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Personal Loans

Avant Loans: Review These Rates Before You Apply for a Loan

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.

Avant Loans Review

AvantAvant_Logo* is a personal loan platform willing to accept borrowers with less than perfect credit scores.

The interest rates are between 9.95% – 35.99% and loans are as small as $1,000 and as high as $35,000.

Avant does not charge a prepayment fee.

Origination fees range from 0.95% – 4.75%, which may be lower than the competition.

They also emphasize speed, and can get the loan to you by the next business day if you have all of your documentation.

What credit do you need?

In general, you will have a much better chance of being approved if your score is above 600, and you can apply for a loan here. Avant is available in all states except Colorado, Iowa and West Virginia.

If you have excellent credit, you may be able to get an interest rate as low as 4.82% with another lender and should definitely shop around.

While Avant* can offer access to competitive rates, you should make sure you compare their rates to other providers. And if you are willing to borrow at 35.99%, you should put together a plan to build your credit score over time so that you can get lower cost options. We can help you get started with our debt guide.

Have you tried these lower rate options?

More and more lenders are willing to work with responsible people who have less than perfect credit.

You may qualify for a low rate credit card to pay off your other bills. If your credit score is above 680, you will mostly likely be able to qualify for a low interest rate credit card. You can check to see if you are approved for a credit card without hurting your score. We have a list of where and how to check for your PRE-APPROVED and PRE-QUALIFIED credit card offers.

There are other personal loan companies with lower rates. We keep a list of companies that offer good personal loan rates to people with less than perfect credit. Unlike a lot of other sites, you won’t get calls from a bunch of loan companies.

You only get in touch with the ones you’re interested in dealing with. And many will tell you your rate without doing a hard pull of your credit report or requiring a phone call.

 See our list of low rate personal loans you might qualify for

You should apply for several you feel comfortable with so you have several rates to compare and you can get lenders fighting for your business.

Are you trying to build your credit score?

Don’t use a loan through Avant (or any loan) just to build your credit score.

Yes, a loan through Avant is reported to the major credit bureaus and paying one on time is a good thing for your credit report.

But there’s a much cheaper way to improve your credit and have a bigger impact.

Get a secured credit card. Even with really bad credit you can get approved – and some have no fees at all.

Using one to build credit is simple – we have a guide here.

You just charge a small amount on the secured card every month, and pay the bill on time and in full each month. After about a year or so of doing that you could see a substantial rise in your score if you make all your other payments on time.

There is no need to get a loan simply to improve your score.

Done all of that?

Avant can be a very good option for borrowers, given its transparency and speed. You can check your rate without hurting your score by clicking on the link “Apply Now” below.

Avant_Logo

APPLY NOW Secured

on Avant’s secure website

It’s better than most options you’ll find from payday loan shops because:

It’s a real installment loan. You’re given a real monthly payment, and your payments pay down the loan itself, not just interest, so you have at least a shot at paying it all off if you keep up the payments.

You can check your rate without impacting your credit score. Avant will use a soft pull to provide you with a rate. We applaud this, because it enables consumers to shop for the best loan for their needs without worrying about harming their credit score. Many traditional lenders do not offer this.

Reviews of their customer service are decent. No one likes paying high rates, and Avant is not a place for really low rates. But they do get decent reviews online for their customer service and treating people with decency.

But make sure you get a secured credit card as well so you can more quickly build up your credit profile. That will help you graduate to lenders who can offer you much more reasonable rates, or get a lower rate through Avant.

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Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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Personal Loans

Where to Get the Best Personal Loan Rates Online

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.

Where to Get the Best Personal Loan Rates Online

Updated August 18, 2017

If you want a personal loan to pay off credit card or other debt, the absolute fastest and most effective way to lower the interest you pay is to apply for a balance transfer, with a 0% rate. You can read our guide to balance transfers to learn about their pros and cons.

But a balance transfer isn’t for everyone, especially if your credit score isn’t perfect or if you need to borrow cash.

A personal loan with a set payoff period a few years from now is often the next best thing with these advantages:

  • One monthly payment
  • A set rate
  • You don’t need absolutely perfect credit
  • You can check your rate without touching your score

There are more attractive deals than ever thanks to some new online lenders and you can see sample rates below for excellent credit and good credit.

Tip: Apply for several loans to check rates. Every lender has different approval criteria and different pricing models – and the difference in rate between lenders (even for people with excellent credit) can be significant. So long as you shop with lenders that use a soft credit pull, you can check your rate without negatively impacting your credit score.

Start Here – Multiple Lenders at Once

LendingTree

Dozens of lenders participate in LendingTree’s personal loan shopping tool – including all of the lenders listed on this page. (Full disclosure, LendingTree is our parent company.) With one application, LendingTree will perform a soft credit pull (with no impact to your score) and match you with multiple loan offers. This is our favorite (because it is easy) way to get multiple offers from lenders in minutes. For people with excellent credit, you could get an interest rate below 6%. For people with less than perfect credit, there are many lenders participating with more liberal acceptance criteria.

apply-now

Why is this a good way to save?

Banks don’t care much for personal loans because the lower rates earn them less profit than credit cards.

Fortunately, some new companies believe you should be able to get a competitive rate without dealing with credit card intro offers, even if your credit isn’t perfect.

They’re doing it by lending online only without the overhead of branches.

They pass the savings on to you through better rates, and you can check up on them below.

Personal loans for Excellent Credit

The following providers are for you if you want the absolute lowest possible rates that reward a record of no late payments and good income, even though you have some high rate debt you want to clean up.

