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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 or let us know in the comment section below!

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

CommonBond Student Loan Refinance Loan Review

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CommonBond Grad Student Loan Refinance Loan Review

Updated October 20, 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.

CommonBond is one of the top four lenders identified by MagnifyMoney to refinance student loans.

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 2.23% – 6.03% 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

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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 2.23% – 6.03% 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

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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 2.23% (variable) and 3.50% (fixed).

Earnest Credit Card

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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).


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


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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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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.

19 Options to Refinance Student Loans - Get Your Lowest Rate

Updated: October 20, 2016

Are you tired of paying a high interest rate on your student loan debt? You may be 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. But the Top 4 lenders offer the best rates, and you should focus your shopping on these lenders.

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 4 national lenders offering the lowest interest rates. We update this list daily:

LenderTransparency ScoreMax TermFixed APRVariable APRMax Loan Amount 



3.50% - 7.74%

Fixed Rate

2.23% - 6.03%

Variable Rate

No Max

Max Loan



3.50% - 7.45%

Fixed Rate

2.23% - 5.78%

Variable Rate

No Max

Max Loan



3.50% - 7.74%

Fixed Rate

2.23% - 6.03%

Variable Rate

No Max

Max Loan



3.25% - 8.22%

Fixed Rate

2.23% - 6.92%

Variable Rate

$125k / $175k

Max Loan

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 2.23% and Fixed Rates from 3.50% (with AutoPay)

sofiSoFi (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 2.23% and Fixed Rates from 3.50% (with AutoPay) – $200 Bonus!

EarnestEarnest (read our full Earnest review) offers fixed interest rates starting at 3.50% and variable rates starting at 2.23%. Anyone who applies from MagnifyMoney in October and is approved will receive a $200 cash bonus from earnest. 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 2.23% and Fixed Rates from 3.50% (with AutoPay)

CommonBondCommonBond (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 2.23% and Fixed Rates from 3.25% (with AutoPay)

lendkeyLendKey (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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In addition to the Top 4 (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 3.89% and 4.45% 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

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

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Featured, Pay Down My Debt

Debt Snowball Vs Debt Avalanche — Which Strategy Works Best?

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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.

The typical American household carries $15,762 of credit card debt. With the average credit card interest rate hovering around 13.35% today, that means households could easily spend more than $2,000 each year on credit card interest alone.

As more and more interest accrues, paying off what might have once been a relatively small amount of debt can easily start to feel like an impossible feat.

That’s why getting out of debt — especially when you have several different types of debt to deal with — requires a strategy.

Two of the most popular debt payoff strategies out there are the “debt snowball” and the “debt avalanche.” The snowball method has been popularized by personal finance celebrities like Dave Ramsey. By comparison, the debt avalanche is lesser known.

But which method actually works best? We did the math to find out.

Debt Snowball

Senior man playing with snow

First, list your debt from the smallest balance to the largest balance. Your goal is to eliminate the smallest debt first. You accomplish that by making only the minimum payment required on all your other debts. Then, take every extra dollar you have and put it toward the smallest debt. Once it’s paid off, you will throw everything into the next largest debt, plus an additional amount that is equal to whatever the previous debt’s minimum required payment was.

As you move from one debt to the next, you are creating an even bigger “snowball” to tackle your larger debts. That’s because you’re not only paying however much you can afford to set aside each month. You’re also adding to that amount when you add in the minimum required payments for each card that you pay off.

Why it works:

The snowball has two advantages. First, it provides you with a clear plan. Second, you build a lot of positive momentum by achieving wins early on, which will help you keep going.

Debt Avalanche

Debt Avalanche - Man Skiing In Winter

To create a debt avalanche plan, list your credit card debt from the highest interest rate to the lowest. Pay the minimum due on all debt except the card with the highest interest rate. Put all extra money toward the most expensive debt until it is eliminated. Once that debt is paid off, take whatever you were paying on that bill and apply it to the next debt on your list, plus the minimum required payment from the debt you just paid off.

