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Posted on May 21, 2022

Is PayPal Safe? [11 Tips to Buy and Sell Safely on PayPal]

Is PayPal Safe? [11 Tips to Buy and Sell Safely on PayPal] | Mint

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credit card or bank information to other users. 

Is PayPal safe for sellers?

PayPal is designed to be safe for both buyers and sellers. All information that is communicated between your device and PayPal’s servers is secured and encrypted as long as the network you’re using is secured. 

  • Paypal security in public: It’s riskier to use PayPal on public Wifi, like at a library or restaurant, as others on the network might be able to gain access to your information (though this is still difficult).
  • Paypal security at home: When using PayPal at home on your own WiFi network, sellers can rest assured that the platform is safe. 

In fact, PayPal fraud is pretty uncommon — accounting for only about 0.32% of revenue. 

PayPal seller protection 

PayPal has a number of seller protection protocols in place to make sure that merchants feel safe and confident using their platform. Here are a few of the PayPal protection measures sellers can expect:

  • Transactions only require a username and password, so no financial information is revealed during transactions. 
  • PayPal offers 24/7 monitoring on all transactions.
  • PayPal uses advanced machine learning and encryption techniques to secure each transaction.
  • They provide Merchant Fraud Protection, so you can contact PayPal directly if something suspicious appears on your history. 
  • They will help you resolve disputes by putting holds on transactions until the issue is solved. 
  • PayPal allows you to securely operate in 202 countries, so you’re not just restricted to your own currency. 

PayPal scam prevention tips for sellers

There are a few measures that you can take to prevent scams as a seller, especially if it comes to a disputed transaction where you must prove to PayPal that you have been wronged:

  • Always use a service like UPS or USPS, so there is documentation that you delivered the item. 
  • Require an e-signature for purchases. 
  • Ensure that all items you sell are clearly explained and described — this avoids customers feeling they have been misled. 
  • Prioritize customer service; if you respond to customer complaints, they are less likely to have an issue with your business. You can also demonstrate to PayPal that you have been on top of buyer complaints. 

If you’re new to ecommerce, be sure to read our longform guide that contains everything you should know about how to sell online. 

Is PayPal safe for buyers?

PayPal isn’t just secured and encrypted for sellers; it’s also a secured platform for buyers, too. PayPal works to ensure that transactions are secured on both ends, so neither party is likely to be victim to PayPal fraud or a scam. 

PayPal buyer protection

PayPal is serious when it comes to buyer protection. They know that their users count on them to facilitate fast, effective, and safe transactions. To ensure this, they have put into place a set of security measures that protect buyers from scams, fraud, and theft:

  • PayPal does not share your financial information with sellers.
  • They offer 24/7 monitoring on all transactions.
  • PayPal uses encrypted security technology on both buyer and seller’s ends to ensure a secure transaction.
  • They offer PayPal fraud protection, and allow you to flag certain transactions as suspicious.
  • If you do have a dispute with a buyer or potential fraudster, PayPal offers dispute resolution, putting a hold on funds until the issue is resolved.
  • PayPal facilitates transactions in countries across the globe, making it possible to purchase things from other countries securely. 

How to make a safe PayPal transaction

While PayPal may offer plenty of security protocols to its users, ultimately, it’s also users’ responsibility to ensure they use the platform in a secure manner. There are a few tips to keep in mind if you plan on purchasing online. The best way to make PayPal safe for yourself as a buyer is to follow a few safety guidelines:

  • Use a credit card rather than a debit card. There are two main reasons for this:
    • First, if there is a disputed purchase, and PayPal won’t refund you, you can still contact your credit card company to see if they will intervene.
    • And second, if someone has gained unauthorized access to your PayPal account, they won’t be able to empty out your bank account if your account is connected to a credit card. 
  • Use a safe password. This goes without saying on any internet account, especially ones that contain sensitive financial information.
    • A good password should have a mix of uppercase and lowercase letters, numbers, and other characters (such as @, &, #, or others).
    • This is one of the best identity theft protection moves you can make.
  • Regularly update software. For instance, if you use the PayPal app on your phone, it’s important to regularly update it.
    • Older versions are more susceptible to hacks, as they lack the most up-to-date security features that PayPal regularly adds to its software.
  • Avoid making financial transactions on public WiFi. You can’t always avoid it, but when you can, it’s a good idea not to use public networks for your financial transactions.
    • It’s possible for other users on an unsecured network to intercept information about your purchase. Instead, use mobile data when away from home if you can. 

Want more information on managing online payments safely? Read our guides on how to spot a scam and coronavirus fraud so you know what to watch out for as you shop online. 

Know the different kinds of PayPal transactions

There are two different ways that users can use PayPal to complete financial transactions.

PayPal Friends and Family

PayPal allows users to send money to friends and family. It’s a convenient way to:

  • Send someone money you might owe them
  • Chip in to buy something together
  • Send a gift

However, there is a small fee that is applied to friends and family transactions, so be sure to factor this into your calculations if you are using PayPal to send money to someone you know. The fee can be paid either by the sender or the recipient. 

Pro-Tip: There is no fee attached to sending a personal payment if you use a PayPal Cash or PayPal Cash Plus account to send money. 

PayPal Goods and Services

You can also use PayPal to purchase goods and services from a buyer, whether that’s your local cafe or an online retailer. When using this method of payment, note that the seller pays the transaction fee, not the buyer. 

PayPal refund policy — how to dispute a charge on PayPal

There are a number of ways that you can request refunds on PayPal.

1. When a transaction is already completed

If you have completed a transaction, and the seller has accepted payment, you will have to ask them directly to refund your money. They can do this by going onto the PayPal app and selecting the “Issue a refund” option. 

2. When a transaction is pending

If your payment is still pending, you can go to your Activity page and press the cancel button next to the payment. If the seller hasn’t accepted your payment for 30 or more days, you are automatically refunded. 

3.  When you’ve requested a refund on the transaction

If you have requested a refund, but the seller has denied it, you can go to the PayPal Resolution Center and open a dispute. If your dispute succeeds, a refund will be issued to the credit card, debit card, or bank account you used to pay for the item. 

PayPal safety: key takeaways

PayPal is a safe and convenient way to pay for goods and services, send money to friends and family, or accept payments from customers and clients as a seller. However, it’s important to know how to use the platform safely. Here’s what to remember:

  • PayPal provides a number of safety protocols for sellers, including encrypting financial data, fraud protection, and 24/7 monitoring. 
  • Even with built-in protection for sellers, it’s still wise to follow safe practice tips:
    • Use a service like USPS or UPS
    • Require a signature from buyers
    • Clearly explain your products, and always provide quality customer service
  • PayPal is also safe for buyers. They include the same set of security protocols for buyers that they do for sellers, including encrypted data and fraud protection, as well as dispute resolution. 
  • As a buyer, be sure to keep tips like these in mind:
    • Opt for paying with a credit card rather than a debit card if you can
    • Use a secure password
    • Update your app to have access to the newest security features
    • Avoid making financial transactions on public WiFi
  • PayPal also allows you to cancel or dispute payments if something goes wrong

PayPal is convenient, fast and secure. By using the right security measures, you can complete your transactions with peace of mind.

 

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Posted on May 20, 2022

How to Earn Money Renting Your RV – Rent Out RV, Profit, Repeat

You love your RV. But chances are, you’re not using it every day of the year. In fact, there are more than 18 million RVs in the U.S, that sit idle for 350 days out of the year. Not only that, but RVs are often the second-most expensive purchase Americans make outside of their home.

If you’ve got a road-ready RV sitting in storage or in your driveway while you make payments on it, you have an opportunity to offset that major expense and let it pay for itself. We’re talking about renting it on an RV rental marketplace like Outdoorsy.

Years ago, homeowners couldn’t fathom allowing “strangers” to rent out their homes. The same way homeowners found online vacation rentals a lucrative and safe enterprise, Outdoorsy is proving that RV rentals can deliver similar success.

RV owners are making up to $50,000 annually by renting out their travel trailers, campers, conversion vans and luxury motorhomes on Outdoorsy.

Entertain the question for a moment and learn just how much you can make by renting out your RV to vetted and verified renters who share your passion for the RV lifestyle and the great outdoors.

How Much Money Can You Make Renting Out Your RV?

No doubt, there’s more to renting out your travel trailer or conversion van than simply listing your property online, accepting a reservation and swapping your keys for money.

Outdoorsy is built on trust. And thoughtful assurances, at every level, are what make that trust rock solid.

Every prospective renter on Outdoorsy has their driving record verified, so you know your RV will be in safe hands with a strong track record of defensive driving.

And then there’s trip insurance, up to $1 million in coverage, and roadside assistance, both of which help strengthen the trust between owner and renter.

Once you account for the insurance costs, listing and reservation fees and driver background checks, RV owners take home about 80% of what renters pay for the pleasure of renting your RV.

