Hate Your Roommate? 48 Ways to Afford Living Solo | Credit.com

Looked at the other way, a two-bedroom place doesn’t usually cost twice as much as a one-bedroom or studio. Citing median rents in 10 US cities, the article noted savings of almost 44% for sharers vs. solos.

Skip a roommate, and you’ll also be responsible for rent/utility deposits, all utilities, and all furnishings and household supplies. Yet plenty of people are sick of roommates or know right out of the gate that they’re simply not suited to sharing.

Done right, the solo life can work. Start by …

1. Learning the Rental Market

Read the ads for a sense of what places cost in your area. If they generally run between $800 and $1,100, then you’ll know to balk at a one-bedroom for $1,300 and to run toward a $700 studio.

This knowledge also helps your planning: I’ll need X dollars for the security deposit and X dollars more for the last month’s rent in advance. At the rate I’m saving to move out, it will take me X more weeks to pull together what I need.

If you have enough cash socked away, start apartment hunting in earnest. If not, keep squirreling away those dollars (more on that below) and looking for other stuff you’ll need. One way to save money is to …

2. Live at Home, Briefly

If your folks are OK with you coming back from college/returning home after your latest roommate disaster, this will give you a chance to save for deposits, emergency fund, etc. Share your move-out timeline with them: “In three months I’ll have all that I need plus a financial cushion, so I really appreciate your welcoming me back.” Pitch in cheerfully with household chores, too.

Continue the apartment hunting while you live at home. In the late fall or winter, be sure to …

3. Watch for Move-in Specials

If the market is slow or the weather is lousy, a landlord may offer incentives. I got one month free when I signed six-month leases on my first and second Seattle apartments.

You should also be willing to …

4. Think Small

“Don’t be afraid of the studio,” advises Michelle Diamond, who blogs at FitNPoor. She moved from a one-bedroom into a studio that felt comfortable and cozy — and cheaper. If you don’t have a ton of stuff, this might work for you, too.

Be realistic about what you can afford, too. Conventional wisdom is that rent should take up no more than 25% to 30% of your net income. Multiply your net pay by 52 (or 26 if you’re paid biweekly) and determine how much you bring home in a year. Depressing, huh?

Being pretty sure you can afford it isn’t good enough. You’ll need security and/or utility deposits, maybe the last month’s rent in advance, and a bunch of other stuff to make the place your own. That’s why you need to …

5. Track your Spending

You might be shocked to find out how much you spend on iTunes and e-books. That’s money that could have gone toward rent. While some folks write down all expenditures and create spreadsheets, it’s easier to use online budgeting sites/apps such as Mint.com or PowerWallet.

Now that you know where your money is going, time to …

6. Create a Budget

The 50-30-20 plan is a good template: no more than half of net income for “musts” (like rent!), 30% for “wants,” and the rest for savings and debt service.

Organizations like the National Foundation for Credit Counseling and the Association of Independent Consumer Credit Counseling Agencies can help you get started; often you can get this help for free. (Note: It’s best to check whichever credit counseling group you wind up with through the Better Business Bureau and your state attorney general’s office.)

Living within your means is smart, not onerous. A great way to get started is to …

7. Ask Why You Buy

Do you really need it? How many hours will you have to work to pay for it? If you absolutely need it, how can you get the best price?

Now, suppose you determine you can manage solo rent on your current earnings if you’re faithful to that new budget. Your next step should be to think beyond your next payday.

Being able to afford the rent is one thing. Sooner or later, though, you’re going to need something you can’t pay for out of pocket: car repair, a medical deductible, a baby shower gift. That’s why your new budget must include ways to …

8. Build an Emergency Fund

Your basic budget covers, well, the basics. But sometimes stuff happens. Youll want to establish what I call the “being able to sleep at night” fund.

9. Get Renters Insurance

You should have this even if you’re not living alone. Should there be a fire or even a simpler issue such as a leaky roof that ruins some of your stuff, would you be able to pay for alternate lodging or replace your belongings?

10. Plan an Incidentals Fund

It’s not strictly necessary to buy holiday, birthday or shower gifts. But you still want to, right? If family or friends are getting hitched or having babies in the coming year, figure out how much you can afford to spend and then stick to that number.

Use a price comparison website like PriceGrabber.com or FatWallet.com to get the best deals you can. Set an alert so you’ll get an e-mail when the items you want hit the price point you can afford.

Still wondering if you can afford some of those gifts, especially if they involve trips to a wedding or driving across the state to see your sister’s baby? Maybe its time to earn more money

Easier said than done, right? That’s why it’s a good idea to start now, rather than the week before a wedding. Some possibilities:

11. Sell Yourself

Donate plasma, sign up for paid medical research — which could be as simple as giving a couple of vials of blood — maybe find a buyer for your hair.

12. Sell Your Stuff

Drop off clothes or accessories at a consignment shop. Sell the electronics you thought were a great idea but turned out to be somewhat extraneous. If you have specific knowledge about vintage Fiesta ware or pre-Mattel American Girl dolls, keep an eye out when shopping yard sales, thrift shops and Craigslist.