Unless you get a rate of 5% or less, you’re probably better off with balance transfer deals, but the convenience of a fixed payment and walking away from credit cards makes personal loans appealing.

SoFi

SoFi

SoFi offers some of the lowest interest rates available if you’re looking to refinance your credit card debt or borrow cash. You’ll need to have a good record of paying your bills on time, but they’re willing to offer rates that are very competitive without an origination fee.

Sofi’s believes if you’ve graduated college or went to grad school you’ll be a more responsible borrower, so they may be more likely to give you a better rate, even if your credit history is limited.

For example if you have $10,000 in credit card debt, good income, and great credit, their best rate could save you as much as 0% balance transfer deals once you factor in the fees for each.

What we like best about SoFi is that they offer no origination fee and no prepayment penalty. If you think you may be able to pay off your loan earlier (or want the flexibility to do that), SoFi is the only lender we reviewed that charges no fee at all. Given their very low rates, we think anyone with good credit should start with SoFi first, and then compare their offer to the rest of the providers.

Rates: 5.49% -14.24%, fixed*, with AutoPay. You can also select a variable interest rate. With AutoPay, the variable rates are from 5.17% – 11.32%*. Rates are based upon 1-month LIBOR.

Upfront fee: 0% – No origination fees, no prepayment fees and no balance transfer fees

Amount: $5,000 – $100,000

Period: 3, 5 or 7 years

Available states: All states except Tennessee and Nevada.

APPLY NOW Secured

on SoFi’s secure website

BestEgg

BestEgg

BestEgg is an online personal loan company that offers low interest rates and quick funding. BestEgg is one of the fastest growing personal loan companies in the country, largely because it has been able to provide one of the best combinations of interest rate and loan amount in the market.

You can check to see your interest rate without hurting your score, and they do approve people with scores as low as the mid-600s. If you have an excellent credit score, BestEgg will be very competitive on terms.

Upfront fee: 0.99% – 5.99%

Amount: up to $35,000

Period: up to 5 years


Lightstream

LightStream

Lightstream is a great choice for people with excellent credit. It is actually part of a bank you might have heard of, SunTrust Bank. They were recently set up to offer some of the best personal loan rates available, and they are delivering. The interest rate you are charged depends upon the purpose of the loan. Interest rates can be as low as 1.99% for a new car purchase (and Lightstream does not put their name on your title. They just put the cash in your bank account, and you can shop around and pay cash for the car). Home improvement loans start at 3.99% , making them cheaper and easier than a home equity loan.

They’ll also approve and deposit your money fast, often the same day, and give extra consideration if you have money in your 401K or equity in your home.

LightStream has created an exclusive offer, just for MagnifyMoney readers. (This offer went live in January 2016). Credit card consolidation loans for MagnifyMoney readers are now as low as 4.19%. The highest rate is 14.49%. Just beware: LightStream does a hard credit pull.

Upfront fee: None

Amount: $5,000 – $100,000

Period: 2 – 7 years

Available states: All


Personal Loans for Good Credit

These providers may be able to help you out if you’re not approved for the very best rates or a 0% balance transfer offer. Check those deals first, there’s no real harm to do that, but if they fall through, give these a try.

LendingClub*

Lending Club

You might not have heard of LendingClub yet, but they are a big player in online loans. And they offer a wide range of rates and terms based on your credit profile and needs. Generally you’ll need a score of about 600 or higher to get approved.

Rates: 5.99 – 35.89% APR

Upfront fee: 1 – 6%

Amount: up to $40,000

Period: up to 5 years

Available states: All except Iowa and West Virginia

APPLY NOW Secured

on Lending Club’s secure website


BestEgg

BestEgg (reviewed earlier in this post) will approve people with credit scores as low as the mid-600s. If you have good credit and are looking for a loan, you should consider BestEgg.


Upstart*

Upstart

Upstart offers loans that look a lot like the ones from the bigger online lenders like LendingClub or Prosper.

They’ll let you borrow up to $35,000 for 3 years. But the key is they will take into account the schools you attended, your area of study, the grades you earned in school, and your work history to see if you can get a better rate.

So while the range of rates Upstart offers is similar to the bigger guys, if you did well in school, you might find the rate you actually get is lower than what the others will offer you, so it’s worth trying.

You’ll need a 640 or better FICO and your monthly payments can’t be more than 55% of your monthly income.

Rates: 7.39% -29.99%

Upfront fee: 1% – 8%

Amount: $5,000 – $50,000

Term: [3 & 5 year loans available/UpstartTerm]

Available states: All


PenFed

Previously, PenFed offers a fixed rate of 9.9% interest rate for 5 years. Veterans get extra special attention so it’s worth checking this online only offer. You have to be a member of the PenFed credit union, but that’s easy and anyone can do that online as part of the process.

Rates: 9.99%

Upfront fee: None

Term: 5 years

Available states: All


Personal Loans for Minimal Credit

Avant*

APRs range from 9.95% – 35.99% and there is no prepayment fee. You can check to see your interest rate without hurting your credit score. Just one warning: if you are willing to borrow money at 35.99%, then you really need to step back and think about building a longer term financial plan. You can download our free Debt Guide, which will help you put together a plan so that you never have to pay interest rates this high again.

Avant’s platform offers access to loans from $1,000 to $35,000, with terms from 2 to 5 years. The minimum credit score varies, but we have seen people with scores as low as 580 get approved.

The good thing about Avant is that these loans are amortizing. That means it is a real installment loan, and you will be reducing your principal balance with every payment.

