What Older Adults Should Know about Getting Divorced and (Maybe) Remarried

My Great Aunt Gert was widowed after being happily married to the same husband – my Great Uncle Bob – for more than 50 years. She remarried at age 83 to a man, my Great Uncle John, who was 85. They had 10 good years together before he died at the ripe old age of 95. Their “gray marriage” was a rarity 30 years ago.

So was gray divorce – but it’s on the rise today. Not everyone has the happy ending Gert had. She had one long, happy marriage followed by another.

In the last five years, I have seen more long-term marriages end than ever before. It’s actually a global phenomenon. Most divorces still happen to couples in their 30s and 40s, but more couples in their 50s and 60s – who have been married for 25 years and up – are deciding to split these days.

Their concerns are different than younger couples who divorce. In a more typical divorce, the partners are concerned with the young kids – assuming there are any – being OK. In gray divorce, partners have often accumulated more substantial assets, so there’s more to be divided. There are older kids, possibly grandchildren. There are more stakeholders.

Sometimes, it’s becoming an empty nester that’s the impetus for the split. The kids are 18 or over and gone. And the couple find they’ve grown apart. Sometimes it’s the children who – maybe even unwittingly – have kept their parents together.

No matter what age the kids are, they still need to be taken into consideration. If they’re in college, the soon-to-be-exes must figure out if college tuition and expenses will be split and if so, how. When the grown children get married, will Mom and Dad still fund the wedding or a portion of it? How?

If there are grandchildren, the uncoupling couple may be paying for private school tuition, summer camps, music lessons. Will Grandma and Grandpa keep paying for those things? And if so, how will those expenses be paid?

In gray divorces, there can be a lot of intertwined interests that have to be unraveled and divided. Vacation homes. Rental property. A family business. Family foundations. I know former couples who continue to operate as business partners or jointly oversee a foundation and its assets. Still others continue to share vacation homes. Just not at the same time – unless it’s an unusually amicable split.

For anyone considering getting out of a long-term marriage, here are a few points to keep in mind.

Divide and conquer

Have you and your soon-to-be-ex shared the same financial planner and estate planning attorney? Probably. Now, you each must have your own set of advisers. It’s cleaner and easier for one spouse to stick with the existing advisors – and for one spouse to get new ones. Plus, ethically speaking an adviser can’t serve each of you.

So, maybe Spouse A keeps the existing attorney and finds a new financial planner, while Spouse B keeps the existing financial planner and finds a new attorney. Each person gets to keep one provider who has the historical perspective. Or maybe one of you wants a fresh start all around, and that works too.

Consolidate and conquer

If the couple are retired, they have likely already consolidated their nest egg, which makes divorce and splitting up assets easier. If they haven’t done this yet, doing so will again make it easier. Move it all over to one financial institution. That makes it a lot easier to track and a lot less stressful.

If the couple haven’t done that yet, it can be part of the negotiations. For smaller accounts – however you determine “smaller” –  close them out and move them to bigger accounts.

When the daughter (or son) says ‘I do’

Who will pay for the wedding(s) of your child or children? That’s often part of divorce negotiations.

It’s cleaner to get this settled at the time of the uncoupling, rather than waiting until much later.

Heir(s) apparent

Any previous estate planning documents that left everything to the surviving spouse may need to be updated with a new beneficiary or beneficiaries. If I’m the adult child of divorcing parents, it’s clear to me that whatever my inheritance originally was going to be, it may now be diluted. Especially if I have siblings.

Talk to your adult child or children about any provisions you’re making. Let them know their needs and interests are being factored in to the agreement.  

Who has the power?

Splitting spouses were probably each other’s power of attorney and healthcare power of attorney. Now what? The responsibility – for one or both parents – may now go to an adult child. These are conversations you’ll need to have at the time of the split.

Who has the (Social) Security?

There is a maze of laws surrounding Social Security (yes, you can collect Social Security from an ex-spouse) and remarriage. Make sure you know them. For example, your 60th birthday is crucial. Get married one day before you turn 60, and you could lose benefits you were entitled to – or may have even already been receiving.

Saying ‘I do’ (again)

If you get remarried, you will want prenups. A prenup gives you – and your adult children and grandchildren – some measure of security. It also reduces any risk of – it must be said – fraud. You’ll also want to update any health insurance and life insurance policies. You may again need to update your power of attorney and healthcare power of attorney – just as you did when you divorced, this time appointing your new spouse.

When you get married, there are a lot of inherent and invisible rights. And responsibilities. You may want to spell out – legally – that your children are not financially responsible for their stepmother or stepfather, should she or he require long-term hospitalization or in-home healthcare. This is where estate planning and financial planning come into play, as well.

Great Aunt Gert, who died in 2018, got lucky. Don’t leave your nest egg or your children’s and grandchildren’s futures to fate. Plan ahead, and have peace of mind.

Founder, GraserSmith, PLLC

Tonya Graser Smith is a Board Certified Specialist in Family Law, licensed North Carolina attorney and founder of GraserSmith, PLLC, in Charlotte, N.C. She focuses her practice on divorce, child custody, child support, alimony, equitable distribution, prenuptial agreements and other family law matters.

Source: kiplinger.com

What’s the Average Student Loan Interest Rate?

With college tuition on the rise, students may take out student loans as they pursue their education. Student loans come with interest and sometimes other loan fees. As you repay student loans, that interest can add up.

While there are options like scholarships, grants, and work-study, sometimes student loans can be necessary to help students fill the gaps as they finance their education. Before borrowing student loans, it’s important to understand how they work, what the average student loan interest rates are like, and how interest rates impact your loan.

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What Is The Average Student Loan Interest Rate?

So, what is the average student loans interest rate?

The interest rate on a student loan varies based on the type of student loan. Federal student loans have a fixed interest rate, meaning it is set for the life of the loan.

For the 2022-2023 school year, the interest rate on Direct Subsidized or Unsubsidized loans for undergraduates is 4.99%, the rate on Direct Unsubsidized loans for graduate and professional students is 6.54%, and the rate on Direct PLUS loans for graduate students, professional students, and parents is 7.54%. The interest rates on federal student loans are fixed and are set annually by Congress.

Private student loan interest rates vary by lender and each has its own criteria for which rates you qualify for. Private lenders also may offer different interest rates if you have a cosigner on your student loan. Private student loans also may offer variable interest rates, meaning they can start lower than a fixed interest rate but then go up over time, based on market changes.

The interest rates on private student loans can vary anywhere from 1% to 13%, depending on the lender, the type of loan, and on individual financial factors including the borrower’s credit history.

Recommended: Types of Federal Student Loans

How Are Interest Rates Determined?

As mentioned previously, the interest rates on federal student loans are set annually by Congress. The rates are tied to the financial markets—Congress sets them based on the 10-year Treasury note. Since 2006, all federal student loans have fixed interest rates. Although federal student loans are serviced by private lenders selected by the federal government, the private lender has no say in the interest rate offered.

For private student loans, the lenders set their own rates, though they often take cues from federal rates. Each lender has their own algorithm and credit standards. The rates quoted for student loans vary based on each applicant’s individual situation—though generally the better a potential borrower’s financial history is, the better rate they may be able to qualify for. When considering a private student loan, shop around with a few different lenders to find the best rate and terms for your personal needs.

To learn more about private and federal student loans check out our student loan help center.

How Is Student Loan Interest Calculated?

The interest on federal student loans accrues daily. To calculate the interest as it accrue, the following formula can be used.

Interest amount = (outstanding principal student loan balance × interest rate factor) × days since last payment

In other words, you will multiply your outstanding loan balance by the interest rate factor. Then, multiply that result by the days since you last made a payment.

To calculate that interest rate factor you can divide the interest rate by the number of days of the year (365).
For example, let’s say you have an outstanding student loan balance of $10,000, an interest rate of 3.73%, and it’s been 30 days since your last payment. Here’s how to calculate your interest:

$10,000 x (3.73%/365)=1.02
1.02 x 30 days=$20.66

Interest amount $20.66

Many private student loans will also accrue interest on a daily basis, however, the terms will ultimately be determined by the lender. Review the lending agreement to confirm.

