Sometimes, the grass really is greener on the other side. Sometimes, it’s just more of the same.
So when it comes to leaving your current job for a new one, how can you tell beforehand if the opportunity is really worth it?
While there’s always going to be risk involved when changing employers, you can make a more confident choice by considering some key factors. Here are the most important variables to take into account before changing jobs.
As the Covid-19 pandemic has shown, many employees can work from home just as efficiently as they would at the office. While some companies have vowed to continue letting people partially or permanently work from home, others have steadfastly refused to make working from home the new normal.
If you prefer a more flexible schedule because of family commitments, chronic health problems, or any other reasons, work-from-home flexibility should be a high priority.
Health insurance is one of the most important factors to consider. A company that pays your premiums is essentially giving you hundreds of dollars in benefits every month.
Ask about the health insurance coverage before you accept a new position, specifically how much the monthly premiums will cost. Many small businesses are not required to provide coverage for their employees. If you’re applying to work at a small company, inquire about health insurance early on.
If the company does not provide coverage, you’ll have to buy a policy from the HealthCare Marketplace, where you’ll be 100% responsible for the premiums.
Paid Time Off
Paid time off is another major consideration to take into account before leaving one company for another. If your employer has a generous vacation policy, you may be surprised to find out that other companies are more strict.
Paid time off includes vacation days, sick days, holidays, and parental leave. If you plan to have kids soon, examine your company’s maternity leave policy so you can compare it to prospective employers.
Retirement Contributions and Stock Options
If you currently receive matching 401(k) contributions from your employer, double-check the vesting schedule of your new job. The vesting schedule outlines how quickly you’ll earn 100% of the employer contributions.
Many employers have a graded vesting schedule, which means that every year you will earn a certain percentage of the employer contributions. For example, if your company has a five-year vesting schedule, you’ll pocket 20% of their contributions every year. Once you’ve worked there for five years, you’ll receive 100% of the contributions.
Others use a cliff vesting schedule, which has an all-or-nothing requirement. You have to work there for a certain number of years to be eligible for 100% of the employer’s contributions. If you work less than that, you won’t be eligible for any of it. If you don’t plan to stay at your next job very long, then it’s important to understand the vesting schedule.
Public companies often provide stock options to their employees, which can be worth thousands of dollars in extra benefits. Employees with a stock purchase plan can buy company stock at a discount and resell it later for a profit.
If you plan to go back to school, look for a company that provides tuition reimbursement. Many employers will pay for all or part of your tuition, but the benefits vary.
Some will require that your degree applies to your current position, while others will be more lenient. If you don’t want a full degree, you may be able to convince your employer to pay for special courses or certificates that will also boost your resume.
Some companies have begun to offer student loan reimbursement. With these programs, employers contribute to your student loans by either matching payments or providing a set amount each year. Like a 401(k) match, you may have to work there for a certain period of time to qualify.
Room for Advancement
If you’re searching for a firm where you can stay for several years or more, it’s important to consider if there’s room to grow. The bigger the company is, the more likely it is that you can stay there and get promoted to another position. That’s harder to do at smaller companies where room for advancement may be limited.
The general office environment can impact your overall job satisfaction, but it’s a topic often neglected during the interview process. If you’re interviewing in-person, notice how the office looks and how employees are acting.
Do you hear laughter or is it dead quiet? Do they have a diverse staff? Are there fun initiatives, like casual Fridays, or does there seem to be a strict dress code? Depending on what you’re looking for, the answers to questions like these are crucial.
No one wants to get a job only to be laid off months later. Before switching companies, investigate your prospective employer to see if they’re in danger of shuttering or being sold.
Look through recent press clippings, especially from the local newspaper or business journal. If you have friends in the industry, ask if they think the company is stable.
Sometimes you can’t help but take a risk, like if you’re working for a start-up or in a volatile industry. In this case, you should have a sizable emergency fund and keep your resume and LinkedIn profile updated in case you lose your job.
Education and Training
When you’re interviewing at a job, ask if they pay for employee education, like attending industry-wide conferences or local training sessions. It’s valuable to work for a company that cares about employee professional development.
If you don’t expand your breadth of knowledge, then you may find yourself in a tough spot years later when looking for another job, with out-of-date skills.
Use Your Intuition
If you’ve considered all the factors listed above but are still getting a bad vibe about the new job, don’t hesitate to back out. Your gut intuition may be telling you something important about the company that you can’t verbalize clearly.
The trade deficit widened in January to a seasonally adjusted $68.2 billion, from a revised $67 billion in December — an increase of 1.8%. The surge in household demand for goods following the onset of the pandemic is the main driving force of the larger deficit in trade. The U.S. economy has bounced back faster than most of its trading partners, resulting in imports outpacing exports. The trade deficit is also widening because depressed global demand continues to hurt U.S. export growth. Widespread vaccinations this year will result in a slight shift in household consumption away from goods and toward services, and a gradual normalization of activity in the services sector.
Pandemic-induced demand by U.S. households fueled imports. Total imports rose 1.2% in January, with imports of goods modestly outpacing imports of services. The former were driven higher by inbound shipments of consumer goods. Booming consumer spending and lean levels of retail inventories indicate that the strength in consumer imports will continue.
