Pay Down My Debt

Introducing FICO 9: What This Means for You

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Yesterday, FICO announced that it will be releasing FICO Score 9.  If you have unpaid medical bills or other collection items, this change will impact you.

What is FICO?

FICO is the most widely used credit score in the country. 90 percent of all credit decisions (mortgages, cards, credit cards, personal loans and more) use the FICO score in some way.

So, when FICO makes a change to its score, we should listen. This score has a big impact, because lenders use it and others (like CreditKarma) are trying to approximate it.

What are they changing?

This change is huge for people with unpaid medical bills and other collection items.

Unpaid medical bills

According to Experian, 64.3 million Americans have a medical collection record on their bureau. In the current world, this can significantly harm their credit score.

If you have an unpaid medical bill, it can be reported to a credit bureau in two ways:

  • The medical service provider can report to the bureau, or
  • A third party debt collection agency that has purchased the debt, or has been contracted to collect the debt, can report it

99.4 percent of cases have been reported by collection agencies. So, if your doctor is calling you to pay – it probably hasn’t been reported to an agency. But, once a collection agency starts calling you, you probably have a negative item on your credit bureau.

The purpose of a credit score is to help lenders understand the likelihood of someone being responsible and paying back on time. There has been a widespread belief that people have been unfairly punished for medical bills. In fact, the CFPB has proven that people have been unfairly punished, in a May 2014 report.

With the new score, FICO is agreeing with the CFPB. Medical collections will now be differentiated from non-medical collections. And people will be “punished less” for medical collections. This makes sense, for three reasons:

  1. The medical system is complex, and many people have been hit with small medical collections that they didn’t even realize they owed. For example, with a small co-pay that ended up with a collection agency.
  2. Historically, many responsible people could not get insurance because they had a pre-existing condition. And, when medical disaster struck, they had no way to pay the medical bills. They tried to be responsible, but couldn’t.
  3. Even with insurance, multiple emergencies in a family can lead to large deductible payments. Doctors and hospitals can quickly turn over bills to collection agencies, resulting in a negative remark on the credit bureau. Even people who are just paying back their medical bills, responsibly, over time can be punished.

This is a big win for the CFPB. Hats off. A government agency has done the math for the industry, and the industry has agreed. This should result in better access to credit, and lower rates on existing credit – once (and if) the changes are accepted by the industry.

Paid Collection Accounts will now be bypassed

Beyond medical bills, many other types of debt can end up on your credit bureau. For example, failure to pay your utility bill, your phone bill, your overdraft or any other type of debt can result in your account being sold to a collection agency. And the agency will usually report the collection account on your bureau. Having these accounts can seriously harm your score.

But, the older the collection item, the less impact it has on your score. I have regularly met people who felt confused. They have recovered and now had money. Should they pay back that five-year-old collection item, or just let it age. They wanted to pay it back, but would receive advice from some people not to do so. Why? Because activity on a collection item could make it appear more recent.

This change removes all ambiguity. If you pay back your collection items, your score will benefit. This is the way it should be.

When will I see the impact

Unfortunately it will take a while. FICO sells its credit score to banks. Whenever a new score is introduced, a bank has to decide whether or not to upgrade. In order to make this decision, they need to do a lot of analysis.

First, they will perform a “retro” analysis. This means they will look at the past few years of their portfolio history, and they will estimate how the portfolio would have performed if the new score was used.

They will then need to build strategies, which includes the cutoff (above what score will they approve accounts), the pricing and the extra rules that they want to build. In my experience, this takes 12 to 18 months (there are so many committees that need to approve this!).

Banks are very eager to “swap in” new customers. So, if previously rejected customers can now be approved, banks will be keen to proceed.

They are less keen to charge people lower interest rates. So, the CFPB needs to watch the banks closely. If people are truly lower risk, they should pay lower prices. But, banks are not eager to reduce pricing.

In Conclusion 

We fully support the changes. Medical bills are being severely punished. And people should not be afraid to pay off collection accounts.

We are realistic: it will be a while before we feel the impact.

And we are rightly skeptical: banks will be happy to approve more people and give more credit. They will be less excited to reduce interest rates.

Got questions? Get in touch via TwitterFacebook, email info@magnifymoney.com or let us know in the comment section below!

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College Students and Recent Grads, Pay Down My Debt

19 Options to Refinance Student Loans – Get Your Lowest Rate

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19 Options to Refinance Student Loans - Get Your Lowest Rate

Updated: August 26, 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 
SoFiA+

20


Years

3.50% - 7.74%


Fixed Rate

2.20% - 6.00%


Variable Rate

No Max


Undergrad/Grad
Max Loan
apply-now
earnestA+

20


Years

3.50% - 7.45%


Fixed Rate

2.20% - 5.80%


Variable Rate

No Max


Undergrad/Grad
Max Loan
apply-now
commonbondA+

20


Years

3.50% - 7.74%


Fixed Rate

2.20% - 5.94%


Variable Rate

No Max


Undergrad/Grad
Max Loan
apply-now
lendkeyA+

20


Years

3.25% - 8.22%


Fixed Rate

2.14% - 6.92%


Variable Rate

$125k / $175k


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. SoFi*: Variable Rates from 2.20% and Fixed Rates from 3.50% (with AutoPay)

SofiLogoSoFi (read our full SoFi review) was one of the first lenders to start offering student loan refinancing products. More MagnifyMoney readers have chosen SoFi than any other lender. Although SoFi initially targeted a very select group of universities (it started with Stanford), now almost anyone can apply, including if you graduated from a trade school. The only requirement is that you graduated from a Title IV school. 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.

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2. Earnest*: Variable Rates from 2.20% 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 2.20%. 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.

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3. CommonBond*: Variable Rates from 2.20% 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.

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4. LendKey*: Variable Rates from 2.14% and Fixed Rates from 3.25% (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.

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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.

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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 3.64% and 4.20% 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 4.65% fixed, and 3.21% variable.
  • Mayo Employees Credit Union: You need at least $2,000 of monthly income and a good credit history. Variable rates are available, starting at 5.15% 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 2.89%.
  • 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 2.23% 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 3.74% and fixed rates starting at 6.24%. 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.

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

CommonBond Student Loan Refinance Loan Review

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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.

CommonBond Grad Student Loan Refinance Loan Review

Updated August 16, 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 2.20% – 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 2.20% – 6.00% 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 2.20% (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.

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Balance Transfer, Best of, Pay Down My Debt

Best balance transfer credit cards: 0% APR, 24 months

Advertiser Disclosure

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.

btgraphic

Looking for a balance transfer credit card to help pay down your debt more quickly? We’re constantly checking for new offers and have selected the best deals from our database of over 3,000 credit cards. This guide will show you the longest offers with the lowest rates, and help you manage the transfer responsibly. It will also help you understand whether you should be considering a transfer at all.

 

1. Best balance transfer deals

No intro fee, 0% intro APR balance transfers

Very few things in life are free. But, if you pay off your debt using a no fee, 0% APR balance transfer, you can crush your credit card debt without paying a dime to the bank. You can find a full list of no fee balance transfers here.

