Drowning in Debt? Tips and Tricks for Getting Out of Hot Water with CreditorsWritten by Beth West
Do you, like millions of other Americans, feel like you’re sinking in an ocean of credit card debt? Well, fear not--there are many options for reducing your debt way before you have to be concerned about receiving notices or daunting telephone calls from debt collectors. The important thing to remember is to be proactive in handling your credit card debt. Unmanaged debt can ultimately lead to lawsuits, loss of property, and tarnished credit reports.Here are a few ideas for managing and/or reducing your debt: · Get in touch with creditors right away. Often times, creditors will reduce credit card interest rates if you simply ask for a break. Explain your situation, and let creditors know if you’re having trouble meeting your minimum monthly obligation. Many creditors will work with you to arrange a customized payment plan. ·Develop a budget. While many people dread this very important step in reducing debt, it can be extremely important in taking control of your financial situation. Compare and contrast fixed expenses—mortgage payments, rent, car payments, and insurance premiums, for example--with variable expenses, such as entertainment and recreation. List all your expenses, even those that seem unimportant. This is an important step in determining your spending patterns, prioritizing expenses, and determining whether or not you have additional money to contribute to monthly payments on your credit card. · Consolidate, consolidate, consolidate. While debt consolidation is a sometimes daunting and drastic step, it can be an important move in quest to reduce your credit card debt. If you’re a homeowner, consider a second mortgage or a home equity loan to pay off high-interest rate debt. While these loans often require you to list your home as collateral, remember that if you start skipping out on credit card payments, you could easily lose your home. What’s more, these loans provide tax advantages that are not available with many kinds of credit.
| | Federal Student Loans versus Private Student Loans – which is best for me?Written by Vanessa McHooley
Federal Student Loans versus Private Student Loans – which is best for me?You have gotten all grants and scholarships you can, but you still need money for your education. It’s time to look at loans. But which is better – federal loans or private loans? Federal loans If you need to take out a loan to help pay for your education, you should always look at federal loans first. The largest source of education loans around, federal loans are long-term loans with low interest rates designed for students who need money for their educations. They have several benefits when compared to other borrowing options, including -Lower interest rates -Options to postpone payments -Longer repayment terms -Easier credit requirements Eligibility for some of these loans, such as Federal Perkins Loan and Subsidized Federal Stafford Loan, are needs-based, while others are not. You will need to complete a FAFSA to apply for these loans. The most common federal student loans are listed below: Federal Perkins Loan The Federal Perkins Loan is a low-interest loan available to students who have exceptional financial need, based on information provided on their FAFSA. Undergraduates can borrow up to $4,000 per year, while graduate students can borrow up to $6,000 per year. Federal Stafford Loan The Federal Stafford Loan is available to undergraduates and graduate students. Loan amounts depend on a student’s year in school and whether they are financially dependent or independent. Your college’s financial aid office determines your eligibility. Stafford loans can be subsidized or unsubsidized. Financial need determines which type a student is eligible for. Subsidized loans are based on financial need. The government pays interest while student is in school, in deferment, and in their grace period.
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