Pay for Delete Letters: Do They Work?

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Are you looking to clean up your credit report? Have you recently discovered a delinquent account on your report that you were unaware of until now? Then you might be considering using a pay for delete letter to get this negative mark off your credit report.

There are a few important things you need to know about pay for delete letters – namely, what they are, how (and if) they work, whether or not they’re ethical, and what other credit restoring options are available to you.

What is a Pay for Delete Letter?

Say you have a delinquent account or two on your credit report, and these accounts are bringing your credit score down. You can send a pay for delete letter to the collection agency that purchased your debt. This letter requests that the account be deleted from your credit report upon being paid either in full, or for a settled amount.

It’s essentially as the name describes – debtors pay the collection agency to get the negative mark to disappear from their credit report. Once the mark is lifted, their credit score will likely rise.

Why is this a tactic some people choose to use? Even if you pay the balance in full, the negative mark still stays on your credit report until seven years from the date of delinquency have passed. Those who don’t wish to wait that long turn to pay for delete as a quicker solution.

Keep in mind that pay for delete letters generally have a much higher chance of success if you’re dealing with the collection agency – not the original creditor. So if your credit card with Chase is past due, and your balance has not been charged off yet, a pay for delete letter may not work. Generally, the lower the balance, the easier it might be to obtain a pay for delete. We offer a few alternative solutions below that might work as well.

Note that a pay for delete letter doesn’t delete your debt. You’re only asking for the account to be deleted from your credit report. Most people use pay for delete letters when they know they owe the debt, but due to unusual circumstances, were unable to pay at the time.

A good example of when to request a pay for delete is if you moved and you never received a bill due to changing addresses. You legitimately owed the balance, but you were never aware of it. This doesn’t exactly make you an irresponsible consumer, it just means there was an error along the way and an account ended up delinquent.

The same goes for owing medical debt when you thought your insurance was covering the bill because you never received a request for payment.

In both situations, you technically owe the money, but through no fault of your own, you were never notified of the debt, so you didn’t pay. Debt collectors are more likely to be understanding in such a situation. Just make sure to have proof (such as a change of address) that might help your case.

However, if your credit card balance was charged off and you simply never paid it because you didn’t have the means to, you may be less likely to get a pay for delete approved.

To see an actual example of an effective pay for delete letter, take a look at the myFICO forums. The Credit Karma forums have a slightly different example that may help you craft your own. Note that some pay for delete letters may outright deny the debt is yours; this is not something we recommend as you shouldn’t be lying to collection agencies if you truly owe the debt.

Can a Pay for Delete Letter Help You?

A pay for delete letter won’t necessarily hurt you, but it’s not guaranteed to help you, either.

That’s because collection agencies don’t have to respond to your letter if the debt is accurate. Furthermore, if you write a pay for delete letter and only obtain a verbal agreement from the collection agency, and you pay, they may not honor your request. The negative mark could remain on your credit report. Even worse, the debt could be sold again, and a new collection agency may ask you for payment.

Unless you get a response from the collection agency in writing, you’re out of luck if the agency doesn’t make good on removing the information from your credit report. They’re not obligated in any way to agree to a pay for delete.

Before you even write a pay for delete letter, send a debt validation letter to the collection agency to ensure the information it has on file is accurate. It may not legally be allowed to collect on the debt, so it’s important to start here before offering to pay, otherwise, you risk paying the wrong company.

If the debt is proven to be valid, and you agree that you owe the balance and want to pay it off to get it deleted from your report, you may actually have more luck calling than writing a letter.

Keep in mind that if it comes to that, you should never agree to pay anything over the phone. Always get things in writing when dealing with a debt collector. In most cases, offering to pay in full will typically result in a pay for delete agreement much more often than offering to pay less than the original amount owed.

Are Pay for Delete Letters Ethical?

Pay for delete letters have been labeled as a shady practice, and for good reason: it requires that collection agencies misrepresent the accuracy of their reporting to credit reporting agencies. That means collection agencies are in violation of the service agreement they have with credit reporting agencies if they accept a pay for delete.

Overall, pay for delete is detrimental to the fundamental purpose of the credit reporting system. If someone was unable to pay their balance and their account was sent to collections, paying after the fact and getting the account erased isn’t an accurate representation of his or her credit history. If a lender looks at said person’s credit report, it might deem him worthy to lend to when he’s been irresponsible with credit in the past.

To be clear, pay for delete letters are not illegal. However, remember that collection agencies aren’t required to acknowledge your request; they’re under no obligation to agree to a pay for delete.

Some will because they would rather get paid, and others might agree to settle on a lower amount because they don’t want the hassle. Don’t get your hopes up, though.

In general, we recommend being honest and not trying to game the system. Pay the debts you owe fair and square. If you find any information on your credit report that isn’t accurate, then use the steps outlined in this Credit Repair eBook to help you restore your credit to good standing.

Recommended Credit Boosting Alternatives

A goodwill letter is a good alternative to start with. It’s different from a pay for delete letter in that you’re admitting you were in the wrong, and are asking for forgiveness. A goodwill letter typically works well if you made a late payment, or if an honest mistake occurred and you’re trying to get it corrected. If you’ve had an account in collections for years, the chances of this alternative working aren’t as a great, but it doesn’t hurt to try.

If the collection agency is unwilling to do a pay for delete, they may be willing to settle for the amount owed. What this means is the negative mark will stay on your credit report (until seven years from the date of delinquency have passed), but it will show as “paid in full” or “settled,” depending on the arrangement agreed upon. This might not be as ideal as having the entire account knocked off your report, but it’s a minor improvement over having an unpaid debt on there.

Depending on the FICO scoring model being used, paid collections can improve your score and your chances of getting approved for a loan. FICO 9 won’t penalize you for paid collections accounts, but you will get dinged for unpaid collections (the exception is medical debt). FICO 8 doesn’t take unpaid collections under $100 into account.

Remember that information on your credit report will fall off after seven years. If you just found out about an unpaid debt because you checked your report, and the debt is several years old, you might be better off waiting it out as long as you’re not in the market for a loan anytime soon. The older a collection is, the less of an impact it has on your credit score, too.

Of course, you should also continue to do what you can to repair your credit. You might need to wait out the seven years it takes for black marks to fall off your credit report, but in the meantime, you should take action to maintain a good score for the future. Pay on time, don’t max out your credit lines, and borrow responsibly.

Conclusion

You can’t bribe your way to a perfect credit report. If the information on your credit report is accurate, then you should bear the consequences. Pay for delete letters aren’t guaranteed to work, and it can be difficult to try and get a collection agency to agree to it. Keep proving that you’re a responsible consumer using the methods outlined in this article, and hopefully your actions will show lenders that you’re a reformed consumer.

The post Pay for Delete Letters: Do They Work? appeared first on MagnifyMoney.

Personal Loans for People with Bad Credit

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Updated May 19, 2016

When your credit is less than satisfactory, it can be difficult to find a lender willing to give you a personal loan. That doesn’t mean it’s impossible to find one – there are more options available now than ever before to get a personal loan with bad credit. What’s better is you can easily apply online to see the rates for which you qualify.

That’s thanks to lenders such as Springleaf, Avant, and Lending Club. They each have lower credit thresholds and none rely solely on your FICO score when deciding to lend to you, making it easier to qualify.

Even though you might have a poor credit score, your actual credit history may not be that bad. Your credit file could be thin because you didn’t start building any credit until recently, or maybe you’ve only ever had one open line of credit. Whatever the reason, just because your score is low doesn’t mean you’re not creditworthy, and these lenders know that.

Therefore, it’s worth making sure you’re still getting a decent deal on personal loan terms. It can be easy to think that because your score is low, you’ll be approved for a less than ideal interest rate, but you shouldn’t accept the first offer that comes your way.