Exports of consumer goods will gain momentum as the world economy continues to improve this year. Exports rose 1% in January, with industrial supplies and capital goods notching the strongest gains. The trade balance in services swung to a surplus for the first time since June, as exports outpaced imports. Still, services exports continue to struggle amid restrictions related to COVID-19. Total exports remain well below their prepandemic level.
Gasoline prices jumped 6.6% in February and drove overall prices up 0.4% for the month. And gasoline prices are headed up in March as well, which would be the fourth consecutive large monthly increase.
The surge in gasoline prices does not mean that inflation is getting out of hand. It was expected that fuel prices would bounce back as the economy gets back to normal. Gasoline prices in mid-March were still below 2019’s peak level.
In contrast to gasoline, prices excluding food and energy edged up only modestly in February. Overall, prices are 1.7% higher than they were twelve months ago.
Used-car prices dropped for the fourth month in a row. They had surged during the pandemic because of shortages of new cars and strong demand. The new government stimulus checks of $1,400 to individuals will likely push up demand for vehicles again, reversing the downward price trend for a while.
Air fares dropped for the third month in a row in February, but this trend is expected to reverse as the current easing of the pandemic is likely to boost travel.
Medical costs are beginning to bounce back after being depressed last year. Costs should end the year up 4.4%, on average.
The cost of shelter is running lower than normal right now because rent increases have been slowed by the pandemic. Rent has been rising at only a 1.5% annual rate, after coming in above 3% for each of the past five years. House prices have been rising strongly, but these are not included in the consumer price index calculation, and won’t start causing steeper rent increases until sometime late this year.
Expect overall prices to rise 2.5% in 2021 as the pandemic recedes. Inflation ended 2020 at 1.4%, far below 2019’s 2.3%, but as the pandemic ends, some prices that had been depressed will start to reassert themselves, such as apartment rents, air fares and hotel rates. Core inflation, which excludes the costs of food and energy, will run at about 2.0% in 2021, up from 1.6% at the end of 2020. The Federal Reserve will recognize that this pickup in inflation is the result of temporary factors, and will not be tempted to raise short-term interest rates in order to tamp it down.
The pace of capital spending picked up yet again in January, rising 1.8% for the month and 8.0% over the past 12 months. Spending is now 8.7% above its prepandemic level, and new orders are 9.7% higher. Purchases of machinery are robust, as are computer sales. Even though many uncertainties about the economy’s progress remain, businesses are apparently deciding to push ahead with expansion plans that had been on hold, in order to be prepared for the eventual recovery. However, surveys indicate that large firms are more enthusiastic than small firms at this time.
Likely beneficiaries of the spending binge include makers of industrial robots and 3D printers. Robots remove the need for worries about physical distancing of the workforce. And 37% of U.S. assembly plants plan to invest in 3D printers, a record high. Interest is also high in collaborative robots, which work in close contact with humans instead of as stand-alone ‘bots. 31% of assemblers are currently using the technology or plan to within the next year, and 17% within two to three years.
A boost for purchases of oilfield equipment seems likely, now that the price of West Texas Intermediate crude oil has surpassed $60 per barrel, its highest level since the beginning of 2020. The number of active drilling rigs has been on a steady upward path since the beginning of October.
Everyone needs extra money from time to time, and this doesn’t change when you have bad credit. Unfortunately, your options become much more limited when you have bad credit. This makes it difficult to qualify for a loan, even when you need it to cover a financial emergency.
Whether you’re wondering how to get a car loan with bad credit, pay hospital bills, or even qualify for a mortgage with bad credit, we’ll show you how to improve your credit score and get your finances back on track.
Not only will you find out how improving your credit score can save you money on your next loan, you’ll also learn steps you can start taking today to start building your credit.
How does bad credit affect your ability to get a loan?
Before you start looking for a loan, it’s important to get an accurate understanding of your credit score. Most lenders use the FICO scores, which ranges from a low of 300 to a high of 850. A “bad” credit score is typically defined as lower than 629.
If you want to know your exact number, you’ll have to purchase that information from FICO. But if you simply want to see what kind of derogatory items are on your credit report (and potentially fix them), you can request a free copy of each of your three credit reports.
It’s a good idea to take advantage of this free service every 12 months to check your reports for accuracy even if you’re not actively looking for a loan.
Once you’ve established whether or not your credit score is low, find out the exact impact bad credit can have on your life. Bad credit affects you both financially and emotionally, but the most expensive effect is the type of loan you’re able to get.
Higher Interest Rates
When applying for a loan, the lender will charge you higher interest rates for a poor credit score. That’s because your lender sees you as a greater financial risk, so they charge higher rates in case you default on the loan.
Higher interest rates can really add up over the life of the loan. Keep reading to find out exactly how much.
Even worse than getting a high interest loan, you may not qualify for a loan at all if your credit score is too low. If the loan is for something non-essential, then this may not be that big of a deal.
But it can significantly affect your well-being if you have serious financial needs, like car repairs or medical bills. At this point, some people decide to turn to “no credit check” lenders who offer predatory products like payday loans.
Though short-term, these loans have extraordinarily high APRs and often lead people into a cycle of never-ending fees for what started off as just borrowing a few hundred dollars. Luckily, there are many ways to avoid ending up in this situation.
Where can you get a loans for bad credit?