Why it works:

By dealing with debt that has the highest interest rates first, you can get out of debt faster and actually save more money on interest in the long run. It can feel more challenging than the snowball method, because you might be facing larger debt balances to start with. But the payoff is how much you’ll save on interest charges.

MagnifyMoney created a calculator that can easily help you see the difference between the snowball and avalanche methods.

Imagine you have three credit cards and can afford to pay $500 a month toward your debt:

  • $2,000 on a credit union credit card with a 6% interest rate
  • $6,000 on a credit card with a 19% interest rate
  • $8,000 on a store card with a 28% interest rate

Using the MagnifyMoney calculator, you see you could save $1,301 by using the avalanche method instead of the snowball method. And that is not surprising: by eliminating high interest rate debt first, you will end up paying less interest overall. You would also be out of debt faster.

The bottom line:

Both strategies will work, but you should pick the one that best fits your personality. If you easily feel overwhelmed by debt and feel like quitting, you should probably try the snowball method. You’ll get early “wins” and feel lots of motivation to keep going. If you’re more disciplined, the debt avalanche strategy might be your best fit.

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Pay Down My Debt, Personal Loans, Reviews

Best Egg Personal 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.

Best Egg Personal Loan

Updated October 5, 2016

Best Egg is a personal loan company trying to make the borrowing process fast and simple for people looking to refinance credit cards or who need funds for personal use. In this review, we will examine the costs and loan application process for applying for a loan through Best Egg. We encourage everyone to shop around for the best rate, and you can find the best personal loans here.


Best Egg offers unsecured personal loans. These are installment loans with a fixed monthly payment for the life of the loan, but like a credit card, are not secured with property such as a car or home. Meaning you don’t have to provide collateral in order to receive a loan.

Best Egg offers loans up to $35,000 with a 3 year or 5-year payback period. Your interest rate is determined by your credit history and can range from 5.99%-29.99% with an origination fee ranging from 0.99%-5.99%.

Best Egg loans are originated through Cross River Bank, which is located in New Jersey. You do not need to be a New Jersey resident to apply for a Best Egg loan.


The best features of Best Egg are the simple terms and competitive interest rates for borrowers with a strong, positive credit history. Beyond the interest charge and origination fee, there are virtually no fees with Best Egg.

The company charges $15 for a late payment and $15 for a returned payment, which is lower than the typical $25 fee. There are no application fees and the origination fee is deducted from your starting loan proceeds, so there is no out-of-pocket cost to get started. However, this does mean you need to factor in the origination fee when you request the amount you need for a loan.

There are no pre-payment fees, so if you are able to make extra payments or pay off your entire balance early, you will not be charged any additional fees.


Best Egg only offers payback periods of 3 years or 5 years. If you want a shorter loan payback period than 2 years or a longer payback period than 5 years, Best Egg will not meet your needs.

As a borrower, your interest rate is based on your credit score and is locked in at the time of origination. While some borrowers may qualify for a 5.99% interest rate and 1% origination fee, Best Egg does not disclose the requirements to qualify for its best rates.

Even at 1%, the origination fee is certainly a negative considering other personal loans like SoFi offer no origination fee and no pre-payment penalty.

The highest interest rates are nearly 30% with a 6% origination fee. These rates are comparable to the worst credit card interest rates and may not offer you any benefit compared to using a credit card, which has no origination fee.

At the worst interest rates, this is still much better than typical payday loans or auto title loans, but you may have lower cost options available including lenders like Avant.

What Do I Need to Qualify?

Best Egg loans are approved based on your credit history. If you qualify, you are assigned a letter grade which corresponds to an interest rate between 5.99% and 29.99%. Current rates are available here.

The application process requires giving your email, and Best Egg uses a “soft pull” on your credit report to determine whether you qualify and find out your interest rate. A soft pull does not impact your credit score.

When you apply, you will need your Social Security number and current contact information handy for the application process, which is typical for any loan application.

