Racial Wealth Inequality Made Worse by Student Loans

Written by adminSeptember 27, 2018
Student Loan Consolidation

It’s easy to talk about how student loans are impacting the quality of life for millennials. They’re delaying life decisions until later in life because this repayment of loans is taking priority. Yet, there’s an even larger wealth discrepancy no one is talking about. This problem is hurting young black Americans more than it is whites.

A new study has come to light, published by Sociology of Race and Ethnicity. The study is called, “Racial Disparities in Student Debt and the Reproduction of the Fragile Black Middle Class.” The details in this report are truly shocking. While most college students in the modern era struggle with paying back their student loans, blacks have it much worse.

According to the study, whites pay their debt down at a rate of 10% per year. It’s 4% for blacks. After fifteen years, blacks still hold 185% more of their debt than their white counterparts. Blacks also take on 85% more debt to go to college than white students. All of these this is only widening the wealth inequality gap between whites and blacks.

Student loan forgiveness is available to millions of graduates who qualify! To learn more about your options and how we can help you pay off your student loans, give us a call at:

Call Now 844-332-2079 

Student Loans and Unique Challenges

This new study is revealing the unique challenges black Americans still face. They don’t have as much familial wealth to draw from to go to school. As a result, they take on more debt. After they graduate, finding comparable work is more difficult. These unique challenges only add to the racial wealth inequality in this country.

“The racial wealth gap is both the biggest and has grown the fastest among those with a college education,” said Jason Houle, assistant professor of sociology at Dartmouth College and co-author of the study. “We point to student loan debt as potentially one thing that explains why that’s happened.”

http://financialhelpers.com/the-cons-of-strategic-student-loan-default/

This study has highlighted that as much as 25% of the wealth gap between whites and blacks is caused by student loans. The information was gathered from a previous study, conducted in 1998. It was called the National Longitudinal Study of Youth 1997 Cohort. Over 8,900 students have responded each year since that study.

Upward Mobility at Risk

One of the other challenges to black students are the types of loans they’re taking out and the schools they attend. Black students frequent for-profit schools and take out private loans. For-profit schools have recently come under fire for their predatory advertising. Those often-expensive schools make false promises of helping students find work after graduating.

Taking out private loans is dangerous in itself. They have fewer protections for consumers that federal loans have. These two problems combined make black students more at risk. It is true that blacks have gained greater access to college degrees over the years, but that access is under “exploitive terms,” according to the research.

“Black Americans now have more access to homeownership than they did, but it’s largely on predatory terms,” Houle said. “This similar thing goes on in the student loan market. In a world where we have rising college costs and rising student debt. It raises questions about whether or not that engine may be sputtering out.”

Read More

Misconceptions About Letting Student Loans Go into Default

Written by adminSeptember 21, 2018
Student Loan Consolidation

Every year, millions of Americans rush to college. It’s part of the American dream. We’ve been told since we were little. If you want to make good money, you need a degree. So, that’s what we do. If someone can’t pay for their schooling, they take out student loans. It’s not a big deal at the time. They sign the dotted line and figure they’ll deal with it later.

Then, later comes. The student graduates, and before they even get a chance to breathe, the bills start coming in. It’s time to pay back your lenders. But, what happens when the economy isn’t doing too well and jobs aren’t aplenty? Is the lender going to wait for you to find gainful employment?

Maybe. There are forbearances that allow you to take some time, but while you’re doing that, interest still accumulates. But many student loan borrowers shrug their shoulders. They think they will be able to tackle the problem later on. That’s when the nightmare turns into a catastrophe.

When Student Loans Become a Burden

Student loans aren’t something that should be taken lightly. There’s a reason why the debt has reached an epidemic level of $1.5 trillion. Actually, there are numerous reasons. Predatory lending, fake claims by colleges, economic hardships, and years of taking out increasing amounts of loans pile on to the problem.

For many who have no options, they have nowhere to turn. They decide that the default is okay for a few years until their situation turns around. If that sounds like you, there are things you should be aware of. You have other options. Here are several misconceptions and consequences of allowing your student loans to default:

Misconception #1: Your Loan Will Just Go Away

There are a lot of people out there who believe if they just stop paying their student loans, they’ll magically go away. The lenders will stop hunting them down, the interest will stop flowing, and life will get back to normal. This is not true!

