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What to Know About Returned Checks and Their Fees

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

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Also known as a bounced check, a returned check is one that the bank has not honored. This is usually because there aren’t sufficient funds in your account.

Regardless of why the check was returned, you may owe a returned check fee. Let’s dive deeper into what a returned check fee is, how much it may cost you and what you can do to prevent these fees in the future.

What is a returned check fee?

If you write a check but don’t have enough money in your checking account to cover it, you may have to pay a returned check fee. A returned check fee is charged by the recipient of the check as a consequence for attempting to distribute funds that you simply do not have. When this happens, the recipient of the check may also be charged by their financial institution, so a returned check fee covers the merchant’s recovery costs.

In addition to the returned check fee charged by the merchant, you may also owe a returned item fee, also called a non-sufficient funds (NSF) fee, to your financial institution.

How much could you owe if a check is returned?

Average Total Cost of a Returned Check
Fee TypeAverage Amount
Returned check fee$20 to $40
NSF fee$30.50

If you bounce a check, the fees can add up fast. As mentioned above, the merchant could charge you a returned check fee to cover their recovery costs. There are state-specific limits to these fees, and they typically range between $20 and $40. Some states also permit merchants to charge a percentage of the check’s amount. In Ohio, for example, you could owe $30 or 10% of check amount, whichever is greater.

You also may have to pay an NSF fee to your financial institution if you wrote a check and don’t have enough money in your account to cover it. While returned check fees and NSF fees vary, their amounts are usually fairly comparable. NSF fees typically average around $30.50 according to a 2019 study by DepositAccounts.com.

Based on the average amounts charged for each fee type, let’s say the merchant charges $30 for a returned check fee and your bank charges $30.50 for an NSF fee. In this case, you may have to dish out a total of $60.50, which is a lot to pay for a returned check.

For more information on the types of fees you may be charged in the instance of a returned check, visit your bank or credit union’s website. If you don’t find what you’re looking for online, give them a call and ask for clarity.

What happens when a check is returned?

Fees aren’t the only consequence of returned checks. You may also face the following repercussions:

  • Your bank or credit union may notify you and report the incident to ChexSystems:ChexSystems is a reporting agency that tracks your banking activity and evaluates your risk for opening new accounts. A bad notation with ChexSystems can keep you from getting approved for credit cards, loans and other products down the road.
  • Your account may be closed: If bouncing checks becomes a habit, your bank could close your account. An account closure, coupled with a series of bad marks on your ChexSystems report, could make opening a new account at another bank difficult.
  • You may face legal trouble depending on the state in which you live: Laws vary from state to state, but you could owe a fee and even face jail time if you knowingly wrote a bad check.

To minimize the consequences of a bad check, reach out to the recipient and explain that you don’t have enough money to cover it. You can work together to come up with a solution.

How to avoid return check fees

While returned check fees are frustrating, there are several steps you can take to avoid them in the future. In order to do so, you will want to evaluate your banking habits and also look at any safeguards you can put in place to prevent overdrawing your available funds in the future.

  • Pay attention to your account balance: Make sure you always know how much money is in your account. You may want to set up low balance alerts so that your bank or credit union notifies you when you’re at risk of overdrafting.
  • Get overdraft protection: The cost of overdraft protection through your financial institution is often worth it because the fees are lower than what you’d pay if you were to overdraft your account.
  • Link your checking and savings account: If you use the same bank for checking and savings, you may want to link these two accounts. This way your savings account can cover any overdrafts that you may accidentally make in your checking account.
  • Only write checks when you have the funds in your account: If you’re expecting funds in your account and write a check before they hit it, you may face a return check fee. So it’s a good idea to wait until the money is in there before you write a check.
  • Keep your spending in check: The more you spend, the less money you’ll have in your account. If you have a tendency to overspend, create a budget and get rid of any unnecessary expenses, such as coffee shop visits or unused memberships.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Pay Down My Debt

What Is Debt Consolidation?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

Debt consolidation is the process of rolling several debts into one easy-to-manage payment. It’s a strategy you can use to simplify the debt payoff process and save some money on interest. If you’re overwhelmed with multiple high interest debts, it may be just what you need to become debt-free faster.

What is debt consolidation and how does it work?

If you have many unsecured debts to pay off, you can turn them into a single monthly payment through debt consolidation. When you consolidate your debt, you won’t have to manage different payments, interest rates, payment dates and payback periods. You’ll eliminate confusion and make the process of repaying debt more manageable.