Here are some estimates on how much you could make by renting out your RV for just one to two weeks:

  • Class A: $2,569 – $5,138
  • Class B: $1,624 – $3,248
  • Class C: $1,540 – $3,080
  • Camper van: $1,204 – $2,408
  • Truck camper: $875 – $1,750
  • Travel trailers: $693 – $1,386
  • Folding trailer: $490 – $980
  • Fifth wheel: $1,113 – $2,226
  • Toy hauler: $770 – $1,540
  • Passenger van: $420 – $840

RV owners can make even more than these estimates if a renter exceeds your mileage or generator restrictions. Outdoorsy accepts even more RVs than those listed above — anything from conversion vans to luxury motorhomes.

You’re paid handsomely for every little bit of wear and tear your RV could potentially sustain for everyday use and insurance protects your property from abuse.

It’s free to list your RV on Outdoorsy. They won’t charge you anything until a renter pays to rent out your RV.

How to List Your RV and Start Earning

Creating a listing is simple, and there will likely be strong interest when you do set out in the RV rental business. But creating a great listing takes a little bit of effort and will be worth your while when renters start to rate the experience.

Signing Up

It’s not a commitment to anything. Signing up for Outdoorsy only indicates you’re open to learning about what could come next.

You’ll need to supply your name, email address and your contact number. You can sign up in a web browser or download the Outdoorsy app.

Creating Your Listing

Outdoorsy will do its part to ensure you can trust renters. With your listing, you’ll have to do your part to attract renters and help them understand just how great of an opportunity renting your RV will be for them.

Take photos showing off your RV. Staging your photos is fine, even encouraged, as it’ll help renters start to daydream about it. You can select the amenities your RV offers and Outdoorsy will compile them on your listing.

You’ll also need to establish your rules for your RV: how many miles they can put on it, the types of places they can take it, how much they can use the generator and so on.

Accepting Reservations

You are never obligated to accept any reservations. But if you’re still nervous about handing over the keys, it gets a lot easier each time.

Also, it’s perfectly acceptable to throw a few questions at potential renters before accepting their booking requests to rent out RV time from you.

Preparing for the Next Renters

More than just removing personal belongings, you’ll want to make sure your RV is clean and is road ready. Your renters will do the same for you when they return it — neither side wants to clean up after the other.

Swapping the Keys for Money

It’ll be back before you know it, and in as good a condition as you remember. The last thing a renter wants is to be liable for insurance costs.

You get to determine where you’ll meet renters to drop off the keys and where they’ll have the RV delivered. But remember, going the extra mile to accommodate your guest will probably earn you rave reviews and will ultimately help attract even more guests.

Getting Paid

Once the key exchange is done, you’ll be paid through Outdoorsy about 24 to 48 hours later. Your bank may take the usual three to five business days to update your ledger, however.

Outdoorsy won’t charge you a dime until a renter has paid to borrow your RV. Once Outdoorsy is paid, they’ll collect insurance and other fees before initiating your payout.

How Insurance Works

If you’ve ever thought about renting out RVs in the past, you were probably dissuaded by your insurance policy’s commercial exclusion clauses and RV rental restriction.

Nearly all RV insurance policies rule out renting out your RV.

Episodic Insurance built into the Outdoorsy Platform

Roamly’s  “episodic” insurance coverage begins covering your RV from the moment you hand over the keys to the renter until the moment you get them back. The renter must purchase Roamly’s episodic insurance as part of the RV booking process, ensuring that the renter, and your RV, are protected on the trip.

This comprehensive policy comes with up to $1 million in liability coverage for each trip.

Personal RV Insurance with No Commercial Exclusions

While your RV is protected through Roamly’s episodic insurance when it’s being rented out, you’ll want to make sure that your RV insurance carrier even allows you to rent it out in the first place. That’s where Roamly’s personal lines of insurance can help.

Roamly’s RV policies explicitly allow you to rent out your RV when you’re not using it by removing the commercial-use restriction found in traditional RV policies. While other carriers will deny legitimate claims or drop your coverage if you rent out your RV, Roamly won’t. In fact, Roamly encourages it, and it offers unique premium discounts the more you rent out your RV on Outdoorsy.

And yes, you really can save up to 25% in many cases by switching over to Roamly, an insurance company that was built by RV enthusiasts just like you.

To see how much Roamly could save you, get a quote here. It takes just 60 seconds and can be done completely online.

Get Paid to Share the RV Lifestyle

People don’t just want to see our country’s National Parks and scenic drives, they want to savor them through immersive experiences that a car or SUV just can’t accommodate.

Ready to rent out your RV? Even if you aren’t quite ready, joining the Outdoorsy community is the next step and it’s completely free.

You can learn from other RV owners who are using extra income from Outdoorsy to pay for their grandkids’ tuition, pay for home improvements or cover all the expenses for their next big adventure.

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Posted on May 20, 2022

How I got my 1st credit card at 18 years old – The Points Guy


How I got my 1st credit card at 18 years old


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Many of the credit card offers that appear on the website are from credit card companies from which ThePointsGuy.com receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This site does not include all credit card companies or all available credit card offers. Please view our advertising policy page for more information.

Editorial Note: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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Posted on May 17, 2022

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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Posted on May 13, 2022

How to Fill Out A Money Order: A Step-by-Step Guide

Although the form for money orders may also look different depending on where you go, you’ll most likely need to the following:
What Ways Can I Send Cash Other Than Using Money Orders?
You can purchase money orders in numerous places including:

  • U.S. Postal Service offices
  • Banks and credit unions
  • Western Union or MoneyGram locations
  • Many large retail and grocery chains such as CVS drugstore, Walmart, Publix, 7-11 and Kroger. Check with the service desk of your grocery store or pharmacy to see if they sell money orders.

The maximum amount for a money order is ,000, so this is not a great payment choice if you need to send a large amount, say for a down payment on a house or the house or for a car. This is usually done with a cashier’s check when a personal check won’t suffice.
Before providing payment, check to make sure to see what the service fee is — some places may charge a different fee based on the form of payment you provide.

How to Fill Out a Money Order

Yes, all money orders need to have the purchaser’s signature in order for them to be a legitimate form of payment. Think of it as giving the payee the authorization to cash the check, much like what you would do on a personal check.

1. Gather the Required Information

Typically, the only person whose address is on the money order is the person (or business) to whom the money order is going — the payee. In some cases, you may need to put your address, though that’s rare.
This section should be on the front of the money order — the back is usually where the payee signs before cashing it.

  • Your name and current mailing address
  • Payment amount
  • The payee — the person, business or organization you want to pay
  • Payee’s current mailing address
  • Reason for payment — you may need to provide an account or billing number

If there is a mistake, first show it to a person where you purchase the money order instead of correcting it yourself. Employees at grocery stores, retail locations and big box stores along with banks and credit unions, will know how to make the corrections. You want the help because different money order companies will have different policies. In some cases, you can correct it yourself, the company corrects it for you, or they’ll cancel it and create a new one altogether.
Source: thepennyhoarder.com

The graphic shows you where to fill in the payee's name on a money order.
Chris Zuppa/The Penny Hoarder

2. Write in the Payee’s Name

You can purchase money orders at banks, the US Postal Office, or money order issuers such as Western Union, MoneyGram, or major retailers like Walmart. They can be purchased at many grocery stores and chain pharmacies.
Once you’ve gathered the necessary information, the next steps are the order in which the money order form will most likely be, from top to bottom.
Plus, it’s a really smart idea to fill in this section as soon as you can after purchasing your money order. That’s because the payee is the only one authorized to to cash or deposit the money order. Sadly, if you lose the money order before you’ve had a chance to write the payee’s name, anyone who has it can now put their name and cash it.

The graphic shows you where you add your name on a money order.
Chris Zuppa/The Penny Hoarder

3. Fill in Your Name

Paying with a money order can be a safe and effective form of payment for amounts ,000 or less,, but it’s not the only one. Sure, you can pay in cash and could make sense if you’re paying someone you trust in person. However, you won’t be able to track the payment like how you could with a money order.

The graphic shows you where you fill in the address on a money order.
Chris Zuppa/The Penny Hoarder

4. Write in Your Address

Keep in mind that each place where you buy a money order may have different requirements as to what you need to successfully fill out and purchase a money order.

The graphic shows you where you fill in the memo line on a money order
Chris Zuppa/The Penny Hoarder

5. Write Important Details in the Memo Line

Money orders are a secure — and relatively cheap — way to transfer money instead of using cash, credit cards or checks. With a money order, you don’t share routing and account numbers as you do with a personal check.
Contributor Sarah Li-Cain is a personal finance writer based in Jacksonville, Florida, specializing in real estate, insurance, banking, loans and credit. She is the host of the Buzzsprout and Beyond the Dollar podcasts.

