Is it Possible to Refinance a Personal Loan?

refinance a personal loan
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Trapped in a personal loan with a high interest rate or a massive monthly payment? It is possible to refinance to a loan that better suits your financial needs. We’ll explain how to refinance a personal loan and pitfalls to avoid when refinancing unsecured debt.

Is it possible to refinance a personal loan?

Refinancing a personal loan involves taking out a new loan to pay off an existing personal loan. Some people will refinance by negotiating new loan terms with their existing lender. However, many people refinance by taking out a new loan from a different lender. They use the proceeds of the loan to payoff their current loan.

It’s important to note that many lenders don’t advertise personal loan refinancing. However, you shouldn’t necessarily exclude them from your loan refinance search.

For example, a company spokesperson from SoFi (one of our top-rated personal loan issuers) explains that it treats all personal loans like incremental debt. If the company believes you can handle the payments on both your existing loan and your new loan, you may qualify for the new personal loan. On the other hand, Lightstream, a division of SunTrust Bank, specifically offers personal loan refinancing. Lightstream prices loans differently based on their intended use. Either company could be a great option to refinance your personal loan.

Depending on your income, your credit score, and your credit usage you may find a great rate at any number of personal loan companies.

When does it make sense to refinance a personal loan?

Refinancing your personal loan generally makes sense when the new loan comes with better terms or you need to refinance in order to remove a cosigner.

For example, your credit may have improved or your income increased significantly enough that you may qualify for a loan with a better APR. On the other hand, you may be struggling to meet your monthly payments and want to take out a new personal loan with lower monthly payments and a longer loan term.

“It could make sense to refinance almost any time if you can get better terms,” says Todd Nelson, business development officer for Lightstream, a division of SunTrust Bank. “Less interest is always a good thing.”

How to refinance a personal loan

No matter your goal, you’ll want to take a few steps to make sure that you get the best possible deal on your new loan.

Understand your existing loan

Before you pay off an old loan, check whether your loan has prepayment penalties, so you can factor any penalties into your loan analysis. Most banks do not charge prepayment penalties for personal loans, but those that do will typically charge a set fee for paying off a loan early. The terms and conditions of your loan will outline whether or not you have to pay a prepayment penalty. If you don’t understand the terms, you can talk to your lender to clarify the rules.

In addition to understanding your prepayment penalties, you’ll want to know your interest rate, the time remaining on your loan, and the required monthly payment. Refinancing your loan may affect all three of these numbers.

Get your credit in order

Once you understand your existing loan, you’ll want to check your credit score. You may need to make some efforts to clean up your credit before applying for a loan refinance. In particular, removing errors from your credit report and paying down credit card debt may help to improve your odds of approval. If possible, avoid applying for additional loans for three to six months before you refinance your personal loan. Applying for multiple lines of credit in a short time period makes you look like a worse credit risk according to the Fair Isaac Corporation, which creates the FICO® scores that are widely used in lending decisions.

Although your credit score matters, it’s not the only factor lenders will consider when setting your loan rate. “A great credit score doesn’t mean you’ll get the best rate,” Nelson cautions. Lenders will also consider your existing debt load, your income and how you’ve used debt in the past.

Prepare a budget

Refinancing a debt means your monthly payment will change. You’ll want to be sure that you can handle the change by preparing a budget. You need to know how much you can realistically pay each month, so you can continue to make timely payments every month.

Start shopping around for a new loan

Once you have your finances in order, you’ll want to start shopping for new loans. A great place to start is with LendingTree, where you can fill out a short online form and potentially get quotes from several lenders at once. LendingTree is the parent company of MagnifyMoney.

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If you don’t see banks offering better terms, you may want to stick with your current loan until you pay it off.

Apply for multiple loans

When you see the potential for savings, start applying for new personal loans. When you apply for a new personal loan, you will see a hard credit inquiry on your credit report. The more places you apply, the more credit inquiries you’ll see.

However, multiple credit inquiries won’t destroy your credit if you apply within a few weeks.
According to the credit reporting bureau Experian, “Generally, credit scoring models will count multiple hard inquiries for the same type of credit product as a single event as long as they occur in a short window of a few weeks.”

When you apply for a personal loan refinance, you’ll need all your personal identification documents, and you may need proof of income (such as a pay stub, W-2 form or a tax return).

Check out our list of the best personal loans for 2017.

Choose the best offer

Once you have a few offers in hand, you’ll want to compare them to see which is the best deal for you.

You can use this calculator to compare the interest you expect to pay on your existing loan (use your current balance, current interest rate, and current monthly payment at the top) with the interest and fees you’ll pay on a new personal loan.

When you find the best offer, you can accept the loan terms with your new lender.

Pay off your old loan

The process for paying off your old loan will vary by lender. According to Nelson from Lightstream, lenders who work with high-credit-score applicants will generally deposit the funds into your checking or savings account. Then it’s up to you to pay off your existing debt.

In general, you can close your old debt by making a payment through the Bill Pay portal on your lender’s website. After you make the payment, you should see a balance of $0. You can call your lender to be sure that the final payment is processed and the loan is closed.

Lenders that work with subprime borrowers may pay off the old debt directly. In those cases, you should still call the lender to confirm that your old debt is closed.

Shopping for lower interest rates

If you’re looking for a lower interest rate, you’ll probably find a better personal loan in one of two circumstances. First, you may find a better interest rate if your credit score improved since taking out the loan. The more your credit score improved, the more likely you are to see great refinancing options.

You may also find a better interest rate if you didn’t originally shop around. In this situation, it may pay off to compare personal offers from a few different lenders. You may be surprised by how low your rate can go.

Of course, a lower interest rate doesn’t mean you’ll necessarily save money when you refinance your personal loan. You will want to do the math the following to see if you will actually save money with a refinance. If the origination fees and the total cost of interest are lower than the remaining interest on your loan, it makes sense to refinance the loan.

Finding lower monthly payments

Anyone looking to lower their monthly payments will usually want to refinance to a longer loan. While credit score improvements may lower your monthly payment a little, spreading the payments over a longer period lowers the payments even more.

If you’re facing a pinched cash flow, refinancing to a longer loan may make sense (especially if you can combine it with a better interest rate). The problem with refinancing to a longer loan is that you’ll generally pay more interest in the long run. Use this personal loan calculator to see how much more you’ll pay over time.

Taking out a larger loan

Some people consider refinancing a personal loan when they want to take on a bigger loan for an upcoming expense, or to consolidate additional debt. Refinancing makes sense if the new loan has a lower interest rate. In general, you want to keep your loan at the lowest interest rate possible, even if that means having two payments. If you want to take on more debt, be sure your budget can handle the added expense. Create a debt payoff plan before you take on any new debts.

When to avoid refinancing a personal loan

Even with lenders offering tantalizingly low interest rates, refinancing a personal loan doesn’t always make sense.

Refinancing isn’t cost-effective

For example, you don’t want to choose a new loan if it won’t save you money. This calculator can help you compare your current costs to the interest and fees you’ll pay if you choose to refinance. High origination fees may keep an otherwise attractive offer from being cost-effective.

Aggressive debt payoff

Refinancing a personal loan may backfire if you’re on an aggressive debt payoff plan. A loan with an origination fee may require several months of standard payments to reach a break-even point. This refinance calculator can help you determine how long it takes to reach the break-even point. (Use a tax rate of 0 percent.)

When you don’t have a debt payoff plan

Some people feel tempted to refinance a personal loan when their budget gets tight, and the monthly payments feel high. A personal loan refinance could be a smart financial move, but the refinance needs to be part of your comprehensive money management strategy. Before refinancing, create a realistic debt payoff plan.

Things to watch out for

In general, personal loans are straightforward, but you should beware of these personal loan traps (especially if you’re trying to refinance a subprime personal loan).

Prepayment penalties: Most major banks don’t charge prepayment penalties, but before you refinance, you’ll want to check your existing loan, too, to make sure one isn’t lurking in the fine print. A prepayment penalty may negate some of the savings you get from lowering your interest rate.

Credit insurance: Some lenders will try to get you to buy life insurance to cover the cost of the loan if you die. In general, this is not a good value. In fact, the Consumer Financial Protection Bureau (CFPB) has adopted measures that restrict the sale of credit insurance. However, you may still hear a pitch for the product.

It makes a lot of sense to have some level of insurance in place to cover your debts if you’re married, lose a job, etc. However, an inexpensive term life policy is a far better value than a loan specific policy. Job loss credit insurance may be a more compelling product, but it can be very expensive. Be sure to weigh the cost of the insurance before purchasing it.

Origination fees: Many personal loans come with origination fees, which can be as high as 8 percent of the loan’s value. That makes taking out a new loan an expensive proposition. Compare the remaining interest on your loan to the cost of the origination fee plus the interest cost of the new loan before deciding to refinance.

Late payment fees: Some lenders will charge you a late fee if you miss your payment date. Late fees can drive up your loan costs in a hurry. Anyone who has struggled with payments in the past will want to check this fee before refinancing.

Alternatives to refinancing a personal loan

Refinancing a personal loan to another personal loan isn’t always the cheapest option. If you’ve got great credit, or you own a home you might find cheap options to eliminate your debt.

Balance transfer credit cards

Some credit card companies will allow you to transfer a personal loan balance to a promotional 0 percent intro APR balance transfer credit card. This can be a quick way to drop your interest rate in a hurry.

Before you apply for a balance transfer credit card, you’ll want to check on a few things. First, you won’t want to apply for a credit card from a bank that holds your debt. For example, you won’t want to opt for the Citi Simplicity® credit card if a Citi Affiliate owns your debt.

It’s also important to clarify that the credit card company will allow you to transfer a personal loan balance to your credit card. For example, the Chase Slate® card does not allow you to transfer personal loan balances to your credit card.

You can generally learn more about a lender’s balance transfer policy by reading their terms and conditions page in a section entitled Balance Transfers. However, if the terms aren’t clear, you should take the time to call a bank representative before applying.

A balance transfer credit card is an appropriate solution for people who can pay down their personal loan debt before the introductory rate expires.

