best Student Loan Refinancing Companies of 2021
As you start your search to find the best student loan for your lifestyle, take the time to compare lenders and all they offer their customers. While there are a ton of reputable companies offering high-quality student loan refinancing products on the market today, there are also companies you should probably steer clear of.
To make your search easier, we took the time to compare most of the top lenders in this space in terms of interest rates offered, fees, borrower benefits, and more. The following student loan companies are the cream of the crop, so you should start your search here.
Our Top Picks:
Splash Financial
College Ave
Earnest
SoFi
CommonBond
LendKey
Wells Fargo
PenFed Credit Union
Student Loan Refinancing Company Reviews
1. Splash Financial
Splash Financial may be a newer company in the student loan refinancing space, but their offerings are competitive. This company lets you check your rate online without a hard inquiry on your credit report, and their variable rates currently start at just 2.25% APR.
Not only are interest rates offered by Splash Financial industry-leading, but the company has a 95% customer satisfaction rate so far. Their cutting-edge technology also lets you apply for your loan and complete the loan process online, meaning less hassle and stress for you as the borrower.
Check Out Splash Financialâs Low Rates
2. College Ave
College Ave offers student loan refinancing products that can be tailored to your needs. They offer low fixed and variable interest rates, for example, and youâll never pay an application fee or an origination fee. You can even qualify for a discount if you set your loan up on autopay, and a wide range of repayment schedules are available.
College Ave also offers a wide range of online calculators and tools that can help you figure out how much student loan refinancing could help you save and whether the move would be worth it in the end. Considering their low variable rates start at just 2.74% APR, thereâs a good chance you could save money by refinancing if you have excellent credit or a cosigner with great credit.
Get Started with College Ave
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 youâll need excellent credit to qualify for the lowest interest rates, loans from Earnest come with variable APRs starting at 1.81% and low fixed rates starting at just 3.45%. To qualify for student loan refinancing with Earnest, youâll need a minimum credit score of 650 and a strong employment and income history. You also need to be current on all your bills and cannot have a bankruptcy on your credit profile.
Refinance and Save with Earnest
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 donât come with an origination fee or any prepayment penalties. Your loan could also qualify for forbearance, which means having up to 24 months without payments during times of financial hardship.
Apply Online with Commonbond
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 donât charge an origination fee.
You can use this companyâs online interface to check your rate without a hard inquiry on your credit report, and variable APRs start at just 2.01% for graduates with excellent credit. LendKey loans also receive 9.3 out of 10 possible stars in recent reviews, meaning their customers are mostly happy with their decision to go with this company.
Save Thousands by Refinancing with LendKey
7. Wells Fargo
While Wells Fargo is mostly popular for their banking products, home mortgage products, and personal loans, this bank also offers student loan refinancing products. These loans let you consolidate student debts into a new loan with a low variable or fixed interest rate, and you can even score a discount for setting your loan up on autopay.
Terms for Wells Fargo loans are available anywhere from 5 to 20 years, meaning you can choose a repayment schedule and monthly payment that suits your needs. Wells Fargo also lets you check your rate online without a hard inquiry on your credit report.
Get Started with Wells Fargo
8. PenFed Credit Union
PenFed Credit Union offers unique student loan products powered by Purefy. You might be able to qualify for a lower interest rate that could lead to enormous interest savings over time, and PenFed lets you choose a repayment term and monthly payment that fits with your budget and lifestyle.
You can apply for student loan refinancing on your own, but PenFed Credit Union also allows cosigners. Low fixed interest rates start at just 3.48% APR, and you can check your rate online without a hard inquiry on your credit report.
Learn More about PenFed Credit Union
What To Look For When Refinancing
If you decide you want to refinance your student loans, youâll be happy to know the refinancing market is more robust than ever. A variety of lenders offer insanely attractive loan options for those who can qualify, although you should know that student loan companies tend to be very finicky about your credit score. Some also wonât let you refinance if you didnât graduate from college, or even if you graduated from an âunapprovedâ school.
While you should be aware of any lender-specific eligibility requirements before you apply with any student loan company, there are plenty of other factors to look out for. Hereâs everything you should look for in a student loan refinancing company before you decide to trust them with your loans.
Low Interest Rate
Obviously, the main reason youâre probably thinking of refinancing your loans is the potential to save money on interest. Lenders who offer the lowest rates available today can potentially help you save more, although itâs important to consider that you may not qualify for the lowest rates available if you donât have excellent credit.
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 isnât great, so make sure to ask family members if theyâre willing to cosign on your new student loan if you hope to get the best rate. Just remember that your cosigner will be jointly liable for repayment, meaning you could quickly damage your relationship if you default on your loan and leave them holding the bag.
Low Fees or No Fees
Student loans are like any other loan in the fact that some charge higher fees or more fees than others. Since many student loans come with an application fee or an origination fee, youâll want to look for lenders that donât charge these fees. Also check for hidden fees like prepayment penalties.
Discounts Available
Some student loan companies let you qualify for discounts, the most popular of which is a discount for using autopay. If youâre able and willing to set up automatic payments on your credit card, you could save .25% or .50% off your interest rate depending on the lender you go with.
Rate Check Option
Many of the top student loan refinancing companies on this list make it possible to check your interest rate online without a hard inquiry on your credit report. This is a huge benefit since knowing your rate can help you figure out if refinancing is even worth it before you take the time to fill out a full loan application.