According to Teri Williams, who is the President of OneUnited Bank, student loans “cannot be discharged or ‘erased’ without payment in full.” There is no bankruptcy option that will wipe it out. With the exception of a fraudulent case or other parameters under the law, your loan will follow you everywhere you go.

Some of those parameters include student loan forgiveness, but that requires qualifying conditions that must be strictly met. There were plenty of students who felt they would qualify, but they didn’t have the right type of loan. And sometimes, the government changes the rules, depending on who is in power.

Misconception #2: Lenders Won’t Work with You

Say what you want about lenders and debt collectors. Many can be downright mean and will use every tactic in the book to get their money. But as long as you’re open, honest, and communicate with them, they will often work with you. They want their money and if you reach out to them, the more options they have for helping you.

Rachel Rabinovich, a financial planner with Society of Grownups, believes debtors want to help. “They are there to help you and the earlier you reach out, the more options they’ll have,” she says. “They don’t want to deal with the paperwork and mess any more than you do.”

http://financialhelpers.com/what-does-it-mean-to-have-excessive-student-loan-debt/

At the end of the day, you borrowed the money, and no matter what situation you’re in, you have to pay it back. Contacting your lender and working out a deal will bode much better for you than ignoring the problem and letting it go into default. They will help you go over repayment plans and more.

“Most lenders prefer to modify terms to make it possible for you to make regular monthly payments rather than taking you to court to obtain a judgment,” said Rabinovich.

Misconception #3: You Can Just Declare Bankruptcy

This topic was briefly covered earlier, but there are no bankruptcy protections against student loans. This is considered the nuclear route for so many people. They turn the key and have all their debts obliterated. With student loans, that’s not the case. The odds of a judge forgiving those is nearly zero.

So, even if you’re declaring bankruptcy, you will still have your loans haunting you.

The big question now is: what happens if you default? Well, the consequences vary. It can extremely complicate your life. Kevin O’Leary of Shark Tank said its best for young people to make paying off their student loans a priority before anything else.

The reason is, if you have a high amount of debt, it can impact your credit score negatively. That makes it that much harder to secure a loan for necessities, like a new car, to get a new credit card, and to even secure a mortgage. Life only gets more expensive once a person starts to settle down, get married, and have children.

“Defaulting on federal loans could make it impossible for you to participate in other federal loan programs,” Rabinovich adds. “For example, defaulting on a federal loan would likely disqualify you from receiving an FHA Loan (Federal Housing Administration). FHA Loans are popular with first-time homebuyers due to their minimal down payment requirements.”

Read More

How Volunteer Work Can Help Pay Back Student Loans

Written by adminSeptember 13, 2018
Student Loan Consolidation

For millions of people struggling with their student loans, many of them are searching desperately for options. For those who couldn’t find work after obtaining their degree, going into default seemed like their only choice. The problem with that is, it made paying their student loans much more difficult, as interest piled on.

However, students have other options they may not be aware of. There are a lot of non-profit organizations looking to help students pay off their loans.

Danny McGee, a Michigan father who racked up $85,000 in student loans to become a building system engineer. After getting his Master’s degree from Tufts University, he was paying $850 per month on his loans. To make up for his lost income, McGee started working restaurant gigs, but it didn’t fit into his schedule.

http://financialhelpers.com/baby-boomers-are-not-doing-as-well-financially-as-you-might-think/

“I spend a couple of hours each week looking for additional ways to pay off my debt,” said McGee. As he continued to search, he found out about one such organization called the Shared Harvest Fund. The Shared Harvest Fund works to connected volunteers with paid opportunities and nonprofits that they are passionate about. Also, they will help pay back student loans.

For former students like McGee, it was the perfect opportunity. “Hopefully, debt freelancing is a way I can be a little bit more efficient with my time and that I can combine my passions in things that I care about with supporting myself,” he said.

How Shared Harvest Fund Works

If you care about social work to benefit others, you can do great work within that community and receive a monthly stipend. It can be anything from community development projects to helping solve homelessness. Just create a profile on their website, and they’ll pair you up with a project you care about. The stipend will pay out as much as $1,000.