Chase Slate

Longest with $0 Intro balance transfer fee and 0% Intro APR

Chase Slate®

With Chase Slate® you can save with a $0 introductory balance transfer fee, 0% introductory APR for 15 months on purchases and balance transfers, and $0 annual fee. Plus, receive your Monthly FICO® Score for free.

You can get longer transfer periods by paying a fee, so this deal is generally best if you have a balance you know you ‘ll pay in full by the end of the promotional period. And don’t expect a huge credit line with this card, so it may be best for smaller balances you can take care of quickly.

Transparency Score
Transparency Score
  • Interest is not deferred during the balance transfer period
  • There are late payment and cash advance fees

Tip: You have only 60 days from account opening to complete your balance transfer and get the introductory rate

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Alliant Credit Union

Good 0% intro period with no intro fee

Alliant Credit Union, 12 months, $0 introductory transfer fee

A no fee alternative if you already have a Chase balance or are looking to take care of additional balances is the Alliant Credit Union 12 month, 0% deal. There’s no fee for the transfer, and Alliant is one of the largest credit unions in the United States, so they’re used to handling new members.

Alliant is a credit union anyone can join, with national availability, by making a $10 donation to Foster Care to Success, though you can apply for the card without being a member.

There is a late payment fee of up to $25, and a penalty APR of 24.49% if you make a late payment that lasts until you make 6 on time payments in a row

Transparency Score
Transparency Score
  • Interest is not deferred during the balance transfer period
  • The range of the purchase interest rate based on your credit history (9.49% – 21.49%) is more than 10%, which is a wide range. You also don’t know which balance transfer promo APR you get (0% – 5.99%) until you apply.
  • There are late payment and cash advance fees

Tip: Beware that not everyone approved gets the 0% introductory rate. Some people report needing a 720 FICO to get 0%, otherwise you may be approved for a rate as high as 5.99%.

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0% balance transfers with a fee

If you think it will take longer than 15 months to pay off your credit card debt, these credit cards could be right for you. Don’t let the balance transfer fee scare you. It is almost always better to pay the fee than to pay a high interest rate on your existing credit card. You can calculate your savings (including the cost of the fee) at our balance transfer marketplace.

These deals listed below are the longest balance transfers we have in our database. We have listed them by number of months at 0%. Although you need good credit to be approved, don’t be discouraged if one lender rejects you. Each credit card company has their own criteria, and you might still be approved by one of the companies listed below.

Santander Sphere

Longest 0% intro balance transfer card

Santander Sphere, 24 months, 0% APR, 4% fee

If you have a big balance, or know you can’t pay off your balance quickly – go as long as you can with a good balance transfer rate, even if it comes with a fee.

At 24 months this is the longest 0% APR balance transfer card in the market right now, so you have 2 years to get the balance paid down.

There’s a $35 late payment fee and a penalty APR of 29.99% applies if you make a late payment, and will apply to your existing balances until you make 6 straight months of on time payments.

Transparency Score
Transparency Score
  • Interest is not deferred during the balance transfer period
  • The range of the purchase interest rate based on your credit history (12.74% – 22.74%) is more than 10%, which is a wide range.
  • There are late payment and cash advance fees.

Tip: You have 90 days after you open the account to complete the balance transfer.

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Citi Simplicity

Long 0% intro balance transfer card

Citi Simplicity, 21 months, 0% APR, 3% fee

Although this isn’t the longest available deal in the market, the Citi Simplicity is one of the most friendly. There are no late fees ever and no penalty APR if you miss a payment. So it’s a safer choice in case things go wrong than other options.

With the longest balance transfer deal good for 24 months (2 years), you can get 0% APR until 2018.

Transparency Score
Transparency Score
  • Interest is not deferred during the balance transfer period
  • The range of the purchase interest rate based on your credit history (13.24% – 23.24%) is 10% or less, which is typical
  • There are cash advance fees

Tip: You have 4 months after you open the account to complete the balance transfer.

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Bank Americard Visa

Decent 0% intro balance transfer period

Bank Americard Visa, 18 months, 0% APR, 3% fee

This is a basic balance transfer deal with an above average term. If you don’t have credit card balances with Bank of America it’s a decent option to free up your accounts with other banks. If you have really good credit, the ongoing APR as low as 11.24% is lower than many other balance transfer deals we’ve seen.

Transparency Score
Transparency Score
  • Interest is not deferred during the balance transfer period
  • The range of the purchase interest rate based on your credit history (11.24% – 21.24%) is 10% or less, which is typical
  • There are late payment and cash advance fees

Tip: You only have 60 days after you open the account to complete the balance transfer.

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Low rate balance transfers

If you think it will take longer than 2 years to pay off your credit card debt, you might want to consider one of these offers. Rather than pay a balance transfer fee and receive a promotional 0% APR, these credit cards offer a low interest rate for much longer.

The longest offer can give you a low rate that only goes up if the prime rate goes up. If you can’t get that offer, there is another good option offering a low rate for three years.

Signal Financial

Longest low rate balance transfer card

Western Federal Credit Union, As low as 5.24% APR, no expiration, $0 fee

If you need a long time to pay off at a reasonable rate, and have great credit, it’s hard to beat this deal from Western Federal Credit Union, with a rate as low as 5.24% with no expiration and no fee to transfer. The rate is variable, but it only varies with the Prime Rate, so it won’t fluctuate much more than say a variable rate mortgage.

Just about anyone can join Western Federal Credit Union. They’ll help you figure out what organization you can join to qualify.

Transparency Score
Transparency Score
  • Interest is not deferred during the balance transfer period.
  • There are late payment fees.

Tip: If you’re credit’s not great, this probably isn’t for you, as the rate chosen for your account could be as high as 18%.

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SunTrust Prime Rewards

Long low rate balance transfer card

SunTrust Prime Rewards, 3.50% APR for 36 months, 3% fee

If you live in Alabama, Arkansas, Florida, Georgia, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, Washington, D.C., or West Virginia you can apply for this card without a SunTrust bank account.

The deal is the prime rate for 3 years with no balance transfer fee. That’s currently 3.50% though your rate will change if the prime rate changes, either up or down.

Transparency Score
Transparency Score
  • Interest is not deferred during the balance transfer period.
  • The range of the purchase interest rate based on your credit history (10.49% – 21.49%) is more than 10%, which is high.
  • There are late payment and cash advance fees.

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For fair credit scores

In order to be approved for the best balance transfer credit cards and offers, you generally need to have good or excellent credit. If your FICO score is above 650, you have a good chance of being approved. If your score is above 700, you have an excellent chance.

However, if your score is less than perfect, you still have options. Your best option might be a personal loan. You can learn more about personal loans for bad credit here.

There are balance transfers available for people with scores below 650. The offer below is targeted at people with lower credit scores. As a result, there is an annual fee and the balance transfer offer isn’t as sweet. However, it will still be better than a standard interest rate.

Just remember: one of the biggest factors in your credit score is your amount of debt and credit utilization. If you use this offer to pay down debt aggressively, you should see your score improve over time and you will be able to qualify for even better offers.

Capital One Quicksilver One

Capital One Quicksilver One,
0% APR for 9 months, $0 transfer fee

Balance transfer deals can be hard to come by if your credit isn’t great. But some banks are more open to it than others, and Capital One is one of them.