HELOCs

Homeowners who have equity in their house may also find that a HELOC, or home equity line of credit, offers better terms than their existing personal loan. A HELOC has tax-deductible interest, and it operates like a line of credit. You can use a HELOC to pay off higher interest debts, or to pay for other important expenses. However, you need to be careful not to treat a HELOC as free money. You still need to pay off your HELOC in time.

The post Is it Possible to Refinance a Personal Loan? appeared first on MagnifyMoney.

PNC Personal Loan Review

personal loan_lg

Updated November 08, 2017
With about 2,800 branches in 19 states and the District of Columbia, [PNCPL]PNC[/PNCPL]is the fifth largest bank in the United States. It’s primarily located in the eastern half of the US, with most of its branches and its headquarters being in the northeast.

If you’re looking for a personal loan from a trustworthy, familiar source, [PNCPL]PNC[/PNCPL] might be your answer. It offers an unsecured personal loan on par with most lenders, as well as a [PNCLoanAmt]secured loan that allows up to $100,000 to be borrowed[/PNCLoanAmt].

Most traditional banks haven’t been able to compete with online-only lenders in the personal loan space, so let’s see how [PNCPL]PNC[/PNCPL] compares.

Personal Loan Details

PNC has three personal loan options – secured and unsecured installment loans, and a line of credit. For the purpose of this review, we’ll be focusing on the installment loans.

Most online lenders only offer unsecured loans. In case you’re not sure of the difference:

  • Secured loans require an agreement to let your creditor use your assets as collateral in the event you default on your loan. This protects the creditor as it can sell your assets and recoup the cost of the loan.
  • Unsecured loans are the exact opposite – there’s no collateral involved. There’s less risk for the borrower and more for the creditor.

While secured loans seem to take the creditor’s side, the bonus is they often have more favorable terms because creditors are taking on less risk. You may have access to better interest rates or more money.

A simple example of a secured loan is a mortgage loan. Your home (property) is used as collateral. If you don’t pay your mortgage, your mortgage lender can seize the property and sell it.

Now that you know what it means to have a secured or unsecured loan, we’ll take a look at the differences between the details.

[PNCPL]PNC’s[/PNCPL] unsecured personal loan allows you to [PNCLoanAmt]borrow between $1,000 and $25,000[/PNCLoanAmt] on a [PNCTerm]variety of terms: 6 months, and 1, 2, 3, 4, and 5-year options are available[/PNCTerm].

[PNCPL]PNC’s[/PNCPL] secured loan allows you to [PNCLoanAmt]borrow much more – between $2,000 and $100,000[/PNCLoanAmt]. The collateral required for this loan is non-real estate (a vehicle, for example).

Both the unsecured and secured loans have fixed interest rates.

Unfortunately, you can’t check APRs or sample payments for secured loans online, and when we called, we were told they vary based on your credit. They were unable to give any APR range.

The APR for unsecured loans varies by the loan amount:

  • [PNCAPR]For a $5,000 loan, the APR ranges from 9.49% – 21.99%
  • For a $10,000 loan, the APR ranges from 6.74% – 19.24%
  • For a $15,000 loan and up, the APR ranges from 5.99% – 18.49%[/PNCAPR]

A payment example: if you borrow $20,000 on a 5-year term with an APR of 7.74%, your monthly payment will be $403.04.

The Pros and Cons

Applying for a personal loan with a bank is typically a bit more time consuming than applying with an online-only lender. This is because banks are thorough with the documentation they request.

However, [PNCPL]PNC[/PNCPL] states the application should take no longer than 15 minutes online.

Unfortunately, if you’re looking at the secured loan option, you can’t apply online. You can only apply by phone, or in person at a branch. You can apply online with the unsecured loan option.

[PNCPL]PNC’s[/PNCPL] APRs are also quite high, especially for the loan amounts. Many online-only lenders are offering better rates starting in the 5% range.

An additional negative might be that [PNCPL]PNC[/PNCPL] only offers fixed rates. While variable rates aren’t stable, they’re usually lower than fixed rates. If you’ll have the ability to pay the loan off soon after it’s disbursed, having the lower variable rate can be beneficial.

If you fall on hard times, there’s a possibility that [PNCPL]PNC[/PNCPL] will allow you to defer your payments, but this is reviewed on a case-by-case basis.

[PNCPL]PNC[/PNCPL] urges borrowers to contact the bank at the first sign of trouble – before their payment is due.

Application Process and Documents Needed to Apply

If you’re applying for an unsecured loan, you can easily apply online and be done within 15 minutes. [PNCPL]PNC[/PNCPL] recommends having the following information ready:

  • Your photo ID
  • Annual income, plus any other sources of income you have
  • Employer information (if you’ve been working there for less than 2 years, have your previous employer information as well)
  • Address/proof of residence (if you’ve been living there for less than 2 years, have your previous address ready)
  • If you’re applying with a co-applicant, you’ll need the same information for them
  • If you’re applying for a personal loan to consolidate debt, you’ll need account statements as [PNCPL]PNC[/PNCPL] needs to know your account number, monthly payment, and outstanding balance

[PNCPL]PNC’s[/PNCPL] application is straightforward, and it also has a checklist available for you on the application in case you need to reference it.

[PNCPL]PNC[/PNCPL] will use [PNCInq]a hard credit inquiry when applying for a loan with them[/PNCInq].

Who Qualifies for a Personal Loan With [PNCPL]PNC[/PNCPL]?

To have the best chances of being approved for a loan with [PNCPL]PNC[/PNCPL], you need very good and established credit, along with a reasonable debt-to-income ratio. Your loan terms greatly depend on these two factors. Being a customer with [PNCPL]PNC[/PNCPL] doesn’t increase your chances of getting approved.

Just a note – if you choose the secured loan and want to use your vehicle as collateral, it must be less than 8 years old and have less than 80,000 miles on it.

Who Benefits the Most from a Personal Loan With [PNCPL]PNC[/PNCPL]?

Borrowers looking for a larger loan amount would benefit from the secured personal loan with [PNCPL]PNC[/PNCPL].

[SoFiPL]SoFi[/SoFiPL] is the only other personal loan lender offering that much money, and while the loan is unsecured, it doesn’t have any physical locations. If you feel more secure applying in-person and receiving assistance from a trusted bank, you might prefer to go with [PNCPL]PNC[/PNCPL].

However, most borrowers will benefit from going elsewhere to get an unsecured personal loan.

The Fine Print

[PNCPrepayFee]There is no prepayment penalty for either loan[/PNCPrepayFee], so you can pay your loan in full at any time.

[PNCOrgFee]There’s no origination[/PNCOrgFee] nor annual fee for the unsecured personal loan.

When called, a [PNCPL]PNC[/PNCPL] representative wouldn’t disclose any other fees associated with the loan (late fees, returned payment fees, etc.).

Transparency

Since there is so little information on its website about the secured loan, it was important to find out as many details as we could from a call.

Unfortunately, the [PNCPL]PNC[/PNCPL] representative that answered the call wasn’t very helpful. The most she could offer was that the loan rates and terms were dependent upon credit, and that the credit score and debt-to-income ratio of an applicant was extremely important.

When asked about late fees for the loan, she said “another department” handles that, and was unable to transfer the call to the appropriate personnel, as you need to have a loan with [PNCPL]PNC[/PNCPL] before fees can be discussed.

This was rather disappointing. Most lenders are open to discussing these details with potential borrowers – fees can make a huge difference when considering loan options. To be one of the few lenders unwilling to discuss fees and rates beforehand kicks [PNCPL]PNC’s[/PNCPL] transparency down a notch.

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Alternative Personal Loan Solutions

As mentioned, [SoFiPL]SoFi[/SoFiPL]* is the closest competitor as it allows borrowers a [SoFiLoanAmt]maximum of $100,000 as well. The minimum you can borrow is $5,000[/SoFiLoanAmt]. Most personal loan lenders have limits of around $25,000 – $35,000.

[SoFiPL]SoFi[/SoFiPL] offers fixed rates and variable rates, while [PNCPL]PNC[/PNCPL] only offers fixed rates for its installment loans. [SoFiPL]SoFi’s[/SoFiPL] [SoFiAPR]fixed APR ranges from 5.49% – 14.24%, and its variable APR ranges from 5.19% – 11.34%, if you’re enrolled in autopay (with a cap of 14.95%)[/SoFiAPR].

There are no fees associated with [SoFiPL]SoFi’s[/SoFiPL] personal loan except for a [SoFiLateFee]late fee, which is 4% of the amount due or $5 – whichever is less[/SoFiLateFee].

You can borrow funds on [SoFiTerm]3, 5, or 7-year[/SoFiTerm] terms, and personal loans are available in 46 states, including the District of Columbia.

[SoFiPL]SoFi[/SoFiPL] also offers unemployment protection. If you lose your job through no fault of your own, you can apply for payment assistance.

[SoFiPL]SoFi[/SoFiPL] uses a [SoFiInq]soft credit inquiry[/SoFiInq] when you first apply to get your rates, which means your credit score won’t be affected. If you choose to move forward with the loan, a hard credit inquiry will be used.

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If you’re looking for good alternatives to [PNCPL]PNC’s[/PNCPL] unsecured loan, take a look at [EarnestPL]Earnest[/EarnestPL]. You can borrow between [EarnestLoanAmt]$2,000 and $50,000[/EarnestLoanAmt] on a [EarnestTerm]1, 2, or 3-year[/EarnestTerm] term.

There are no hidden fees associated with [EarnestPL]Earnest’s[/EarnestPL] personal loan, and it’s offered in 23 states plus the District of Columbia.

You’ll need a [EarnestCreditScore]minimum credit score of 720[/EarnestCreditScore] to be eligible for approval with [EarnestPL]Earnest[/EarnestPL], and a [SoFiCreditScore]minimum of 700[/SoFiCreditScore] to be approved with [SoFiPL]SoFi[/SoFiPL], but both lenders take other factors into account, unlike [PNCPL]PNC[/PNCPL]. Your employment history, education, and salary matter as well.