If you do have a poor credit history, some reputable lenders might be willing to offer you a loan. Just remember, you’re going to be paying a lot of interest on top of the amount you borrow.
Check Out Our Top Picks:
Best Personal Loans for Bad Credit
It’s always good to check with your local bank or credit union, although they are likely to have stricter lending standards and a slower origination process. If you have an existing relationship with a bank or credit union, they may be willing to help you out.
Many online lenders offer quick approval and funding, even for borrowers with a low credit score. Just be sure to do your research to make sure the company operates a legitimate business.
Before taking out a personal loan from anyone, check to see what kind of reviews that company has received and what its Better Business Bureau rating is.
Bad Credit Lenders
Here are a few online lenders that offer bad credit loans:
Avant is a major online lender offering bad credit loans that only requires a minimum credit score of 580.
MoneyMutual is a lending aggregator that offers short-term loans to borrowers with low credit. You do need to have a consistent monthly income of at least $800 to apply.
CashUSA partners with lenders offering loans to people with bad credit between $500 and $10,000. The credit and income requirements are flexible, but the interest rate could be pretty high.
BadCreditLoans.com is a lending marketplace for borrowers with bad credit who need quick access to cash. You could receive up to $10,000 with loan terms up to 60 months.
PersonalLoans.com is another lending marketplace that offers personal loans to borrowers with poor credit. You will need to prove that you have a monthly income of at least $2,000 to qualify.
OneMain has physical locations in addition to its online presence and actually has no credit score minimum. The company says its average customer has a credit score between 600 and 650. Don’t get too excited, though – your APR could be as high as 35.99%.
Things to Know About Applying for a Bad Credit Loan
If you do decide on getting a bad credit personal loan, keep a few things in mind so you don’t damage your credit scores even further. First, limit your number of loan applications.
Every time you apply for a loan, the lender makes an inquiry on your credit report. This lowers your credit score anywhere between one and five points depending on your situation.
That might not seem like a lot, but it could affect your interest rate if you’re on the border between “bad” and “fair” credit. Plus, many lenders view a large number of inquiries as a risk factor, especially if they’re all made within a short period of time.
Thoroughly research potential lenders in advance and see if they offer to make a soft pull on your credit rather than a hard one. That way you can compare interest rates without hurting your credit even more.
Going through a lending marketplace is a good way to limit your credit inquiries as well. With just one application, you’ll receive quotes from multiple lenders that are willing to work with you.
How much extra interest should you expect to pay on a loan with bad credit?
Even after getting approved for bad credit loans, there’s no getting around the fact that it’s going to be an expensive decision. Just how expensive depends on the terms and conditions of the loan.
On top of your interest rate, your lender may also charge an origination fee. Unfortunately, this is a pretty universal concept, so there’s not much you can do to avoid paying it.
The origination fee is usually charged as a percentage of your loan amount, so – just like interest – the more you borrow, the more you pay. You don’t have to come up with the cash upfront; instead, the fee is deducted from your loan.
Make sure you account for this deduction in your loan request. For example, if you need a $20,000 loan and there is a 3% origination fee, be sure to request $20,600 because 3% of $20,000 is $600.
Annual Percentage Rate
A helpful tool in determining the best interest rate and applicable fees is the loan’s annual percentage rate or APR. This number helps you compare offers that have different rates and fees to see which is better on an annual basis.
However, APR does not account for the loan term, which is the amount of time it will take you to pay off your loan. A loan may have an extremely low interest rate, but if it takes 10 years to pay off, you might actually end up paying a lot more in interest.
There are a lot of variables to consider when figuring out how much interest you’ll be paying. Let’s look at an example to help put these facts and numbers into context.
Auto Loan Calculator
Let’s say you want to figure out how to get a new car loan with bad credit. By using an online calculator, you can determine if making the purchase now is worth paying the extra interest compared to fixing your credit first.
According to Experian, the average length of a new car loan is 67 months and the average loan amount is $28,711. For simplicity’s sake, let’s say you get a 60-month (five year) loan for $28,000. Here is how MyFICO estimates different credit scores to stack up in the same scenario.
The differences in the amount of interest paid over the life of the loan are jaw-dropping: a person in the lowest range pays nearly $9,500 more than someone in the highest range. So you wouldn’t be paying $28,000 for that new car, you’d actually end up paying almost $37,500.
Bumping your credit score up just 31 points from a 589 to a 620 could save over $4,600 in this scenario. Think of how many paychecks that adds up to before you decide on getting a loan with a bad credit score.
Total interest paid
720 – 850
690 – 719
660 – 689
620 – 659
590 – 619
500 – 589
Should you fix your credit before applying for a loan?
If you want to potentially save thousands of dollars on your next loan, then yes, you should consider fixing your credit before you apply. While some credit components take time to improve, there are many actionable steps you can take right now to improve your credit scores.
It’s always better to get a head start on the process rather than waiting for a financial emergency. If you don’t need the money right away, take the time to fix your credit now so you can save big when you are ready to borrow.
Here are five steps you can take right away to fix bad credit:
1. Dispute any errors on your credit report
Before you attempt to repair your credit, you want to know what you’re dealing with first. So the first place to start is by reviewing and disputing any errors on your credit report. And checking your report will give you a good idea of where you can begin making improvements.