This money is paid directly to your student loans. Even if you’re unable to do significant community projects, other odd jobs might fit within your expertise, such as accounting and legal assistance. It’s all about user experience to help others in a way that uses their time wisely. Jan Overton, a USC grad with six-figure debt amounts agrees.

“I’m really looking for work that’s more conducive to my schedule. Even if it’s only an extra $250 – at least those hours I work are giving to someone else to help someone,” she said. “If I could help other people at the same time while paying off my loans, not just for a job, but enriching my life, it’s such a better way to do it.”

Other Organizations to Help Repay Student Loans

Shared Harvest Fund isn’t the only organization that helps repay student loans. SponsorChange and Zero Bound are two others that use philanthropic work in this manner. The National Health Service Corps is a group that is in desperate need of health care professionals to volunteer in underserved areas.

AmeriCorps is a government program that matches professionals up with service programs. They can aid with natural disaster response and other relief efforts. Users who participate can receive the Segal AmeriCorps Education Award that grants the equivalent of the Pell Grant.

Students should know that there are options to help them pay for their student loans. It may be a struggle for a while, doing volunteer work at your own pace while paying off loans will be worth it. Gaining financial freedom while benefiting the community is something no one should regret.

Read More

The Student Loan Debt Problem is Worse than We Could Imagine

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.

Read More

4 Things Every Parent Should Know about Student Loans

Written by adminAugust 24, 2018
Student Loan Consolidation

As August comes to close, most college students have already made it to the dorms in preparation for the new year. Perhaps you’ve already secured all the funding you needed. This most likely includes some type of student loan. Paying for college is a giant headache. What you don’t know about student loans can set your child back after they graduate.

There are numerous stories of people who lost out on work because they couldn’t pay their loans. Licenses were stripped and years of hard work went down the drain. It may be an easy decision to help your kid get into the college of his or her dreams, but there are numerous challenges they will face.

Therefore, let’s take a look at several aspects of student loans you may not know.

1) Co-Signers Are on the Hook for Student Loans

It’s an easy decision for parents to do whatever it takes to help their child get into a good school. Many even feel the need to co-sign the loan. Parents should know the massive risk that comes with that. If your child cannot find work after graduating, you are making the payments. You can be sure that the lenders will be coming after you for repayment.

Another tragic story involved the Mason family. Steve and Darnelle Mason’s daughter Lisa dreamed of going to nursing school, so they cosigned a $100,000 private loan. At the age of 27, she died of sudden onset liver failure. Tragically, the lenders went after Steve and Darnelle to pay back what became $200,000 worth of student loan debt, late fees, and interest.

2) Look for Free Money First

Depending on how much money you make, there are tons of grants and scholarships out there. Some aren’t so easy to find, but they do exist. You can find a grant for just about anything these days. Any amount of money you can get to help offset the cost of college is worth the time spend researching and applying.

Also: http://financialhelpers.com/student-loan-debt-is-hurting-the-economy/

You can find grants and scholarships based on religious affiliation, ethnicity, student achievement, financial status, and so much more. The best way to find them is to get those fingers going and search the internet.

3) Set Out a Plan Ahead of Time for Paying Back Student Loans

Here’s one most people don’t think to do. You have no idea what the economic climate will be 4-7 years down the road. The best way to conquer the burden of debt is by being smart and prepared. There are several government programs and institutions that offer student loan forgiveness. Financial Helpers is one such company who is willing to work with you.

The best way to prepare for that day is to work on improving your child’s credit as they go through school. Get a credit card, teach them about fiscal responsibility, and save money. As their credit score improves, they can later refinance their loans.

4) Start Saving ASAP

The best advice is to start saving money for college as soon as they’re born. For those of you whose children are already entering college, it’s a bit too late for this step. But for everyone else looking to be prepared, there are state prepared college accounts you can pay into and use the power of compound interest.

This step not only takes away the student loan equation, but also the additional money paid into interest. Instead, you can use interest for your benefit and not the bank’s. There are other tax benefits as well. Do your research and be prepared!

