Commuting to work is one of the top things people consider when looking for an apartment. A long commute adds stress to your life. You sit in traffic, you use a substantial amount of gas, and you have far less free time than you would with a shorter commute. Moving closer to work makes life so much easier, but make sure you take all factors into account when apartment shopping based on your commute.
A move for shorter commuting
Switching neighborhoods to make your commuting time more tolerable is a great call. However, in order to ensure that you aren’t adding a different kind of stress, you need to ask yourself a few questions.
Is the new neighborhood safe?
Look into the crime rates in the neighborhood you are considering. You don’t want to jeopardize your safety for a shorter commute; it’s simply not worth it.
What’s the cost-benefit analysis?
Do a cost benefit analysis to see what your long commute is costing you. You want to look at the full cost of additional mileage on your car, including general wear and tear, depreciation, the cost of more frequent oil changes and repairs AND the cost of gas. Be realistic when figuring your gas costs, by learning the mileage your car gets. Talk to your accountant, if needed, about the wear and tear factor.
What’s the cost effectiveness of the move?
Once you know what your commute to work actually costs (and what it might cost in a new neighborhood), you can compare that to rent prices. See what the rent prices are in the neighborhood you’re considering. Even if a place has higher rent, you may still be coming up on top because your car expenses would be so much less.
The commuting drive-time test
Online maps are one way to get a general idea of your drive time. But these don’t take traffic into account. You want to make sure your shorter commute will actually save time. A new neighborhood may make your commute a few miles shorter, but if you’re not saving any time because you’re stuck in traffic day in and day out, it’s a wash. Give your commute a try from your new neighborhood. How is rush hour traffic? Are you still saving time even during peak driving times?
Many folks like proximity to a freeway when considering a new neighborhood. But back roads may get you to work faster. When you’re doing your drive tests, see if there is a route for you to avoid the major freeways. This could save you time and sanity.
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The benefits of a shorter commute
There are so many benefits to having a shorter commute: less stress, since you won’t be spending nearly as much time on the road in traffic; less money, in gas and car upkeep; time, as you’ll have more time to yourself each day. There are many perks to cutting down your commuting time.
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After a long hard day at work, the last thing you want to do is deal with traffic and a long trip home. Traffic is stressful and can be dangerous as well. Why not take one less stressor out of your life? A shorter trip home will not only impact your sanity but your pocket book too.
With the recent rise in gas prices, many people have been looking for ways to save money on gas. These efforts usually fall into two categories; reducing your fuel consumption, or finding a way to pay less. Realizing that because of the various uses for crude oil, gas prices are somewhat out of our control (especially if our only weapon is a gas boycott), we are limited in how we can reduce the price that we pay. Paying less for gas is really just a matter of either finding the lowest priced gas stations in your area, or using various credit card benefits to get cash back.
However, it is in the area of reducing fuel consumption, where people can get very creative. Unfortunately, some of these techniques can actually cost you money or make your drive more dangerous. Recently, Investopedia published an article outlining some of these methods. I thought it would be interesting to see which fuel saving techniques they highlighted and what they had to say about each one.
They are listed below, with my feedback beneath each one. Be sure to leave your comments below.
Save Money On Gas? Not With These Techniques!
Devices To Increase Airflow
The Theory: High-tech devices designed to increase your engine’s airflow will improve fuel efficiency.
The Facts: It sounds plausible, but the results don’t back up the impressive claims. Consumer Reports tested several of the devices, such as Fuel Genie ($89.95, plus shipping), that purport to increase fuel economy by accelerating airflow to the engine. The tests found no noticeable gains in MPGs, despite claims of 50% fuel savings. While it’s true that drastically increasing the airflow to an engine is a common way to increase horsepower (i.e. forced induction through turbo and superchargers), doing so will actually increase fuel consumption and increase wear on the engine, not to mention that this proven technology costs significantly more than its gimmicky competition.
I have to admit that I have never gotten so much into fuel efficiency that I’ve researched or purchased an airflow gadget. However, I know that some people have been willing to make significant investments in these types of gadgets in order to increase their miles per gallon.
If the problem of increasing the wear on your engine is true, then these gadgets will end up costing a lot more than what you pay for gas!
Fuel Additives
The Theory: The gas we buy can be improved by adding scientifically formulated chemicals that will increase fuel efficiency and, sometimes, horsepower.
The Facts: Clearly, some drivers believe the answer to their fuel woes lies in a magic elixir, because there are numerous fuel treatments that claim to increase MPGs, despite no scientific proof or explanation of how less fuel is burned. According to CNN.com, one common tactic used by shady fuel-additive makers is to tout the product’s approval by the Environmental Protection Agency (EPA). This suggests that a trusted consumer watchdog has approved the product’s claims, but in fact, the EPA had only deemed that the product does not increase a vehicle’s harmful emissions. The truth is, if there were an additive that made fuel burn more efficiently, oil companies would be racing to market their new gas at the pumps and gain a bigger market share.
I used to add a fuel treatment to my car every 3,000 miles. I never noticed a difference in how the car ran, or in the fuel efficiency, but I just figured it was because I wasn’t paying close enough attention.
I think that the worthless EPA approval is pretty deceptive. The average person would think that the claims to improve fuel efficiency have been tested and proven to be true; however, it just means that it won’t increase your emissions!