Rates: 9.95% – 35.99%

Upfront fee: 0.95% – 4.75%

Amount: up to $35,000

Period: up to 5 years

Available states: All except Colorado, Iowa and West Virginia.

For Example: A $6,500 loan with an administration fee of 3.75% and an amount financed of $6,256.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $265.40.

APPLY NOW Secured

on Avant’s secure website


Springleaf

Springleaf offers personal loans through its branch network to people with less than perfect credit. You can start your application online. If you qualify, you will have to visit a branch to complete the application. Once in the branch, if you have all of the required documents, you can receive you loan proceeds immediately via check.

You can borrow from $1,500 to $25,000. The interest rates are not low, and can go up to 36%. They will also charge an up-front origination fee that is not refundable. You should definitely shop around at other lenders first, given the high cost of the loan and the need to visit a branch.

Rates: 25.10%-36.00%

Upfront fee: varies

Amount: up to $25,000

Period: up to 5 years


As these new companies evolve, expect even more attractive options to emerge, so when you think about lowering your rates, don’t just look to the banks you know.

Give an online lender a chance. You may be rewarded with lower rates, good service, and faster freedom from debt.

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* 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.

Got questions? Get in touch via Twitter, Facebook or email (info@magnifymoney.com)

Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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Balance Transfer, Pay Down My Debt

The Fastest Way to Pay Off $10,000 in Credit Card Debt

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.

Before you read on, click here to download our FREE guide to become debt free forever!

Screen Shot 2015-02-03 at 1.30.44 PM

Digging out of the debt hole can feel frustrating, intimidating and ultimately impossible. Fortunately, it doesn’t have to be any of those things if you learn how to take control.

Paying down debt is not only about finding the right financial tools, but also the right psychological ones. You need to understand why you got into debt in the first place. Perhaps it was a medical emergency or a home repair that needed to be taken care of immediately. Maybe you’d already drained your emergency fund on one piece of bad luck when misfortune struck again. Or maybe you’re struggling with a compulsive shopping problem, so paying down debt will likely result in you accumulating more until the addiction is addressed.

Understanding the why and how of your debt isn’t the only reason psychology plays a role in how you should create your debt attack plan.

You also need to understand what motivates you to succeed. Do you want to pay down your debt in the absolute fastest amount of time possible that will save more money or do you want to take some little wins along the way to keep yourself motivated?

The common terms for these debt repayment strategies are:

  • Debt avalanche: starting with the highest interest rate and working your way down, which saves both time and money.
  • Debt snowball: paying off small debts first to get the warm and fuzzies that will motivate you to keep going.

Whichever version you pick needs to set you up to be successful in your debt repayment strategy. Now it’s time to find the proper tools to help you dump that debt for good.

The first step in crafting a debt repayment strategy is to understand what you’re eligible to use. Your credit score will play a big role in whether or not you’ll qualify for products like balance transfers or competitive personal loan offers.

A credit score of less than 600 will make it difficult for you to qualify for a personal loan and will eliminate you from taking on a balance transfer offer.

If you have a credit score above 600, you have a good chance of qualifying for a personal loan at a much lower interest rate than your credit card debt. With new internet-only personal loan companies, you can shop for loans without hurting your score. Click here (you will be taken to the LendingTree site) to get rates from multiple lenders in just a few minutes, without a credit inquiry hurting your score. With a simple, single application form, you can get matched with multiple lenders. People with excellent credit can see APRs below 6%. But even if your credit isn’t perfect, you might be able to find a good loan because LendingTree partners with dozens of lenders. [Disclosure: LendingTree is the parent company of MagnifyMoney.]

If you have a score above 700, you could also qualify for 0% balance transfer offers.

[Click here if you’re looking to rebuild your credit score.]

Not sure what your credit score is? Click here to learn how to find out.

Now let’s talk about the financial tools to add into your debt repayment strategy in order to dig out of the hole.

Let’s say you have $10,000 in credit card debt, and are stuck paying 18% interest on it.

You already know that putting as much spare cash as you can toward paying down your debt is the most important thing to do. But once you’ve done that, so what’s next?

Use your good credit to make banks compete and cut your rates

MagnifyMoney’s Paying Down Debt Guide has easy to follow tips on how to put banks to work for you and get your rates cut.

You could save $1,800 a year in interest and lower your monthly payments based on several of the rates available today. That means you could pay it off almost 20% faster.

Here’s how it works.

Option One: Use a Balance Transfer (or Multiple Balance Transfers)

If you trust yourself to open a new credit card but not spend on it, consider a balance transfer. You may be able to cut your rate with a long 0% intro APR. You need to have a good credit score, and you might not get approved for the full amount that you want to transfer.

Your own bank might not give you a lower rate (or only drop it by a few percent), but there are lots of competing banks that may want to steal the business and give you a better rate.

Our favorite offer is the Barclaycard Ring credit card from Barclays. There is a $0 intro balance transfer fee and 0% APR for 15 months. The card charges no annual fee. It also has a low APR after the balance transfer period is over, just in case you have a balance remaining.

Barclaycard Ring™ MasterCard<sup>®</sup>

LEARN MORE Secured

on Barclaycard’s secure website

If you think it will take longer to pay off your debt, consider Discover, which offers an intro 0% APR for 18 months (with a 3% balance transfer fee).

MagnifyMoney keeps the most complete list of the longest and lowest rate deals available right now, including deals with no fees. Just answer a few questions about how your debt and much you can afford to pay, and you’ll get a personal list of the deals that will save you the most.

promo-balancetransfer-halfIt also has six tips to make sure you do a balance transfer safely. If you follow them you’ll save thousands on your debt by beating the banks at their game.

