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So I’ve Refinanced My Student Loans – Now What?

By Caroline Farhat

 

Congratulations! You just made the big step of refinancing your student loans. Your wallet is fatter and you’ve likely shaved off thousands of dollars from what you will have to pay on your student loans. That’s a huge achievement that will positively impact your financial life.

 

You may be tempted to use your new found moolah on brunches and vacations, but don’t start spending lavishly quite yet. While present you may be saying “yes!” to fancy dinners, future you would really benefit from spending this extra cash in a smarter way. If you’re feeling financially empowered, you’ll love these five financial tips for what to do after you refinance to maximize your money.

 

1. Reexamine (or create) your budget

Any time you have a change in your financial situation, such as a raise or a new recurring bill, it’s important to evaluate your current budget. If you don’t already have a budget, getting a little extra money each month can be a great motivator to start one. We’re fans of the zero-based budget system. With zero-based budgeting, you allocate each dollar you make to a specific expense or goal so it can help curb unnecessary expenses you may regret later. For example, say you bring in $4,000 a month after taxes. You spend $3,000 on fixed expenses such as rent, utilities, and food. Your monthly payment for student loans is $600, leaving you with $400 extra each month. Under zero-based budgeting, you would allocate the extra $400 to other goals (such as contributing to a savings account) or wants (such as a travel budget). Once you have figured out exactly where each dollar will go, you should set up an automatic transfer to a savings account so that you never get tempted to spend money that you should be saving.

 

Of course, budgets aren’t one size fits all. If you have a method that works for you, then use that! The important things to know and keep track of are:

  1. How much money you have (after taxes and health insurance payments)
  2. Your essential fixed expenses (such as housing, utilities, food, student loan payments)
  3. Your non-essential fixed expenses (such as gym memberships, Netflix, etc.)
  4. Your long-term financial goals (buying a house, saving for a child, retirement)
  5. Your short-term financial goals (dining out, travel)

 

2. Start or pad your emergency savings account

If you don’t have at least three months of living expenses saved up, you need to start right now. We don’t want to set off alarm bells, but an emergency savings account is the number one thing everyone needs to have on their financial to do list. Depending on your situation, you may benefit from stashing away six to nine months of living expenses, but start with at least three months and build from there. Be sure to have this money easily available, so put it in a savings or checking account that does not incur any fees or penalties for withdrawing money. For example, you do not want to put your emergency savings in a CD, even if it will yield you a higher interest rate, because getting your money out can be a costly and sometimes time-intensive process. That said, find a savings account that will pay you interest so you don’t lose all your earning power on that money.

 

3. Pay down other high-interest debt

After you have a healthy savings account, paying off high-interest debt should be your next priority. Just like how refinancing your student loans helped you save money in the long run, paying off debt with high interest rates such as credit card debt or a personal loan will help you shave off hundreds or possibly even thousands of dollars that you would have to make in interest if you just paid the minimum monthly payment. Even putting an extra hundred dollars a month to this debt can pay off big time in the future. Additionally, lowering your debt load can help bolster your credit score, especially if you are carrying a lot of credit card debt. Your debt-to-income ratio is critical if you want to get a mortgage or other big-ticket items so paying down high-interest debt can only work to your advantage.

 

4. Contribute to your retirement

Say you have a healthy emergency savings, you’ve paid off all of your credit cards, and you have enough to cover your living expenses with a little bit of extra fun money. First, congrats! That’s a big feat and you’re killing it with your finances!

 

Set your future self up for success is by starting or increasing your contribution to a retirement account such as a 401(k) or IRA. Retirement accounts benefit from compounding interest so the sooner you start, the better. Plus, many employers have matching programs that help you pad your retirement account. Remember the free money you can make from a high-interest savings account? This is similar, but your future self will be the one to reap the benefits.

 

5. Treat yourself, responsibly

If you have refinanced your student loans, it’s safe to say that you’re clearly on top of your financial game. Let’s be real — there will always be a list of things you can and should do with your money. But it shouldn’t all be about the work. You deserve to treat yourself! Just be sure to do it responsibly. Should you suddenly move into a budget-busting luxury penthouse apartment? Probably not. But you absolutely should treat yourself to that nice dinner or new pair of sneakers you’ve been eyeing. The keys to a successful financial life are staying informed and staying balanced. Just like any other goal, providing little rewards along your journey can help you stay motivated. So take this as our encouragement to enjoy yourself! Just do it responsibly with an eye on your financial independence.