I don’t think I’ve purchased this stuff since we got our new car over 3 years ago, but I always had a supply in my trunk before that!
Premium Gas
The Theory: Premium gas provides increased performance and better gas mileage.
The Facts: This is true … if you own a premium automobile that requires high-octane gas, but these cars make up the minority of daily drivers. So if you’re in the majority – drooling over Ferraris from the seat of your Corolla – your car’s engine control unit (ECU) is programmed to run on the octane levels present in regular gas. Increasing the octane – either through buying premium gas or adding bottles of octane-boost – can actually cause the engine to be less efficient, as the car’s combustion timing becomes altered and efficiency is lost. But the most noticeable loss will be the extra 20 cents per gallon you’ll be wasting to buy high-octane gas. A safe bet is that if you can afford a vehicle that requires only premium fuel, you likely aren’t concerned with gas prices or tracking mileage.
This is one I’ve always known about. I think the only time I ever purchased anything higher than regular was when the gas station ran out, and they charged the same price as regular.
Once in a while I would come across people who swore by a higher octane, but they could never tell me why. It was just another case of, “it costs more, so it must be better”!
I love what the article said at the end of this…it’s very true. If you can honestly afford a car that needs a higher octane, you probably aren’t worried about your MPG as much as most.
Over Inflating Your Tires
The Theory: Rounder tires roll easier, creating less work for the engine and therefore, better MPG.
The Facts: Again, this tip is true … to a point. Over inflated tires will have less friction with the road, which lessens the effort the engine exerts to keep the car rolling, providing slight gas savings. However, overinflated tires will wear out quickly and irregularly, causing you to need early replacements at a cost of about $50 to $100 per tire. What’s worse is that the decreased contact with the road increases stopping distances and limits handling capabilities. This all adds up to a large risk in costly accidents and injuries. Even if you are lucky and avoid a collision, it would take a lifetime (which could very well be short if you’re riding on bald and bulbous tires) for your fuel savings to negate the cost of four new tires. According to Edmunds.com’s testing, the fuel consumption difference between driving with over-inflated tires and tires at the recommended pressure is negligible. Sometimes, despite what GM’s recent track record suggests, carmakers do know what they’re doing and the recommended settings and levels do provide the best results.
I’ve actually never heard of this trick. It just seems so dangerous, because you have less of your tire making contact with the road – meaning it is more difficult to brake! Even if the increase in MPG were substantial, I would not feel comfortable doing something this dangerous!
I think that the cost of your new tires and the increased risk of being in an accident, would easily negate any gains you have from buying fuel less often.
Roll Down The Windows Rather Than Using Air Conditioning
The Theory: Operating the AC to cool the vehicle uses fuel, so it’s more efficient to cool off by driving with the windows down.
The Facts: While it’s true that some fuel is used to operate the AC compressor, as much or more fuel is lost when the windows are down. Rolling down the windows increases the drag on the car, which causes the car to work harder to maintain its speed. For even better mileage, you can improve your AC’s efficiency by using the re-circulation setting on the car’s HVAC system instead of forcing the AC to cool the hot air from outside. Heeding this tip will increase your mileage, as well as your comfort.
This has been a subject of great debate for a while now. Many people – including me for a while – will drive on the highway with the windows down in the summer, in order to save money by not turning on the AC. Actually, I do it because I love fresh air and I didn’t want the AC to burn up gas. However, once you get over about 40 MPH, the drag on the car (from the air resistance) causes the fuel efficiency on your car to drop dramatically. Therefore, if you are driving on the highway, you will burn less gas by using the AC and keeping the windows up.
Now, I just have to weigh this fact against my need to feel comfortable. I am one of the few people who I know are more comfortable with air blowing on my face in the summer, than having the “conditioned” air blowing on me. If gas prices continue to increase, I may have to get used to running the AC (on the lowest setting, or course).
Reader Questions
What methods have you implemented in order to save money on gas?
How often do you think about rising gas prices?
What are some common myths that you’ve heard about saving money on gas?
Simply put, liability-only car insurance is a type of policy that only provides coverage for damages you cause, not damages you sustain. Full coverage builds on liability-only and adds additional coverage, including coverage for damages to your vehicle from collisions as well as non-collision incidents such as storms and fires. In the U.S., the average cost of car insurance for minimum coverage — the lowest coverage level of insurance that you can purchase — is $622 per year, while full coverage costs an average of $2,014 per year.
Keep in mind, though, that your auto insurance needs will likely change over time. You may find that full coverage is the best option for you now, while in the future, you may be more apt to choose liability-only. Reassessing your needs once in a while, especially if you’ve recently gone through a life change, can help you align your coverage with your circumstances. Below, we delve deeper into the differences between liability-only and full coverage to help you determine which is best for you as you gather car insurance quotes.
Liability-only car insurance
Liability car insurance coverage is the part of your policy that pays for the injuries and damages you cause to someone else in an at-fault auto accident. Most states require drivers to carry at least a minimum car insurance coverage limit, often called “minimum coverage.” However, you can buy higher liability limits than required by your state and still have a “liability-only” policy, as long as you don’t add coverage for damage to your vehicle.
Liability coverage is broken down into two parts:
Bodily injury liability: This coverage pays for the injuries you cause to another party in an at-fault accident.
Property damage liability: This portion of your liability coverage pays for the damages you cause to another’s property, such as another vehicle, a fence or a building.