While there are several debt consolidation strategies at your disposal, a debt consolidation loan is a popular option. A debt consolidation loan is a personal loan you use to combine multiple debts with a new one, ideally with a lower interest rate and more favorable terms. You’ll receive a lump sum of cash to pay off your debts, and then make a single monthly payment on your new loan. (Some lenders can pay off your creditors directly, however.)

You can use debt consolidation to pay off consumer debt such as:

  • Credit cards
  • Medical bills
  • Utility bills
  • Payday loans
  • Taxes
  • Collection bills

Once you figure out all the unsecured debt you owe, use our debt consolidation loan calculator to get an idea of how long it will take you to repay them. The calculator compares the cost of all your debts versus the cost for a debt consolidation loan. It can help you determine how much money you can potentially save.

Pros and cons of debt consolidation

Pros:

Cons:

  • One monthly debt bill: Since you’ll only have to make one monthly debt payment rather than several, you’ll find the debt payoff process to be much easier.
  • May save money on interest: If you have high interest rates on your existing debts, consolidating them to a lower interest rate can allow you to save money over time.
  • Lower monthly payments: With debt consolidation, you can reduce your monthly payments through a lower interest rate and, if you choose, a longer repayment term.
  • Can pay off debt faster: A lower interest rate and a single debt bill can allow you to become debt-free faster than if you were to keep your multiple debt payments.

  • Potential fees: Some lenders charge an origination fee to take out a loan. Others may charge you a prepayment penalty if you pay off your debt early.
  • Can be hard to qualify: Traditional debt consolidation loans are unsecured personal loans, which require great credit to receive the best interest rates.
  • Does not solve an overspending problem: While debt consolidation can be a helpful strategy, it won’t help you control your spending and stay out of debt.

Where to find debt consolidation loans

Banks, credit unions and online lenders all offer debt consolidation loans. You might start your search for a loan with your current bank or by looking up lenders in your area who offer debt consolidation loans. But don’t overlook online lenders. They have lower overhead costs compared to lenders with brick-and-mortar locations and can pass those savings on to borrowers.

Loan marketplaces such as LendingTree can be especially helpful when you’re exploring lenders. By filling out a simple form, you can be matched with up to five lenders. You might also check out MagnifyMoney’s personal loan marketplace. Here are a few options you’ll find there.

Debt consolidation loan lenders
 

FreedomPlus

Learn more

Peerform

Learn more

SoFi

Learn more

APR

7.99%-29.99%

5.99%-25.05%

5.99%-18.28%

Terms

24 to 60 months

36 or 60 months

24 to 84 months

Borrowing limits

$7,500 to $40,000

$4,000 to $25,000

$5,000 to $100,000

Origination fee

1.99% - 4.99%

1.00% - 5.00%

No origination fee

Minimum credit score requirement

Varies

600

680

How to compare debt consolidation lenders

To understand your loan options, you’ll want to prequalify with several lenders. This process only requires you to provide basic information about yourself, your finances and the loan you want. Prequalifying will give you an idea of the kinds of loan terms you may get when you formally apply.

As you review lenders and offers, pay attention to such factors as:

  • Interest rates
  • Borrowing limits
  • Repayment terms
  • Fee structures
  • Minimum credit score requirements

Is debt consolidation worth it?

Debt consolidation may be a good idea if…

  • You have good credit: Lenders reserve the best loan terms, such as low interest rates, to borrowers with strong credit profiles. A lower rate could translate to a lower overall cost of borrowing.
  • Consolidating would make repayment cheaper: Debt consolidation is generally used to make repayment cheaper. That means accessing a loan with fewer fees and a lower interest rate. However, you might also choose a shorter-term loan to minimize interest charges.
  • You have other bills to worry about first: Debt consolidation may also make sense if you want lower monthly payments, such as by picking a longer-term loan. Although this would increase your total borrowing costs, it could allow you to focus on other financial priorities by freeing up some cash each month.
  • You’re tired of juggling multiple loans: If you have several credit card and loan bills to worry about, debt consolidation could make your life easier. By combining your debts, you’ll only have one monthly payment to worry about.

Debt consolidation may be a bad idea if…

  • You have bad credit: Borrowers with poor credit may find it difficult to find an affordable loan to consolidate debt. However, if you’re facing super-high interest rates, such as those offered on payday loans, a debt consolidation loan may yet be more affordable.
  • You’ll only rack up more debt: Debt consolidation can be a great way to wipe out credit card debt. But if freeing up your credit lines only means you’ll rack up more credit card debt, then consolidation may not make sense. You don’t want to bury yourself deeper into debt.
  • It wouldn’t save you money: Lenders commonly charge an origination fee equal to 1% to 8% of your loan amount. Tack on potential prepayment penalties from your old creditors, and you may find debt consolidation won’t save you money after all. Take these factors into account when exploring your options.