You might be scared of a balance transfer, but there is no faster way to cut your interest payments than taking advantage of the best 0% or low interest deals banks are offering.

Thanks to recent laws, balance transfers aren’t as sneaky as they used to be, and friendlier for helping you cut your debt.

Sometimes the first bank you deal with won’t give you a big enough credit line to handle all your credit card debt. Maybe you’ll get a $5,000 credit line for a 0% deal, but have $10,000 in debt. That’s okay. In that case, apply for the next best balance transfer deal you see. MagnifyMoney’s list of deals makes it easy to sort them.

Banks are okay with you shopping around for more than one deal.

Option Two: Personal Loan

If you never want to see another credit card again, you should consider a personal loan. You can get prequalified at multiple lenders without hurting your credit score, and find the best deal to pay off your debt faster.

Personal loan interest rates are often about 10-20%, but can sometimes be as low as 5-6% if you have very good credit.

Moving from 18% interest on a credit card to 10% on a personal loan is a good deal for you. You’ll also get one set monthly payment, and pay off the whole thing in 3 to 5 years.

Sometimes this may mean a higher monthly payment than you’re used to, but you’re better off putting your cash toward a higher payment with a lower rate.

And you’ll get out of debt months or years faster by leaving more money to pay down the debt itself. If you want to shop for a personal loan, we recommend starting at LendingTree. With a single application form, dozens of lenders will compete for your business. Only a soft credit pull is completed, so your credit score will not be harmed. People with excellent scores can see low APRs (sometimes below 6%). And people with less than perfect scores still have a good chance of finding a lender to approve them. (Note: MagnifyMoney is owned by LendingTree)

If you don’t want to shop at LendingTree, you can see our list of the best personal loans here.

Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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Balance Transfer

How to do a Balance Transfer with Bank of America

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.

Black woman using credit card and laptop

So, you have been approved for a balance transfer. Congratulations – there is no better way to save money and get out of debt faster. Just make sure you complete the transfer as soon as you receive your card in the mail and never more than 60 days after you apply, because you can lose the introductory offer.

Completing a balance transfer is easy. You can do it on the phone or online, and it should only take a few minutes.

What You Need

You will need the account number and balance of the credit card that has the debt.  These cards will be referred to as the “transfer from” account. If you have a $3,000 balance at Discover, and you want to transfer it to your new Barclaycard account, then you will need the account number and balance of the Discover account.  And, in this example:

  • The transfer from account is Discover.
  • The transfer to account is Bank of America.

Once you have that information, you are ready to go.

Call

You can call the customer service number on the back of your credit card, and they will be more than happy to help you complete the balance transfer. The phone representative will go through security checks and then ask for the credit card number and amount of debt that you want to transfer. Call center employees often receive a bonus to complete a balance transfer, so you will usually find a very eager person on the other side of the telephone line.

The bank makes the payment to your credit card for you.  If you are close to your due date, I recommend making the minimum payment to your card to ensure that you do not have any late fees. The payment (in this example, from Barclaycard to Discover), can take up to 3 weeks. It is usually faster, but you should not take any chances and want to avoid being hit with a late fee.

Online

Most banks make it easy to complete a balance transfer online. Once you receive your credit card, you will need to sign up for online banking. Below, we will show you how to complete an online balance transfer with Barclaycard. Click on these names if you’re looking for a step-by-step guide for: Discover, Capital OneChase or Barclaycard.

Step 1

Login to your account go to “Transfers” and select “For credit card balance transfers”.

bofabt1

Step 2

Select which account you’d like to use.

bofabt2

Step 3

Select an offer. You should see the introductory offer listed.

bofabt3

Step 4

  • The account number of the credit card that has your debt right now.  This is the account number of the transfer from account.
  • The amount that you want to transfer

Most banks have a limit on the total amount that you can transfer.

bofabt4

Step 5

You will then be shown the terms and conditions of the balance transfer offer, which you will need to accept.

Here are the most important items:

  • Make sure the terms of the balance transfer match the terms of the offer when you applied. If you are expecting a 0% fee and a 0% interest rate for 15 months, make sure that is what you see. If there are any issues, call the bank directly.
  • Make sure you pay on time.  If you go 60 days late, you will lose your balance transfer offer

Step 6

You will then receive your confirmation.  Bank of America will pay your existing credit card bill to roll the debt over to their bank.  But, it can take up to 3 weeks.  So, we recommend that you make the minimum payment if your bill is due in the next 3 weeks.

Remember

  1. Make sure you pay on time.  Paying late (60 days) can lead to a loss of your 0% interest rate.  And it would go to the penalty rate.
  2. Take full advantage of the balance transfer period to pay down as much of your debt as possible.
Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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Banking Apps

2015’s Best & Worst Mobile Banking Apps: 100+ Banks & Credit Unions Ranked

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.

Overdraft_lg_mobile vs trad

Having a mobile banking app that works reliably is more important than ever as the number of consumers using mobile apps to deposit checks has grown over five times since 2011 according to a recent Pew study. Chase reported that last year more checks were deposited via phones and ATMs than in its branches, comprising 58% of deposits, including 45 million smartphone check deposits.

MagnifyMoney compiled the ratings of iOS and Android banking apps from over 100 of the biggest banks and credit unions, including the 50 largest banks and 50 largest credit unions along with a selection of top online direct banks.