13. Get a Side Gig

It doesn’t have to be a second part-time job; some people make good money from occasional work. Let it be known you’re available to walk a dog, house-sit, fix a computer, clean and organize a garage, baby-sit on a Saturday night, be the sign-waving guy dressed as the Statue of Liberty outside a tax-preparation joint.

Or head to a quick-gigs site like Fiverr or TaskRabbit. Someone might be willing to pay you to sing “Happy Birthday To You” in Klingon or break down and recycle boxes.

What Is Your Lifetime Cost of Debt?How much will you pay in interest over your lifetime? You may be surprised. Find Out Now
Setting up on the Cheap

You’ve saved up your deposits, built an emergency fund and planned for contingencies. But if you’re moving straight from college to single living then you might be shocked at how much you’ll need to set up housekeeping.

Your childhood home had a lot of stuff in it that you took for granted: dishes, cookware, measuring spoons, laundry detergent. Or maybe you lived with roommates for years and someone else provided niceties like a sofa or a dining table and chairs.

Even just a few basics could cost you a lot, right when you’re trying to conserve. Try these tips to outfit yourself affordably:

14. Hit the Dollar Store

Not everything there is a good deal. But you can’t beat a one-buck mop bucket.

15. Put it Out in the Universe

Need a table, a bookshelf, a lamp? Let it be known! A relative or friend, or someone known to a relative or friend, might be looking to sell such stuff cheaply. You might even …

16. Get it for Free

Someone who’s moving or combining households might want to get rid of that table vs. having to pay to dispose of it. Keep checking Freecycle and the “free” section of Craigslist, too. I’ve seen some pretty nice furniture up for grabs.

That’s not the only way to get freebies, though. Two more tactics:

17. Shop Curb mart

That is, keep an eye on what neighbors put out on trash day or by the dumpster when they move. I’ve gotten stuff like bookshelves, a floor lamp, straight-back chairs, picture frames and a still-in-the-box computer mouse this way.

18. Let Students Buy it for You

Live in a college town? Find out when school lets out for the summer and also where students dump their stuff. You’ll be astonished at what people throw out because replacement is cheaper than shipping or storage.

Can’t get stuff for free? Maybe you could …

19. Get it secondhand

Yard sales can yield treasure on the cheap. Thrift stores vary in quality and selection, but you can usually find dishes, cookware, food-storage containers, lamps and other necessities.

Utility Tricks

Solo renters can’t rely on roommates to help subsidize the cost of lights, heat and water, or to kick in for Internet bills. Take a hard look at these costs.

20. Cut the Cable

Plenty of people get by with stuff like Netflix, Hulu and Amazon Prime Instant Video.

21. Get a Better Phone Deal

Smartphones are becoming extensions of self. But you need not overpay to stay connected.

22. Shop Around for Internet

The cost of getting online just keeps going up. When it’s bundled with phone and/or cable service it can be hard to decide to switch. Set aside a few hours to run the numbers for deals among the providers in your area.

Think about cutting the cable (see above) if it makes sense and running your phone and Internet separately. Finally, consider FreedomPop’s rechargeable wireless hotspot device.

23. Skip the Dryer

You can hang most items versus paying $1.50 per load to dry them. Besides, the dryer takes years off your duds with its heat and tumbling. If the washer/dryer is in your apartment (lucky you!), the dryer will make your place a lot hotter in the summer.

24. Cut Back on AC

“5 Strange Ways to Stay Cool Without Air Conditioning” has tips that will help you raise the central-air setting or resist turning on the window unit. You might also try making this DIY air cooler for a cost about about $8.

25. Ignore the Thermostat

Don’t turn the heat up five degrees every time you get a chill. Instead, take a tip (or a lot of them) from “Fighting Over the Thermostat in Your House? Here’s How to Win.”

26. Plug the Leaks

Put rolled-up towels at door bottoms to keep cold air from leaking in. Ask the landlord if you can add caulk and weather stripping to the windows and foam gaskets to electrical outlets and switches. (Ask the landlord to pay for these, too.)

Eat to Live (Alone)

“Food” is the budget area with the most wiggle room. You probably can’t negotiate your rent or your car payment downward, but you can …

27. Learn to Cook

Did you know how to set up a smartphone or put together a bookcase before you read the instructions? Get yourself a cookbook or go online for bonehead-simple recipes. Challenge yourself to re-create your favorite restaurant dishes.

28. Embrace Speed Scratch

Not every meal has to be hands-on. Buying a rotisserie chicken, a bag of salad greens and some baking potatoes to throw in the microwave is still cheaper than going out to eat. (Bonus: leftovers!)

29. Get a Slow Cooker

We’ve gone way beyond casseroles made with cream of mushroom soup. Search the Internet for “slow cooker gourmet” and you’ll be amazed.