3 debt consolidation alternatives

Balance transfer credit card

A common alternative to a debt consolidation loan is a balance transfer. With this repayment strategy, you’ll take out a balance transfer card and move your existing credit card debt onto it. The benefit of a balance transfer card is that they commonly come with a promotional 0% APR. You can avoid interest charges by repaying your debt in full during the promotional period.

However, if you don’t repay your debt in full, you’ll be responsible for all of the interest that accrued. There’s also a balance transfer fee you’ll typically pay; it’ll be a percentage of the balance you transfer. That said, this strategy is one of the best for consumers who can aggressively repay what they owe and are sure the balance transfer fees they’ll pay will be offset by the amount they save on interest.

Pros

Cons

  • Move your debt to a better credit card: Depending on the card you get approved for, you may be able to move your debt to a card with a lower interest rate and more favorable terms.
  • Interest savings: You can consolidate your credit card debt into a single credit card with a 0% or low promotional APR that can save you money on interest.
  • Can help your credit: If you use your credit transfer card to reduce your credit utilization ratio, pay down debt faster and lower your balance to zero, you can improve your credit.

  • Balance transfer fee: While balance transfer fees vary, most credit cards charge 3% of the balance.
  • Promotional APRs expire quickly: These APRs last about 12 to 21 months. After this period, the card will function like a typical credit card and the interest rate will go back up.
  • Can add to debt: If you have a spending problem, a balance transfer card can make it worse and put you in more debt by freeing up your old credit lines.

Home equity loan

A home equity loan allows you to borrow against the equity you have in your home. Other factors such as your outstanding mortgage balance, home’s value and your credit health will affect your loan eligibility and amount.

Because you use your home as collateral, you’ll find home equity loans come with better terms than you may find on an unsecured loan such as a personal loan. However, you’ll find a longer application process as well as closing costs. You should be able to reliably make payments in full and on time each month, too. Otherwise, you risk losing your property.

Pros

Cons

  • Fixed interest rates: That means predictable monthly payments throughout repayment.
  • Lower interest rates: With collateral, a home equity loan will generally be more affordable.
  • Larger loan amounts: Depending on your available equity, you could access a large loan amount.
  • Your home is collateral: If you fail to repay your home equity loan, you could lose your property.
  • Closing costs: Expect to pay about 2% to 5% in fees.
  • Slow application process: It can take several weeks to receive loan approval and funds.
  • Need home equity: New homeowners, for example, may find they don’t yet have enough equity to qualify.

401(k) loan

With a 401(k) loan, you borrow money from your retirement savings and repay them over time with interest. Your monthly payments, including interest, go right back into your retirement account. Unlike with a 401(k) withdrawal, where you permanently remove money from savings, you won’t have to pay taxes or penalties on a 401(k) loan unless you default.

You can access this type of loan through the retirement plan offered by your employer. Often, you’ll have up to five years to repay the loan amount. If you leave or lose your job, though, you’ll be required to repay the full loan amount within a short period.

Pros

Cons

  • Low-cost borrowing: Since the interest you pay goes right back into savings, a 401(k) loan can be affordable.
  • No credit check: This loan also doesn’t appear as a debt on your credit report.
  • Lost savings: You’ll miss out on the money you would have earned on your borrowed amount.
  • May suddenly need to repay the full loan amount: If you lose or leave your job, you’ll be asked to quickly repay the loan.
  • Taxes and penalty, if you default: If you’re under 59 ½, you’ll pay certain fees for defaulting.

Debt settlement

Debt settlement involves negotiating with your creditors to settle for less than what you owe. You can hire a debt settlement company to negotiate with creditors on your behalf, though that may be a risky move. That’s because some debt settlement companies will ask you to stop making payments in order to starve creditors into negotiating over a payoff amount; you’re also liable to pay fees.

Pros

Cons

  • Potential to reduce your debt: Debt settlement can lower the amount of debt you owe to various creditors.
  • One deposit every month: If you hire a debt settlement company, you’ll deposit money into a special account every month. As your balance goes up, they’ll contact your creditors to negotiate lower settlement amounts.
  • Can pay off debt faster: With debt settlement, you may be able to settle your debt in only 24 to 48 months.