The graphic shows where you sign a money order
Chris Zuppa/The Penny Hoarder

6. Sign Your Name

There should be a section either called “pay to the order of” or “pay to” near the top of the money order. The payee can either be an individual or the name of a business (such as if you are to purchase a money order to pay a bill).
There will be a section that says “purchaser” or “from” on the money order, usually underneath the payee. Yes, you write your name in this section.

After Filling Out the Money Order

When you purchase a money order, you’ll need to fill it out to ensure the payment goes through.
For the last point above, it’s important to know what your rights are in case your money order is lost or stolen. If you want to make sure you can cancel or replace the money order, reading through the terms and conditions will show you what you need to do in case that ever happens (though we sincerely hope you won’t have to).
Here’s what you need to do to fill out a money order correctly:
Instead, you can consider the following money order alternatives:
When Filling Out a Money Order, Whose Address Do I Put?
The money order issuer should give you a receipt — hold onto it. This piece of paper should have a tracking number and other important information to let you know where the money order is and if it’s been cashed.

Avoid These Mistakes on Money Orders

To fill out a money order correctly, you’ll need the following information:
If the money order is for a bill payment, adding the account number in this section could be helpful. Some money orders have a section that’s called “account number” or “payment for” that you could write these details in.

  • Writing the payer in the payee field
  • Spelling the payee’s name wrong
  • Writing the payee’s name incorrectly
  • Misspelling your name or leaving it blank
  • Throwing away or losing your receipt
  • Not signing the money order
  • Not reading through the terms and conditions of the money order before making the purchase

Do Money Orders Need to be Signed?

Alternatives to Money Orders

Plus, if your money order is lost or stolen, you can use this receipt and tracking number to cancel or get a replacement money order. However, that’s assuming that the money order hasn’t already been cashed by someone else.
Where Can I Purchase a Money Order?

  • Personal check: Writing a personal check from your bank account allows you to track your payment and has many of the same types of information you’ll need to fill out for money order purchases.
  • ACH transfer: Most commonly called an online bank transfer, you can make electronic transfers from one financial institution to another and typically takes a few days to process.
  • Wire transfer: A wire transfer may take longer (many banks charge a fee), but it’s useful if you’re sending money to another country or in larger amounts. Depending on the nature of the transaction, some businesses will only receive payments this way.
  • Certified check: This type of check is used in place of a personal check and guarantees funds because it’s drawn directly from your bank account when you purchase one. Personal checks don’t have this guarantee and are subject to the bank’s overdraft penalties should you not be able to cover the amount.
  • Cashier’s check: This type of check is similar to a certified check except the funds are drawn from the bank’s account, though the funds are still coming from yours.
  • Prepaid debit card: Though you’ll need to be careful to prevent the card from being lost or stolen, you can preload it with the exact amount you want to pay someone or to pay bills. You can use cash or money from your bank account via debit card to buy a prepaid card at many stores.
  • Person-to-person apps: Using apps like Paypal or Venmo offers a fast and convenient way to send money that also allows you to track payment.
You have more choices than ever when it comes to money transfer apps. We’ve rounded up the best money transfer apps for 2022 to help you choose.

Most money orders will have a “memo” field where you can write additional information that could be relevant. In many cases, people write the purpose for the money order, such as a bill payment or as a gift to a relative.

Frequently Asked Questions (FAQs) About Money Orders

Each of these options have their own pros and cons, so it’s crucial to see what those are before making your decision. The main differences between these forms of payment have to do with the cost and speed of payment.

The money order issuer should have these areas clearly labeled so you know where to fill it out.
Yes, it’s straightforward to fill out a money order, but making a mistake — even a minor one — can end up having severe consequences. That’s why it’s important to check before sending off your money order or even before you finalize your purchase.

  • The payee’s name
  • The payee’s address
  • The payment amount
  • Your (the payer’s) name
  • Your address (if applicable)
  • Reason for payment

Aside from that, you’ll need to have an acceptable form of payment to purchase the money order. Some places, especially grocery stores and convenience stores, may impose amount limits and not allow you to use a credit card.

Before sending your money order off, you’ll need to pay for it. In most cases, you can only use cash or a debit card to pay for them —in some rare cases, money order companies may let you pay with a credit card.
Close to the bottom of the money order is where you’ll need to sign it. There should be a section that’s labeled specifically for your signature, whether it’s “from”, “purchaser,” “drawer,” or “signer.”
Here are some common mistakes people make when filling out a money order:
We’ve answered some of the most common questions about money orders.
What Do I Have to Fill Out on a Money Order?
Once you’ve filled out the money order, look over it carefully to make sure that everything you’ve filled out is correct. You’ve signed on the signature line, you’ve made it out to the right person and you have the recipient’s address correct. Check, check and check.

  • Personal check
  • ACH (or electronic) transfer
  • Wire transfer
  • Certified check
  • Cashier’s check
  • Prepaid debit card
  • Person-to-person money transfer apps like Paypal or Venmo.
When writing the payee’s name, make sure you spell it correctly and that your writing is legible. Don’t forget to write it in ink so that nobody can tamper with it.
There may be a section where the money order gives you an address field to write your (the purchaser’s) address. In some cases, there may even be a section where you can add the payee’s address. If there’s both, check to see you’re writing the correct address in the correct spots.

Some other options you can use to send cash other than money orders include:
While not complicated, you do need to know the types of information you need to fill out, as well as how to do so correctly.

Posted on May 13, 2022

How to Check Credit Score: A Comprehensive Guide

How to Check Credit Score: A Comprehensive Guide – MintLife Blog

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overall financial health. Learn how to check your credit score.

Checking your credit score isn’t as challenging as it may seem, and once you know how the process becomes faster and easier each time. Several methods are available for checking your credit. Review the options below to determine which one makes the most sense for you.

Step 1: Check Your Credit Card or Loan Statement

When you apply for a credit card or loan, the lender pulls your credit information to determine if they’ll approve you. These entities will provide you with your credit score or you can ask them to send you a copy. Receiving your credit score from an entity you’re already working with can save you time and money. But if you’re not planning to apply for a credit card, loan, or other new line of credit in the near future, it may be best to choose a different method for checking your credit score.

Step 2: Use a Free Service

A range of services are available that all you to check your credit score for free. No matter which service you choose to use, follow the steps listed on the website to receive your free credit score. Be sure to read the fine print before entering your credit card or payment information.

Step 3: Purchase Your Scores

In addition to the free services, you can also receive your scores through one of the three major credit bureaus (Experian, Equifax or TransUnion) or an outside entity. The cost typically ranges from $10 to $20 per credit check. Some people choose this option because they like what a particular report offers or because a free method isn’t currently available to them. Many free services offer a variety of valuable information, so do your research before determining which option is best for you!

Step 4: Go see a Nonprofit Credit Counselor

Nonprofit credit counselors are available to help people improve their financial standing. Whether you want to save more, eliminate debt or create a budget, nonprofit credit counselors can provide guidance. Depending on the counselor, your credit score check might be free or cost a small amount. In addition to receiving your score, a credit counselor can help you understand what your score means and how you can improve it.

What to Know When You Check Your Credit Score

While a credit score may seem straightforward, there are some nuances to be aware of. By understanding key information about what your number means, you’ll get the most out of your credit score check.

There Are Many Different Credit Scores and Credit Score Ranges

Not all credit bureaus and credit reporting entities utilize the same scoring system. For example, there are several websites and apps like Turbo that provide a free score and tools like a free personal loan calculator. The scoring model used may be slightly different than another bank, lender or credit bureau. If you were to check your credit score through a couple of different entities, you’re likely to receive somewhat differing numbers.

In addition, each entity may categorize their credit score ranges differently. One organization might define good credit as anything above 700, while another entity might say that anything above 680 is good. Keep this in mind as you review your score and compare it with the guidelines of the financial product or service you’re considering.

There’s No Need to Limit How Often You Check Your Credit Score

Checking your own credit is considered a soft inquiry, not a hard inquiry. Soft inquiries don’t impact your credit score, so checking your score often won’t cause it to lower.

You’ll also want to review your credit report periodically, which lists your payment history, open lines of credit and any outstanding debt. By reviewing your report, you’ll be able to identify cases of fraud or outstanding credit you’ve forgotten about.

Pay Attention to Your Range, Not Your Exact Number

Your credit score can fluctuate and can even differ based on which entity calculates your score. That’s why it’s more important to focus on the range your score falls in, rather than your exact number. All credit scores fall somewhere between 300-850. Generally speaking, between 720-780 is considered a “good” score and an “excellent” score is 781 and beyond.

You can learn more about credit score ranges here.

You Can Take Steps to Improve Your Score

If your credit score is not where you’d like it to be, there are plenty of methods for raising it. Although any method to improve your credit score will take time, a higher score increases your eligibility for financial products, loans, and credit card offers.