While there is no transfer fee for this card, and it has a 0% APR for almost a year, beware there is a $39 annual fee. If you try a couple of the options above and have no luck, then consider this as a fallback option.

Transparency Score
Transparency Score
  • Interest is not deferred during the balance transfer period.
  • You know the exact interest rate you will pay after the balance transfer period (22.90%).
  • There are late payment and cash advance fees, as well as an annual fee.

Tip: You can request a balance transfer 10 days after you receive your card. And you can do the transfer anytime before November to qualify for the $0 fee and 0% rate.

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2. Learn more

Checklist before you transfer

Never use a credit card at an ATM

If you use your credit card at an ATM, it will be treated as a cash advance. Most credit cards charge an upfront cash advance fee, which is typically about 5%. There is usually a much higher “cash advance” interest rate, which is typically above 20%. And there is no grace period, so interest starts to accrue right away. A cash advance is expensive, so beware.

Always pay on time.

If you do not make your payment on time, most credit cards will immediately hit you with a steep late fee. Once you are 30 days late, you will likely be reported to the credit bureau. Late payments can have a big, negative impact on your score. Once you are 60 days late, you can end up losing your low balance transfer rate and be charged a high penalty interest rate, which is usually close to 30%. Just automate your payments so you never have to worry about these fees.

Get the transfer done within 60 days

Most balance transfer offers are from the date you open your account, not the date you complete the transfer. It is in your interest to complete the balance transfer right away, so that you can benefit from the low interest rate as soon as possible. With most credit card companies, you will actually lose the promotional balance transfer offer if you do not complete the transfer within 60 or 90 days. Just get it done!

Don’t spend on the card

Your goal with a balance transfer should be to get out of debt. If you start spending on the credit card, there is a real risk that you will end up in more debt. Additionally, you could end up being charged interest on your purchase balances. If your credit card has a 0% balance transfer rate but does not have a 0% promotional rate on purchases, you would end up being charged interest on your purchases right away, until your entire balance (including the balance transfer) is paid in full. In other words, you lose the grace period on your purchases so long as you have a balance transfer in place.

Don’t try to transfer between two cards of the same bank

Credit card companies make balance transfer offers because they want to steal business from their competitors. So, it makes sense that the banks will not let you transfer balances between two credit cards offered by the same bank. If you have an airline credit card or a store credit card, just make sure you know which bank issues the card before you apply for a balance transfer.

3 Steps for Setting up a Balance Transfer

Nick Clements of MagnifyMoney, who once ran a large credit card business, explains how to set up a balance transfer.

Comparison tools

Savings calculator – which card is best?

If you’re still unsure about which cards offer you the best deal for your situation, try our calculator. You get to input the amount of debt you’re trying to get a lower rate on, your current rate, and the monthly payment you can afford. The calculator will show you which cards offer you the most savings on interest payments.

Savings calculator
Balance transfer or a loan?

A balance transfer at 0% will get you the absolute lowest rate. But you might feel more comfortable with a single fixed monthly payment, and a single real date your loan will be paid off. A lot of new companies are offering great rates on loans you can pay off over 2, 3, 4, or 5 years. You can see a list here.

And you might find even though their rates aren’t 0%, you could afford the payment and get a plan that takes care of your debt for good at once.

Use our calculator to see how your payments and savings will compare.

Balance Transfer Graph

Questions and Answers

Yes, you can. Most credit card companies will allow you to transfer debt from any credit card, regardless who owns it. Just remember that once the debt is transferred, it becomes your legal liability.

Yes, you can. Most banks will enable store card debt to be transferred. Just make sure the store card is not issued by the same bank as the balance transfer credit card.

As a general rule, if you can pay off your debt in six months or less, it usually doesn’t make sense to do a balance transfer.

Here is a simple test. (This is not 100% accurate mathematically, but it is an easy test). Divide your credit card interest rate by 12. (Imagine a credit card with a 12% interest rate. 12%/12 = 1%). In this example, you are paying about 1% interest per month. If the fee on your balance transfer is 3%, you will break even in month 3, and will be saving money thereafter. You can use that simplified math to get a good guide on whether or not you will be saving money.

And if you want the math done for you, use our tool to calculate how much each balance transfer will save you.

With all balance transfers recommended at MagnifyMoney, you would not be hit with a big, retroactive interest charge. You would be charged the purchase interest rate on the remaining balance on a go-forward basis. (Warning: not all balance transfers waive the interest. But all balance transfers recommended by MagnifyMoney do.)

Many companies offer very good deals in the first year to win new customers. These are often called “switching incentives.” For example, your mobile phone company could offer 50% off its normal rate for the first 12 months. Or your cable company could offer a big discount on the first year if you buy the bundle package. Credit card companies are no different. These companies want your debt, and are willing to give you a big discount in the first year to get you to transfer.

Completing a balance transfer is easy. If you are applying for a new credit card, most credit card companies will just ask you for the account number of the credit card that has the debt. The transfer will then happen automatically. (It will look like the balance transfer credit card made a payment for you). You can also call your credit card company, and complete the transfer easily on the phone.

Automate your payments so that it doesn’t happen! If you do miss a payment, you will be charged a late fee. If you become 60 days late, you could lose your promotional interest rate and could be charge the punitive rate, which is often near 30% with most companies.

No, you can’t. Credit card companies are trying to steal balances from their competitors. So these deals are only good if you bring balances from competitors.

Many credit card issuers will allow you to transfer money to your checking account. Or, they will offer you checks that you can write to yourself or a third party. Check online, because many credit card issuers will let you transfer money directly to your bank account from your credit card. Otherwise, call your issuer and ask what deals they have available for “convenience checks.”

In most cases, you cannot. Once a balance transfer is complete, it is complete.

Yes, it is possible to transfer the same debt multiple times. Just remember, if there is a balance transfer fee you would be charged that fee every time you transfer the debt.

You can call the bank and ask them to increase your credit limit. However, even if the bank does not increase your limit, you should still take advantage of the savings available with the limit you have.

Yes. You decide how much you want to transfer to each credit card.

No. You do not earn rewards with a balance transfer. No cash back, no points and no miles can be earned with a balance transfer.

No, there is no penalty. You can pay off your debt whenever you want without a penalty.

Mathematically, the best balance transfer credit cards are no fee, 0% offers. You literally pay nothing. The best in the market is offered by Chase, which has a 15 month 0% introductory offer with a $0 introductory fee.

However, if your debt is already with Chase, or you think it will take years to pay off your debt, you should consider a longer duration offer or a personal loan. You can find 21 month offers with 3% fees and 24 month offers with 4% fees. Your savings over the two years would likely be substantial, even when you include the cost of the fee.

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Balance Transfer, Best of, Pay Down My Debt

9 Best 0% APR Credit Card Offers – August 2016

Advertiser Disclosure

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.

There are a lot of 0% APR credit card deals in your mailbox and online, but most of them slap you with a 3 to 4% fee just to make a transfer, and that can seriously eat into your savings.

At MagnifyMoney we like to find deals no one else is showing, and we’ve searched hundreds of balance transfer credit card offers to find the banks and credit unions that ANYONE CAN JOIN which offer great 0% interest credit card deals AND no balance transfer fees. We’ve hand-picked them here.