Liability coverage is often listed as split limits, which are listed in a bodily injury per person / bodily injury per accident / property damage per accident format. However, your liability coverage may also be a “combined single limit,” meaning it’s one number that can be used flexibly to cover the damages and injuries you cause.
Some states also require other coverage types as part of their minimum coverage requirements, including:
Personal injury protection (PIP): This coverage pays for your medical bills and your passengers’ medical bills if you are injured in an accident, regardless of fault. PIP may also pay for lost wages and the costs for household services you can’t perform due to injuries. In no-fault states, PIP is required.
Uninsured and underinsured motorist: These two coverage types pay for injuries you sustain if you are hit by a driver who does not have insurance or does not have enough insurance to cover your bills. This also provides coverage if you are a pedestrian hit by an uninsured motorist or a victim of a hit-and-run accident.
Medical payments: Although only required in a few states, medical payments coverage is similar to PIP. It pays for your injuries and the injuries to your passengers regardless of fault. However, medical payments coverage does not cover lost wages or household services like PIP.
Takeaway: You must purchase a car insurance policy with at least your state’s minimum required coverage types and limits in states where car insurance is required. However, you can purchase higher liability limits and other coverage types, such as medical payments, and still have a “liability-only” policy.
Full coverage car insurance
Full coverage car insurance refers to a policy that has all the state-required coverage types as well as comprehensive and collision coverage, which add coverage for damage to your vehicle. While it’s possible to have a full coverage policy with low liability limits, many full coverage policies have higher limits for liability coverage to offer more robust coverage and greater financial protection for you and your family.
Full coverage policies include:
Collision: This coverage pays for your vehicle’s damages from collisions, such as hitting another vehicle, tree or building. Collision coverage will help cover your vehicle’s repairs in a covered claim, regardless of fault.
Comprehensive: Often called “other-than-collision” coverage, comprehensive pays for non-collision damages, such as damages caused by fire, theft, weather, vandalism or striking an animal.
You may also be able to add some additional coverage types, known as endorsements, to full coverage policies:
Rental reimbursement: This coverage will pay for a rental car if your vehicle is not driveable and is being repaired or replaced by a claim covered under your comprehensive or collision coverage. There is generally a per-day coverage limit and a total maximum amount of coverage limit.
Roadside assistance: This endorsement pays for service calls needed for your vehicle, like a tow, jump start or tire repair service.
Gap insurance: Gap coverage is designed to pay the difference between your new car’s actual cash value and the amount you owe on a loan or lease. If your vehicle is totaled or stolen and you owe more than the car is worth, gap coverage pays the difference.
Takeaway: A full coverage policy is generally more expensive than a liability-only policy, but it provides more financial protection and often has higher liability limits. Full coverage is often required when a vehicle is financed or leased. Additionally, you must have full coverage to qualify for several common endorsements, including car rental coverage and roadside assistance.
Save more, spend smarter, and make your money go further
“John, I sold some stock and used the proceeds to completely pay off two credit cards. That takes my credit card debt from almost $17,000 to zero. It also reduces my debt-to-limit ratio from over 50% to 0%. Needless to say I’m excited to see what happens to my credit scores as a result. How long will it take for my credit scores to reflect this reduction in debt?”
The answer to this question is actually quite simple and it opens up a topic on which I don’t believe I’ve ever written in my 22 years in the credit industry.
The answer to the reader’s question is that it will likely not take more than one month for your scores to reflect this reduction in debt, and if your timing was good it could take much less than that.
The reason it could take up to one month for your credit scores to reflect the reduction in credit card debt is because it could take up to one month for the credit reports to be updated to show the zero balance on those two credit cards.
Credit scores are 100% dependent on the information in your credit reports, so even though your balances are zero today, your credit reports also have to reflect the zero balances in order for your scores to benefit.
This leads me to the next issue, which is the changing of your credit scores. The question suggests that credit scores change over time as data on your credit report changes.
And while this is a completely reasonable assumption, it’s not actually true. Credit scores do not change over time as your credit report data changes.
Changing Vs. Recalculating
Credit scores are not a part of your credit report. They are not “updated” like, for example, your credit card account is updated.
When your score is calculated for a lender it is not maintained as part of your credit history.
It is calculated, discarded, and then recalculated the next time a lender pulls your credit reports and requests a credit score. So, the answer posed in the title of this article is, “Never.”
Your credit score never changes.
Credit Score Tracking Services
There are websites like Credit Karma that will give away free credit scores and then track them for you over time but that’s different.
The score tracking is one of their features. The credit bureaus don’t track your scores over time as they’re calculated.
If your VantageScore credit score or FICO credit score is 730 on Sunday and 780 the following Sunday, it gives the impression that your score increased by 50 points during the week.
That’s not true. Your score was simply recalculated a week later and the latter scored out at 780 instead of 730.
Why the Numbers Fluctuate
So how do you attribute different scores over time?
There has to be a scientific explanation of why your score was a 730 last Sunday and a 780 this Sunday, and there is.
The difference in scores is likely attributable to one or more credit report and credit scoring model events. Your score could be different because of;
1) Something material changed on your credit reports.
Assuming everything, and I mean EVERYTHING, stayed the same on your credit reports (dates, balances, statuses, composition) except for one significant change, you could argue that the one change is responsible for the difference in scores.