Let’s take a look at what these three lenders offer so you know what terms are available to you.

Avant Personal Loan

You can borrow anywhere from $1,000 to $35,000 with a personal loan from Avant*. Specific rates and terms vary depending on your state of residence, but in general, terms offered are 2 to 5 years, and APRs range from 9.95% to 39.95%.

An example loan repayment: if you borrow $3,000 with an APR of 36.00% on a 3 year term, you’ll have a monthly payment of $137.41.

Applying with Avant doesn’t affect your credit score – it’s initially just a soft pull. On its FAQ, it states most customers have a FICO score ranging from 600 to 700, though you can still qualify with a score of 580.

Its customer service team is on staff seven days of the week to assist you in case you have any questions. It’s also possible to receive your funds as soon as the next business day.

Avant’s personal loans are currently offered in all states except West Virginia, North Dakota, Iowa, and Maine.

There is no prepayment penalty or origination fee. However, if you’re 10 days past due on a payment, you’ll be charged a $25 late fee. Avant does mention it offers late fee forgiveness, though.

If your payment is returned unpaid, you’ll be responsible for a $15 fee each time your payment fails to go through.

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*referral link

Lending Club Personal Loan

Lending Club* is different than Springleaf and Avant because it’s a peer-to-peer lender. Individual investors can choose to put their money toward your loan – the money isn’t coming from a bank.

As with Avant, you can borrow anywhere from $1,000 to $40,000 with Lending Club. You can borrow for up to 5 years. Its APR ranges from 5.99% to 35.89%.

For example, if you borrow $20,000 on a 5 year term at an APR of 8.91%, your monthly payment will be around $185.24. That’s including an origination fee of 3% (or $600), so the total amount you receive would be $19,400.

There’s no prepayment penalty, but you need to watch out for the origination fees. These range from 1% to 6%, depending on your loan grade. Remember to factor this in when receiving offers, because being charged an origination fee lessens the amount of money you actually receive.

To be eligible for a loan with Lending Club, you must be 18 years or older and have a verifiable bank account. You must be a U.S. citizen, permanent resident, or have a valid long term visa. Your credit score should be at least 600 to qualify.

Lending Club does not offer loans in Iowa and West Virginia.

When determining creditworthiness, it takes the following into consideration:

  • Debt-to-income ratio
  • Credit score
  • Length of credit history
  • Number of open accounts
  • Usage and payment history
  • Other credit inquiries over the past 6 months

It has an A+ rating with the BBB and has been accredited since 2007.

LendingClub

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*referral link

Springleaf Personal Loan

Springleaf offers personal loans ranging from $1,500 to $10,000. You can apply for a secured or unsecured loan. You can also apply online and have a decision within a day.

Springleaf has been around for over 90 years, has an A+ rating with the BBB. It is a brick-and-mortar bank with over 800 branches across 27 states. Unfortunately, that means it’s limited to those with branches nearby, as you need to physically sign for the loan.

Its website has minimal information on APRs, terms, and fees for loans, but from the calculator provided, we know the APR range is 15.99% to 39.99%, and 2 to 5 year terms are offered.

Springleaf also has a track record for working with borrowers who have low credit. You need a minimum credit score of 550 to qualify.

What would an example loan look like? If you borrow $4,000 on a 3 year term, at an interest rate of 30%, your monthly payment will be around $169.81.

You can check to see if Springleaf has a pre-qualified offer for you, as it doesn’t affect your credit score. If you do accept its offer, then a hard credit inquiry occurs.

Springleaf

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*referral link

Which Lender is the Best Choice?

It’s largely going to depend on the rates you receive. Luckily, with Avant and Lending Club, you’re able to apply without a hard inquiry on your credit, which allows you to shop around without worry. It’s smart to start with these two lenders and see which of the two offers you better terms.

Here’s a side-by-side comparison of the rates and terms offered by all 3 lenders:

Criteria Springleaf Avant Lending Club
Amount Borrowed Up to $10,000 Up to $35,000 Up to $40,000
APR Range 15.99% – 39.99% 9.95%-39.95% 5.99% -35.89%
Length of Loan Up to 5 years Up to 5 years Up to 5 years
Min. Credit Score 550 550 600

Your best option is to shop around. You can apply to Lending Club, Prosper and Avant without hurting your score. We recommend you start there first.

If you need the money today and live near a Springleaf branch, that is your best option. But if you can wait a day, Avant is able to get the funds to you in one business day.

 

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 * We’ll receive a referral fee if you click on the “Apply Now” buttons in this post. This does not impact our rankings or recommendations You can learn more about how our site is financed here.

The post Personal Loans for People with Bad Credit appeared first on MagnifyMoney.

Upstart Loan Review: Low Rates for Recent College Grads

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Updated April 13, 2017

Upstart is an online lender offering unsecured, fixed-rate personal loans. Although it started as a lender targeting recent graduates, it has become a lender that offers loans to a wide range of credit profiles.

The founders of Upstart wanted to provide young adults that might not have a lengthy credit history with a way to lessen their debt burdens. To do this, it came up with an algorithm to determine creditworthiness based on education, career, job history, and standardized test scores. But Upstart is not only targeting young people with a limited credit history. If you have an excellent traditional (e.g. FICO) score, you should be able to find a good deal at Upstart as well.

Upstart is one of the few lenders who don’t focus entirely on your FICO score, which means its slightly more lenient when it comes to qualifying.

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How Do Upstart’s Rates Match Up?

The APR range is 6.37% – 29.99% (the origination fee of 1% – 6% is included in the APR). Upstart is competitive with LendingClub*, (5.99% to 35.89% APR). However, if you have excellent credit, you should consider SoFi instead (read our full SoFi review here). SoFi has very low rates and charges no origination fee.

While the range is large, if you have a decent credit score, you should be able to obtain a loan with an APR less than what you’d normally get with a bank or credit card.

You can see our round-up of the best personal loans here.

Personal Loan Details

Upstart’s minimum loan amount is $1,000, and its maximum loan amount is $50,000.

A 3-year and 5-year term is available.

If you took out a $10,000 loan, and were able to obtain a fairly good interest rate (say, 7.55%), you would end up paying $311.29 monthly.

What Requirements Do You Need?

While Upstart prides itself on taking education, area of study, and job history into consideration, they still require a minimum FICO score of 640. They also look at your debt-to-income ratio, and you need to be in good standing on all of your accounts to qualify. You can’t have any accounts in delinquency or collections.

If you have insufficient credit history, Upstart will take your application into consideration.

There is no minimum income required to qualify, but you do need to have a debt-to-income ratio of less than 50%.

You also need to have a degree from an accredited institution or be graduating within the next 6 months. Otherwise, you must be accepted to a supported bootcamp starting within 3 weeks from when you apply for the loan, and be actively seeking employment upon graduation from the bootcamp.

Having a full time job (or a full time job offer starting in six months), or another source of regular income is recommended.

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The Fine Print: Fees

There are fees associated with Upstart. First, there is a loan origination fee, ranging anywhere from 1%-6%, depending on the grade of your loan. This fee is rolled into the APR.

Next, if you fail to make a payment within 10 days of your due date, you can be charged a late fee, which is the greater of 5% of the past due amount or $15. If you don’t make any payments within 30 days of the due date, Upstart will report your loan as delinquent to the credit bureaus.

If you prefer to pay by check, you will incur a $15 check processing fee.

If your check bounces, or you have insufficient funds in your bank account, you’ll incur a $15 fee.

There is no prepayment penalty.

What Documents Are Needed to Apply?

You’ll need the standard color photo ID, proof of employment, and proof of income. If you have regular sources of income from full time or part time jobs, you can upload your most recent paystubs.

If you earn any bonuses or commission, you need an offer letter that lists target bonuses or a commission structure that lists target commission levels.

