Advertiser Disclosure

Disclaimer: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

News

CFPB’s New Rules for Debt Collectors: The 5 Most Exciting Changes

family in debtThere’s good news for the 70 million Americans who are being pursued by debt collectors: The Consumer Financial Protection Bureau rolled out new plans to overhaul the debt collections industry.

The CFPB’s long-awaited plans to tackle the multi-billion-dollar business of debt collection were laid out in a proposal Thursday. The proposal would require debt collectors to gather “more and better information about the debt before they collect.”

“This is about bringing better accuracy and accountability to a market that desperately needs it,” said CFPB Director Richard Cordray.

Here are the 5 most remarkable changes in the CFPB’s new rules:

Collectors must know that they are collecting the right amount of debt from the right person.  Oftentimes, debt passes through the hands of so many debt buyers and sellers that by the time they reach a consumer, they could have lost important identifying information along the way. This proposed rule would put the onus on collectors to verify the debt they are pursuing before they begin contacting the consumer. Millions of consumers are pursued by collectors for debts they don’t actually owe, or for amounts of debt that are incorrect.

Collectors would only be able to contact consumers six times per week. As it stands, credit card companies allow collectors to call consumers up to 15 times per day.  The new proposed rules would limit all contact — phone, email, snail mail, etc. — to only six times per week.

No more zombie debt collections. The CFPB is proposing a rule that would force debt collectors to tell a consumer when they are contacting them about a debt that is too old to collect. As it stands, debts can only be collected for a certain number of years (this varies by state). But it’s almost impossible for a consumer to know when they no longer have a legal obligation to repay a debt. That makes it easy for collectors to pursue people for debts that are too old. The nastiest part about this tactic is that by enticing consumers to make even the smallest payment, they effectively restart the clock on that old debt, and the consumer is once again legally obligated to pay up. If this passes, this would be a major game changer in the debt collections industry.

Consumers could easily find out more information about their debts. The CFPB would have every debt collector include a “tear-off” sheet that consumers to fill out and return to them to dispute the debt. If they mail the dispute to a collector within 30 days, then the collector would have to send a detailed debt report and could no longer pursue the debt until that report is sent.

No more passing on unverified debts to other debt buyers. Debt is bought and sold at a rapid rate. Important information can easily be lost along the way, making it difficult for consumers to know if a debt actually belongs to them. The CFPB would stop debt collections agencies from selling debts that have not yet been verified.

 

Not everyone was cheering the CFPB’s new rules.

The National Consumer Law Center, a consumer legal advocacy group, is already calling on tougher rules than the CFPB lays out.

“Instead of simply requiring collectors to have full and accurate information, the CFPB proposal sets up a complicated and inadequate system that lets collectors rely on information that may be inaccurate,” said Margot Saunders, an attorney with the National Consumer Law Center.

The rules are also missing a key component, according to the NCLC: Stiffer penalties for bad actors.

“We are also disappointed that the proposal does nothing to increase penalties for abusive collectors,” said April Kuehnhoff, an NCLC attorney who specializes in debt collection.  “Stronger penalties are essential to stop especially abusive collectors from continuing business as usual.”

What’s next?

Settle in for the long haul. This list of proposed rules is just the first step in what could be a year-long (or more) process to implement these new rules. The CFPB has to send this proposal to a panel of industry experts who will no doubt want to weigh in and propose their own changes. You can make your voice heard by submitting a public comment through the CFPB’s website.

Have you been pursued by a debt collector for a debt you don’t owe? File a complaint with the CFPB.

TAGS: ,

Advertiser Disclosure

Disclaimer: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Health, Life Events

The First 8 Financial Steps You Should Take When a Parent Dies

parent death_lg

The unexpected death of a parent brings up many challenges. Near the top of the list is sorting through the financial to-dos, both because it’s a demanding task with a variety of potential points of confusion and because it’s the last thing anyone wants to be dealing with at a time like this.

This can be especially difficult for your surviving parent to handle if he or she was not the primary financial decision maker. It can be confusing and overwhelming to take over these new responsibilities, especially when the grief is still fresh.

You may be called upon to help, but what if you’re not sure how to handle it either? What should you do?

I asked several financial planners how they would guide a client through this process. Here’s what they said.

1. Don’t Make Any Big Decisions Right Away

There are certain things that need to be handled quickly after the death of a parent, and we’ll get into those below. But there are some big financial decisions that may be best left until later, when you are likely to be less em There’s usually no need to rush decisions like whether to sell a house or what to do with life insurance proceeds.

“The death of a loved one is always traumatic and it may take a while to grieve,” says Shane Larson, CFP® of Splarson Financial Planning. “Slowing things down will help people make better decisions.”

2. Get Multiple Copies of the Death Certificate

You’ll need the death certificate to do a number of important things, like making a life insurance claim and receiving money from a 401(k).

Pam Horack, CFP® of Pathfinder Planning suggests getting as many as 20 copies of the death certificate.

“Get more than what you think you need,” Horack says. “It’s the number one thing you want to make sure you have easy access to.”

How to actually order the death certificate does vary by state, but many of which do require you to go through the Department of Health. You may also be able to find information about how to order death certificates in your state from VitalCheck. The cost of ordering a death certificate also varies by state. New York, for example, charges $15 for an in-person death certificate order for each copy plus a one-time $2.75 fee for identity verification. While North Carolina charges $24 for the first copy and $15 for subsequent copies as a base price. You’ll pay more to order online through the third-party service like VitalCheck, which charges a vendor fee, but it may be faster than going in person or sending a request via snail mail.

3. Call Their Financial Planner for Back-up

If your parent was already working with one or more financial professionals, such as a financial planner, CPA, or estate attorney, contact them and enlist their help.

A qualified professional who is already familiar with your parents’ situation will make the process much easier and can give advice on how to make some of the bigger, more complicated decisions you’ll be facing.

If there isn’t already a financial professional on board, you may want to consider seeking one out. As Dennis Crowley of Vitruvius Wealth points out: “A professional can look at a bank statement and say, ‘Your deceased spouse wrote checks to ABC life insurance every quarter. Where is that policy?’ Or ‘You had income checks coming from both XYZ mutual fund and Third National Bank. Where are those statements and accounts?”

A good professional can also help you avoid mistakes and make the most of the opportunities available to you. For example, Daniel Frankel, CFP® of WealthCollab in Seattle points out that distributing money from an IRA could lead to a big tax hit, while transferring it to an inherited IRA allows you to continue deferring taxes. That kind of guidance can be invaluable.

Ask friends and family for referrals and don’t be afraid to take your time interviewing people. Ask them about their experience with situations like yours, how they get paid, what they will do for you, and make sure you feel comfortable with them before moving forward.

4. Find Their Will

When it comes time to make the real financial decisions, your parent’s will is the place to start, assuming one exists.

First, a will appoints the executor of the estate, who is the person in charge of locating and gathering the estate’s assets, paying any debts and taxes owed, and distributing the property to the right people. If there is no will or no executor is named, the state will appoint one for you.

Second, a will lays out your parent’s plans for how their property should be distributed. This both ensures that his or her wishes are carried out and makes your life easier by taking certain decisions off your plate.

5. Gather All Their Financial Account Information

Locating and organizing all of your parent’s financial accounts can be one of the most difficult and time-consuming parts of this process, especially if things were not well organized to begin with. It’s also a crucial step, primarily to make sure that your surviving parent has all the financial resources he or she needs, but also to ensure that other assets are passed on appropriately.