What to Look for in a Student Loan Interest Rate

When you take out a federal student loan, you’ll receive a fixed interest rate. This means that you’ll pay a set amount for the term of the student loan. In addition, all of the terms, conditions, and benefits are determined by the government. And, federal student loans provide some additional perks that you may not find with private lenders like income-driven repayment plans.

On the other hand, private loans tend to have higher interest rates since the lender sets them. Private lenders review your credit score, income, and other factors to determine the rate you receive. This way, they can ensure you’re financially stable and can repay your loan before loaning you the funds.

Because of the higher interest rates and potentially fewer perks, you should first take advantage of all federal student loans you qualify for before comparing private loan options.

Average Interest Rates for Student Loans FAQ

Here are some common questions about the average interest rates of student loans.

What Is a Good Fixed Interest Rate for Student Loans?

When it comes to cost, the lower the interest rate, the better. The lower the interest rate, the less a borrower will owe over the life of the loan, which could help individuals as they work on other financial goals. If you’re taking out federal loans, the student loan interest rate is set by federal law, so you don’t have a choice for what is and isn’t a reasonable interest rate.

When it comes to private student loans, it’s wise to shop around and compare your options to find the most suitable financing solution. Since every lender offers different terms, rates, and fees, getting quotes from multiple lenders may help you select the best option for your personal needs. But, keep in mind, private student loans do not have the same borrower protections as federal student loans, including income-driven repayment plans or deferment options, and should be considered only after all federal aid options have been exhausted.

Is 30k In Student Loans Bad?

If you owe $30,000 in student debt, you’re right in line with the outstanding balance of most borrowers. Roughly 42.9 million Americans have federal student loan debt, and each owes about $36,406.

Is a 4.75% Interest Rate Good?

With interest rates on private student loans ranging anywhere between 1% and 13%, a 4.75% interest rate is not too bad. But, when it comes to federal average student loan interest rates, you can expect to pay more than 4% for undergraduate direct subsidized loans and direct unsubsidized loans.

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How Can I Reduce the Interest Rates on my Student Loans?

The interest rate on federal student loans, while fixed annually for the life of the loan, does fluctuate over time. For example, for the 2021-2022 school year, Direct subsidized and unsubsidized loans for undergraduates increased to 3.73% from 2.75% for the 2020-2021 school year.

To adjust the rate on an existing student loan, borrowers generally have two options. They can refinance or consolidate the loans with hopes of qualifying a lower interest rate.

Refinancing a federal loan with a private lender eliminates them from federal borrower protections such as income-driven repayment plans or Public Service Loan Forgiveness. The federal government does offer a Direct Consolidation loan, that allows borrowers to consolidate their federal loans into a single loan. This will maintain the federal borrower protections but won’t necessarily lower the interest rate. When federal loans are consolidated into a Direct Consolidation Loan, the new interest rate is a weighted average of your original federal student loans’ rates.

Refinancing student loans with a private lender may allow qualifying borrowers to secure a lower interest rate or preferable loan terms. Note that extending the repayment term will generally result in an increased cost over the life of the loan.

To see how refinancing could work for your student loans, take a look at the student loan refinance calculator.

The Takeaway

The average student loan interest rate varies depending on the type of loan. The interest rate for federal Direct Unsubsidized and Subsidized loans is set annually by Congress and fixed for the life of the loan. The interest rate on private student loans is determined by a variety of factors including the borrower’s credit history and may range anywhere from 1% to up to 13%.

Refinancing with a private lender may allow borrowers to qualify for a lower interest rate, which could help them save money over the life of the loan. Remember that choosing to refinance with a private lender means the borrower will lose the protections of a federal loan (such as Income Based Repayment, Income Contingent Repayment, or PAYE), but if you don’t think you will use those programs, refinancing may be an option to consider.

There are absolutely no fees when refinancing with SoFi. See your interest rate in just a few minutes—with no pressure to sign up.


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IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL SEPTEMBER 1, 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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Source: sofi.com

Adopting A Rescue Pup? Here’s How 15 Dog Experts Recommend Introducing A New Dog To Your Home

Here’s how to help your rescue dog go from shelter life to the good life!

With approximately 3.1 million dogs ending up in U.S. animal shelters each year, it’s safe to say — there are rescue dogs aplenty anxiously awaiting to find their furrever homes. May is National Pet Month and while there’s no perfect time to adopt a rescue, there’s a lot to consider before introducing a new dog to your home. Here’s what 15 dog experts recommend you do when it’s time to welcome Fido into the fold.

1. Build trust little by little

Woman with a rescue dog on her couch.

Woman with a rescue dog on her couch.

“If your new dog is fearful or shy, help your dog by guiding the dog to different options than being afraid, without feeling sorry for the dog,” says Julie Hart of Rescue Dogs Responsibly. “Encouraging a dog to engage his nose will help him understand scary objects and new environments. Fearful dogs thrive with predictability and routine, so try to do approximately the same things with the dog every day until the dog gets more comfortable. Use a leash or a long line to move the dog around the house and yard to be in the same area as you, but not too close.”

“Building trust in small steps with fearful dogs and laying a good foundation will lead to greater progress in the long run,” says Hart.

2. When introducing a new dog to your home, let your pup explore at their own pace

“When introducing a new dog your home, keep the first week quiet and low-key,” says Debi McKee from Rescue Dogs 101. “Start by allowing your dog one room or area before overwhelming them with the entire house. Allow the dog to go at their own pace.”

3. Feed your new best friend the right dog food

Dog looking up from its food bowl.

Dog looking up from its food bowl.

“Bringing home a new rescue pup can be stressful for your pup,” says Danielle Marchessault, a pet wedding planner and coordinator and owner of For the Love of Paws. “There are so many changes happening, which can cause stress-related tummy issues. To help reduce any potential tummy upset, ask the shelter staff what your pup has been eating so that you can replicate it for the first few meals at home!”

4. Establish a routine that you and your pup can stick to

“One of our biggest tips for new dog owners is establishing a routine for your new dog right away! There’s so much stimulation and new things going on for your pup when it first arrives home that it can be super overwhelming.” says the OC Pom Rescue.

“For you new owners, decide when mealtime will be, when and where the pup will go potty, when you want to take the dog for a walk and when it’s time for bed. Getting into a routine promotes comfort and stability, which will make that transition into the home that much more comforting and seamless!”

5. Keep your rescue dog active and stimulated

Dog standing in the doorway next to a welcome mat.

Dog standing in the doorway next to a welcome mat.

“To help your new rescued family member feel comfortable in its new home and environment, stimulate your furry friend with activity. Just like with people, young and old, it’s important to keep your furry family member’s brain active,” says Healing4Heroes, a non-profit organization dedicated to assisting military service members and veterans by connecting wounded service members, as well as those with Post Traumatic Stress Disorder and Traumatic Brain Injuries with A.D.A compliant service dogs.

“As a renter, you can drop pieces of kibble indiscriminately around your home. This will keep their brain active as they search for yummy treasures while getting them comfortable with the different rooms in their new environment. Congratulations on adopting a family member that will love you forever, no matter what you do!”

6. Practice patience

“Patience is the most important part of welcoming a rescue dog into your home,” says Molly Weinfurter and Mabel the rescue dog. “Most dogs have moved between shelters and foster homes their whole lives, so it will take some time for them to get comfortable and let their true personalities show. Watching a dog come out of their shell and thrive is the most rewarding experience, so give your new dog plenty of space in the beginning.”

7. Pick up some eco-friendly, doggy-approved products

Rescue dog with toys in his mouth at home.

Rescue dog with toys in his mouth at home.

“As a new pet parent, providing a comforting safe space for a new rescue pet is a must. Part of making a safe space for them is providing mental and physical stimulation through toys that help keep them entertained mentally and physically,” says the Gone to the Dogs team.