If one 0% APR credit card doesn’t give you a big enough credit line you can try another bank or credit union for the rest of your debt. With several no fee options it’s not hard to avoid transfer fees even if you have a large balance to deal with.

1. Chase Slate® – 0% Introductory APR for 15 months, $0 Introductory Balance Transfer FEE

ChaseSlateScreenThis deal is easy to find – Chase is one of the biggest banks and makes this credit card deal well known. Save with a $0 introductory balance transfer fee, 0% introductory APR for 15 months on purchases and balance transfers, and $0 annual fee. Plus, receive your Monthly FICO® Score for free.

You can get this offer if you complete the balance transfer within 60 days of opening the account. So it’s worth a shot to see how big of a credit line you get. If it’s not enough, move on to the other options below.

2. Alliant Credit Union Credit Cards – 0% APR for 12 months, NO FEE

Alliant is an easy credit union to work with because you don’t have to be a 754_card.AlliantVisaPlatinumcreditcardsmember to apply and find out if you qualify for the 0% APR deal.

Just choose ‘not a member’ when you apply and if you are approved you’ll then be able to become a member of the credit union to finish opening your account.

Alliant Credit Union

Anyone can become a member of Alliant by making a $10 donation to Foster Care to Success.

If your credit isn’t great, you might not get a 0% rate – rates for transfers are as high as 5.99%, so make sure you double check the rate you receive before opening the account, and they might ask for additional documents like your pay stubs to verify the information on your application.

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3. Edward Jones World MasterCard – 0% APR for 12 months, NO FEE

edwardjonesYou’ll need to go to an Edward Jones branch to open up an account first if you want this deal. Edward Jones is an investment advisory company, so they’ll want to have a conversation about your retirement needs.

But you don’t need to have money in stocks to be a customer of Edward Jones and try to get this card. Just beware that you only have 30 days to complete your transfer to lock in the 0% rate.

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4. Quorum Federal Credit Union – 0% APR for 12 months, NO FEE

quorumQuorum is a New York based credit union anyone can join by joining the Select Savers Club. All of Quorum’s credit cards offer the 0% for 12 months with no fee.

However, Quorum is not currently accepting online applications from new members, so you’ll need to call 1-800-874-5544 and press 3 to apply. Just be aware the 12 months starts from when your account opens, not when you make the transfer, so if you wait a month to do the transfer, you’ll only get the zero deal for 11 months. And the 0% deal isn’t prominent on the Quorum site, you’ll see it buried in the fine print.

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5. Purdue Federal Credit Union – 0% APR for 12 months, NO FEE

purdue-credit-union-visaThe Purdue Federal Credit Union doesn’t have open membership, but one way to be eligible for credit union membership is to join the Purdue University Alumni Association as a Friend of the University. Anyone can join the association, but it costs $50. The minimum credit line on the Visa Signature card offering 0% is $5,000, so if approved the $50 would be like a transfer fee of 1% or less. The good news is you can apply and get a decision before you become a member of the Alumni Association.

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6. Logix Credit Union Credit Card – 0% APR for 12 months , NO FEE

If you live in AZ, CA, DC, MA, MD, ME, NH, NV, or VA you can join Logix Credit Union and apply for this deal. Some applicants have reported credit lines of $15,000 or more for balance transfers, so if you have excellent credit, good income, but a large amount to pay off (like a home equity line), this could be a good option.

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7. First Tennessee Bank Credit Card – 0% APR for 12 months, NO FEE

If you want to apply online for this deal, you’ll need to live in a state where 275_cardfirsttennesseplatinumpremiervisaFirst Tennessee has a branch though. Those states are: Tennessee, Florida, Georgia, Mississippi, North Carolina, and South Carolina.

You need to have an existing First Tennessee account to apply online, but if you don’t have one, you can print out an application and mail it into their office to get a decision. You’ll find a link to the paper application when the online form asks you whether you have an account or not.

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8. Capital One QuickSilver ONE – 0% APR for 9 months, NO FEE

quicksilveroneThere’s a catch here. While there is no balance transfer fee, this card has a $39 annual fee.

If you’re transferring a big balance of $2,000 or more, the $39 isn’t a big deal. But if it’s a small balance and one you don’t plan to pay off within 9 months, then consider other options with no annual fee first.

Capital One tends to approve people with less perfect credit for this card than some of the other options and you might be able to check if you are pre approved by Capital One without hurting your credit score. Beware that after the 0% rate ends in 9 months your rate will ratchet up to a scary 23.24%.

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9. Aspire Credit Union Credit Card – 0% APR for 6 months, NO FEE

You don’t have to be a member to apply and get a decision from Aspire. Once youAspirecu do, Aspire is easy to join – just check that you want to join the American Consumer Council (free) while filling out your membership application online.

Make sure you apply for the regular ‘Platinum’ card, and not the ‘Platinum Rewards’ card, which doesn’t offer the introductory deal.

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10. Elements Financial Credit Card – 0% APR for 6 months, NO FEE

ElementscardTo become a member and apply, you’ll just need to join TruDirection, a financial literacy organization. It costs just $5 and you can join as part of the application process.

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11. Justice Federal Credit Union – 0% APR for 6 months, NO FEE

justicefcuIf you’re not a Department of Justice, Homeland Security, or U.S. court employee (or a few others), you need to join a law enforcement organization to be a member of Justice Federal. One of the eligible associations for membership is the National Native American Law Enforcement Association. It costs $15 to join.

You can apply as a non-member online to get a decision before joining. And Justice is unique in that its Student credit card is also eligible for the 0% no fee deal, so if your credit history is limited and you’re trying to deal with a balance on your very first card, this could be an option.

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For Texas residents: RBFCU – 0% APR for 12 months, NO FEE

Randolph Brooks Federal Credit Union is based in South Central Texas, but membership is available to any Texas resident who joins the American Consumer Council. Their cards offer no balance transfer fees and a 0% APR for 12 months.

If you live near Houston, the Community Resource Credit Union offers 0% for 15 months with no fee. But you need to live or work within 10 miles of one of their branches on the Northeast side of Houston.

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Are these the best deals for you?

If you can pay off your debt within the 0% period, then yes, a no fee 0% balance transfer credit card is your absolute best bet. And if you can’t, you can hope that other 0% deals will be around to switch again.

But if you’re unsure, you might want to consider…

  • A deal that has a longer period before the rate goes up. In that case, a balance transfer fee could be worth it to lock in a 0% rate for longer.
  • Or, a card with a rate a little above 0% that could lock you into a low rate even longer.

The good news is we can figure it out for you.

Our handy, free balance transfer tool lets you input how much debt you have, and how much of a monthly payment you can afford. It will run the numbers to show you which offers will save you the most for the longest period of time.

promo-balancetransfer-wide

The savings from just one balance transfer can be substantial.

Let’s say you have $5,000 in credit card debt, you’re paying 18% in interest, and can afford to pay $200 a month on it. Here’s what you can save with a 0% deal:

  • 18%: It will take 32 months to pay off, with $1,312 in interest paid.
  • 0% for 12 months: You’ll pay it off in 28 months, with just $502 in interest, saving you $810 in cash. That even assumes your rate goes back up to 18% after 12 months!

But your rate doesn’t have to go up after 12 months. If you pay everything on time and maintain good credit, there’s a great chance you’ll be able to shop around and find another bank willing to offer you 0% interest again, letting you pay it off even faster.