Here are a few ideas for how to gather all of this information:

  • Ask your surviving parent if he or she knows where bank accounts, retirement accounts, insurance policies and investments are held.
  • If your surviving parent has no idea where any of the financial holdings are, then there may be bank and investment statements, insurance policies, credit card statements and the like somewhere in the house to help you start tracking them down.
  • A CPA or financial planner your parents have been working with may have much of this information.
  • Mark Struthers, CFA, CFP® of Sona Financial recommends this service from the IRS to track down past tax returns that may contain important account information.
  • Track email and regular mail for statements and other notifications from financial institutions.
  • Torian Pizzola of Friar Wealth Management suggests contacting your parent’s employer to ask about any benefits or pay they may be entitled to. Sometimes there can be significant retirement accounts and life insurance proceeds to collect.

No matter how diligent you are, be prepared for this process to take some time and for there to be some frustrations along the way.

“Even when everything is organized, it can take more than a year to feel like you’ve reviewed and consolidated paperwork and files,” says Mindy Crary, MBA, CFP® of Creative Money.  “So just keep at it methodically. It’s a marathon to get through all of this, not a sprint.”

6. Make Sure the Bills Are Paid on Ties

One of the most immediate financial concerns is ensuring that your surviving parent knows how to pay the bills and handle other basic needs for the foreseeable future. All of the work you did to gather account information will help with this. As you piece together where your parents’ money is currently held and which bills are due to which companies, you can start to create a plan to make sure that basics like the mortgage, electricity, and groceries are handled.

Creating this financial guidebook can be complicated, so Leslie Ransom, CFP® of Indie Financial Planning suggests starting with a 30-day spending plan and building it out from there. That way the immediate needs are handled without overwhelming anyone.

7. Other To-Dos

In addition to those major items, there are a number of other things to keep in mind during this process. Scott Smith, Principal and Senior Adviser at Olympia Ridge – PFA, has been through this process before and provided a good checklist that includes that following:

  • Find and open safe deposit boxes.
  • Contact the Social Security Administration, and possibly the Veterans Administration, about possible benefits.
  • Close credit cards, turn off automatic payments, and ask if there is any credit life insurance available to pay off any remaining balances.
  • Secure your parents’ home and other property if it will be left vacant or unattended.

Daniel Frankel, CFP® also advises freezing your parent’s credit report and opting out of free credit card offers as a protection against potential fraud.

8. Communicate, Communicate, Communicate

The real key during this whole process is to keep the lines of communication open between all affected parties to make sure everyone’s voice is heard and everyone knows what’s going on. This includes your surviving parent, your siblings and their spouses and children, other close friends and family members, professionals, legal counsel, and everyone else involved in the process. Open communication will help ensure that everything is handled as smoothly and with as few disagreements as possible.

Eventually, you can use also this experience as an opportunity to talk to your surviving parent about their wishes and how they would like things handled after their death. The more communication there is ahead of time, the easier this process will be on everyone involved.

TAGS:

Advertiser Disclosure

Disclaimer: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

College Students and Recent Grads, Reviews, Student Loan ReFi

LendKey Student Loan Refinance Review

LendKey Student Loan Refinance Review

Updated July 27, 2016

Could you imagine trying to find the best student loan refinancing rate from community banks and credit unions on your own? How would you do it? Would you call every bank and credit union and ask for help? What a nightmare.

LendKey has relationships with 300+ community banks and credit unions all over the United States. LendKey* can issue loans to residents in any of the 50 states. This keeps you from having to pound the pavement by your lonesome. LendKey’s website will show you the best rate for refinancing your student loans.

Since 2007, LendKey has been a one stop shop for student loan refinancing. It also offers other types of loans. But for the sake of this review we’ll be focusing on how LendKey takes care of graduates looking to improve their debt situation. Fixed APRs range from 4.50% – 8.22%. Variable rates start as low as 2.14%.

Who can benefit from using LendKey? Anyone hoping to refinance their student loans should consider LendKey. It is easy to apply:

Lendkey

Apply Now

 

If you’re on the fence about refinancing, here are some of the benefits to be gained:

Lower Payments

Refinance your way to a more manageable monthly payment.

Lower Rates

Spend less on interest by getting a lower rate than the aggregate of all individual student loans.

Simplified Finances

Making payments on multiple loans to multiple institutions at different times of the month can be quite the hassle. It’s much easier to remember just one payment. Many lenders even let you consolidate both private and federal loans.

Different Repayment Options

Different lenders offer different repayment options. It’s wise to explore all the options to determine what makes the most sense for your particular situation.

Pros of Using LendKey

A Unified Application Process

This is hugely important. With LendKey, you’re not shuffled through tons of screens on different domains – all using different logons and different (confusing!) user interfaces. Within 5 minutes, a person can navigate through LendKey’s application process. This means after 5 minutes, you can see how much you can save by refinancing. You can even choose what loan you want.

Cosigner Release Available

Yes, you can secure a low interest rate and then cut loose your cosigner. Once you prove you are responsible – LendKey no longer needs a cosigner tied to your account. This may help convince a cosigner to work with you initially. They won’t need to be on the hook for long. Once you’ve made 12 full and consecutive on-time payments, your cosigner may be released. LendKey does a credit check and examines your income to see if you are free to go it alone.

No Origination Fee

This is helpful since it means you are free to shop around without feeling committed.

Further Interest Rate Reduction

1% interest rate reduction once 10% of the loan principal is repaid during the full repayment period. This is subject to the floor rate.

0.25% ACH Interest Rate Reduction

Many lenders reduce interest rates by a quarter percent for borrowers who agree to automatic payments.

Federal and Private Loans Can Be Consolidated Together

However, you lose some federal benefits in doing so. Things like free insurance (provided with federal loans if you are killed or severely disabled), public service forgiveness and military service forgiveness as well as income-based repayment plans. Grace periods will likely be omitted when writing the new consolidated loan.

Over 40,000 Borrowers Serviced

As of January 2016, 40,000 people have used LendKey’s services.

Excellent Customer Support

According to cuStudentLoans (which LendKey owns so take this with a grain of salt), 97% of customers are satisfied. Customer support comes out of New York and Ohio. Phone support is available each day from 9AM to 8PM EST.

For what it’s worth, I called into support 5 times at random. The support I received from the sales team was really great. Even the gentleman with only 6 months of experience was quite knowledgeable.

Eligible Schools

This list of eligible schools is 2,200 and growing. Chances are your school is on the list. However, LendKey doesn’t encourage students to submit eligibility requests as other student loan refinancers do.

Return Policy

Yes, you can ‘return’ your loan. LendKey offers a 30 day no-fee return policy to allow you to cancel the loan within 30 days of disbursement without fees or interest. That’s pretty incredible.

Cons

LendKey Doesn’t Give You the Complete Picture

LendKey doesn’t help a lot with stacking institutions against each other. I suppose this is meant to not to play favorites. However, it would be nice to be able to read about each institution within the LendKey interface. I’d still advise opening up another tab to research the banks you are considering.

The Fine Print You May Miss

Since LendKey is a loan matchmaker, there isn’t a lot of fine print on the site. This means a person still needs to review the fine print of each institution before finalizing his or her loan as mentioned before. LendKey does a fantastic job of getting you 90% of the way. But that last 10% of fine print is between you and your lending institution. Read through everything before signing up for a new loan.