Read More

Student Loan Debt is Hurting the Economy

Written by adminAugust 20, 2018
Student Loan Consolidation

As August is wrapping to a close, many fresh-faced college students are descending into their dorms to obtain the holy grail known as a college degree. Many believe they MUST get a degree, but there’s an even bigger debate raging on: is it worth it? Student loan debt is crippling so many people.

Currently in the United States, there are millions of people who can’t afford to move on with their life after college. They’re so entrenched and burdened with student loan debt that becomes impossible for them to move on with their life.

Student Loan Debt in the Trillions

If you look at the top three debts most Americans hold, student loan debt would be number two, weighing in at over $1.4 trillion. The first would be mortgage debt at $9 trillion. This is the only issue to hit college students once they graduate. They then must spend the next decade of their lives seeking out student loan forgiveness options.

There’s a report by Bloom Economic Research reveals the numerous challenges faced by people who have a ridiculous amount of student loan debt. Families are left with options before and after school to attempt to pay for higher costs.

Also: http://financialhelpers.com/trump-administration-signs-massive-student-loan-forgiveness-bill/

Many families tried to tap into their home equity to try and pay for their children’s college, but after the economy went down and home values tanked, this only left them with a few options. It was these options that caused the inflation of higher college costs. Now, student loan debt is at its highest level it’s ever been in this country’s history.

Tuition Rising Even as Student Loan Debt Rises

Even as student debt becomes an epidemic, and more students seek out student loan forgiveness programs after they graduate, prices keep going through the roof. Between 2007 and 2017, the overall cost of college has risen 176%.

It breaks down like this:

-CPI rose by 21%.
-Textbooks up 88%.
-School housing up by 51%.
-Student debt has tripled since 2017.

Student Loan Payments Hamper Economic Growth

It’s not just student loans that are growing. The cost of literally everything else is going up as well. The average rent is up 2.8% alone from last year. The average cost of rent per month in the United States is $1,400, according to RentCafe.

If you add on the average student loan payment of $351, yet people are spending as much as $1,800 even before they buy groceries and turn on the lights. This is your lucky enough to jump into a career as soon as you graduate. Many Americans aren’t that lucky.

Student loan forgiveness is really the only hope a lot of Americans have. The government continues to create programs to help struggling students, and there are better options for paying off debt sooner. Rather than plugging away at the debt for a decade and putting off important life events, there are options you might not be aware of.

Calling Financial Helpers today can help create a program that works for you to pay off student debt sooner, and even offer student loan forgiveness to considerably reduce your overall debt and payments. To learn more, call the number below:

Call Now 844-332-2079

Student Loan Debt Problems Add Up

Nearly half of all people between the ages of 18 and 34 have student loan debt. This debt averages out at around $33,000 per person, but can be as high as $150,000. This is the age when most people should be enjoying their careers, buying a house, and starting a family.

But, if you have a ridiculous amount of debt, it will impact your ability to do incur more debt to do those things. It can cause your credit score to lower, and keep banks from offering a mortgage and/or vehicle loan.

It’s sort of like a vicious cycle. More debt means less people buying things. Less people buying things hurts the economy, so jobs are lost. When economic growth is stagnant, wages stand still. When inflation occurs, the price of everything gets more expensive, but wages are still stuck and debt keeps piling up.

The Impact of Student Loan Debt

Right now, baby boomers are forced to care for their children who can’t afford to move out on their own. The birth rate has fallen nearly 30% because marriage and starting a family has been pushed off until things are better.

According to Jerome Powell, the chairman of the Federal Reserve, this vicious cycle is only getting worse.

“You do stand to see longer-term negative effects on people who can’t pay off their student loans. It hurts their credit rating, it impacts the entire half of their economic life. As this goes on and as student loans continue to grow and become larger and larger, then it absolutely could hold back growth.”

Something has to change. The scary thing is, the more relief the government finds for students, the more colleges decide to up their prices. Student loan forgiveness might just be the only option they have left.

Read More

How You Can Prevent Student Loans from Destroying Your Credit

Written by adminJuly 12, 2018
Student Loan Consolidation

We’ve covered the ongoing student debt crisis extensively here at Financial Helpers, and we’ve made it our mission to help graduating students know how they can solve their debt problem as quickly and efficiently as possible.

