debt

5 Ways to Get Out of Debt for Good

Written by adminAugust 13, 2019

Americans have a personal debt problem. Together we owe more than $13 trillion to our creditors. This is according to data collected by the Federal Reserve Bank of New York. It’s so bad that millions of Americans are struggling to figure out how to get out of their debt. Once they get into it, it seems like a revolving cycle of bad news and collection calls that never seem to stop. It’s really putting a burden on most of us.

Every single state in the country is incredibly stressed out about their debt. It touches most lives as we need to take out a certain amount of debt to do much of anything. You want to buy a house, a car, go to college, or many other things, we need to take out a loan. Most of us cannot afford these things on our own.

If you’re really struggling under a mountain of debt, it’s going to take a lot of work to get to the point where you’re financially free. Let’s take a look at five different ways to which you can help get yourself out of debt.

1) Write It All Down

You may be shocked to learn that most Americans would that do not know the total amount that they owe. You would think that this would be the first step for a lot of people. Yet, they just keep taking out more and more debt without really understanding how it works. They don’t even care about the impact that taking out all this additional debt or the havoc is causing in their lives. This is why you should go through all of your accounts and write down every single cent so that you can lay it out before you and look at what you all. This is the first step in taking care of the problem.

2) Pay Off the Smaller Debts First

If you’re able to do it, pay off your smaller debts first. Paying off some your smaller debts will increase your credit score and show a record of your ability to pay off your debt. Once you have some of the smaller debts out from underneath you, you can then put more money towards the bigger debts to get those paid off quicker.

3) Consider Your Spending Habits

One area that is necessary for you to look at is how you got into debt in the first place. Learn from your mistakes and grow out of them. If you just keep on taking more and more debt without learning how you got in debt in the first place, is not going to bode well for you. You need to stop the hemorrhaging of money. The more debt you take out, the worse your credit score gets and the more interest that you have to pay on that debt. Find out how you got there and stop it. You and your family’s livelihoods depend on it.

4) Don’t Take Out New Debt to Pay for Old Debt

Once one account gets so large that you can’t pay it back, some people will take out more debt to pay it off. But then are stuck with an even larger debt and paying off even higher interest fees. If you can’t pay off this first step, how are you going to pay off the second that? The goal is to get rid of debt, not take on more debt.

5) Declare Bankruptcy

Declaring bankruptcy should be a final solution. If there’s no other alternatives for you, then this might help you get rid of your debt and get a fresh start. You will have to restart building your credit all over again and it can take several years. If you have student loan debt, you cannot simply wipe away with bankruptcy so there are certain debts that you will have to continue to pay no matter what.

Written by adminAugust 13, 2019

Loans

One of the biggest struggles Americans have is paying back their debt. Even while the economy is soaring, and unemployment is at record lows, debt continues to pile up. It seems as if we find more reasons to keep getting more debt and less reasons to actually pay back. Yet, the good times never last and there will be a time when most Americans regret of the debt they’ve accumulated.

Collectively, Americans all around $13.2 trillion in personal debt. This combines all types of debt including credit card debt, mortgage debt, student loans, auto loans, and personal loans. Were always eager to buy the next big thing, but we scarcely consider the impact paying and trust will have down the road. Especially if the economy slows down or work dries up.

The worst thing about debt is the stress that puts on so many people. Student loan debt alone is forcing young Americans to put off making major life decisions. New studies have revealed that millennials are waiting longer to get married, by home, or start a business. They’re waiting longer than any other previous generation.

Having a lot of debt causes a lot of major problems. They can be difficult to keep up with the payments. When that happens, usually debt collectors come calling in a have many tricks and tactics to use to get you to pay up. Not to mention how much unpaid debt can destroy your credit score and make life even more difficult for you.

Let’s look at several ways removing debt from your life can ease your stress:

1) No More Debt Collectors Calling

Nothing can strike more fear in a person that a call from a debt collector. As stated previously, they have many tricks and tools up their sleeves to help entice you to pay up. They don’t care about what you’re going through or any situation you might be in. The truth is, they’ll continue bugging you until you do pay them what you owe.