I read the Better Business Bureau complaint log for LendKey. There are only 11 complaints in the past 3 years. SoFi (a competitor) has 18 and another competitor, Earnest, has no complaints. These complaints were mostly small misunderstandings between the LendKey support team and the borrowers.

The Application Process

There are four steps to the simple application process. Step 1 is for estimating monthly payments for a private student loan. It’s simple. You identify the amount you’d like to borrow and fill in a radio button indicating your credit is fair, good, or excellent. The last part is where you enter which state you live in. This is because many programs are state specific. Step 1 takes 1 minute.

Step 2 takes 2 minutes. This is the step where you compare the rates and offers available to you. Choose what works best for your unique situation.

Step 3 again only takes 1 minute. This is the actual application. As mentioned earlier in this article, this process is done through the LendKey interface. And don’t worry, information inputted into LendKey is safe (privacy policy).

Step 4 takes 10 minutes. This is the step where a person verifies identity, school, and income (screenshots/pictures work so there’s no hassle with scanning!). You will know if you are approved during this step.

As with any company, there are competitors. Here are two worthy rivals also worth considering:

Alternatives to LendKey

SoFi

SoFi stands out with a job placement program. Yes, SoFi has an entire career services division. It’s smart. Instead of spending money on collections, SoFi invests in its borrowers. Also, if you would like a 20-year loan, consider SoFi. As mentioned earlier, LendKey caps out at 15 years.

SoFi logo

Apply Now

*referral link

Earnest

If you have a low credit score but have potential to earn a good income, Earnest will treat you well. Earnest looks beyond a simple credit score. The application process examines employment history, future earning potential and overall financial situation.

Earnest seems to take a very personal approach to each customer. A customer states an amount they can pay each month and Earnest will give them a loan, accordingly. Earnest also lets borrowers skip a payment each year. This could come in handy if money gets tight around the holidays. Just keep in mind, this can increase your future payments to compensate for the missed on.

Fixed interest rates start at 3.50% and variable interest rates start at 2.15%.

However, Earnest isn’t available for all US residents.

Earnest

Apply Now

Final Thoughts

LendKey runs a fantastic student loan refinancing division. The company offers many, many customizable options with very few downsides. With no application fee, it’s worth seeing what this student loan refinancing powerhouse can do for you.

Lendkey

Apply Now

Customize Student Loan Offers with Magnify Tool

 *We’ll receive a referral fee if you click on offers with this symbol. This does not impact our rankings or recommendations. You can learn more about how our site is financed here.

TAGS: ,

Advertiser Disclosure

Disclaimer: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

College Students and Recent Grads, Pay Down My Debt, Reviews

CommonBond Student Loan Refinance Loan Review

CommonBond Grad Student Loan Refinance Loan Review

Updated July 27, 2016

CommonBond was founded by three Wharton MBAs who felt the sting of student loans after they graduated. The founders decided to provide a better solution for graduates, as they thought the student loan system was broken and in need of reform. As a result, they strive to make the refinance (and borrowing) process as simple and straightforward for graduates as possible.

CommonBond* began by servicing students from just one school, and has rapidly expanded. Today, CommonBond loans are available to graduates of over 2,000 schools nationwide. Although the business started servicing only students with graduate degrees, today CommonBond is also available to refinance undergraduate degrees as well.

As you might be able to tell by the name, CommonBond thinks of its community as family. There is a network of alumni and professionals within the community that want to help borrowers. This alone sets it apart from other lenders, as members often meet for events.

While these are all great things, we know you’re more interested in how CommonBond might be able to help you make your student loans more affordable. Let’s take a look at what terms and rates they offer, eligibility requirements, and how they compare against other lenders.

Refinance Terms Offered

CommonBond offers low variable and fixed rate loans. Variable rates range from 2.14% – 5.94% APR, and fixed rates range from 3.50% – 7.74% APR.

Note that these rates take a 0.25% auto pay discount into consideration.

There is no maximum loan amount. CommonBond will lend what you can afford to repay. CommonBond offers fixed and variable rates with terms of 5, 10, 15, and 20 years.

The hybrid loan is only offered on a 10 year term – the first 5 years will have a fixed rate, and the 5 years after that will have a variable rate.

CommonBond has a great chart listing repayment examples based off of borrowing $10,000, which can be found on its rates and terms page.

To pull an example from that, if you borrow $10,000 at a fixed 4.74% APR on a 10 year term, your monthly payment will be $104.80. The total amount you will pay over the 10 year period will be $12,575.90.

The Pros and Cons

CommonBond is available to graduates of 2,000 universities. While that is a very long list, not all colleges and universities are included.

One pro to consider is the hybrid loan option available. It might seem a little confusing at first – why would someone want a variable rate down the road?

If you’re confident you’ll be able to make extra payments on your loan and pay it off before the 5 years are up, you might be better off going with the hybrid option (if you can get a better interest rate on it).

This is because you’ll end up paying less over the life of the loan with a lower interest rate. If you were offered a 10 year loan with a fixed rate of 6.49% APR, and a hybrid loan with a beginning rate of 5.64%, the hybrid option would be the better deal if you’re intent on paying it off quickly.

What You Need to Qualify

CommonBond doesn’t list many eligibility requirements on its website, aside from the following:

  • You must be a U.S. citizen or permanent resident
  • You must have graduated

CommonBond doesn’t specify a minimum credit score needed, but based on the requirements of other lenders, we recommend having a score of 660+, though you should be aiming for 700+. The good news is CommonBond lets you apply with a cosigner in case your credit isn’t good enough.

Documents and Information Needed to Apply

CommonBond’s application process is very simple – it says it takes as little as 2 minutes to complete. Initially, you’ll be asked for basic information such as your name, address, and school.

Once you complete this part, CommonBond will perform a soft credit pull to estimate your rates and terms.

If you want to move forward with the rates and terms offered, you’ll be required to submit documentation and a hard credit inquiry will be conducted. CommonBond lists the following as required:

  • Pay stubs or tax returns (proof of employment)
  • Diploma or transcript (proof of graduation)
  • Student loan bank statement
  • ID, utility bills, lease agreement (proof of residency)

CommonBond also notes it can take up to 5 business days to verify documents submitted, so the loan doesn’t happen instantaneously.

Once your documents are approved, you electronically sign for the loan, and CommonBond will begin the process of paying off your previous lenders. It notes this can take up to two weeks from the time the loan is accepted.

Who Benefits the Most from Refinancing Student Loans with CommonBond?

Borrowers who are looking to refinance a large amount of student loan debt will benefit the most from refinancing with them.

Common Bond

Apply Now

*referral link

Keeping an Eye on the Fine Print

CommonBond does not have a prepayment penalty, and there are no origination fees nor application fees associated with refinancing.

As with other lenders, there is a late payment fee. This is 5% of the unpaid amount of the payment due, or $10, whichever is less.

If a payment fails to go through, you’ll be charged a $15 fee.

It’s also noted that failure to make payments may result in the loss of the 0.25% interest rate deduction from auto pay.

Transparency Score

Getting in touch with a representative is simple and there is a chat and call option right on the homepage. Some lenders have this hidden at the bottom, or they don’t offer a chat option at all.

CommonBond also lets borrowers know they can shop around within a 30 day period to lessen the impact on their credit.

It does not list its late fees on its website, unlike other lenders. However, after making a chat inquiry, the question was answered promptly.

CommonBond does offer a cosigner release and is ranked with a A+ transparency score.

Alternative Student Loan Refinancing Lenders

The student loan refinancing market continues to get more competitive, and it makes sense to shop around for the best deal.