“Sustainably- and ethically-made toys are great for both pets and pet parents alike! You can find eco-friendly toys made out of materials like wool, hemp, cotton or wood. These are all-natural materials that won’t harm animals or the environment in the manufacturing process like some plastics do. If you’re just starting out as a fur mom or dad, then it might be worth considering the idea of buying eco-friendly cat and dog products!”

8. Keep safety and stability top of mind

“Take things slow and understand your new dog might be confused or frightened, so your No. 1 priority is keeping him feeling safe. You don’t want him to learn that you’re the person who scares him or will force him to do things he doesn’t feel safe doing. Now is the time for trust-building, never intimidation,” says Kate LaSala CTC, CBCC-KA, PCBC-A, CSAT from Rescued By Training.

9. Lean into crate training

Two rescue dogs in a crate.

Two rescue dogs in a crate.

Photo courtesy of Lucky Dog Animal Rescue

“When bringing a new dog to their home, we recommend getting settled into a reliable routine with plenty of exercise right off the bat!” says Lucky Dog Animal Rescue. “Long walks and trips to the dog park are great ways to tire your pup out so they have less desire to get into things at home. Teaching your dog that the crate is a safe space for them to stay when you’re not home, taking them out on regular intervals and rewarding desirable behavior are all great ways to set a routine.”

10. Stock up on doggy necessities

“Homecoming day is an exciting time, both for you and your new rescue, but it’s important to keep it low-key when introducing a new dog to your home,” says Janice Jones from Small Dog Place. “Your new dog will be anxious so having everything prepared beforehand is a must. Stock up on a comfortable bed and blanket, dog bowls, leash, harness and, last but not least, assure you have a good supply of toys and treats.”

“This special day should be reserved for you, your family and your new rescue — a time to get acquainted in a peaceful environment. Your dog will not only want to explore his new home but also where to find his bed, the water bowl and where to eliminate. This is also a good time to show your neighbors just how responsible a pet parent you are during walks, by picking up immediately after him and keeping the grounds clean.”

11. Show affection through playtime and walks

A dog walking on a leash outside.

A dog walking on a leash outside.

“The most important thing you can do when introducing a new dog to your home is creating a space they can call their own to help comfort them as they adjust to their new surroundings,” says Jennifer Dew, the founder and owner of 9 to 5 Pets.

If you’re looking for an easy transition with your rescue pup, Dew recommends the following:

  • Take your rescue dog on regular walks and give them lots of playtimes to release their energy and help lower their stress as they’re wrapping their paws around the transition and change.
  • Shower your new pup with affection to help reassure them that everything’s OK and make plans to stay at home with them as much as possible that first week to help reinforce their sense of security (which is you) in their new home.

And lastly, Dew shared, “Dogs thrive on routine, so when they experience a lot of change (good or bad), it causes stress and anxiety which can lead to unwanted behavior like accidents in the house or excessive barking. So, stay patient with them and keep in mind that this behavior is relative to the stress and anxiety they’re feeling and that they are doing the best they can. With love, patience, routine and positive reinforcement, any negative behavior should subside in time as they settle into their new home with you.”

12. Repeat the old adage “Slow and steady wins the race”

“Forget Me Not Rescue highly encourages slow introductions to other pets in the home. We specialize in hard-to-place pets like seniors so it may take several visits to make the adoption successful. Patience, time and a loving touch are very important,” says Margarita Fazioli from the Forget Me Not Rescue.

13. Keep calm and carry on

A woman holding a dog.

A woman holding a dog.

“When preparing for your new rescue pup to arrive, make sure to have a sense of calmness be your focus,” says The Peaceful Pack. “This will help when you start introducing a new dog to your home and promote a greater feeling of peace, stability and trust for your pup. Control what you can in your environment by creating cues for calmness, such as playing classical music, giving your pup their own space & providing enrichment-filled playtime.”

14. Regularly remind yourself and your family that introducing a new dog to your home takes time

“Our No. 1 tip for welcoming a new rescue dog into your home is to provide the new dog with time to become accustomed to their surroundings,” says Amber L. Drake from the DogBehaviorBlog. “There will be new sights, smells and sounds, which can be overwhelming to a new dog. Waiting one or two days to begin introducing new guests or pets to your rescue dog is recommended. And, as with any new adventure, patience is key.”

15. See what your pup gravitates toward

A woman scratching a dog under its neck on the couch.

A woman scratching a dog under its neck on the couch.

“When you start introducing a new dog to your home, especially a rescue animal, you need to provide the most comfort possible,” says Lauren Farricker from WoofRepublic.com. “Patience is very key during this time of transition as you learn how to integrate with each other. So, for new rescue pup parents, I advise trying to obtain their existing bed, blanket or a toy that gives them a sense of comfort in the new space that provides a semblance of where they’ve been as they are learning their new safe spaces. Shelter dogs may not have any existing items, so observe what they gravitate towards in their first few days to see how they find comfort.”

No bones about it

Welcoming a new animal into the family is just as much of a transition for you, as it is for the dog. So, while you show patience in welcoming your new best friend into your apartment, make sure to show a little grace for yourself. After all, this is an adjustment period for everyone.

Source: rent.com

Examining the Different Types of Student Loans

With the average annual cost of college for the 2021-2022 school year $10,740 for public four-year in-state and $38,070 for private non-profit four-year schools, it’s not uncommon for students to use loans to help pay for their education.

The two major umbrellas to consider are federal student loans and private student loans. Federal student loans are those backed by the U.S. Department of Education, while private student loans are offered through financial institutions such as banks, online lenders, and credit unions.

Knowing what types of student loans are available to you and understanding your student loan statement can help you figure out the best way to save money in the long run.

What Are The Different Types of Student Loans?

One of the first things to understand is the difference between federal and private student loans.

Federal student loans are loans offered by the government, at a fixed interest rate and with certain restrictions. Depending on borrower needs, students could qualify for either subsidized or unsubsidized federal loans (more on those, later). Federal student loans come with protections for borrowers’ loans like income-driven repayment options, deferment, forbearance, and access to the Public Service Loan Forgiveness (PSLF) program. Most federal student loans also have annual lending limits .

For some students, federal student loans aren’t enough to cover the cost of a college education. Some turn to scholarships, grants, or a part-time job to fill in the gaps. Other students rely on private student loans, offered by lenders and financial institutions, to cover the cost of college.

Applying for Federal Student Loans

The first step in the federal student loan process is to fill out the Free Application for Federal Student Aid (FAFSA®). That will involve compiling some family financial history. Even students who don’t think they’ll qualify for financial aid will likely still want to fill out a FAFSA. All federal student loans require a FAFSA first. And some schools use information from the FAFSA to determine eligibility for other types of aid like scholarships or grants.

All federal student loans require a FAFSA first.

After filling out the FAFSA, students will receive a financial aid package which includes any federal aid awarded to the student including grants, work study, and loans. Depending on financial circumstances, the loans will either be subsidized or unsubsidized.

The Different Types of Federal Student Loans

Think of federal student loans as an overarching category. There are different types of federal student loans, each of which have different eligibility requirements, borrower maximums (or not), and interest rates. Understanding all your options means you’ll be better prepared to determine the best way to finance your education.

Recommended: Private Student Loans vs. Federal Student Loans

For the 2022-2023 school year, the interest rate on Direct Subsidized or Unsubsidized loans for undergraduates is 4.99%, the rate on Direct Unsubsidized loans for graduate and professional students is 6.54%, and the rate on Direct PLUS loans for graduate students, professional students, and parents is 7.54%. The interest rates on federal student loans are fixed and are set annually by Congress.

Direct Subsidized vs. Unsubsidized Loans

Federal Direct loans, also known as Stafford Loans, can be either subsidized or unsubsidized. With a subsidized student loan, the government will cover the accrued interest while the borrower is enrolled in school, during the grace period, and during any periods of deferment. Not having to pay interest on your loans during school can really help—especially since interest accrues and capitalizes, or gets added to the principal loan amount, and then accrues more interest. There are no subsidized federal loans for graduate students—only for undergrads.