If you have rental income, you’ll need your lease, which should show your full name, monthly amount, and lease term.

If you have side gigs (such as income from being an Uber or Lyft driver), you’ll need to have earned a consistent income for six months before Upstart can take it into consideration. If you meet that requirement, you just need to upload the proof of six months of consistent income.

If you’re self-employed and a sole proprietorship, you’ll need a copy of last year’s tax return and this year’s invoices. They’ll look at Line 31 of your Schedule C.

If you’re involved in a partnership or LLC, you’ll need last year’s personal tax returns that show your portion of income and this year’s invoices.

You might need to provide bank statements or proof of home ownership (if you own a home), but this will vary on an individual basis. Once you complete the application, Upstart will notify you of what you need.

Additionally, if you graduated within 4 years of your application date, you’ll also need your standardized test scores, which you can take a photo of, or take a screenshot of online, and a copy of your transcript.

Who Benefits the Most from Upstart?

Upstart is a great solution to those in their twenties who are finding it difficult to obtain a reasonable personal loan elsewhere. Their interest rates are competitive with the other peer-to-peer lending companies, plus they’re willing to lend to those who have thin credit histories, whereas many companies are not.

If you’re a young adult who doesn’t have a lengthy credit history, but has a decent credit score, and are looking to pay off debt (credit card, medical, auto, or student loans), or finance a larger purchase (such as a wedding or travel), then Upstart’s personal loan is a good fit.

Lastly, if you fit this profile and need a loan quickly, accepting your loan before 5pm ET means you’ll have the funds in your account the next business day (unless you’re paying off private student loans). The entire process is efficient and done completely online.

Remember: if you don’t accept the loan, you won’t receive a hard inquiry on your credit report, only a soft one. In any case, borrowers typically have a 45-day window to shop around for personal loans. Credit bureaus recognize that you’re attempting to get the best rate possible, and will count all inquiries during this time as one inquiry.

If Upstart doesn’t sound like the right fit for you, then explore other personal loan offers with our customizable table

The post Upstart Loan Review: Low Rates for Recent College Grads appeared first on MagnifyMoney.

Best Tax Software of 2016 to Save Money

Tax return check

It’s tax season, and if you’re like most people, you’re dreading it. Gathering all your paperwork, crossing all your t’s, dotting your i’s, and forking over a bunch of money to your accountant might make receiving a refund look less attractive.

However, filing earlier is better. The longer you wait, the higher your risk of identify fraud is, and the more expensive tax preparation software gets. The good news is if your tax situation is simple, there are plenty of ways to take control of filing your taxes, and for less money!

Do you only need to file a 1040? Then you’re in luck. The IRS has approved a number of tax preparation software for free federal filing, provided your adjusted gross income meets the requirements.

Need something with a bit more detail? We’re taking a look at the top five tax preparation software, and comparing all the different packages to figure out which is the best deal.

What Makes Tax Preparation Software Great?

There are plenty of options out there to choose from when it comes to tax preparation software, and the pricing is often tricky to navigate. Trickier than it needs to be, anyway. That’s where we come in. We’re breaking down all the costs and fees and giving you a straight recommendation on which tax software to choose.

The following criteria are what we were on the lookout for when choosing each:

  1. Price: Base prices, prices to file a state return, and prices to file a federal return (when applicable)
  2. Cost of add-ons: Are different tax forms, such as Schedule A’s, E’s, and D’s more money?
  3. Customer service availability: Filing your taxes can still be a complicated process. It helps to have a representative to call for free with any questions you have.
  4. How payment is received: Most people prefer to receive their refund electronically, but some companies offer pre-paid debit cards.
  5. Is audit help available after filing? In case you find yourself getting audited by the IRS, it helps to have professionals on your side.
  6. Importing prior returns: Having the ability to import your prior returns is great if your situation hasn’t changed much as it cuts down on the amount of time it takes to file.

For the purposes of this article, we’re covering details that matter to an average family with two income earners, who have dependents, and aren’t business owners in any way.

Feeling a little overwhelmed? Before you go through this guide, you can also go to the IRS website to see what software is recommended for you so you have a starting point. You’ll also get information on which one you qualify with to file for free.

Before you jump to an online tax preparation software option, see if you can file for free

Before you get started, double-check to see if you qualify for free filing. This could include:

  • If you make less than $100,000 and can file with a 1040EZ
  • You’re 60 years of age or older with low to moderate income
  • You have an AGI of $62,000 or less
  • You have an AGI of $54,000 or less, are disabled or have limited English

Check all your options here.

Self-employed? Then find your best options here.

Learn about free tax filing for for every state online here.

Best for Low Cost, No Frills: FreeTaxUSA

FreeTaxUSA

 

 

FreeTaxUSA emphasizes its straightforward pricing. It offers the basics for less, without all the bells and whistles. It’s a decent tax preparation software if you’re used to filing your own taxes, but the website itself isn’t very user-friendly. Its FAQ database isn’t presented well, so it may take a bit longer to find the answers you need. That said, if price is your top concern, it’s worth considering.

Price

FreeTaxUSA has its services divided into two categories: free and deluxe. Free is free for the most part, although you’ll pay $12.95 to file a state return on either plan. However, it doesn’t matter how complicated your tax situation is – you’ll pay the same no matter what.

The deluxe plan is only an extra $5.95, and it includes a few more options detailed below.

Cost of add-ons

While FreeTaxUSA has an affordable “base” price, there are a few add-ons you can choose if you need to. You’ll pay $9.95 for an amended return under the free plan, and it’s included in the deluxe plan.

You can also pay $5.95 for priority customer support on the free plan, though it comes included in the deluxe plan. Paying $5.95 to upgrade to deluxe makes sense if you want access to live chat and audit assist as well.

Customer service

Free unlimited customer support is offered for the free plan. Priority customer support with the deluxe plan means going to the “front of the line” whenever you have a question, and the live chat is available during tax season every weekday from 9AM-9PM ET.

How you can receive payment

You can receive your tax refund via direct deposit or check.

Audit Support/Guarantees

FreeTaxUSA only offers audit support to those who purchase the deluxe plan, but this doesn’t provide you with hands-on help like some of the audit services offered by other companies. Instead, you can speak with an audit specialist who can address your notice and provide you with information on how to rectify it.

It doesn’t look like FreeTaxUSA offers a maximum refund guarantee, but it does offer an Accuracy Guarantee. If there are any miscalculations on your tax return, it will reimburse you for any penalties and interest incurred. You have to write to FreeTaxUSA within 45 days of the error being discovered to get this reimbursement, though.

Importing prior returns

If you have filed a tax return with FreeTaxUSA previously, you can import the information over for free.

Overall Verdict

FreeTaxUSA is a good, no-frills budget option for those who are first-time filers, those with simple tax situations, or those who don’t need as much guidance in filing their taxes. If you found yourself overwhelmed at the number of packages available with other tax preparation software, FreeTaxUSA provides a less complicated solution.

Best No Frills and Easy to Use: TaxSlayer

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TaxSlayer might not be a household name, but its tax software has been in use since 1998. It claims to have helped prepare millions of returns for Americans and started off as a family-owned tax preparation business. The website is very user friendly and modern compared to some of the other choices.

Price

Unlike other tax preparation companies, TaxSlayer only offers online products, making it easy to compare each:

  • Free basic edition: You can electronically file a 1040 EZ return for free, although the state return costs $23.99 for the first return, and $14.99 for each additional state
  • Classic edition: $12.99, and the state return costs $14.99
  • Premium edition: $34.99, and the state return also costs $14.99

Cost of add-ons

There’s not a huge difference between what’s offered for each edition. The biggest difference is in the level of support each receives.

As a classic edition user, you have the ability to import your return from the prior year, and to compare that return to your current one.