This would have to be validated by manually scoring the credit report before and after the change and measuring the true impact of that one change.
This manual scoring can take several hours and isn’t fun at all. In fact, I just got the chills thinking about doing it.
2) Something seemingly immaterial changed on your credit reports…but it was actually kind of important.
A great example would be a date associated with an account or with something derogatory.
If an account or a derogatory item crossed one of the many thresholds associated with the age metrics of a credit scoring system and all of a sudden became “older,” that could cause a change in score even though cosmetically the credit reports look the same.
3) Your credit report experienced what’s referring to as Scorecard Hop.
Scorecard hop is a non-technical term meaning that something changed on your credit report and it has caused your credit report to be scored using a completely different series of measurements by the scoring model.
Imagine changing the speedometer in your car from Miles Per Hour to Kilometers Per Hour. You’re still going to same speed but the measurement of your speed is very different.
This can be something as minor as a new account hitting the credit report or an ancient collection falling off.
When you scorecard hop EVERY measurement associated with your credit report changes and it’s next to impossible to put your finger on why your scores are different unless you score the credit report manually.
John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of Mint.com or Intuit. Follow John on Twitter.
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The National Association of Realtors released its 2013 National Housing Pulse Survey recently, and they’ve been sharing bits and pieces for free on their blog.
A more interesting tidbit shared over the weekend shed some light on the sacrifices home buyers make in order to scrounge up enough cash to buy a piece of property.
Ditching the Luxury Lifestyle
The top cutback made by all buyers was on “luxury items” or “non-essential items,” which is pretty standard if you’re gearing up to purchase anything expensive.
Of all buyers surveyed by NAR, 32% indicated that they had to cut back in those departments.
Broken down further, 42% of first-time buyers said they had to ditch such items, compared to just 26% of repeat buyers.
Entertain Yourself
The second biggest concession was entertainment, with 26% of all buyers indicating that they had to forego fun while saving up to buy a home.
Again, many more first-time buyers (35%) had to make this sacrifice compared to seasoned repeat buyers (20%).
Whether you’re in the market to buy a home or not, you should limit how much you spend on entertainment, which can add up in a hurry.
I Don’t Have Anything to Wear
The third biggest hard decision a prospective buyer had to make involved clothing, with 20% indicating that new clothes were on hold.
More than a quarter (27%) of first-timers had to wear their old clothes while home shopping, compared to 15% of repeat buyers, who perhaps felt more at ease with the process.
It’s certainly easier to buy a home the second or third time around, knowing the potential pitfalls and setbacks that can occur.
At the same time, the housing and mortgage market is constantly in flux, so what worked five years ago might not fly today.
How Does Camping Sound?
The fourth biggest guilty pleasure given up was vacationing, which 13% of buyers said they canceled to pursue their home buying crusade.
Again, more first-time home buyers (14%) cut back in this category compared to those who’ve already been there (11%).
Believe it or not, there are plenty of times when buyers or refinancers are out of town are critical periods during the loan process.
Don’t go on vacation if you know your loan documents might need to be signed, or if you’re anywhere in the process for that matter.
There’s a good chance you’ll need to sign or fax an important document, so stay close to home until the loan funds.
Ride a Bike
The fifth biggest sacrifice buyers made was either selling an existing vehicle or deciding not to purchase one, though only six percent of respondents noted this.
It was again higher for first-time buyers (7%) than repeat buyers (6%), but just barely.
For the record, you shouldn’t make any significant purchases when shopping for a home, especially something that requires a loan, like a car.
If you take out another loan around the same time you take out a mortgage, your credit score will likely take a hit, and you could even have issues with your debt-to-income ratio exceeding the allowable limits.
Conversely, selling a car could actually help you in the affordability department if you had an associated car loan/lease that you could now remove from your DTI calculations.
So those were the top five sacrifices. Some respondents (6%) also reported taking a second job to earn some extra income for the home purchase.
Just note that while it’s great to earn some extra dough, a short-term, part-time job likely won’t be used for qualification purposes.
Overall, 53% of buyers said they didn’t need to make any sacrifices at all, so perhaps affordability isn’t a concern just yet. Either way, save up, season your assets early on, and be ready to document everything!
People who are pursuing Frugal yet Badass Lives of Leisure tend to be pretty fun to hang around with. I learned this shortly after starting this blog, and since then I have cashed in on many opportunities to meet up with fellow Mustachians.
This is another one of those, but a pretty ambitious one. Three long-term members of our gang have taken it upon themselves to arrange an all-weekend meetup at a retro (but beautiful) camp in the Pacific Northwest – roughly between Tacoma, WA and Mt. Ranier. They were kind enough to invite me and the eminently cool writer J.D. Roth to join, and of course we both said yes.
More than just a meetup, it is a fully planned deal with 50 spaces (20 were filled before publishing this article) where the food and accommodation is included. And since it is planned by true Mustachians, it is a non-profit event, only $200 for the whole thing, and you can get there from Seattle/Tacoma on under a gallon of gas in a good car (or a few bowls of oats on your bike). Quite a nice contrast from the decadence of those Ecuador trips.
Update: I just got word from the organizers that the remaining spots filled up. And it was only lunchtime on the Saturday that I posted this. This is further evidence towards my theory that the Pacific Northwest is the nation’s hotbed of Mustachianism.