The government does not pay the interest on unsubsidized Direct loans. That means, even while you’re in school, the loans are accruing interest. You don’t have to make payments on the loans while you’re a full-time student, but interest is building up. As the interest accrues, it is added to the loan’s principal.

Recommended: Student Loan Grace Periods: What You Need to Know

That’s why it’s possible to have a higher remaining loan balance than the initial loan amount after graduation. Individuals with an unsubsidized student loan do have the option to make interest-only payments on the loan during periods of deferment, including while they’re in school, but are not required to do so.

Federal loans have fixed interest rates (that are set annually), meaning they don’t change over the life of the loan.

Federal student loan borrowing limits vary depending on factors like your year in school and whether or not you are a dependent student. For example, first-year undergrads who are considered independent or whose parents are not able to take out parent loans have a maximum borrowing amount of $9,500 (of which only $3,500 can be subsidized) annually. The maximum for dependent students is $5,500 in their first year, with the same $3,500 cap on subsidized loans.

PLUS Loans

Direct PLUS loans can be borrowed directly by a graduate student, or Parent PLUS loans can be taken out by an undergrad’s parents. PLUS loans, in both forms, have the same benefits as other federal loans in that the interest rate is fixed and there are flexible repayment options.

Unlike other federal loans, PLUS loans require a credit check. They’re designed for graduate and professional students, who have had more time to build up a credit score. The maximum PLUS loan amount you can borrow is the full cost of tuition less any other financial assistance.

When taking out student loans for college, a lot of the options depend on your FAFSA and what’s determined to be your family’s financial need or ability to pay. If you’re a dependent student , then there will likely be some expectation of parental contribution and your parents may be offered the option of taking out Parent PLUS loans.

Parent PLUS loans are similar to Direct PLUS loans, except parents are expected to begin repaying the loan while the student is still in school—though they can request a deferment until graduation.

Direct Consolidation Loans

After graduation, students might have a number of different federal student loans. That can obviously be confusing. If you want to consolidate all federal loans into one place, then you may be able to pool them into a Direct Consolidation Loan. This allows you to only make one monthly payment towards all your federal student loans.

A Direct Consolidation loan will not lower your overall interest rate.

A Direct Consolidation loan will not lower your overall interest rate. The interest rate on your new Direct Consolidation Loan is simply a weighted average of the interest rates, rounded up to the nearest eighth of a percent, of your existing federal loans. Consolidation could also wipe out any history of payments you were making toward PSLF. Only federal loans can be consolidated with a Direct Consolidation Loan.

Related: A Look Into the Public Service Loan Forgiveness Program

Repay your way. Find the monthly student loan
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Private Student Loans

Students who don’t receive enough funding from the federal government, may look to private student loans as an option to finance their education. Private loans are offered by lenders such as banks, online lenders, and credit unions.

Applying for Private Student Loans

Private lenders do not use the FAFSA to determine a potential borrower’s creditworthiness. Instead, students interested in borrowing private loans will fill out a loan application directly with a lender. Before applying, lenders will generally allow people to get a quote to see if they pre-qualify and at what rates. This can be helpful when evaluating different lenders.

The terms, interest rates, and borrowing limits on private loans may vary by lender. Lenders will use factors like the borrower’s credit score to determine the interest rate they qualify for. When borrowing a private student loan you’ll generally have the option to choose between a fixed or variable interest rate.

Student loan repayment options will be determined by your lender. Some offer deferment plans while the borrower is enrolled in school and others require payments to start as soon as the loan is disbursed.

Another private student loan option is to consolidate or refinance your existing student loans after graduation. This might be beneficial if it lowers your interest rate and saves you money over the life of your loan. Federal student loans offer unique borrower benefits and protections like income-driven repayment plans. Refinancing federal loans eliminates them from these benefits.

Understanding the Student Loan Statement

When you take out a loan, you sign a promissory note, which outlines the interest rate, loan amount, and repayment terms. If you hold federal student loans, when you graduate you select a repayment plan. If you don’t do anything, you’ll automatically be put on the Standard Repayment plan.

For most federal loans, the Standard Repayment plan is a set monthly payment for up to 10 years. There are a few other repayment plans to choose from, including four income-driven repayment plans. The different plans allow you to pay back your loan over different time periods. The longer the repayment term, the more you’ll pay in interest over the life of the loan.

When you look at your student loan statement, you’ll see each loan listed as the total loan amount, how much principal remains, how much interest has accrued since your last payment, your current interest rate, and how much your current monthly payment is—in addition to any fees, such as late fees, you might owe.

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The Benefits of Refinancing Student Loans

It’s possible to consolidate both federal and private student loans into one new loan when you refinance your student loans with a private lender. If an applicant qualifies for a lower interest rate and a shorter term, it could reduce the amount of money paid in interest over the life of the loan.

Make sure to weigh the benefits that come with your federal loans against the value of refinancing. When you refinance federal loans they will no longer be eligible for federal borrower protections.

Some private lenders offer similar borrower protections. For example, borrowers who refinance with SoFi may qualify for Unemployment Protection. This can help eligible borrowers pause their loan payments if they unexpectedly lose their job through no fault of their own. To see what refinancing could mean for you, take a look at SoFi’s student loan refinancing calculator.

The Takeaway

The two main categories of student loans are private and federal. Federal loans are awarded to students based on information they provide in their FAFSA annually. Federal loans have a fixed interest rate and are eligible for a variety of repayment plans, as determined by the U.S. Department of Education.

Undergrads may qualify for unsubsidized or subsidized federal loans, depending on their financial need. Graduate students may qualify for unsubsidized loans or PLUS loans. Parents of undergraduates may also borrow Parent PLUS loans.

Private student loans are offered by private financial institutions. In order to borrow a private student loan, individuals will generally need to file an application with a lender. The lender will review factors like the applicant’s credit history, among others, in order to determine the terms they qualify for.

Check out what kind of rates and terms you can get in just a few minutes.


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SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL SEPTEMBER 1, 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

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Source: sofi.com

The 10 Best Stocks for a Bear Market

Bear markets are an inevitable if particularly unpleasant part of the market cycle. But investors who hold the best stocks to buy for bear markets can mitigate at least some of the damage.

No, the S&P 500 isn’t in a bear market – a 20% decline from its peak – just yet. It has, however, been flirting with one for some time. The Nasdaq Composite, for its part, fell into a bear market a while ago. 

Either way, 2022 has been a dismal year for equities with no clear end in sight. Bottoms are hard to call in real time anyway, and, besides, stocks can trade sideways for as long as they feel like it. 

And so if this is how things are going to continue, investors might want to arm themselves with the best stocks they can find. And right now, those stock picks should focus on resiliency during deep downturns.

The best bear market stocks tend to be found in defensive sectors, such as consumer staples, utilities, healthcare and even some real estate equities. Furthermore, companies with long histories of dividend growth can offer ballast when seemingly everything is selling off. And, of course, low-volatility stocks with relatively low correlations to the broader market often hold up better in down markets.

To find the best stocks to buy for bear markets, we screened the S&P 500 for stocks with the highest conviction consensus Buy recommendations from Wall Street industry analysts. We further limited ourselves to low-volatility stocks that reside in defensive sectors and offer reliable and rising dividends. Lastly, we eliminated any name that was underperforming the broader market during the current downturn.

That process left us the following 10 picks as our top candidates for the best stocks to buy for a bear market.

Share prices, price targets, analysts’ recommendations and other market data are as of May 17, courtesy of S&P Global Market Intelligence and YCharts, unless otherwise noted. Stocks are listed by conviction of analysts’ Buy calls, from weakest to strongest.

