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This Week in Student Loans: February 28

Please note: Education Loan Finance does not endorse or take positions on any political matters that are mentioned. Our weekly summary is for informational purposes only and is solely intended to bring relevant news to our readers.

 

This week in student loans:

parent reading student loan bill

Parents Owe $100 Billion Of Student Loans

The latest data on student loan debt has revealed that while 44 million borrowers collectively owe $1.6 trillion in student loan debt in the U.S., 3.6 million borrowers collectively own $96.1 billion in Parent PLUS Loans.

 

Source: Forbes

 


chart representing rise in portion of borrowers on income-based repayment plans

Record Portion of Student Loans are on Income-Based Repayment

During the fourth quarter of 2019, it was found that almost a fourth (24.7%) of $452 billion in federal student loans were being paid using an income-based repayment plan, which was 21.8% higher than the fourth quarter of the previous year.

 

Source: Market Watch

 


photo of older man in debt

Debt Among Oldest Americans Skyrockets 543% in Two Decades

According to the Federal Reserve Bank of New York, total debt for Americans over age 70 increased 543% from 1999 through 2019. More specifically, student loan debt for 65-year-olds increased 886% per person between 2003 and 2015.

 

Source: CNBC

 


photo of beauty products

First Aid Beauty Launches Fab Aid Campaign to Tackle Student Loans

A popular beauty brand just took an angle on tackling student debt – First Aid Beauty recently announced that several of their new products sold at Sephora will contribute 10% of retail sales toward a $1 million commitment to help students and graduates pay down their student loan debt. Individuals can apply to have their student loans paid off by First Aid Beauty at fabaid.com by submitting a video sharing their student loan story, and winners will be chosen by the brand’s advisory board.

 

Source: Yahoo

 

 

That wraps things up for this week! Follow us on FacebookInstagramTwitter, or LinkedIn for more news about student loans, refinancing, and achieving financial freedom.

 


 

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.

An Ophthalmologist’s Guide to Student Loan Refinancing

Whether you have already achieved your dream of becoming an ophthalmologist or you are in the midst of your residency, the last thing you need to worry about is overpaying for your student loans. This guide will help you understand your different options so you can make the best financial decision for you and your future. 

 

By Caroline Farhat

 

Ophthalmologists and Student Loans

If you are part of the 73% of medical graduates with student loans, you may be facing an average of $192,000 in medical school debt according to a 2017 report from the Association of American Medical Colleges. While in residency, an ophthalmologist in 2017 was earning about $55,000 on average, but after residency, the average salary for an ophthalmologist is about $366,000 — making student loan debt much more manageable. 

 

Before looking into options available to you to help pay down your debt, it’s best to know the following information: 

  • The type of loans you have. There are different programs available to you based on whether you have federal or private loans. 
  • The balance of your loan, interest rate and term period remaining. With this information, it will be easier to determine what course of action can be the most beneficial for you. 

 

Options To Pay Student Loans

So how do you tackle the six-figures of student loan debt you may be facing? Outlined below are the different options you have. Depending on your types of loans, you may be able to do a combination of the options to maximize your payments.

 

1. Loan forgiveness

There are state and federal programs that provide loan forgiveness or payments towards your loans depending on the types of loans you have and the sector of your work. 

 

For federal loans one major program is Public Service Loan Forgiveness. This program forgives your remaining student loan debt after 10 years of qualifying payments while you work at a qualifying nonprofit hospital. There are specific requirements for this program including the type of federal loans, when you make payments for them to qualify and the payment plan you are on, so be sure to closely read the requirements! 

 

For federal and private student loans there are numerous programs that provide forgiveness up to a certain amount or payments for working in underserved areas for a certain period of time. 

 

The Association of American Medical Colleges has a helpful database with loan forgiveness programs to check out. 

 

2. Make payments during residency

Some may think forbearance is the only option due to the lower salary during residency and the large payments due on the loans. However, this may not be the best option since interest continues to accrue during forbearance. For federal loans, income-driven repayment plans may be a better option since it could significantly lower your monthly payment. Although your payment may not fully cover the interest accruing it will at least cut down on the amount the loan is increasing. 

 

3. Refinance student loans

Refinancing student loans can be a great option whether you have federal or private loans and especially if you have any variable interest rates on your loans. Variable interest rates are tied to the LIBOR rate and any changes to the rate could increase your student loan payment. 