 

 

3 Things You Should Know About Black Friday

Black Friday used to be just one, crazy day of shopping. Deal seekers would wake up before sunrise, grab a thermos of coffee and a warm jacket, and wait in line for hours to get the best deals on televisions, laptops, and Cabbage Patch Dolls. The desire to shop and save is so popular that Black Friday has spun off nearly a week’s worth of celebrations, including:

 

  • Black Friday – November 29, 2019
  • Small Business Saturday – November 30, 2019 (The lesser-known shopping day that encourages support of small businesses)
  • Cyber Monday – December 2, 2019
  • Giving Tuesday – December 3, 2019 (The do-good day that rallies communities around giving time and money)

 

Black Friday itself has even crept into our day of gratitude, with stores opening just after the dishes are cleared on Thanksgiving night. Some brands and shoppers have pushed back against Black Friday, like REI with their #OptOutside campaign that provides an active alternative to malls and box stores. But for many, the excitement of Black Friday is as much a part of Thanksgiving as turkey and pumpkin pie.

 

For those who are on the hunt for the best deals, here are a few tips to help you succeed.

 

Make a List (and Check It Twice)

While this tip is true for nearly every shopping trip, you definitely need a list, plan of attack, and even a budget for Black Friday. What items are your absolute must-haves? Are you more of a big-ticket item shopper or are you in it for smaller deals on everyday items? Just as you need to plan out that Thanksgiving dinner menu, sit down and list where you want to go and in what order to keep yourself from impulse buys and overspending. There’s no worse feeling than getting home and realizing you wasted money on something that wasn’t really a good deal or that you didn’t even want. Consider the following for your list:

 

  • Category
  • Item
  • Store or URL (for online Black Friday deals)
  • Deal or Coupon Code
  • Price
  • Budget Countdown

 

Shop Online

Cyber Monday used to be the online shopping day of the holiday season, but Black Friday is king for a reason and quickly expanded in-store-only deals to the online crowd. Shopping online helps you cover more territory in less time, and there are apps that can help you organize and simplify your shopping efforts.

 

With the BlackFriday.com app, you can easily filter through Black Friday promotional clutter, search by keywords, compare deals at different retailers, share deals with friends, and even set up notifications for when sales start. With the TGI Black Friday app, you can set up alerts if one (or more!) of your big-ticket items go on sale before Black Friday. This app also has a shopping list feature so you can digitize your plan of attack.

 

Shop All Year

For decades, Black Friday has gotten a reputation for being the deal day of the year. The name “Black Friday” even dates back to the 1960s when it was first used to name the kickoff to the holiday shopping season. However, it’s not always the best time of the year to get the best deal on several key items.

 

Televisions frequently go on sale just before the Super Bowl to appeal to fans looking to see the biggest game of the year on a new screen. On the hunt for a smaller electronic device? iPhones are typically discounted in September after the annual Apple event announcing the latest models. What about a new set of skis for the slopes? The best time to shop can be just before the end of the ski season, as retailers look to clear out inventory. And for more of the homebody, home goods are often discounted around holidays like President’s Day, Independence Day, and Labor Day. Finally, if you are ready to kick off the new year in a healthy way, consider waiting until June or July to buy that gym membership. At that time, gyms are eager for sales since clients are outside enjoying the long, sunny days of summer.

 

Find Other Ways to Save

You don’t have to brave the weather and the crowds to save money before the holidays. If you have student loans, you can keep money in your account by refinancing or consolidating. ELFI customers reported saving an average of $309 every month and an average of $20,936 in total savings after refinancing. See what kind of savings you can qualify for at elfi.com/refinance-education-loans.

 


 

1Average savings calculations are based on information provided by SouthEast Bank/Education Loan Finance customers who refinanced their student loans between 8/16/2016 and 10/25/2018. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon several factors.

 

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.

Meet the Personal Loan Advisors of ELFI: Part 2

This Thanksgiving, we’re thankful for the individuals who help Education Loan Finance continue to serve those with student debt with top-notch customer service – our Personal Loan Advisors! Navigating student loans can be tricky, but our PLAs are ready to answer any question you can think of when it comes to refinancing student loans. Here’s a look at a few of our dedicated Personal Loan Advisors who make ELFI great.

 


 

Colene Helveston

Meet Colene, an ELFI Personal Loan Advisor and major Florida Gators fan. With three children and three grandchildren, Colene has a deep concern for people working hard to pay off student debt. Her favorite part of working for ELFI is helping borrowers who have difficulty getting approved for refinancing – she is patient with them throughout the process and keeps them updated on all documents they need. She says it feels great when the borrower finally gets approved, is happy with their rate, and immediately leaves a good review.

Her latest review from a customer:

“Colene was wonderful in guiding me through the entire process. She was always quick to respond and explain what was needed and why.”

Thanks for all you do, Colene!

 


Drew Johnson

Meet Drew, an ELFI Personal Loan Advisor that assists customers through each stage of the refinancing process, from the application phase to the funding of their loan. His favorite part of working for ELFI is interacting with his customers and finding commonality.

Drew’s most recent review from a customer:

“Communication was top notch. Drew answered my questions quickly and clearly. I felt like I could trust him and the whole process moved along very smoothly.”

We appreciate you, Drew!