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10. Berkshire Hathaway

A Berkshire Hathaway (ticker: BRK.B) signA Berkshire Hathaway (ticker: BRK.B) sign
  • Market value: $694.1 billion
  • Dividend yield: N/A
  • Analysts’ consensus recommendation: 2.25 (Buy) 

Warren Buffett’s Berkshire Hathaway (BRK.B, $314.81) gets a consensus recommendation of Buy with only modest conviction, but then a mere four analysts cover the stock.

One pro rates it at Strong Buy, one says Buy and two have it at Hold, per S&P Global Market Intelligence, which means the latter two analysts believe Buffett’s conglomerate will only match the performance of the broader market over the next 12 months or so.

That’s a reasonable assumption if stocks do indeed avoid falling into bear-market territory. BRK.B, with its relatively low correlation to the S&P 500, tends to lag in up markets. 

By the same token, however, few names generate outperformance as reliably as Berkshire does when stocks are broadly struggling. That’s by design. And Buffett’s wisdom of forgoing some upside in bull markets to outperform in bears has proven to be an incomparably successful strategy when measured over decades. 

Indeed, Berkshire’s compound annual growth (CAGR) since 1965 stands at 20.1%, according to Argus Research. That’s more than twice the S&P 500’s CAGR of 10.5%.

As one would expect, BRK.B is beating the broader market by a wide margin in 2022, too. The stock gained 5.2% for the year-to-date through May 17, vs. a decline of 14.2% for the S&P 500. 

If we do find ourselves mired in a prolonged market slump, BRK.B will probably not go along for the ride. That makes it one of the best bear market stocks to buy.

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9. CVS Health

A standalone CVS Health (ticker: CVS) businessA standalone CVS Health (ticker: CVS) business
  • Market value: $130.3 billion
  • Dividend yield: 2.1%
  • Analysts’ consensus recommendation: 1.92 (Buy) 

The healthcare sector is a traditional safe haven when markets turn south. Where CVS Health (CVS, $99.60) stands out is that few sector picks possess its unique defensive profile.

CVS is probably best known as a pharmacy chain, but it’s also a pharmacy benefits manager and health insurance company. Analysts praise the company’s multi-faceted business model for both its defensive characteristics and long-term growth prospects.

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“We are bullish on CVS tied to its unique set of assets, robust clinical capabilities and expanding presence in the attractive Medicare business,” writes Truist analyst David MacDonald, who rates the stock at Buy. “We view CVS’ integrated pharmacy/medical benefits as well positioned. Significant scale across its business lines, a strong balance sheet and robust cash flow generation provide dry powder for ongoing capital deployment activities over time.”

MacDonald has plenty of company in the bull camp. Nine analysts rate CVS at Strong Buy, nine call it a Buy and seven have it at Hold. Meanwhile, their average target price of $118.82 gives the stock implied upside of about 27% in the next 12 months or so.

Investors can also take comfort in the stock’s low volatility. Shares have a five-year beta of 0.77. Beta, a volatility metric that serves as a sort of proxy for risk, measures how a stock has traded relative to the S&P 500. Low-beta stocks tend to lag in up markets, but hold up better in down ones.

That’s certainly been the case with CVS stock this year. Shares were off 3.7% for the year-to-date through May 17, but that beat the S&P 500 by nearly 11 percentage points. Such resilience makes the case for CVS as a top bear market stock to buy.

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8. Coca-Cola

Cans of Coca-Cola (ticker: KO) in iceCans of Coca-Cola (ticker: KO) in ice
  • Market value: $285.2 billion
  • Dividend yield: 2.6%
  • Analysts’ consensus recommendation: 1.88 (Buy) 

Few names in the defensive consumer staples sector can match Coca-Cola (KO, $65.79) when it comes to blue-chip pedigree, history of dividend growth and bullishness on the part of Wall Street analysts.

Coca-Cola’s blue-chip bona fides are confirmed by its membership in the Dow Jones Industrial Average. But the company also happens to be an S&P 500 Dividend Aristocrat, boasting a dividend growth streak of 60 years and counting.

Oh, and Coca-Cola also enjoys the imprimatur of no less an investing luminary than Warren Buffett, who has been a shareholder since 1988. At 6.8% of the Berkshire Hathaway equity portfolio, KO is Buffett’s fourth-largest holding. 

Coca-Cola’s more immediate prospects are bright too, analysts say. It’s an unusually low-beta stock, for one thing, and that has been very helpful during this dismal 2022. Shares in KO have gained more than 11% for the year-to-date through May 17, beating the broader market by more than 25 percentage points.

True, KO was hit hard by pandemic lockdowns, which shuttered restaurants, bars, cinemas and other live venues. But those sales are now bounding back. Analysts likewise praise Coca-Cola’s ability to offset input cost inflation with pricing power. 

“We think KO’s strong fourth-quarter results reflect its brand power and ability to thrive in an inflationary environment, as top line improvement was entirely driven by price and mix,” writes CFRA Research analyst Garrett Nelson (Buy). 

Most of the Street concurs with that assessment. Twelve analysts rate KO at Strong Buy, six say Buy, seven have it at Hold and one calls it a Sell. With a  consensus recommendation of Buy, KO looks to be one of the best bear market stocks to buy.

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7. AbbVie

A picture of an AbbVie (ticker: ABBV) buildingA picture of an AbbVie (ticker: ABBV) building
  • Market value: $273.5 billion
  • Dividend yield: 3.5%
  • Analysts’ consensus recommendation: 1.88 (Buy) 

Pharmaceutical giant AbbVie’s (ABBV, $155.30) defensive characteristics stem from it being part of the healthcare sector, as well as a low-volatility Dividend Aristocrat. 

But the Street is outright bullish on the name for other reasons as well. 

High on analysts’ list are ABBV’s growth prospects and its pipeline. AbbVie is best known for blockbuster drugs such as Humira and Imbruvica, but the Street is also optimistic about the potential for its cancer-fighting and immunology drugs.

“After the recent weakness in ABBV, we revisited the model, and we came away even more confident regarding the growth prospects and pipeline,” writes Wells Fargo Securities analyst Mohit Bansal, who rates AbbVie as his Top Pick. “We think the consensus forecast significantly underestimates post-2023 growth. There are multiple pipeline catalysts in the 2022 to 2023 timeframe which are not in consensus models.”

At Truist Securities, analyst Robyn Karnauskas (Buy) largely agrees with that view. Although ABBV is suffering with the expected erosion of sales of Humira, newer drugs such as Rinvoq and Skyrizi are rapidly gaining momentum, the analyst says.

The bottom line is that bulls outweigh bears on this name by a comfortable margin. Twelve analysts rate ABBV at Strong Buy, four say Buy, seven call it a Hold and one says Sell.

AbbVie also stands out as a top bear market stock to buy because of a half-century of annual dividend increases. Same goes for ABBV’s low beta. The latter indicates relatively low correlation to the S&P 500, and is evidenced by ABBV stock gaining 14% for the year-to-date through May 17. That beat the broader market by 28 percentage points.

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6. Medtronic

A Medtronic (ticker: MDT) glucose monitorA Medtronic (ticker: MDT) glucose monitor
  • Market value: $142.6 billion
  • Dividend yield: 2.4%
  • Analysts’ consensus recommendation: 1.85 (Buy) 

Medtronic (MDT, $106.39) is another low-volatility healthcare stock with a long history of dividend growth that analysts say remains poised for even more market-beating returns.

Shares in one of the world’s largest manufacturers of medical devices gained nearly 3% for the year-to-date through May 17, a period in which the S&P 500 shed more than 14%. Even better, with an average price target of $123.18, the Street gives MDT implied upside of 17% in the next 12 months or so.

That’s why analysts’ consensus recommendation stands at Buy, with fairly high conviction. Of the 26 analysts surveyed by S&P Global Market Intelligence covering MDT, 13 rate it at Strong Buy, four say Buy and nine call it a Hold.

Part of MDT’s appeal stems from its reasonable valuation. Shares change hands at 18.8 times analysts’ 2022 earnings per share (EPS) estimate. And yet MDT is forecast to generate average annual EPS growth of nearly 10% over the next three to five years.