Clean up your credit report: Review your credit report and identify whether you need to change your financial behavior in any way. While you can’t remove negative items from your report, they typically will age off after seven years. Make sure to also look for false items on your credit history, such as an unpaid bill.

Be timely with your payments: Whether it’s a utility bill or credit card payment, be sure to consistently pay on time.

Pay off your debt: While you do need to have some debt to show that you can pay it off responsibly, you don’t want to rack up large credit card balances or lease a new car every year. In other words, your balance shouldn’t become a high percentage of your overall credit line. To accomplish this, continue to pay off your outstanding debt and avoid unnecessarily large purchases.

Limit how many new lines of credit you open: A lender may consider how many new lines of credit you’ve recently applied for, which could negatively impact your score.

Maintain long-term accounts: A solid track record of paying off your credit on-time will show a potential lender that you are reliable. Try to keep a couple of accounts open, active, and paid over time to demonstrate a strong credit history.

Most negative information ages off after about 7 years

While a late payment or unpaid bill stays on your report for a while, credit reporting doesn’t occur for longer than seven years from when the original debt was charged off. Exceptions to this rule include defaulted student loans and bankruptcy.

It’s Important to Check Your Credit Score

Understanding and monitoring your credit score allows you to be in tune with your financial standing and make adjustments as needed. Checking your credit score periodically offers a few important benefits. Get your absolutely free credit score from Turbo – it’s quick and easy!

Understand Your Financial Standing

Your credit score is one indicator of your overall financial health. It provides information about your credit experiences and your history of paying bills, in addition to any outstanding debt you may have. By checking your credit score, you get a glimpse where you currently stand financially. Your credit score can almost always be improved (unless you’re one of the lucky few with perfect credit), so knowing your score gives you key insight into whether or not you should prioritize giving your score a boost.

Several companies consider your credit score along with your other financial indicators, like your income and debt-to-income ratio, when approving you for a loan or service. Your credit score provides indication of how likely you are to repay the loan amount on time.

Ensure You Can Get the Best Terms

When lenders pull your credit score and credit report, they receive your history of paying bills, how long you’ve had certain accounts, and if debt collection has ever been utilized. Based primarily on these factors, they will then make a determination of the terms they will offer you. Typically, the better your credit score, the lower fees or rates you’ll receive.

If your score isn’t where you’d like it to be, you can take time to work on your score before following through with a lender. You might improve your credit score by doing things like paying off  your current debt and being timely with all of your payments.

Determine Eligibility for Financial Products

Some lenders and financial vendors provide guidelines as to what they’re looking for from a potential borrower. For example, a credit card company might require a score of 720 or above to be approved, or a mortgage company may require a credit score within a particular range to lock in a certain interest rate. By knowing your score, you’ll have better understanding of which financial products and terms you might be eligible for.

Alert Yourself of Potential Fraudulent Activity

Pulling your credit score won’t give you direct information regarding fraudulent activity, but it could be a clue that fraudulent activity has occurred. If you think your credit score is suspicious, be sure to pull your credit report or sign up for credit monitoring.

Knowing how to check your credit score gives you instant access to your financial standing and helps you better understand what improvements you might like to make to your private life. Regularly checking your credit score and identifying areas for improvement is key to maintaining a strong financial life. To get started, get your free credit score and spend some time assessing your financial goals.

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Posted on May 12, 2022

Student Loan Interest Rates for June 2022

There’s no way around it — college is expensive. This means that for many students, taking out a loan is the only way to realistically cover these expenses. And, like most other loans, student loans accrue interest.

In this article, we’ll explore the current interest rates across the most common student loan products, including federal and private student loans.

When we discuss federal interest rates on student loans in this article, we’re referring to what the rates would be when the freeze is lifted.

Comparing Rates Between Federal, Private and Refinance Loans

Something you may notice is that, at the lowest end, private lenders seem to offer better interest rates than federal. It is important to note that these lowest interest rates are very difficult to get — your credit needs to be outstanding.

It’s also important to remember that, although fixed interest rates appear to have a higher range in the tables below, your interest rate by definition can change. So, while you may qualify for a lower interest rate on a variable-rate loan, it’s entirely possible that this rate will eventually go up and become higher than you would have gotten with the fixed-rate loan. This is simply the tradeoff (and risk) of variable interest rates.

Federal Loan Interest Rates at a Glance

Loan Type Borrower Fixed Interest Rate Loan Fee
Direct Subsidized and Direct Unsubsidized Loans Undergrad students 3.73% 1.057%
Direct Unsubsidized Loans Graduate or professional students 5.28% 1.057%
Direct PLUS Loans Parents and graduate or professional students 6.28% 4.228%

Federal rates increased across the board for the 2021-2022 school year by nearly a whole percentage point. That’s unfortunate, but they are still lower than they have been for years, and generally much lower than an equivalent private student loan.

Federal loans come in two basic types: subsidized and unsubsidized. The primary difference is around when the interest starts accruing:

  • Subsidized student loan: Interest is paid by the Education Department as long as you’re enrolled at least half-time in college.
  • Unsubsidized student loan: Interest begins to accrue as soon as the loan is dispersed.

There are some other differences, but they’re relatively minor compared to this.

The last thing to cover with federal loans is the loan fee (also known as the origination fee). This fee is calculated as a percentage of the total loan amount and then deducted automatically from each disbursement. In practice, this means you’ll receive a smaller loan than the amount you actually borrowed.

Private Loan Interest Rates at a Glance

Loan Type Interest Rates
Fixed rate 3.34% to 14.99%
Variable rate 1.04% to 11.99%

The wide variation in interest rate ranges is due to two factors: different lenders offering different rates, and the fact that the rate you’ll get is impacted by your credit and other factors.

As mentioned above, fixed interest rates tend to have higher rates on paper, but you don’t have to worry about that rate increasing on you, which is a very real possibility with variable-rate loans.

Loan Refinance Interest Rates at a Glance

Loan Type Interest Rates
Fixed rate 2.59% to 9.15%
Variable rate 1.88% to 8.9%

If your credit is good, it’s possible to refinance your existing student loan to get a lower interest rate. This is not always possible, but it can be an option worth exploring. These refinanced interest rates can themselves be lower than “normal” private rates, so it can be an option worth exploring.

How Student Loan Interest Rates Are Determined

Although federal and private loans are technically different, they often follow similar trends. In other words, when federal student loan interest rates go up, private rates are likely to do the same. Likewise for when they go down. Let’s look at what actually goes into determining federal and private interest rates.

Federal Student Loan Interest Rates

These student loan interest rates are set each year by Congress, based on the high yield of the 10-year Treasury note auction in May. The new rate applies to loans disbursed from July 1 to June 30 of the following year.

Federal student loan rates are always fixed. This means that they won’t change during the life of the loan — whatever interest rate you get when you take out the loan is what you’ll keep until it’s paid off (it changes with student loan refinancing).

Private Student Loan Interest Rates

These loans are funded by banks, credit unions, and other private lenders. As such, interest rates vary between the different lenders, and it’s worth shopping around whenever possible.

Private lenders usually offer both fixed-rate and variable-rate loans. Fixed-rate means that your interest rate remains the same over the life of the loan. It can neither increase nor decrease.

A variable interest rate, on the other hand, means that your interest rate can fluctuate with the market. Sometimes you can get lucky and have it go down for a period of time. However, the risk with variable-rate loans is that the interest rate goes up significantly and you end up paying much more than anticipated.

It’s important to keep this in mind when selecting a loan. It may be worthwhile to take a slightly higher fixed interest rate rather than assume the risks of a variable rate.

The Impact of COVID-19 on Student Loans

The interest rate cuts in 2020 had a major ripple effect on student loan interest rates. Despite the slowly recovering economy, interest rates remain lower than they’ve been in years, for federal student loans and private fixed-rate and variable interest rate loans. This is excellent news for student loan borrowers, and we hope to see these rates remain low in the coming year.

Currently, all federal student loan debt is frozen until Sept. 1, 2022. This means that rates are set to zero and no payments are due until that date. This loan repayment freeze originally began in March 2020  at the outset of the pandemic and has been extended six times at this point.

The Pros and Cons of Federal Student Loans vs. Private Student Loans

Let’s explore the pros and cons of the two major classes of student loans — federal and private. Neither is perfect, as we’ll see. Rather, each is suited to particular situations and types of borrowers.

Federal Student Loans


Pros

  • Flexible repayment plans. Federal loans are eligible for income-based repayment plans and loan forgiveness. These can be a huge help if you find yourself in a tough financial spot.
  • Much lower requirements. It’s almost always much easier to qualify for a federal loan than it is a private student loan, particularly if you want a good interest rate.
  • More affordable overall. Most of the time you’ll end up paying less on federal student loans than on a private student loan.