  • No guarantees: Your creditors are under no obligation to negotiate over your debt.
  • Your credit will take a hit: When you settle a debt, your credit report will show that a debt was paid off for less than the full amount.
  • High fee: If you opt for a debt settlement company, you may owe them a fee of 15% of your total debt once it settles.
  • Tax consequences: You may have to pay taxes on the portion of your debt that is forgiven by creditors.

Bankruptcy

Bankruptcy is a legal process where your assets are used to pay off debts (Chapter 7) or you repay debt via a debt repayment plan (Chapter 13). Since bankruptcy comes with long-term legal and financial consequences, it’s wise to consult a bankruptcy lawyer before pursuing it.

Pros

Cons

  • Relief from collection activity: Once you file for bankruptcy, most debt collectors will stop contacting you.
  • Chance to discharge your debts: If you are overwhelmed with debt, bankruptcy can allow you to wipe them out.
  • A short process: Chapter 7 bankruptcy only takes 4 months, on average.

  • May lose some of your assets: If you opt for Chapter 7, you may lose your home and other assets.
  • Negative long-term impact to your credit: While Chapter 7 bankruptcy stays on your credit report for 10 years, Chapter 13 remains for seven years.
  • Strict qualifications: You’ll have to meet certain income criteria if you wish to pursue Chapter 7. If you don’t qualify, Chapter 13 may be your only option.

Debt consolidation can be a great way for you to take control of your debt and improve your finances. However, it is not right for everyone so it’s important to do your research before you take the plunge.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Personal Loans

Citibank Personal Loan Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

 

Citi
APR

7.99%
To
23.99%

Credit Req.

Not specified

Terms

12 to 60

months

Origination Fee

Not specified

APPLY NOW Secured

on Citi’s secure website

Citibank personal loan details
 

Fees and penalties

  • Term lengths: 12 to 60 months
  • APR range: 7.99%-23.99%
  • Loan amounts: $2,000-$50,000
  • Time to funding: Checks are mailed within five business days of approval.
  • Credit check: Hard Pull
  • Origination fee: Not specified.
  • Prepayment fee: Not specified.
  • Late payment fee: Not specified.

Perks offered to Citibank personal loan customers aren’t widely advertised online. However, linking a personal loan account to an eligible checking account enrolled in Citi ThankYou Rewards can help you earn points on a monthly basis. Points never expire and can be redeemed for gift cards, travel rewards, cash and more.

Eligibility requirements

  • Minimum credit score: Not specified.
  • Minimum credit history: Not specified.
  • Maximum debt-to-income ratio: Not specified.

While a minimum credit score isn’t listed, Citibank does specify that the lowest quoted personal loan rate requires the borrower to have excellent credit and to use Citibank Auto Deduct.

Citibank personal loans are only available to borrowers with a maximum of one existing personal loan account with the financial institution. If clients wish to apply for a second Citibank personal loan, the most recent personal loan cannot have been opened within the past six months. Qualified applicants are also required to have a minimum annual income of $10,500.

It’s also worth noting that anyone who wants to apply for a personal loan online must either be a current Citi checking or savings account customer registered for Citibank online or have received a Citi Personal Loan offer with an invitation number. Without an invitation, current customers who don’t have an online account and non-customers must apply in person at a Citibank branch or over the phone.

Applying for a personal loan from Citibank

Personal loans are available in amounts from $2,000 to $50,000, but applications cannot be submitted online for amounts exceeding $30,000. Applicants who wish to borrow up to $50,000 must call 1-877-362-9100 or visit a Citibank branch location.

To begin the online application process, current Citibank customers registered for online access will need to enter their user ID and password. Non-Citibank customers who have received a Citi Personal Loan offer with an invitation number will be directed to an application site and asked to enter the invitation code, their last name and zip code.

Credit scores are not impacted for viewing a personal loan offer. Upon approval, a check for the full amount of the loan will be mailed within five business days.

Pros and cons of a Citibank personal loan

Pros:

Cons:

  • Fixed rate: Citibank personal loans come with a fixed rate, allowing borrowers to enjoy fixed monthly payments. Note that defaulting on your loan may come with a 2% APR increase.
  • ThankYou Rewards: Borrowers can earn monthly ThankYou Rewards and redeem them for cash, gift cards, travel, and more.
  • Competitive rates: Fixed rates range from 7.99% to 23.99% APR.
  • Flexible terms: Borrowers can choose from a variety of repayment terms, from 12 to 60 months.
  • Limited online application access: To apply online, prospective borrowers must either be a current Citi checking or savings account customer registered for Citibank online or have received a Citi Personal Loan offer with an invitation number. Without an invitation, current customers who don’t have an online account and non-customers must apply in person or by phone.
  • Lowest rate may be hard to get: To receive the lowest quoted rate, borrowers must use Citibank Auto Deduct to repay the loan, have excellent credit, borrow at least $10,000, have a loan term of 36 months or less and sufficient relationship balances.