One of the market leaders is SoFi. It’s always worth taking a look to see if SoFi* offers a better interest rate.

The two lenders are very similar – CommonBond offers “CommonBridge,” a service that helps you find a new job in the event you lose yours. SoFi offers a similar service called Unemployment Protection.

SoFi’s variable rates are currently 2.15% – 5.95% APR with autopay, and its fixed rates are currently 3.50% – 7.74% APR, which is in line with what CommonBond is offering.

SoFi also doesn’t have a limit on how much you can refinance with them.

SoFi logo

Apply Now

 *referral link

Another lender to consider is Earnest. There is no maximum loan amount, and Earnest has a very slick application process. Interest rates start as low as 2.15% (variable) and 3.50% (fixed).

Earnest

Apply Now

*referral link

Lastly, you could check out LendKey. It offers student loan refinancing through credit unions and community banks, but only offers variable rates in most states and fixed rates in a select few. The maximum amount to refinance with an undergraduate degree is $125,000, and the maximum amount to refinance with a graduate degree is $175,000.

All three of these options provide forbearance in case of economic hardship and offer similar loan options (5, 10, 15 year terms).

Lendkey

Apply Now

*referral link

Don’t Forget to Shop Around

As CommonBond initially conducts a soft pull on your credit, you’re free to continue to shop around for the best rates if you’re not happy with the rates it can provide. As the lender states on its website, if you apply for loans within a 30 day period, your credit won’t be affected as much.

Since CommonBond does have strict underwriting criteria, you should continue to shop around and don’t be discouraged if you are not approved. The market continues to get more competitive, and a number of good options are out there.

Customize Your Student Loan Offers with MagnifyMoney Comparison Tool

 

*We’ll receive a referral fee if you click on offers with this symbol. This does not impact our rankings or recommendations. You can learn more about how our site is financed here.

 

TAGS: , ,

Advertiser Disclosure

Disclaimer: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

College Students and Recent Grads, Pay Down My Debt

19 Options to Refinance Student Loans – Get Your Lowest Rate

19 Options to Refinance Student Loans - Get Your Lowest Rate

Updated: July 27, 2016

Are you tired of paying a high interest rate on your student loan debt? Are you looking for ways to refinance your student loans at a lower interest rate, but don’t know where to turn? We have created the most complete list of lenders currently willing to refinance student loan debt.

You should always shop around for the best rate. Don’t worry about the impact on your credit score of applying to multiple lenders: so long as you complete all of your applications within 14 days, it will only count as one inquiry on your credit score. You can see the full list of 19+ lenders below, but we recommend you start here, and check rates from the top 5 national lenders offering the lowest interest rates. We update this list daily:

LenderTransparency ScoreMax TermFixed APRVariable APRMax Loan Amount 
commonbondA+

20


Years

3.50% - 7.74%


Fixed Rate

2.14% - 5.94%


Variable Rate

No Max


Undergrad/Grad
Max Loan
apply-now
lendkeyA+

20


Years

4.50% - 8.22%


Fixed Rate

2.14% - 6.92%


Variable Rate

$125k / $175k


Undergrad/Grad
Max Loan
apply-now
earnestA+

20


Years

3.50% - 7.45%


Fixed Rate

2.15% - 5.80%


Variable Rate

No Max


Undergrad/Grad
Max Loan
apply-now
SoFiA+

20


Years

3.50% - 7.74%


Fixed Rate

2.15% - 5.95%


Variable Rate

No Max


Undergrad/Grad
Max Loan
apply-now
PurefyA+

20


Years

3.95% - 6.75%


Fixed Rate

3% - 4.95%


Variable Rate

$350k / $350k


Undergrad/Grad
Max Loan
apply-now

We have also created:

But before you refinance, read on to see if you are ready to refinance your student loans.

Can I Get Approved?

Loan approval rules vary by lender. However, all of the lenders will want:

  • Proof that you can afford your payments. That means you have a job with income that is sufficient to cover your student loans and all of your other expenses.
  • Proof that you are a responsible borrower, with a demonstrated record of on-time payments. For some lenders, that means that they use the traditional FICO, requiring a good score. For other lenders, they may just have some basic rules, like no missed payments, or a certain number of on-time payments required to prove that you are responsible.

If you are in financial difficulty and can’t afford your monthly payments, a refinance is not the solution. Instead, you should look at options to avoid a default on student loan debt.

This is particularly important if you have Federal loans.

Don’t refinance Federal loans unless you are very comfortable with your ability to repay. Think hard about the chances you won’t be able to make payments for a few months. Once you refinance, you may lose flexible Federal payment options that can help you if you genuinely can’t afford the payments you have today. Check the Federal loan repayment estimator to make sure you see all the Federal options you have right now.

If you can afford your monthly payment, but you have been a sloppy payer, then you will likely need to demonstrate responsibility before applying for a refinance.

But, if you can afford your current monthly payment and have been responsible with those payments, then a refinance could be possible and help you pay the debt off sooner.

Is it worth it? 

Like any form of debt, your goal with a student loan should be to pay as low an interest rate as possible. Other than a mortgage, you will likely never have a debt as large as your student loan.

If you are able to reduce the interest rate by re-financing, then you should consider the transaction. However, make sure you include the following in any decision:

Is there an origination fee?

Many lenders have no fee, which is great news. If there is an origination fee, you need to make sure that it is worth paying. If you plan on paying off your loan very quickly, then you may not want to pay a fee. But, if you are going to be paying your loan for a long time, a fee may be worth paying.

Is the interest rate fixed or variable?

Variable interest rates will almost always be lower than fixed interest rates. But there is a reason: you end up taking all of the interest rate risk. We are currently at all-time low interest rates. So, we know that interest rates will go up, we just don’t know when.

This is a judgment call. Just remember, when rates go up, so do your payments. And, in a higher rate environment, you will not be able to refinance to a better option (because all rates will be going up).

We typically recommend fixing the rate as much as possible, unless you know that you can pay off your debt during a short time period. If you think it will take you 20 years to pay off your loan, you don’t want to bet on the next 20 years of interest rates. But, if you think you will pay it off in five years, you may want to take the bet. Some providers with variable rates will cap them, which can help temper some of the risk.

Places to Consider a Refinance

If you go to other sites they may claim to compare several student loan offers in one step. Just beware that they might only show you deals that pay them a referral fee, so you could miss out on lenders ready to give you better terms. Below is what we believe is the most comprehensive list of current student loan refinancing lenders.

You should take the time to shop around. FICO says there is little to no impact on your credit score for rate shopping as many providers as you’d like in a single shopping period (which can be between 14-30 days, depending upon the version of FICO). So set aside a day and apply to as many as you feel comfortable with to get a sense of who is ready to give you the best terms.

Here are more details on the 5 lenders offering the lowest interest rates:

1. CommonBond*: Variable Rates from 2.14% and Fixed Rates from 3.50% (with AutoPay)

Commonbond1CommonBond (read our full CommonBond review) started out lending exclusively to graduate students. They initially targeted doctors with more than $100,000 of debt. Over time, CommonBond has expanded and now offers student loan refinancing options to graduates of almost any university (graduate and undergraduate). In addition (and we think this is pretty cool), CommonBond will fund the education of someone in need in an emerging market for every loan that closes. So not only will you save money, but someone in need will get access to an education.