Before you do any balance transfer though, make sure you follow these 6 golden rules of balance transfer success:

  • Never use the card for spending. You are only ready to do a balance transfer once you’ve gotten your budget in order and are no longer spending more than you earn. This card should never be used for new purchases, as it’s possible you’ll get charged a higher rate on those purchases.
  • Have a plan for the end of the promotional period. Make sure you set a reminder on your phone calendar about a month or so before your promotional period ends so you can shop around for a low rate from another bank.
  • Don’t try to transfer debt between two cards of the same bank. It won’t work. Balance transfer deals are meant to ‘steal’ your balance from a competing bank, not lower your rate from the same bank. So if you have a Chase Freedom with a high rate, don’t apply for another Chase card like a Chase Slate and expect you can transfer the balance. Apply for one from another bank.
  • Get that transfer done within 60 days. Otherwise your promotional deal may expire unused.
  • Never use a card at an ATM. You should never use the card for spending, and getting cash is incredibly expensive. Just don’t do it with this or any credit card.
  • Always pay on time. If you pay more than 30 days late your credit will be hurt, your rate may go up, and you may find it harder to find good deals in the future. Only do balance transfers if you’re ready to pay at least the minimum due on time, every time.

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Best of, Pay Down My Debt

7 Personal Loans for 600 to 700 Credit Scores

Advertiser Disclosure

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.

7 Personal Loans for 600 to 700 Credit Scores

Updated July 20, 2016

If you have a less-than-perfect credit and want to pay off credit card debt, fund home improvement projects, or pay for unexpected expenses, then finding a lender that will consider your credit might seem like an uphill battle.

Refinancing high-interest debt with a personal loan can quickly cut down the amount of interest you’re paying, which effectively allows you to pay if off in less time. You particularly want to avoid payday and title loan lenders at all costs.

Many personal loan companies approve people with scores as low as 600. The best way to shop for the best deal is to use the MagnifyMoney Personal Loan Shopping Tool. With this tool, you can get prequalified for personal loans without hurting your credit score. With just one application (which takes less than five minutes), multiple providers will compete for your business and offer you real rates. You can start shopping here.

If you don’t want to use the tool, you can go to each personal loan company individually. Here are 7 personal loans for people with credit scores of 600 to 700. Read below to see if one is right for you!

LendingClub

LendingClub offers loans of up to $40,000, for individuals with a minimum credit score of 600. Its APR ranges from 5.99% to 35.89%. LendingClub also uses a soft credit pull to determine your rate, which will not affect your credit.

The Fine Print

In order to qualify for a LendingClub personal loan you must:

  • Not have more than 5 hard credit inquiries in the last 5 months
  • Have at least two active credit accounts open
  • Have a credit history of at least 36 months
  • Debt-to-income ratio of less than 40%
  • Be able to verify employment and income

Once you have met the minimum criteria, LendingClub uses its own scoring system to determine what amount you can borrow as well as your rate.

You can borrow money for up to 60 months, but it does charge up-front (origination) fees depending on credit worthiness, which come out of the loan amount.

Pros

  • Can see your rate with a soft credit pull
  • Will consider applicants with credit scores as low as 600
  • Offers very competitive interest rates for people with scores below 700
  • The application process only take a few minutes

Cons

  • Missed payments or items in collections will result in your application being rejected
  • Loan processing could take a week or more
  • APR can be as high as 35.89%
  • It does charge origination fees
  • Is not available in Iowa or West Virginia

LendingClub will approve people with credit scores as low as 600. If approved, the interest rates offered can be very competitive and the online application process is easy. This is good first stop for anyone with a score of 600 or higher to find the best deal.

LendingClub

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*referral link

Avant

Avant offers loans up to $35,000. There is no prepayment penalty. It is possible to get your loan within one business day. Avant will accept people with credit scores as low as 580.

The Fine Print

Interest rates range from 9.95% to 36.00%. Avant does charge an up-front origination fee (this is new).

An Avant loan application only requires a soft pull to see your rate, which does not affect your credit score, and there are no prepayment penalties.

The Avant personal loans scores an “A” Transparency Score.

Pros

  • Minimum credit score of 580, through it prefers to work with scores above 600
  • “A” Transparency Score
  • Can see your rate with a soft credit pull
  • Fixed terms, fixed interest rate, no prepayment penalties

Cons

  • Interest rates as high as 36%
  • Avant charges an origination fee

Avant is a good option for people with less than perfect credit. You can check your rate without hurting your score and it has an “A” transparency score.

Avant_Logo

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OneMain

OneMain offers loans up to $10,000 for individuals with credit scores starting at 600. It offers terms of up to 60 months and APR ranges from 17.99% to 35.99%.

The Fine Print

In order to be accepted for a OneMain Loan, you must live near a OneMain branch, as a face-to-face meeting is required to finalize the loan. OneMain personal loans are not available in Alaska, Arkansas, Connecticut, Massachusetts, Nevada, Rhode Island, Vermont, or Washington D.C.

In order to qualify you must have:

  • Verifiable, steady income
  • No bankruptcy filings, ever
  • Be at least 18 years of age
  • Have at least some established credit history
  • Credit score of at least 600

If, at any time during the application process, OneMain becomes aware that you intend to use the personal loan for gambling, your loan application will be cancelled. OneMain personal loans cannot be used for business expenses or tuition.

You cannot see your OneMain rate until it performs a hard credit pull, which does affect your credit, and the OneMain personal loan earns a “B” Transparency score.

Pros

  • Credit score as low as 600
  • Fixed Rates
  • No Prepayment penalty
  • Fixed terms
  • Convenient location, at OneMain branches

Cons

  • APR ranges from 17.99% – 35.99%
  • Loans cannot be used for business expenses or tuition
  • Cannot see rate without a hard credit pull
  • Personal loans only available up to $10,000
  • Loans not available in Alaska, Arkansas, Connecticut, Massachusetts, Nevada, Rhode Island, Vermont, or Washington D.C.
  • You must visit a OneMain branch to complete the loan.

The OneMain personal loan caters to people with low credit scores, or who would prefer to complete the personal loan application process at a branch, rather than online.

OneMain

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*referral link

Springleaf

Springleaf offers personal loans ranging from $1,500 to $25,000. Borrowers can actually apply online and receive instant approval before visiting a branch. The online application does require a hard credit pull.

The Fine Print

Springleaf APRs range from 25.10% to 36.00%, which could actually be higher than the APR of a credit card.

Springleaf loans are only available in 27 states, but will consider borrowers with scores of less than 600.

Pros

  • No application fee
  • Will consider credit scores as low as 550
  • Many local branches, to receive funds

Cons

  • APR ranges from 25.10% – 36.00%
  • Hard credit pull required
  • “B” Transparency Score
  • Only available in 27 states

If you have damaged credit, a Springleaf loan may be perfect for you. Just be careful with the APR, as its minimum APR is quite high.

Springleaf

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*Referral link

Vouch

Vouch offers a unique lending experience, where your friends and family are able to “vouch” for your financial responsibility by putting a monetary stake on it and your rate decreases. Your friends and family must offer to pay back some of the loan in case you can’t, much like a co-signer. The Vouch personal loan basically lets you leverage your network and get a lower rate on a loan.