This should be a fun but not overly formal and scheduled event. For my part, I hope to hang around, do some hiking and lake activities, stay up late and respectfully break various rules, and talk with you about interesting things.. but not deliver any sort of prepared presentation.
The dates are from Friday, May 30 until Sunday, June 1st.
I’ve taken down the link to the ticket page since they are all spoken for. Many thanks to hosts Kristin, Joe and Emma for doing all of the hard work! We now return to our regularly scheduled programming..
Epilogue:
The event has come and gone, but the memories will be around for good. What an amazing experience! What a group of readers this blog has. Here is a little summary from Joe on the event, with a picture of the gang.
When you look at Peerform reviews you first need to understand the difference between conventional loans and peer to peer loans. While traditional loans come from a bank and can take months to get done, P2P loans are done through a platform that connects investors and borrowers.
Peer-to-Peer lending sites are rapidly becoming preferred destinations for both borrowers and investors. Peerform is a newer member of the P2P Market and it provides opportunities for both borrowers and investors to get better rates than what they can get from banks or other traditional loan and investment sources.
About Peerform
Peerform was founded in 2010 by Wall Street executives with backgrounds in finance and technology. They started the platform because they realized that traditional lenders like banks seemed unwilling to provide loans for individual and small business owners.
The solution was to create a peer-to-peer lending platform that would bring both borrowers and loan investors together. This would also give investors an opportunity to earn much higher interest rates on their investments than what they could get through traditional bank investments like savings accounts, money market accounts, and certificates of deposit.
The platform is able to offer lower rates to borrowers, and higher rates to investors, because it lacks the physical infrastructure and employment base that banks have. The reduction in operating costs from running a technology driven online lending platform could be passed on both borrowers and investors.
Peerform is headquartered in New York City and has been featured in major media outlets, such as Time and The Street. Peerform is currently eligible to make loans to residents in the 36 following states: Alaska, Alabama, Arkansas, Arizona, California, Delaware, Florida, Georgia, Hawaii, Illinois, Kentucky, Louisiana, Massachusetts, Maryland, Michigan, Minnesota, Missouri, Mississippi, Montana, North Carolina, Nebraska, New Hampshire, New Jersey, New Mexico, Nevada, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, Vermont, Washington, and Wisconsin.
Loans made on Peerform are underwritten by Cross River Bank, a federally insured New Jersey chartered bank and FDIC member.
Borrowing Through Peerform
The Peerform borrowing process is quick and simple, and you can use the loan proceeds for just about any purpose, including for business related needs.
Here are the highlights of the Peerform lending process:
Loan purpose. Peerform makes personal loans that can be used for a wide variety of purposes, including debt consolidation, credit card refinancing, home improvement, major purchases, car financing, business purposes, medical expenses, moving and relocation, wedding expenses, vacation, home buying, or other needs.
They also have a category referred to as a “green loan”. That’s where you take a personal loan and use it to purchase alternative energy equipment for your home. This typically can be something like solar panels for heat and hot water, or even the generation of electricity.
Loan amounts. Peerform will make loans that range in size $1,000 and $25,000.
Loan terms. All loans made through Peerform are for a term of 36 months. All loans are also fixed rate, installment loans that will be fully paid off at the end of the term. Peerform does not offer any other loan terms at this time.
Minimum borrower qualifications. In order to qualify for a loan with Peerform, you must have:
A minimum credit score of 600
No delinquencies, bankruptcies, tax liens, judgments, or non-medical related collections in the past 12 months
A minimum of one revolving account ever opened
A maximum debt-to-income ratio (DTI) of not more than 40% (not including mortgage debt)
A minimum of one open bank account
Although you don’t need to be employed, you do need to have an income which can be documented and verified. Also in regard to income, if you’re married, your spouse’s income cannot be used to qualify for the loan. Peerform provides personal loans, so you cannot include a cosigner for qualification purposes, nor make joint applications.
The loan application process. Peerform’s loan application uses a five step process:
Registration – This is an online registration that you can complete within a few minutes
Personal loan selection – After completing the online registration, the platform will review your information, and offer loan terms or alternatives.
Personal loan listing – After you have selected the loan terms that you want, your loan request is listed on the platform so that it can be evaluated by potential investors.
Verification – You will be asked to submit documentation that supports the information that you supplied in your registration form, or that will be needed to verify your identity.
The loan registration process will ask you to provide basic information, such as the loan amount you are requesting, the purpose of the loan, your credit score range, your full name, address, phone number, date of birth, email address, and annual salary and wages. You will then be asked to create a password.
Once you complete the registration form, you will be informed immediately if you qualify for a loan, and what the rate for that loan will be. Again, all loans are for a term of 36 months.
If you accept the offer, your loan request will be placed on the platform for investors to review and consider if they want to invest in it. You will also be taken through a step-by-step process to complete your application. Making application does not have any impact on your credit score.
Identity verification will involve you uploading copies of one of the following: your drivers license, military ID with photo, passport with photo, or US federal or state government ID. You will also be asked to verify your income. This will include two recent pay stubs, but they may also request recent tax returns and/or a copy of your bank statements.
Loan funding. In a best case scenario, your loan funds will be available shortly after the loan is put on the personal loan listing platform. However, all listed loans can remain on the platform for up to two weeks, which is known as the two-week listing period. You can track investor interest in your loan during the process.