Go to site

2. LendKey*: Variable Rates from 2.14% and Fixed Rates from 4.50% (with AutoPay)

Lendkey1LendKey (read our full LendKey review) works with community banks and credit unions across the country. Although you apply with LendKey, your loan will be with a community bank. If you like the idea of working with a credit union or community bank, LendKey could be a great option. Over the past year, LendKey has become increasingly competitive on pricing, and frequently has a better rate than some of the more famous marketplace lenders.

Go to site

3. Earnest*: Variable Rates from 2.15% and Fixed Rates from 3.50% (with AutoPay)

earnest1Earnest (read our full Earnest review) offers fixed interest rates starting at 3.50% and variable rates starting at 2.13%. Unlike any of the other lenders, you can switch between fixed and variable rates throughout the life of your loan. You can do that one time every six months until the loan is paid off. That means you can take advantage of the low variable interest rates now, and then lock in a higher fixed rate later. You can choose your own monthly payment, based upon what you can afford (to the penny). Earnest also offers bi-weekly payments and “skip a payment” if you run into difficulty.

Go to site

4. SoFi*: Variable Rates from 2.15% and Fixed Rates from 3.50% (with AutoPay)

 

SoFi (read our full SoFi review) was one of the first lenders to start offering    student loan refinancing products. Although SoFi initially targeted a very select  group of universities (it started with Stanford), now almost anyone can   SofiLogoapply. You need to have a degree, a good job and good income in order to  qualify. SoFi wants to be more than just a lender. If you lose your job, SoFi will  help you find a new one. If you need a mortgage for a first home, they are there  to help. And, surprisingly, they also want to get you a date. SoFi is famous for  hosting parties for customers across the country, and creating a dating app to  match borrowers with each other.

Go to site

5. purefy: Variable Rates from 3% and Fixed Rates from 3.95% 

purefy

Purefy (read our full purefy review) was formerly known as CordiaGrad. The founder of purefy used to work for a big bank, and decided to buy a small bank and use it as a platform to grow. Purefy will refinance undergraduate and graduate loans.

Go to site

In addition to the Top 5 (ranked by interest rate), there are many more lenders offering to refinance student loans. Below is a listing of all providers we have found so far. This list includes credit unions that may have limited membership. We will continue to update this list as we find more lenders. This list is ordered alphabetically:

  • Alliant Credit Union: In order to qualify, you need to have a bachelor’s degree. The minimum credit score is 680, and you need two years of employment and a minimum income of $40,000. Interest rates start as low as 3.75%. Anyone can join this credit union by making a $10 donation to Foster Care for Success.
  • Citizens Bank: To get the best deal, you should have at least a bachelor’s degree. They will look at your credit history, and want to make sure that at least the last three payments on your student loans have been made on time. If you don’t have your degree, you need to have made the last 12 payments (principal and interest) on time. You must make at least $24,000 per year. They offer fixed rates starting at 4.74% and variable rates start from 2.19%.
  • College Avenue: College Avenue offers fixed rates starting at 4.74% and variable at 2.50%, and only offers 15 year terms.
  • CommonWealth One Federal Credit Union: Variable interest rates start at 3.36%. You can borrow up to $75,000 and need to be a member of the credit union in order to qualify.
  • Credit Union Student Choice: This is a tool offered by credit unions. The criteria and pricing vary by credit union. The credit unions have restricted membership, but you can find out if you qualify on this site.
  • DRB Student Loan*: They will refinance undergraduate, Parent PLUS and graduate loans including MBA, Law, Medical/Dental (Post Residency), Physician Assistant, Advanced Degree Nursing, Anesthetist, Pharmacist, Engineering, Computer Science and more degrees. Variable rates as low as 4.17% and 5.77% fixed.
  • Eastman Credit Union: They don’t share much of their criteria publicly. Fixed rates start at 6.5% and you must be a member of the credit union. Credit union membership is not available to everyone.
  • Education Success Loans: You must be out of school for at least 30 months, and you must have a degree. You also need a good credit score, with on-time payment behavior. Variable and fixed loan options are available, with rates starting at 4.99%.
  • EdVest: They offer refinancing options for private loans used to finance attendance at a Title IV, degree-granting institution. If the loan balance is below $100,000 you need to make at least $30,000 a year. If your balance is above $100,000 you need to make at least $50,000. Variable rates start at 3.180%, and fixed rates start at 4.740%.
  • First Republic Eagle Gold. It’s hard to beat these rates – starting at 1.95% fixed and 1.87% variable. But you need to go in person to a First Republic branch to complete your account opening. They are located in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego, Portland (Oregon), Boston, Palm Beach (Florida), Greenwich, and New York City. Loans must be $60,000 – $300,000 and you need a 750 or higher credit score with 24 months experience in your current industry.
  • IHelp: This service will find a community bank. Community banks can actually be expensive. You need to have 2 years of good credit history, with a DTI (debt-to-income) of less than 45% and annual income of at least $24,000. Fixed rates are available, starting at 6.22% with a co-signer, and 7.21% for non-cosigned loans.
  • Mayo Employees Credit Union: You need at least $2,000 of monthly income and a good credit history. Variable rates are available, starting at 5.00% and you would need to join the credit union.
  • Navy Federal Credit Union: This credit union offers limited membership. For men and women who serve, the credit union can offer excellent rates and specialized underwriting. Variable interest rates start at 3.87%.
  • RISLA: You need at least a 680 credit score, and can find fixed interest rates starting at 4.49% if you use a co-signer.
  • UW Credit Union: $25,000 minimum income required, with at least 5 years of credit history and a good repayment record. Fixed and variable interest rates are available, with variable rates starting at 2.18% and fixed rates starting at 4.04%. You need to join the credit union in order to refinance your loans.
  • Wells Fargo: As a traditional lender, Wells Fargo will look at credit score and debt burden. They offer both fixed and variable loans, with variable rates starting at 3.49% and fixed rates starting at 5.99%. Wells Fargo does not have a tradition of being a low cost lender.

You can also compare all of these loan options in one chart with our comparison tool. It lists the rates, loan amounts, and kinds of loans each lender is willing to refinance. You can also email us with any questions at info@magnifymoney.com.

Don’t forget to follow us on Twitter @Magnify_Money and on Facebook.

Screen Shot 2014-12-04 at 11.24.05 AM

 

*We’ll receive a referral fee if you click on offers with this symbol. This does not impact our rankings or recommendations. You can learn more about how our site is financed here.

TAGS: , ,

Advertiser Disclosure

Disclaimer: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Life Events

6 Easy Strategies To Help Save on Your Wedding

Save on Your Wedding

When my husband and I were beginning to plan our wedding, we were blown away by how much a traditional wedding would cost us. We even tried looking at smaller venues and trimming our guest list. In the end, we decided to elope instead, a decision that was partially driven by our own sticker shock.

The average wedding topped out at $32,641 in 2015, an all-time high, according to The Knot.

Of course not all couples chose to spend that much on their nuptials, and whether you do will be a personal decision between yourself and your fiancé (and perhaps any family who might be kind enough to chip in). In a perfect world, the betrothed couple would take into account other financial factors before jumping into an expensive wedding — things like their future plans to buy a house or have a family, pay down debt or go on a nice honeymoon. In the real world, however, a wedding is something that happens (hopefully) once in your life, and then it’s over, and for this reason, many people end up feeling like it’s okay to splurge on what is most likely the happiest and most important day of their lives to date.