This can be very stressful, but the only way to get them off your back is by being current. Once the debt is paid off, it is officially yours! You won’t have to worry any longer about whether you will lose what you’ve been working hard to pay off. Pay off your debts as soon as you can and life will get easier. Remember the feeling of being hounded and make better decisions.

2) You’ll Have More Money

There’s already so much we have to pay for. Most Americans can’t even afford to pay for their healthcare or insurance. You never know when your car insurance is going to go up, you might need a little emergency money. When it be good to finally have a little extra disposable income? When you pay off certain debts, you finally own what you are paying off. That means no more money is escaping out of your purse or wallet. You can finally see or have a little extra spending money if you’re spending is already covered.

3) You Will Finally Repair Your Credit Score

Repairing your credit score takes time. It may be really low right now, but have to stay that way. Don’t let it get worse by acquiring more and more debt. And as you begin to pay off your debt and the total amount you owed starts going down, that’s when your credit score starts to inch back up. When you finally pay off the debt in full, you’ll be seen in a better light in the event you need to take out credit again.

4) You Can Finally Plan for the Future

Here’s a difficult fact: most Americans are ill-prepared for retirement. We spoke previously about how debt is forcing people to put off making major decisions. One of those major decisions is the ability to afford saving for retirement. Having more money provides you with many more options. The more you save, the more you can plan a good vacation, for retirement, or even decide to start a business. Maybe you want to invest in the stock market. Whatever it is you want to do, the list that you have, the better off you’ll be.

Written by adminJuly 2, 2019

Credit & Debt

It may not be fully understood what causes the recession, but usually high levels of consumer debt play a major role. If we take on a lot of debt, we do so because the economy allows us to. Either things are going really great, as they appear to be doing so currently record levels of low unemployment, or things are going well and people need to take on debt to get through it.

Right now, maybe both of these situations are in play. Consider that were just now coming out of the recession that hit back in 2008. It took us nearly an entire decade to get back on our feet. During that time, people had no choice but to take out debt in order to survive. They went back to school, took up credit cards, and got behind on their bills and had to use loans to pay for them.

And while these situations are in flux, the total US consumer debt has surpassed $14 trillion early in 2019. This is higher than the $13 trillion limit back in 2008. That much household debt helped send the global economy into a tailspin. We’re talking about auto loan debt, credit card debt, student loan debt, and mortgage debt, with many Americans balancing all four.

All of this data is according to Marquette Associates Senior research analyst Ben Mohr. In 2008 it was the housing market that really pushed economy into a major recession. This time, if such a thing happens, it will be because of student loan debt which is sitting a notable increase among economists and strategists.

Rising Consumer Debt

Right now, we may begin to see larger amounts of consumer debt. Read time in the stock market is at or near record highs. Housing market is doing really well, the Federal Reserve is looking at reducing interest rates, and the job market is better than it’s ever been before. When things are good like this, it starts to get some economists worried about the spending habits of Americans which can throw this entire system into a lurch.

Eventually the debt becomes too much for Americans to handle. The bubble pops. Interest rates start rising and the cost of living starts to push beyond what most Americans can handle. But were not there yet, as the Marquette analyst says defaulting on this debt is still quite low, meaning Americans and investors alike aren’t being overwhelmed.

In fact, consumer delinquency on loans are very near historic lows. Back in 2008, the increase in loan delinquencies revealed that there was a major problem in crack was beginning to form under the weight of so much consumer debt. That’s not happening today, so not too many people are worried that we’re in the midst of a new recession, but it won’t take too much, especially as the weight of debt gets heavier and cracks begin to form.

Were even finding that Americans who default on their first mortgage loans are much lower than before the 2008 recession. Were currently living in a time with historically low interest rates, increased job numbers, and steadily increasing salaries. Hopefully we can continue down this path of American prosperity.

Written by adminJune 20, 2019

Credit & Debt

Your credit score can impact a lot more than you realize it does. We’re talking about its ability to keep you from making major life decisions, taking care of yourself during an emergency, or even the ability to save money. Low credit scores can also be blamed for causing issues in relationships and putting a person in turnoff territory.