Cons

  • Origination fees. Federal student loans are subject to small origination fees, which aren’t part of a private student loan. This means your loan disbursements are usually going to be smaller.
  • Borrowing limits for undergraduates. This means some students may actually need to take out a small private loan in addition to the federal loan to cover their full college costs.
  • Can’t choose your loan servicer. Federal student loans are turned over to a loan servicer to handle the payments and administration of that loan. Some of them have sketchy reputations

Private Student Loans


Pros

  • Larger loans. If you know that you’ll need a certain amount of money, and it’s more than federal loans can offer, it might make more sense to simply go private.
  • Potentially lower rates. A private loan may have lower rates, particularly with student loan refinancing. That said, you’ll need an excellent credit score to get these lowest rates.
  • No origination fees. Private student loans don’t have the origination fees that come with federal student loans.


Cons

  • More difficult to qualify for. Private loans have stricter requirements, particularly around credit histories. Federal student loans are almost always easier to qualify for.
  • Generally higher interest rates. Unless your credit is outstanding, you’ll almost always get a better interest rate with a federal student loan.
  • Less flexibility in repayment options. Some private lenders are willing to work with borrowers on this, but there’s no law or regulation forcing them to, and thus, no guarantee.

Frequently Asked Questions (FAQs) About Student Loan Interest Rates

If you still have questions about student loan interest rates, don’t worry — we’ve got answers. Here are some of the most common questions.

What is the Interest Rate on Student Loans Right Now?

Student loan interest rates range from a low of 1.04% to a high of almost 15%. The rates depend on whether you’re looking at federal or private, which type of loan, which private lender you go with, your credit history, and more. 

That said, here’s the quick bullet list:

  • Federal direct for undergraduate students: 3.34%
  • Federal unsubsidized for grad students: 5.28%
  • Federal Direct PLUS for parents and graduate students: 6.28%
  • Private fixed-rate loans: 3.34% to 14.99%
  • Private variable-rate loans: 1.04% to 11.99%

Will Student Loan Interest Rates Go Up in 2022?

This is a hard question to answer. They are expected to remain fairly low for the foreseeable future, but this can always change. For the 2021-2022 school year, federal rates did increase, but they are still a good bit lower than they were prior to the pandemic.

Are Student Loan Rates Dropping?

Rates increased for the 2021-2022 school year, but remain lower than they were prior to the COVID-19 pandemic. So while they didn’t drop this year, they have dropped significantly compared to a few years ago.

What’s the Difference Between a Subsidized and Unsubsidized Federal Student Loan

A subsidized federal student loan is one in which interest is paid by the U.S. Department of Education Department while you’re enrolled at least half-time in college. An unsubsidized loan, on the other hand, begins accruing interest immediately on disbursement, even if you’re still enrolled in school.

Subsidized student loans have a six-month grace period after graduating. During this time, no payments are due, and the Education Department continues to pay the interest on the loan.

An unsubsidized loan, on the other hand, begins accruing interest immediately on disbursement, even if you’re still enrolled in school. The student is responsible for this interest. Unsubsidized loans still have a six-month grace period after graduation, but interest continues to accrue during this time. The interest then capitalizes, which means it gets added to the original loan amount.

When Do Student Loan Interest Rates Start?

Federal student loan rates are set each spring and go into effect July 1, running until June 30 of the following year. At that point, the new interest rate will take effect.

What is Student Loan Refinancing?

Student loan refinancing is a way to decrease the amount of interest paid on your loan. Essentially, when you refinance, the new lender pays off your existing loan and gives you a new one with new terms.  

Not everyone can refinance — there are fairly strict rules to evaluate your credit and income to determine eligibility. Additionally, you generally reset the length of your loan term when you refinance, so it can sometimes end up costing you more money. 

Finally, while you can refinance a federal loan, you lose the extra benefits they come with, including income-based repayment options.

What is Income-based Repayment?

This is a special repayment option available to federal borrowers that lets you tailor your monthly payments to your income. These plans are typically based on a percentage of your monthly disposable income. This can be quite a bit lower than you’d otherwise pay. The tradeoff is that it can take much longer to pay off the loan. 

Additionally, loans on these repayment plans are automatically forgiven after 20-25 years of payments.

Penny Hoarder contributor Dave Schafer has been writing professionally for nearly a decade, covering topics ranging from personal finance to software and consumer tech.

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Posted on May 12, 2022

How to Send Money: The 9 Best Ways to Transfer Money

Sending money to friends and family is so common nowadays that “Venmo” has entered the lexicon as an actual verb.

And while peer-to-peer payment apps like Venmo and Cash App are certainly the most convenient ways to pay your friend back for concert tickets or split a bill at dinner, some people need to send much larger sums of money, often internationally, to support families back home.

Fortunately, the average person now has access to a multitude of safe and affordable ways to send and receive money — but some are certainly safer and cheaper than others.

How to Transfer Money

Stuffing an envelope full of cash, slapping a stamp on the corner and dropping it in a blue United States Postal Service (USPS) box is certainly convenient, but it’s probably the least safe way to send money nowadays. To securely send money to a friend or family member, consider one of these options:

  • Money transfer apps
  • Wire transfers
  • Paper checks
  • Money orders
  • Linked bank accounts

What Are Money Transfer Apps?

Money transfer apps are a form of peer-to-peer payment using smartphones (or at least a computer connected to the internet). Popularized by PayPal, which is commonly used as a payment platform for small business owners and freelancers, money transfer apps are now a dime a dozen.

While it’s nice to have a choice, it can be frustrating when someone owes you money and you use separate apps. One of you will have to give in and download the app the other is using. “Do you have a Cash App?” is the new “Is Pepsi OK?”

Not sure which online service to use? We rounded up the best money transfer apps of 2022, including:

  • PayPal
  • Venmo
  • Zelle
  • Cash App
  • Facebook Pay
  • Apple Pay
  • Google Pay

We’ll dive into some of these apps more below.

What Are Wire Transfers?

Wire transfers certainly predate money transfer apps and are a relatively secure (but costly) way to send large sums of money, domestically or internationally. You’ll work with a bank, credit union or institution like Western Union to electronically (by “wire”) send money to another bank.

So why wire transfers? Digital transfer apps often have caps on how much you can send at one time, but if you have a larger sum to send — whether as a down payment on a new house or money to support your family back in your home country — wire transfers can get the job done.

But just how much do wire transfers cost? We’ve broken down the typical wire transfer fees so you can plan for your next transfer.

What Are Paper Checks?

In this world of debit cards, online banking, e-commerce and the mobile wallet, checks can certainly feel antiquated. But they still serve a purpose (did you know you can use them to find your account and routing number?), and it’s important to know how to write a check, even in 2022.

Checks are tied directly to your checking account. You can write a check for the amount owed to another person and hand-deliver it to them or mail it. The recipient then needs to physically deposit the check at a bank or ATM (or just cash it). With mobile banking, the recipient might be able to deposit the check from the comfort of their own home.

Writing a check is a gamble sometimes. If the recipient waits several months to cash it, it’s possible you could forget about it and suddenly not have enough in your checking account when they finally take action.

That means the check could bounce (similar to a debit card being declined), or, if you have overdraft protection, you may just pay an overdraft fee.

As a recipient, you should be cautious of accepting a check as payment, especially if you will never see the payer again. When receiving payment for a service or sale, you should make sure it clears before ending the transaction with the other person.

What Are Money Orders?

With the advent of peer-to-peer payment apps, money orders are no longer a household name. However, they still exist, and they’re a great, affordable alternative to a paper check.

For a nominal fee (USPS charges $1.45 for money orders up to $500), you can pay for a money order, which is essentially a check that can’t bounce because you fund it when you purchase it.

Note: You can’t use a credit card or check to purchase a money order. Have cash or debit on hand.

For the person sending the money, this takes the guesswork out of the process. You don’t have to wonder when the recipient will ultimately cash your check; you’ve already spent the money, and you’ve washed your hands of the transaction.

For the person receiving the money, this instills a level of confidence. The check cannot bounce, so there’s no risk of being swindled by the payer.

The USPS caps money orders at $1,000, and if you purchase more than three separate money orders at $1,000 each in a single day, you’ll have to fill out a form (and provide a government-issued photo ID).

Pro Tip

If you need to send a larger sum of money, try a cashier’s check. These can be used to send greater amounts of money at once, but you’ll pay more for the service.

What Are Linked Bank Accounts?

If you have a checking account and savings account with the same financial institution, these are linked.

For example, you can move money from your savings account over to your checking account to prepare for an upcoming automatic payment, or you can take part of your direct deposit paycheck into your checking account and fund your savings with it.