If you’ve decided to go the fancy wedding route, there are still some things you can do to take the pressure off your wallet going into the planning. Besides some of the obvious (cut down on your guest list, pick a less popular day of the week to get married, DIY things like your makeup, hair, flowers or table decorations, etc.), we’ve rounded up a couple out-of-the-box ways that people are saving some cash on their big day, while still celebrating it exactly the way they envisioned.

1: Shoot for a longer engagement

If you haven’t started saving for your wedding yet, then a long engagement can buy you time. Start by setting a savings goal and contributing toward you wedding with each paycheck. Also, you’ll have time to encourage your friends and family to give you cash gifts for any special occasions leading up to your wedding, which you can put toward your savings. You’ll have time to set aside your tax refund and annual bonuses as well.

2: Get discounts from vendors by advertising their services at your wedding

Some vendors — like your caterer, the DJ, photographers, etc. — might offer you a small discount if you give them a plug on your big day. Of course you’ll want to make sure this is done in a tasteful way (putting your florist’s name in neon lights probably isn’t necessary). Usually, vendors might ask you to put a small place card at each table setting letting your guests know which vendors you used. Alternatively, you could print the list on the back of your guest’s place cards, if you’re using them. It’s a win-win. You get to trim your budget a little and you save your guests the trouble of vetting vendors themselves.

3: Consider a wedding package

If you’re looking to elope or have a small ceremony, a package can be an easy way to save on your overall costs. Many wedding venues (think hotels, B&B’s, and resorts) offer wedding packages. These packages typically include rooms for the bride and groom, a photographer, the wedding meal and other perks like a free bottle of champagne or tickets to a show. The downside is that you won’t be able to pick and choose your vendors. The venue may also limit the number of guests you can invite.

If you’re considering a wedding package for a destination wedding, then there will obviously be other costs to factor in as well. A destination resort wedding can quickly go from a great bargain to a budget buster.If you want a big wedding abroad, prepare to pay extra for every additional guest. Many resorts limit wedding packages to a certain number of guests (typically 10-50). On top of that, resorts often charge fees for every guest who chooses to stay at a different resort. In order to attend the wedding, they’ll need to purchase a day pass to the resort, which can cost $50 or more, easily.

4: Use a Pop-Up wedding service

If wedding planning has done nothing but stress you out — and if you’re willing to think a little bit out of the box — than a pop-up celebration may be just the thing for you. Pop-up weddings are basically slightly-better-planned elopements. Services will coordinate all the vendors for you. All you have to do is pay a flat fee and show up. Pop-ups usually involve just the couple, a witness, and the pop-up wedding planning service, although some services allow a limited number of guests to attend.

Pop-up weddings cost much less because they typically last only a couple of hours and they don’t require all the bells and whistles of a traditional wedding.

Flora Pop in Las Vegas, for example, plans pop-up ceremonies for couples complete with vintage signs and flowers to still make the day feel special and unique. Prices start around $550 for local ceremonies and increase to $1,200 or more for options that take place in the desert or other remote locations.

Pop the Knot, on the other hand, helps match couples looking for a pop-up wedding with vendors in New York (and soon Chicago). Pop the Knot will help you find a venue, an officiant, photographer and flowers. The service will even deliver your photos to you. You can pay for additional upgrades, such as decorations, an altar and videographer. They have a handful of different packages. A pop-up wedding with 10 guests at an art gallery in the Lower East Side is $2,239, while a pop-up in Grand Central Station with 10 guests (standing room only) is $1,615.

Pop Wed Co. is another option based in D.C. that offers to take care of everything for your fabulous elopement (including the paperwork to make it official) starting at $2,900 + 6% sales tax.

Then again, if you’re in Las Vegas and want to just get married on a whim, the Las Vegas Wedding Wagon skips all the fan fair and comes directly to you with an officiant, photographer, witness (if necessary), the ability to file your legal paperwork and a certificate for renewal of vows … all for the low, low price of $129.

5: Save on catering by hiring a food truck

Not only are food trucks popular right now, but they can cost much less catering a traditional sit-down meal. You can find the right food truck for your tastes on sites like Roaming Hunger. Couples can use the interactive map on this site to find the perfect food truck options in cities like Atlanta, Boston, Chicago, Denver, Philadelphia, Tampa and many more.

6: Never use the “W” word

One simple rule to abide by throughout your wedding planning: Avoid the word “wedding”. As soon as you ask a bakery for a “wedding cake” or a jeweler for a  “wedding band” then you’re automatically going to pay more. Try shopping around for some items for your special day without telling sales reps you’re having a wedding. You may find a beautiful dress for your bridesmaids off the rack at a much better price than you would find at a bridal salon. And you may pay twice as much for a cake if you call to order a wedding cake or wedding cupcakes. (Want proof? Check out this report on Vox).

TAGS:

Advertiser Disclosure

Disclaimer: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Credit Cards, Reviews

Blispay Credit Card Review: 2% Cash Back Card, if You’re Careful

Credit Card Review

When it comes to cash back cards, the competition is fierce. Blispay is a new Visa credit card that offers 2% cash back with no restrictions and a financing option for large purchases. Although 2% cash back with no cap is decent, the special financing promotion incentive could easily do more harm than good. In this post, we’ll help you determine if the Blispay credit card should be in your wallet.

Here’s what we’ll cover:

  • The Blispay credit card offer
  • How cash back works
  • The fine print details
  • The pros and cons

The Offer  

1. All purchases earn 2% cash back

There’s no revolving categories or spending limits. The Blispay credit card gives you unlimited 2% cash back on all purchases, no spending caps and no strings attached.

2. Special financing for 6 months

Beyond the 2% cash back deal, Blispay offers a financing option for big spending. Whenever you make a purchase of $199 or more, you get 6 months to pay it off interest free. However, if the balance of that purchase is not paid off within 6 months, retroactive interest will be charged at 19.99% APR from the day the transaction posted to your account. That’s a big catch: you’re interested isn’t waived, it’s retroactive. Failing to pay off the purchase in 6 months means the 19.99% APR that’s been accumulating will all get tacked onto your balance.

Screen Shot 2016-07-22 at 11.28.10 AM

LearnMore

A Closer Look at Blispay 2% Cash Back

How to earn cash back

Cash back can be earned at any merchant where Visa is accepted. Purchases made through Apple Pay, PayPal or a digital wallet with a Blispay credit card will count for 2% cash back as well. Occasionally, Blispay may offer special cash back promotions where you can earn even more from your spending. For an example, if you spend $5,000 on your card for the year, you have the potential to earn $100 in cash back, which is a 0.02% cash back value.

How to redeem cash back

The draw of the Blispay cash back program is you won’t need to do anything beyond pay for a purchase to earn and redeem cash back. Each month, the cash back tallies up and automatically applies as a credit to your statement balance when the billing period ends. The application process is also quick. You can apply online and start using your account right away.

The Fine Print

Simple way to earn rewards: The 2% cash back on all purchases with no cap is an uncomplicated way to earn a reward from using the Blispay card. However, the fine print comes in with the special financing. The “no payment, no interest” promotion seems like a deal upfront, but it can really be a trap if you’re not careful.

Understand the consequences of deferred interest: This special financing is really just deferred interest and means interest accruing on your balance will be charged at a later time. If you rely on the promotion to avoid making payments right away on many purchases, you can easily run into trouble when 6 months expires on each one. The way Blispay includes the interest-free period as a promotion alongside the 2% cash back deal could be a way to lure you into spending more money than you can pay off before interest hits.