Who is this Best For?

If you have credit card debt with a high interest rate, refinancing with Best Egg could save you a lot of money on interest over the life your debt. If you can lower your interest rate and set a fixed payback period compared to the open ended time frame on a revolving credit account, you could easily save thousands of dollars.

The site suggests using loan proceeds to help pay for a move, vacation, home improvement, debt consolidation, home purchase, or vehicle purchase. This product may save you money compared to credit cards, but it is a best practice to avoid debt where possible, particularly for optional luxury purchases like a vacation.

What About the Fine Print?

One of the biggest benefits of using Best Egg compared to competitors is that loans with Best Egg do not come with a mountain of fine print. There is almost no fine print actually.

You do not pay unless you get a loan and the only fees you will encounter are the origination fee and from late payments and rejected payments from your bank account. That is really it. There is no catch.

Unless you’re in Massachusetts, then the fine print states that your minimum loan amount is $6,000.

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One alternative for your personal loan needs is SoFi. SoFi charges no origination fee, no pre-payment penalty fees and offers larger loans up to $100,000. SoFi also offers longer loan terms with a 3, 5, and 7 year option.

SoFi offers fixed rates between 5.95% – 14.24% and variable rates between 4.83% – 11.43%. Although SoFi does not use FICO, you do need to be a prime or super-prime borrower. That means you must be current on all of your obligations. And if you ever filed for bankruptcy, you will not be approved.

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LendingClub is a social peer-to-peer lending site where your loan is funded by a large group of investors who each contribute to your loan. A $3,000 loan could be funded by as many as 120 individual investors.

LendingClub loans assign a letter grade which corresponds to an interest rate, similar to Best Egg. Interest rates are similar, ranging from 5.99% to 35.89%. The largest loan available on LendingClub is $40,000.

If you are unhappy with your interest rate at Best Egg, it could be worth applying at LendingClub to see how your rate comes in. Depending on your history, your rate may be better or worse than Best Egg. Just be aware: LendingClub is not available in Iowa or West Virginia.


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Always Shop Around

It doesn’t hurt your score to see your offer with Best Egg, but there are other personal loan providers who also offer a soft pull. Don’t just take the first offer you receive. You should always be shopping around for the best possible rate, especially because lenders offering a soft pull don’t harm your credit score.

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Balance Transfer, Best of, Pay Down My Debt

9 Best 0% APR Credit Card Offers – October 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.

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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. La Capitol Federal Credit Union – 0% APR for 12 months, NO FEE

lacapitolAnyone can join La Capitol Federal Credit Union by becoming a member of the Louisiana Association for Personal Financial Achievement, which costs $20. Just indicate that’s how you want to be eligible when you apply for the card – no need to join before you apply. And La Capitol accepts members from all across the country, so you don’t have to live in Louisiana to take advantage of this deal on the Prime Plus card.

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5. 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. Look for the sentence “The introductory purchase and balance transfer APR is 0% for 12 months from account opening and applies to ALL Quorum MasterCard credit cards” at the very bottom of their page.

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6. 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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7. Navy Federal Flagship Rewards – 0% APR for 12 months , NO FEE

Navy Federal Flagship card imageIf you or a family member has a military affiliation, you can join Navy Federal Credit Union. This one has 0% on both purchases and balance transfers and an ongoing APR as low as 10.24%. Beware that there is a $49 annual fee on this card, but it’s not charged the first year, so you won’t have to pay a fee until the intro APR is complete or almost complete, depending on when you initiate your transfer. This deal ends on 11/1/16.

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8. 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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9. 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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10. 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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11. 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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12. 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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13. 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.


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.


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.


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.

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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


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%.


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.


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.


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.



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.


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

Unify Financial 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 Unify Financial 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 Unify Financial Credit Union. They’ll help you figure out what organization you can join to qualify, and you don’t need to be a member to apply.

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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%.


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.


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,
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 (23.24%).
  • 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.


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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What Happens When My Debt Gets Sold?