The data, collected from iTunes and Google Play the week of November 30, was used to create a composite 1 to 5 rating factoring a weighted average of the ratings from both the iOS and Android platforms. This is the 2nd year MagnifyMoney has compiled the ratings, and this year’s results include comparisons to 2014 to see which banks and credit union apps have most improved and deteriorated.

The best and worst mobile banking apps include:

  • Best Large Bank App: Chase (4.2)
  • Best Credit Union App: Eastman Credit Union, ESL Credit Union, SEFCU, VyStar, Redstone Federal, (tie: 4.7)
  • Best Regional Bank App: East West Bank (4.4)
  • Best Online Direct Bank App: BankMobile (4.6)
  • Worst Large Bank App: Citibank (3.2)
  • Worst Credit Union App: American Airlines Federal Credit Union (2.5)
  • Worst App Overall: Umpqua Bank (2.2)
  • Most Improved App: Visions Federal Credit Union (4.3, +37% from 2014)
  • Most Deteriorated App: Umpqua Bank (2.2, -43% from 2014)

You can read more about the findings below these graphics…

10 Best and Worst across all banks and credit unions reviewed

MobileAppRatingsGraphic2015-SummaryAllSizes

Best and Worst among the 10 biggest banks and credit unions

MobileAppRatingsGraphic2015-LargestInstitutions

Credit unions top the ratings

8 of the 10 highest ranked apps were from credit unions. Five credit unions shared the very top average score of 4.7, including Eastman Credit Union, ESL, Redstone Credit Union, SEFCU, and VyStar Credit Union, a top ranking and rating they each shared in our 2014 study.

BankMobile and Simple were the only online direct banks in the top 10, while no traditional banks made the top 10 list.

Of the 10 highest ranked apps, 8 of them used an interface from an external app developer, Digital Insight. All 8 were credit unions who selected Digital Insight, and this is in contrast to internal development favored by larger banks and even some regional banks. The un-flashy Digital Insight interface (pictured below) was cited for simplicity and reliability by users.

DigitalInsightInterface

Customer feedback about top rated apps includes:

  • Eastman Credit Union: “Easy to use, quite effective, does everything you might need. The biometrics is a great addition.” – 11/29/15
  • ESL Credit Union: “Now that Touch ID support has been added, this app is perfect. Simple and easy to navigate, it does everything that I need without gimmicky stuff getting in the way.” – 12/1/15
  • SEFCU: “Does what it’s supposed to, simple interface.” – 11/27/15
  • Simple: “The app is excellent. A total banking solution within the app. You never need to login via a web browser to do something which is not possible within the app.” – 12/2/15

Bank apps have room for improvement

Across all institutions surveyed the average rating was 3.8 out of 5.0, with traditional banks averaging 3.7, online direct banks best at 3.9, and credit unions at 3.8.

But credit unions are not immune. 6 of the 10 worst rated apps were from credit unions, and all but one of those had a substantial decline in ratings during 2015.

Banks appear to be managing the middle, with few apps in the very top or very bottom of rankings.

Among online direct banks we surveyed, EverBank was the lowest rated, with an average 3.0 rating, down 5% from 2014.

Chase has the best app among big banks, while Citibank lags.

Among the 10 largest banks in the country, the average rating ranged from a high of 4.2 for Chase to a low of just 3.2 for Citibank. Chase improved its rating 9% from our 2014 study, unseating Capital One as the highest rated large bank app.

In the last year the Chase Mobile app has added Touch ID iOS login and pre-login for easy previews of balances without a full login for its 20 million plus mobile users

chaseapp

Citibank’s app was cited for inconsistent mobile check deposit functionality and a low limit for mobile deposits of just $1,000 per day, both issues consumers cited last year as well. In comparison online direct bank Ally’s mobile deposit limit is  $50,000 per day.

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The average for all traditional banks surveyed was 3.7.

HSBC had the lowest rated iOS app among the 10 largest banks at 2.1, while PNC bank had the lowest rated Android app at 3.5.

Customer feedback about large bank apps includes:

Chase: “Easy to use, easier to understand, and has me contemplating changing all my banking to Chase. Shows my car loan and credit card activity all in one convenient app. Once I confirmed my app with my online profile I couldn’t believe the convenience. Well done Chase, well done.” – 10/11/15

Citibank: “Overall a good banking app, but the fact that you can’t access your statements is infuriating.” – 11/23/15

Wells Fargo: “I’ve been using this app for more than three years now with minimal problems. I deposit more than 15 checks per month using the app without any difficulty, occasionally some problems with handwritten illegible checks…Sure the UI is outdated, but I love how powerful Wells Fargo online banking is compared to PNC and all the dumbed-down, simplified and useless apps.” – 9/30/15

BankMobile leads online direct banks.

Among the online direct banks reviewed, BankMobile had the highest rating at 4.6, just ahead of Simple at 4.5, though with far fewer ratings in its pool at fewer than 200 versus 5,000+ for Simple.

For both apps, customer comments tended to be more about bank service and the lack of fees rather than the apps themselves. Launched in early 2015, BankMobile is a division of Customers Bank in Pennsylvania, but available nationally and designed to be the first fully mobile native bank. Simple is now a division of BBVA and its app rating of 4.5 is almost identical to last year’s.

EverBank had the lowest rating among online direct banks at 3.0. EverBank’s app received complaints for a lack of Touch ID, no external transfer functionality, and issues with operating system updates.

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Umpqua Bank takes the bottom.