 

 


Amanda Scott

While Amanda is no longer a PLA, we are thankful for her taking on the role of Customer Service Lead! She enjoys to crotchet keepsakes for her friends and family, as well as for herself. Besides the snacks, her favorite part about working at ELFI is being able to help people navigate the student loan space.

 

Her favorite story with a customer involved dealing with a father and son – the son was applying to have his student loans refinanced, but didn’t quite meet the criteria. Amanda kept them in mind for some time and let them know when the criteria changed (which wasn’t required of her). Not only did the son qualify to have his student loans refinanced, but the father went on to refer his two daughters to Education Loan Finance, all because of the work Amanda put into helping them! Now that’s a good example of how helping others truly comes around!

 

Here’s a testimonial from one of Amanda’s former customers:

 

Great work, Amanda!

 


 

Leaders in Customer Service

These dedicated individuals and the rest of ELFI’s Personal Loan Advisors are to credit for our 4.8 out of 5.0 TrustPilot Rating and #1 Best Refi for Customer Service award from NerdWallet. As a team, they strive to provide elite service to everyone who inquires about refinancing their student loans.

 

Why Does ELFI Use Personal Loan Advisors?

There’s no one-size-fits-all solution for student loan refinancing. Personal loans often come with a fixed amount of time to pay them back – which means that if you’re in your twenties and just starting out on your career path, you want to be sure that your monthly loan payments are affordable. You also need to be aware that missing a payment could seriously damage your credit rating. Weighing all the refinancing options available to you can be difficult on your own, which is why we provide every customer with a dedicated Personal Loan Advisor to help them navigate the process from start to finish.

 

The appointment of a PLA is a unique feature of ELFI’s services. If you’re interested in refinancing your student loans, our PLAs are always available by phone, text, or email. One of our PLAs will be dedicated to you from the moment you apply and will work with you each step of the way to ensure your ELFI refinanced loan is the optimal fit for you. Contact us to get started!*

 

*Subject to credit approval. Terms and conditions apply.

Educate Yourself Before Taking Out Student Loans

Taking out student loans to attend college has become extremely common in the United States. However, just because they are common does not mean you shouldn’t pay attention to what you’re getting into. It’s important to know your responsibilities when taking out a loan of any type, especially student loans. Take these steps before making an investment in your education by taking out a student loan. 

 

Educate Yourself

Before you take out a student loan, educate yourself on the details of it. Make note of the interest rates, eligibility terms, repayment terms, etc. before signing off on the loan. Our friends at eCampusTours have several articles and resources about student loans that can help you better understand your loan terms:

 

Repayment Plan

Keep in mind that when you take out a student loan, you will have to pay it back – even if you don’t graduate or aren’t happy with your education. If you want to get a grasp on what your repayment will look like following college, check out this worksheet: 

 

 

 

Ideally, you’ll secure a job in your field after graduating from college. Although you’ll want to pay off your loan quickly, keep in mind that your overall repayment shouldn’t exceed 15% of your monthly income. ELFI has some additional tips for prioritizing your student loan repayment. Here’s a worksheet that can help you determine how to repay your loans following college:

 

 

Taking out student loans is a commitment. Educating yourself on the responsibilities associated with student loans will help you make sound decisions about your education and will prevent you from feeling blindsided by your student loan debt and repayment terms later on.

 


 

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.

This Week in Student Loans: November 22

Welcome to our weekly roundup on all things student loans. Let’s take a look at some top happenings of the week (click to scroll to the story):

Filing Bankruptcy to Alleviate Student Debt?

LendEDU’s Mike Brown wrote a column for Business Insider regarding the Student Borrower’s Bankruptcy Relief Act, which was proposed in May by Senator Dick Durbin and was cosponsored by Democratic presidential candidates Bernie Sanders, Elizabeth Warren, and Kamala Harris. If passed, the bill would erase the current part of the bankruptcy code that makes private and federal loans non-dischargeable unless “undue hardship” is proven, which has been known to be very difficult.

 

This is especially relevant as a LendEDU study found that 32% of bankruptcy filers carried student loan debt, with student loans making up 49% of their total debt on average.

 

The proposed law would treat student debt the same as other forms of consumer debt in bankruptcy proceedings, which may lead some student loan borrowers to consider filing bankruptcy to start fresh from their debt, despite the negative connotations. Whether that’s a smart move for borrowers is up for debate.

 

Source: Business Insider

Employers Joining in on Student Debt Repayment

In the midst of rising student debt, The Chicago Tribune reported that more employers are launching benefits programs to assist their employees in repaying their student loans.

 

“According to a survey last year of 250 companies by the Employee Benefit Research Institute, 11% offered student-loan repayment subsidies and 13% planned to add it as a way to attract and retain employees,” the article states.

 

Among the corporations following the trend are Hulu®, HP®, and Fidelity Investments®.