Going premium gives you priority access to customer support in the form of chat and jumping ahead in the phone lines.

As you can see on the comparison page, both the classic and premium edition comes with “all major forms,” which are listed here.

Customer service

The basic plan includes free email support and live phone support, which is nice to see. Live chat and “ask a tax professional” is only offered for the premium edition.

How you can receive payment

You can receive your refund via direct deposit or check. In some cases, you can have your state refund put on a pre-paid debit card.

Audit Support/Guarantees

TaxSlayer offers a guaranteed maximum refund, in which they’ll refund you the purchase price you paid if you get a larger refund using another tax preparation software.

It also guarantees its calculations, and will reimburse you for federal or state penalties and interest charges.

However, audit assistance is only available to those who purchase the premium edition.

Importing prior returns

TaxSlayer only allows classic and premium users to import prior tax returns filed with TaxSlayer.

Overall Verdict

One drawback to TaxSlayer is that it’s not supported in every state, so check to see if you can file by using this map from its website.

Other than that, its product offerings are fairly straightforward. If you don’t think you need much guidance and don’t have a complicated tax situation, choose the free edition. If you need a little extra support, go with classic, and if you want to get the best level of support, choose premium.

Read full TaxSlayer review here.

Best Options for Audit Protection: TurboTax and H&R Block

It’s a fairly low probability you’d be picked by the IRS to get audited, especially with straight-forward taxes. However, if you still feel the need to pay for the extra protection, and recognize you will pay a premium for the service, these are your best options.

TurboTax

 

 

Most people have heard of TurboTax as it’s one of the larger giants out there. If you’ve been a customer for the past few years, you might remember the confusion surrounding its pricing in 2015.

There are a lot of layers to the product offerings, and there are four different packages to choose from for both online and CD products. Let’s look at each.

Price

These prices are for TurboTax’s online products:

  • The federal free version allows you to file state and federal for free if you’re filing a 1040EZ/A
  • The deluxe version is $34.99 (down from $54.99)
  • The premier version is $54.99 (down from $79.99)
  • The home & business version is $79.99 (down from $104.99), but this is primarily for business owners

Note that filing with the state is an additional $36.99 across the board (aside from the free version).

These are the prices if you want to buy the CD product:

  • Basic: $29.99
  • Deluxe: $59.99
  • Premier: $89.99
  • Home & Business: $99.99

For the basic plan, filing with the state is an extra $39.99, and if you want to file electronically, it’s an additional $19.99.

For all other CD plans, one state file is included. Additional states are $39.99, and e-files are still an additional $19.99. You can file an unlimited amount of federal tax returns, and you can e-file up to 5 federal returns for free.

Cost of add-ons

There’s a $20 difference between the deluxe and premier version of TurboTax – is it worth paying for?

As you can see on the pricing page, the premier package offers investments and rental property income, whereas deluxe doesn’t. If rental property isn’t something you’re concerned with, or if you’re not an active investor, then you’re safe sticking with the deluxe version.

The deluxe version is listed as the most popular. If your tax situation isn’t simple enough to file a 1040EZ/A, or if you want to itemize, or if you have charitable contributions you want to deduct, it’s worth paying for.

Customer service

You can talk to a tax expert as long as you pay for an online TurboTax product. Tax experts aren’t available for those filing with the free federal offering. Within the fine print, it says “fees may apply” when speaking with a tax expert.

Product experts are available for those who purchase CD products.

How you can receive payment

You can choose to get your refund via direct deposit, check, or a pre-paid Visa card.

Audit Support and Guarantees

TurboTax guarantees that you’ll get the maximum refund available to you using its software. If you happen to get a larger or smaller tax amount due by using another preparation method, it will refund you the purchase price you paid. Those using the free version will receive a payment of $14.99 and a refund of the state purchase price paid.

TurboTax will also cover any penalties and interest incurred if there are calculation errors found by the IRS.

Lastly, it offers an Audit Support Guarantee in the form of free year-round audit support guidance from a tax professional.

Importing prior returns

TurboTax allows you to import last year’s tax return if you’ve used TurboTax before, but it will also import information from H&R Block or TaxAct online software.

You can import your W-2 straight from your employer if you have its EIN, or you can take a picture of it and upload it.

Overall Verdict

Make things easier on yourself by choosing an online product. TurboTax says in its FAQ that the CD products are a better value for those filing multiple returns (for family and friends), but if you’re just looking to file for your family, then you’re better off with an online product. The deluxe version is a safe bet for the average family.

Read full TurboTax review here.

H&R Block

 

 

H&R Block is another household name, and it argues that it’s the cheapest software in town – not TaxAct. It has a comparison chart on the main page of its website to illustrate this. Let’s investigate.

Price

For online products:

  • Free: Filing federal taxes is free, though you’ll pay $9.99 to file per state
  • Basic: $24.99, and $36.99 per state
  • Deluxe: $34.99, and $36.99 per state

All online products come with free federal e-file, however, TaxAct’s free plan gives you a free federal and state return, whereas H&R Block’s doesn’t. That said, H&R Block’s free version offers more options.

For downloads:

  • Basic: $19.95, and $39.95 for state
  • Deluxe: $44.95, and $39.95 for state
  • Premium: $64.95, first filing for one state is included

All downloadable software comes with 5 free federal e-files. State e-files are $19.95 each for all versions, though additional state filings are $39.95 each.

Cost of add-ons

H&R Block highlights that it offers the Schedule A form for free on its basic plan, whereas other companies offer it with their plus or deluxe packages.

That’s certainly a highlight, though you might want to consider upgrading from the online free plan to the basic plan if technical support, storage of your tax return, and importing your tax return from last year is important.

The deluxe plan is $10 more, and you get access to mortgage interest deductions as well as reporting investment income, and guidance on how to optimize your taxes with charitable donations.

The downside is reporting rental property income is only available to premium users, and it’s offered at a lower tier elsewhere.

As for downloadable products, the deluxe plan offers the same advantages over the basic plan, although you also get one free state filing.

Consider upgrading to premium if you need a Schedule E for rental property income, or if you received an inheritance this past year.

Customer service

Free technical support and free, unlimited tax advice from an expert is offered across all plans except the free version.

How you can receive payment

You can get your refund via direct deposit, check, or put it on an Emerald Card Prepaid MasterCard.

Audit Support and Guarantees

H&R Block offers a maximum refund guarantee, and if “another online tax preparation method” gives you a larger refund amount, or shows you owe less, it will refund the purchase price of the software.

It also has an Accurate Calculations Guarantee, which means you’ll get reimbursed up to $10,000 if the IRS finds any mathematical errors on your return. H&R Block covers the penalties and interest.

The audit is where H&R Block shines. It offers a free in-person audit consultation if you filed with H&R Block and receive a notice from the IRS.

Importing prior returns

You can import last year’s tax return if you filed with H&R Block, TurboTax, or Quicken.

A Word of Caution With the “Bonus” Refund

H&R Block is running a promotion to get a “bonus 5% or 10%” on top of your refund. A look at the fine print reveals it’s not that simple.

First, you must choose a $100 increment from your federal tax refund to put toward buying an e-gift card. H&R Block will then put an extra 5% or 10% (depending on the software you’re using) toward the purchase of the gift card.

Unfortunately, it’s not a flat bonus. If you’re planning on using your tax refund to pay down debt or increase your savings, you might not benefit from this.

Overall Verdict

H&R Block offers free in-person audit assistance and a Schedule A form on its lower tier. If your tax situation isn’t that complicated, but you want to itemize, H&R Block may be a good solution. If you want to report rental property income or investment gains, then you should look elsewhere.

Read full H&R Block review here.

Best Option to Lock-in Low Filing Price: TaxAct

TaxAct

 

 

TaxAct is another big player in the tax preparation software industry. It also claims to be one of the least expensive options out there. Let’s see what it has to offer.