Low credit scores can cause higher interest rates, expensive insurance, and so much more. Sometimes, a bad score isn’t the person’s fault. Perhaps they had a medical emergency and are now trying to pay back a lot of debt. A divorce and big spending by a spouse can lead to it as well. Either way, low credit scores make life difficult.

The new middle class is essentially a person who is making a decent amount, but are unable to save. A lot of them don’t have health insurance, which costs them big time in the end. There’s new information coming by Elevate, a company that looks at data from non prime Americans. To be considered non prime, you must have a credit score below 700.

Those with a low credit score are finding out they have a harder time financially than those with a good credit score. This might seem obvious, but it happens in ways you might not expect. Their incomes are less steady. They’re paying a lot more for things that someone with good credit is paying less for.

Credit Scores and Dating

42% of people who were surveyed said the person’s credit score played some role in their interest in another person. This is an interesting statistic found by Bankrate and Princeton Survey Research Associates International. A good credit score says someone is responsible with their finances and money issues cause problems in relationships.

Women are rightfully more judgmental about credit scores than men. The survey looked at 1,000 adults and found about half of the women said they wouldn’t date someone with a bad credit score. Men care less about it, with only 35% saying the same. Older millennials are the group that seems to care the most about the subject.

There are very good reasons for this. Low credit scores can make it nearly impossible to buy a house, get an auto loan, get any type of loan if one is needed, and so much more. Even if they’re able to find that one company out there willing to give them, let’s say, a mortgage, they’d pay nearly $50,000 more than people with good credit.

This is ultimately what makes life more difficult for people with a lower credit score. They’re shelling out a lot more money and it’s catching up to them. They make higher monthly payments and can’t seem to get ahead in their finances. This is why it’s essential to focus on improving your credit score and saving money any way you can.

Written by adminMay 25, 2019

Saving

Times are surely changing in the United States and not for the better. While the economy is roaring back to life after a decade-long recession, it’s not good news for everyone. There’s still a lot of income inequality and massive quantities of debt. Social Security is being drained out. The cost of living is rising while incomes are staying the same.

$20 used to buy you a lot more at the grocery story just a few short years ago. Gas prices are one crisis away from jumping past $3 and even $4 per gallon. All of these struggles and worries combine and prevent average Americans from being able to save any money. They can’t afford healthcare costs or insurance. Prescription drugs are too expensive.

And because so many people are living paycheck-to-paycheck, they worry about a lot of things. Retirement is one of them. If you can’t save money for retirement, you’re going to be worried about whether you can retire at all. In fact, one-fourth of all Americans already think they’ll never be able to stop working in their lifetime.

According to a study from the Economic Policy Institute, more than one-fourth of the population should be more worried about retirement. Over one half of working people have absolutely nothing saved up for retirement at all. Many apparently think they’ll be able to make up the difference at some point. They’re deluding themselves if they think they will.

Debt is a Major Driver in Preventing Retirement

There are several things that contribute to this lack of saving for retirement. Healthcare costs, longer lifespans than previous generations, and other issues can creep in. But the main driver is debt. Americans can barely afford to live on a typical salary and take out hefty loans throughout their lives. These loans have high interest rates and are difficult to pay back.

Maybe we can afford all of our bills, but many Americans borrow more than they can afford. If interest rates rise, then it hits the economy like a ton of bricks. One study from the Transamerica Center of Retirement Studies reveals that 66% of U.S. citizens say they’re biggest concern in life is paying off their debt.

The study also revealed that paying off debt is a major priority over saving money. “Retirement is all about cash flow. In my mind, it doesn’t matter what your income is. It doesn’t matter what your portfolio size is,” retirement expert Bill Losey told Bankrate. “It really all boils down to habits: having a plan, being frugal, making sure that you have a debt reduction plan.”

It’s so much debt, it’s difficult to pay off in an entire lifetime. Americans expect they’ll be paying the debt well into their golden years, forcing them to work longer than expected. That can be a difficult thing, as companies often like to replace older workers with faster, younger, and cheaper employees.