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Overdue Notice bill debt

When you take out a loan or make a purchase with your credit card, you have a legal obligation to repay the money. However, there are many reasons why you might not be able to make a payment. Perhaps you lost your job, or you have other more pressing debts to pay.

Whatever the cause, if you don’t make a payment, you could be charged a late payment fee in addition to the accruing interest. If you continue not making payments, the original creditor might turn to a debt collection agency that will actively try to contact you and get you to repay the money. The agency could be a department within the creditor’s company, or it might be a third-party agency that is hired to collect your payment on the company’s behalf. Eventually, if the company doesn’t receive any money, it might sell the right to collect your debt to an outside debt collection agency.

You Now Owe the Collection Agency the Money

Once the debt buyer purchases your debt, the firm has a legal right to collect money from you. But why does this happen? Often the original creditor doesn’t feel that it’s worth the time to continue trying to collect the money from you, and they sell the account at a discount — sometimes just pennies on the dollar. The agency that buys the debt, often in large batches along with others’ debts, can make money even if it only collects a small portion of what you owe – although, of course, it will be happy to take the full amount.

You’ll See a New Account on Your Credit Reports

The three major credit-reporting bureaus, Equifax, TransUnion, and Experian, track and record activity related to your loans and credit accounts. When a collection agency buys your debt, the transfer of the debt’s ownership gets reported to bureaus. The bureaus will open a new account with the collection agency’s name and the amount owed on your credit report. The original creditor’s account’s status might change to something similar to “charged off,” “transferred,” or “paid.”

Rod Griffin, director of public education at Experian, says there could be a note on the account saying the debt was “sold to” or “transferred to” and the collection agency’s name. Likewise, the collection agency’s account on your credit report may have a note saying the debt was transferred or bought from the creditor.

In some cases, your debt could be sold from one collection agency to another. “[Experian’s] policy is that you only have one collection agency that can collect on that debt,” says Griffin. While the original creditor’s account remains on your report, the first collection agency might fall off and be replaced by the new collection agency. If it doesn’t, Griffin says you can file a dispute to get the first collection agency removed. Similarly, double-check the original account and report an error if it has an “open” account status.

The Derogatory Marks Fall Off Your Credit Reports at the Same Time

Many derogatory marks, including a collection account, can remain on your credit reports for up to seven years and 180 days from the date your debt is declared delinquent. Some people worry that when their debt is bought and transferred, the clock gets reset, but luckily that’s not the case.

The timeline is determined by the original date of delinquency, and by law, debt collection agencies must report the original delinquency date to the credit-reporting agencies. The date will stick with the debt, even if it transfers hands several times over.

Griffin says you might hear about other dates, the most recent update date or the reported date, for example. While those could change if you’re in contact with the collection agency, that won’t extend the time for a deletion. After seven years and 180 days, sometimes sooner, the original account and related collection accounts will be taken off your credit reports. They will no longer impact your credit score, although you might still be legally obliged to repay the money.

Consider Paying Off a Collection Account to Help Your Credit Score

FICO Score 9 and VantageScore 3.0, the most recent versions of FICO’s and VantageScore’s basic credit-scoring systems, ignore paid collection accounts when calculating a credit score. This is in contrast to previous scoring models that considered a collection account, even a paid one, a negative mark and adjusted your score accordingly. Most lenders rely on the previous credit-scoring models when screening applications, but it’s worth keeping the change in mind if you’re concerned about your credit score.

When you have an account that was sent or sold to a collection agency and is nearing the seven-year mark, it might make sense to wait and let the account drop off your reports. However, if you’re looking for a way to quickly improve your credit score, paying off a collection account could be an option.

Bottom Line

If you fall behind on your debt payments, your creditor might sell your past-due account to a debt collection agency. The transfer gets recorded on your credit reports, and you’ll now owe the agency money. Having an account sent or sold to collections can negatively impact your credit score. Although you might be able to improve your score by repaying the debt, you could need to wait up to seven years and 180 days from your first missed payment for the account and subsequent negative marks to fall off your credit reports.