“We see this as an attractive valuation,” notes Argus Research analyst David Toung (Buy), adding the company “has solid post-pandemic growth opportunities from both current and soon-to-be-launched products.”

Indeed, the Street singles out MDT’s strong portfolio of existing products, as well as promising new ones under development.

“We believe Medtronic’s deep product pipeline should drive improving revenue growth and enable margin improvement resulting in high single-digit EPS growth and multiple expansion,” writes Needham analyst Mike Matson (Buy).

The best stocks to buy for bear markets often return cash to shareholders, too. And MDT’s history in that regard is as solid as they come. This Dividend Aristocrat has increased its payout annually for 44 years and counting.

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5. General Dynamics

An F-16 Fighting Falcon, made by General Dynamics (ticker: GD)An F-16 Fighting Falcon, made by General Dynamics (ticker: GD)
  • Market value: $64.3 billion
  • Dividend yield: 2.1%
  • Analysts’ consensus recommendation: 1.81 (Buy) 

Shares in defense contractor General Dynamics (GD, $232.02) benefit in down markets both from their relatively low volatility and dependable dividends. That alone makes GD worth considering as one of the better bear market stocks to buy.

What puts General Dynamics over the top, however, is its robust long-term growth forecast and potential for high share-price appreciation, analysts say.

GD’s defensive characteristics have certainly been well documented so far in 2022. Shares gained 11% for the year-to-date through May 17, a period in which the S&P 500 fell more than 14%. 

And the Street sees more outperformance ahead. Of the 16 analysts issuing opinions on the stock tracked by S&P Global Market Intelligence, nine call it a Strong Buy, two say Buy, four have it at Hold and one calls it a Sell.

Analysts forecast General Dynamics to generate average annual EPS growth of 11.6% over the next three to five years. And, notably, their average target price of $266.07 gives GD implied upside of about 15% in the next 12 months or so.

“Over the long term, GD management is focused on driving growth through modest sales increases, margin improvement, and share buybacks,” writes Argus Research analyst John Eade (Buy). “The company also aggressively returns cash to shareholders through increased dividends (most recently with a hike of 6%).”

If we do find ourselves slogging through a bear market – or just a sideways market – 15% price upside would be outstanding. And as a Dividend Aristocrat with 31 consecutive years of payout increases to its name, shareholders can at the very least count on GD for equity income.

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4. Iron Mountain

An Iron Mountain (ticker: IRM) datacenter against a white backgroundAn Iron Mountain (ticker: IRM) datacenter against a white background
  • Market value: $15.6 billion
  • Dividend yield: 4.6%
  • Analysts’ consensus recommendation: 1.71 (Buy) 

Iron Mountain (IRM, $53.99) is a real estate investment trust (REIT) with a twist. While the company is growing out a more modern datacenter arm, its legacy business is to store, protect and manage documents. In some cases that means it merely shreds them. The good news is that when corporate customers do indeed store paper documents, they tend to do so for very long periods of time.

That sort of predictability not only helps Iron Mountain maintain a generous dividend, but it allows IRM stock to trade with relatively low volatility. No wonder analysts particularly like Iron Mountain as one of the best bear market stocks to buy. 

“We view IRM as a defensive stock in the current environment, with significant valuation discounts to more traditional REITs (storage and data centers), an improving organic revenue growth story, and the very strong likelihood that the dividend will start to be raised at a 5% to 7% annual pace starting in 2023,” writes Stifel analyst Shlomo Rosenbaum (Buy).

Only seven analysts cover the stock, per S&P Global Market Intelligence, but their consensus recommendation comes to Buy with fairly high conviction. Four pros rate IRM at Strong Buy, two say Buy and one has it at Sell. Meanwhile, their average target price of $61.67 gives IRM implied upside of nearly 20% in the next year or so. 

Such returns would be extraordinary in a bear market, but then, IRM has been holding up its end of the bargain on defense so far. Shares have improved by 2.3% for the year-to-date through May 17 to beat the S&P 500 by about 12 percentage points.

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3. Mondelez International

A stock of Oreo cookies made by Mondelez International (ticker: MDLZ)A stock of Oreo cookies made by Mondelez International (ticker: MDLZ)
  • Market value: $91.0 billion
  • Dividend yield: 2.1%
  • Analysts’ consensus recommendation: 1.67 (Buy) 

Consumer staples giant Mondelez International (MDLZ, $65.45) is one of the best stocks for a bear market for many of the same reasons that it’s one of the best stocks to stave off sizzling inflation. 

The company’s vast portfolio of snacks and foods include Oreo cookies, Milka chocolates and Philadelphia cream cheese, to name a few. Sales of such consumer favorites tend to hold up well amid rising prices thanks to fickle palates and brand loyalty. 

Where MDLZ stands out among analysts, however, is in its ability to handle higher input costs thanks to a longstanding hedging program. The company also has been successful in passing higher costs on to consumers.

“We hold a strong growth outlook for Mondelez as its sales growth continues to outperform our expectations driven by strong market share performances and strong category growth rates,” writes Stifel analyst Christopher Growe (Buy). 

Nine consecutive years of dividend increases and a stock that trades with much lower volatility than the S&P 500 should also serve investors well in a tough market. Indeed, MDLZ was essentially flat for the year-to-date through May 17, vs. a decline of more than 14% for the broader market. 

Stifel is in the majority on the Street, which gives MDLZ a consensus recommendation of Buy, with high conviction. Twelve analysts rate it at Strong Buy, eight say Buy and four have it a Hold. 

Pricing power, market share gains and low volatility all help make the case for MDLZ as one of the best bear market stocks to buy.

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2. UnitedHealth Group

UnitedHealth Group (ticker: UNH) signUnitedHealth Group (ticker: UNH) sign
  • Market value: $462.1 billion
  • Dividend yield: 1.2%
  • Analysts’ consensus recommendation: 1.63 (Buy) 

Blue-chip stocks in defensive sectors such as healthcare tend to hold up better in bear markets, which is why it’s no surprise to see UnitedHealth Group (UNH, $492.93) make the cut.

This Dow Jones stock is the market’s largest health insurer by both market value and revenue – and by wide margins at that. But UNH’s sheer size alone is hardly a reason to hold it through a market downturn.

Shareholders can also take comfort in 13 consecutive years of dividend increases, a stock that’s historically been much less volatile than the broader market, and an outsized profit-growth forecast.

Analysts praise UNH on a number of fronts, with contributions from the Optum pharmacy benefits manager business being a regular highlight. A steep decline in hospitalizations due to COVID-19 is also a welcome relief.

“We maintain our Strong Buy rating on UNH as we believe shares continue to offer an attractive risk-reward tradeoff, and expect management to execute on its mid-teens EPS growth target,” writes Raymond James analyst John Ransom. 

The Street, which gives the stock a consensus recommendation of Buy with high conviction, expects the company to generate annual EPS growth of nearly 14% over the next three to five years. 

Lastly, this low-vol stock is performing as expected in 2022. It is off less than 2% for the year-to-date through May 17. That’s better than the S&P 500 by 12 percentage points.

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1. T-Mobile US

T-Mobile (ticker: TMUS) storeT-Mobile (ticker: TMUS) store
  • Market value: $161.2 billion
  • Dividend yield: N/A
  • Analysts’ consensus recommendation: 1.55 (Buy) 

Telecommunications stocks have always been favored for dividends and defense, and those are good attributes to have in a bear market. Where T-Mobile US (TMUS, $129.00) stands out is that shares in the wireless carrier have tremendous price upside too, analysts say.

You can chalk TMUS’s bright future up to the company’s $30 billion merger with Sprint. The deal closed two years ago, but the benefits have been escalating ever since. 

That’s because the “trove” of mid-band spectrum Sprint brought to TMUS allowed the telco to rapidly build out its next-generation 5G mobile wireless network, notes Argus Research analyst Joseph Bonner (Buy). The high-speed network, in turn, gave the company a competitive advantage over Verizon (VZ) and AT&T (T).