But it is possible that your loan will not be fully funded within the two-week listing period. If it isn’t, you can either accept a lower loan amount (up to the amount funded), or you may need to reapply.
Interest rates and fees. Just like Lending club loans, interest rates with Peerfrom range between 7.12% APR and 29.99% APR. Rates are based on your Peerform Grade, and broken down into four alphabetic groups, each with its own rate range:
AAA, AA+, AA, A+ and A: 7.12% APR to 13.94% APR (credit score range: 700+)
BBB, BB+, BB, B+ and B: 14.86% APR to 19.44% APR (credit score range: 680 – 699)
CCC, CC+, CC, C+ and C: 20.87% APR to 26.92% APR (credit score range: 600 – 679)
DDD and DD+: 28.33% APR and 29..99% APR (credit score range: not indicated)
There are no application fees. There are however origination fees, typically 5.00% of the loan amount on all loans grades, except Peerform Grade loans AAA (1.00%), AA+ (2.00%) and AA (3.00%). The origination fee is deducted from your loan proceeds. For example, if your loan is $10,000, and the origination fee is 5.00%, you will receive net loan proceeds $9,500. The origination fee is payable only if the loan is issued.
The preferred loan repayment method by Peerform is by direct debits from your bank account. But you do have an option to pay by paper check. If you do, there is a $15 check processing fee for each check.
Late payments are assessed a fee of 5% of the monthly payment, subject to a $15 minimum per occurrence. There is also an unsuccessful payment fee in the event that your payment is refused. That fee is $15 per unsuccessful attempt, or a lesser amount as determined by state law.
There are no prepayment penalties in the event that you want to make a partial or full early payment on your loan.
Loan payments. You can repay your loan either by automatic draft from your bank account, or by mailing in monthly checks. However, Peerform does charge a fee of $15 per payment if you pay by check. There is no charge if you pay by automatic bank draft.
Site security. Peerform follows bank level security protocols, which includes encrypting and storing sensitive data in dedicated 24 hour maintain servers, which are protected with firewalls and housed in a secure facility. Servers are equipped with Secure Socket Layer (SSL) certificate technology to ensure encryption.
You also don’t need to concern yourself with the fact that investors will have access to your personal information. They will get only the information needed for investment purposes, but will not have access to any information that personally identifies you. In that way, you can apply for a loan anonymously, and not concern yourself that the information is available to someone who is either unintended or inconvenient, and certainly not for general public consumption.
Investing Through Peerform
If Peerform is a great place to get a loan, it’s also a rich source of investment opportunities.
Here is how investing through Peerform works:
Investor qualifications. In order to invest on Peerform, you must be an accredited investor. That’s an investor who is either high income or high net worth, or both, and who is generally recognized as a sophisticated investor who understands risk, knows how to invest into it, and is prepared to lose all of his or her investment (the temperament factor).
According to the US Securities and Exchange Commission, an accredited investor is defined as anyone who…
earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR
has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).
.large-mobile-banner-2-multi-106border:none !important;display:block !important;float:none !important;line-height:0px;margin-bottom:15px !important;margin-left:auto !important;margin-right:auto !important;margin-top:15px !important;max-width:100% !important;min-height:250px;min-width:250px;padding:0;text-align:center !important;This differs from other P2P lenders. Prosper loan investors are allowed to start with as little as $25 to get started.
Investments offered. Peerform offers two types of investment products, whole loans and fractional loans. Whole loans are just what the name implies – you’re buying an entire loan. These investments are typically offered to institutions. Fractional loans are portions of loans, that are offered to individual investors.
These are not unlike investments on other P2P sites in which you can either invest in an entire loan, or in small pieces of many loans, commonly called notes.
All loans available for investment on Peerform are subject to analysis by the Peerform Loan Analyzer. The tool uses a highly advanced and dynamic algorithm for pricing loans. It uses empirical methods rather than filters (which are used on most P2P platforms) in order to better calculate consumer credit risk.
Custom portfolio. The portfolio enables you to diversify by customizing your investments to meet your needs. You can set investment goals, and the customization tool will outline how to invest your capital in order to reach your investment goals in the most concise way.
Fraud protection. Loan fraud is not uncommon and increases loan defaults, so Peerform takes extra steps to weed it out. In addition to requiring documentation to verify the borrower’s identity and income on the loan registration form, Peerform also uses both proprietary methods and commercially available licensed technologies and solutions to both detect and prevent fraud.
This includes third-party services such as Lexis Nexis for user identification, TransUnion for credit checks, and OFAC compliance.
Peerform also verifies that there is a variation of no more than 10% in the income stated by the borrower on the registration form, and that which is proven by the income documentation. If needed, IRS Form 4506T will be completed and sent to the IRS to verify the borrower’s income tax records. A small debit is taken from the borrower’s bank accounts, and verified by the borrower to make sure that the bank account is valid. The borrower’s phone number and email IP location are also verified.
Investment returns. Peerform offers rates of between 6.44% and 28.33% (net of origination fees). This rate range refers to returns before deducting for loan defaults, so your actual returns will be something less. .
Summary
Peerform is one of a growing number of P2P lending sites that also offers investment opportunities. The platform is using cutting edge technology to set the most accurate loan rates, which will also reduce the number of defaults that lowers the investment return on so many P2P lending sites.