2. Start making your payments on time
One of the easiest ways to raise your credit score is by making your monthly payments on time. Your payment history counts for a significant portion of your credit report, so if you struggle to make your monthly payments on time, your credit scores will take a hit.
And you may be surprised to learn that this applies to more than just lending products. It also includes credit cards, personal loans, home loans, utilities, and even your cell phone bill. Once you have that under control, start paying down any existing credit card debt.
3. Lower your credit utilization ratio
Your credit utilization ratio accounts for 30% of your credit score, meaning you’re not just judged on the amount you owe, but also on the amount you have borrowed compared to the amount you are allowed to borrow.
If your credit cards let you borrow up to $10,000 and your balance is $4,000, your credit utilization ratio is 40%. Ideally, your credit utilization ratio should be below 30%, so try to make extra payments until you can reach that ideal range.
4. Consider using a credit repair service
If you’ve already taken the steps we outlined above with minimal success, then you may want to consider hiring a professional. A credit repair service can dispute any negative items on your account and help improve your credit score faster than if you’re doing it on your own. Here is our top choice for a credit repair service.
By law, an item must be removed from your report if the creditor can’t verify it within 30 days. By having a tireless advocate on your side, you’ll make sure your current and past creditors are following the law. They will help you make sure your credit history has been updated to accurately reflect your financial history.
5. Show a lender can you repay the loan
Once you’ve put in the work to raise your credit score, it can help to look for ways to show an online lender, bank, or credit union that you’re able to repay the loan. Providing proof of income can give a lender more peace of mind and demonstrate that you’re financially capable of repaying the loan.
If you don’t have any proof of income and your credit score is still lower than you’d like, you can consider applying with a creditworthy co-signer. Ideally, this will be someone who has a good credit history and can vouch for you with your lender.
However, you should only use a co-signer if you’re certain you can repay the loan. If you default on a loan, the bank will go after your co-signer, which will put their financial future at risk.
How can you maintain your credit score once it’s fixed?
After taking the time and effort to raise your credit score, make sure you do everything in your power to keep it up — or get it even higher!
You might not be looking for another loan or line of credit at the moment, but you never know what your financial future will look like. Perhaps you rent an apartment now, but want to buy a house further down the road.
Getting a Mortgage
It’s hard to figure out how to get a mortgage with bad credit, so do your best to make sure you take care of your credit now. That means paying all your bills on time, setting aside cash for emergency savings, and not racking up unnecessary debt.
Remember, most infractions stay on your credit report for up to seven years, so the financial decisions you make now stick with you for a long time.
Renting an Apartment
Plus, think of all the ways poor credit affects your life outside of getting a loan. Many landlords run credit checks on prospective tenants, so it can be difficult to rent an apartment with bad credit.
Potential employers also sometimes run credit checks on job applicants to see how they handle their money. Why? They think that if you’re not responsible in your personal life, you probably won’t be responsible in your work life.
So bad credit not only affects your spending power, it affects your earning potential as well. Keep every door open by making a conscious effort to continually improve your credit. It would be a huge waste of time and effort to give up on all the progress you just made. Do yourself a favor and consciously manage your money going forward.
It certainly is possible for people with bad credit to get a loan, but that doesn’t mean it’s the best decision for you. Analyze just how urgent your financial needs are. Then, decide if you can wait a while to improve your credit before taking out a high-interest loan.
A reputable credit repair service can help you aggressively put your credit score on the fast track to improvement. Check out our credit repair reviews page for a list of reputable credit repair companies that can get you started today.
June 8, 2019Posted By: growth-rapidly Tag: Buying a house
Many millennials start the home buying process without a real understanding of what it takes be a homeowner.
In fact many of them don’t even know the many upfront costs when buying a house — including coming up with a down payment, moving costs, closing costs, renovating costs, and so many others.
They think that if they have a sizable down payment and a stable job, the hard yards are over. Well, not quite…
Wondering how these mistakes can affect your overall financial plan? Talk to a local financial advisor.
That lack of knowledge can lead them to make costly mistakes, including paying thousands of dollars in loan interests, defaulting on their home loan, or going bankrupt. Here are some of the biggest mistakes millennials make when it comes to buying a house — and what can be done instead.
Check out: 5 Signs You’re Not Ready to Buy a House.
1. Not understanding the importance of a good credit score.
One of the most important things a mortgage lender looks at when deciding to pre-qualify or qualify you for a mortgage loan is your credit score.
Yet, many millennials don’t know the importance of maintaining a good credit score. Lacking that fundamental knowledge could cost them a lot. One is that you will have a hard to get qualified for a loan.
Second, even if a mortgage lender offers you a mortgage loan, you will likely get a high mortgage rate. A high mortgage rate can cost you thousands of dollars in interest – money that you could contribute towards your retirement savings.
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To avoid this mistakes when buying a house, millennials should first figure out their credit scores through a free monitoring service like MyFreeScoreNow. A good credit score is around 730.
Once you have an idea of what your credit score is through your credit report, take steps to improve it. One way to raise your credit score is not to max out your credit limit.
Maxing out your credit cards can hurt your credit score significantly. So keep your credit utilization rate under 30 percent.
Another way to improve your credit score is to pay your bills on time. Payment history accounts for 35% of your overall credit score. So it’s very important to pay your bills promptly.