Price

For online products:

  • Free: Free is free. If you’re filing a 1040 EZ/A, you don’t have to worry about paying for federal or state
  • Basic: $9.99, state is an additional $9.99
  • Plus: $14.99, state is an additional $14.99
  • Premium: $21.99 (usually reserved for self-employed individuals), state is an additional $14.99

For download products:

  • Free: Again, if you have a simple tax situation, you can file your federal taxes for free. You’ll pay an additional $14.99 for each state
  • Basic: $19.99, includes 5 free federal e-files and 1 state return
  • Plus: $29.99, includes 5 free federal e-files and 1 state return
  • Premium: $39.99, includes 5 free federal e-files and 1 state return

There’s also an “all-state” version available for $59.99, but you likely don’t need this unless you moved a lot during the past year, or are filing for multiple people.

If you’re interested in comparing TaxAct to TurboTax and H&R Block at a quick glance, it provides this chart on its website.

Cost of add-ons

For the purpose of this review, we’ll focus on comparing the free, basic, and plus plans.

The only upgrade you get when choosing the basic plan over the free plan is the ability to import last year’s tax return (if you filed with TaxAct). Online users will also get a “Price Lock Guarantee,” which means whatever the price of the product is at the time you begin filing is what you’ll be charged. Prices are known to increase the closer it gets to tax day.

When you upgrade from basic to plus (a $5 increase with online software, or $10 increase with downloadable software), you gain access to Schedule A, D, and E, meaning you can itemize, report gains and losses from investments, and report rental property income. You can also import donations made.

Customer service

If you choose the free option, you’ll have access to free email help. All other plans get access to email and phone support.

How you can receive payment

You can receive your refund via direct deposit, check, or an American Express Serve reload card.

Audit Support and Guarantees

TaxAct guarantees that you’ll receive the largest refund if you file with its software. If you don’t, it will refund you the purchase price of the software. If you’re filing using the free version, you’ll receive $4.99.

To obtain a refund, you’ll have to write to TaxAct within 60 days of filing.

TaxAct also guarantees its calculations, so if the IRS spots an error, TaxAct will pay for it (penalty and interest included).

If you’re audited, TaxAct offers an Audit Assistant website you can use, but you can also email or fax for additional (personal) assistance. It doesn’t make any mention of additional fees for this service.

Importing prior returns:

TaxAct can import last year’s tax return if you filed with TaxAct, though this isn’t available with the free version.

Overall Verdict

TaxAct is certainly one of the cheaper options, and it offers many of the same services as TurboTax and H&R Block. If your tax situation is on the simple side, but not simple enough to file for free, go for the basic or plus online product, or the basic download product.

If you want to itemize deductions and have rental property income or investment information to report, then you should choose the plus version.

Which Should You Pick?

This answer greatly depends on your needs. As we mentioned at the beginning, you can visit the IRS website and fill out a short survey that will point you in the right direction. Most of these companies also offer to guide you to the right product if you select the situations that apply to you.

As a general rule of thumb, if you’re a newer filer or recent graduate, you can likely get away with filing on any of the free versions offered (or if you meet the requirements to file for free).

If you’re part of a dual-income family, have dependents, have made charitable contributions, need to itemize, or need a Schedule D or E, the plus or deluxe plans should cover you.

In most cases, you won’t need more than that. The top tier offerings are reserved for those who have businesses or a lot of money being shuffled around. Don’t pay for more when you don’t have to.

Be sure to compare prices carefully if you’re stuck between two companies. As you can see, some include state and federal filings, while others don’t. Not all plans are created equal – TurboTax’s deluxe version may not have the same options as H&R Block’s.

Hopefully you have a better idea of what tax preparation software you should choose. Don’t procrastinate on the decision, though. Remember that prices increase around March, and it’s better to have your money working for you than with the government!

The post Best Tax Software of 2016 to Save Money appeared first on MagnifyMoney.

How to Set Up Your Student Loans on REPAYE

college-grad (1)

Have you looked into the Pay As You Earn (PAYE) Repayment Plan offered by the U.S. Department of Education, only to realize you don’t qualify? Then you’ll be interested to know about the Revised Pay As You Earn (REPAYE) Repayment Plan.

PAYE is only available to borrowers who took out student loans from the Federal government after October 2007. Unfortunately, that restriction excluded about 5 million borrowers that could have otherwise benefitted.

The solution for those 5 million borrowers is REPAYE. Regardless of when you took out student loans, you can apply for this Income-Driven Repayment Plan.

What’s the Difference Between PAYE and REPAYE?

Other than the eligibility requirements, there are a few differences to be aware of. Under PAYE, your monthly payment is capped at 10 percent of your discretionary income, and it will never exceed your payment under the 10-year Standard Repayment Plan. REPAYE, on the other hand, only caps your monthly student loan payment at 10 percent of your discretionary income, there is no guarantee to keep you from paying more than what you would under a 10-year Standard Repayment Plan .

This is an important distinction. According to the U.S. Department of Education, if your income were to rise substantially, you may eventually pay more under REPAYE than you would under the 10-year Standard Repayment Plan.

You may know that Income-Driven Repayment Plans qualify for forgiveness after 20 or 25 years. The same holds true for REPAYE. If you hold an undergraduate degree, your loan balance will be forgiven after 20 years, and if you hold a graduate degree, your loan balance will be forgiven after 25 years. Under PAYE, loan balances are forgiven after 20 years. Just remember that the amount forgiven may be subject to tax.

If you’re married, it doesn’t matter whether you file jointly or separately. Income documentation for your spouse and yourself is required upon applying. With PAYE, you only need to supply income documentation for you and your spouse if you file jointly.

[Lowering a student loan payment after filing a joint tax return]

One last difference occurs in what happens when your payment isn’t enough to cover the interest that accrues on your balance. On subsidized loans under REPAYE, you’re not responsible for paying the difference between your monthly payment and the remaining interest that accrues for the first 3 consecutive years. Further, after those 3 years have passed, you’re still only responsible for paying half the difference. PAYE only offers the benefit of not having to pay the difference for the first 3 consecutive years.

Why Should I Sign Up Under the REPAYE Repayment Plan?

There’s no reason not to see if you qualify for REPAYE, as it doesn’t have extra income eligibility requirements like other Income-Driven Repayment Plans. As with any repayment plan, you want to make sure it’s a good solution for you.

How do you do that? Use the Repayment Estimator offered by the Department of Education. At a glance, it will tell you what repayment plans are available to you, and what your estimated monthly payments would be under each.

If you’re already on an Income-Driven Repayment Plan, but didn’t qualify for PAYE, make it a point to see how your payments would change under REPAYE.

[How to set up IBR, PAYE and ICR repayment plans]

REPAYE is the Best Repayment Plan for me – How do I Sign Up?

The government has been working to make it as easy as possible to switch repayment plans, and you can do so by filling out a form online.

To start, you’ll need your FSA ID to sign in. If you know your login information, head to the main page of studentloans.gov here. There will be a small box with a green “Log In” button – click this to enter your username/email and password.

REPAYE 1

If you haven’t created an FSA ID, or don’t remember your information, don’t worry. You can have a security code sent to your email, or you can answer 3 of 5 challenge questions correctly to reset your password. Creating an FSA ID requires you to fill out a short form.

REPAYE 2

Once you’re in, you may be prompted to review your account settings. Give those a look over; agree to the terms, and then save your changes.

You should get sent to a page that looks like this, with your personal information on the right side:

REPAYE3

You’ll then be on a page that briefly explains what Income-Driven Repayment Plans are. Click the green “Start Application” button if you’re ready to apply, or use the link above the button to preview the application to make sure you have everything you need.