Vouch offers installment loans ranging from $500 to $7,500 and APR starting at 10.68%. However, even if you receive a loan at a 20% APR, your rate can actually decrease during the term as more friends and family vouch for you.

The Fine Print

In order to apply for a personal loan from Vouch, you must:

  • Be 18 or older
  • Be a legal U.S. resident
  • Have a credit score of at least 600
  • Must not be in foreclosure or bankruptcy
  • Have a verifiable bank account

Vouch does not charge any application, annual, or prepayment fees. It does charge 1% to 5% in origination fees. Late fees are 5% of your payment with a minimum of $15.

You can apply for a Vouch loan online with a soft credit pull, as long as you have a mobile phone to which Vouch can send a security code. Once the application has been filled out, it takes 24-48 hours to receive a loan offer.

Pros

  • Can see your rate with a soft credit pull
  • Minimum credit score of 600
  • No application, annual, or prepayment fees
  • Can apply online

Cons

  • APR up to 30%
  • Late fees are 5% of your payment, with a minimum of $15
  • Loans only up to $7,500

The Vouch personal loan is a great option if you have damaged credit and a network of friends and family that can support you in order to lower your rate.

Vouch_logo2

 

Vouch is no longer accepting loan applications. 

Freedomplus

Freedomplus offers loans ranging from $5,000 to $35,000 that can be used for everything from debt consolidation, to unexpected expenses. APR ranges from 8.47% to 29.90%.

Its biggest selling point is the same-day approval and availability of funds within 48 hours, a lifesaver in some circumstances.

The Fine Print

In order to qualify for a Freedomplus loan, you must:

  • Be 18 years or older
  • Be a legal US resident
  • Have a valid ID
  • Minimum credit score of 700
  • At least $25,000 in verifiable income
  • No bankruptcies in the last two years

Freedomplus charges origination fees ranging from 1.00% to 5.00%, which is deducted from the loan amount before you receive the funds. There are no prepayment penalties.

The Freedomplus personal loan scores a “B” Transparency score because its fee structure and much of the fine print is unclear or not covered by the final contract.

You can prequalify with a soft credit pull, which does not affect your credit score. However, Freedomplus requires a phone screening with each applicant before the loan is approved.

Pros

  • Will approve credit scores as low as 700
  • The phone screening may improve your chances of being approved for the loan
  • Same-day approval and funds within 48 hours
  • No prepayment penalty
  • Can prequalify with a soft credit pull

Cons

  • APR ranges from 8.47% to 29.90%
  • The fee structure is not readily available for review
  • Origination fee of 1.00% to 5.00% applies

The Freedomplus personal loan is a good option for you if you have less than perfect credit, and need access to funds quickly, without visiting a physical branch.

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Prosper

The Prosper personal loan process is a little different than a traditional lender. It is not a bank, but rather a peer-to-peer lender. Once you have applied, and checked loan terms and rates, you create a loan “listing” that then appears on in the Prosper marketplace.

From these listings, peers (investors) choose which loans they would like to finance. When your loan listing is financed, the money is transferred to your bank account.

Prosper offers loans from $2,000 to $35,000, and APR ranges from 5.99% to 36.00%. It offers loans terms of either 36 or 60 months. Your APR is determined during the application process, and is based on a credit rating score created by Prosper. Your score is then shown with your loan listing to give potential lenders an idea of your creditworthiness.

The Fine Print

Your loan listing will remain active for 14 days. After 14 days, your loan must be at least 70% funded to receive the funds. If you are not 70% funded within 14 days, you must reapply to have your loan re-listed.

Origination fees range from 1% to 5% and are based on your Prosper score. In order to qualify, you must:

  • Have a bank account
  • Have a social security number
  • No more than 7 inquiries on your credit in the last six months
  • A verifiable, steady income
  • A credit-to-debt ratio of less than 50%
  • At least three open accounts, such as checking, savings, and credit card.
  • No bankruptcies in the last year

A returned payment may result in a $15 fee, and late payments past 15 days are charged a 5% fee, with a minimum of $15.

Prosper’s overall fine print is very clear is its fees are quite minimal, so it scores it an “A” Transparency Score. Also, you can check your Prosper rate with a soft credit pull, which will not affect your credit score.

Pros

  • Minimum credit score of 640
  • Can see your rate with a soft pull
  • No prepayment penalties
  • Paying off a Prosper loan can reduce your APR on future Prosper loans

Cons

  • Only 14 days to secure financing from peer lenders
  • Origination fee of 1% to 5% applies
  • APR varies from 5.99% – 36.00%

Prosper is a flexible alternative with a low-end APR that beats a credit card.

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Shop Around to Find the Best Deal

If you have made past credit mistakes, or have very little credit, there are personal loans out there for you. Many of these lenders offer rates much lower than what you would be paying on a credit card, shaving month and hundred or thousands of dollars off of your debt.

Don’t give up on a personal loan just because of your credit – there are options out there for you. It never hurts to shop around and look for the best rates available, especially if the lender does a soft credit pull to show you your options.

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Building Credit, Credit Cards, News, Pay Down My Debt

The Perfect Credit Score Isn’t Really 850

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Do you really need an 850 credit score to get the best rates?

Most people assume that in order to get the best treatment from lenders, you need to have perfect credit. Across both of the most common credit scoring brands, FICO and VantageScore, that highest score is 850 out of the now-standard range of 300 to 850.

But the truth is that while it’s nice to boast that you’ve maxed out your credit score, it’s almost impossible to achieve the magical 850. It’s also entirely unnecessary. There is no lender or credit product that requires you to have a credit score of 850 in order to be approved.  There is no lender or credit product that requires you to have a credit score of 850 in order to earn the best terms. In fact, your credit scores can be 90 to 130 points off the maximum and still result in your getting approved for the best deals from mainstream lenders.

To put it bluntly, 850 doesn’t buy you anything but bragging rights.

Case in point, according to Informa Research, which tracks interest rates by credit scores on a daily basis, the lowest rates offered on various mortgage related loans are being offered to people with scores at or higher than 760. And, the lowest rates offered on various auto loans are being offered to people with scores at or higher than 720.

The quest for a perfect 850 is often given different fictitious monikers like “Triple-A Credit” or “A+ Credit”, when in reality there is no such designation in the world of consumer credit scoring.  Your credit “rating” is the number, whether it’s an 850 or a 525.

Earning the ever-elusive 850 credit score requires that you have a statistically perfect credit report that indicates you are completely void of any sort of credit risk. But again, this is unnecessary and you will do just fine with 760 or better, which is a much easier target to hit.

How to get to 760

A score of 760 doesn’t require perfection. You can even have derogatory entries (like a missed payment) and still get there. It just requires that these negative marks are older and limited. You can even have a balance on your credit card and still score at or above 760. Your best bet is to use 10% or less of your card’s credit limits.  That means no more than a $1,000 balance for every $10,000 in credit limits across all of your cards.

The other targets are harder to hit because they’re not entirely in your control.  For example, the older your credit history is the better you’re going to score. Since you can’t exactly control time, this will be one of those areas where you’ll do better organically as time passes.