30. Batch Cook

Spend one Saturday a month cooking a bunch of dishes and freeze them in you-sized portions.

31. Shop the Bakery Outlet

No, it doesn’t mean “stale bread.” We shop there regularly and get baked goods four or five (or more) days before their sell-by dates. Why pay $3.50 for a loaf of multigrain bread when you can pay $1.50?

32. Use Coupons

Supermarkets and drugstores let you download Qs to your store loyalty card. Coupons + sales + in-store rebates = more money to throw against the rent.

33. Start a Supper Club

Got friends who like to cook? Make plans to cook for one another one night a month (or a week). Or do a lunch club if you have friends at work.

34. Eat What You Want!

Some days you just don’t feel like cooking. When you live alone you can have a bowl of cereal for supper or eat ramen straight from the saucepan without your roommate(s) staring judgmentally at your food choice. Anyone who’s ever had a roomie go full-on vegan/gluten-free/Paleo and lecture everyone else nonstop will appreciate this option. While this isn’t healthy in the long term, it won’t hurt you now and then to eat a sliced tomato and a package of cheese crackers for supper.

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Invite Everyone Over

Once you’re all moved in, it’s time to show off the new place. Entertaining at home solves two potential problems: If you’re bored and maybe a little bit blue, you might overspend to cheer yourself up, and it also keeps the “fun” section of your budget under control.

But isn’t entertaining expensive? Not necessarily. Try these frugal-fun tips:

35. BYOB Wine Tasting

Each friend brings an interesting yet still affordable plonk. You provide cheese and crackers or some other nibbly bits.

36. Game Night

Board games. Online games. Charades. Improv. Whatev.

37. Host a Potluck

Give just enough direction to make sure everyone doesn’t bring a salad, or chips and salsa.

38. Have a Dinner Party

It doesn’t have to be fancy! Make it a chili feed, cook a batch of spaghetti sauce, celebrate the summer with the freshest salad greens and ripest tomatoes you can find.

39. Binge Watching

Got Netflix or Hulu? Watch as much of a favorite show as your guests can stand. Or borrow an entire season’s worth from the library. Provide snacks.

40. Sports Night

Some friends, some chips and beer, your favorite sporting event – can’t get much easier.

41. Spa Night

Invite a couple of BFFs for DIY beauty regimens – tons of tips exist online for facials, manicures, deep conditioners and the like. Talking about boys is optional.

Out on the (Affordable) Town

Getting out of the apartment now and then is good for you. Keep the entertainment section of your budget low by getting creative:

42. Gallery Openings

Lots of cities have a “First Friday” or “Art Walk” event, wherein local galleries/museums schedule openings on the same night. Take a couple of pals to one or more of the openings. Bonus: You’ll probably get fed, since these events tend to feature hors d’oeuvres and maybe even wine.

43. Free Museums

It’s often possible to beat those pesky fees at museums and also zoos and aquariums. For strategies, see “Free Admission to More Than 1,500 Museums, Aquariums and Zoos.”

44. Pay-What-You-Can Night

Some theater companies and comedy troupes offer “whatever you can afford to give” performances. Look for them in your area.

45. Free Movies

Catch summer blockbusters and art films alike without paying. Look for advertising.

46. Social Buying Vouchers

Groupon, Living Social and others offer discounts – sometimes deep ones – to restaurants, shows and attractions. Keep your eyes peeled.

47. Discounted Social Buying Vouchers

Sites like CoupFlip.com and CoupRecoup.com sell unwanted Groupons et al. at often-steep discounts. The cheapest one I ever saw was for a Chicago restaurant: $40 worth of tapas for $1.71.

48. Discounted Gift Cards

Want to go to a movie, eat at a chain restaurant, hit the links, bowl a few games? Go to the aggregator site GiftCardGranny.com and look for discounted gift cards for the places you want to be. I routinely get 20 percent off movie gift cards this way.

Not everyone can (or wants to) use all 48 frugal hacks. But unless you’re paid very well, then you’ll have to make some sacrifices if you want to live alone. Every dollar you can save on basics and frivolities alike is a dollar that can support your desire for peace and privacy.

This post originally appeared on Money Talks News.

More from Money Talks News:

  • Where Being a Renter Really, Really Stinks
  • 10 Tips to Spend Less on Clothes
  • 8 Creative Ways to Clear Clutter in 2015

Image: Pixland

Understanding the pros and cons of debt relief

By Andrew Housser

Many Americans struggle to rein in their debt. Whether it is student loans, car financing, medical bills or credit cards, countless people find their income barely stretches to cover the payments. Many struggle month after month year after year. Others are able to change their ways and get out of debt on their own.

Still others find that they cannot make monthly payments. They might even be at risk or suffer through having a car repossessed or facing foreclosure on their home not to mention the daily struggle of having creditors and collectors ringing the phone.

Fortunately, people have many options to get out of debt. Here is an explanation of the pros and cons of three common paths to finding debt relief.