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The Best Way to Deal with Law School Debt

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Statue of justice legal law lawyer

The burden of six-figure debt is the new norm for law school graduates. According to the American Bar Association, the average public law school graduate carries $88,000 in debt, and private law school graduates carry a crushing $127,000 in debt. If you’re a JD struggling to figure out how to start whittling down your debt, here’s what to do:

Step One: Take a Look at the Big Picture

You can’t develop your debt payoff strategy until you understand your financial big picture. Gaining a clear financial picture doesn’t have to be difficult. You can start by reading the free e-book, Richer in 7 Hours, which walks you through how to calculate your net worth, how to eliminate debt, and more. The key is finding out how much you spend and how much money you are bringing in. From there, you can figure out how much you can afford to put toward your loans over time. The book will help you understand your finances so you can create a strategy to eliminate your law school debt.

Step Two: Know Your Options

Once you’ve created a clear picture of your finances, you’ll need to understand the things you can do to manage and eliminate your debt.

For Federal Student Loan Debt

The federal government offers a variety of programs that help you manage your federal student loan debt. These options don’t apply to any of your private loans. If you have federal loans, you may qualify for income-driven repayment plans, loan consolidation, interest-free loan deferment, loan forbearance, repayment assistance, or Public Service Loan Forgiveness. These programs won’t lead you to rapid debt freedom, but they may alleviate some of the burden.

Income-Driven Repayment Plans

The federal government offers four income-based repayment programs:

  • Pay As You Earn (PAYE)
  • Revised Pay As You Earn (REPAYE)
  • Income-Based Repayment (IBR)
  • Income-Contingent Repayment (ICR)

We’ve outlined the major differences between the programs below.

 income based repayment chart

Under income-driven repayment plans, you will need to “recertify” your income and family size every year to determine your payments. That just means picking up the phone to call your lender and asking to re-enroll in the program. These programs can be helpful as you grow your income, or if you’re seeking Public Service Loan Forgiveness.

Loan Consolidation

If income-driven repayment programs won’t save you any money based on your salary, but you have a high level of debt relative to your income, consider federal loan consolidation. Federal loan consolidations group your loans into a single loan with a single interest rate, and they extend the amount of time you have to pay. Consolidated loans over $60,000 have 30-year payment periods.

If you choose to consolidate your federal loans, you will still be eligible for income-driven repayment programs if you qualify in the future. Direct consolidation loans are eligible for Public Service Loan Forgiveness as well.

Your new interest rate will be determined by taking the weighted average of the interest rates on all the loans you wish to consolidate. In some cases, a consolidation will result in a longer payoff period, and dragging out the length of the loan could result in your paying more in interest.

Public Service Loan Forgiveness

Public Service Loan Forgiveness (PSLF) offers relief to those working for the government or eligible nonprofits. In order to be eligible, you will need your loans to be on an income-driven repayment plan or 10-year standard payment plan and make 120 payments (10 years’ worth of service) before the remaining amount is forgiven. The 120 student loan payments do not have to be consecutive.

If your loans are in a grace period, deferment, forbearance, or default, or you are currently in school, you cannot make a payment toward the 120-payment limit. Only federal loans qualify for PSLF, so do not refinance through a private lender if you’re pursuing loan forgiveness.

If you qualify for PSLF, you will not owe taxes on the amount forgiven after 120 payments.


During loan deferment, you do not have to make payments on your loans, but you must apply and qualify for loan deferment before you can cease payments. Qualifying situations include being in school (including an approved fellowship), up to three years of unemployment, up to three years of economic hardship, and during active military duty (and the 13 months following active military duty).

If you have subsidized loans including Direct Subsidized Loans, Federal Perkins Loans, or Subsidized Federal Stafford Loans, the government will usually pay interest during deferment.