The lowest rated app overall was from Umpqua Bank, with a 2.2 combined rating, down over 40% fro last year. Umpqua had challenges updating both its web and mobile banking systems earlier this year, including adding mobile deposit functionality and merging with Sterling Bank. More recently, users complain about an interface that doesn’t take advantage of more recent phones, and ongoing mobile deposit bugs.

umpquaapp

Customer feedback about the Umpqua app includes:

“As other reviewers have said the mobile deposit function will probably save you drive time but is by far the least useful mobile deposit feature I have used. The app decides when to take the picture and not the user.” – 12/2/15

“This app seems like someone’s first attempt to write an iOS app. The keyboard is the one from iOS 6. Nothing has been updated for the iPhone 5 let alone the iPhone 5s, 6, or 6s.” – 10/26/15
“App is extremely buggy and slow. Often freezes and does not seem to function with basic features like transfers or check depositing. Customer service in branch and over the phone has significantly degraded. I have had a much better experience with Chase. Sayonara Umpqua!” – 12/9/15

Android users are more satisfied

Across banks, credit unions, and online direct institutions, Android users were significantly more satisfied, with an average 3.9 rating versus 3.1 for iOS users. iOS users tend to have more complaints about apps not leveraging the latest hardware and operating system capabilities.

Visions, Wings Credit Union most improved

Visions Credit Union rolled out Touch ID support, person to person transfer, and a more modern interface to good reviews from its customers this year, increasing its rating 37% from 2014.

The Wings Credit Union app for the first time added mobile deposit, playing catch up with most large banks and credit unions, and increasing its average rating 21% from 2014.

Customer feedback about the Visions and Wings apps includes:

Vision: “The new Visions FCU app is easy to use and makes banking convenient. Love the card controls feature and Touch ID. Keep up the great work, Visions!” – 11/17/15

Wings: “This app makes my life so easy since I don’t live in a state with a branch. I love that I can keep my favorite FCU and have most all of the same functions as branch, just without the actual branch. Every time you make upgrades the app gets better and better. Thanks for making it easy for those of us who no longer live near a branch.” – 11/20/15

Troubled upgrades lead to deterioration

The two most deteriorated app ratings were for Umpqua Bank and American Airlines Credit Union.

Umpqua’s 43% decline stemmed from a buggy upgrade and simultaneous conversion of both its web and mobile banking interfaces.

American Airlines Credit Union’s app rating saw a 38% decline from last year, on the back of an update this summer that led to many complaints about reliability. An update this fall seems to have addressed some of the issues, but negative feedback continues.

Methodology

App ratings were recorded the week of November 30, 2015 in iTunes and the Google Play store and include ratings for all app versions. Overall ratings are a weighted average of iOS and Android ratings based on the number of reviews for each platform. Institutions with no mobile apps were excluded from ranking summaries.

The 50 largest banks are defined as those with the largest deposits per FDIC data June 2015 were examined, with those not offering consumer checking accounts excluded.

Among credit unions, the 50 largest by assets according Bauer Financial were examined. For online direct banks, 10 of the largest Online Direct Banks were chosen by number of app ratings.

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

Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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College Students and Recent Grads, News

5 most tangible 2015 student loan changes from the President

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.

Student loans are part of a complex system, made so in part by the high cost of education, which requires multiple layers of financing, but also by a patchwork of options that often overlap, a result of Federal intervention. The result is more defaults than necessary with financial hardship made even harder by making it difficult for borrowers to know exactly what options are on the table, and how to resolve them.

President Obama and his administration have unveiled a flurry of new proposals this week, aimed at simplifying the system. You can read the full statement from the President here.

None of the proposals is groundbreaking in itself – most involve administrative changes at the Department of Education – but some of the more under-reported and tangible proposals include the following:

A new website. The headline proposal by the President is probably the one that offers the least change for informed borrowers today. It wants to create a more effective system for lodging complaints against servicers and collections agencies, so students having trouble making payments are treated more fairly. The tactic will be for the Department of Education to create a new online portal to process complaints. However, there are already federal avenues to get help today, which we discuss below.

One new element was a request by the President to offer a way to complain about colleges themselves, such as poor quality instruction, though no specifics were offered.

Repaying higher interest loans first. The proposal includes forcing student loan servicers to apply pre payments to higher rate loans rather than lower rate loans first. As intuitive as it sounds, today servicers don’t guarantee any extra payment you make will go to the highest interest rate loan first. But you can get around this yourself by specifying which loan you want your pre-payment to cover. The proposal would make this process automatic.

Competition for U.S. News rankings. The Department of Education will attempt to develop a quantitative college ranking system by this fall that takes into account the value offered by each college’s degree. In theory this would incent colleges to control the cost of attendance in order to rank higher, an outcome that could benefit students. But such change requires 1) broad consumer acceptance of the rankings, and 2) other incentives that inflate college costs to be altered. Such change could have the greatest impact at middle tier schools, where costs of attendance vary widely, but the career income of students is in a more narrow range.

Current rankings from PayScale.com are an interim alternative for parents and students to assess before choosing a college. PayScale’s ROI calculations factor real salaries earned by alumni as well as the cost of attendance via federal data.

A single place to get Federal account information. This might be the most practical of the plans. Today, students with multiple loans often need to login to multiple service providers to handle basic tasks like checking balances and managing payments. And every separate login and password is yet another hurdle to staying on top of debt and paying on time.

While the White House did not provide concrete details, in principle it wants a ‘centralized point of access’ for all federal borrowers to be able to check account and payment information.

Re-balancing federal repayment assistance. While the President introduced a Pay as You earn repayment option that caps repayments at 10% of income last year, the federal budget has not yet been finalized to handle the additional cost of delivering this program. Central to that is the fact that repayment assistance programs tend to disproportionately help graduate students, who under Federal rules are allowed to borrow higher amounts than undergraduate student. As such, they tend to be more likely to qualify for repayment assistance under Federal guidelines.