 

The types of student loan benefits that are being offered vary from employers making direct payments to lenders, offering tools to manage repayment, and even matching employee’s student loan payments with contributions to their 401(k) retirement plan. Perhaps more businesses will continue to catch on to high demand for debt relief among recent college graduates and implement benefits to attract their talent.

 

Source: Chicago Tribune

Will the College Affordability Act Enable Government Refinancing?

With all the buzz surrounding the College Affordability Act that was introduced by House Democrats in October, it’s worth looking into the details of what the act will change. Forbes writer Zack Friedman explains the three ways this could change repayment, with the first being that the government will enable borrowers to refinance their student loans to “today’s interest rates.”

 

How these rates will compare with top private student loan refinancing lenders is yet to be known. If this plays out like the in-school funding market, well-qualified borrowers may still receive better rates in the private market. In addition, there are some other limitations to the proposed refinancing program, including strict limits on the dollar amount of private loans that could be refinanced through the government. 

 

The proposed program would also eliminate origination fees of federal student loans (joining many private lenders like ELFI, who already do this for borrowers) and would “simplify” student loan repayment by replacing the variety of federal loan repayment plans with just two plans: one fixed student loan repayment plan and one income-based repayment plan. This “simplification” comes at a cost for borrowers who will lose access to:

 

  • Revised Pay As You Earn Repayment Plan (REPAYE) 
  • Pay As You Earn Repayment Plan (PAYE)
  • Income-Contingent Repayment Plan (ICR Plan).

 

Source: Forbes

 

Trump’s Loan Discharges Halted for 24,000 Veterans

In August, President Trump called the U.S. Education Department to forgive student loan debt for veterans who are “totally and permanently” disabled. However, this process has been delayed due to regulatory complications, leaving 24,000 veterans who would qualify without student loan forgiveness. The number of veterans who have received discharges of their loans thus far has reached 3,300.

 

The hang-up is that the Education Department “could not legally move ahead with the automatic loan forgiveness until the agency first rewrote the regulations governing the program,” according to the internal memo. It has been reported that the department is taking steps toward doing so and that new proposed regulations were pending review at the White House.

 

Source: Politico

 

Boston Librarian Upset With Public Service Loan Forgiveness Program

NBC Boston shared an article surrounding Maija Meadows Hasegawa, a Boston librarian who is upset at the lack of information she was provided regarding the qualification requirements for the Public Service Loan Forgiveness Program.

 

“It was almost like unless you knew to ask, nobody would tell you,” she stated in the article.

 

Hasegawa notes that the rules of the program sounded simple at first: get a full-time public service or nonprofit job and make 120 qualifying payments. After applying and being rejected, she was surprised to find that she could have switched her loan type to qualify, which she eventually did. She also wasn’t aware that she needed to be in an income-based repayment plan, which she eventually did as well.

 

Hasegawa is like many of the 102,051 applicants who have filed for the PSLF program, of which only 1,216 have been accepted – frustrated.

 

Source: NBC Boston

 

Follow us on FacebookInstagramTwitter, or LinkedIn for more news about student loans, refinancing, and achieving financial freedom.

 


 

NOTICE: Third Party Websites
Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – The bank is not responsible for the content. Please contact us with any concerns or comments.

Tips for Navigating Career Fairs

Career fairs present you with the opportunity to network with potential employers, learn about job opportunities in your prospective industries, get eyes on your resume, and even get some preliminary interview practice. While these opportunities are great, you won’t be able to take advantage of them without proper preparation. Here are some tips for making the most out of career fairs. 

 

Prepping for the Career Fair

Do your research

Before the fair, contact your college’s career center to see what companies will be present at the fair. Make a list of the companies or organizations that you’re interested in and conduct some online research about them. Understanding the company’s history and information about what they offer will help you better engage recruiters, and just might earn you an on the spot interview.

 

Prepare your resume

Proofread your resume, show it to friends and professionals you know, and even run it by someone in the career center. Follow our guide about resume tips for some help here. If you want to go above and beyond, make different resumes for different career paths that you’re interested in. 

 

Find appropriate attire

While most career fairs suggest business casual attire, make sure you’re prepared to dress to impress. Typically men should wear pressed pants with a shirt and tie, and women should wear pants or a skirt with a blouse. Wearing sneakers or a graphic tee probably isn’t a good idea. 

 

Practice your pitch

Get your “elevator pitch” ready for the career fair. This is basically just your way of introducing yourself, highlighting your skills, and presenting your interests to the recruiter or employer. Being able to express your skills and aspirations in a succinct manner will be sure to impress potential employers.

 

Create a list of questions

Come up with a few questions to ask the employers, so they will know you are interested in their company. These should be questions that you could not find the answers to during your research. Here are some sample questions:

  • What kinds of entry-level positions exist within your company?
  • What courses do you suggest in order to be a successful candidate?
  • What is the average length of stay in entry-level positions?
  • What new product lines/services have been announced recently?