Check out: How To Raise Your Credit Score to 850.
2. Not understanding how much down payment is enough.
A down payment on a house is the single most important factor when it comes to buying a house. Unless you are so wealthy that you can buy a house with outright cash, you will need to come up with a down payment.
The recommended down payment is 20% of the home purchase price. But many first time home buyers can be qualified for a FHA loan, where the down payment is 3.5%.
Feeling Overwhelmed With Your Finances?, You have options and there are steps you can take yourself. But if you feel you need a bit more guidance, simply speak with a financial advisor. SmartAsset’s free tool matches you with fiduciary advisors in your area in 5 minutes. If you are ready to meet your goals, get started with Smart Asset today.
However, the disadvantage of putting less than 20% is that you will have to pay Private Mortgage Insurance (PMI). A PMI is extra fee added to your monthly mortgage payment.
Another disadvantage is that it will take you longer to pay off your mortgage. And your monthly mortgage payments will be much more.
One way to not have to worry about a PMI is to save for a 20% down payment before starting the home buying process. Saving for a down payment should not be that hard if you have a savings strategy in place.
See: What is a Typical Down Payment on a House?
Taking out a mortgage loan to purchase a house is the most expensive financial decisions you can ever make in your life. So it’s important to have the best mortgage rates possible so you don’t end up paying thousands of dollars in interest over the life of the loan.
Yet, most millennials only speak with one lender when buying a home. That is a big mistake. When you speak with one lender, you don’t know what other mortgage rates are available to you. A good mortgage rate means less interests. So not speaking with multiple lenders is one of the mistakes to avoid when buying a house.
4. Not knowing other upfront costs associated with buying a house
You might think that just because you’ve found a home and you have been approved for a loan, that your hard work is over. Well, not quite. In addition to coming up with a down payment, there are several other upfront costs when buying a house.
There are inspection costs. Before you buy a house, it’s always a good idea to inspect the house for defects. In fact, it is mandatory. Lenders will simply not offer you a loan unless they have seen an inspection report.
There are loan application fees. Some lenders may charge you a fee for applying for a loan. This fee typically covers tings like credit check for your credit score or appraisal.
There are repair costs. Unless your house is perfect from the very first time you occupy it, you will need to do some repair. Depending on the condition of the house, repair or renovating costs can be quite significant.
There are moving costs. Depending on how far you’re moving and/or how much stuff you have, you may be up for some moving costs.
So avoid these mistakes when buying a house, and your home-buying experience should go as smoothly as possible.
MORE ARTICLES ON BUYING A HOUSE:
10 First Time Home Buyer Mistakes to Avoid
How Much House Can I afford
5 Signs You’re Better Off Renting
7 Signs You’re Ready to Buy a House
How to Save for a House
Not All Mortgage Lenders Are Created Equally
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With interest rates steadily climbing since after the recession of 2007, it’s important to be aware of what is a good interest rate when you’re planning on financing, whether it’s for a car, a home or your education. Take a closer look at what’s happening with interest rates in 2019 below and how you can make sure you’re getting the best rate possible for your situation.
Knowing What Is a Good Interest Rate
Being able to tell what is a good interest rate depends on the type of loan you’re thinking about getting. Here are some of the average, high and low interest rates for the most popular types of loans.
According to Federal Reserve data, the average rate on all credit cards as of May 2019 was 15.13%, while the average rate charged to cardholders with a balance was 17.14%. But credit card rates can vary widely. According to U.S. News & World Report, average APRs for rewards-style credit cards ranged from 16.8% to 25.24%, as of August 1, 2019.
Lower rates than these are available, but you’ll need great credit to get them. Lowering your interest rates by just a couple of points can be helpful when you’re trying to make a dent in debt. If your current credit card rate seems high, consider transferring the balance to one of your existing cards with a lower rate or a new one with an introductory 0% APR offer. Just watch out for balance transfer fees that can total 2–4% of the transferred amount.
According to the Federal Reserve, the average 48-month new car loan rate was 5.35% as of May 2019. The National Association of Federal Credit Unions puts the average 5-year new auto loan rate from banks at 4.86% versus 3.69% through credit unions, as of August 2019. For a 5-year used car loan from a bank, the highest interest rate was 12.75% and the lowest was 2.69%.
Is 4.75% a good interest rate?
For an auto loan, 4.75% is probably a good interest rate. That’s under the current 5-year new auto loan average rate for banks. But if you have excellent credit, you may be able to get even lower if you shop around.
Caroll Lachnit, features editor and consumer advice expert for Edmunds.com, recommends consumers shop for financing before they shop for their car. Otherwise, you could fall victim to the yo-yo financing trap where you “think that you’ve done the deal but then you find out (the dealer) couldn’t do the deal.” So, what is a good interest rate for a car? As of August 2019, anything under 5% is going to be a good auto loan rate, and anything under 4% would be excellent.
If your current rate is higher than this and you have decent credit, you may be able to refinance to a lower rate. Just make sure that by doing so you reduce the interest rate without increasing the remaining term on the loan. Don’t refinance for any longer than the time left on your loan.