Sometimes, you might have a checking account with one bank (perhaps for their generous ATM reimbursement policy) but a savings account at another (maybe because of a higher APY). You can set each up as a linked bank account to the other.

As an alternative to sharing one bank account (called a joint account), some spouses and domestic partners choose to link their own bank accounts. This makes it easy to send money back and forth for shared expenses, but there is inherent risk to this. Only link bank accounts with someone you absolutely trust.

Note: If your banks include Zelle (more on this below), there’s no reason to link your accounts to send and receive money. Zelle can do all of that through your bank apps for you — without sharing confidential account numbers and total access to accounts.

9 Best Ways to Send Money

So what’s the best way to send money? It depends on your needs: How fast do you need to send and receive money? Is it domestic or international? How much money are you sending?

To get you started, we’ve broken down the basics like fees, transfer limits and transfer time of nine unique ways of sending money.

Zelle: Best for Fast Money Transfers

With Zelle, you can send money instantly (or just about). Most mobile banking apps include Zelle, which means you don’t have to download and link your bank account number to a third-party app.

Pro Tip

If you need to send a larger sum of money, try a cashier’s check. These can be used to send greater amounts of money at once, but you’ll pay more for the service.

Within your banking app, you can easily find friends and family with an email address or mobile phone number to request and send money. As long as the other person has Zelle through their bank, domestic transfers should be fast and secure — without any fees.

A chief selling point for Zelle: Money goes directly into your or your recipient’s bank account. No need to shuffle funds from an app over to your bank after you receive money from a friend.

If you can’t find Zelle within your bank’s mobile app, you can download the Zelle app directly for iOS and Android, but your recipient must bank with a financial institution that partners with Zelle.

Fees: $0.

Transfer limits: Vary by bank or credit union; if using Zelle through its own app, you are capped at $500 per week.

Transfer time: Zelle is one of the fastest ways to send money online. You can receive your funds in just a few minutes, if not instantly, at no charge to you.

Venmo: Best for Easy Transfers

Venmo is arguably one of the best apps for sending money solely due to its popularity. In 2021, Venmo saw $230 billion in payment volume, which was up nearly 50% over 2020.

The social media aspect of Venmo is popular with younger spenders, as is the ease of setting up the account. You can link Venmo to your bank or credit union for direct withdrawals and deposits into your account, or you can set up Venmo with a linked debit card.

As long as you connect Venmo to a checking account or debit card, domestic transfers are free. If you’re willing to pay a fee, connecting a credit card is just as easy. International transfers are not possible.

Fees: $0 for bank account and debit card transfers; 3% for using a credit card to send money; 1.5% fee (minimum $0.25 and maximum $15) for instant transfers.

Transfer limits: Upon sign-up, person-to-person spending is limited to $299.99, but once the account is verified, you can send up to $4,999.999 on a weekly rolling basis.

Transfer time: 1-3 business days, unless you pay fees for instant transfers.

Cash App: Best for Cryptocurrency

Venmo does not necessarily corner the market on transferring money. In fact, in late 2021, Cash App announced that it had more than 75 million active customers, meaning the app is gaining on Venmo, which stands at 75 million active users.

And Cash App is appealing. If you’re into cryptocurrency, this app serves as a platform for buying and selling (for a fee). There are also in-app “cash boosts,” which are promotions and discounts for different goods and services, like Chipotle and DoorDash.

There’s even a $5 referral bonus when you get a new friend to sign up using your invite code.

Unlike Venmo, debit card transfers carry a fee, but they are instant. Otherwise, you can connect your bank account or request a Cash Card that you can spend like a debit card (with instant access to funds in your account).

Fees: $0 for bank account transfers; 3% for using a credit card to send money; 0.5% to 1.75% (minimum of $0.25) for instant debit card transfer.

Transfer limits: Starting out, you can send up to $250 in a week and receive up to $1,000 a month. You can increase these limits by providing info like your birthday and the last four digits of your Social Security Number.

Transfer time: 1-3 business days, unless you pay fees for instant transfers.

Money Orders: Best for Paper Payment

Not a fan of linking your bank account to an app? Your options for sending money are limited, but you can still do it the old-fashioned way. Rather than send a paper check in the mail, go to the USPS and get a money order (or cashier’s check for a larger amount).

Fees: $1.45 for transfers up to $500; $1.95 for transfers up to $1,000.

Transfer limits: $1,000 per money order.

Transfer time: You will mail your money order, so it depends on the shipping option you choose.

PayPal: Best for Small Businesses and Contractors

PayPal has been in the game a long time and can be used for peer-to-peer payments and business transactions alike. PayPal offers stability and security just by virtue of having been established for so long.

Unlike some of the apps already discussed, a PayPal account enables international transfers (fees apply). You can also get a business account with PayPal, but the fee structure (already complicated for individual users) is more nuanced.

You’ll link your bank account to PayPal, can send and request funds through the platform and need to know the mobile number or email of anyone you plan to transact with. Fees apply for connecting cards.

Fees: $0 for domestic transfers; 1% for instant transfers; 2.9% + fixed fee for cards; 5% for international transfers (minimum $0.99 and maximum $4.99). Because the PayPal service is more complex, we recommend reviewing their dedicated fee resources.

Transfer limits: Up to $60,000, but this can vary.

Transfer time: 1-3 business days, unless you pay fees for instant transfers.

Bank Wire Transfer: Best for Large Domestic Transfers

Wire transfers are the most expensive way to send money, but if you need to get a large sum of money to someone securely, it might be your best option.

If the transfer is domestic, banks and credit unions often offer the lowest wire transfer fees. Depending on your bank, you might pay a small fee (or nothing at all), and your recipient is less likely to have to pay a fee to receive the money.

That’s why we recommend using a bank or credit union, rather than a service like Western Union, for domestic wire transfers.

Fees: Vary by bank.

Transfer limits: Vary by bank ($100,000 a day is common).

Transfer time: 1-3 business days domestically, with many done in 24 hours.

Western Union: Best for International Money Transfers

Because Western Union is the largest money transfer company in the world, it has the most extensive network of locations for sending and receiving money. This makes it ideal for international wire transfers.

Just be prepared for fees to match the convenience.

Fees: Vary by location, currency, in-person vs. online banking, etc. Fees are generally expensive.

Transfer limits: Varies by receiver’s country.

Transfer time: Generally 24 hours domestically and 1-5 business days internationally.

Digital Wallets: Google Pay or Apple Pay

If you are comfortable with digital wallets, paying with Google Pay (Android users) or Apple Pay (Apple users) can be quite convenient.

These not only allow you to send and receive funds from friends and family, but you can also use them to make in-store purchases at participating vendors. You’ll just need a linked debit card or linked bank account.

There generally aren’t fees for Google Pay and Apple Pay unless you need instant transfers.

International Transfer: WorldRemit and Remitly

WorldRemit is growing in popularity for speedy international cash transfers. Its network is nowhere near as extensive as Western Union, but the transfer is fast and the fees are low.

Remitly is great for home delivery. You can send money from the U.S. to one of many developing countries. Rather than requiring your recipient to go to a store or bank for a cash pickup, you can have the funds delivered to their home, for a fee.

Here are some other payment methods to transfer money online:

  • Wise
  • Walmart2Walmart
  • Facebook Pay
  • Xoom
  • OFX

Frequently Asked Questions (FAQs) About How to Send Money

You have lots of questions about the best ways to send money to friends and family. We’ve got the answers to the most popular questions.

How Can I Send Money to a Friend?

Nowadays, there are plenty of ways to send money to friends, but one of the easiest ways of sending money is via digital banking apps like Venmo, Cash App or Zelle. You can download these from the Apple App Store or Google Play Store.

Android users can also consider Google Pay while Apple users have Apple Pay at their fingertips.

What Is the Fastest Way to Send Money?

Zelle offers instant bank transfers for free. For a fee, you can typically do instant transfers via other money transfer service options like PayPal and Venmo.

What Is the Safest Way to Send Someone Money?

Digital peer-to-peer payment apps are generally safe, as are wire transfers when you personally know the recipient. (Never wire money to a stranger.)

Money orders and cashier’s checks are a safer alternative to paper checks or sending cash in the mail.

Contributor Timothy Moore is a writer and editor in Cincinnati, Ohio. He focuses on banks, loans and insurance for The Penny Hoarder. His work has been featured on Debt.com, The Ladders, Glassdoor, WDW Magazine, Angi and The News Wheel.

Source: thepennyhoarder.com

Posted on May 12, 2022

What Is Fiat Currency? A Definition + How It Differs From Cryptocurrency

What is Fiat Currency? – MintLife Blog

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Earlier in history, people used gold in exchange for goods and services, instead of the paper money we’re all used to today. But now, instead of gold, we use currency such as the U.S. dollar, the euro, and even cryptocurrency in exchange for products.