Retirees Aren’t Ready for Healthcare Hikes

If you think healthcare is expensive when you’re a young adult or even middle aged, you haven’t seen anything yet. It’s much more expensive when you’re at retirement age. It’s common sense. We get older, our bodies start falling apart more. We might be fine for a while, but eventually, our age always catches up with us.

Women in particular have it rough. They pay more in healthcare throughout their life than men do. They also live longer than men, so they spend even more money on healthcare and retirement then men do. In a lot of circumstances, women leave it to the men to budget the money and save, leaving them in a massive hole.

It’s really difficult to know what to expect when you’re older. Maybe we can look at family history and expect some health issues, but most people don’t. They don’t save or plan for accidents. They don’t have a rainy-day fund. Worst of all, they don’t save much for retirement at all, expecting it to be covered later.

Retirees Are Scared

As we continue to age, more Americans start feeling the retirement crunch. They begin to feel as if they won’t have enough money to last the rest of their life. What happens when they officially run out of retirement money? This is a real fear that’s growing. Retirees are becoming increasingly scared of running out of all their money before they die.

While this is going on, it’s going on quietly. The rest of us aren’t really as concerned about it. Statistically speaking, we’re showing we don’t really care to save money for retirement. More studies are coming out all the time proving that we don’t put our money where our mouth is. Short-term goals constantly take precedence over long-term goals and it’s hurting us.

Why save when we want that giant house or brand-new car? There are credit cards we need to max out buying stuff we really don’t need or care about once we have it. It’s this thinking that desperately hurt us later in life. We get to the point where we realized just how much money we wasted and regret not saving more. 68% of millennials have no retirement plan.

“Many people today are outliving their assets because they did not include retirement in their long-term financial goals,” says Doyle Williams, an executive at COUNTRY Financial. “Americans need to seek financial guidance now so they can eliminate the fear of never being able to retire. By taking some simple steps almost everyone can put a plan in place to secure their financial future.”

A World Economic Forum Study

A new study from the World Economic Forum bares all of this out. We’re living longer than we anticipated. “The key driver of the challenges facing retirement systems is increasing life expectancy and a falling birth rate,” the study says. “This leads to a smaller workforce supporting an ever-growing population of retirees.”

“The lack of awareness of the basics on how interest and returns will compound over time, how inflation will impact savings, and the benefits of holding a broad selection of assets to diversify risks means that many individuals are ill-equipped to manage their own pension savings,” WEF says. “Some groups are particularly vulnerable, including women, the young and those who cannot afford, or choose not to seek, financial advice.”

Written by adminMay 25, 2019

Credit & Debt

Back in December, CreditCards.com did a survey asking 1,000 Americans about their debt and their thoughts surrounding it. What the survey revealed was quite shocking. It found that as much as 25% of the population believes their debt is so great, they’ll never pay it off. In fact, they expect to die with a large amount of debt left to be dealt with.

41% of those surveyed say they have no clue when they’ll be able to pay their debt off. They’re working on it, but apparently don’t have it budgeted out. 65% say they’re not sure when or even if they’ll ever. These are terrible statistics that are making life difficult for everyone. Having significant amounts of debt hurt the economy as a whole.

An analyst for CreditCards.com, Ted Rossman, described these stats as “depressing” and one that everyone should try to avoid.

“You’ve got to do whatever you can — whether it’s a balance transfer, taking on a second job, cutting expenses, or whatever you have to do,” he added. “Credit card debt has a much greater impact on your finances than something like a mortgage, an auto loan, or a student loan, because those products are all in the 4, 5, 6% range. Credit card rates are so much higher.”

Growing Credit Card Rates

Credit card interest rates are currently higher than any type of loan out there. These rates recently came into focus after both Bernie Sanders and Alexandria Ocasio-Cortez came out in favor of legislation to se the rate at 15%. They hope lowering the interest rates will help all Americans, but especially the working class.

“There is no reason a person should pay more than 15% interest in the United States,” the freshman representative wrote on Twitter. “It’s a debt trap for working people + it has to end.”

“Practically speaking, I don’t think that’ll become law any time soon,” Rossman said of the proposal, “but I still think it’s an important discussion to have because credit card rates are really high.”