 

Refinancing loans can reduce your monthly payment and save you interest over the life of the loan. For example: Say you have $150,000 of student loans remaining with the average rate for graduate loans at 7.08% with 15 years left on the term of the loan. Your payment would be $1,355 per month. If you refinanced to a new 15 year term loan and qualified for an interest rate of 4.35%, your new monthly payment could be $1,136 per month saving you $219 per month and $39,408 over the life of the loan. 

 

Check out our student loan refinance calculator to get a better idea of what you could be saving on your loans.* 

 

There are many lenders that provide student loan refinancing. When comparing the best student loan refinance companies be sure to look for no application fees, no origination fees and no prepayment penalties. It’s also good to read reviews about the company to be sure they have good customer service. 

 

At ELFI we never have application or origination fees and no prepayment penalty. You also receive a personal loan advisor to help with the refinancing process. 

 

Different lenders have different requirements for refinancing. In general you need: 

  • good credit score: minimum in the 600s. At ELFI we require a minimum of 680. 
  • solid length of credit history. At ELFI we require at least 36 months. 
  • be a U.S. citizen of the age of majority. 
  • must have obtained a degree from an approved post-secondary institution. 
  • a minimum amount of loans you are refinancing. At ELFI you need a minimum of $15,000 in loans to refinance. 
  • financial documents, including W-2 and recent paystub. 

 

4. Live like you’re a resident even after residency

Although your salary may be much higher after residency, it’s best to keep your expenses the same as when you were a resident. Create and stick to a budget based on your residency income and use all your additional income to put towards paying off your student loans. Not only will this help pay your loans off faster and save you interest in the long run but learning to live below your means will allow you to keep out of debt in the future and create a more stable financial future. 

 

Bottom Line

Becoming an ophthalmologist was hard enough. You should be incredibly proud of your accomplishment and not let student loan debt damper this exciting time. When you are facing six-figure student loans, it may seem difficult and never ending. But by researching options and making a plan you can tackle the debt effectively! 

 


 

*Subject to credit approval. Terms and conditions apply. 

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.

A Veterinarian’s Guide to Student Loan Refinancing

If you are a veterinarian or are in school to become one, you’re part of a growing field. According to the U.S. Bureau of Labor Statistics, the job outlook for veterinarians is expected to grow by 18% by 2028, far higher than the average for all occupations. 

 

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.

 

Becoming a veterinarian can be an expensive process. The American Veterinary Medical Association reported that the average amount of student loan debt for graduates was $143,000. 

 

However, you also have high earning potential. The median wage for veterinarians is $93,830, which is far higher than most Americans make. With a higher-than-typical income, you’re an excellent candidate for student loan refinancing, which can help you manage your debt and save money.

 

Why student loan refinancing is helpful for veterinarians

When you decided to go to veterinary school, you likely had to take out graduate and professional degree loans to pay for your education. Unfortunately, student loans for graduate degrees tend to have higher interest rates than other forms of debt. 

 

Even Grad PLUS Loans — a form of federal loan for graduate and professional degree students — have an interest rate of 7.08%. With such a high rate, your loan balance can quickly grow, causing you to owe far more than you originally borrowed. 

 

By refinancing your student loan debt, you can qualify for a lower interest rate, allowing you to save a significant amount of money. 

 

For example, if you had $143,000 in student loan debt at 7% APR and a 10-year repayment term, your monthly payment would be $1,660 per month. By the end of your repayment term — including interest charges — you would have repaid a total of $199,242.

 

If you refinanced your debt and qualified for a 10-year loan at just 5% APR, your monthly payment would drop to just $1,517, reducing your monthly payment by $144 per month. Over the course of your repayment, you’d repay $182,008. By refinancing your debt, you’d save over $17,000. 

 

Original Loans

APR: 7%

Loan Term: 10 Years

Minimum Monthly Payment: $1,660

Total Interest Paid: $56,242

Total Repaid: $199,242

 

Refinancing Loans

APR: 5%

Loan Term: 10 Years

Minimum Monthly Payment: $1,517

Total Interest Paid: $39,008

Total Repaid: $182,008

  

  

How to refinance veterinary school loans

You can refinance your veterinary school loans in four simple steps:

 

1. Review eligibility requirements

Make sure you meet the lender’s eligibility requirements. At ELFI, borrower’s must meet the following criteria: 

  • You must be a U.S. citizen or permanent resident 
  • You have at least $15,000 in student loan debt
  • You make at least $35,000 per year
  • Your credit score is 680 or higher
  • Your credit history is at least 36 months old
  • Your degree was issued by an approved post-secondary institution and program of study

You can find the list of participating schools on ELFI’s eligibility requirements page.* 

2. Consider adding a cosigner

If you don’t meet the minimum eligibility requirements, or you want to improve your chances of qualifying for a lower interest rate, consider adding a cosigner to your loan application. Typically, you’d ask a parent, relative, or close friend to cosign the loan application with you. If you can’t afford the payments, the cosigner is liable for making them, instead. 