Who’s the best fit for a Citibank personal loan?

A Citibank personal loan can be a great option for consumers with a one-time need to borrow money. Those looking to get the lowest rate at Citibank will need to fulfill the following qualifications:

  • Repay with Citibank Auto Deduct
  • Have excellent credit
  • Borrow at least $10,000
  • Repay the loan within 36 months
  • Have sufficient relationship balances

That could be a lot of hoops to jump through. However, loan amounts range up to $50,000, so this product can be a good fit for consumers who need a higher loan amount. The chance to earn ThankYou Rewards, which can be redeemed for cash, gift cards, travel, and more can make this lender a good choice for many borrowers.

Citibank consumer reviews

Citibank has an F rating from the Better Business Bureau (BBB), as of July 2019. LendingTree, MagnifyMoney’s parent company, does not have consumer reviews on personal loans from Citibank.

We advise potential borrowers to carefully research lenders before applying. Read each lender’s fine print to get a good understanding of its fee structure, review rates and terms and consider customer reviews.

Citibank FAQ

No. You do not need to put any money down in order to take out a Citibank personal loan.

You can take out a Citibank personal loan to make improvements to your home, pay down high-interest debt, or fund a large, one-time purchase.

Citibank Auto Deduct automatically deducts the required payment from your checking, savings, or money market account. You can land a lower rate by signing up for Citibank Auto Deduct.

If you do not pay back your Citibank personal loan, your APR may increase by 2%.

To earn monthly Citi ThankYou Points, you need to complete one qualifying bill payment and one qualifying direct deposit each statement period.

A Citigold membership gets you your own Relationship Manager, a wide range of investment products in all major currencies, global banking and investment services, access to offshore wealth management, and more. By joining, you can get a 0.25% rate discount on your personal loan.

If you join Citi Priority, you can receive a 0.25% rate discount on your personal loan as well as waived fees for various financial products, 24/7 customer service, and preferred pricing on a selection of mortgages.

Alternative personal loan options

LightStream

APR

3.99%
To
19.99%*

with AutoPay

Credit Req.

Not specified

Terms

24 to 144*

months

Origination Fee

No origination fee

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure

LightStream is the online lending division of SunTrust Bank.... Read More


*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay may be higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 3.99% APR with a term of 3 years would result in 36 monthly payments of $295.20.

LightStream, a division of SunTrust Bank, offers personal loans from $5,000 to $100,000. Rates are fixed and vary by loan purpose. There are no fees attached to the loan, including prepayment penalties, making it a good choice for consumers who might want to pay the loan off early. Loans can be funded as quickly as one day of approval, so this is a good option for anyone who needs cash fast.

PenFed Credit Union

PenFed Credit Union
APR

Starting at 6.49%

Credit Req.

Not specified

Terms

Up to 60

months

Origination Fee

None

APPLY NOW Secured

on PenFed Credit Union’s secure website

Pentagon Federal Credit Union (PenFed) offers personal loans with terms up to five years and maximum loan amounts of $20,000.... Read More

PenFed grants personal loans from $500 to $20,000. Along with none, there are also no other hidden costs, making it a great choice for borrowers looking to avoid additional expenses. Funds are available immediately, which is advantageous for consumers who need cash now. Do note, personal loans are only available to PenFed members.

SoFi

SoFi
APR

5.99%
To
18.28%*

Credit Req.

680

Minimum Credit Score

Terms

24 to 84

months

Origination Fee

No origination fee

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure

SoFi offers some of the best rates and terms on the market. ... Read More


Fixed rates from 5.99% APR to 18.28% APR (with AutoPay). SoFi rate ranges are current as of October 5, 2020 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

SoFi provides personal loans ranging in value from $5,000 to $100,000, making it a good choice for borrowers who need a significant amount of money. Rates are fixed and loans are completely free of fees. Funds are typically deposited in consumer accounts a few days after approval and the successful completion of required paperwork. An added bonus, SoFi’s unemployment protection benefit offers an additional layer of security by allowing borrowers to temporarily pause payments and helping them find a new job if they become unemployed….

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Get Personal Loan Offers
Up to $50,000

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