 

At the Career Fair

Devise a game plan

Picking up a copy of the floor plan at the career fair and mapping out your main booths of focus will help make the process less overwhelming. Some lines may be longer than others, so plan your strategy to make the best use of your time. While you want to try to talk with every employer in your targeted group, remember to stay open to meeting other employers you may not have originally considered.

 

Be respectful

While you want to make the most of the career fair, you shouldn’t just move from booth to booth picking up free stuff and handing out your resume. This can be a major turn-off for recruiters because they want to talk with people interested in the company, not the giveaways.

 

Warm up

Start your rounds by going to a couple of booths that are not at the top of your list. This way you can get warmed up to interacting with the recruiters before meeting the employer in which you are really interested.

 

Show confidence

Remember to smile, make eye contact, and give firm handshakes when introducing yourself to recruiters. Being confident should come easy to you as long as you do your preparation homework before the fair. Remember your pitch and be ready to answer any questions about your resume. Don’t forget to ask the recruiters questions about their companies; it shows that you are interested.

 

Ask for business cards and contact information

For future correspondence, be sure to request the business card of each recruiter with whom you speak. Make notes on the back of the cards to help you remember what was discussed.

 

Close strong

When wrapping up with employers, you should always ask about the next step in the recruiting/application process. Be sure to shake hands and thank them for their time. Stress your interest by saying that you look forward to hearing from them within the near future.

 

Following the Career Fair

Review literature 

After the fair, go through all the information that you gathered from the recruiters. Look over your notes and think about your interactions with each employer, so you can decide which positions may be of interest to you.

 

Follow up

Be sure to send thank-you notes to the recruiters with whom you spoke. Include specific information so the recruiters will remember you. If the recruiters asked for more information, such as transcripts, another resume, writing sample, reference list, etc., be sure to get that information to them as soon as possible. 

 

For more tips and suggestions on navigating the career fair and to find out about career fairs in your area, visit your school’s Career Center.

 


 

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.

5 Ways to Declutter Your Life in 2020

We’re all busy and feel overwhelmed from time to time. Balancing a job, family time, friendships and finances can take a pretty major toll. Taking control of the space around you and getting a grasp of your financial situation can take a burden off and help you feel at ease. Here are some tips for decluttering your life and your finances. 

 

1. Learn to Say No

When it comes to simplifying your life, one of the best tactics is to cut off your clutter at the source – in other words, learning to say “no” to things you don’t need . This also applies to the voice in your head that tells you to hang on to old furniture, keepsakes, family belongings, and everything else that you stuff away or put into storage. The truth is, holding onto everything of monetary or sentimental value just isn’t logical. Knowing when to say no, when to donate, and when to let things go will be a big help in simplifying your life. It’s been found that the average American thinks about decluttering at least six times per year, but only ends up decluttering about three times each year. Holding onto too many things can create a great deal of stress.

 

Try taking photos of your keepsakes and family furniture and file it away. By doing that, you’re able to hold onto the memories without holding onto the items that cause clutter in your home.

 

2. Clean Out Your Closet

Having a surplus of clothing can cause cluttering nightmares. While we like to hold onto novelty t-shirts from every 5k race, or think we’ll be able to squeeze into the jeans we last wore ten years ago, eventually things can get out of hand. If you struggle with overloaded closets and dressers, here’s a trick you might want to try – turn all of your clothes inside-out. After 9-12 months, reassess your clothing inventory and see which clothes are left inside-out. You now have a clear-cut idea of which clothes you wear, and which you don’t. If it’s left inside-out at the end of that time period, consider donating it to a good cause. If this doesn’t work for you, try sorting through them a few times each year and getting rid of the items you know you don’t wear.  

 

3. Cut Down on Food Waste

Our refrigerators get cluttered too. The main reason? We simply don’t eat everything we buy. If you’re the type that ends up with a full cart at the grocery store after going in for one thing, you’re probably dealing with an overloaded fridge as well. A study found that Americans consume only about 50% of the meat, 44% of the vegetables, 40% of the fruit and 42% of the dairy we buy. What doesn’t go to waste takes up precious space in our pantry and refrigerator. After all, who knows how long that bottle of salad dressing has been sitting there? Look into meal planning or even getting an affordable meal subscription (just don’t let it fall into the category mentioned below). What’s great about meal subscriptions is they’re perfectly portioned and will go far in cutting down the amount of food you waste or store away.

 

4. Cut Out Unnecessary Subscriptions

Ever checked your monthly bank statement to find that you’re paying $4.99 for a random app that you no longer use? A new study that surveyed 2,500 U.S. consumers found that they spend an average of $1,900 in subscriptions that are unaccounted for. These can include anything from TV and music streaming services to subscriptions to your local car wash. Getting your subscriptions under control is a great way to simplify your finances and decrease month-to-month spending. 