Save more, spend smarter, and make your money go further
Maybe you didn’t hit the mega-millions jackpot, but you’ve come into some extra cash. It might be tempting to go out and indulge, but there is probably a better way to spend that money.
In the second installment of this 3-part series, Jennifer Openshaw, America’s Chief Consumer Advocate, Wall Street Journal columnist and CEO of Family Financial Network, is back with advice on what to do with $10,000.
From building an investment portfolio to purchasing reliable transportation, see what she says about how to make sure your financial decisions have a positive impact on your long-term financial well-being.
If you are just catching up on the series, check out Jennifer’s infographic on what you should do with $1,000. The ideas range anywhere from tuning up your car to making a few minor home improvements — even getting certified in yoga instruction.
Click on “Launch Infographic” for an expanded view.
Save more, spend smarter, and make your money go further
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Medical bankruptcy is an unofficial term for clearing out medical debt under Chapter 7 or Chapter 13 bankruptcy.
According to the U.S. Census Bureau, Americans hold nearly $200 billion worth of medical debt. As you can imagine, medical debt can cause quite a bit of financial distress for anyone who has it.
Medical bills can affect your credit and make paying off other bills difficult. Filing bankruptcy due to hefty medical bills may help you eliminate your medical debt and have a fresh start, but it isn’t always a perfect solution. Here, you’ll learn what medical bankruptcy is and how it works so you can decide if it’s the right choice for your situation.
What does medical bankruptcy mean?
“Medical bankruptcy” isn’t a legal term used in bankruptcy court, but it’s often used unofficially to describe filing for bankruptcy to eliminate medical debt. The most common forms of bankruptcy for individuals struggling with medical debt are Chapter 7 and Chapter 13—they have some similarities as well as differences for discharging debt.
Can you discharge medical debt in bankruptcy?
Both Chapter 7 and Chapter 13 can help you discharge medical debt as long as you follow the court’s guidelines and are approved for the filing. When you file bankruptcy, your debts are categorized as either secured or unsecured debts. Secured debts are types of debts for which you provide collateral or a down payment, like a home or a vehicle. Credit cards and other non-collateralized debts are unsecured debts.
Medical bills fall under the unsecured debts category, which gives you more options when you’re filing for bankruptcy. For example, if you’re approved for Chapter 7 bankruptcy, you may be able to have the entirety of your medical debt eliminated.
Which type of bankruptcy should you file for medical debt?
Choosing which form of bankruptcy to file depends on your unique circumstances as well as what the courts will approve. The primary difference between Chapter 7 and Chapter 13 bankruptcy is that Chapter 7 allows you to eliminate debt after liquidating some of your assets. With Chapter 13 bankruptcy, you’re provided with a repayment plan to pay off debts over time.
How to file Chapter 7 bankruptcy for medical debt
To qualify and file for Chapter 7 bankruptcy, you’ll need to pass a means test. The means test is when the court takes a look at your household income compared to the average in your state. If you’re below a certain threshold, you can file for Chapter 7. When people ask, “Does bankruptcy clear medical debt?” they’re usually referring to Chapter 7.
During a Chapter 7 bankruptcy, you’re assigned a trustee who evaluates your financial situation and your assets. For assets that don’t fall under your state’s specific exemptions, you may be required to sell them in order to pay back a portion of your debt. Once the assets are sold to pay back creditors, the remaining debt is removed.
How to file Chapter 13 bankruptcy for medical debt
People with a steady source of income typically file Chapter 13 for their medical bankruptcy. If your medical condition isn’t preventing you from working and receiving regular pay, this may be your best option for bankruptcy.
Under a Chapter 13 bankruptcy filing, you submit a proposal to the courts, which is based on your income. The proposal contains information on how much you believe you can pay on a monthly basis. You’re given a three-to-five-year timeline to repay your debts based on the court’s decision. Once your repayment plan is complete, the court discharges your bankruptcy.
Alternatives to filing medical bankruptcy
Medical bankruptcy is an option that many people turn to, but it can affect your credit for seven to 10 years. Derogatory marks on your credit can make it difficult to apply for loans, and it can also result in putting down larger deposits when renting a home or turning on utilities.
Before filing for medical bankruptcy, here are some alternative ways to pay your medical bills and avoid bankruptcy:
Sell assets: Yes, this is part of Chapter 7 bankruptcy, but it does not affect your credit if you do it on your own. You can use these funds to pay down your medical debt.
Borrow from a friend or family member: This is typically a good option to avoid interest, but medical debt doesn’t accrue interest. It still may be helpful to avoid the debt going to collections.
Settle your debt: Much like other forms of debt, you may be able to call and negotiate with your medical debt creditors to settle the debt for less.
Consolidate your debt: Debt consolidation allows you to combine multiple medical bills into one, which can help reduce the number of creditors you have and make repayment more manageable.
Find extra sources of income: Depending on your medical condition, it can be helpful to work additional hours or find side work to pay down your debt.
FAQ
The following are some of the most common questions when it comes to medical bankruptcy.
What is the difference between bankruptcy and medical bankruptcy?
Technically, there’s no difference between bankruptcy and medical bankruptcy. While medical bankruptcy isn’t a legal term, you can claim medical debt when you file for bankruptcy.
How long does medical bankruptcy last?