U.S. News thinks this will result in tightening of qualification for assistance for graduate students, as a way to keep the program sustainable for undergraduate students who may be in more acute financial distress. The President’s proposal this week mentions reforms to ‘streamline’ and ‘better target’ income driven repayment plans, which we interpret as finding ways to reallocate the assistance, potentially at the expense of graduate students.

So if you are considering starting grad school in a couple of years, don’t count on today’s repayment assistance when making your plans.

Where can you get help today?

You don’t have to wait until 2016 to get help if you’re being mistreated by your student loan servicer or a collection agency.

If your servicer is handling a Federal loan, you can go directly to the Department of Education, and its website lets you file a complaint with the Ombudsman Group of the Department of Education.

If you have a problem with a Private loan, which may be issued by your school, a bank, or credit union, you can go to the Consumer Financial Protection Bureau (CFPB). Its website has a form that lets you file a complaint, and the company you’re complaining about will be asked to respond to both you and the CFPB within 15 days.

The CFPB gets attention at financial institutions because it has the power to fine and file lawsuits for practices it feels are misleading or in violation of laws. And it requires that companies close out complaints in full within 60 days.

We also have a discussion on exactly what you should do if you miss a student loan payment.

 

Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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News

Crisis Looming: 53% of Resetting HELOC’s are Upside Down

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.

Young couple calculating their domestic bills

Home Equity Lines of Credit (HELOCs) were very popular before the 2008 crisis. If you had equity in your home, you could open a very low cost line of credit, making it easy to borrow against your home. The typical HELOC would have a 10 year drawdown period. During that time, you could use your line of credit by writing checks, transferring funds electronically or even using a special purpose debit card. Yes, you could finance a flat-screen television using your home as collateral.

During the 10-year drawdown period, you would typically only need to make interest-only payments on the amount that you had borrowed. And the interest rates were incredibly competitive. Some bans were even offering interest rates below prime during the drawdown period. For example, if you had a $30,000 balance, your monthly payment could be a low as $50. Even better, that $50 was tax deductible, which meant you would be getting a refund at the end of the year. It became incredibly easy for people to run up significant debt. And, with real estate prices increasing rapidly, borrowers continued to feel wealthy, because the value of their home continued to outrun the balance of their debt.

At the end of the 10 year drawdown period, the payments would convert to a 20 year amortizing loan, at a much higher interest rate. Depending upon your credit score, the interest rate could go from 2% to 9%, for example. In the $30,000 example above, the payment would increase from $50 to $270. That is a dramatic price increase, otherwise referred to as a payment shock.

When these loans were originally sold, brokers and bankers told borrowers not to worry about the rest. The general belief was that house prices would continue to increase, and banks would continue to lend. You could always refinance the balance and go back into another interest-only drawdown period. The promise to borrowers was that you would never have to pay off your debt, and many people believed that promise.

Fast forward 10 years, and many of the HELOCs issued during the crisis are now resetting. But there is a problem: it is almost impossible for subprime borrowers to find a bank willing to lend. And, even worse, 53% of the resetting HELOCs are on properties that are upside down. In other words, the balance of the mortgages is greater than the value of the property, which means no bank will lend, even if the credit score is high.

That creates a big issue for borrowers who can not afford the rate reset. If they can’t afford the new monthly payment, and can not find a new lender willing to underwrite the risk, they will risk foreclosure.

RealtyTrak yesterday released a report detailing the scale of the rests coming. And the story does not look good. 3.3 million HELOCs are scheduled to reset over the next 3 years. The average payment shock will be $140 a month, but a significant number of people will see much bigger resets.

But the real issue is that 53% of the HELOC customers (1.8 million people) are upside down on their property. That means their home is worth less than the balance of their mortgages. For these individuals, they will be at high risk of foreclosure.

The next 3 years will be challenging for borrowers, and we will be watching closely to see what loss mitigation options banks propose. But even principal forgiveness is not without it challenges, as the borrowers may have a tax liability as a result.

 

Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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Bargains and Deals, Fine Print Alert, News

Is the Fidelity IRA Match a Gimmick? There Are Better Deals

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.

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Fidelity just announced a novel way to attract your IRA retirement money: a match on your contributions for three years if you roll over money to Fidelity from a competitor.

But is it Fidelity IRA match the best deal for rolling over your money?

Here’s how it works

When you roll over money from a non-Fidelity IRA account, you’ll get a match on all of your new contributions for the next three years if you use this link to handle the rollover.

There are five tiers of matching:

  • 1% for rollovers of $10,000
  • 1.5% for rollovers of $50,000
  • 2.5% for rollovers of $100,000
  • 5% for rollovers of $250,000
  • 10% for rollovers of $500,000

You can contribute up to $5,500 to an IRA each year ($6,500 if you’re over age 50) and you can earn up to $1,950 in matching over the 3 years.

Here’s an example:

Let’s say you have $100,000 sitting in an IRA and you roll it over to Fidelity.

Then you contribute as follows, earning the 2.5% match on the contributions because you rolled over $100,000.

  • Year 1: Contribute $5,500, get a $138 match
  • Year 2: Contribute $4,000, get a $100 match
  • Year 3: Contribute $5,000, get a $125 match

That’s $363 in extra money Fidelity is adding to your account.

There may be better deals

Unless you’re doing a really large rollover for the bigger matches, you might earn more with a simple one time bonus.