Account diversity is also a tough one to control. People will score better if they’ve got a record of managing different types of accounts, such as credit cards, student loans, auto loans, and mortgages. Nobody will (or should) go out and buy a car or a house just to benefit their credit scores. This is one of the metrics where you will improve as time passes and you build a history of auto loans and mortgages.

If all of this seems too complicated then let’s make it really simple. If you pay all of your bills on time all the time, apply for credit only when you actually need it and use credit cards sparingly then you’re going to earn and maintain great credit scores. It would be impossible for you not to do so.

Still obsessed with hitting 850?

If you are still obsessed with credit score perfection then there are some milestones that are going to need to be met and maintained.

A perfect payment history. Your credit report is going to have to be void of any negative information, and there are no exceptions. If you’ve got derogatory entries like late payments, liens, judgments, collections, defaults and the like then an 850 is not in the cards for you.

A low utilization rate. Utilization plays a big role in your score and it can be a little confusing. Essentially, credit scoring models look at your total statement balances across all your cards and compare it to your total available credit limit. They don’t even give you bonus points if you pay that balance off in full each month. They simply look at how much your balance comes out to with each billing cycle. The lower your total statement balances are, the better off you are score-wise. To get the perfect 850, don’t even think about carrying a balance on your cards. You need to be at or close to zero percent.

You’ve shown a long history of good behavior. If you apply for credit too often, have limited credit score information or have a young credit report then you’re not going to max out your score. You can’t open a bunch of accounts in a short period of time without hurting your scores. It reduces the average age of your credit and it also means a hard credit inquiry on your account, which can also ding your score. Again, this is no big deal if you’re shooting for the ideal credit score of 760 (or in the neighborhood of that) but it can certainly hurt you on your path to 850.

Have more questions about your credit score? Send us an e-mail at info@magnifymoney.com. 

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5 Steps to Take When Your Car is Repossessed

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For the most part, you will know ahead of time when a car repossession is on the horizon. But, even when you have an inkling your car is about to get taken away, walking outside to find it missing is upsetting.

A car repo can jeopardize your mobility long-term. And if you don’t have access to public transportation or a friend to give you a lift, having no car to get to and from work could mean you’ll lose your job, which triggers other financial issues. If your car has been repossessed (or it’s a possibility it will happen soon) here’s what you need to know and the options for getting it back.

Step 1: Take a Record of Any Property Damage

There are laws in place to protect you when a repo company comes for the car. They can’t disturb the peace, use excessive force, damage your property or cause you harm in the process.

If you believe the repossession happened aggressively, you may have a case for reimbursement of damage or the return of your car. The repo agency may also get hit with a penalty for their actions. Take photos of the damage as a backup and get a second opinion from an attorney.

You should also have a record of what the car looks like and any damages before it’s repossessed. Otherwise, could turn into a bit of a “he said, she said” debate.

Step 2: Find Out Why Your Car Was Taken

Technically, a car isn’t “yours” until you pay off the car note. If you default, in most states the company financing your car has the right to take it back without warning you. The same applies if you’re leasing a car. Miss a few payments and the lessor can take back the property.

When a repo occurs, contact the creditor as soon as possible. Unlike when a contractor tows your car for minor offenses like unpaid parking tickets, after a repo, your car doesn’t wait patiently on a lot until you bring your bills current. The car can be sold to recover the financial loss.

Fortunately, many states require that you’re notified of the pending auction or sale of your vehicle beforehand, so you have a reasonable time to act. Ahead of the sale, you may be able to reinstate the auto loan, pay off the loan entirely or buy the car back. We’ll talk about each option for reclaiming your car in the next section.

Besides defaulting on a loan, in some states, your car may be repossessed when your insurance lapses. If you’ve stopped paying your car insurance, find out from your creditor or DMV if that’s the reason your car is missing and ask what the penalties are for not keeping insurance.

Step 3: Explore Options to Reclaim the Car

The rules for getting your car back when your payments are in default vary by state and contract, but according to the Federal Trade Commission, there are generally three options to discuss:

Reinstate Your Auto Loan: This will probably be the most affordable and less cumbersome option if it’s available to you. Reinstating the loan is when you pay the amount you’re behind plus all of the fees associated with the repossession including towing and storage to get it back.

Redeem Your Car: Redeeming the car means paying off the entire balance of the loan to get your car back. Going this route may not be feasible or smart if your car is worth less than you owe. Besides the entire loan amount, you’re also on the hook for the repossession fees.

Buy Your Car Back: Again, this option may not be possible if you’re having a hard time just making car payments. When you get the date and time of the auction your car will be in, you can attend and try to buy it back.

Step 4: Decide if You Can Afford to Get the Car Back

After going through each of your options, you may find you’re not financially stable enough to retrieve your car. Even in the best case scenario of reinstating your loan, you’ll need to have the means to make regular payments and maintain the car. If you can’t handle it, you may have to let the car go. There are some financial implications when giving up on the car as well.

When a creditor sells your car, it has to make a reasonable effort to get a fair market price for it. If the fair market price is less than how much you owe, you can be sued for deficiency; the difference between how much you owe and how much the car sells for.

Fortunately, if the car sells for more than what you owe, you also get to pocket the difference. You should get a notification of whatever you owe or if money is owed to you. Follow up on the resale yourself if you don’t. Unpaid deficiency can end up in collections.

Lastly, if you plan to wash your hands of the car loan, you could be in a deep financial hole all the way around and in the process of filing bankruptcy. If so, you may be able to include the car in the agreement and get it back. In this case, contact the attorney handling your bankruptcy right away.

Step 5: Get Your Belongings

Regardless of how you intend to resolve the repossession, you’re entitled to all of your belongings in the car. Whoever has your car should make a reasonable effort to protect your belongings from damage and theft. It’s a good practice to not leave any valuables in the car if you’re on the verge of repossession to avoid theft or damage.

Often, you’ll be contacted with the location where you can pick your stuff up. If you find anything missing or damaged, take notes. You may be able to reduce your deficiency bill with proof that you experienced property loss.

Final Word: Act early

If you know making future car payments is going to be a struggle, you’ll benefit the most from acting early to avoid the costs of repossession. Here are a few steps you may be able to take:

  • Negotiate: If you’re going through a temporary hardship, you may be able to work out a short-term deal of reduced or excused late auto payments. You won’t know unless you ask. Be sure to get any form of agreement in writing.
  • Sell your car: Selling a car with a lien can be difficult, but not impossible. You have the best shot at selling if the car is worth more than you owe. Once sold use public transportation or a carpool for the time being.
  • Refinance the loan: You may be able to refinance to a lesser monthly payment before things go south. Keep in mind, refinancing may come with processing fees and other costs, so you need to factor them into the equation.
  • Surrender the car yourself: If you’re already in default and know the repossession is coming, you can give up the car on your own terms. No dramatic car tow scene necessary and you can clear the car of your belongings. Then if you decide to redeem your car or reinstate the loan, you won’t have to pay some of the repossession fees.

Having your car repossessed is scary, but even when you hit rock bottom, there are solutions. If you put aside the emotions and think logically, you can recover. Your best move is to prevent it and keep the lines of communication open with the company servicing your auto loan.
If it’s too late for that, your main choices (depending on your contract and state) are to bring the loan back current and fork up repossession costs, pay-off the loan, buy the car back or give up the car entirely.