Chapter 13 bankruptcy takes three to five years to repay your debt, and it remains on your credit report for seven years. Chapter 7 bankruptcy can take four to six months and will stay on your credit report for 10 years.
How does medical bankruptcy impact credit?
Medical bankruptcy affects your credit score, so it’s helpful to understand the downsides of filing for bankruptcy. Chapter 7 bankruptcy stays on your credit report for 10 years, while Chapter 13 bankruptcy only lasts for seven.
As long as a bankruptcy is on your credit report, it hurts your credit and is also a red flag for lenders and anyone else who checks your credit. This can result in loan rejections as well as higher deposit requirements when you rent or start a utility service.
Can you claim medical debt on bankruptcy?
Yes. You can claim an unlimited amount of medical debt when you file for bankruptcy.
Does a medical bankruptcy affect your spouse?
If you’re married, your medical bankruptcy can affect your spouse, even if you file alone. Your spouse’s assets may need to be liquefied under Chapter 7 bankruptcy, but if you file individually, your bankruptcy will not affect their credit.
How to repair your credit after medical bankruptcy
Medical bankruptcy may be the best way to get back on your feet financially, but it can also affect your credit for years to come. If you’re planning on buying a home or car, or if you’re hoping to make other big purchases using credit, it can be difficult to get approved for these.
Lexington Law Firm has a team of legal professionals who can help you repair your credit. We have different credit repair services like credit monitoring and financial education tools to help you on your journey to rebuilding your credit. To learn how Lexington Law Firm could assist you, contact us today.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.)
Reviewed By
Vince R. Mayr
Supervising Attorney of Bankruptcies
Vince has considerable expertise in the field of bankruptcy law.
He has represented clients in more than 3,000 bankruptcy matters under chapters 7, 11, 12, and 13 of the U.S. Bankruptcy Code. Vince earned his Bachelor of Science Degree in Government from the University of Maryland. His Masters of Public Administration degree was earned from Golden Gate University School of Public Administration. His Juris Doctor was earned at Golden Gate University School of Law, San Francisco, California. Vince is licensed to practice law in Arizona, Nevada, and Colorado. He is located in the Phoenix office.
A 10,405-square-foot home Frank Lloyd Wright designed for his cousin, Richard Lloyd Jones, and completed in 1929, is in need of its next steward.
With a listing price of $7,995,000 and an incredible architectural pedigree, “this is a once-in-a-generation property for Tulsa,” says listing agent Rob Allen, of Sage Sotheby’s International Realty.
Known as Westhope, “this is a house that people in Tulsa feel belongs to the city, that it’s part of their history,” Allen adds.
Despite the steep asking price, this is not the Sooner State’s most expensive home for sale—although it’s the second-most expensive property in Tulsa. Westhope is a close runner-up to this new $8,500,000 listing.
Standout structure
This Wright property is significant for several reasons: Its square footage ranks it among the largest of his designs. It’s the only textile-block house outside of California.
It’s also one of only three Wright homes in Oklahoma. (Two others are in Bartlesville: Price Tower and the Harold Price Jr. House.)
Local developer Stuart Price snapped up the home in 2021 for $2,500,000. He then embarked on a restoration, inside and out.
“This has been a passion project of Stuart’s,” Allen says. “He’s loved owning this house. He’s held fundraisers here. And [actress] Sophia Bush hosted her pre-wedding dinner party here last year. Since we’ve listed it two days ago, it’s received significant exposure and inquiries.”
Passion project
Lloyd Jones, publisher of the Tulsa Tribune and co-founder of All Souls Unitarian Universalist Church in Tulsa, owned the five-bedroom, 4.5-bath home until the 1960s.
The family who owned it next updated the kitchen and enclosed the patio to create a family room.
Allen estimates Stuart to be the sixth owner.
Stuart’s work on the home started with the outside, where “thousands of individual panels of glass, a lot of which were fogged,” needed replacing, Allen says. Concrete “textile blocks (also) needed to be repointed or replaced.”
Another major project was refinishing the stained-concrete floors. Price “brought in a company based out of Dallas to refurbish all the floors,” says Allen.
The kitchen got a much-needed refresh as well, he adds. “Price did his best to improve upon (the design) while still trying to maintain the look and feel of a Frank Lloyd Wright home. The cabinets are all original and stained. The countertops were a black granite, and he replaced those with lighter countertops.”
While not original to the home, the dining set was built according to a Wright design. Original to the home are built-in bookshelves and long, cushioned benches.
The 1.5-acre property includes an outdoor pool and a five-car garage.
In 1975, the residence was listed on the National Register of Historic Places. What sets this house apart—even among Wright’s storied designs—are alternating square glass windows and textile blocks.
Searching for a steward
Tulsa’s Midtown is considered “one of the most highly sought-after neighborhoods in Tulsa,” Allen says. “It garners the highest prices per square foot in the city. It’s got this great topography with winding roads. You can be in downtown Tulsa within minutes.”
Who will likely buy this?
“I’m looking for someone who wants a Frank Lloyd Wright house. I’m not just looking in Tulsa. I’m looking everywhere,” Allen says.
“Whoever takes on this property must have a passion for preserving this significant property and being a steward of something that’s so important, particularly to the people of Tulsa,” he adds.
“We’ve definitely thought about an institutional buyer, maybe a university or museum, or a foundation that wants their headquarters there,” he continues. “I don’t want to leave anybody off the table.”