“We know … that about 40% of cardholders are already paying their bills in full each and every month, so that’s great,” Rossman said. “Those are the kinds of people that are great candidates for rewards. But, the 60% who are carrying debt really need to prioritize their interest rate over all else. Unfortunately, a lot of people aren’t doing that.”

The reality is, overall household debt has been creeping up in recent years. Despite a robust economy, people are leaning more on debt than ever before. Perhaps they believe they can afford it with the extra cash in their pockets, but it’s still only 40% of people who pay their credit card debt in full.

“We feel like most people are being responsible,” Rossman said. “Most people who have credit card debt didn’t get there because of a vacation. They didn’t get there because of a shopping spree. They got there because something happened with their health, their car, their home, or they’re just having trouble making ends meet.”

“That’s a tough situation to be in,” Rossman added. “I think it brings up some of the fundamentals of personal finance about doing whatever you can to budget, live within your means.”

Written by adminSeptember 4, 2018

Student Loan Consolidation

You may not know who Seth Frotman is, but he was a beacon of hope for many who struggled with their student loan debt. He was put in charge of a department in the Consumer Financial Protection Bureau designed to protect students against unfair and deceptive practices.

Frotman’s primary job was to assist borrowers of student loans by resolving complaints against private lenders. He prevents students from getting scammed. Of the thousands of claims of wrongdoing by lenders, he read them all and responded accordingly.

Frotman should be considered a hero for consumers everywhere. He oversaw the return of over $750 million to students. On September 1st, Frotman is officially retired from his role as ombudsman. The reason why he left should upset and terrify everyone who has a student loan.

Why Did the Student Loan Watchdog Quit?

You may be wondering why such a hero would quit. If he was genuinely helping students recover money after improper student loan practices, he should continue his work. However, as he put it, the government under the Trump administration no longer cared. In his resignation letter, Frotman blasted the current regime for handcuffing his ability to solve problems.

“It has become clear that consumers no longer have a strong, independent Consumer Bureau on their side. Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting. Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America,” the letter read.

http://financialhelpers.com/5-student-loan-debt-statistics/

Sadly, the CFPB’s former protector no longer believes the bureau is empowering students and their families to make informed financial decisions. The government is instead backing the financial industries and letting them get away with murder. This problem is hurting students and their ability to overcome massive amounts of student loan debt.

What to Do Next

Thankfully, there are still options available to help protect those with student loan debt. For one, Financial Helpers is available to help you navigate the troubling waters. If you want to know what your options are, or whether you qualify for loan forgiveness, give us a call. You can reach us at the number below.

Call Now 844-332-2079

The best thing you can do is remain vigilant and understand your options. There are currently over 44 million borrowers in the U.S. Over 10% have defaulted on their loans. With each passing year, the amount of average debt each student carries grows. The situation is only getting worse.

As student loan debt crosses the $1.5 trillion-mark, federal protection is more critical than ever. One wrong move in handling your loans can hurt your credit score. Whatever you do, don’t take a passive approach to your student loans. Defaulting your loan is the worst thing you can do. Now with fewer protections, they can come after you harder than ever. They can garnish your wages and take your tax return. Don’t let the sharks ruin your life. Call Financial Helpers today.

Written by adminAugust 31, 2018

Student Loan Consolidation

It might seem like the title of this article is a sensational headline to instill fear. In reality, the student loan debt problem continues to grow out of control in this country. According to the National Center for Education Statistics, the typical student will loan $6,600 this year. That averages out to be around $22,000 by the time they graduate.

It’s one thing to look at the numbers. Most college students have already resigned to the fact that they will have student loan debt once they graduate. Yet, it’s the default rate that’s concerning. In 2012, just over 10% of students defaulted on their loans. Over the next few years, that rose by 16% and continued to climb.

Student Loan Debt is Crippling Students

Overall, as many as 30% of the students who graduated struggled to repay loans. $23 billion was owed and $9 billion of it was in default this past year alone. This is a growing problem that has no end in sight. It is reaching crisis-levels as students become unable to pay back their loans. The number of defaults is rising significantly.