 

There are a variety of budgeting apps that help you track your finances, but Clarity Money® is great for managing subscription services in particular. After connecting your bank account, it will provide you with a list of your recurring subscriptions, and even allows you to cancel them right from the app. 

 

 

5. Refinance Your Student Loans

If you’ve graduated from college, you may be paying back student loans. Some people can find themselves paying back several loans that all accrue interest at different rates, and have differing payment due dates. Refinancing your student loans may make repayment more manageable because it consolidates your student loans into one monthly payment with a single interest rate. Not only could you have the flexibility of choosing a repayment term that fits your financial goals, but you could also lower your interest rate or save money over the life of your loan. 

 

We hope these tips help put your mind, your finances, and your life, at ease. By following these tips, 2020 could really be “new year, new you”. Stay tuned for more helpful tips from the ELFI team.

 


 

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.

The Average Cost of College

When it comes to shopping, many of us have champagne taste and a beer budget. We shop with our eyes and our hearts before taking a peek at the price tag. The process of selecting a college is no different. We make decisions based on location, athletic teams, available programs of study, greek life, or even where our friends apply. Unfortunately, for many people, the cost of college lives at the bottom of the checklist, despite being a vital factor to consider. 

 

The average cost of college for the 2019-2020 school year, is $21,950 for public, four-year, in-state colleges and $49,870 for private universities. This is an increase of 2.6% and 3.3%, respectively, over the year prior, alone. 

 

Without question, college is expensive, and very few people are talented enough to get an athletic or academic scholarship to completely or partially cover the cost of education. An even smaller number of people are able to pay for a degree out-of-pocket. That leaves the majority of college students and their families to rely on loans to pay the bills.  

 

Further complicating matters, a lot goes into the cost of college, including your residency status, level of degree you seek (bachelor’s, master’s, or doctoral), where you live (on-campus, alone, or with a house full of roommates), and even how much you eat or how you commute to campus. 

 

To help you understand where you can save, as well as how you can cover expenses with financial aid, let’s dig into what comprises the average cost of college. 

 

Tuition

Average Cost: $10,440 (public) | $36,880 (private)*

Tuition is the amount you pay your university to enroll in classes. The total changes based on the number of credit hours you take and if you take courses with additional charges like science labs or residential academic programs that let you attend smaller classes in your dorm. Offers like the Western Undergraduate Exchange (WUE) can help students save money by providing in-state tuition to out-of-state students. Despite programs like this, the average cost of college is always rising because tuition increases each year based on inflation, school budgets, and a variety of other factors. 

 

Mandatory fees are lumped into tuition and include contributions toward campus construction and access to things like:

  • Student rec center
  • Athletic events
  • Career services
  • Student activities
  • Computer labs
  • Bus passes
  • Etc. 

 

Room and Board

Average Cost: $11,510 (public) | $12,000 (private)*

Many colleges require you to live on-campus for at least your first year of attendance. The benefit of this requirement is that you’re close to classes and resources, including dining halls and bodegas that can be paid for with your room and board fees. These costs aren’t typically part of the bill for community colleges or schools with a high population of daily commuters. However, students will still need to cover living expenses like rent, utilities, and groceries if they chose not to live at home with their parents and amounts vary based on eating habits and geographic locations. For example, rent in California is higher than in Tennessee and the general cost of living in an urban setting is higher than it is at a rural school. 

 

Books

Average Cost: $1,240 (public and private)*

Books can be a secret killer when it comes to college expenses. No one ever anticipates the sticker shock associated with their first $300 textbook. These costs also include necessary technology like tablets or laptops for note-taking and essay writing. It also can include special supplies like graphite pencils and drawing paper for art majors or scrubs or stethoscopes for nursing majors. These semesterly shopping trips can do real damage to your checking account and add to the average cost of college. 

 

Transportation

Average Cost: $1,230 (public) | $1,060 (private)*

So far, we’ve focused on what you’ll need to pay to get by on campus, but we haven’t talked about the expenses associated with getting to campus. These costs impact resident and commuter students and range from airplane tickets and bus fare to parking passes and tanks of gas.  

 

Financial Aid 

When factoring the average cost of college, the other side of the ledger is represented by financial aid in the form of scholarships and need-based grants. With these awards, that don’t have to be repaid, the cost of tuition is reduced. 

 

In addition to scholarships and grants, federal and private loans are available to help cover the cost of college. Private lenders offer student loan options for undergraduate students, graduate students, and even parents. Loans cover everything from tuition to personal expenses that you’ll occur during your college years, like cell phone bills, clothes, laundry, or even a bed for your apartment. The biggest thing to keep in mind when taking out loans is to borrow only what you’ll need. It’s necessary to have money to pay bills while you’re a full-time student, but borrowing too much can put you in a bind when it comes time to pay back those loans.

 


 

* Source: https://research.collegeboard.org/pdf/trends-college-pricing-2019-full-report.pdf

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.