*referral link

It Pays to Shop Around

While it would be convenient to have the first lender you apply with be the best solution, that’s not always the case, even with a trusted lender like [PNCPL]PNC[/PNCPL]. Personal loans from bigger banks are falling by the wayside as online-lenders are offering much better rates and terms. Do yourself a favor and shop around to get the best rates, even if you have a prior relationship with the bigger names out there. If you shop around within a 30-day window, your credit won’t take a big hit.

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*We’ll receive a referral fee if you click on offers with this symbol. This does not impact our rankings or recommendations. You can learn more about how our site is financed here.

The post PNC Personal Loan Review appeared first on MagnifyMoney.

Top 4 Personal Loans for an Engagement Ring

Engagement ring

Updated November 08, 2017
Getting engaged is an exciting yet nerve-wracking milestone. You’re eager for your partner to say “yes” and hoping she’s impressed by what she sees when you open the box.

The best way to afford the ring of her dreams is planning early and saving up. Financing an engagement ring should be your absolute last resort. After all, there are other larger expenses that come after marriage including moving, buying a home or starting a family that you could spend that money on instead.

Still, if you decide financing is right for you, here are a few personal loans that provide funds for engagement rings:

[EarnestPL]Earnest[/EarnestPL]

[EarnestAPR]Rates from 5.25% APR[/EarnestAPR]

Earnest has the lowest interest rate of the loans on our list and no origination fee. [EarnestTerm]Loan terms are 1, 2 and 3 years[/EarnestTerm]. [EarnestLoanAmt]Earnest will lend you $2,000 to $50,000[/EarnestLoanAmt]. Other [EarnestCreditScore]than your credit score[/EarnestCreditScore], Earnest will look at your income, education, earning potential and other factors to decide if you’re eligible for the loan. [EarnestOrgFee]There’s no origination fee[/EarnestOrgFee] and [EarnestPrepayFee]no prepayment penalty[/EarnestPrepayFee]. There is, however, a [EarnestInq]hard pull of your credit report[/EarnestInq].

Earnest could be a good option if you have limited credit history, but an offer letter or current position that pays you more than enough money to cover loan payments. After submitting an application, you’ll get a response within 2 business days.

[LendingClubPL]LendingClub[/LendingClubPL]

[LendingClubAPR]Rates from 5.99% APR[/LendingClubAPR]

LendingClub is a peer-to-peer loan marketplace where people who need to borrow money are matched up with investors. [LendingClubTerm]You can get a loan for up to 5 years[/LendingClubTerm]. [LendingClubLoanAmt]You can borrow up to $40,000[/LendingClubLoanAmt]. [LendingClubOrgFee]The origination fee is 1% to 6%[/LendingClubOrgFee]. Your origination fee is assigned based on your credit profile. The higher your credit score the less you’ll pay for origination. You can check to see if you’re approved and your rate without harming your credit score.

After applying for LendingClub, peer investors will see your profile in the marketplace and hopefully fund your loan. Once your loan is funded by investors and your application documents check out, you’ll get the money wired to your account.

To get the very best rates through LendingClub you’ll need an excellent credit history, low debt-to-income ratio and a high credit score among other factors.

LendingClub loans are not available in Iowa or West Virginia.

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[KarrotPL]Karrot[/KarrotPL]

Karrot is not currently offering new loans. Should you have an outstanding loan, Karrot states they are still servicing those loans.

Karrot gives out [KarrotLoanAmt]personal loans from $5,000 to $35,000[/KarrotLoanAmt]. [KarrotTerm]Loan terms range from 3 to 5 years[/KarrotTerm]. [KarrotOrgFee]The loan has an origination fee of 1.05% to 4.75% that’s non-refundable and deducted from the loan upfront[/KarrotOrgFee]. Karrot doesn’t charge prepayment penalties. Other than origination, fees will only come into play if you skip out on a payment, have a check returned or request copies of your loan documents.

Shopping for loan rates on the site won’t ding your credit score. Karrot doesn’t go into specifics about the credit score you need to qualify, but you do need to at least have a credit history and a bank account to verify your income.

[ProsperPL]Prosper[/ProsperPL]

[ProsperAPR]Rates from 5.99% APR[/ProsperAPR]

[ProsperLoanAmt]You can borrow as little as $2,000 and up to $35,000 from[/ProsperLoanAmt] Prosper, another peer-to-peer lending marketplace. [ProsperTerm]Loan terms are 3 and 5 years[/ProsperTerm]. [ProsperOrgFee]Prosper loans have a 1% to 5% origination fee[/ProsperOrgFee], but [ProsperPrepayFee]no prepayment penalties[/ProsperPrepayFee].

At a minimum, [ProsperCreditScore]you must have a 640 FICO score to qualify for Prosper[/ProsperCreditScore]. You also need to have a debt-to-income ratio less than 50%. Shopping for rates with Prosper won’t impact your credit score either.

Honorable Mention – LendingKarma

LendingKarma isn’t a lender. Instead, it’s a site that manages loans between people who know each other. As a rule of thumb, you should avoid borrowing or lending money to friends and family since involving money in relationships tends to cause drama.

But, if someone you know agrees to help out and you’re both on the same page, LendingKarma can make your life easier. LendingKarma takes care of the logistics of borrowing including the contract, payment schedule and friendly reminders. The fee for contract administration is paid one time and $50 to $100 per loan.

Final Thought

Financing an engagement ring is not something we recommend. It’s just not worth going into debt over. Explore all of your options instead. Here are a few:

  • Get what you can afford in cash now and upgrade when you have more money.
  • Try unclaimed diamond and discount jewelry stores to get a deal.
  • Skip the diamond altogether for gems that are a little more affordable like amethyst or sapphire. These gems are popular now anyway.
  • Buy a stone similar to a diamond like moissanite or a replica until you can get a real one. If you choose a “fake” starter ring, make the decision as a couple. You don’t want her to find out from another source that her ring isn’t a true diamond.

At the end of the day, an engagement ring is supposed to symbolize commitment. Sadly in some ways it’s morphed into a symbol of status. That doesn’t mean you should feel pressured to get a ring (or ask for a ring) you can’t afford. Do what’s best for you.

The post Top 4 Personal Loans for an Engagement Ring appeared first on MagnifyMoney.

Trapped in Payday Loan Debt? Here’s How You Can Escape.

Trapped in Payday Loan

Nobody likes being in debt, but it’s even worse when it seems like there’s no way out. That’s how the 12 million Americans who take out payday loans each year usually feel. That’s understandable, considering they pay out around nine billion dollars in loan fees. But there is hope—you don’t have to be stuck in the payday loan debt cycle forever.

Why It’s So Easy to Get Buried in Payday Loans

Payday loans are unsecured personal loans targeted at people who need money fast but don’t possess the type of credit or collateral required for a more traditional loan. Usually the only requirements to qualify for a payday loan are an active bank account and a job. Companies like MaxLend, RISE Credit, and CashMax have made an art out of providing high-interest loans to people who feel desperate and out of options.

The very structure of payday loans is set up to keep people on the hook. Here’s a breakdown of what payday loan debt looks like, according to the Pew Charitable Trusts:

  • It’s not short-term. Although payday loans are advertised as quick, short-term loans, the average payday loan borrower is in debt for a full five months each year.
  • Loan fees are huge. Average loan fees are $55 every other week, and the average borrower pays $520 per year for multiple loans of $375.
  • People borrow for the wrong reasons. Most payday loan borrowers—70%—spend the money on everyday expenses, like groceries, gas, and rent, rather than on emergencies.
  • It’s a vicious cycle. To totally pay off a loan, the average borrower would need to fork over $430 the next payday following the loan. Because that’s a big chunk of change, most people end up renewing and extending the loan. In fact, 80% of all payday loans are taken out two weeks after another one was paid in full.

What Happens If I Don’t Pay My Payday Loan?

As with any other loan, if you default on a payday loan, it can result in growing fees, penalties, and possible legal action. Because many payday loans use automatic debit payments to take funds directly out of a bank or prepaid account, you can also end up with overdraft fees on top of everything else. This can leave you without the funds you need to pay for necessities like food, childcare, and utilities. To top it all off, you may also experience a barrage of calls and threats from debt collectors.

This all sounds extremely unpleasant, but there are ways you can get help with payday loans.

How to Get Out of Payday Loan Debt

As we’ve established, it’s crucial to stop the vicious cycle of payday loan debt. There is payday loan help, but it can be hard to know where to start.

The best way out can depend on where you took out the loan. Laws governing payday loans vary from state to state. Some states, like Colorado, are currently working to change the way payday loans are administered in order to make it easier for customers to pay loans back and avoid the snowball effect of constant loan renewal. Other states require payday lenders to offer borrowers an  Extended Payment Plan (EPP), which stops the accrual of fees and interest.

Here’s a closer look at some of the options available to get rid of payday loan debt.

Extended Payment Plans (EPPs): If you borrowed from a lender who is a member of the Community Financial Services Association of America (CFSA), then you may be in luck. CFSA’s Best Practices allow a payday loan customer the option of entering into an EPP.  This means you’ll have more time to repay the loan (usually four extra pay periods) without any additional fees or interest added for that service. Best of all, you won’t be turned over to collections as long as you don’t default on the EPP. Here are the steps to follow if you want to apply for an EPP:

  • Apply on time. You must apply for the EPP no later than the last business day before the loan is due.
  • Sign a new agreement. If you took out your loan through a storefront location, you’ll have to go back to that location to turn in your application. If you took out a loan online, you’ll need to contact your lender for instructions about how to sign your new agreement.