“The success of the company’s service plan innovations has been evident in its robust subscriber acquisition metrics,” Bonner writes. “T-Mobile remains the best positioned of the national carriers to take market share.”

T-Mobile’s clear advantages over peers is key to the Street’s consensus recommendation on the stock, which stands at Buy, with high conviction. It also factors into analysts’ average price target, which, at $167.55, gives TMUS implied upside of 30% in the next year or so.

With a five-year beta of 0.51, TMUS can kind of be thought of as being half as volatile as the S&P 500. That low-vol character has paid off handsomely so far this year. TMUS is up nearly 11% for the year-to-date through May 17, a period in which the broader market has fallen more than 14%. 

If the recent past is prologue, TMUS will prove itself as one of the best bear market stocks to buy.

Source: kiplinger.com

Swimming Pool Financing: What to Know and Best Pool Loans

Who doesn’t love a relaxing dip in the swimming pool on a sweltering, hot day? And when that swimming pool is in your backyard, it’s even better.

You could bring your friends together over the summer by hosting pool parties. You could teach your kids to swim right at home. If you rent out your place on Airbnb or Vrbo, you could fetch top dollar for the additional amenity.

Sounds like a dream.

If your house didn’t already come with a pool when you moved in, there’s still a possibility of turning your pool fantasies into reality if you have enough space.

And if you don’t have tens of thousands of dollars upfront to spend on a pool construction project, there’s always pool financing.

What Is Pool Financing?

Pool financing is when you borrow money from a financial institution or lender to cover the costs of building a pool. Pool construction typically costs anywhere from $17,971 to $46,481 with the average cost being around $32,059, according to HomeAdvisor.

Of course, the cost will vary based on the size, the type of pool, your location and where you plan to build the pool on your property. Adding a small plunge pool to a cleared, flat space in your backyard will cost considerably less than adding a resort-style pool with waterfalls and a jacuzzi to your property that requires you to cut down multiple trees and level the land.

Besides the personal enjoyment that comes along with having a pool, this addition to your home could boost your property value and make your home more desirable to future buyers, renters or short-term guests.

The high cost to install a pool means that many people rely on pool financing. There are several ways to go about getting a loan for a pool.

Options for Pool Financing

If you want to add a pool to your property, but don’t have the cash upfront, you have several options.

You could get a personal loan (sometimes referred to as a pool loan), a home equity loan, a home equity line of credit or a cash-out refinance. Some pool builders or retailers offer in-house loan programs through their partner lenders. You might also consider using a credit card as your method of financing.

Personal Loans (AKA Pool Loans)

Pool loans are unsecured personal loans offered by banks, credit unions and online lenders. You may be able to get a pool loan through the financial institution where you already have existing accounts, or you might choose to get financed from an online lender or financing consultant company that deals exclusively with pool loans and home improvement loans.

One of the benefits of personal loans is that you don’t have to offer up any collateral. If you stop making payments and default on your loan, you don’t have to worry about your house being foreclosed — though the lender still could sue you. If approved for an unsecured personal loan, you can usually receive funds within a couple of days, much quicker than some other financing options.

Because you don’t have any collateral backing the loan, however, these financing options can come with higher interest rates. Interest rates can start around 3% and go up to about 36%.

A borrower’s credit score, credit history, income and existing debt load all affect the interest rate.

Personal loan terms generally range from about two to 12 years — though some pool loans can have terms up to 20 years or more. You can get loans from $1,000 to over $200,000 to fund simple above-ground pools or elaborate in-ground pool projects.

Home Equity Loans

Home equity loans are essentially when you tap into the equity you have in your home and take out a second mortgage. If you have a significant amount of equity, you could finance your pool project this way.

Home equity loans generally have lower interest rates than personal loans because your home is used as collateral. If you default on your loan, the lender could foreclose on your home.

Also, with home equity loans you’ll face additional fees, like a home appraisal cost and closing costs, so be sure to factor that into your decision making.

Home Equity Line of Credit (HELOC)

A home equity line of credit or HELOC also taps into the equity you have in your home, but it’s a revolving line of credit that you can use for several years instead of a loan that provides you with one lump sum of cash.

With a HELOC, you can pull out funds as needed to finance your pool construction and other home improvement projects. While you’ll only pay back what you borrow, the interest on HELOCs are usually adjustable rates rather than fixed rates. That means your monthly payments can increase during your repayment period.

Cash-Out Refinance

A cash-out refinance is essentially when you replace your existing mortgage with a new mortgage that exceeds what you owe on the house and you take out the difference in cash.

You can then use that lump sum to pay for your pool, and you’ll pay it back throughout the course of your new mortgage — over the next 10 to 30 years depending on your loan terms.

A cash-out refinance might make sense if you’re able to get a lower interest rate than your current mortgage. However, just like with a home equity loan or HELOC, your home is being used as collateral, and you’ll face additional fees involved in the refinancing process.

In-House Financing from the Pool Builder

Some pool companies may directly provide you with pool financing offers, so you don’t have to search for financing on your own. The pool companies typically aren’t offering the loan to you themselves, but they’ve partnered with a lender or network of lenders to provide you with financing options.

This type of financing is the same as applying for a personal loan or pool loan. The benefit is that you get a one-stop-shop experience instead of having to reach out to lenders individually. Your pool contractor may even be able to assist you through the loan process.

The downside is that you could potentially miss out on a better deal by only getting quotes from the pool company’s partnered lenders.

Credit Cards

Because of their high interest rates, credit cards are usually not recommended as options for financing a new swimming pool. However, there can be situations where it’d make sense.

If you’re able to open a zero-interest credit card and pay the balance back before the zero-interest period expires, paying with a credit card can be a great option — especially if it’s a rewards card that’ll give you points, airline miles or cash-back for spending or a bonus just for opening the account.

If you choose this financing option, be sure that you’ll be able to pay off the balance in a relatively short period of time. Most credit cards only offer zero-interest periods for the first 12 to 21 months. After that your interest rate could go up to 18% or more.

Pool Loan Comparisons

Getting quotes from multiple lenders will help you select the best deal for your pool construction project. Here’s what a few top lenders are currently offering.

Lyon Financial

Best for Long Loan Terms

4.5 out of 5 Overall

Key Features

  • Pays the pool contractor directly
  • 600 minimum credit score
  • Offers military discounts

Lyon Financial is a financing consultant that has been in business since 1979 and works with a network of lenders to provide loans for pool and home improvement projects. Unlike personal loans that provide the borrower with the funds upfront, Lyon Financial disburses the funding directly to the pool builder in stages as the project progresses.

Lyon Financial

APR (interest rates)

As low as 2.99%

Maximum loan amount

$200,000

Loan terms

Up to 25 years

HFS Financial

Best for Large Pool Loans

4 out of 5 Overall

Key Features

  • Provides loans up to $500,000
  • Most loans are funded within 48 hours
  • No prepayment penalties

HFS Financial is a financing company that partners with third-party lenders to provide homeowners with the money to construct pools on their property. Use their “60 second loan application” to kick off the loan process. Funds are typically dispersed within 48 hours.

HFS Financial

APR (interest rates)

As low as 2.99%

Maximum loan amount

$500,000

Loan terms

Up to 20 years

Viking Capital

Best for Customer Service

4.5 out of 5 Overall

Key Features

  • Supports a network of pool builders
  • 650 minimum credit score
  • Offers military discounts

Viking Capital is a family-owned business that has been in operation since 1999. The company acts in the capacity of a financial consultant, and partners with a network of lenders to provide multiple loan offers for pool construction projects.

Viking Capital

APR (interest rates)

As low as 5.49%

Maximum loan amount

$125,000

Loan terms

Up to 20 years

5 Steps to Securing Pool Financing

Follow these steps to secure a loan for your pool.

1. Determine What Monthly Payments You Can Afford

Before you dig into your pool financing options, you should be clear on what monthly payment you can afford. Having a pool is a luxury. You don’t want a pool construction project to jeopardize your ability to pay your bills and meet your needs.