The Importance of a Good Debt to Income (DTI) Ratio

It is evident to most people that having more income and less debt is good for their finances. If you have too much debt compared to income, any shock to your income level could mean you end up with unsustainable levels of debt. Every month you have money coming in (your salary plus additional income) and money going out (your expenses). Your expenses include your recurring bills for electricity, your cell phone, the internet, etc. There are also regular amounts that you spend on necessities, such as groceries or transportation. On top of all of this, there’s the money you spend to service any debts that you may have. These debts could include your mortgage, rent, car loan, and any student loans, personal loans, or credit card debt.

 

What is the Debt-to-Income Ratio (DTI)?

The Debt-to-Income Ratio (DTI) lets you see how your total monthly debt relates to your gross monthly income. Your gross monthly income is your total income from all sources before taxes and other deductions are taken out. Below is the formula for calculating your DTI:

DTI = (Total of your monthly debt payments/your gross monthly income) x 100

 

Example: Let’s suppose the following. Your gross monthly income is $5,000, and you pay $1,500 a month to cover your mortgage, plus $350 a month for your student loans, and you have no other debt. Your total monthly payments to cover your debts amounts to $1,850.

 

Your DTI is (1,850/5,000) x 100 = 37%

Here’s a handy calculator to work out your DTI.

 

Why is Your DTI Important?

Your DTI is an important number to keep an eye on because it tells you whether your financial situation is good or if it is precarious. If your DTI is high, 60% for example, any blow to your income will leave you struggling to pay down your debt. If you are hit with some unexpected expenses (e.g., medical bills or your car needs expensive repairs), it will be harder for you to keep on top of your debt payments than if your DTI was only 25%.

 

DTI and Your Credit Risk

DTI is typically used within the lending industry. If you apply for a loan, a lender will look at your DTI as an important measure of risk. If you have a high DTI, you will be regarded as more likely to default on a loan. If you apply for a mortgage, your DTI will be calculated as part of the underwriting process. Usually, 43% is the highest DTI you can have and likely receive a Qualified Mortgage. (A Qualified Mortgage is a preferred type of mortgage because it comes with more protections for the borrower, e.g., limits on fees.)

 

So, What is a Good DTI?

If 43% is the top level DTI necessary to obtain a Qualified Mortgage, what is a “good” DTI? According to NerdWallet, a DTI of 20% or below is low. A DTI of 40% or more is an indication of financial stress. So, a good rule of thumb is that a good DTI should be between these two figures, and the lower, the better. 

 

The DTI Bottom Line

Your DTI is an essential measure of your financial security. The higher the number, the less likely it is that you’ll be unable to pay down your debt. If there are months when it seems that all your money is going toward debt payments, then your DTI is probably too high. With a low DTI, you will be able to weather any financial storms and maybe even take some risks. For example, if you want to take a job in a field you’ve always dreamed about but are hesitating because it pays less, it will be easier to adjust to a lower income. Plus, debt equals stress. The higher your DTI, the more you can begin to feel that you’re working just to pay off your creditors, and no one wants that.

 

DTI and Student Loan Refinancing

Your DTI is one of several factors that lenders look at if you apply to refinance your student loans. They may also assess your credit history, employment record, and savings. Refinancing your student loans may actually decrease your DTI by lowering your monthly student loan payment. This may help you, for example, if you want to apply for a mortgage. ELFI can help you figure out what your DTI is and if you are a good candidate for student loan refinancing. Give us a call today at 1.844.601.ELFI.

 

Learn More About Student Loan Refinancing

 

Terms and conditions apply. Subject to credit approval.

 

NOTICE: Third Party Web Sites

Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – The bank is not responsible for the content. Please contact us with any concerns or comments.

7 Benefits of Refinancing Student Loans

By Kat Tretina

Kat Tretina is a freelance writer based in Orlando, Florida. Her work has been featured in publications like The Huffington Post, Entrepreneur, and more. She is focused on helping people pay down their debt and boost their income.

 

It’s a scary feeling: you just graduated from college, and your student loan grace period comes to an end. Suddenly, you have to start making payments on your loans, and your minimum monthly payments eat up a significant portion of your entry-level salary.

 

It’s a common problem. According to Experian, Americans carry $35,539 in student loan debt, on average. And, student loans often have sky-high interest rates, causing your loan balance to balloon over time.

 

If you’re overwhelmed by your debt and are looking for ways to manage your loans, one option is student loan refinancing. Refinancing your student loans can be a smart way to tackle your debt and save money over the length of your repayment.

 

What is student loan refinancing?

Student loan refinancing is a process where you work with a private lender to take out a loan for the amount of your current debt, using the new loan to pay off your old ones. The new loan has completely different terms than your previous loans, including interest rate, repayment term, and minimum monthly payment.