Cash back is worthless if you don’t pay off your bill in full: If you choose to use this card, understand that earning 2% cash back is worthless if you keep getting charged 19.99% APR later on. You want to avoid interest entirely to get the most benefit from a cash back card. Otherwise, you may pay more in interest than you even earn in cash back.

The Blispay Fee Structure

The Blispay credit card has no annual fee. So, if you choose this card and pay off your balances diligently, it is possible to earn cash back for free. But, you will have to pay more for purchases made internationally since there’s an international fee of 3%. Lastly, there’s a minimum interest charge of $2.00 and the late payment fee is $25 to $35.

Pros and Cons

Pro: No restrictions on the 2%. You can earn 2% cash back without adjusting your spending habits or paying attention to categories. There’s also no cap. You’ll earn 2% cash back no matter how much you purchase.

Con: Special financing is retroactive interest. If you rely on the financing for many large purchases, you can fall behind on payments and get charged retroactive interest. When that happens you won’t see much, if any, return from 2% cash back. The no-interest financing option could be a trap, so be cautious.

Pro: No annual fee. You won’t need to earn a certain amount of cash back to compensate for an annual cost of this card because there is none.

Con: High fees. Although there’s no annual fee, the interest rate and other fees such as the 3% foreign transaction fee are ones that need your attention. If your credit score is good to excellent, you may be able to get a lower interest rate with another card that doesn’t have the special financing element. For instance, the starting interest rate on the Citi Double Cash card is just 13.24% APR as opposed to 19.99% APR.

(No matter what cash back card you decide on, it’s best to pay off your balances entirely to skip interest altogether. But a lower interest rate is ideal in case you do need to revolve a balance.)

Pro: Automatic statement credit. Each statement period your cash back will appear as a credit on your account. You won’t have to initiate the redemption of cash back. This card requires hardly any maintenance.

Alternative Cash Back Option

Another simple double rewards card you want to consider is the Citi Double Cash. You earn 1% cash back for making purchases and your rewards double when you pay off those purchases. In this case, you’re incentivized for paying off your bills right away which is the best method of using a cash back card.

Who Will Benefit Most from the Blispay Credit Card

The Blispay credit card gets a low score from us because of the financing angle included in the promotion. Reeling you in with deferred interest can hurt you more than 2% cash back can help if you fall off track. But, if you plan to avoid the 6 month special financing trap, you may be able to reap the benefits of cash back while steering clear of the pitfall.

TAGS: ,

Advertiser Disclosure

Disclaimer: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

News

Wells Fargo’s Amazon Prime Student Loan Discount: Is It Worth It?

Student Loan Discount

Wells Fargo just launched a new promotion for student borrowers who also use Amazon’s Prime Student program: a pretty sweet 0.50% discount on their private student loan interest rate.

Even better, that discount can be stacked with the other interest rate discounts Wells Fargo already offers. Right now, you can shave 0.25% off your rate if you sign up for automatic loan payments and 0.25% off your rate if you are already an existing Wells Fargo bank customer.

If you tick all three of those boxes, you could reduce your loan rate by 1%. A Wells Fargo spokesperson told MagnifyMoney the deal is part of a “multi-year” contract but did not say exactly how long the promotion will last.

Of course, this is a classic carrot-and-the-stick scenario. Wells Fargo would rather we pay attention to the carrot here — that 0.50% interest rate reduction — and ignore the stick — the $49/year cost of an Amazon Prime Student account.

But is the carrot sweet enough to justify the pain of that $49 stick? We tapped Mark Kantrowitz, student loan guru and publisher of Cappex.com, to see if the math works out:

“Assuming that a student signs up for Amazon Prime just to get the student loan discount, a 0.50% interest rate reduction will yield savings of about $30 per year assuming a 10-year repayment term and $10,000 in debt. Amazon Prime costs students $49 per year while they are in college. So, assuming the student gets Amazon Prime only while they are in school and cancels after graduation, the $196 four-year cost requires only $6,500 in debt to break-even over the course of the 10-year repayment term. If the borrower wants the average annual savings to equal the cost of Amazon Prime, then they would need about $16,000 in debt to break even.”

In short: This is not a bad deal, and we didn’t even factor in the additional interest rate reductions you might qualify for. As we mentioned before, Wells Fargo offers a 0.25% discount for borrowers who set up auto payments and a 0.25% discount for existing customers.

“For students who were already thinking about borrowing from Wells Fargo, this would seem to be a good deal,” Kantrowitz says.

But here’s the catch:

Businessman Looking At Carrots Dangling From Stick.

Even with that 0.5% discount, you’re still taking out a private loan. And private loans should always be a last resort when you’re borrowing for college. Federal student loans are much cheaper because they charge much lower interest rates. Right now, an undergraduate borrowing a federal Stafford Loan would get a 3.76% rate vs the 5.94-10.93% rate Wells Fargo charges for undergraduate loans. And the federal government offers its own 0.25% interest rate reduction if you sign up for auto payments, which makes that gap even wider.

Numbers aside, federal loans also come with loads of flexible repayment options. That means if you graduate and you’re struggling to repay your loans, your payments can be adjusted to fit your budget. There’s even more incentive to stick to federal loans if you are pursuing a career like teaching, nonprofit work or some other kind of public service job. You may qualify for Public Student Loan Forgiveness, but only your federal loans will be forgiven.

For these reasons, it’s crucial to always max out whatever amount of federal loans you’re eligible to borrow before you even think about private loans. In fact, if you max out your federal loans and you need private loans to fill the void, you might want to take a step back and rethink your school of choice.

“Needing to borrow a private student loan or a Federal Parent PLUS loan may be a sign that the student is overborrowing,” Kantrowitz says.

TAGS:

Advertiser Disclosure

Disclaimer: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Reviews

Amazon Mechanical Turk Review: Is Your Time Really Worth the Money?

Review

Ask the Google gods how to make quick money online, and you’re bound to come across a couple of articles that recommend Amazon Mechanical Turk. Also referred to as mTurk, this Amazon platform allows users to complete tasks that computers can’t in exchange for easy money.

Easy money doesn’t necessarily mean good money, though. Often you’ll get paid pennies for your time captioning a video, transcribing an audio clip, taking surveys, writing trivia questions or even writing a full-fledged article. When you first sign up, you’re likely to see jobs, or Human Intelligence Tasks (HITs) as they’re more commonly known, offering anywhere from a penny to a couple dollars.

Back in 2011, when I knew nothing about pulling in extra cash online, I came across one of said articles and took mTurk for a whirl. I spent a cumulative five hours earning a little over $5, bringing my average hourly wage to a little over a dollar per hour.

I quickly abandoned the platform, but things haven’t gotten better since I ran my experiment five years ago. Amazon Mechanical Turk is commonly referred to as a digital sweatshop because of the obscenely low pay, and many report feeling like the work they’ve done is unethical.

How Amazon Mechanical Turk Works

There are 500,000+ people around the world turking. While most of them are from the US and India, Amazon has enlisted the help of workers from over 190 countries total. If you’re interested in joining the force, you’ll find the set up process is pretty simple and straightforward.

How to sign up

To get started with Amazon Mechanical Turk, you’ll need something most of us have: an Amazon account. However, you need to take it one step further than just having a credit card on file for easy check out. For turking, you need to set up your Amazon Payments information which includes your mailing address, Social Security number, tax information and payment settings.