The worse part about it is, the government is overlooking it. Schools continue to rake in major profits in federal aid. Because they are subsidized, they can continue to raise the cost of college for everyone. Federal laws have attempted to keep colleges accountable. It requires them to keep the number of defaulted borrowers below 30% to remain in the student loan program.

There is hope for some students, but they must know their options. Student loan forgiveness is one option available, as well as lower monthly payments and interest. To find out if you qualify, call Financial Helpers today at:

Call Now 844-332-2079

High Default Rates

Back in 2012, the government still cared about keeping the default rates low. 93 schools were at risk of being kicked out of the aid program due to having high default rates. In just a few years, the feds decided to stop tracking and suddenly the number rose to 636 schools. What do the colleges care? The government gives them money.

Also: http://financialhelpers.com/student-loan-debt-crosses-the-1-5-trillion-mark/

For-profit schools have an even worse track record. 44% of students who obtained student loan debt were facing major financial distress. 25% of them defaulted on their loans. This was only a few years after being in the repayment program. It often takes students a decade or longer to repay them in full.

Why is this Happening?

In order to maintain within federal levels of default, colleges have been using a nasty strategy. They have been aggressively telling students to use forbearances and deferments. This may pause their loans for the time being while they struggle, but it’s a sneaky way of avoiding the situation. As long as the schools get their money, they’re happy.

For many, high interest rates make it nearly impossible to pay back the loan. They owe too much money, and if something happens and they can’t afford the loan, that’s it. It grows exponentially larger. Yet, the government keeps avoiding the problem as they flow more money into schools.

The truth is, to tackle this problem, the federal government, individual states, and schools need to make changes. They should all work together to make college more affordable. By forcing students to rely on loans, they’ve turned what used to be a great investment into an economic nightmare.

Written by adminAugust 23, 2018

Student Loan Consolidation

There’s no doubt that President Trump wants the support of veterans. He never fails to bring them up during rallies. It was so important to him, he told anyone who listened that vets needed better care. That included student loan forgiveness.

In doing so, Trump vowed to fix the VA to give them the best medical care and treatment available.

When it comes to helping students suffering under the massive weight of their loans, he felt less inclined to help. In fact, President Trump and Betsy DeVos attempted to roll back programs set in motion by the Obama administration.

Luckily, under the new budget, the current administration budged and kept the student loan forgiveness programs intact. For now. Who knows where these programs will go in the next fiscal year. As student loan debt continues to climb to record numbers, help is needed more than ever.

Student Loan Forgiveness is Essential for Vets

This new effort by the Trump administration hopes to make it easier for veterans to receive student loan forgiveness. For most students, this isn’t a simple process and it comes with hoops and qualifications. The difference is, many vets are unable to work normal jobs to pay back the loans.

In 2016, nearly 4 million vets had disabilities connected to their time in service. 1.3 million of them had quite serious disabilities, most of which leaves them unable to work at all. Even without a physical disability, there are other mental and psychological issues from their time in war. PTSD and depression are common among the veteran population.

According to Education Secretary Betsy DeVos: “Our nation’s veterans have sacrificed much for our country. It is important that, in return, we do all we can to give them the support and care they deserve.”

Check out: http://financialhelpers.com/trump-and-devos-still-want-to-make-massive-cuts-to-student-aid-programs/

Student loan debt is a problem for most Americans, but it’s even dire for veterans who are unable to work. Making these programs easier for them will help cut down their financial burdens after leaving the military.

Student Loan Forgiveness Simplified

It was actually the Obama administration who created the Total and Permanent Disability Discharge program originally, but it wasn’t really known to veterans. The lack of publicity made it difficult for vets to obtain student loan forgiveness.

The goal of the Trump administration is to expand the original program and make it easier for vets to get their hands on.

“Simplifying the loan forgiveness process and proactively identifying veterans with federal student loans who may be eligible for a discharge is a small but critical way we can show our gratitude for veterans’ service,” said DeVos.

The idea is to have the Department of Veterans Affairs to directly reach out to each veteran independently to alert them about the program and offer assistance in completing the application for student debt forgiveness.

There are a few requirements to be accepted by the program, including having a disabling disability that prohibits your ability to repay.