Part of that is having the knowledge to understand how your student debt works and how to tackle it in the future so it doesn’t come back to haunt you. Life can be difficult with this debt, as one small mistake can destroy your credit for years to come.

The best thing to do is know how to handle your debt going in and have a working understand of the credit system. There are three outcomes that can result from your handling of student debt.

1) It can lower your score. (15% of students)
2) Your score can remain the same. (63% of students)
3) You can improve your score. (22% of students)

It almost seems miraculous that you could walk away from student debt with a better credit score than when you went in, but it’s definitely possible if you know what you’re doing.

When you have a higher credit score, you can refinance your loans. To learn how that works, you can give us a quick call today to see if you qualify and to inquire about existing government programs that can reduce your overall debt. It’s worth a quick call if it means saving thousands of dollars over the life of your loan. You can reach us at:

Call Now 1-844-332-2079

It all comes down to personal behavior towards money. Those who increased their credit score were more proactive about taking care of the debt. They kept their credit card balances down, was never late on a payment, and acted to lower their overall payments.

Those who hurt their credit score ended up borrowing more money and added as much as 78% to their overall balance. Missed payments STILL add interest to your loan, so if you’re not regularly paying down the balance, you could be increasing it.

There are 5 specific criteria that are used to determine your score. Make sure you line up with all 5 and you’ll do well.

1) Your payment history. When you apply to borrow money, you give your word that you’ll pay it back. If you keep your word and make on-time payments, that will reflect well on your overall record. It’s a sign of trust and totals about 35% of your score.

2) The amount you owe. One consideration that will be made is how much debt you currently have. If you have a lot of debt, are maxed out on your credit cards, and keep trying to borrow, that will reflect negatively on you. This is about 30% of your score.

3) Your total credit history. Making a couple on-time payments won’t reflect much on your score, but if you show your reliability over time, it can help nudge your score a few points higher. This is about 15% of your score.

4) Are you new to the game? About 10% of your score is made up simply by how often you apply for credit. If you have a lot of attempts, it can reflect as bad behavior versus someone who isn’t constantly applying.

5) Do you have a variety of debt? If you’re able to successfully manage debt across different spectrums, then you’ll increase your score. For example, if you have a mortgage, credit cards, and student loans and you’re paying on them, you will be more trustworthy. This makes up the final 10% of your score calculation.

Again, it’s all about behavior. If you have an active loan, it’s the best way to build your credit and show you can be trusted with other types of debt. Sadly, studies show as much as 43% of students with student debt will default in the next 5 years.

Ethan Dornhelm, Vice President of FICO, had this to say about improving your credit score after college:

“If (students) can find a way to pay that back in an on-time fashion consistently over a period of months and years, they will be in a position when they reach those life cycle events like wanting to buy a house, a car, or a home. Their FICO score will be in good shape as long as they’re managing their revolving debts and keeping them relatively low, not spending more than what they have, and paying their bills as agreed.”

Read More

Why Are Millennials Still Struggling to Buy a Home?

Written by adminJuly 11, 2018
Student Loan Consolidation

Here we are, a decade after the worst housing disaster in American history hit the economy. The economy is booming, there are a record number of jobs available, and unemployment claims are lower than they’ve been in 70 years.

Despite this, millennials are still struggling to make due. Riddled with student loan debt and making too little to take care of their bills, more kids are living at home longer than ever before.

According to a study from Zillow, nearly one-forth (or 23%) of millennials are still living with their parents. You might think this is a holdover from the Great Recession, but this number is actually higher than at any other point in the last decade.

Aaron Terrazas, an economist at Zillow, thinks the problem has more to do with the high cost of rent than anything else.

“As rents outpaced incomes over the past decade, young people turned to their families in large numbers to ease the housing cost crunch. But even as the labor market has improved, the family safety net has yet to unwind. Living with parents may allow young adults to pursue work or a passion that may not be especially lucrative, or save enough money for first and last month’s rent or a down payment on a home of their own.”

He makes a good point. The cost of rent has skyrocketed past the increase in wages, making it unaffordable to begin with. Add in the fact that millennials have the highest level of student debt than any other generation (62% of millennials have student debt), that makes it virtually impossible to start life on the right foot.

Danielle Hale, an economist for Realtor.com, agrees.