Flexible Repayment Plan
Also make sure any lender you go with offers some flexibility in your repayment plan and your monthly payment. Youâll want to make sure refinancing aligns with your long-term financial goals and your monthly budget, and itâs crucial to choose a new loan with a monthly payment you can live with.
Most lenders in this space offer repayment timelines of up to 20 years, which means you could spread your payments over several decades to get a monthly payment that makes sense with your income. Keep in mind, however, that youâll pay more interest over the life of your loan when you take a long time to pay it off, so you may want to consider prioritizing a faster payment plan.
The Bottom Line
Student loan refinancing may not sound like a lot of fun. However, taking the time to consider all your loan options could easily save you thousands of dollars. This is especially true if you have a lot of debt at a high interest rate. By consolidating all your student loans into a new one with a lower APR, you could make loan repayment easier with a single payment and save a ton of money that would otherwise go to straight to interest without helping you pay off your loans.
The first step of the loan process is the hardest, however, and thatâs choosing a student loan refinancing company that you trust. The lenders on this list are highly rated, but they also offer some of the best loan products on the market today.
Work with College Ave, our top pick, to refinance your student loan.
Start your search here and youâre bound to wind up with a student loan you can live with. At the very least, you’ll have a better idea of the loans that are available and how much you might save if you decide to refinance later on.
The post The Best Student Loan Companies For Refinancing appeared first on Good Financial Cents®.
The post The No-Cash Envelope System That Works appeared first on Penny Pinchin' Mom.
I am a strong believer in the cash envelope system. It works great for our family. But I also know that is not the case for everyone. You may not want to use cash but love the envelope system concept. Fortunately, there is a program you can use that marries your desire to use plastic with the discipline of a cash envelope budget.
When it comes to managing your money, spending and trying to get out of debt, there are many programs and apps out there. But, not all of them can do everything. That means one app for your budget, another for trying to get out of debt and then yet another for managing your spending.
ProActive does it all. You can manage your money, spending, budgeting, and debt payoff – all from one simple to manage app! But, before you jump in and download it, make sure you read this honest review. That way, you’ll know what to expect!
What is ProActive?
ProActive combines the beauty of shopping with plastic and the discipline of cash envelopes. The system ensures that you never overspend – ever! Just like with cash, when the envelope is empty, you are done shopping!
What is the cash envelope budget?
A cash envelope budget is what it sounds like. Rather than using plastic to shop you get cash and place the budgeted amounts into envelopes. For example, if your budget for food is $200 a paycheck, then you get cash and place $200 in an envelope earmarked for groceries.
When you grocery shop, you use only the cash in the envelope. That is all you have available to spend. It is impossible to overspend. If there is only $20 left then that means you can’t spend $22. There is not enough money there.
It is a system that works very well for people who want to better manage and control spending.
How does it work?
Once you sign up and create your account, you will get a ProActive branded debit card. When you are ready to spend, you use the ProActive card. But, before you can swipe, you have to let the app know which envelope the money needs to come from. That way, you always stay on budget and don’t spend more than you should.
Add funds to your account
When you get paid, review your budget. Pay the bills that are due. What you have left over is what you have left to spend on everything else on your budget. It will include items such as clothing, household items, personal care and beauty, groceries, entertainment, dues, etc.
You will go into the app and click the “+” icon. That starts the transfer from your bank account to your ProActive debit card.
Allocate the money to your virtual envelopes
Once the funds are deposited, you have to assign an amount to each category (a.k.a. envelope). Review the budget to see what you have available to spend.
Shop as usual (but pay with the ProActive card)
You can’t swipe your card until you have told the card which category (or envelope) the money should come from. Simply open the app and click the spend category. Then you can swipe.
If there is not enough money left in the category to cover your purchase, it will be declined. That makes it impossible to overspend.
The smart way to use ProActive
As parents, we teach our kids. They need to know how to take care of themselves, cook, clean and do other things around the house. But, it seems that financial responsibility is one that gets overlooked.
One thing that ProActive allows is for you to add your kids and teach them how to manage their own money. You can put funds on their account and they too can set up categories. And, just like mom and dad, they have to select the category before they spend so they are not spending more than they should either.
ProActive not only teaches your kids how to use a debit card, but also the financial responsibilities that go along with it. And, it is in an environment that both mom and dad can see (and control).
Who is ProActive a fit for?
Just like with every other app or budget system there is never a one-size-fits-all system. That means this may not work for you. If you love your credit card for the rewards then this will not work for you. You can’t attach a credit card and use this program.
But, if you struggle to try to manage your money and spending then you really need to get this app. It makes it impossible to overspend and helps you learn how to think about every purchase you make. You may not need to use it forever as you will become disciplined.
What does it cost?
When you sign up, ProActive will give you a 15-day trial. They want to make sure it is a fit for you before they make you pay. Then, if you love it, you continue at $5.75 a month (paid annually, so $69). You can add a second user for $29 a year and even add your kids for just $24 each.
What happens if I forget my phone?
It happens. We leave our phones behind. In that case, it is important that you always have an alternative payment method handy, such as your bank debit card, credit card or cash.
If your goal is to get out of debt, you have to first start with your budget and spending. If you don’t do that, you will never achieve your goals. ProActive is one tool that helps you every step of the way.
The post The No-Cash Envelope System That Works appeared first on Penny Pinchin' Mom.