For example, Fidelity itself has these lucrative one time bonuses via a different promotion:

$200 for rollovers of $50,000 – $99,999

On a rollover of $50,000, you’d earn only $165 from the ‘match’ bonus if you contribute $5,500 each year

$300 for rollovers of $100,000 – $249,999

On a rollover of $100,000 you’d earn $248 from the ‘match’ bonus if you contribute $5,500 each year

$600 for rollovers of $250,000 – $499,000

On a rollover of $250,000 you’d earn $825 from the ‘match’ bonus if you contribute $5,500 each year

$1,200 for rollovers of $500,000 – $999,000

On a rollover of $500,000 you’d earn $1,650 from the ‘match’ bonus if you contribute $5,500 each year

$2,500 for rollovers of $1,000,000

On a rollover of $1,000,000 you’d earn $1,650 from the ‘match’ bonus if you contribute $5,500 each year

Other major brokers like Schwab, Ameritrade, and ETrade offer similar one time deals.

And if you are a die hard maximizer, you could rollover your money each year to a new broker and collect bonuses each time. That would earn you substantially more than the Fidelity ‘match’ bonus could over 3 years.

But all in, while the idea of rewarding new contributions to your IRA each year is a great one as it reinforces good behavior, the actual rewards are sub-par in many cases. Do a little math first to make sure you’re not short changed.

Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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News

Santander Agrees to Limit Use of ChexSystems

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.

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On Friday, the Attorney General of New York announced that it had reached an agreement with Santander Bank. Starting from September 30, 2015 Santander will overhaul its use of ChexSystems and has promised to largely eliminate its use of “account abuse” screening which has made it impossible for many people to open a checking account. This follows recent agreements with Capital One and Citibank.

Many people have never heard of ChexSystems. Like Experian, TransUnion and Equifax, ChexSystems is like a credit bureau, except if tracks information related to checking accounts. If you go overdraft on your checking account and never pay back your fees, you will be reported to Chex. Like the credit bureaus, your information will stay in ChexSystems for 7 years. Overdrafts which remain unpaid for 60 days are typically reported, although there are no rigid reporting requirements.

A senior manager at Chase told MagnifyMoney that Chex is the “wild west” of reporting. Banks report to the database at their own discretion. Some banks could report for just a small unpaid balance. For example, one unpaid overdraft of $5 could keep you from opening another bank account for years. Because most banks tend to refuse to open accounts once you have negative information on your report, regardless of the severity.

Given the costs of financial services for the unbanked, the Attorney General’s office of the State of New York has taken an interest in the use of ChexSystems and its disproportionate impact on the poor. Santander Bank will continue to use Chex to screen for fraud. However, most overdraft infractions will now be ignored, allowing people to open bank accounts.

People have the right to request a free copy of their ChexSystems report once a year, and can dispute incorrect information. You can request your free report here and you can dispute incorrect information here.

We applaud the Attorney General of New York for championing this cause, and we hope that more banks abandon this practice. Ironically, banks could eliminate all overdrafts by declining any transaction that causes and overdraft and charging no fee for that decline. American Express has done just that with Bluebird, so it is possible.

Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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How to Complain, Mortgage, News

CFPB Warns Consumers of Reverse Mortgage Problems

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.

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As more Americans age, reverse mortgages are growing in popularity as a way for retirees to unlock the investment in their homes. 41% of Americans age 55-64 have no retirement savings account, and even those that do have a median balance of only $103,000. Yet homeowners over age 62 have nearly $4 trillion in equity in their homes, and that’s the source of retirement savings most people will ultimately rely on.

While smiling celebrity pitches make reverse mortgages them sound safe and appealing, they are riddled with fine print and traps for the uninitiated.

The Consumer Financial Protection Bureau (CFPB) recently released a report highlighting consumer complaints relating to reverse mortgages.

Some of the most common issues include:

Not being aware the loan can’t be taken over. When the last borrow dies, the loan comes due and must be repaid – either at the balance remaining or 95% of the property’s assessed value. That often means the house must be sold to cover the loan. Many surviving family members are unaware of this, and struggle with the fact that the home they were counting on keeping must be sold, as they are not eligible to take over the payments on the loan.

Not keeping up with property taxes and insurance. Many complaints arise when lenders claim property taxes are overdue, which put the mortgage in default, even though the taxes were paid. Families need to be diligent about making sure the loan servicer is keeping accurate records.

Younger generations living in the home and being surprised. Mortgage servicers want payment as soon as possible after the last borrower dies, leaving family members who may live in the borrower’s house in the lurch. They may feel pressured to take action that’s not in their best interest, and not understand all of the options available. In this situation, the CFPB advises contacting a Housing and Urban Development counselor to get a free assessment. You can find one near you here.

Inflated appraisals. Within 30 days of notification that the loan is due, the lender will send an appraiser to determine the home’s current value. The amount heirs have to pay is the lower of 95% of that appraised value or the remaining balance on the mortgage. Many complaints involve appraisals that are inflated and the don’t accurately reflect the value of the home, leaving the family paying more than it’s truly worth. This is especially a problem in situations when house prices have declined since the reverse mortgage was taken, and the appraised value is lower than the remaining balance of the loan.

Even the best planning won’t avoid every sticky issue with a reverse mortgage.

If your family is having problems with a reverse mortgage, and the servicer is giving you the runaround, the CFPB is available to help.

Simply use the CFPB complaint form to tell them about your problem, and who the servicer is.

The servicer will be required to respond to the CFPB with the status of your complaint by law, and you’ll often get a faster response than if you try contacting the servicer on your own.

Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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