Figure out how much disposable income you have to work with by comparing your monthly earnings to how much you typically spend each month.

Don’t forget to factor in maintenance and additional utilities usage when estimating how much you can afford to go toward pool costs.

2. Check Your Credit History

When you’re financing a pool, having a good or excellent credit score will help you secure a loan with a low interest rate. Ideally, your credit score should be 700 or above.

Some lenders may offer you financing if you have fair or poor credit, however you may have to pay a lot more over time due to higher interest rates.

To boost your credit score before applying for a pool loan, follow these steps.

3. Get Cost Estimates for Your Pool

Talk with pool builders to get estimates on the total cost of your desired pool project. Get estimates from multiple pool companies so you have a better idea of what options exist.

If the estimates come in higher than you expected, consider scaling down the size of your pool project or using different materials.

Make sure any additional work — like constructing safety fencing — is included in your estimate.

4. Choose What Type of Financing Your Prefer and Shop Around For Lenders

After you figure out what options are available within your budget, it’s time to decide on what type of financing you prefer.

Will you be applying for an unsecured loan or do you plan to tap into your home equity or refinance your mortgage? Are you going to purchase a small above-ground pool that you could pay off in 15 months using a zero-interest credit card?

Once you know what type of financing you’ll go with, reach out to multiple lenders so you can compare offers and choose the best deal. You may be able to use a competitor’s lower offer to get a lender to reduce their offer even further.

5. Complete Loan Application and Sign Off on All Paperwork

The final step to get your pool project financed is to complete any additional paperwork and sign off on the dotted line. Expect to provide information about your income and other existing debt.

Your credit score may take a dip after taking on new debt, but it should rebound as you make regular, on-time payments.

Alternatives to Pool Financing

Taking on debt for a new pool doesn’t have to be your only option.

You could put off your pool construction project for a few years and save up for the expense in cash. Open a high-yield savings account to use as a sinking fund and don’t make withdrawals from the account until you’ve reached your savings goal.

If you think you’re outgrowing your current home — or are looking to downsize — wait until you’re ready to move and then look for a new home with an existing pool.

Or if you’re okay with not having a pool in your backyard, you’ll save money by visiting public pools or renting private pools from Swimply on occasion. This is a good option if you think you wouldn’t get much regular use of having your own pool.

Frequently Asked Questions

How many years can you refinance a pool for?

You can finance a pool over 20 to 30 years, depending on the type of financing you secure. If you need decades to pay back the loan, you might consider refinancing your mortgage or taking out a second mortgage. Private, unsecured loans typically need to be repaid sooner, however some have loan terms of 20 years or more.

What is the best way to finance a pool?

It all depends on your individual circumstances and preferences. If you’ve built up a ton of equity in your home and want to spread your debt payments over a lot of time, you might lean toward a home equity loan or HELOC. If you’ve got excellent credit and would qualify for a low-interest personal loan (unsecured loan), that might be the better option.

What credit score do you need for pool financing?

Ideally, you’ll want to have a credit score of 700 or higher to get the best interest rates for pool financing. Some companies, however, will accept lower credit scores. As a result, your loan may have a higher interest rate.

What is a good interest rate for a pool loan?

An interest rate around 5% is a good deal for a pool loan. You may be able to find rates even lower if you have excellent credit.

Nicole Dow is a senior writer at The Penny Hoarder.

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Source: thepennyhoarder.com

3 Instances When a Landlord Can Legally Break a Rental Lease

Read this to understand when you can legally break a lease agreement.

Even before the pandemic, landlords filed 3.6 million eviction cases on average in the U.S. each year. The process is emotional and difficult for everyone involved, but there are circumstances for which you as a landlord will have to break a lease agreement early.

If you’ve got a month-to-month lease agreement, either party can terminate at any time with proper notification, at a minimum of 30 days. But if you’ve got a fixed-term lease agreement with a tenant, such as a one-year lease, you can’t break the lease mid-way through on a whim.

When can you legally terminate a lease agreement early?

Breaking a lease agreement with cause

You’ve got a lease agreement that’s legally binding that the tenant signed before moving in. If that tenant violates the lease agreement by having an unapproved roommate, unauthorized pet, unpaid rent, has caused major damage or conducted illegal activities, you have every right to terminate their lease “with cause.”

In this instance, you would send your tenant a “cure or quit” notice. Either they “cure” the problem by paying rent owed, for example, or they “quit” the property. You can even send an “unconditional” quit notice if the issue at hand isn’t cured. For example, if the tenant alters or damages part of the property without your consent and there’s no way to fix the problem. Check your state laws on these types of lease terminations.

Eviction notice.

Eviction notice.

Can a landlord break a lease agreement without cause?

You can do so but you must include the reasons for this kind of early termination in the tenant’s lease agreement. If it’s not in the agreement, you can’t just force a tenant out on a whim.

Add a clause to your lease agreement that allows you to break a lease with 30- or 60-days’ notice so the tenant has time to find another place to live. Work with an attorney to make sure the language is accurate. Be upfront and clear in your language and point it out to the tenant at signing. There’s no reason to hide your intentions. If you know well in advance that you may have to break the lease, sign a month-to-month lease.

Reasons to break the lease early

There are certain circumstances under which you can break a lease, including:

1. You want to sell the property

You can sell whenever you want, but you must have a clause in the lease agreement in order to terminate the lease legally. Lease contracts will transfer along with the property and the new owner has to abide by them. Some buyers want properties that are already tenanted.

Decide if you want the tenants on the property during the sales process or if you want them out before putting the property on the market. Also, check whether your state requires you to offer existing tenants the first right of refusal.

You want to keep your tenants happy if they’re staying on the premises. And they do have some legal rights, including 24-hour notice of showings, the right to stay during a showing and the transfer of their security deposit to the new owner once the property sells.

Lay hardwood floors

Lay hardwood floors

2. You need to renovate the property

As a landlord, you must keep your property safe and habitable. If you need full access to the property in order to renovate and remodel to keep your property in good condition, you can terminate a lease. If the upgrades are going to cause health and safety issues, you can terminate a lease early. Again, you must have a clause in the lease agreement in order to terminate the lease legally.

3. You need to move into the rental space

If you’re renting out a house, for example, and you need to move back in, you can legally terminate the lease early.

How to terminate a lease

There are a few steps you must follow to legally end a lease to avoid a tenant possibly filing a claim in court.

Send a notice to the tenant letting them know that you’re terminating their lease. Check your state laws on how to write and deliver this termination notice. There are specific requirements for doing this.

Depending on the reasons you’re giving this notice, it may state the tenant’s transgression and warn them that they must vacate the property or face eviction. Or, you might give the tenant a few days to act on fixing whatever they did wrong, e.g., find a new home for their unauthorized pet or pay any rent owed. Again, check your state laws.

If the tenant doesn’t comply with the notice, you may have to file an eviction lawsuit.

Make sure it

Make sure it

When a landlord is not allowed to break the lease early

The bottom line is if you haven’t included a clause in your lease that you may terminate the lease early, you can’t just go ahead and do so. And your state may have a list of circumstances under which you’re restricted from ending a lease early. For example, there are usually rules around breaking the lease on a rent-controlled apartment.

You may just have to wait

Nobody likes the eviction process, and you don’t want to end up in court. But sometimes, you must remove a tenant. If it’s possible, your best bet is to wait until lease renewal time and not renew the lease. Depending on your state laws, you may need to give 30- to 60-days’ notice on non-renewal.

If you didn’t have an early termination clause in your lease agreement, but you need your tenant to move out, you can pay them, a.k.a., offering cash for keys. You give a tenant enough money to cover their moving costs and a deposit on another place they might rent.

Always be open and communicative with your tenants for the best outcome. In all cases, if you’re a property manager or landlord and you need to break a lease agreement, check your state laws and get an attorney’s input.

Source: rent.com