Credit Counseling: If an EPP isn’t an option, you may want to talk with a credit counseling agency. While credit counseling agencies spend their time helping consumers get out of debt, these kinds of loans can present unique challenges. “It’s not a traditional loan with set guidelines in terms of how they work with us,” explains Fox. In spite of those challenges, there are things a credit counseling agency can do to help you get out of payday loan debt:

  • Restructure the payback. Fox says that payday lenders who are members of the CFSA “seem to be more lenient” and are “more apt to try to work with people.” Those lenders will often “restructure to pay back (the balance) over six to twelve months when coming through our program.” But he also adds that this applies in  only about 40–50% of the payday debt situations clients are dealing with.
  • Negotiate a settlement. If restructuring the payback terms isn’t an option, the credit counseling agency will try to work with the lender to determine a settlement amount that will resolve the debt altogether. If you can pay off the loan with a lump-sum payment (this is the time to ask Mom or Dad for help), the agency may be able to settle the debt for a percentage of the outstanding amount.
  • Adjust your budget. If no other options are viable, the agency can work with you to come up with a budget that will help you find the money to get the loan paid off. Sometimes that means reducing payments on other debts, consolidating debts, or reprioritizing other expenses.

Bankruptcy: Nobody wants to resort to this option, but sometimes it’s the only way to get out from under this kind of debt. There is a myth out there that you can’t include payday loans in a bankruptcy. However, that is not the case: “For the most part, payday loans aren’t treated any differently in bankruptcy than any other unsecured loan,” writes attorney Dana Wilkinson on the Bankruptcy Law Network blog.

Another unsubstantiated claim is that you may be charged with fraud or arrested if you can’t pay a payday loan back or if you try to discharge the loan. One of the reasons this fear is so widespread is that payday loan debt collection scammers often make these kinds of threats, despite the fact that these threats are illegal.

What to Do After You Get Rid of Payday Loans

After you get out of payday loan debt, you want to make sure you never go to a payday lender again. Some of the smartest things you can do to start cleaning up your credit include signing up for a free credit report. Regularly checking your credit is the best way to make sure you clear up any mistakes. Plus it’s rewarding to see your credit score improve.

You can also sign up for credit repair or search for a consolidation loan to help you pay off all of your debt. This allows you to start moving in the right direction financially.

Getting out of payday loan debt can seem daunting, but it’s worth the effort and hard work. Taking control of your finances—and actually being able to plan for the future—is a reward worth striving for.

Are you trapped in payday loan debt? Or have you found your way out? Share your story in the comments below.

Image: Ingram Publishing

The post Trapped in Payday Loan Debt? Here’s How You Can Escape. appeared first on Credit.com.

Can You Use a Personal Loan for a Home Down Payment?

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Scraping together the down payment on their mortgage is the biggest challenge facing many would-be homebuyers. And lots of those would probably like to use a personal loan to top up their savings so they reach their lender’s threshold. But can they do that?

The short answer is that few lenders would give their consent to a borrower looking to use a personal loan for their down payment. You would be taking on new debt and then taking on even more debt on top of that…not exactly the greatest solution.

The good news is that there are lots of different options out there for low down payment mortgages and even assistance programs that can help you get together funds for a down payment.

How Much Do I Really Need For A Down Payment?

Let’s make sure you know how big your down payment needs to be. Because, if you are a bit fuzzy on that, you are not alone. And you could be in for some good news.

A survey of professionals at a 2017 conference hosted by the Mortgage Bankers Association revealed a persistent myth: Twenty-eight percent of respondents thought “consumers still mistakenly believe that a 20 percent down payment is a requirement for purchasing a home.” And another four in 10 respondents thought that even those who knew 20 percent isn’t necessary still believed they’d find it difficult to buy a home with less.

Those consumers couldn’t be more wrong. Creditworthy buyers can usually get approved for a mortgage with a down payment as small as 3 or 3.5 percent. And some (more than you may think) who qualify for specialist mortgage programs need put down nothing. Discover more about all those options below.

Here are the minimum down payments required for a selection of mortgages.

Remember: You may get a better mortgage rate if you increase the amount you put down.

The Best Mortgages for a Low Down Payment

Type of Loan

Down Payment Requirement


Mortgage Insurance

Credit Score Requirement

FHA

FHA

3.5% for most

10% if your FICO credit score is between 500 and 579

Requires both upfront and annual mortgage insurance for all borrowers, regardless of down payment

500 and up

SoFi

SoFi

10%

No mortgage insurance required

Typically 700 or higher

VA Loan

VA Loan

No down payment required for eligible borrowers (military service members, veterans, or eligible surviving spouses)

No mortgage insurance required; however, there may be a funding fee, which can run from 1.25% to 2.4% of the loan amount

No minimum score
required

homeready

HomeReady

3% and up

Mortgage insurance required when homebuyers put down
< 20%; no longer required once the loan-to-value ratio reaches 78% or less

620 minimum

homeready

USDA

No down payment required

Ongoing mortgage insurance not required, but borrowers pay an upfront fee of 2% of the purchase price

620-640 minimum

Conventional loans (one not backed by a government program)
A conventional loan is simply a type of mortgage loan that isn’t backed by a government program. Usually these loans require a 5 to 20 percent down payment, though that can be as low as 3 percent using offerings such as Fannie Mae’s HomeReady or Freddie Mac’s Home Possible mortgages. You will need to be reasonably creditworthy.

SoFi

SoFI offers mortgage loans for minimum down payments of 10 percent. You can borrow between $100,000 and $3 million. And you will not have to pay for private mortgage insurance (we’ll talk more about PMI below), even though you have not reached the usual 20 percent down payment threshold. But you will need to have good-to-great credit and sound finances.

Federal Housing Administration mortgage (FHA loan)

FHA mortgages require a 3.5 percent down payment if your credit score is 580 or higher. This can be good if your credit score is less than stellar, but it may be more costly than other options. That is because you will be liable for mortgage insurance premiums (MIPs), which will be added to your monthly mortgage payments.

U.S. Dept. of Agriculture mortgage (USDA loan)

USDA loans require no down payment, unless you have significant assets. There are various eligibility criteria, including your having a low to moderate income. And you must purchase in an eligible area, although those areas make up 97 percent of the nation’s land mass. You can check if you and your area qualify using a tool on the USDA website.

Veterans Affairs mortgage (VA loan)

VA loans also require no down payment. These are for veterans, those still serving in the military and related groups. You can check your eligibility on the VA website. If you qualify, it is highly likely this will be the best mortgage you can get.

Learn more by checking out our guide to The Best Mortgages That Require No or Low Down Payment.

3 Ways To Get Help With Your Mortgage Down Payment

Down payment assistance programs

Before exploring ways of borrowing to top up your down payment funds, you should definitely check out your eligibility under various assistance programs. These are typically targeted at middle- and low-income buyers, and you may have to use a lender that participates in the program.

Some programs provide outright grants or gifts that do not have to be repaid. And they are often available to both first-time buyers and existing homeowners.

Many of these down payment assistance (DPA) programs are state-based. You can click through to your local offering, if any, from the U.S. Department of Housing and Urban Development (HUD) website, which has a link for each state. You should also call your city or county to see if it operates a similar, parallel program.

Others are run across multiple states by nonprofits, such as the National Homebuyers Fund. Freddie Mac recommends a look-up tool on the private Down Payment Resource website as a way of tracking down DPA programs for which you might be eligible.

Finally, do not forget to check with your human resources department. Some employers offer help.

Using a gift from family or friends

Suppose you cannot get help from a mainstream DPA or your employer. Perhaps your parents or another close relative, fiancé, fiancée or domestic partner may be willing to give you a gift toward your down payment. Your lender should normally have no problems with this arrangement. But it is very likely to apply a couple of industry-standard rules:

  1. You must meticulously document the gift process and provide copies of the donor’s withdrawal slip or check, and the recipient’s deposit slip. If appropriate, a copy of the donor’s check to the closing agent is fine.
  2. You must provide a letter or form signed by the donor declaring that the payment is a gift and not a loan. This must include certain information and statements, and you can download a sample gift letter from the NOLO legal website.

Many lenders will allow this gift to cover 100 percent of the down payment. However, some may prefer you to provide some of the funds yourself.

Expect your loan officer to be mildly suspicious of large gifts. Some applicants try to sneak through money that is actually a loan in disguise, risking jail time or fines for mortgage fraud. If you raise any red flags, your loan officer can investigate the funds in great detail, including their ultimate source.

It is generally fine to borrow money from friends or relations for part of your down payment, providing you declare the loan(s) to your lender. It can then include your repayments when it assesses your ability to afford your mortgage.

Central to that assessment is your debt-to-income (DTI) ratio. As the name suggests, that is the proportion of your monthly income that goes out in debt payments, including minimum payments on credit cards and standard payments on instalment loans, such as auto, student and personal loans, as well as your new mortgage. You should also include any regular commitments for alimony or child support.

LendingTree has a DTI calculator that can help you determine yours. If you plan on borrowing for your down payment, include the payments on the loan(s) from your family or friends when you use it. It is unlikely a lender will allow your DTI to be higher than 50 percent. Some types of mortgage require 43 percent, and many lenders prefer it to be in the 30s.

Borrowing from yourself

One way to keep your DTI low is to borrow from yourself because not all lenders count repayments of such loans in your DTI, even if you have to make them. But you need to check your lender’s policy before you proceed, and either rule out this option or find a more sympathetic source for your mortgage.

How do you borrow from yourself? By raiding your retirement pot. You may be able to make a withdrawal or take a loan from your 401(k), IRA or Roth IRA to fund your down payment.

But, unless you are a tax accountant, you should take professional advice before doing so. No, really. This is a big step with lots of potential implications.

Potential implications of raiding your retirement funds

  1. Unless you use money in a Roth IRA, you could find yourself with significant tax liabilities if the loan isn’t repaid.
  2. If you withdraw money from your 401(k), your employer could demand immediate repayment in full if you switch jobs or otherwise leave.
  3. Some 401(k) funds have rules against this sort of borrowing.
  4. Whatever you do, there is a high chance your retirement fund will take a big hit.

As previously suggested, take advice from a trusted, reputable professional.

Advantages of making a 20 percent down payment

There’s a reason that 20 percent down payment myth survives. It may well be that, decades ago, your parents or grandparents had to find that much as a minimum.

And 20 percent remains an important threshold for borrowers. Put down that much or more, and you won’t have to pay for private mortgage insurance (PMI).

You have to pay the premiums for PMI (they are mostly wrapped up in your monthly mortgage payment, but you may have to make an upfront payment too), but the only benefit you get from them is an ability to borrow with a smaller down payment. If any claim is made on the policy, probably because you have defaulted on your loan, the payout will go directly to the lender.