“Existing debt and lower down payments leave younger shoppers more exposed than others to the impact of rising mortgage rates and record-high home prices,” she said.

By comparison, only 9% of Gen Xers have student debt.

If you have large amounts of student debt, the odds of finding a home and moving on with your life aren’t in your favor. If you’re in this situation and unsure about how to take care of your student debt, give Financial Helpers a call! We’d love to hear from you to discuss your options.

Call Now 1-844-332-2079

There are government programs and strategies designed to help get you out of student debt faster and cheaper than just paying the bill. The government knows this is a major crisis, but no one knows how long the Trump Administration will keep certain programs in place.

He’s already attempted to target the help implemented by President Obama in a bid to cut government spending, but agreed to keep them for another year to get the most recent budget passed through.

According to the survey, 35% of millennials hope to make their first purchase within the next year, but 98% of those who are looking find themselves running into one obstacle after another, forcing them to push it off longer than they thought.

The biggest problem is the rising cost. If you have a lot of student debt you’re trying to pay back, and not fully employed, the struggle is going to be having enough for a down payment and finding the right home at a price you can afford.

“For millennials, the dream of homeownership is alive and well, but with prices going up and inventory continuing to shrink, this new generation of buyers are facing more obstacles than any other demographic,” says Trulia economist Cheryl Young. “With tight budgets and fewer choices on the market, most millennials are forced to make trade-offs and are more willing than other generations to give up home and neighborhood features in order to find their ideal home.”

Read More

4 Strategic Steps to Help You Get Out of Debt Forever

Written by adminJuly 10, 2018
Credit & Debt Settlement

The Federal Reserve Bank in New York estimates that the total amount of household debt in the United States has reached $13.21 trillion.

Debt is something we’re all ashamed of. We want to live the perfect American dream, but circumstances haven’t always been present in the last decade to make that happen. So, we’ve had to beg, borrow, and (hopefully not) steal to get by.

From credit card debt, mortgages, and auto loans to student debt, we’ve piled it on and can find ourselves drowning in it before even hit 30.

People who find themselves under mountains of debt struggle even more because they don’t know how to get out from it, especially if there’s a change in income.

What you need is a proven strategy designed to get you out of debt once and for all. Here are four steps you can take:

1) Start by Building Your Savings

One of the most important things Americans need to have is savings stashed away for a rainy day. Yet, according to a survey, the vast majority of us don’t even have access to $400 if we needed it. That’s a scary statistic!

You can’t gain financial freedom without having some money put away in case you need it. Believe, that day will come. That day could be today and you’d be out of luck. Talk to your bank and create a savings account where a certain percentage of paycheck is automatically deposited.

You’ll also want to start an account that’s designed for spending. You’ll probably have to live as lean as possible to get through your debt crisis while saving money for an emergency, but if you have a few extra bucks, toss them into the spending account and they’ll add up. You can use that money for whatever you want.

2) Consolidate/Restructure Loans

There are options out there designed to help you take care of your debts. Most people don’t even take the opportunity to check if they qualify for these options. Restructuring your loan can save you hundreds of dollars per month. Consolidating can combine several loans into one single payment.

One good way to determine if you’re ready for a restructure is by your credit score. If you got a loan when you were younger and your score wasn’t that good, you probably were slapped with high interest. As your score improves, you can be trusted and have your interest lowered.

If you wonder about qualifying for lower interest payments and whether you can consolidate, gives us a call here at Financial Helpers. We’ve helped thousands of people by negotiating better deals with their debtors and lowering their rates, saving them thousands. Call us at the number below today to see how we can help.

Call Now 1-844-332-2079

3) Attack Your Loans

If you have multiple loans and can’t consolidate them, then there’s a method available to help you decide which loan to tackle first. Garrett Gunderson, chief wealth architect at Wealth Factory, says the best way to do this is by using the “Cash Flow Index”.

Take the balance of a loan and divide it by the minimum monthly payment. The answer should determine which loan is eating most of your cash flow and should be paid off first. If it’s below 50, then that’s a high cash flow loan. If it’s over 100, then you have a more efficient loan.

The idea is to show you’re improving your debt to income ratio. Paying off the lowest cashflow loans first will help you do just that.