Unlike other types of debt, you can’t shop around to find out what is a good interest rate for federal student loans. That’s because these rates are set under the federal Direct Loan program. As of July 2019, the interest rate for direct subsidized and unsubsidized loans at the undergraduate level was 4.53%. Graduate-level unsubsidized loans have an interest rate of 6.08%, and direct PLUS loans have an interest rate of 7.08%.
Is 4.5% a good interest rate?
For undergraduate students, 4.5% is a good interest rate for a federal student loan. However, it may be hard to come by unless federal rates go down. “For new loans, there is only one way to reduce the rate and that’s to sign up for auto debit,” says Mark Kantrowitz, publisher of Finaid.org. In other words, you may be able to get a small reduction in your interest rate if you agree to have your payments automatically deducted from your bank account.
The good news is that your credit score won’t be a factor in determining the rate you pay for a federal student loan. However, “PLUS loans require that you don’t have an adverse credit history (no current delinquency of 90 or more days and other negative items in the last five years),” Kantrowitz explains.
What is a high interest rate for a private loan?
Many students have to look to outside funding to afford college, and private student loan interest rates can vary widely depending on the term and amount. According to the National Association of Federal Credit Unions, bank interest rates for a three-year unsecured loan range from 2.9% to 18.86%, with an average of 9.74%, which means anything over 10% is likely to be considered high.
For these loans, borrowers are clustered into tiers based on credit scores, says Kantrowitz. But you can’t find out the credit score ranges for those tiers in advance because that’s considered competitive data. “You have to apply and get a credit check before they will tell you how much they will charge,” he warns, adding that “the best rates go to about 5% of borrowers, while two-thirds get the worst rates.”
The best strategy is to max out federal loans first and shop around when it comes to private loans. And make sure to apply in a short period of time. “When lenders access your score, it creates an inquiry on your credit report, which can hurt your credit score. But certain types of inquiries are grouped together, so you can have any number of inquiries of a certain type, and they will only count as one, and student loans tend to fall into that category,” says Barry Paperno, former community director for Credit.com. “So, it’s a good idea to do your student loan shopping in a short period of time—ideally within a 14-day period but definitely within a 45-day period.”
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The National Association of Federal Credit Unions lists the average 30-year fixed mortgage rate at 3.937% through credit unions and 4.072% fixed through banks as of August 2019. Mortgage rates will vary depending on lender and loan terms, with average bank interest rates ranging from 2.5% to 8.75% for a 15-year fixed mortgage, for example.
Mortgage rates can be very confusing because so many factors come into play. “First, mortgage rates vary every single day. They fluctuate based upon many factors inside the United States and worldwide,” says Joseph Kelly, president of ArcLoan.com. “Secondly, mortgage rates vary based upon ‘cost.’ On any given day, there are a variety of interest rates available where the borrower may get a lower rate by paying additional cost or higher rates, which can even include a lender credit to the borrower.”
If you’re taking out a 30-year mortgage for $200,000 with $4,000 in closing costs, you might be able to choose between a rate of say 3.5% with closing costs or 3.875% with no closing costs. Kelly explains, “In the case of the 3.5%, the lender is giving the borrower a ‘credit’ for the closing costs. Is it worth paying approximately $4,000 to save an additional $69 per month in this example? That depends on how long you expect to be in the property and what you expect interest rates do in the next few years.”
It’s not always an easy decision. If you’re shopping for a new mortgage loan or to refinance your current loan, be sure to ask about closing costs as well as the interest rate and work with a reputable lender who can explain the differences and walk you through the process.
How to Get the Best Interest Rate
Getting the best interest rate on a loan often comes down to your personal credit history and how much time you have to shop around. Here are four tips to help you get a good interest rate.
1. Check Your Credit
Simply put, your credit score matters for most interest rates. Lenders develop tiers based on credit scores, and those with great scores typically snag the best deals on auto loans, mortgages, credit cards and private student loans. FICO scores above 760 usually get borrowers the best rates, but every lender sets its own standards. You can sign up to get your free credit score and reports at Credit.com.
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2. Watch Out for Fees
While a low rate may be appealing, the savings can easily get eaten up with fees—especially if the difference between two lenders’ rates is less than 1%. James Royal, former vice president and director of marketing for Informa Research Services, Inc., recommends considering the fees just as much as the interest rate.
3. Go for a Fixed Rate
When you can, get a fixed-rate loan rather than one with a variable rate that can change in the future. Interest rates are still trending higher, which makes locking in a low rate now a smart strategy. However, this may not be possible for every loan type. Credit cards, for example, usually offer only variable interest rates.
4. Comparison Shop
For most loans, what is a good interest rate is relative, which is why it’s important to shop around for rates online and with local brick-and-mortar stores. “Do your homework online,” says Royal. “Then talk to your financial institution. A lot of banks are trying to offer incentives in order to change consumer behavior, such as having your mortgage at the same place where you have your checking account,” he explains.
And always make sure to check with your local credit unions in addition to big-name banks. Credit unions are often able to offer better rates or more flexible loan terms and approvals than larger financial institutions.
The following is a guest post by Eric Lindeen, of Anna Buys Houses.
The second quarter of 2020 marked the highest U.S. mortgage delinquency rate (reported as 60-days past due) since 1979. Amidst the chaos of the pandemic, federal and state governments have made efforts to protect against the financial strain U.S. consumers are enduring—including mortgage payment forbearance of foreclosure.