The biggest downside to a low down payment: PMI

Like we mentioned, most mortgage loans that come with a low down payment requirement have a big caveat — the added cost of private mortgage insurance.

The amount you pay for PMI will depend on the type of mortgage you choose and maybe your personal circumstances:

  • Conventional loan — You will get a quote from your lender. Monthly payments are typically lower than on some other types of mortgage and will depend on your credit score and the size of your down payment. Your upfront payment is likely to be small or sometimes zero.
  • SoFi loan — There is no PMI and so no MIPs on these loans with a down payment equal to or higher than 10 percent.
  • FHA loan — This is often the most expensive type of PMI. But its costs are not affected by your credit score, and the size of your down payment tends to have less impact. So this is a good bet if your credit is iffy and you don’t have substantial savings. At the time of writing, in 2017, you can expect to pay 1.75 percent of the loan value as an upfront charge, and then anything between 0.45 percent and 1.05 percent annually, depending on how much you borrowed and the sizes of your original loan and down payment. Although calculated on an annual basis, ongoing premiums are spread evenly through the year and collected through your monthly payments. If you cannot afford the upfront payment, it may be possible to wrap it up in your overall loan.
  • USDA loan — This is similar to the FHA loan’s PMI model, but typically has lower upfront and monthly payments. As with FHA loans, if you cannot afford the upfront payment, it may be possible to wrap it up in your overall loan.
  • VA loan — You do not pay ongoing monthly premiums with one of these. However, you do pay an upfront cost, called a “funding fee.” For first-time buyers in 2017, these range from 1.25 percent to 2.4 percent, depending on your type of service and the size of your down payment. For regular military with a zero down payment, it is 2.15 percent. If you cannot afford that funding fee, you may be able to wrap it up in your overall loan.

Most sorts of PMI terminate (either automatically or on request) when your mortgage balance reaches 80 percent of the contract price or the property’s appraised value when you bought your home. However, that does not apply to FHA loans. You will likely be on the hook for PMI premiums for those until you move or refinance.

Should you wait to get a mortgage until you can avoid PMI?

By now you may be pondering a dilemma: Should you jump into the market now and swallow those PMI costs? Or might you be better off holding back until you have the whole 20 percent down payment, thus avoiding PMI altogether?

Your smart choice largely depends on the real estate market where you want to buy. It might also depend on the market where you are selling, if you are not a first-time buyer. And it is mostly down to math.

A matter of math

Research home-price trends in your target neighborhood to see whether they are rising (they are in most places) and, if so, how quickly. Bear in mind that some forecasting companies expect growth to continue, but more slowly. For example, CoreLogic calculated home prices grew 6.7 percent nationwide in the year ending July 2017, but expects that to slow to 5 percent by July 2018.

It makes sense to go ahead and jump into the housing market if you anticipate that the value of your home will increase sufficiently year after year to offset the added cost of PMI.

Once you have a feel for those price trends, use a calculator like MagnifyMoney parent company LendingTree’s mortgage calculator to model your options. It will itemize your PMI as part of your total monthly payment. Work out how much you could save by avoiding PMI, and compare that with how much you stand to lose in home-price inflation if you wait to save that 20 percent.

You are now in a position to make an informed decision over whether to buy now or carry on saving. Of course, if in the meantime you find the home of your dreams, you can always choose to go with your heart rather than your head.

For more information, read What Is PMI and Is It Really That Bad?

One last thing about personal loans…

There are lots of things to like about personal loans. They are easy, quick and relatively cheap (or often free) to set up. They almost always have lower interest rates than credit cards for equivalent borrowers. And they make budgeting simple, because you know how much you will pay each month, subject to rate hikes.

However, typically their rates are noticeably higher than secured loans, such as mortgages and home equity products. And you need good credit to get a low interest rate.

Some lenders advertise personal loans for as much as $100,000. Others have more modest caps. How much you will be able to borrow will depend on many factors, including how easily you can afford to repay it and your credit score.

Find out more at Shopping for Personal Loans.

The post Can You Use a Personal Loan for a Home Down Payment? appeared first on MagnifyMoney.

5 Things You Need for a Successful Home Fitness Routine

Here's everything you need to get in shape at home.

Have you been skipping the gym too many times? Enough with the excuses. Just because you can’t get out (or don’t want to join a gym), doesn’t mean you can’t stay fit. Here’s everything you need to work out at home successfully without going into debt.

1. The Right Surface

If you have a spare area in your home to call your own, create a cushioned surface with Soft Tiles, which are interlocking 5/8-inch thick mats made of a non-toxic ethylene-vinyl acetate foam ($120 at SoftTiles.com for a nine-piece set covering a 6 1/2-foot by 6 1/2-foot space). These waterproof tiles are available in a ton of colors and have attachable beveled edges to create a smooth transition from the floor, so no tripping. Keep it simple with a color or two or use the Soft Tiles “mat builder” feature to create your own design.

If your workout space needs to be convertible, a yoga mat is a good way to go. There are different thicknesses, colors and patterns available, so check out a yoga lifestyle site like Gaiam.com for lots of high quality options.

2. The Right Apparel

You might think you’re just working out at home, so why wear anything special? Think again.

“Gearing up in clothing that’s designed for you to work out is one of the most powerful reminders to get into your fitness practice,” said Tara Mackey, health expert, author of “Cured By Nature” and founder of The Organic Life blog. “When I was first starting to change my exercise habits, I simply left my workout clothes and running shoes out by my bed the night before. This becomes an automatic reminder to make fitness a priority — first thing in the morning.”

I recommend ultra comfortable clothes you can also see yourself wearing for a run or at the gym. For women, a supportive workout bra is a must. The Tasc Performance TTFN (Ta Ta For Now) Studio Sports Bra ($44 at TascPerformance.com) is a mid-impact sports bra with supportive straps and a wide bottom band. It has crisscross straps in the back and side cutouts, so it’s cute under a loose tee if you make it to the gym or have to run out for an errand.

My new favorite leggings are the Luna Leggings from Liquido ($84 at LiquidoActive.com), which are said to help with microcirculation, firmness and reduce the appearance of cellulite. All I know is they are comfy and flattering. They are great to work out in, but are equally as comfortable for all-day wear.

For men, the Shēdo Lane Men’s Short Sleeve Sun Shirt ($28 at ShedoLane.com) is one of the softest tees you’ll own. The fabric has stretch and movement and, if you decide to go for a run, the shirt has an Ultraviolet Protection Factor of 50+. The Hylete verge II flex-woven zip pocket shorts ($80 at Hylete.com) feel virtually weightless but are durable and have features like a zippered pocket and a two-way drawstring allowing you lace the shorts inside or outside, depending on your preference.

3. The Right Tools

No matter what kind of workouts you prefer, it’s wise to stock up on a few essentials should you decide to branch out. A good place to start is with an all-in-one kit like the FitKit — Total Fitness in a Kit ($39.99). This kit contains essentials like resistance bands, a door anchor and a jump rope. It’s also weighs only 2 pounds so it’s good for travel. It includes fitness cards to help get you started and you’ll have access to a library of more than 250 exercises. For more workout options, check out YouTube, where you’ll find hundreds — if not thousands — of free fitness videos of any style, length or discipline you can imagine.

Mackey suggests weights as well. “Even if you have to use soup cans (which is what I did before I could afford a set of weights), make sure you are lifting at least a little bit every day,” she said. “Today, the investment is minimal; you can find five-pound weights for less than $20 on Amazon.” I also like to have a couple of kettle bells and an exercise ball on hand.

4. A Good Recovery Rub

Even if you’re working out at home, you can go overboard. For days when you are experiencing soreness, keep a muscle rub, like the Procure Epsom Salt Rub ($5.97 at Walmart) on hand. This lightweight gel is a blend of of Epsom salt and aloe vera to sooth sore muscles. And it’s fragrance-free so you won’t smell like a walking bottle of menthol.

5. An Alternative Exercise Option

And for those days when you don’t feel like doing anything at all, place a Posture Cushion ($37.99 at BackPainHelp.com) on the chair at your desk. Not only is it helpful for back pain and is comfortable to sit on, it functions like a fitness ball. Its unstable surface forces your body to sit actively to stay balanced, which, in turn, strengthens your core. If you’ve invested in a fitness ball, you can replace your desk chair with it for the same effect.

As you begin your new workout regimen you’ll want to meet with your doctor to make sure you’re healthy enough to do the workouts you’re planning. Likewise, you’ll want to check your financial health before buying a bunch of equipment. You don’t want to gain physical fitness at the cost of fiscal fitness. You can start by checking your credit scores absolutely free on Credit.com.

Image: Mikolette

The post 5 Things You Need for a Successful Home Fitness Routine appeared first on Credit.com.

Earnest: Personal & Student Loans for Responsible Individuals with Limited Credit History

Earnest - Personal & Student Loans for Responsible Individuals with Limited Credit History

Updated August 21, 2017

Earnest is anything but a traditional lender for unsecured personal loans and student loans. They offer merit-based loans instead of credit-based loans, which is good news for anyone just starting to establish credit. Their goal is to lend to borrowers who show signs of being financially responsible. Earnest is working to redefine credit-worthiness by taking into account much more than just your score.

They have a thorough application process, but it’s for good reason – they consider different variables and data points (such as employment history, education, and overall financial situation) that traditional lenders don’t.

Earnest*, unlike traditional lenders, says their underwriting team looks to the future to predict what your finances will look like, based upon the previously mentioned variables. They don’t place as much emphasis on your past, which is why a minimal credit history is okay.

Additionally, as their underwriting process is so thorough, Earnest doesn’t take on as much risk as traditional lenders do. With their focus on the financial responsibility level of the borrower, they have less defaults and fraud, which allows them to offer some of the lowest APRs on unsecured personal loans.

Personal Loan (Scroll Down for Student Loan Refinance)

Earnest offers up to $50,000 for as long as three years, and their APR starts at a fixed-rate of 5.25% and goes up to 12.99%. They claim that’s lower than any other lender of their type out there, and if you receive a better quote elsewhere; they encourage you to contact them.