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College Students and Recent Grads, Consumer Watchdog, Pay Down My Debt

Collection Fees on Student Loans You Never Knew Could Happen

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If you’ve ever been through federal student loan entrance counseling, then you know that failing to make payments on federal student loans can have serious consequences. If you fall behind on your required monthly payments after you graduate, the Department of Education may take steps like garnishing your wages before they ever reach your bank account, withholding your tax refund, or even suing you.

But did you know that failing to pay back your federal student loans could also make you liable for collection fees?

If you have federally-financed student loans that are in default—which in most cases means that you haven’t made payments for 270 days—the federal government may refer your account to a collection agency. What may come as a surprise is that these collection agencies typically charge fees or commissions, and these fees can be added to the balance that you owe.

Though the fees vary depending on the agency and the type of loan you have, they can exceed 15% of your total balance, and can even reach up to 40% of your total balance in the case of Perkins loans. This means that if your current loan balance is $20,000, you could suddenly have between $3,000 and $8,000 in fees added to your account.

Ouch.

So how can I avoid having to deal with a collection agency?

Avoid default: The best way to avoid collection fees is to ensure that your student loan does not go into default. If you are struggling to make your monthly payments, contact the Department of Education right away to explain your situation and figure out a plan. For example, you may be able to reduce your required monthly payment amount through an income-driven repayment plan. You can find more information about how to apply for income-driven repayment here.

Check into deferment or forbearance: Depending on your situation, you may also be eligible for loan deferment or forbearance. You should look into applying for deferment or forbearance if you have returned to school, if you have an illness or financial hardship that affects your ability to make payments, or if you have recently served in the military. More information about loan deferment and forbearance is available here.

Heed warnings: If you do fail to make your required monthly payments, your loans will become delinquent and you will receive warnings from the Department of Education. Do not ignore these warnings. If you ignore them, your loans will go into default after 270 days and may be referred to a collection agency.

Monitor your credit: Additionally, if you have missed any payments on your student loans, be sure to check your credit score and get a credit report. If your credit score has been brought down by one or more missed payments, you can try writing a letter of goodwill to your loan servicer explaining your situation and politely requesting that they remove the missed payment from your credit report. You can find more information on how to write a letter of goodwill here.

But what if my loans have already been sent to a collection agency?

Take action immediately: If you receive a notice from a collection agency, this means your loans have gone into default. It is critical that you respond to the agency immediately to work out a plan for repayment. If you enter into a repayment agreement within 60 days, you will not be charged collection fees.

Try to pay back in full: If you are able to pay the full amount back, pay it immediately. This may not be an option for many people, but it is the fastest way to get your loans out of default.

Set up a rehabilitation plan: If you cannot pay the full amount, work with the collection agency to create a repayment plan—known in this case as a rehabilitation plan—that is manageable based on your current income. If the agency suggests a monthly payment amount that you feel is unmanageable, let them know that you need a lower amount, and send them documentation of your current income as proof.

Don’t miss a payment: Follow through on the rehabilitation plan! If you fail to make the payments you have agreed to, collection fees will be added to your account.

Ensure default status gets removed: After you have made nine on-time monthly payments according to the terms of your rehabilitation plan, your loan will be removed from default status. A loan can only be rehabilitated once.

Resources to help you

  • How to make a payment to a collection agency here.
  • 7 things to know if you have debt in collections here.
  • The Department of Education has a page about student loan default here.
  • The Department of Education’s page about getting out of student loan default is here.
  • The Department of Education provides contact information for the collection agencies it works with here.

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Can Debt Repayment Be Fun? Yes, It Can.

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“Fun” is not a word most of us would use to describe the experience of being in debt. When we talk about debt, we are more likely to use words like “stressful”, “frustrating”, “anxiety-inducing”, “burdensome”, and “depressing”. Our debt may keep us up at night worrying, cause us to feel ashamed, or prevent us from being able to use our money for other things that are important to us. I get it—I’ve carried some amount of student debt for over seven years, and I’ve never used the word “fun” to describe the experience.

At least, not until recently.

I finally finished graduate school in January with nearly $57,000 of student debt and started making loan payments soon thereafter. And while I expected the process of debt repayment to be a wholly unpleasant one, I’m discovering, to my surprise, that this doesn’t necessarily have to be the case. I’m finding that while being in debt is most certainly a negative experience, the process of paying back debt can actually be…kind of fun. The key is how you approach it.

If you want to switch from a “debt repayment is a drag” mindset into a “debt repayment is fun” mindset, try these ideas:

Choose to view debt repayment as a challenge rather than a burden

It may feel like a burden sometimes, but paying back a large amount of debt can also be viewed as a challenge—just like training for a marathon, learning a new language, or working towards a promotion. And as with other types of challenges, you have a certain amount of control over how quickly you reach your goal. There’s no rule that says you have to make only the minimum payment each month. In fact, the faster you can make payments, the less interest you’ll have to pay in the long run (and the sooner you’ll be out of debt!).

As part of the challenge, try to cut back on your spending

I work for a non-profit and don’t make a huge amount of money, but by cutting my expenses as much as possible (I have roommates and don’t own a car), I’ve been able to put about 30-40% of my income each month towards my debt. Everyone’s financial situation is different, but I suggest taking a close look at your spending habits to see if there are areas where you could cut back in order to make higher payments and reach your goal more quickly.

Compete against yourself from month to month

In other words, make debt repayment into a game! Track how much you spend over the course of each month, and see if you can spend a little less than you did the previous month and put a little more towards your loans. I recommend tracking your spending by category so you can see where it’s possible to cut back. For example, if you spent $105 on eating out last month, try to only spend $75 this month. Then, take that $30 you saved and use it to make an additional loan payment.

Pick up side jobs if/when possible

If you have extra time, you may be able to make some additional money by babysitting, tutoring, selling unwanted items on Craigslist, participating in paid research studies, doing freelance work, or any number of other possibilities. Try to put any extra money you make directly towards your debt.

Chart your progress visually

I highly recommend creating a visual tracking system that you can update each time you make a payment. This will make it easier to appreciate the amazing progress you’ve made thus far and watch as you get closer and closer to your goal. I have a spreadsheet that I update whenever I make a loan payment, as well as a corresponding graph that shows my progress. I actually get really excited about updating it each month and watching the graph change.

Tell people about your progress

It can be motivating, and even fun, to share your successes with others. I find that family and friends are often interested and impressed when I tell them I’m aggressively paying back my loans. Let people know when you hit $80,000, or $40,000, or $10,000, or whatever milestones are meaningful to you.

Celebrate milestones

When you reach an exciting milestone, take some time to treat yourself to fun and special activity that you don’t do every day. You could host a potluck with friends, take yourself out for ice cream, or go out to a movie. It could be anything as long as it’s fun, relaxing, and not too expensive.

Always remember that you have a great deal of control over how you view yourself and your financial situation

The situation is what it is, but you can choose how to think about it. I know from experience that it can be easy to spend time blaming yourself for getting into debt or being angry at “the system” for allowing you to borrow such a large amount of money. However, I’m slowly learning that accepting my past decisions and focusing on making as much progress as I can towards my goal of getting out of debt can make a world of difference.

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