What Is a Forbearance?
Forbearance is the postponement of mortgage payments, or the lowering of monthly payments for a specified time period; it’s not loan forgiveness. Repayment terms are negotiated between the borrower and lender. Mortgage forbearance is one tool to help protect homeowners from foreclosure due to temporary hardships, such as a job loss, natural disaster, or pandemic. Some homeowners may opt for strategic forbearance, meaning they proactively enter a forbearance agreement just in case they lose their ability to make their mortgage payments.
As of October 25, data from the Mortgage Bankers Association (MBA) reports that approximately 2.9 million U.S. homeowners are currently in forbearance plans. That number represents 5.83% of servicers’ portfolio volume. MBA data also shows that nearly 25% of all homeowners in forbearance plans have continued to make their monthly payment (perhaps an indicator of the use of strategic forbearance).
How Do Forbearance Plans Work?
Mortgage payment forbearance programs have come at a time when many Americans are losing their livelihood and others fear the potential fallout from the health and economic crisis. Not all forbearance plans are created equal. Therefore, it’s critical to understand how different plans are structured to protect your financial health and credit.
The Coronavirus Aid, Relief and Economic Security (CARES) Act is one measure enacted to provide relief to consumers facing hardships due to the impacts of the coronavirus. One provision of the Act allows mortgage payment forbearance and provides other protections for homeowners with federally or Government Sponsored Enterprise (GSE) backed or funded (FHA, VA, USDA, Fannie Mae, Freddie Mac) mortgage loans.
If you have a federally or GSE-backed mortgage, no documentation is required to request forbearance, other than an assertion that you are facing a pandemic-related hardship. Borrowers are entitled to an initial forbearance period of up to 180 days. If necessary, an extension of an additional 180 days may be requested. Federally backed mortgages are protected against foreclosure through December 31, 2020.
Recently, the foreclosure moratorium was extended yet again to at least March 31, 2021 for GSE-backed loans (Fannie Mae and Freddie Mac). Be sure you understand who owns your loan and the terms of your loan as these deadlines approach. Extensions are likely to continue to help borrowers keep their homes and lenders navigate the constant uncertainty that is 2020.
The CARES Act amended the Fair Credit Reporting Act (FCRA) with a provision that when a lender agrees to forbear an account of a consumer impacted by the pandemic, the consumer complies with the terms of the forbearance. Then, the mortgage issuer must report that account as current to credit reporting agencies.
How Your Credit Factors into Forbearance
On paper, knowing that your credit won’t be affected by forbearance seems like a good deal. There’s an important distinction here. Your loan doesn’t need to be current to qualify for forbearance under the CARES Act. However, any delinquencies on your account prior to entering a forbearance plan will impact your credit report. Make sure that your loan is current, and being reported as current to the credit bureaus, before you agree to a forbearance of foreclosure.
What about Private Mortgages?
Around 30% of single-family mortgages are privately owned. Many private banks and loan servicers have voluntarily implemented relief measures that don’t fall under the same protections of the CARES Act. Terms vary by institution and state of residence. And relief plans may not be structured in the same manner as federally-backed and funded loans.
For example, borrowers with private loans may be required to pay back all missed payments in a lump sum as soon as the forbearance period ends. Lump sum payments are not required for GSE-backed loans. Additionally, if modifications are made to a privately funded loan, the new terms could impact your credit score depending upon how the lender reports the status of your loan to the credit bureaus.
The good news is that the three major credit bureaus (i.e., Equifax, Experian, and TransUnion) are providing free weekly online credit reports through April 2021. Be sure to check these reports to ensure that the new terms of your loan are being reported as “paying as agreed” and not reported as late. Credit.com also has resources to help check and manage your credit.
It’s also important to understand the terms of your loan. Some homeowners who recently refinanced were asked to sign a form that was quickly described as “new COVID paperwork.” The fine print stated that their new loan was not eligible for forbearance relief measures.
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Mortgage payment forbearance is one tool that can protect homeowners from defaulting on their loan, damaging their credit, and worst of all, losing their home to foreclosure. Key takeaways include, knowing who owns your loan, who services your loan, and what type of protections are available to provide relief if the current economic crisis is impacting you or you fear that it might.
There are proactive steps to protect against foreclosure and determine the right path for your personal situation.
Retail sales jumped 5.3% in January, as $600-per-person stimulus checks hit pocketbooks early in the month. All major categories of spending rose. The biggest beneficiaries: Department stores, up 23.5%; home furnishings, up 14.7%; electronics, up 12.0%; nonstore (mostly e-commerce), up 11.0%; sporting goods and hobbies, up 8.0%; and restaurants, up 6.9%.
More stimulus is expected: The current Democratic stimulus proposal includes an additional $1,400 per person, though with income restrictions. With COVID-19 infections dropping this month, sales should continue to be strong as restrictions are eased and more people feel comfortable shopping or eating out in-person. The recent winter storms should ding February sales in Texas and certain other states, however.
Restaurants finally caught a break in January, doing better than expected despite a continuing pandemic surge. Falling COVID-19 infection rates in February also bode well for restaurants, though likely not until after the current winter storms subside.