Typical loan structure

How does this look on paper? If you needed to borrow $20,000, your estimated monthly payment would be $599-$638 on a three- year loan, $873-$911 on a two- year loan, and $1,705-$1,744 on a one-year loan. According to their website, the best available APR is on a one-year loan.

Not available everywhere

Earnest is available in the following 36 states (they are increasing the number of states regularly, and we keep this updated): Arkansas, Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Utah, Virginia, Washington, Washington D.C., West Virginia, Wisconsin and Wyoming.

Get on LinkedIn

Earnest no longer requires that you have a LinkedIn profile. However, if you do have a LinkedIn profile, the application process becomes a lot faster. When you fill out the application, your education and employment history will automatically be filled in from your LinkedIn profile.

What Earnest Looks for in a Borrower

Earnest AppEarnest wants to lend to those who know how to manage and control their finances. They want borrowers to know the importance of saving, living below their means, using credit wisely, making timely payments, and avoiding fees.

They look at salary, savings, debt to income ratio, and cash flow. They want borrowers with low credit utilization – not those maxing out their credit cards and experiencing difficulty in paying.

Borrowers must be over 18 years old and have a solid education background. Ideally, they attended college or graduate school, have a degree, and have a history of consistent employment, or at least a job offer that gives them the opportunity to grow.

Overall, Earnest wants to make sure borrowers are taking their future as seriously as they are. After all, they’re investing in it! The team at Earnest knows that money often holds people back when it comes to being able to achieve their dreams and goals, and they’re all about helping borrowers get there.

For that reason, Earnest seeks to learn more about those that apply for loans with them. They review every line of your application, and they want to develop a lifelong relationship with their borrowers. They genuinely want to help and see their borrowers succeed.

The Fine Print – Are There Any Fees?

Earnest actually doesn’t charge any fees. There are no late fees, no origination fees, and no hidden fees.

There’s also no penalty for prepaying loans with Earnest – they encourage borrowers to prepay to reduce the amount of interest they’ll pay over the life of the loan.

Earnest states that one of its values is transparency (and of course, here at MagnifyMoney, that’s one of ours as well!), and they are willing to work with borrowers who are struggling to make payments.

Hala Baig, a member of Earnest’s Client Happiness team, says, “We would work with the client to make accommodations that are appropriate to help them through their situation.”

She also notes that if borrowers are late on payments, they do report the status of loans on a monthly basis.

What You Can Do With the Money

The $30,000 loan limit is enough to pay off debt such as an undergraduate student loan, medical debt, or consumer debt, relocate for a job, improve your home or rental property, help you fund a down payment, or further invest in your education.

Earnest’s APR is much, much better than you’ll receive on many credit cards, and it could be a viable way to decrease the burden of debt you’re currently experiencing.

Earnest logo 1

The Personal Loan Application Process

Earnest does a hard inquiry upon completion of the application. They’re very open about this on their website, stating that hard inquiries remain on credit reports for two years, and may slightly lower your credit score for a short period of time.

Compared to Upstart, their application process is more involved, but that’s to the benefit of the borrower. They aim to underwrite files and make a decision within 7 business days – it’s not instantaneous.

However, once you accept a loan from Earnest and input your bank information, they’ll transfer the money the next day via ACH, so the money will be in your account within 3 days.

Student Loan Refinance

When refinancing with Earnest, you can refinance both private and federal student loans.

The minimum amount to refinance is $5,000 – there’s no specific cap on the maximum you can refinance.

We encourage you to shop around. Earnest is one of the best options, but there are others. You can see the best options to refinance your student loans here.

Earnest offers loans up to 20 years. Unlike other lenders, Earnest allows borrowers to create their own term based on the minimum monthly payment you’re comfortable making. Yes, you can actually choose your monthly payment, which means the loan can be customized to your needs. Loan terms start at 5 months, and you can change that term later if needed.

You can also switch between variable and fixed rates freely – there’s no charge. (Note that variable rates are not offered in IL, MI, MN, OR, and TN. Earnest isn’t in all 50 states yet, either.)

Fixed APRs range from 3.35% to 6.39%, and variable APRs range from 2.81% to 6.19% (this is with a .25% autopay discount).

If you refinance $25,000 on a 10 year term with an APR of 5.75%, your monthly payment will be $274.42.

The Pros and Cons of Earnest’s Student Loan Refinance Program

Similar to SoFi, Earnest offers unemployment protection should you lose your job. That means you can defer payments for three months at a time, up to a total of twelve months over the life of your loan. Interest still accrues, though.

The flexibility offered from being able to switch between fixed and variable rates is a great benefit to have should you experience a change in your financial situation.

As you can see from above, variable rates are much lower than fixed rates. Of course, the only problem is those rates change over time, and they can grow to become unmanageable if you take a while to pay off your loan.

Having the option to switch makes your student loan payments easier to manage. If you can afford to pay off your loans quickly, you’ll benefit from the low variable rate. If you have to take it slow and need stability because you lost a source of income, you can switch to a fixed rate. Note that switching can only take place once every 6 months.

Earnest also lets borrowers skip one payment every 12 months (after making on-time payments for 6 months). Just note this does raise your monthly payment to adjust for the skipped payment.

Beyond that, Earnest encourages borrowers to contact a representative if they’re experiencing financial hardship. Earnest is committed to working with borrowers to make their loans as manageable as possible, even if that means temporary forbearance or restructuring the loan.

Lastly, if you need to lower your monthly payment, you can apply to refinance again. This entails Earnest taking another look at your terms and seeing if it can give you a better quote.

Who Qualifies to Refinance Student Loans With Earnest?

Earnest doesn’t have a laundry list of eligibility requirements. Simply put, it’s looking to lend to financially responsible people that have a reasonable ability to pay their loans back.

Earnest describes its ideal candidate as someone who:

  • Is employed, or at least has a job offer
  • Is at least 18 years old
  • Has a positive bank balance consistently
  • Has enough in savings to cover a month or more of regular expenses
  • Lives in AR, AZ, CA, CO, CT, FL, GA, HI, IL, IN, KS, MA, MD, MI, MN, NC, NE, NH, NJ, NY, OH, OR, PA, TN, TX, UT, VA, WA, Washington D.C., and WI
  • Has a history of making timely payments on loans
  • Has an income that can support their debt and routine living expenses
  • Has graduated from a Title IV accredited school

If you think you need a little help to qualify, Earnest does accept co-signers – you just have to contact a representative via email first.

Application Process and Documents Needed to Refinance

Earnest has a straightforward application process. You can start by receiving the rates you’re eligible for in just 2 minutes. This won’t affect your credit, either. However, this initial soft pull is used to estimate your rates – if you choose to move forward with the terms offered to you, you’ll be subject to a hard credit inquiry, and your rates may change.

Filling out the entire application takes about 15 minutes. You’ll be asked to provide personal information, education history, employment history, and financial history. Earnest takes all of this into account when making the decision to lend to you.

The Fine Print for Student Loan Refinance

There aren’t any hidden fees – no origination, prepayment, or hidden fees exist. Earnest makes it clear its profits come from interest.

There are also no late fees, but if you get behind in payments, the status of your loan will be reported to the credit bureaus.

Earnest logo

Who Benefits the Most from Earnest

Those in their 20s and 30s who have a good grip on their finances and are just getting started with their careers will make great borrowers. If you’re dedicated to experiencing financial success once you earn enough money to actually achieve it, you should look into a loan with Earnest.

If you have a history of late payments, being disorganized with your money, or letting things slip through the cracks, then you’re going to have a more difficult time getting a loan.

Amazing credit score not required

You don’t necessarily need to have the most amazing credit score, but your track record with money thus far will speak volumes about how you’re going to handle the money loaned from Earnest. That’s what they will be the most concerned about.

What makes you looks responsible?

Baig gives a better picture, stating, “We are focused on offering better loan alternatives to financially responsible people. We believe the vast majority of people are financially responsible and that reviewing applications based strictly on credit history never shows the full picture. One example would be saving money in a 401k or IRA. That would not appear on your credit history, but is a great signal to us that someone is financially responsible.”

Conclusion

Overall, it’s very clear that Earnest wants to help their borrowers as much as possible. Throughout their website, they take time to explain everything involved with the loan process. Their priority is educating their borrowers.

While Earnest does have a nice starting APR at 3.35%, remember to take advantage of the other lenders out there and shop around. You are never obligated to take a loan once you receive a quote, and it’s important to do your due diligence and make sure you’re getting the best rates out there. If you do find better rates, be sure to notify Earnest. Otherwise, compare rates with as many lenders as possible.

Shopping around within the span of 45 days isn’t going to make a huge dent in your credit; the bureaus understand you’re doing what you need to do to secure the best loan possible. Just make sure you’re not applying to different lenders once a month, and your credit will be okay.

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The post Earnest: Personal & Student Loans for Responsible Individuals with Limited Credit History appeared first on MagnifyMoney.

SoFi Review: Personal & Student Loans with Low Rates and No Fee

SoFi Review: Personal & Student Loans

Updated August 21, 2017

[SoFiPL]SoFi[/SoFiPL] is an online loan company that offers student loan refinancing options, mortgages and personal loans. [SoFiPL]SoFi[/SoFiPL] offers some of the lowest interest rates and the best consumer experience in the market. We have researched thousands of products from hundreds of companies, and [SoFiPL]SoFi[/SoFiPL] is one of our favorites. However, they have strict credit criteria and target people with good jobs, good income, a proven ability to manage a budget and good credit history. If [SoFiPL]SoFi*[/SoFiPL] approves you, you will probably have a difficult time finding a lower interest rate anywhere else.

In this post, we will review both Student Loans and Personal Loans. (They have just launched mortgages, and we will be updating this post later with a review of that product). For each, we will discuss:

  • The details of the product: how much can you borrow, and at what price
  • Approval criteria: how does [SoFiPL]SoFi[/SoFiPL] underwrite, and who are they likely to accept

In addition, at the end we will give you more details of [SoFiPL]SoFi[/SoFiPL], including who funded them, how big they are and their reputation.