REPAYE 4

As you can see from step 2, the most important information to have on hand when filling out the application is your Adjusted Gross Income (AGI). The application allows you to import that information using the IRS Data Retrieval Tool, but it’s good to be aware of in case there’s a discrepancy.

If you’re unable to use the IRS Data Retrieval Tool, you’ll have to fill out a paper application. There’s another note that says: “If you are married, file a joint federal tax return with your spouse, and have separated from your spouse or can no longer access your spouse’s income information, then do not complete this request on StudentLoans.gov. Instead, call your servicer and request special instructions.”

Assuming you can continue, you’ll notice the application is divided into four parts: Application Information, Income Information, Personal Information, and Review & Sign.

REPAYE 5

Application information should take you seconds to fill out:

REPAYE 6

Next up is importing your income information from the IRS. Click “Link to IRS” to continue with your application:

REPAYE 7

You’ll be taken to IRS.gov, and you’ll find some of your basic information is already filled out. Complete the rest of the application as needed.

Once that’s done, you have the option to transfer the information over to your application. Review your AGI before transferring to ensure that it’s accurate.

When you’re back to the application, you’ll be asked if your income has drastically changed since you filed your last tax return – choose yes or no depending on your situation.

At this point during the application process, you’ll see which repayment plans you qualify for (if any). As REPAYE doesn’t have income eligibility requirements, you should see estimated monthly payment amounts listed there. Double check that the “current loan balance” listed for your student loans is correct, too.

If you’re not familiar with Income-Driven Repayment Plans, take a moment to look at the explanations about each on this page. Several questions are answered in the “more information” links:

REPAYE 8

Happy with your results? Then you can scroll to the bottom and choose to enroll in the plan that will grant you the lowest monthly payment amount, or manually select which repayment plan you want to be considered for.

REPAYE 9

You’ll notice that your loan servicer is mentioned here. As an alternative to filling out this application, you can call your loan servicer and request to be put on a different repayment plan as well. They’ll be able to educate you on the options available so you can make the best repayment decision for your situation.

Once you move on, you’ll be asked to review your personal information such as your address, email, and phone number. Make sure these are all up to date before continuing.

You’ll have one final chance to review all the information you’ve given, and there are additional notes at the bottom if you want to read the “fine print.” If all the information is accurate, electronically sign the application and submit it for consideration.

Overall, the application isn’t very difficult to fill out – it took me around 10 minutes. Take your time in understanding what you’re signing up for, and reach out to your student loan servicer if you have any questions about the different repayment plans available. Keep tabs on your student loan accounts as well – it may take some time for the new payments to go into effect, and you don’t want to accidentally miss a payment or pay less while your request is processing.

Did You Get Approved? You’ll Have to Reapply Next Year

One last thing – if you’re approved for an Income-Driven Repayment Plan, you’ll need to “recertify” your income each year. This makes sense, since your payments are based off of your AGI. If it changes, your monthly payment will change.

You’ll go through the exact same process, but be sure to set a reminder for yourself so you don’t forget to renew.

The post How to Set Up Your Student Loans on REPAYE appeared first on MagnifyMoney.

Review: Navient Student Loan Servicer

college-grad (1)

Navient’s company name is new, but its services are not. In 2009, Sallie Mae began servicing Federal student loans on behalf of the Department of Education, and in 2014, Navient separated from Sallie Mae to continue as the loan manager branch of the company.

It helps 12 million customers with their federal and private student loans. If you’re one of those customers, continue reading to find out what Navient offers, and how you can resolve a dispute if a problem arises.

Overview of Navient

Navient claims its customers “default at a rate 30 percent better than the national average” because it provides a wide range of financial tools on its site. Let’s see if it lives up to that claim.

First, Navient offers a “Protect Yourself From Fraud” section, which is great to see from a student loan servicer. Lately, many student loan debt relief scams have been making the rounds. These third-party companies offer to lower your debt, get your debt forgiven, or enroll you in a different repayment plan – all of which you can do for free with the help of your servicer. Navient does a good job of explaining what you need to be aware of and how you can avoid getting scammed.

[Learn more about student loan debt relief scams here]

There’s also a section on renewing Income-Driven Repayment Plans, which is important to know if you’re enrolled in one. You don’t have to fully re-apply each year, but to stay enrolled, you need to provide the Department of Education with updated paperwork “certifying” your family size and income. Navient gives you all the details you need, including how to renew and what documents you need. Some borrowers aren’t aware they need to go through this process and may temporarily lose access to the Income-Driven Repayment plan because they fail to send in the necessary paperwork.

[How to set up an income-driven repayment plan]

If you’re experiencing financial difficulty, Navient has an entire section on what you can do if you’re having trouble paying. This includes a list of options for both federal and private borrowers, and contact numbers for Navient so you can talk to a representative about which option is best for you.

One of the most frustrating things to deal with as a borrower is how your payments are applied to your loan. Navient breaks this down depending on what type of loan you have, and if you have a single loan or multiple loans. There’s a section for federal and private loans.

Along with these articles pertaining to repayment of your student loan debt, Navient offers brochures of financial tips you can use to manage your money while paying off your debt. It offers helpful money management tips, strategies to help you save more, a budget worksheet, and a financial goal worksheet, both of which you can fill out. Additionally, Navient has partnered with EverFi to provide an educational course called “The Navient Path to Success!” that customers have access to.

Navient also has a very user-friendly website. It’s extremely easy to navigate and the information is presented in a clear way.

What Borrowers Are Saying

Navient has a few customer testimonials on its website, but those are curated. If you’re looking for real opinions, you might want to check the BBB, or reviews from bloggers who have Navient as their student loan servicer.

A customer posted a review on Consumer Affairs explaining that Navient had sent out two consolidation packets and mixed the names and addresses up. She received someone else’s packet, and that person had her husband’s. Highly sensitive information was contained in the packets, and upon calling the Fraud Department at Navient, she found the number wasn’t working.

Not surprisingly, others report having issues only after Navient took over from Sallie Mae. Many borrowers were paying their loans down with Sallie Mae without a hitch, but when Navient took over, payments didn’t get processed properly. In some cases, payments also weren’t getting automatically withdrawn when borrowers signed up for autopayment.

The BBB website shows 2,006 complaints closed within the last three years, with 787 of those closed within the last 12 months. By far, the most common issue borrowers cite is billing and collections, with over 1,300 complaints filed there. The runner up is problems with the product or service, with over 600 complaints filed.

One borrower said he called Navient to ask about the public service loan forgiveness program and a representative responded that they couldn’t help with that or “reconsolidation.” (Meanwhile, the website says to call to change your repayment plan.) There are additional complaints about payments not showing up. Some borrowers have had to provide proof of payment, and Navient has insisted that they didn’t pay, or have taken an extended period of time to apply payments.

There’s also the fact that the government sued Navient for overcharging on interest, specifically to service members. These borrowers are entitled to a 6% interest cap for loans taken out before their service begins, and Navient was ignoring the cap.

How to Resolve a Dispute With Navient if You Have Federal Student Loans

Borrowers with federal student loans must first go through Navient before they can enlist the help of the Student Aid Ombudsman Group (information below). It’s clear from some of the complaints filed by borrowers that you might want to ask to speak to a supervisor if the representative isn’t helping you.

If you’re not 100% sure what the cause of your problem is, Navient has quite a bit of information on its website, and you should try researching your question there first. Once you have a basic understanding of what should be happening, call customer support and explain your issue. Make sure you keep a pen and paper handy so you have a record of your communication.

If you aren’t satisfied with the representative’s answer, ask to speak to a manager, or try calling back to speak with a different representative. It’s unfortunate you might get better results this way, but it’s worth trying to get your issue resolved quicker.

Depending on the type of loan you have, you’ll have to call or write to a different address. Navient has its contact information listed here.