 

7 student loan refinancing benefits you should know

While refinancing is a well-known strategy for paying off debt, there are some often overlooked benefits to refinancing student loans you should know before submitting your loan application.

 

1. You could lower your interest rate

Many student loans have very high interest rates. Over time, those rates can cause your loan balance to grow, forcing you to repay far more than you originally borrowed. For example, the interest rate on federal PLUS Loans for graduate students is a whopping 7.08% APR* according to the US Department of Education.

 

If you have good credit and stable income, you could qualify for a lower interest rate by refinancing your student loans. Education Loan Finance offers fixed-rate loans with interest rates as low as 3.14% APR*, and variable-rate loans with rates as low as 2.39% APR*.¹

 

2. You may be able to reduce your monthly payment

When you refinance your student loans, you can choose a different repayment term than you currently have. You could choose a loan term of 5, 7, 10, 15, or even 20 years. With a longer repayment term, you could reduce your monthly payment.

 

With a longer payment term, you’ll pay more in interest over time. However, that tradeoff may be worth it to you to get a more affordable monthly payment that fits comfortably within your budget.

 

3. You could save money over the length of your loan

Student loan refinancing can be a powerful money-saving tool. If you qualify for a loan with a lower interest rate, you could save a significant amount of money.

 

For example, let’s say you had $35,000 in student loan debt with an interest rate of 7% APR*. Under a 10-year repayment plan, your monthly payment would be $406. Over the length of your loan, you’d repay a total of $48,766.

 

But let’s say you refinanced your debt and selected a 10-year loan at 4% APR*. Under the new loan terms, your monthly payment would drop to $354 per month — freeing up $52 per month from your budget — and you’d repay just $42,523. Refinancing your student loans would help you save over $6,200! In fact, customers reported saving an average of $309 every month and an average of $20,936 in total savings after refinancing student loans with Education Loan Finance.²

 

chart depicting student loan repayment savings

 

4. You’ll have one simple payment going forward

During your years in college, you likely took out several different student loans — both federal and private loans — to pay for your education. According to Mark Kantrowitz, student loan expert and publisher of Saving for College, the average college graduate leaves school with eight to 12 different student loans.

 

If you have multiple loans, managing them can be overwhelming. You’ll have several different loan servicers, monthly payments, and due dates.

 

Refinancing your student loans can be a smart solution because you consolidate all of your student loans into one and have the option of choosing a new term with likely a lower interest rate. Going forward, you’ll have just one loan servicer and one monthly payment to remember. This is in contrast to consolidating your loans with the federal government, which calculates your new interest rate based on the weighted average of your previous loans and rounds up to the nearest one-eight percentage point.

 

5. Having a co-signer can help you score a lower rate

If you have a limited credit history or income, you may not be able to qualify for a refinancing loan on your own. However, there’s a workaround: you can add a qualified co-signer who is willing to guarantee the loan to your application.

 

A co-signer is a relative or friend with good credit and stable income who guarantees the loan. If you miss payments, the lender will go to the co-signer for repayment, instead. Having a co-signer reduces the lender’s risk, increasing your chances of qualifying for a loan and getting a low interest rate.

 

6. Parent loans are also eligible for refinancing

Student loan refinancing isn’t just for recent college graduates. If you’re a parent who took out student loans to pay for your child’s education, you could qualify for refinancing, too.

 

In general, parent student loans tend to have high interest rates. But when you refinance, you can qualify for a much lower rate, helping you save money or pay off your debt ahead of schedule.

 

Parents who refinance through Education Loan Finance can choose a loan term of five, seven, or 10 years. Fixed-rate loans are available with rates as low as 3.14% APR*, and variable-rate loans are as low as 2.39% APR*.¹

 

7. You can get a rate quote without damaging your credit

When you’re researching your refinancing options, it’s important to know that some lenders require you to submit a full application before they’ll give you a quote. The lenders will perform a hard credit inquiry when they review your application, which may lower your credit score. According to myFICO, the organization behind the FICO credit score, a hard credit inquiry can reduce your score by as much as five points.

 

However, Education Loan Finance allows you to get a rate quote with just a soft credit inquiry, which has no impact on your credit score. You can get an estimate of what interest rate and loan terms you can expect in a matter of minutes.

 

The bottom line

If you’re struggling with student loans and feel like you’ll never be able to dig your way out of debt, student loan refinancing can provide you with much-needed relief. Now that you know the seven biggest secrets to refinancing student loans, you can make an informed decision and take charge of your debt.

 

If you’re ready to take the next step, complete a quick, no-fee application with Education Loan Finance

 


 

*APR=Annual Percentage Rate.

 

¹Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. Terms and conditions apply. Interest rates current as of 10/1/2019. The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. Interest rates may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. Rates are subject to change.

 

²Average savings calculations are based on information provided by SouthEast Bank/Education Loan Finance customers who refinanced their student loans between 8/16/2016 and 10/25/2018. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon several factors.

 

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.