Student Loan Refinance (Skip Ahead for Personal Loans)

[SoFiSL]SoFi[/SoFiSL] has just reduced the minimum loan amount. You can now refinance as [SoFiSLLoanAmt]little as $5,000[/SoFiSLLoanAmt] of student loan debt. There is no cap on how much you can refinance. Based upon your cash flow, [SoFiSL]SoFi[/SoFiSL] will try to provide an option to refinance all of your student loan debt.

There is [SoFiSLOrgFee]no origination fee[/SoFiSLOrgFee] and [SoFiSLPrepayFee]no prepayment penalty[/SoFiSLPrepayFee]. It offers some of the lowest rates out there. [SoFiSLAPR]Fixed APRs range from 3.35% – 7.125%*, and variable APRs range from 2.815% – 6.740%[/SoFiSLAPR].* These rates are available so long as you enroll in auto-pay.* Given that interest rates are at an all-time low, you should think carefully before signing up for a variable interest rate. If you can pay off your loan in a short period of time, you could save a lot of money. If it will take you longer, you may not want to take the interest rate risk.

You can refinance on a [SoFiSLTerm]5, 10, 15, or 20 year term[/SoFiSLTerm].

For example, if you borrow $30,000 on a 10 year term at an APR of 4.615%, your monthly payment will be $312.58. Under those terms, you’re paying back a total of $37,509.60 (120 payments). If you borrow the same amount, but have a 6.8% APR, your monthly payment is $345.24, paying back a total of $41,428.80. In this case, [SoFiSL]SoFi’s[/SoFiSL] low rates have the potential to save you nearly $4,000.

[SoFiSL]SoFi[/SoFiSL] will refinance both private and federal student loans. However, if you refinance a federal loan you will give up all federal protections and programs, including income-based repayment programs. [SoFiSL]SoFi[/SoFiSL] is unique among private lenders because it offer unemployment insurance, free of charge. If you lose your job for no fault of your own (you can’t quit), [SoFiSL]SoFi[/SoFiSL] will suspend your monthly payments until you find a new job. You can do this for up to 12 months. The interest that accrues during this period would be added to the loan.

[SoFiSL]SoFi[/SoFiSL] also offers an entrepreneur program to help graduates who dream of owning a business.

Under this program, loans can be deferred for six months so borrowers can focus on growing their businesses. [SoFiSL]SoFi[/SoFiSL] provides access to networking events, mentors, and investors.

Refinancing with [SoFiSL]SoFi[/SoFiSL] isn’t an option for everyone. First, refinancing is currently unavailable to those residing in Nevada, and variable rate options aren’t available to those in Ohio or Tennessee.

Second, [SoFiSL]SoFi[/SoFiSL] has a list of available schools and programs it services. If your school or program isn’t on that list, you won’t be eligible to refinance.

Third, [SoFiSL]SoFi[/SoFiSL] typically [SoFiSLInq]requires applicants to have excellent credit[/SoFiSLInq]. [SoFiSLCoSigners]It occasionally accepts co-signers – you must call to review your situation with a representative. However, there’s no co-signer release if you move forward with one on your loan[/SoFiSLCoSigners].

To be eligible to refinance your student loans with [SoFiSL]SoFi[/SoFiSL], you need to meet the following requirements:

  • You must be a U.S. citizen or permanent resident 18 years or older
  • You need to have a 4-year undergraduate or graduate degree from a Title IV accredited institution
  • You have to be employed or have an offer of employment starting in 90 days from the time you apply
  • You need to be in good standing on your current student loans
  • You should have a good, stable employment history
  • A strong monthly cash flow is a must
  • [SoFiSLCreditScore]An excellent FICO score will improve your chances of being approved[/SoFiSLCreditScore]

The application process is straightforward and [SoFiSL]SoFi’s[/SoFiSL] pre-approval should take you less than 15 minutes to complete. You likely won’t need most of the documents listed below until you’re ready to move forward with a loan, but they’re good to have on hand while you’re shopping around.

  • Existing student loan information [SoFiSL](SoFi[/SoFiSL] will need your account information for the loans you wish to finance)
  • Employment information – salary, offer of employment, length of employment
  • Most recent pay stubs as proof of income and employment (if you’re currently employed)
  • Diploma or transcript in the event [SoFiSL]SoFi[/SoFiSL] needs to verify your graduation

It’s good to note [SoFiSL]SoFi[/SoFiSL] accepts screenshots from your PC and pictures taken from a phone, so if you don’t have access to a scanner, there’s no need to worry.

If you’re ready to get started, you can apply for a refinance and check your rate by clicking the button below.

APPLY NOW Secured

on SoFi’s secure website

Details on [SoFiPL]SoFi’s[/SoFiPL] Personal Loan

At [SoFiPL]SoFi,[/SoFiPL] you can [SoFiLoanAmt]borrow between $5,000 and $100,000[/SoFiLoanAmt].

There is [SoFiOrgFee]no origination fee,[/SoFiOrgFee] [SoFiPrepayFee]no prepayment penalty[/SoFiPrepayFee] and no balance transfer fee. They are truly unique in this regard.

You can [SoFiTerm]borrow the money for 3, 5 or 7 years[/SoFiTerm].

In addition, [SoFiPL]SoFi[/SoFiPL] offers unemployment protection. Unlike traditional personal loan companies, they are not looking to make money from unemployment insurance. Instead, they are offering it as a feature and a brand promise. And the insurance is generous. If you lose your job through no fault of your own, you will be given a payment holiday. Interest will continue to accrue on the loan (and be added to the balance), but no payment will be due and your loan will continue to be reported as current to the credit bureau. You can have 3 consecutive months of payments made at a time, and you can have up to 12 months of payments made during the life of the loan. That offers great flexibility. In addition, they offer job placement services to help you find a job.

[SoFiAPR]Fixed interest rates range from 5.49% to 14.24%[/SoFiAPR]* – but you have to sign up for auto-pay in order to get these rates. In addition, [SoFiPL]SoFi[/SoFiPL] offers [SoFiAPR]variable interest rates from 5.17% – 11.32%* with auto-pay. The rates are based upon 1-month LIBOR and are capped at 14.95%[/SoFiAPR].*

You can use the loans for almost any purpose: pay off credit card debt, home improvement, or anything else because the money can be deposited as cash in your checking account.

APPLY NOW Secured

on SoFi’s secure website

What Does It Take to Get Approved?

In order to be approved for a loan, you must at least meet the following requirements:

  • You are a US citizen or permanent resident
  • You are at least the age of majority in your state (typically 18)
  • You are currently employed
  • You have graduated from a selection of Title IV accredited universities or graduate programs (only for the student loan product. For personal loans, there is no university requirement).

Personal loans are not available to residents of the following states: Mississippi, Nevada and Tennessee.

If you fail to meet the above criteria, you will be rejected. However, just because you meet these criteria does not mean that you will be approved. [SoFiPL]SoFi[/SoFiPL] will:

  • Perform an analysis of your ability to repay. They do a “cash flow analysis” looking at your income and expenditure, making sure you can pay
  • Perform an analysis of your history with credit. Missed payments and defaults will most likely get your rejected. You need to have a strong history of repayment. Although they are not a FICO-driven lender (because they look at education, employment and cash flow), the following people will likely have a difficulty getting approved:
    • People who do not have excellent credit. In particular, if you have missed payments or have rapidly built up debt, you could find it difficult to qualify.
    • If you have a “thin credit file”, you will still have a good chance of getting approved. A thin file means that you do not have much information in your credit report. Although that could be a problem with traditional credit scores, [SoFiPL]SoFi[/SoFiPL] might still be willing to work with you.
    • People with collection items, judgments or other negative legal action

[SoFiPL]SoFi[/SoFiPL] offers some of the lowest interest rates out there, and they are picky about who they approve. If you have a good degree, a good job and a history of making payments on time, you will likely be able to benefit from [SoFiPL]SoFi[/SoFiPL].

And here is the best news: you can check to see if you will be approved, and the interest rate you would receive, without hurting your credit score. [SoFiPL]SoFi[/SoFiPL] uses what is called a [SoFiInq]“soft pull”[/SoFiInq] to determine your interest rate and your loan amount.

Given how low the interest rates are at [SoFiPL]SoFi,[/SoFiPL] if you have a college degree you should take the 3-4 minutes to see if you can be approved. The only cost is your time.

Screen Shot 2015-02-26 at 6.49.15 PM

Remember that you’re in no way obligated to take a loan once you apply.

Unless you accept the loan and go through with the hard credit inquiry, [SoFiPL]SoFi[/SoFiPL] doesn’t hold you to taking the loans presented to you.

All About [SoFiPL]SoFi[/SoFiPL]

You can trust [SoFiPL]SoFi[/SoFiPL]. They are a very well funded start-up, having raised $164 million from some of the biggest and most influential venture capital firms in the Silicon Valley.

They have also built a very strong relationship with investors, and have funded more than $2 billion in loans to date.

[SoFiPL]SoFi[/SoFiPL] has been created with a mission to revolutionize the way we borrow in this country. In particular:

  • They want to make it easy for people to shop for a loan, believing that you should be able to get your interest rate without hurting your score
  • They want to create an easy, seamless experience with a great user experience
  • They want to cut out the costs of the big banks, giving lower interest rates to borrowers and higher interest rates to lenders
  • They want to create a different type of borrowing experience, by providing unemployment insurance as a free benefit.

Their mission, and their personal loan product, align to the vision of MagnifyMoney. When we created MagnifyMoney, we hoped to find lenders like [SoFiPL]SoFi,[/SoFiPL] and are pleased to award them an A+ Transparency Score.

APPLY NOW Secured

on SoFi’s secure website

We only have one criticism: their underwriting criteria is very tight right now. Hopefully, over time, they will be able to expand the criteria and be able to provide the great experience to people who may have experienced some financial difficulties in the past.

The post SoFi Review: Personal & Student Loans with Low Rates and No Fee appeared first on MagnifyMoney.

The Ultimate Guide to Getting a Better Job This Year

You've decided it's time to get a better job — now here's how you do it.