4) Be Wary of Investing in Assets

You might think having an investment is a great way to secure future wealth, but at the current moment, it’s dangerous to do, especially if you have high debt. The debt is seriously risking your family’s livelihood and needs to be dealt with. If you can, the best course of action is to cash out and put the money towards your debt instead.

“Money is so accessible and available. People have created a massive amount of debt because we’ve become a society that’s not about the cost of the purchase, but the payment behind the purchase. People look at what they might be able to afford based on the payment not considering any mishaps, emergencies or other issues that may happen along the way,” said Gunderson.

Read More

5 Reasons Why You Should Never Default on Your Student Loans

Written by adminJuly 9, 2018
Student Loan Consolidation

Student debt is a major crisis in this country.

As we’ve previously covered, student debt has risen to a new record of $1.5 trillion. As that number continues to rise, it becomes increasingly difficult to figure out how to pay it back!

This crisis has been around, but it accelerated towards the end of the Great Recession. A lot of students were graduating college, only to find the job landscape barren. There were plenty of people with bachelor’s degrees working at fast food and living back home with their parents.

It’s been estimated by the Brookings Institute that nearly 40% of all student loans borrowers will most likely default on their loans. That’s a scary number!

The problem with default on your loans is it can wreck your life at a time when you’re trying to learn how to stand on your two feet. It sets you back significantly in ways you may not realize at the time.

Jeremy Wine, the supervisor of student loan counseling at Take Charge America, says, “People from all walks of life are defaulting on their student loans, affecting them for years to come. Paying student debt must take top priority.”

Here’s a list of 5 things that can happen if you default on your student loans.

1) They can demand payment in full.

Once you graduate, you’ll have options for paying back your loan. It’s typically set to be a monthly payment, but what happens if you miss one? Your account will be considered delinquent. Interest is typically added. It takes about nine months of non-payment to be considered in default.

At that time, your creditor can then decide they want the payment in full. No payments will do…you had your chance! It will be their discretion on if they’re willing to work with you further. Your loan will remain in default until the whole thing is paid off.

The best way to avoid this is to stay in constant communication with your creditor. Let them know if you need to skip a payment, but it’s best to make the loan your biggest priority, as it will hurt you down the line if you don’t.

If you feel lost and need to know what your options are, call Financial Helpers today. Our team of student loan experts are standing by to help you through the process, show you what you can do, and even help you apply for existing government programs before they get closed for good. You can reach us at:

Call Now 1-844-332-2079

2) Major collection costs added.

If there’s one thing banks are good at, it’s collecting extra fees. If your loan defaults, they’re going to go out of their way to find you and it won’t be pretty. Fees ranging as high as 20-40% can be added to your loan. Making the loan bigger is the last thing you need!

3) Wreck your credit score.

One of the worst things that will happen to you if you go into default is the impact on your credit score. As soon as you are 9 months delinquent, your credit score will reflect that you’re in default, and the score will drop significantly. Payment history is a huge factor in determining your score, so it will remain until the loan is paid off.

4) They’ll come after your paycheck/refund.

A lot of people think they can just graduate college and not pay their loans. It’ll disappear on their credit after 7 years anyway! But what they don’t realize is, the bank is going to come for your money and they’re tied to the government.

If you don’t make regular payments and go into default, say goodbye to your tax refunds. The government will take most of it. If you’re married and you file jointly, they’ll take your spouse’s refund too. They’ll even garnish your paycheck.

The good news is, this is mostly their way to get your attention. The wage garnishment will continue until you call them and set up a real repayment plan.

5) Default will prevent you from being trusted.

Your credit isn’t the only thing that will be harmed by not paying your student loans. Your credit history is pulled for a lot of things you want to do in life. Need to get a new car? Rent an apartment? Get that big job? You might get a big, fat NO if they see you’re in default.

Other professional employers looking to hire you, like doctors, teachers, lawyers, and other service workers can have their license taken away if they’re in default, so trying to find a job in any of those sectors would be extremely tough.

“It’s best to deal with it immediately. I know it’s really challenging because student loan debt is so high and it’s unmanageable for some borrowers, especially when they are placed in a standard repayment plan. But ignoring it and not doing anything about it is one of the worst things to do,” said Wine

Read More