But if you have other federal loans, interest accrues during deferment, but you do not have to pay interest on the loans during deferment. Instead, the interest will be “capitalized” or added onto your principal loan balance when you resume repayment.


If you do not qualify for loan deferment, you may qualify for loan forbearance. You can request forbearance for illness or financial hardship, but your lender doesn’t have to grant it. On the other hand, your lender must grant forbearance under certain qualifying circumstances. Qualifying situations include when you work in a service position where you’ve received a national service award, work in a low-income school, or are activated as a member of the National Guard, among many situations.

During forbearance, you do not have to make loan payments, but interest continues to accrue. You can either make interest-only payments, or you can allow the interest to be added to your loan balance when the forbearance period ends.

For Private Student Loan Debt

Private student loans don’t come with all the same programs as federal loans, so there are no forgiveness or income-driven repayment options available. Instead, try implementing some of the following strategies. Your best option may be to refinance your private loans at a lower interest rate. But before you go that route, consider these tips:

Loan Repayment Assistance Programs

Many schools want to encourage their alumni to work in public service, and they offer modest assistance to some qualifying individuals. Loan repayment assistance programs can differ from school to school, but you may find valuable help if you choose to go into public service.

Seek Out a Signing Bonus

Some firms will offer to assist you with student loans if you commit to a multiyear contract with them. If you have multiple offers, consider negotiating for a student loan repayment bonus. New lawyers reported repayment bonuses of $2,500-$75,000 when they signed multiyear contracts.

Become a Technical Expert

Lawyers with a science, medical, or engineering background may receive offers to pay off all their student loans if they choose to become patent attorneys or work in the U.S. Patent Office. Lawyers with technical expertise remain rare, so firms and the government compete over these types of lawyers.

Implement an Aggressive Payment Plan

You could take the scrappy way out by just getting aggressive with your payments. You can do this by attacking one loan at a time with the maximum amount you can afford and paying the minimum on your other loans. You can calculate the interest you’ll save and how quickly you can pay off your debt using the Snowball vs. Avalanche Calculator.

Before you start paying down your debts, be sure that you’ve got an emergency fund in place, and that you’re taking advantage of any employer matching on your 401(k) plan.

Do Not Pay Off Private Loans with Credit Cards

Purposely putting your debt on credit cards for the purpose of bankruptcy is fraud, and it could lead to jail time. If you’re facing default on your private loans, do not pay them with credit cards that you think can be bankruptible. Additionally, law school loans that have been transferred to your credit cards cannot be discharged in bankruptcy court.

For Federal and/or Private Loans

Refinance at a Lower Rate

If you’re interested in saving money on interest, the best thing you can do is refinance your student loans at a lower rate. But don’t refinance unless you feel confident that you will not need to use the flexible repayment options for federal loans as outlined above. Once a federal loan is refinanced through a private lender, it will no longer be eligible for programs like forgiveness, income-driven repayment, forbearance, or deferment. Private loans do not qualify for any of the loan repayment help outlined above.

Refinance your loans with a company that can offer you the lowest rates or the most flexible terms. You can use the Compare & Save tool to help you learn about your refinancing options.

Step Three: Implement Your Strategy

Now that you understand your financial picture, and you know your options, you can implement a plan that will help you manage or eliminate your law school debt. Taking the right actions will help you deal with your law school debt.

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How This California Couple Paid Off $100,000 of Debt in 2 Years

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Student Loan Debt
Illustration by Kelsey Wroten

When 31-year-old Priscilla Jones completed her MFA in film in 2011, she was left with a total of $96,000 of student loan debt from both her undergraduate and graduate studies. (She requested that we change her name for privacy reasons). Over the next three years, thanks to compounding interest charges, the original amount ballooned to $118,000. On her current payment plan, it would take another 15 years to pay off all her debt.

Rather than dragging the process out, she and her husband (we’ll call him Nathan), decided to aggressively pay down her debt. Over the next 22 months, they paid off $100,000 of the original loan balance — all while raising a young child in Los Angeles.