For federal loans with the U.S. Department of Education, call 800-722-1300 or write to:

Navient U.S. Department of Education Loan Servicing
P.O. Box 9635
Wilkes-Barre, PA 18773-9635

Note – this is the address for general correspondence, so don’t send payments there! You can also fax documents to 866-266-0178.

Additionally, Navient says it’s active on various social media platforms, and you can try making your issue known there. Just be sure to follow the guidelines Navient has set, otherwise your post may be deleted.

Before taking any action, you should look at this list of common problems student loan borrowers face. The Department of Education put this together, and it may help if you’re trying to figure out what steps you need to take before contacting customer service.

Getting Help From the Student Aid Ombudsman Group

Before going to the Student Aid Ombudsman Group, you need to have the proper documentation and proof that you’ve been corresponding with Navient. Think of it like preparing for a court case (only a little less serious) – you want to have everything you need to present your case to the Ombudsman.

Thankfully, the Department of Education has a few documents to help you with this. In fact, you must complete this checklist before contacting the Ombudsman. It’s easy to understand, and will help direct you to a solution if it can be resolved without the help of the Ombudsman.

Once you’re ready, you have a few choices as to how you contact the Ombudsman. The easiest way is to fill out this online form at the Department of Education’s website. That page also lists the contact information for the Ombudsman, which is as follows:

Phone: 1-877-557-2575
Fax: 202-275-0549

Address: U.S. Department of Education
FSA Ombudsman Group
830 First Street, N.E., Mail Stop 5144
Washington, DC 20202-5144

One last word about the Ombudsman – your representative will not immediately side with you. The Ombudsman’s job is to get to the bottom of the dispute and to ensure there’s enough documentation provided by both sides to reach a resolution. The Ombudsman is more of a mediator than an advocate. If she finds that Navient is in the wrong, then she’ll assist you in rectifying the situation, but don’t assume that’s what will happen.

How to Resolve a Dispute With Navient if You Have Private Student Loans

The Consumer Financial Protection Bureau takes complaints from borrowers with private student loans. It’s similar to the Student Aid Ombudsman Group, as it will try to get an answer from Navient on your behalf. However, the CFPB has been taking action to crack down on misbehavior by private student loan lenders and servicers, so your complaint will be taken into consideration.

While you can go to the CFPB immediately, if you’d like to try and contact Navient before escalating the issue, you can find the contact information on this page by scrolling down.

Otherwise, all you need to do is fill out a five-step complaint form with the CFPB online. You can also give the CFPB permission to use your complaint on consumerfinance.gov so others are aware of the issue you’re experiencing.

Once you’ve completed the form, your complaint will be forwarded to Navient, and the CFPB will issue a tracking number to keep you updated on the status of the issue. It shouldn’t take longer than two weeks to hear back, but set your own reminders so you don’t forget to check in.

Keep Communication Open With Navient

All student loan servicers have their faults, but no matter what, they’re the ones servicing the loans. As a borrower, it’s your job to keep in contact with Navient. Miscommunication happens, and as a consumer, you must look out for yourself. Check your free credit reports (annualcreditreport.com) three times a year to ensure nothing is being reported incorrectly by Navient, and always stay on top of your transactions so you know if a payment hasn’t gone through. The sooner you contact a representative about an issue, the quicker it can get resolved.

The post Review: Navient Student Loan Servicer appeared first on MagnifyMoney.

Review: Oklahoma Student Loan Authority (OSLA) Servicing

mortar board cash

Oklahoma Student Loan Authority (known as OSLA) Servicing is a not-for-profit company that began servicing federal loans in July 2012.

The U.S. Department of Education transferred Direct Loans that were previously assigned to the Direct Loan Servicing Center (ACS) and in repayment status to OSLA. It also services FFELP loans.

Overview of OSLA Servicing

At first glance, OSLA’s website looks a bit outdated. It’s not as user-friendly as some of the other federal loan servicers. That doesn’t mean there isn’t useful information contained on the site.

One of the first things you might notice at the top of the page is the alert: “Approach with caution 3rd party debt relief offers.”

OSLA 1

This links to a valuable blog post the U.S. Department of Education wrote on the subject, which we’ve also covered. In short, if you’re contacted by a third party company offering to relieve you of your student loan debt burden for a fee, walk away. You can do everything they’re offering you on your own for free.

As you can see, right above that notice is a tip on how to identify what type of loan you have. OSLA primarily services Direct Loans, but it also services FFELP loans, which have a separate login page. The Direct Loan login is right underneath that warning.

If you’re looking for any type of form for your student loans, OSLA has one page for all of them. This includes forms to request a certain repayment plan, to apply to an Income-Driven Repayment Plan, to request forbearance or deferment (there are different forms for each reason), and to request forgiveness or discharge. There are also two separate forms specifically for FFELP loans as well. It’s nice to have the forms located on one page so you don’t have to search around on the U.S. Department of Education website for them.

[How to Set Up an Income-Driven Repayment Plan]

OSLA has some information on Public Service and Teacher Loan Forgiveness here, so you can see which requirements you need to meet before applying.

What Borrowers Are Saying

OSLA has a customer service satisfaction survey on its site, although it doesn’t provide the number of people surveyed or how the results were received.

OSLA 2

For the most part, borrowers surveyed said the customer service they received was either good or excellent.

How do actual reviews compare? There aren’t many out there compared to the other student loan servicers.

There are two Better Business Bureau profiles, one for OSLA Student Loan Servicing and one for Oklahoma Student Loan Authority. The first has 13 complaints closed with the BBB in the last 3 years, 2 of which were closed in the last 12 months. The second has 2 complaints in the last 3 years, none of which were in the past 12 months.

Only 3 complaints are written out, and all pertain to payments not being credited to the account. In all cases, OSLA communicated with the borrower, and admitted when it was at fault. In the first case, a borrower’s account showed as delinquent even though she had sent the payment in. Unfortunately, OSLA misinformed her as to which payment was missing, and there was confusion on both ends until the payment was traced and posted.

In the second instance, the borrower mailed the payment to the incorrect address, and also had the incorrect account number associated with the payment. OSLA assumed her loans had been transferred and that she was using her previous servicer’s information. In cases like this, OSLA states it takes 60-120 days to retrieve the original payment because it has to be routed through the US Treasury Department and the Department of Education.

In the third case, OSLA was at fault, as they neglected to post a payment for the borrower. He had to call a second time to request that the payment be processed, and OSLA responded that it was posted in June (even though the payment was originally made in March).

These complaints were all filed in 2013, shortly after loans began transferring to OSLA. During this transition phase, it’s possible there was some confusion among borrowers and even customer service representatives with the new system. There have only been 2 complaints in 2015, with one negative review left in February 2015 about incorrect tax information being provided.

Resolving a Dispute With OSLA Servicing

Just because there are a lack of complaints doesn’t mean you haven’t had a hard time communicating with OSLA. Before you can submit a complaint with the Student Aid Ombudsman Group, you must try contacting OSLA first.

Unfortunately, OSLA doesn’t make its contact information public. You must log in to view it. The only information available is a phone number: 866-264-9762, and email (DLCustserv@osla.org). Customer service hours are between 8AM – 5PM CT.

The address listed on the bottom of the website is as follows:

Oklahoma Student Loan Authority
525 Central Park Drive
Suite 600
Oklahoma City, OK 73105

However, if you can log onto your account, you should double check to make sure there isn’t a different address for specific correspondence.

Our advice is to keep calling and emailing until you receive a helpful response. You may not have any luck on the first or second try. It’s a hassle, but so is having an unresolved student loan issue.