1. Debt negotiation.

Debt negotiation (sometimes called debt settlement) companies negotiate directly with creditors to resolve peoples unsecured debt balances. While they are in a debt negotiation program, consumers do not make payments to creditors. Instead, they deposit savings into a dedicated account. Once the debt negotiation company negotiates, or settles, a debt, the consumer uses the saved funds to pay the creditor.

The pros of debt negotiation are that people can get out of debt, typically in 24 to 48 months; debt balances may be reduced by almost half (before fees); the monthly program payment usually is significantly less than minimum debt payments; and the impact on credit profiles often is less than that of a bankruptcy filing. The cons of debt negotiation are that creditors may continue calling during the negotiation process or even pursue legal action; your credit rating will be negatively impacted due to not making minimum payments; you must pay a fee to the debt negotiation company for its services; and, as with any forgiven debt, you might have to pay income tax on the forgiven debt amount (although this tax can be waived for people whose debts are greater than assets).

Bottom line: Debt negotiation is a viable option for people who are struggling to make minimum payments, and who are willing to dedicate themselves to a process lasting two to four years.

2. Credit counseling.

In credit counseling, companies help consumers repay debt on a set schedule. Some credit counseling agencies are nonprofit, but many are for-profit. Credit counseling agencies generally set up a debt management plan (DMP) that reduces the consumers monthly payment obligation. The agencies can do this through pre-arranged agreements withcredit card companiesthat allow them to lower interest rates on existing debt to a creditor-issued concession rate.With a DMP, the consumer deposits money each month with the credit counseling agency, and the agency then uses those funds to pay creditors. Consumers will pay back 100 percent of the debt they owe, plus interest, at the reduced concession interest rate.

The pros of credit counseling are that collectors will stop calling as long as you are on track with the program; the monthly payment is often less than creditors minimum payment obligations (but higher than a debt negotiation program payment); and having one monthly payment can simplify the debt repayment process. The cons of credit counseling are that the fees can be expensive ($10-$15 per month, per enrolled debt); you will pay back 100 percent of the principal amount of the debt, plus interest (at the reduced concession rates); it can have a negative impact on your credit profile and access to credit while enrolled in the program (which can be up to five years); and the success rate often is low in large part driven by the relatively high monthly payment obligation.

Bottom line: Credit counseling can be a good option if you only need a lower interest rate, and have the discipline to stick with the program while not incurring additional debt.

3. Debt consolidation.

Debt consolidation is the process of compiling multiple debts into one loan, with one monthly payment. Some people undertake this process on their own, whether through balance-transfer credit card offers, a home equity loan (using the proceeds to repay other debts) or a personal loan. Others opt to work with debt consolidation services, who help consolidate debt for a fee on top of the interest on the loans.

The pros of debt consolidation are that the process has one predictable monthly payment and one predictable interest rate. Debt consolidation loans often have a fixed amortization period, which provides the ability to pay debt down in a specific time period. Interest rates on debt consolidation loans typically are much lower than interest rates on credit cards; and in the case of using a home equity loan to consolidate debt, the interest may be tax-deductible. The cons of debt consolidation are that the option might not be available to people with poor credit or no income; the monthly payment may be higher than credit card payments, even with a lower interest rate (given a shorter payback period); and loans secured against a home or vehicle put those assets at risk if you fail to make timely payments on the loan.

Bottom line: People who are not in a hardship, and who have the ability and self-discipline to pay down their debt and resist charging up balances on other credit cards, might find debt consolidation useful.

Whichever method you choose to get out of debt, it is important to ensure that you work with a credible company. One way is to choose an accredited member of the American Fair Credit Council (AFCC). The AFCCs code of conduct is even stricter than the FTCs. It also can be helpful to choose a firm that requires counselors to receive certification from the International Association of Professional Debt Arbitrators.

ABC of personal loans

Your colleagues are going on a swanky holiday. You want to join them but don’t have the money. Or, you are facing a medical emergency and your credit card limit is not sufficient. Often, a personal loan is the perfect solution in such situations.

Apply only if necessary

While a personal loan is the most suitable choice for many purposes, there are some instances when it is worth considering other options.

One, for consumer durable purchases, manufacturers and retailers often have financing schemes, with benefits in terms of interest rates and offers which will not come with a personal loan.

Two, for buying a new car, loans are normally cheaper than personal loans. But to buy a used car, a personal loan could be cheaper than a used-car loan. Three, for home improvement projects, you can consider a home loan top-up if you have one.

If you already have a personal loan running at the lowest possible interest rate, you could top-up your existing loan.

If you have multiple dues on credit cards and other personal loans, you could opt for a balance transfer programme.

Under this programme, banks offer a single fresh loan at a discounted interest rate to close all your current oustandings (personal loan and credit card), and offer an incremental loan amount to meet your extra requirements. Also, don’t be tempted to borrow more just because you are eligible.

Choose right

Interest rate range for a personal loan varies from 11.99 to 24 per cent.