This is the year you’re going to make more money — or take on a leadership role at work, apply for your dream job or even try a completely new career path. Whatever it is, you know you want something in your professional life to change.

Understandably, you might be overwhelmed by the prospect of making your work dreams a reality. These job-hunting tips from the pros should make it more manageable.

If You’re Just Starting to Look for a New Job (or Thinking About It)

Evaluate What’s Truly Important to You
Yes, the amount on your paycheck is important. After all, you need to pay your bills. But what else do you want from your next gig — a shorter commute? A place you can advance? Flexible schedule? Whatever it is, make the added elements of your next job part of your search to help increase the odds you’ll be happier wherever you land.

Look at Companies, Not Just Jobs
Instead of only focusing on job listings that are already posted, expand your search to find companies you think you’d enjoy working at. They may not have anything right away, but taking the step toward talking with a hiring manager about what you think you’d bring to the table may provide opportunities you wouldn’t have had otherwise.

“Make a list of the items that you like and wish were part of your current culture and compare it to future opportunities,” said Tony Gulley, managing partner of Executive Casting, a recruiting firm based in Raleigh, North Carolina. “Culture is the foundation of satisfaction and a cornerstone for employee retention, so you should not overlook this.”

Find a Mentor & Heed Their Advice
If there is someone in your field (or in your place of work) whose career, motivation, abilities or other traits you wish to emulate, tell them so and ask if they would be willing to help you become better at what you do. Don’t be shy about asking for this help. It’s not a one-way street, and the mentor as much as the mentee benefits from the relationship. Mentoring can help a seasoned professional become more cognizant of things they may do as a rote response to business situations. This will position you to advance in your current workplace or seek a better job elsewhere.

Pick Up New Skills
Eyeing a job in sales but deathly afraid of speaking in public? Perhaps it’s time to brush up on your skills. A little training or an after-work class can help you beef up your resume where you need it most.

Revamp Your Resume …
Are you still using that resume you crafted in college? Sure, you’ve updated it along the way, but maybe it’s time to consider either starting from scratch or getting rid of some of the details on there that are taking up prime real estate. Ask yourself if those early jobs are really reflective of your skillset or where you want to go in your career. If not, clear them off and make room for other more important details.

Remember, a lot of companies and recruiting firms use software to scan resumes, so prepare yours for a digital review. Dawn D. Boyer, a Virginia-based resume writer and career consultant, stressed the importance of composing digital resumes in word-processing documents with simple, easy-to-read formats that include keywords related to the type of work you’re looking for.

… And Make Sure You Proofread It
There are enough challenges to getting a new job, so don’t stand in your own way by sending application materials with errors.

“It’s shocking how many resumes cross my desk with incorrect grammar, improper punctuation, and multiple misspellings,” said Susan McNeill, a recruiter for Back to Basics Learning Dynamics, an education company in Delaware. “A sloppily written resume is an immediate red flag.”

Network, Network, Network
Sometimes the best way to find the next step is by talking to someone who’s been there. Reach out to your alumni network, tap friends or send cold emails to start conversations.

“Cold call companies and express your interest in hearing about any future openings in your line of work” said Jana Tulloch, a human resources professional at software education company DevelopIntelligence in Boulder, Colorado. “Often there are vacancies on the horizon that just haven’t been posted, and you could be the early bird who gets the worm.”

If You’re Actively Looking

Get Uncomfortable
Growth doesn’t happen by sitting still. You don’t improve your skills or opportunities by not stretching a bit, so volunteer to take on duties and projects that you might not feel completely qualified for. The same holds true when applying for jobs, especially if you’re a woman. Men are far more likely than women to apply for positions for which they might not meet every criteria.

Find a Recruiting Agency
There are plenty of services out there that help companies fill positions with qualified candidates, and the companies using these services tend to be larger employers with better benefits and salaries (they also pay the recruiters, not you, so don’t think you have to pony up any cash). You can reach out to these companies directly to make sure they know you exist, but it’s also wise to make sure you’re easy to find on the internet. Make sure your LinkedIn profile is updated and your resume is linked to it. Also, making your profile searchable on job sites like Monster.com and TheLadders.com can be helpful.

Check Your Credit
Some employers will pull a version of your credit report as part of their hiring process, and you’ll want to keep errors or unknown missteps from hurting your prospects. You can get your credit reports for free each year at AnnualCreditReport.com and view your free credit report snapshot, updated every 14 days, on Credit.com. Got bad credit? Here’s what to do if an employer wants to check out your credit report.

Prepare to Be Googled
According to a 2016 CareerBuilder survey, 59% of hiring managers use search engines to research candidates while 60% are also looking up applicants on social media — and, yes, what they find could cause you to lose out on a position. What could cost you, specifically? Survey says provocative or inappropriate photographs and videos, discriminatory comments, badmouthing of former employers or fellow employees, and poor communication skills. What can help? Background information that supports your job qualifications, a professional image, a wide range of interests and (you guessed it) good communication skills.

Find Out What You’re Worth
Use sites like Glassdoor to find out what other people at your level in your field make. That information can help you in the job search and negotiation process.

If You’re Going On Interviews

Review Your References
You want references that can speak to your work ethic and accomplishments firsthand, not necessarily the person in your orbit with the flashiest job title. If you’re thinking of adding someone new, be sure to clear it with them first. If you’re satisfied with your current advocates, double-check that their contact information is current. They can’t stump for you if the prospective employer can’t actually get in touch with them. Plus, the hiring manager might count a wrong number against you.

Don’t Forget Interview Prep
“Don’t show up empty-handed,” Boyer, the career consultant, said. “Your carry-in list should be a paper copy of your resume, a paper copy of your list of recommendations if they ask for them, and a typed list of questions to ask the future employer.” She also recommended bringing pre-written thank-you notes so you can drop it in the mail immediately upon leaving the building.

Ask For Feedback When You Get Rejected
Use the job-application process as a learning tool. If you don’t get an interview — or if you do and they choose another candidate — ask the recruiter or hiring manager why they didn’t select you and what you could do to improve your chances for getting a position like the one you applied for.

Keep an Open Mind
While it’s helpful to have a checklist in mind, having too many requirements may hold you back. Keep an open mind so you give each opportunity the consideration it deserves.

Image: Geber86 

The post The Ultimate Guide to Getting a Better Job This Year appeared first on Credit.com.

Payoff Personal Loan Review

personal loan

Updated December 13, 2015

Payoff* is a company that offers personal loans. Their goal is to help consumers get out of debt, and they don’t even like to be described as a loan company. If their algorithm is able to detect that you are going to use this loan to go further into debt, rather than payoff your existing debt at a lower interest rate, they may decline you. The goal of their business is in their name: they want you to payoff your high interest rate credit cards so that you can accelerate your debt repayment.

They currently offer a personal loan product, and in this review we will describe:

  • The terms of the loan (price, maximum loan amount, interest rate)
  • The qualification criteria
  • The application process

Terms of the Loan

Interest Rate: Between 8% and 25% APR

Loan Amount: $5,000 – $35,000

Term: Up to 60 months

Origination Fee: Between 2% – 5% of the loan amount, deducted from your proceeds when you book the loan

There are no prepayment or penalty fees with the loan.

The Qualification Criteria

Payoff is extremely transparent about their requirements for a loan. If you don’t meet the minimum criteria outlined below, you should not bother applying. If you do meet these minimum requirements, you should then apply online to see what interest rate and loan amount you would be offered. The great thing about Payoff is that you will not hurt your credit score by applying online. They use a “soft pull” – not only for the initial application, but all the way through to funding. They do not believe that shopping for a faster way to get out of debt should harm your credit score.

Here are the requirements:

Minimum FICO Score: 660 or higher (these scores can vary month to month. If you have a score in the mid-600s, you should give an application a try)

Debt-to-income ratio: 50% or lower. Payoff uses an “unsecured debt-to-income” ratio. Take the monthly payment of personal loans, credit cards and other debt, and divide that by your monthly income. If that ratio is 50% or less, you can get approved. For example, if you make $1,000 a month and pay $500 towards your credit cards and personal loans, you will have a 50% deb-to-income ratio (= 300 / 1000).

Age of credit history: You need to have at least 3 years of credit. In other words, you oldest open credit card should have been opened at least 3 years. They are not looking to work with people who are brand new to credit, and already in a lot of debt.

Other credit requirements: You need to have at least 2 “open and satisfactory” accounts. That means you have at least 2 accounts that are open, and where you have been paying on time. In addition, you can not have opened more than 1 personal / installment loan in the last 12 months. Remember: they want to target people who have debt but want to get out, and a lot of recent borrowing could indicate that you are headed further into debt.

Delinquencies: You should be current on all of your debt. In addition, you should not have been 90 days or more delinquent on any debt in the last 12 months.

And you can not have any tax liens.

In summary: Payoff is looking for people who have found themselves in debt. If you make your payments on time and are responsible, but just feel like the balance on your debt is never going down (because all of your money goes to interest), Payoff could be for you. If you have bad credit, very little credit, or continue to take on more debt every month, Payoff is not the right option.

The Application Process

The application process is very simple. You start by visiting Payoff and applying online. You can do that here*.

You will be asked a few questions, and Payoff will look to see if you are qualified for the loan. They will give you an indication of the loan amount and interest rate. You can do all of that without hurting your credit score.

Payoff may want to verify some of your information. They will walk you through the process.

Once all of the verification is complete, they will transfer the funds to your bank account.

It is a very easy, digital process. But they also have a call center that can answer your questions along the way.

In Conclusion

We spoke to the management team at Payoff. They really are trying to be different. Their goal is to help people get out of debt, and they only want to work with people who share that goal.

If you have a score in the mid-600s, have never missed a payment and are serious about getting out of debt (so that you stop putting all of your money towards interest), Payoff could be the best option for you. And given that you can see your interest rate with a soft pull, you really don’t have anything to lose by checking.

You can apply at Payoff here:

Apply Now

You can see other personal loan options here.

The post Payoff Personal Loan Review appeared first on MagnifyMoney.