Nowadays, there are different types of currencies — some can be backed by a government, such as fiat currencies, and some are decentralized and backed by blockchain technology, such as cryptocurrencies. This article will go over the answer to “What is fiat currency?,” its pros and cons, as well as how it differs from other currencies.

What Is Fiat Money?

Fiat currency, or fiat money, is a type of currency that’s issued by the government and is not backed by physical commodities, such as gold. Instead, the fiat money value comes from the public’s trust in the issuer, the government.

Why is it called fiat currency? The fiat definition comes from a Latin word that can be translated to “let it be done” or “it shall be.” Fiat money only has value because the government gives it value and, therefore, it has more control over the currency and how much can be printed.

A graphic answers the question “what is fiat money,” which is a type of currency issued by the government and not backed by a physical commodity.

Fiat Money vs. Cryptocurrency

Fiat money is a legal tender, which is a currency declared legal by the government, and its value is backed by the issuer (the government). On the other hand, cryptocurrency is a digital currency that’s backed by blockchain technology and decentralized, meaning it’s not backed by a central authority like a government.

Unlike fiat currency, a cryptocurrency is more volatile and brings a higher level of information security compared to fiat money. Although some people believe cryptocurrencies may replace fiat currencies in the future, most transactions around the world are still done using fiat money.

Fiat Money vs. Commodity Money

Commodity money has an intrinsic value, which means it has a perceived or true value attached to it. This type of currency is derived from a material that has value, such as gold or silver. Fiat money, on the other hand, has no intrinsic value. Consider dollar bills — they’re all cut from the same paper, but their values can differ depending on what a government deems the currency is capable of being exchanged for.

Fiat Currency vs. Representative Money

Representative money is also produced by the government, but unlike fiat money, it’s backed by a physical commodity. There are different forms of representative money, such as credit cards and checks, which represent an intent to pay.

Although fiat money is backed by the government, representative money can be backed by different assets. In the case of a check and credit card, they are backed by the money in a bank account.

A graphic explains the difference between fiat money and commodity money, representative money, and cryptocurrency.

Understanding Fiat Money in the United States

Throughout most of U.S. history, national currency was backed by gold and silver. In 1933, the government passed the Emergency Banking Act in hopes of restoring the public’s confidence in the national financial system. This act would develop a program to rehabilitate banking facilities and later abandon the gold standard, which let citizens exchange currency for gold. From there on, the gold standard was completely replaced by fiat money: the U.S. dollar.

Pros and Cons of Fiat Money

Just like other currencies, such as cryptocurrencies, there are some pros and cons to fiat money.

Advantages of Fiat Money Disadvantages of Fiat Money
Greater control over the economy Not a foolproof way to protect the economy
Cost-efficient to produce Possibility of hyperinflation
Convenient to use Unlimited supply could create economic bubbles

Advantages of Fiat Money

Fiat money is not only cost-efficient to produce, but it’s also easy to carry around and exchange. But one of the biggest benefits is that fiat money is not backed by a commodity, meaning it’s not scarce, unlike gold. For this reason, a government has greater control over the currency supply, which gives it the power to manage economic variables such as interest rates, liquidity, and credit supply.

Since a government has control over the money supply, it also has the power to protect the country from a financial crisis. In fact, the U.S. Federal Reserve has a dual mandate to keep the unemployment rate and inflation rate low.

Disadvantages of Fiat Money

Although a government has control over its currency supply, it’s still not a guaranteed way to protect the economy from a financial crisis, such as a recession. Another disadvantage of fiat money is that it’s subject to inflation and a government could mismanage and print too much money that could result in hyperinflation.

In addition, the price of fiat money depends on government regulations and fiscal policy, which could result in a bubble with a rapid increase and decline in prices.

The Future of Fiat Currency

Almost every country now has fiat money as a legal tender, so it’s hard to say what’s on hold for the future. Although there is a rapid rise in cryptocurrencies — and some experts believe it could eventually replace fiat currency altogether — fiat money gives governments more flexibility to manage a country’s economy, therefore, we can expect it to stay the primary medium of exchange for years to come.

FAQs About Fiat Currency

Here are some commonly asked questions about fiat currency.

What Are Alternatives to Fiat Money?

Nowadays, almost all countries have fiat money as a legal tender. Although gold coins could be an alternative to fiat money since you can buy and sell them, they are not commonly used for everyday purchases.

Cryptocurrency is another fiat money alternative that’s on the rise. Cryptocurrencies such as Bitcoin could be used in the future as the main form of currency, but for now, it’s still not widely accepted.

Why Do Modern Economies Favor Fiat Money?

Due to the limited amount of gold coming out of mines, central banks could not keep up with its new value. Fiat money was the alternative that provided cost-efficient production and was convenient to use, and also gave greater flexibility to the government in order to manage its own currency.

Does Fiat Money Lead to Hyperinflation?

Although overprinting fiat currencies could lead to hyperinflation, most developed countries usually experience a moderate amount of inflation. Hyperinflation has occurred in the past, even with commodity money, and it could occur in the case that a fiat currency rapidly loses value, such as when people lose faith in the nation’s currency.

Why Is It Called a Fiat Currency?

Fiat currency stems from a term that can be translated to “it shall be” in Latin, and refers to a type of currency that’s issued by the government and is not backed by physical commodities, such as gold. The U.S. dollar, the euro, and the pound are examples of fiat money.

Is Bitcoin a Fiat Currency?

Bitcoin is not a fiat currency, since it’s not a legal tender issued by the government. Bitcoin is a cryptocurrency backed by blockchain technology and free of a central authority.

Examples of Fiat Currency

Some examples of fiat currencies are:

  • U.S. dollar (USD)
  • Euro (EUR)
  • British pound (GBP)
  • Korean won (KRW)
  • Japanese yen (JPY)
  • Indian rupee (INR)
  • Mexican pesos (MXN)
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Posted on May 12, 2022

The 13 Best Bad Credit Loans of 2022

APR range
Best for No Minimum Credit Score
Contributor Dana Miranda is a Certified Educator in Personal Finance® who has written about work and money for publications including Forbes, The New York Times, CNBC, Insider, NextAdvisor and Inc. Magazine. 

Key Features

Company APR with Autopay Loan Amounts Min. Credit Score
SeedFi 7.42% – 29.99% $300 – $4,000 520 GET DETAILS
Happy Money 5.99% – 24.99% $5,000 – $40,000 600 GET DETAILS
Stilt 7.99% – 25% $1,000 – $35,000 None GET DETAILS
Universal Credit 8.93% – 35.93% $1,000 – $50,000 560 GET DETAILS
Best Egg 5.99% – 35.99% $2,000 – $50,000 640 GET DETAILS
LendingClub 7.04% – 35.89% $1,000 – $40,000 600 GET DETAILS
Prosper 7.95% – 35.99% $2,000 – $40,000 600 GET DETAILS
OneMain Financial 18% – 35.99% $1,500 – $20,000 None GET DETAILS
Avant 9.95% – 35.99% $2,000 – $35,000 580 GET DETAILS
NetCredit 19.9% – 155% (range varies by state) $1,000 – $10,000 None GET DETAILS
Upgrade 5.94% – 35.97% $1,000 – $50,000 580 GET DETAILS
LendingPoint 5.94% – 35.97% $2,000 – $36,500 600 GET DETAILS
Upstart 5.22% – 35.99% $1,000 – $50,000 580 GET DETAILS

SeedFi

Key Features

Minimum credit score
3.5 out of 5 Overall

  • Build savings while you repay
  • Two monthly payments aligned to payday
  • Access $300 to $4,000 today

3.5 out of 5 Overall

  • Loans between $5,000 and $40,000
  • Pay off credit card debt
  • No prepayment fees

3.5 out of 5 Overall

  • AI-powered lending for partner banks
  • Considers more than your credit history
  • Loan amounts as low as $1,000

3.5 out of 5 Overall

  • APR: 7.99% – 25%
  • Loan amounts: $1,000 – $35,000
  • Minimum credit score: None

3.5 out of 5 Overall

  • Funding within one day
  • Fixed interest rate
  • Rate discounts for debt pay off

3.5 out of 5 Overall

  • Funding within three days
  • Adjust your payment due date
  • Variety of terms

3.5 out of 5 Overall

  • Borrow up to $40,000
  • Funding within 48 hours
  • No prepayment penalty

3.5 out of 5 Overall

  • Peer-to-peer lending
  • Next-day funding
  • No prepayment penalty

3.5 out of 5 Overall

  • No minimum credit score
  • Secured loans available
  • Interest rates from 18% – 35.99%

3.5 out of 5 Overall

  • Next-day funding
  • Minimum 580 credit score
  • Not available in New York

3.5 out of 5 Overall

  • Next-day funding
  • No prepayment penalty
  • Interest rates between 19.9% and 155%