How to perform HITs

After you’re all set up, you’ll be able to view available HITs. To give you an idea of what you’ll be doing, here are some of the jobs from just a few days ago:

hits zoom with header

Primarily, these jobs involve transcription work. For example, if you took the second job, you’d earn $.01 for extracting and transcribing purchased items from an image of a receipt. If you took all 117,046 HITs yourself, you’d earn $1,170.46, but you’d also have spent a lot of time deciphering 117,046 receipts.

Other jobs that have appeared in the past include writing trivia questions, captioning videos, taking surveys, and writing articles of varying lengths.

To accept a singular hit, you click on the “View” option to the far right. You will be shown an example of the HIT, and then have the option to “Accept” or “Skip.”

How to get paid

Any money you earn from completing your HITs will be deposited into your Amazon Payments accounts. From there, you can decide if you’d like the money transferred directly to your bank account, or if you’d like to redeem your earnings via an Amazon Gift Card.

Some People Do Make Money Turking

If you spend a lot of time turking, you’ll start to see some higher-paying jobs. “Higher-paying” is a relative term, though; if you have tens of thousands of HITs under your belt, you can start seeing jobs that pay around $9-$25 per hour. You’re also more likely to be approached for private contract work.

You will have to spend a significant amount of time building up those tens of thousands of HITs, though, and you’ll have to maintain an approval rating of as close to 100% as possible. This means avoiding shady requesters. There are some solid strategies to making sure those rating your work are doing so fairly.

How to maintain a high approval rating

  1. Be careful who you accept work from: Don’t accept a huge number of HITs from someone you haven’t worked with before, as each, individual HIT has the potential to negatively affect your approval rating. If you haven’t yet built up a good relationship, you don’t know how they will rate you.
  2. Avoid opinion-based HITs: You also want to avoid surveys and other question/answer-based tasks that require you to provide an opinion. If the requester uses a true/false rating system after asking you what you think, you’ll be guessing as to which opinion they want to hear. If you get into a HIT and realize this is what’s happening, return it. Losing the small amount of money is better than having your approval rating lowered, as that’s what will affect your ability to get higher paying jobs in the future.
  3. Use resources available to you: Some turkers use the University of California San Diego’s Turkopticon plugin to identify requesters who don’t pay and/or give unwarrantedly poor approval ratings. This tool allows you to benefit from the experience of others so you don’t suffer the same fate.

Some People Don’t Care that They’re Not Making Money Turking

For some, Amazon Mechanical Turk provides a way to bring in extra money when there seems to be no other alternative. While the pay is extraordinarily low, the flexibility of working from home and accepting HITs only when you are able to with no running obligation provides those with chronic, yet unpredictable disabilities such as depression and Multiple Sclerosis with a way to supplement an extremely limited income as their illnesses prevent them from taking on jobs that require a set schedule.

Still others use mTurk as a way to get their hands on extra spending money. These people aren’t struggling to pay their bills every month, but would like a little extra cash on hand for the occasional splurge. They work full-time jobs, and aren’t interested in adding a regular part-time position to their routine. They view the flexibility and low obligation of mTurk as positives that outweigh the very real negative of low pay.

Alternatives to Turking

Turking pays a pittance. There are much better ways to pull in some cash on the side, even some that are legit stay-at-home gigs, which have low barriers to entry. Here are just a few of them:

  • Get a part-time job. Even if you’re only getting paid minimum wage, you’ll be massively outperforming the potential starting rate on Amazon Mechanical Turk.
  • Sell your stuff via the internet. Go through your house and find the things you don’t need or use anymore. List them on an online marketplace such as craigslist or eBay. If you use craigslist, you won’t even have an obligation to leave your house. You can have buyers come to you. The time you spend taking pictures, listing and mailing is almost sure to have a better hourly return than turking as a newbie.
  • Actually get paid for your work as a transcriptionist. If transcribing or captioning from home sounds like a realistic way you could bring in some extra money, shop around. mTurk is not the only platform that pays for these services, and there are many that pay much, much better—even into double digit hourly wages.

 

TAGS: ,

Advertiser Disclosure

Disclaimer: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

News

Education Expert on Trump’s Student Debt Plan: ‘It’s borderline laughable’

Trump’s Student Debt Plan

With only a few months left before he squares off against Hillary Clinton for the U.S. Presidency, Donald Trump’s plan to tackle college affordability is slowly beginning to take shape.

Trump’s plan rests on three main pillars — getting the federal government out of the student loan business, asking colleges and universities to put more skin in the game, and changing the way we determine how much students can borrow for school.

It’s the third leg of that stool that has education experts balking. Currently, students are granted aid (that includes federal student loans but also access to PELL grants and Perkins Loans) largely based on how much their family can afford to contribute. Under a Trump plan, students with the best odds of finding a job after graduation would get the most financial aid.

That means people who major in low-paying fields wouldn’t be allowed to borrow vast sums to finance their degree, Sam Clovis, co-founder of Trump’s Presidential campaign, said in a recent interview. It would be up to lenders and college administrations whether a History major should be able to borrow as much as an engineering major.

“If they choose to borrow the money, they have to pay it back. It’s that simple,” Clovis said.

Would a plan like this even work?

We asked three education experts to weigh in.

Taken at face value, Trump’s plan is fairly logical, but it would be practically impossible to implement, said Barmak Nassirian, a policy expert with the American Association of State Colleges and Universities.

A snap judgment by a banker trying to assess somebody [based on their major] is almost borderline laughable,” Nassirian said. “You don’t know when you sit across from a student whether they’re going to complete their degree, whether they’ll switch their major or whether they’ll even get a job.”

There is a bevy of research out there on the return on investment of a college degree. There are even studies that have attempted to estimate the ROI of a pursuing certain degree at a specific school.

A snap judgment by a banker trying to assess somebody [based on their major] is almost borderline laughable.”

But Trump’s plan would make it nearly impossible to determine aid eligibility for students with non-linear career paths. For example, some students start taking core college classes before they even declare a major, says Mark Kantrowitz, a student loan expert and publisher of Cappex.com.

Lenders would also have to figure out how to handle students who may start off with a lucrative major — say, petroleum engineering — but switch their major to something like social work or literature halfway through the year.  Even students in potentially high-paying majors could find themselves in an awkward place.

“[It’s] unclear how to handle fields of study that initially have low income that increases significantly a few years after graduation,” Kantrowitz notes.  He points to medical school graduates, who start out earning a relatively low salaries during their internship and residency programs, which can last three to five years.”

Humanities majors would clearly get an unfair shake if Trump’s plan were ever set in motion. Lynn Pasquerella, President of Association of American Colleges and Universities, defended the need for humanities while also acknowledging the need for education reform.

“My fear is that in our rush to prove the critics wrong, many [in higher education] fail to take seriously their underlying message—that higher education is too expensive, too difficult to access, and doesn’t teach people twenty-first century skills,” Pasquerella said.

“In order to restore public trust in higher education and destabilize the cultural attitudes at the basis of Trump’s policy proposal, we need to demonstrate in a more compelling way to those outside of the academy the extent to which we actually are teaching students 21st-century skills, preparing them to solve our most pressing global, national and local problems within the context of the workforce, not apart from it.”

There may be far better ways to decrease student loan borrowing than judging borrowers on their major. Students and their families should take advantage of resources out there to determine whether a certain degree or college is worth the price of attendance. A good starting place is the College Scorecard, published by the Department of Education. On that site, families can see the total cost of attendance of a given school, recent data on graduation rates and how many graduates struggle to repay their student loans.

TAGS: , ,

Do you have a question?