Normally, personal loans are fixed rates loans. Banks often offer different interest rate based on income levels, as well as for different categories of companies. So where you work can make a difference.

Some banks offer different interest rates for different loan periods too; similarly, some offer lower interest rates for higher loan amounts.

If possible, choose a loan with part-payment facility as you get the flexibility of using extra cash flows and reduce your interest outgo.

Similarly, most institutions allow pre-closure of loans, and normally levy charges of 0-5 per cent. You could use this facility to close the loan early if you get sudden cash flows. Make use of the several independent loan comparison websites too. Most of the time, a personal loan application can get rejected due to the applicants bad credit record.

However, you can approach institutions (banks/NBFCs) which do lend to customers with unsatisfactory credit track records. Or you can consider the services of agencies that specialise in helping customers overcome their poor credit history.

The writer is Managing Director, RupeeZone

Growth in Q1 2015 profitability for P&C insurers | PropertyCasualty360

The first quarter of 2015 saw net investment gains of $16.4 billion, after capital gains jumped from $2.9 billion to $4.7 billion, increasing net investment income from $11.2 billion in the first quarter of 2014 to $11.7 billion in the first quarter of 2015. Since the start of ISOs quarterly records in 1986, this marks the highest first quarter capital gains and net investment gains realized.

The industry needs to focus on underwriting, as investment gains may be unpredictable and investment yields will likely remain suppressed for a while, said Beth Fitzgerald, president of ISO Insurance Programs and Analytic Services. Its those insurers that stay current on emerging issues and make use of predictive analytics that will be the best prepared to weather potential storms that the markets, social or technological developments, or nature might send their way.

Mild catastrophic losses

Net written premiums rose by 3.7% to $125.9 billion in the first quarter 2015 from $121.4 billion in the first quarter of 2014. The unchanged 3.7% net written premium growth rate from first-quarter 2014 to first quarter of 2015 is below the 4.3% average for the last 12 quarters and the 4.1% growth rate for full-year 2014. In the first quarter of 2015, the growth rate in net earned premiums fell to 3.7% from 4.2% in first-quarter 2014 and 4.3% for full-year 2014.

Property/casualty insurers had a strong first quarter, underscoring strong capital levels, competitive markets, underwriting disciplines, and business competencies, said Robert Gordon, PCIs senior vice president for policy development and research. These results, partially attributable to mild catastrophic losses, have insurers well positioned to continue to provide the necessary financial security for their policyholders as we move farther into yet another uncertain hurricane season.

View full report Property/Casualty Insurance Results: First-Quarter 2015.

Lazard Global Total Return and Income Fund Declares Monthly Distribution

NEW YORK–(BUSINESS WIRE)–The Board of Directors of Lazard Global Total Return and Income Fund,
Inc. (the “Fund”) (NYSE:LGI) has authorized the Fund to declare
today, pursuant to a level distribution policy, a monthly distribution
of $0.09282 per share on the Fund’s outstanding common stock. The
distribution is payable on August 24, 2015 to shareholders of record on
August 12, 2015. The ex-dividend date is August 10, 2015.

Portfolio data as of June 30, 2015 including performance, asset
allocation, top 10 holdings, sector weightings, regional exposure, and
other Fund characteristics have been posted on Lazard Asset Management’s
(“LAM”) website, www.LazardNet.com.
Additionally, any notices required by Section 19(a) of the Investment
Company Act of 1940, as amended, which provides information regarding
the respective estimated amounts of each monthly distribution derived
from net investment income, net realized capital gains (short- and
long-term) and return of capital, will also be available on www.LazardNet.com.

The Fund’s objective is total return, consisting of capital appreciation
and current income. The Fund seeks to achieve its objective by primarily
investing in a portfolio of approximately 35 to 45 equity securities
with a market capitalization of at least $5 billion at the time of
purchase that are domiciled in those countries that comprise the MSCI
World Index. The Fund seeks enhanced income by investing in short
duration (typically less than one year) emerging market forward currency
contracts and other emerging market debt instruments.

An indirect subsidiary of Lazard Ltd (NYSE: LAZ), LAM, the Fund’s
investment manager, offers a range of equity, fixed-income, and
alternative investment products worldwide. As of March 31, 2015, LAM and
affiliated asset management companies in the Lazard Group managed $199
billion worth of client assets. For more information about LAM, please
go to www.LazardNet.com.

ZestFinance Launches Unsecured Personal Loans

Los Angeles-based Zest Finance, one of the areas growing number of financial technology (fintech) startups, said today that it ha launched a new product, to offer up unsecured, personal loans to middle class Americans. ZestFinance said its new product–Basix–uses its technology to better evaluate creditworthiness of borrowers, and allows consumers who otherwise wouldnt be able to tap into traditional credit systems, and who wouldnt qualify for a band loan, to gain access to credit. The new loans will be available for three year terms, and will feature fixed interest rates of between 26% to 36%, with fixed monthly payments. ZestFinance is led by Douglas Merrill. The company said it is also offering up its credit decisioning technology behind the product available to other lenders. ZestFinance is venture backed by Peter Thiel, Lightspeed Venture Partners, Matrix Partners, Kensington Capital Holdings, and Eastward Capital Partners.