3.5 out of 5 Overall

  • Checking, credit and loans in one platform
  • No prepayment penalties
  • Next day funding

3.5 out of 5 Overall

  • Next-day funding
  • No co-sign loans
  • Not available in Nevada or West Virginia

Loan amounts
3.5 out of 5 Overall

Types of Loans for Bad Credit

Is There a Real Way to Get a Loan with Bad Credit?
3 out of 5 Overall

  • Debt consolidation loan. This is a type of personal loan where the loan proceeds go to your creditors instead of directly to you. Debt consolidation or refinancing is a way to pay off high-interest debt like credit cards and pare down your monthly obligations to a single payment.
  • Secured loan. A secured personal loan is one where you put up collateral, like a car (title), boat, jewelry or something else of value. If you don’t repay the loan on time, the lender will own the collateral. These types of loans are usually easier to get when you have bad credit, because your collateral reduces the lender’s risk of losing money if you don’t repay.
  • Unsecured loan. An unsecured personal loan is one without collateral to back it. Typical lenders require good or excellent credit for an unsecured loan, but the lenders in this list make these loans available to borrowers with lower credit scores.
  • Home equity loans. If you have a low credit score but you’ve paid off a lot (or all) of the mortgage for a home you own, you could take out a loan based on how much your home is worth. These loans tend to come relatively easily, because they’re backed by your home, which is an incredibly valuable asset.
  • Credit builder loans. These loans, from lenders like SeedFi, may be structured as personal loans or something else, but they function similarly. They often come in low amounts so you have low monthly payments, and part of the loan might be withheld in a savings account as collateral until you repay.
  • Payday loans. If you can’t qualify for a traditional personal loan, payday lenders are lying in wait to get you money in an emergency. Payday loans are meant to carry you between paychecks, and you qualify based on your expected income rather than your credit score. They come with effective interest rates of around 400% — or about $15 to $10 for every $100 you borrow — which can compound quickly if you’re unable to repay within two weeks.

Loan Risks to Consider

640
600

  • APR. Annual percentage rate is the annualized amount you’ll pay over the amount of your loan. Bad credit personal loan rates tend to fall between 9% and 35%. The lower your credit score and the longer your repayment period, the higher your rate will likely be.
  • Origination fees. Most lenders charge a fee out of your loan right up front, typically as a percentage of the loan amount. An origination fee could lop off around 2% or 3% of your loan before you receive it, so count that in when you figure out how much to borrow.
  • Late fees. If any monthly payment is late, some lenders charge a late fee that’s a percentage of the payment due or a flat fee. Those fees get added to your loan balance and then accrue interest, so they can add up over time.
  • Prepayment penalties. Some lenders charge you a fee if you repay ahead of schedule. This is as silly as it sounds, so it’s becoming pretty rare. But it’s an option, so keep an eye out for prepayment fees in your loan agreement, and plan your repayment accordingly.

Upstart is a platform that supports partner lenders in making loans to borrowers using proprietary AI to assess creditworthiness. The platform looks at factors beyond your traditional credit score (though it also does a credit check), including education and income, so you could have a higher chance of approval if you have a low or no credit score but other positive factors.

  • Application for credit. When you apply for credit — a loan, a new credit card, a mortgage, etc. — lenders typically report the request to credit bureaus. Any request for credit can briefly knock your credit score down, and multiple requests in a short period can have a serious impact in the short term (because lenders don’t want to lend to someone taking on a bunch of debt all at once). A soft credit check for prequalification doesn’t get reported, so comparing rates doesn’t hurt your score.
  • Debt-to-income ratio. Your monthly loan payment gets added to your debt-to-income ratio (DTI), the difference between how much you make each month and how much you owe in debt payments. A high DTI, above 35% to 45%, can hurt your ability to get additional credit or loans, including a mortgage.
  • Payment history. Make on-time payments, and your credit score will likely improve! Just make sure the lender reports payments to all three credit bureaus (they usually mention that on their site or in their FAQs, or you can ask customer service). If you make late payments or don’t repay the loan in full, that’ll be a negative mark on your credit report.

Who Can Take out a Loan With Bad Credit?

APR range

  • Minimum credit history. Lenders might have a low or no credit score requirement, but they could still have a minimum credit history — how long you’ve had activity on your credit report. The minimum is usually three years, but consult each lender to learn theirs.
  • Debt-to-income ratio. Lenders consider the other debt you’re repaying when assessing your ability to repay their loan. Your DTI tells them how much room you have to add an extra debt payment to your bills each month.
  • Income. With any credit score, lenders look for a stable source of regular income to make sure you have a way to make monthly payments. This number could be even more important if you have a low credit score, because some lenders lean more heavily on this factor to determine your eligibility.
  • Education. Some lenders look at your education to assess the likelihood you’ll earn the money necessary to repay a loan. This can be especially helpful for recent grads with a short credit history or no credit score.
  • Bill pay history. Companies often report delinquent bills to credit bureaus, which are reflected in your credit score. But a positive payment history for everyday bills and rent don’t traditionally help your score. Some lenders use alternative assessment methods that include positive payment history, and you can sign up for third-party platforms that’ll report your history to credit bureaus to help your score.

How to Get a Loan If You Have Bad Credit

Best for Fair Credit Loans

  • Consider your options. Ask whether a personal is the best way to cover your costs. Maybe you could avoid the debt and instead delay the purchase or negotiate an expense you’re facing.
  • Review your finances. When you review loan offers, you’ll want to know what you can comfortably pay each month for a few years.
  • Check your credit score. Applying for a loan dings your credit report, so you don’t want to apply for loans you aren’t confident you’ll qualify for. Check your score first, then find lenders that match your situation.
  • Compare lenders. Check reviews like this to compare loan offers side by side. This lets you see lender options and requirements to find the ones that align with your needs.
  • Get pre-qualified. This is how you find out whether you’re likely to get accepted by a specific lender based on your specific financial information. Give a little information to go through a soft credit check that won’t affect your score, and see pre-qualified offers. Then you can decide whether it’s worth applying in full.
  • Review the loan details. Before you put in an official application, check the details of the offer carefully. Do the repayment period and monthly payment fit with your financial plan?
  • Complete an application. Once you choose a loan, fill out an application with the lender. They’ll do a hard credit check and — if you were accurate and honest on the initial check — likely approve you for the loan.
  • Receive the funds. If you’re using a loan to pay off debts, the funds usually go directly to your other lenders. If you’re getting funds for yourself, they’ll be deposited directly into your bank account, usually within one to three business days with online lenders.
  • Set up a payment plan. Stay on top of payments, and this loan can help you improve your credit score. If it fits your circumstances, set up automatic payments, which can help you pay on time and usually comes with an interest rate discount. If you’re paying back other debts at the same time, use a repayment method like the debt snowball or avalanche to determine where to direct your money whenever you’ve got extra to put toward your financial goals.

Where to Get a Bad Credit Loan

19.9% – 155% (range varies by state)

  • Banks and credit unions. Institutions in your town or online could make personal loans and let you keep all of your finances in one place, including banking, credit cards, investing, loans and insurance.
  • Online lenders. These companies (all of the lenders in our list above) usually only offer loans and credit but not other banking or financial services — though there are some exceptions that focus on lending but also offer other services.
  • Marketplaces. Online marketplaces like Fiona, AmOnee or OppLoans aggregate offers for all types of loans and credit cards so you can see pre-approved rates with a single soft credit check. They often work with partner lenders that prefer good or excellent credit borrowers, so you might come up with nothing if you have a low credit score. But they can be a way to quickly assess your options without checking a bunch of lender sites.

Frequently Asked Questions (FAQs) About Getting a Bad Credit Loan

Best for Borrowers Without Traditional Credit History
Follow these steps to get a personal loan with a low credit score:
4.5 out of 5 Overall
OneMain financial makes secured or unsecured personal loans to borrowers with no minimum credit score. You can borrow up to ,000 with a term of two, three, four or five years. The trade off for the flexibility in borrowing is relatively high interest rates: APRs range from 18% to 35.99%.
Key Features
580
What is the Easiest Type of Loan to Get with Bad Credit?
Key Features
580
Where Can I Borrow Money Immediately?
Avant is a personal loan lender that’s friendly to fair-credit borrowers: Most Avant borrowers have credit scores between 600 and 700, but you may be eligible for a loan with a credit score as low as 580. Get a loan for up to ,000 with funding as soon as the next day after you’re approved.
Yes, secured loans are a traditional option for borrowers with low credit scores. And lots of companies have cropped up in recent years to offer innovative ways to assess a borrower’s creditworthiness without relying solely on a credit score. You’ll likely have to show stable income, education in a lucrative field and/or a history of on-time bill or rent payments. Check out Stilt, OneMain Financial and NetCredit above for loans with no minimum credit score

2 out of 5 Overall
ARP range

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