Once approved, the Department of Education will tell your lenders that you are free and clear. The best part is, if you’ve already made payments towards your student loans, they will be refunded back to you.

This is great news for vets everywhere. Their service means a lot to this country, many of whom will suffer a lifetime of pain and disability. The more we can take care of those who serve us, the better we’ll be for it.

Written by adminAugust 15, 2018

Student Loan Consolidation

Your car or truck is your pride and joy. You love driving it and you consider it the pearl of the road. Maybe you’ve even named it and treat it well, like a member of the family. You get regular oil changes, take it in for a tune-up, and keep it clean. If you got a loan for your vehicle, you might be locked into a long-term relationship.

This is only part of your responsibility as a car owner. I do the same for my truck to keep it running as long as it can. But something I didn’t like doing was paying for my truck every month. As my budget tightens and I have other bills I need to pay for, I decided to look for ways I can pay off my loan sooner.

Another reason why this is important is to avoid paying more than the vehicle is worth. If you’re paying off a loan, then you’re most likely paying thousands of dollars of extra interest as well. By paying it early, you can save yourself the extra cash and own your vehicle outright.

Also: http://financialhelpers.com/americans-are-now-paying-a-lot-more-in-credit-card-fees/

Here are the 5 strategies I used to pay off my truck loan sooner.

1) Instead of Making One Payment Every Month, I Made Two

This is sort of a brilliant trick. Most loaners will allow you to make as many payments as you want. Instead of paying only once per month, pay half in the middle of the month. By doing this, you’ll make 26 half-payments instead of 12 regular payments, which means you’ll end up paying 13 full payments overall. That’s squeezing in an entire extra month of payments.

To look at it another way, rather than paying off the loan during the 60 months you planned, you can be finished with it in 54 months just by making two half-payments per month.

2) I Rounded Up When Making Payments

When you pay your monthly bill (or bi-monthly if you use the step above), a large portion of it goes towards interest. Anything above that threshold is payment towards your vehicle. If you decide to round up to the nearest $50 increment, you can cut a 60-month loan down to 47 months and save over $500 in interest.

For example, if your monthly bill is $208, but you decide to pay $250, that extra $42 goes directly towards your vehicle, not the interest, meaning you can pay off the loan faster and save on the interest you would’ve had to pay if you just paid the minimum. It would add up to an extra $512 paid towards the loan in a year.

3) I Made Several Larger Payments

This is an obvious point, but it certainly helps to make an additional larger payment or two if you can afford it. You might want to spend that money on something else, but the more you can put into it during the year, the faster you’ll pay off the loan and the less you’ll thrown down in interest.

4) I Never Missed a Payment

This is a big one. Since getting a truck loan, my credit score has gone up significantly. One of the major reasons for that is I have 100% on-time payments. If you do miss a payment, it can reflect negatively on your credit score.

While some lenders do allow for a missed payment a couple times a year (hey, stuff happens), missing that payment will just add more interest and take you longer to pay it off. Do your diligence. If you have to cut back on other bills, do it. Once you’re clear and free of the loan, you’ll have a lot more money in your pocket.

5) I Was Able to Refinance

I mentioned in the point above that making on-time payments significantly improved my credit score. When you get a loan, the interest rate is based on that score, as it offers a picture to the lender about your ability to pay it back. If your score goes up after a decent amount of time of regular payments, you’re more trustworthy.

You might be able to get lower monthly payments, less interest, and a shorter term by refinancing. If you can’t get all three, then it might not be worth it. Even if you can get lower payments, still paying the amount you were before will only help you pay it off that much quicker.

For me, these steps were part of a greater strategy. I had a poor credit score with little history. By showing some fiscal responsibility, I was able to improve my score and pay off my vehicle in a lot shorter of a time. It’s small steps like this that can get you closer to true financial freedom.

Why Did the Student Loan Watchdog Quit?

What to Do Next

Student Loan Debt is Crippling Students

High Default Rates

Why is this Happening?

Student Loan Forgiveness is Essential for Vets

Student Loan Forgiveness Simplified

Recent Posts

Recent Comments

Categories

Become a member

Popular Posts