How Can I Get an Unsecured Personal Loan?

Unsecured personal loans are loans that are not guaranteed by collateral, such as property or other assets, and are instead issued solely on the creditworthiness of the borrower. These factors can make unsecured personal loans — also called signature loans — relatively risky bets for lenders. In order to get a lender to issue this kind of loan, the borrower is generally required to have excellent credit.

This risk also means that unsecured personal loans typically come with interest rates that are higher than those levied on secured loans, but not as high as many credit cards. This makes them attractive to borrowers who want a personal loan to pay off debt or finance large purchases at lower rates. Since an unsecured personal loan can be expensive, it is important to find the best rates and the most favorable terms.

Read: When to Use a Credit Card Vs. Personal Loan

Finding Low Rates on Unsecured Personal Loans

Banks, credit unions and peer-to-peer lenders all issue personal loans — but the rates and terms can vary wildly between different institutions. Large, national banks are often the most selective and least likely to work with borrowers who have spotty credit.

Community and local banks are generally less convenient, with fewer ATMs and branches, but often compensate by offering better rates and more personal customer service in order to compete. Similarly, credit unions are nonprofit, member-owned institutions often offer their members better rates than banks. Membership is based on varied criteria, such as occupation, residency or military service.

Since online banks do not assume the overhead associated with physical branches, such as employees and security, they are often able to offer lower rates on loans. Peer-to-peer (P2P) lenders enable borrowers to bypass traditional financial institutions altogether and borrow directly from investors, who buy into loans with rates that are based on the borrowers creditworthiness.

Avoid bad credit personal loans or any personal loans in which lenders are not concerned with credit history. These subprime loans are often predatory in nature and come with extraordinarily high interest rates that can actually perpetuate long-term debt, since the interest charged often ends up costing more than the original loan.

Related: 10 Best Credit Unions Anyone Can Join

How to Get an Unsecured Personal Loan With Low Interest

More than virtually any other type of loan, an unsecured personal loan rate depends on the borrowers credit history and credit score. The single most important step a borrower can take to securing a loan at a favorable rate is to improve his or her credit score.

The major credit bureaus base your score on five criteria, according to myFICO.com:

  • 35 percent of your score is based on your payment history.
  • 30 percent of your score is based on credit utilization.
  • 15 percent of your score is based on the length of your credit history.
  • 10 percent of your score is based on new credit.
  • 10 percent of your score is based on your blend of credit.

First and foremost, pay your bills on time, every time. If your credit has been damaged by late payments or missed payments in the past, the next important step you can take is to improve your credit-card utilization rate by paying down credit-card debt. You should shoot to owe less than 10 percent of your available credit, but anything under 20 percent wont hurt your credit score.

After you work to improve your credit, you should look for the best possible rate by comparison shopping.

Read: 5 Personal Loans for Low Credit Scores

Researching Unsecured Personal Loan Rates

According to the Consumer Protection Financial Bureau, you should do your loan shopping in a timely manner. When credit inquiries for loan applications are filed in quick succession, credit bureaus can generally see that the borrower is shopping for the best rate as opposed to seeking several new loans at once, which can damage your credit. Any hit to your credit score will be minor, and well worth the benefit of finding a better rate.

Look for fixed-rate loans, which are loans with rates that do not change throughout the life of the loan. This is preferable to variable-rate loans, which often have lower introductory rates but can raise rates dramatically and unexpectedly, making it difficult for borrowers to predict payments from month to month.

Watch out for origination fees — which can be less than 1 percent to as much as 5 percent — as well as late payment fees and fees that charge for certain methods of payment, such as checks. Also, ask about fees associated with refinancing or paying the loan early. Some lenders may charge fees or prepayment penalties, which should be considered when deciding to refinance, said Todd Nelson, business development officer at LightStream, the online lending division of SunTrust Bank.

People interested in unsecured personal loans should start on a site like PersonalLoans.com, which gathers information on the borrowers needs, and pairs them with third-party lenders based on the data they collect. It is up to the borrower, however, to shop around, to be mindful of scams, to research the lenders and choose the best rate.

What Credit Score Is Needed for a Personal Loan?

If youre strapped for cash but have pressing financial obligations, such as car or home repairs, or you need money for a vacation, a personal loan might be your best option. Personal loans can help you tackle common financial problems.

Your credit score is one of the most important factors lenders take into account when they consider your eligibility for a personal loan. The interest rate you receive will also be affected by your score. As you consider personal loans offered by local banks and credit unions, find out how your credit score is determined and what rates you can expect.

Read: What Is a Good Credit Score Anyway?