Even though November and December sales showed monthly declines, holiday sales were still above last year’s level. Holiday sales of in-store goods were 4.9% above last year, though only 3.0% higher if building-store sales are excluded. E-commerce sales were roughly 26% higher than last year. Of course, not all stores have done well. Clothing, electronics and department stores have a lot of ground to make up to get back to last year’s sales level.
Bad credit is not something that can be solved overnight. Although you can work to repair your credit, progress usually takes time. Sometimes, you do not have time to wait for your credit score to improve because you need a loan right now.
Life has a habit of throwing unexpected expenses in your path such as an unexpected medical bill or car repair. Whatever has you seeking a personal loan, it is likely something that you need the money for soon. It might be ideal to wait for your credit score to improve but that is not always possible.
Luckily, there are many online lenders that are willing to provide bad credit personal loans for $5,000 or more. Let’s take a look at some of the best lenders who provide personal loans to people with bad credit.
Best Personal Loans for Bad Credit
You can absolutely secure a personal loan with bad credit. However, you should keep in mind that you will likely not receive the best terms. With bad credit, lenders are likely to charge you a higher interest rate for the loan. Make sure you absolutely need a personal loan before moving forward.
CashUSA serves as your one-stop shop to connect with online lenders that offer personal loans with bad credit. With a quick request process, CashUSA will work to connect you to a lender that is willing to work with you.
CashUSA lenders provide personal loans with a loan amount of $500 to $10,000. APR can vary widely based on the individual lender and your credit score, but it can range between 5.99% to 35.99%. The interest rate is variable with terms between 90 days and 72 months. Funds are deposited directly into your bank account.
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As the name suggests, BadCreditLoans.com is a place to find unsecured personal loans if you have bad credit. BadCreditLoans.com is not a direct lender but the site will connect you to lenders that are willing to work with you.
Lenders in the BadCreditLoans.com network offer loan amounts up to $10,000. Although most of the personal loans through these lenders are smaller than $10,000, it is possible to obtain the full $10,000.
The APR on personal loans can range between 5.99% and 35.99%. Interest rates are variable but generally on the shorter side, starting at just 3 months. You can get the money deposited in your bank account as soon as the next business day.
Full review of BadCreditLoans.com
PersonalLoans.com works to connect borrowers with personal loan offers between $500 and $35,000. If you have bad credit, then you should not expect to be approved for the maximum $35,000 loan. Although not everyone is able to qualify for the maximum amount, every applicant can request the amount they are seeking.
The APR on personal loans ranges from 5.99% to 35.99%. The APR you qualify for will be largely based on your credit score. One big benefit offered by PersonalLoans.com is the flexibility of repayment terms which range from 6 to 72 months. You’ll have the ability to choose the timeframe you’d like to repay the loan.
A final benefit of these personal loans is that there is no prepayment penalty. You’ll be able to repay your debt as quickly as you’d like without any repercussions.
Full review of PersonalLoans.com
Although Avant typically works with borrowers of average to above-average credit, it is still a company worth looking into. You do not need good credit to apply for an Avant personal loan.
The company offers personal loans with loan amounts between $1,000 and $35,000 with APRs that range from 9.95% to 35.99%. Many Avant borrowers are using the personal loan as a way to consolidate their debts. If you are using this strategy to rebuild your credit, the Avant may be the right choice for you.
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You can obtain a personal loan from OneMain Financial with a loan amount of between $1,500 and $25,000. However, the company has set slightly different limits for each state, so you will need to confirm your state’s limit with your local office.
As an applicant, you’ll have the option to pursue a secured or unsecured personal loan. If you have poor credit scores, then a secured loan may be the better option.
The interest rates will vary greatly based on your credit history but you can expect an APR range from 25.10% to 36%. The maximum loan term we’ve seen in 60 months. Make sure you ask about the origination fee as it varies per state.
One thing to note about these personal loans is that they will need to be executed after communication with a loan officer. That means you’ll need to make an appointment with a loan officer and talk to them in-person or over the phone.
Full review of OneMain Financial
This Chicago-based lender works with borrowers across the country to provide bad credit personal loans. The company offers unsecured personal loans with a loan amount of $1000 up to $10,000.
NetCredit evaluates each loan application on a case-by-case basis. Your loan offer will likely vary greatly based on your credit score and the state you live in.
Since the company works in many states, the APR range is extremely wide, from 36% to 155%. You’ll need to check out NetCredit in your state to better understand what this company can offer you. There may also be an origination fee depending on where you live.
Full review of NetCredit
A personal loan can seem difficult to obtain at a bank or credit union if you have bad credit. However, the lenders above can help you get approved for a loan to fund whatever life throws your way.
While it is possible to obtain a personal loan with a poor credit score, it may not be the best financial move, especially if you want to use it to consolidate credit card debt. It is more than likely that you will be offered unfavorable loan terms and high interest rates, which could cost you thousands over the course of your loan.
You could be using those funds to pay down other debts to improve your credit score. With a higher credit score, you’ll be able to obtain more favorable personal loan terms in the future. With that said, bad credit installment loans are still usually a better option than payday loans. Just make sure you can afford the monthly payments before you move forward with a personal loan.
Before applying for short-term loans, think of other ways that you could fund the immediate emergency. You could sell belongings, pick up a side hustle, or find a way to fix the problem yourself. If you are interested in rebuilding your credit score, then take advantage of our free DIY guide.