Here’s how they did it:

Making a pact

While Nathan, 41, was fully aware of Priscilla’s debt load when they got married in 2011, it wasn’t until 2014 — on Valentine’s Day, to be exact — when the couple opened the hood on Priscilla’s student loans to uncover what was lurking underneath.

“For the first few years of our marriage, we just couldn’t afford to buckle down to pay them off, so we didn’t really take a close look,” says Nathan.

The catalyst for examining Priscilla’s loans? In less than two months, one of the largest loans Priscilla carried — a total of $88,000 — would come out of forbearance. The additional loan payment would triple their monthly bill from $300 to $900. Two weeks later, they decided to dump their savings accounts, putting $24,000 toward her largest debt.

And then they made a pact: They would do everything they could to pay off the loans within three years.

Working overtime

On top of working a full-time job in operations at a tech startup, Priscilla took side jobs, working an additional 20 to 30 hours a week. She kept $600 a month from her salary for personal spending and used the rest to pay off her student loans. She and Nathan made sure to keep $5,000 to $10,000 in an emergency fund at all times.

Bonuses and promotions

They lived off of Nathan’s salary in management at a tech startup, and Nathan’s work bonuses went straight toward paying off the debt. When Nathan started his current job in 2012, he earned $53,000, including bonuses. His company soon saw tremendous growth. As a result, Nathan quickly ascended the ranks, and his income spiked dramatically. The couple’s combined salary in 2014 was $170k and $160k in 2015, and every penny they could pinch went toward their debt load.

“We think of ourselves as being very fortunate,” says Nathan. “But even if my income hadn’t grown as it did, we would’ve used the same mindset and tactics to pay off our loans. Instead of it taking three years, it would’ve taken 10.”

Never ‘act your wage’

Although they were in a high income bracket, no one would have guessed as much by looking at their spending habits. They lived as frugally as possible to focus on paying off the student loans. They stayed in the two-bedroom, two-bathroom apartment in Venice that Nathan had locked down at a low rate during the recession. They drove two beat-up cars that were paid off in full and had good gas mileage.

“We really had to examine our needs versus wants,” says Priscilla. While they’ve never been big spenders, and value community and experiences, they had to put some of their wants on hold. For instance, Nathan, who loves to invest, contributed just the minimum toward his employer’s 401(k) to qualify for the full matching contribution. Priscilla curbed any frivolous spending on clothes. They also put off getting new carpet and furniture, both of which needed desperately to be replaced.

They shopped at the Dollar Store, didn’t buy clothes that required dry cleaning, and refrained from traveling for pleasure. They paid as many bills as they could on their credit cards, which were paid in full each month. Any reward points they racked up went toward gift cards for restaurants and movies. A rare dinner out would be at El Pollo Loco or In-N-Out Burger.

“We turned it into a game, and had fun with it,” explains Priscilla. For instance, the couple placed a chalkboard in their kitchen and wrote on it the outstanding debt amounts and interest rates, along with specific dates for hitting their goals.

The ‘avalanche’ method

To prioritize which debts would be paid off first, they decided to use the ‘debt avalanche’ method. They aggressively knocked off the loan with the highest interest rate first, then worked their way down. They would challenge each other to save as much as they could toward paying off the loan. “Working together to pay off debt helped us bond,” adds Nathan.

“To stay motivated, we would obsessively calculate how much interest we were paying each day,” says Priscilla. “At one point we were paying $37 a day in interest alone.”

Taking time to celebrate

When they reached a debt payoff total of $100,000 in February 2015, they decided to ease up on their loan repayments. To celebrate, they rented a limo and had a night out on the town. They also finally were able to give their apartment a facelift. “We no longer have to move furniture around to hide the holes in the carpet anymore,” Priscilla says.

In September of this year, the couple made their final loan repayment and are completely debt- free.

They say that it’s essential to maintain perspective when paying off student debt.
“Remember, you’re not dying,” Nathan says. “Just focus on paying it off, and your debt will get crushed.”