Your Credit Score and Why It Matters

Banking customers who use credit cards and take out loans have credit scores. Your score is a three-digit number that tells banks how trustworthy you are as a borrower. It is also a reflection of your repayment history and debts.

Your credit score is based on your credit report, which is a detailed summary of your credit activity over the years. Information on your report is collected by three major credit bureaus: TransUnion, Experian and Equifax. Your lenders report your repayment history to these organizations.

Credit bureaus use a scoring system based on the Fair Isaac Corporation (FICO). Your FICO score can range anywhere from 300 to 850. The better your score, the more liable you are to qualify for higher loan amounts and lower interest rates. If you have a low score, you might only qualify for small loans with high rates.

What Credit Score Do I Need for a Personal Loan?

As personal loans are unsecured — meaning they are not backed by any sort of collateral — interest rates can vary wildly based on your creditworthiness. Customers who used LendingTree to review personal loan rates in March 2015 saw rates as low as 3.99 percent and as high as 41.7 percent.

For personal loans, a difference of just 50 points on your credit score can affect your interest rate by several percentage points. Lanco Federal Credit Union, for example, offers the following personal loan rates based on your credit score:

  • Customers with 750+ scores receive a 10.99% APR
  • 700-749 scores receive a 11.99% APR
  • 660-699 scores receive a 12.99% APR
  • 620-659 scores receive a 15.99% APR
  • If your score is under 620, your rate will be 17.99% APR

How Good Credit Helps You Save on Personal Loans

Raising your credit score will affect the affordability of your personal loan, saving you money on interest over time. Consider the following data from LendingTree:

  • A personal loan borrower with a poor credit score who finances $10,000 for 48 months with a 30% APR can expect to pay $17,288.46 over the life of their loan.
  • A borrower with an excellent credit score who receives a 8.18% APR will pay $11,758.80 over the life of the same loan.

In this scenario, the borrower with the higher credit score saves more than $5,500 over the course of a four-year loan. Those savings amount to nearly $1,400 each year.

Reviewing Your Credit Report

While lenders might also consider your employment history and monthly income when evaluating your creditworthiness, your credit report can make or break loan deals. Before applying for a personal loan, get a copy of your credit report and review it thoroughly.

There could be items youre not aware of that are bringing down your credit rating, such as unfavorable information from someone who has the same name as you, or being the victim of identity theft, said Annie Sanchez, founder of website Debt Free like Annie. If you notice inaccurate information, you can easily dispute it by writing the credit reporting company.

When reviewing your report, you also want to look out for information that might raise red flags for lenders: If you have paid late, gone over 30 percent of your credit limit, closed your oldest credit cards, applied for too much credit at the same time or stuck to only one source of credit, its possible that you could get denied or receive an unfavorable interest rate, said Sanchez.

Related: 4 Credit Report Red Flags You Don’t See — But Your Lender Does

How to Raise Your Credit Score

Your credit score changes often. If your score is less than ideal, you can build healthy financial habits to improve your credit standing over time. You can even make it a mission to raise your FICO score 100 points in one year.

Correcting errors on your credit report can be a fast way to boosting your score. You can also aggressively pay down outstanding debts and set up automatic payments so you always pay bills on time. With an improved score, you can take out a personal loan with a lower rate. If you take extra care to pay back your loan on time, you can improve your credit score even more.

American Consumer Credit Counseling Offers Tips on What You Need to Know …

As many homeowners still struggle to pay their mortgages, ACCC offers advice on how to effectively refinance.

Boston, MA (PRWEB) July 10, 2015

Getting a new mortgage to replace the original is a great way to save money and lower your monthly payments, but not all lenders and borrowers are good candidates. That’s why national nonprofit American Consumer Credit Counseling is offering helpful tips for homeowners to know before they restructure their mortgage.

Many homebuyers are misinformed about down payments, lender rules, mortgage rates and refinancing. According to a recent survey from Zillow, 47 percent of current homeowners incorrectly believe they must wait at least one year between refinancing. Separately, the survey revealed that one in five homeowners – nearly 14 million Americans – said they did not believe underwater borrowers (owing more than your home is worth) could refinance. In addition, more than one-third of current homeowners incorrectly believed that you can only refinance your home every 12 months.

“Too many homeowners are unaware of the opportunities to refinance and save money,” said Steve Trumble, president and CEO of Newton-based American Consumer Credit Counseling. “As people work through their careers and continue to increase their salary, they are more likely boost their credit score. With this increase in credit comes the ability to procure home loans at lower rates. A lower interest rate can have a significant effect on monthly mortgage payments, potentially saving homeowners hundreds of dollars a year.”