When to Get Help from the Student Aid Ombudsman Group

If you’ve successfully contacted OSLA, but it hasn’t helped you yet (and you’ve spent weeks or months trying to resolve your problem), then you can call in the Student Aid Ombudsman Group. Why do you have to wait? This checklist of steps must be completed before contacting them (it says so right on the page). Use this checklist as a guide to prepare.

After completing the checklist, you should have all the information you need to submit a complaint, which you can quickly do online. Alternatively, you can mail that form to this address:

U.S. Department of Education
FSA Ombudsman Group
830 First Street, N.E., Mail Stop 5144
Washington, DC 20202-5144

You can also call to speak with an Ombudsman at 1-877-557-2575, or fax documents or forms to 202-275-0549.

Please note that you’re free to submit a complaint if you think you’ve taken appropriate action and OSLA isn’t holding up its end of the agreement. Don’t think your complaint is too trivial if it has caused you a lot of stress. Other people may be experiencing the same problem, and the more complaints that are submitted, the more attention it will get.

Make Your Voice Heard

You shouldn’t be getting wronged by student loan servicing companies. While no industry is perfect, student loan servicers are garnering more and more attention as wrongful practices surface. That’s only happening because borrowers are speaking up. You have a right to let your concerns be heard as long as they’re reasonable. If you’ve been struggling to get an issue resolved, let it be known and file a complaint with the Ombudsman so the appropriate action can be taken.

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What Happens to Debt When You (or family members) Die?

Businessman Holding Document At Desk

Debt is pervasive in the United States. According to a report by The Pew Charitable Trusts, 8 in 10 Americans have some sort of debt, and older generations are bringing debt into retirement.

This begs the question – what debt goes away when you die, and what debt do people inherit?

If your parents have a pile of credit card debt, if you’ve co-signed a loan, or if you’re one half of a couple who has a mortgage together, this is a very real concern.

When you take on joint debt, you’re likely not thinking about what might happen if the other person passes away. When you take out a personal or student loan and ask someone to co-sign for it, they’re likely not thinking about what the chances of you passing away are.

The unfortunate reality is it can happen to anyone, and with so many Americans in debt, it pays to have the necessary knowledge to handle such a tragedy in case it occurs.

Rule of Thumb to Follow

A general rule of thumb to keep in mind as you read this article is that loved ones generally don’t inherit debt, especially if the debt was in one person’s name.

However, if you co-sign for a debt, you become responsible when the borrower dies. When you co-sign for a debt, you accept responsibility to pay if the other party cannot.

In many cases, if someone dies while in debt, creditors will go after their estate. The assets within the estate are used to satisfy the debt. If an asset is left to you, such as property, creditors can force the sale of the property and take the proceeds to pay off the debt. If there’s anything left after the debt is paid, that amount will go to you. If there’s nothing left because debts exceed assets (the estate is insolvent), creditors tend to eat the difference, and nothing goes to you.

Can You Inherit Your Parents’ Debt?

For any children worried that they might inherit their parents’ consumer debt, breathe a sigh of relief. Unless you yourself have a joint account with your parents, you will not inherit their debt, and you will not be responsible for it when they pass away.

From the FTC itself: “Family members typically are not obligated to pay the debts of a deceased relative from their own assets.”

That means if your name is not associated with any of their accounts, there’s no need to worry. If you’re a joint account holder on any credit cards, you will be responsible, since you took joint ownership.

Medical debt, on the other hand, is a different case depending on where you live. 30 states have filial responsibility laws, which require children of elderly parents who cannot financially support themselves to contribute money toward their parents’ well-being. This mainly involves medical care, food, clothing, and shelter (though requirements vary from state to state).

Pennsylvania has one of the stricter policies under this law. In 2012, an appeals court ordered a son to pay $93,000 for his mother’s nursing home stay, as it fell under the filial responsibility law.

This doesn’t apply to medical debt incurred outside of this context. For example, if a parent underwent surgery years ago and still has a balance from it, the estate would generally be responsible for paying it.

What Happens to Student Loan Debt When You Die?

Most of us are aware that discharging student loans in bankruptcy is difficult, but thankfully, the rules are somewhat more lenient when death is involved. According to the Federal Student Aid Office, “Federal student loans will be discharged due to the death of the borrower or of the student on whose behalf a PLUS loan was taken out.”

That means if a student loan borrower passes away (parent or child), the student loan debt goes with them. However, a death certificate is necessary for proof.

What about private loans? It depends on your lender and if you co-signed for a loan. Some private lenders may forgive student loan debt if the borrower passes away and if there’s no co-signer. If you co-signed for your child and they pass away, you’ll likely still be responsible for paying back the loan.

Where Does the Responsibility of Debt Fall if a Spouse Dies?

As with most of this information, debt you’re responsible for as a spouse will vary depending on where you live. The following states have “community property” rules, meaning debt incurred while married will be the responsibility of the other spouse if one dies: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. (It’s optional in Alaska.)

In “common law” states, debts are not considered joint unless both spouses sign a contract together, or if the specific purpose of the debt was for the benefit of the marriage, such as child care or food. If the debt is in one spouse’s name, then they’re solely responsible for it. For example, if one spouse has a car loan or business loan in their name, then the other spouse doesn’t assume responsibility for it if the first spouse passes away.

According to Nolo, half of the common law property states don’t allow creditors to go after joint property to pay debts that are considered separate. Once again, laws differ by state, so it’s wise to consult with a lawyer that’s versed in your state’s laws.

What about a mortgage? In a community property state, your home is considered joint property, so you would be responsible for continuing to pay the mortgage if your spouse dies. In a common law state, if you’re co-owner of the property, you would be responsible for making payments.

The Garn-St. Germain Depository Institutions Act of 1982 has prohibited lenders from invoking the “due on sale clause,” which means you don’t have to pay the entire balance of the mortgage because it has been transferred into your name. Know your rights in case lenders harass you.

A home equity line of credit is trickier to deal with. If you and your spouse applied for one together, the surviving spouse may need to apply to refinance or show proof that they can maintain payments. Otherwise, the LOC may be frozen. If your spouse applied for a HELOC on their own before you were married, you shouldn’t be liable.

As for medical debt, in community property states, if the debt was incurred while married, the other spouse is responsible for paying it. However, it’s worth asking for hospitals to forgive some or all of the balance if you can’t afford the payments on your own.

What Can You Do?

If a creditor comes after you for debt from a deceased relative and you’ve determined you’re not responsible for it (under the above guidelines), you’re protected under the Fair Debt Collection Practices Act. According to the FTC, it “prohibits debt collectors from using abusive, unfair, or deceptive practices to try to collect a debt.”

You can tell creditors that the person they are trying to collect from is deceased. You can also offer to send the creditor a certificate of death if they require proof, and you can direct them to the executor of the estate if that person isn’t you.

Some creditors may continue to pressure you, but it’s important to stand your ground. Most creditors will simply ask you for a list of assets so they can collect on the debt, but if there aren’t any assets, they should cease calling you after you explain the situation.

The best idea is to communicate with creditors via mail, this way you have a paper trail in case you need to go to a lawyer. You want to get as much as you can in writing.

As a side note, you should designate beneficiaries when possible (for example, on your retirement accounts). Doing so means your loved ones can claim the assets you want to leave them. If you don’t designate beneficiaries, the funds will be rolled into the estate. That’s why it pays to be prepared with an estate plan.

It’s also a good idea to monitor your credit to ensure no accounts are opened and no loans are taken out in your name without knowledge. Sadly, some family members with access to your information may get desperate enough to do this. In the event they die, and your name is associated with the debt, you could have a big problem on your hands. CreditKarma.com and CreditSesame.com both offer credit monitoring for free and you can get your three free credit reports via annualcreditreport.com.

Lastly, remember to talk with a lawyer if you find yourself in this situation. They will be able to provide the best help tailored to your state and specific situation. Call up your state’s bar association and they should point you to someone who can help.

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