ACCC offers the following tips to know before refinancing a home loan:

  • Beware of Increased Terms: Borrowers should be aware that increasing the term of the loan repayment means more payments and more interest paid. Borrowers can use an online home refinance calculator to help calculate monthly payments under these repayment plans.
  • Meet Qualifying Criteria: Before deciding to refinance, borrowers should be sure to meet all of the qualifications. To refinance, homeowners should have regular income, at least 10 to 20 percent equity in their homes, and a FICO credit score of 740 or better. Borrowers with scores as low as 620 can qualify for a Federal Housing Administration mortgage, which are available through banks, credit unions, and other lenders.
  • Look at Short Term Loans: If youre not going to stay in your home for over 10 years, you should consider a hybrid loan that is fixed for 5, 7, or 10 years and then converts into a 1-year adjustable rate mortgage. These loans reduce the amount of interest paid, but if you stay beyond the fixed period, your rate could rise.
  • Know Your Options: Before refinancing, weigh your options. Compare monthly payments, interest savings, length of mortgage, refinancing costs, eligibility etc. Before you refinance speak with your current lender and see what types of options are available and let the lender know you are shopping around for the best deal.

All homeowners have their own unique and personal financial situation, but taking advantage of refinancing can be rewarding – particularly when consumers take the time to properly research and make educated decisions on the timeliness of their repayments.

ACCC is a 501(c)3 organization that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:

  • For credit counseling, call 800-769-3571
  • For bankruptcy counseling, call 866-826-6924
  • For housing counseling, call 866-826-7180
  • Or visit us online at ConsumerCredit.com

Discover Personal Loans and Finicity Work Together to Help Consumers …

MURRAY, Utah and RIVERWOODS, Ill., June 23, 2015 /PRNewswire/ –Finicity Corp.trade;(www.finicity.com), makers of the popular personal finance application Mvelopes (www.mvelopes.com) and Discover Personal Loans are working together to help consumers take control over their finances. Finicitys Financial Wellness programs, including Mvelopes, help keep people on track with their spending, budget, and planned loan repayment.

We talk to so many people everyday through our Finicity Financial Wellness programs who are needlessly paying more interest than they have to and it is keeping them in debt for extended periods of time, said Steve Smith, CEO and Co-Founder at Finicity. With personal loans, such as Discover Personal Loans that can have proceeds sent directly to creditors, were able to take a very principled approach to enabling our customers to free up cash, reduce interest, and ultimately get rid of the debt that is crushing them.

This unique program brings together the power of Discovers Personal Loans, backed by Finicitys tools, education and accountability, to help consumers eliminate high interest debt. Once approved for a personal loan, Mvelopes users can sync their Discover Personal Loan with their web and mobile app to help them stay on top of payments and focus on paying their balances off as quickly as possible.

Discovers mission has always been to help people spend smarter, manage debt better and save more so they achieve a brighter financial future, said Yan Chang, senior vice president, Discover Personal Loans. Working with Finicity is a great fit because the added tools and resources provided will help give our customers more control over their finances and help them achieve their financial goals.

Discover Personal Loans provides a number of useful benefits that Finicity Financial Wellness members and Mvelopes users can leverage, including:

  • No origination or closing fees. No prepayment penalties. This allows customers to remain focused on paying off the loan as quickly as possible, while not having to worry about extra fees up front in order to do so.
  • Same-day decision in most instances. No more waiting for a long review process. Plus, funds are sent the next business day after acceptance of the loan.
  • Flexible payment terms. Choose from 36 up to 84 months based on your budget and financial goals.
  • Funds can be sent directly to you or your creditors. Choose the option that is best for you. Optimal choice and flexibility makes sure your funds work for you.

This program is currently available for Mvelopes and Money4Life Coaching customers who are seeking to save money by consolidating higher interest rate debt via a Discover Personal Loan.

About Finicity

Finicity is an award-winning Internet and mobile software services company specializing in personal financial productivity applications, financial wellness programs, and data services for the Fintech industry. For more than a decade, its flagship Mvelopes has helped hundreds of thousands of users regain control of their finances with its digital application of proven envelope budgeting principles. Now the leading personal envelope budgeting solution on the market, Mvelopes has been honored with a PC World 2006 World Class Award, was named one of The 100 Best Products of Year by PC Worlds editors, was recognized as one of The 4 Best Money Managers by Success Magazine, and was recently selected by Kiplinger as the Best Budgeting Site for Over-Spenders. Finicity launched its Data Services division in September, 2014 and is now providing Data Services Solutions to hundreds of organizations serving the Fintech industry. Founded in 1999, Finicity is privately held, with headquarters in Murray, Utah. Find more information online at www.finicity.com.

About Discover

Discover Financial Services (NYSE: DFS) is a direct banking and payment services company with one of the most recognized brands in US financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company issues the Discover card, Americas cash rewards pioneer, and offers private student loans, personal loans, home equity loans, checking and savings accounts, certificates of deposit and money market accounts through its direct banking business. It operates the Discover Network, with millions of merchant and cash access locations; PULSE, one of the nations leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in more than 185 countries and territories. For more information, visit www.discover.com/company.

Media Contacts

Heather Hughes
Finicity Public Relations

Susan J. Diaz de Leon
Discover – Public Relations

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SOURCE Finicity Corp.