 

By having a cosigner, you boost the likelihood of getting approved for a loan and securing a competitive interest rate. 

 

3. Get a rate quote

Before submitting your loan application, get a rate quote so you have an idea of what kind of loan terms you can qualify for with a consolidation loan. With ELFI’s Find My Rate tool, you can get an estimated rate in just a few minutes without any impact on your credit score.* 

 

Once you find a loan term and interest rate type that works for your needs, you can move forward with the loan application. 

 

4. Submit your loan application

You can complete your loan application online. You’ll be prompted to enter basic personal information, such as your name, address, employer, and income. To speed up the process, make sure you have the following documents on hand: 

  • Paystubs
  • W-2 for the previous year
  • Government-issued ID

You’ll also need to know who your current loan servicer is, your account number, and your current loan balance. 

 

The entire application takes about 15 minutes to complete. Once you submit the application, ELFI’s underwriting team will review your information and will contact you with a decision and next steps. 

 

Until you receive a loan approval and notification and loan disbursement, make sure you keep making payments on your current student loans to avoid missed payments and late fees. 

3 other options for managing your loans

While student loan refinancing can be an effective way to manage your debt, it’s not a good idea for everyone. If that’s the case for you, there are some other options you can use to manage your loans: 

1. Income-driven repayment plans

If you have federal student loans, you may be eligible for at least one of the four income-driven repayment (IDR) plans:

  • Income-Based Repayment
  • Income-Contingent Repayment
  • Pay As You Earn
  • Revised Pay As You Earn

With IDR plans, your loan servicer extends your repayment term, increasing it from 10 years to 20 or 25 years. Your monthly payment is generally capped at a percentage of your discretionary income. Depending on your family size and income, you could dramatically reduce your monthly payments. 

 

After 20 to 25 years of making payments — depending on which plan you’re on — the remaining loan balance is discharged, but the forgiven amount is taxable as income. 

 

You can apply for IDR plans online

 

2. Public Service Loan Forgiveness

As a veterinarian, you may qualify for Public Service Loan Forgiveness (PSLF) if you have federal student loans and work for a non-profit organization or government agency for at least 10 years while making 120 monthly qualifying payments on your debt. Payments made under an IDR plan qualify for PSLF, no matter how low they may be. 

 

After 10 years of making payments, your remaining loan balance is forgiven. The forgiven balance isn’t taxable as income. 

 

Use the PSLF help tool to see if your employment and loans are eligible for loan forgiveness. 

 

3. State student loan repayment assistance programs

Veterinarians are in hot demand, and many states are experiencing shortages of trained professionals. To recruit and retain veterinarians in high-need areas, some states offer student loan repayment assistance programs, where they offer help repaying your student loans. In return, you must agree to commit to work for a set period of time in a designated service area. 

 

For example, Minnesota operates the Rural Veterinarian Loan Repayment Program. Eligible veterinarians who agree to work for five years in a qualifying position can receive $15,000 per year in loan repayment assistance, up to a maximum of $75,000. 

 

Visit the American Veterinary Medical Association’s website to see if your state offers a similar program. 

 

Managing your student loans

If you need help tackling your debt, student loan refinancing can make a lot of sense. And ELFI can help you achieve your goals. In fact, NerdWallet ranked ELFI as the top lender for veterinary school loan refinancing, giving it a five-star rating. 

 

Use ELFI’s student loan refinancing calculator to see how much you can save by refinancing your student loans.*

 


 

*Subject to credit approval. Terms and conditions apply. To see eligibility requirements, visit https://www.elfi.com/eligibility-requirements-to-refinance-student-loans/.

 

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.

7 Great Things to Spend Your Tax Refund On

While tax season fills most people with dread, there’s one thing everyone looks forward to — tax refunds. According to the IRS, approximately 71% of American tax filers receive a tax refund. In 2019, the average tax refund was a whopping $2,869. If you’re like many people, that may be the biggest lump sum you’ll see all year – so it’s important to use it wisely. 

 

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.

 

7 Best things to spend your tax refund on

During tax season, retailers compete for your business. You’re bombarded with advertisements and sales trying to get you to spend your newfound money. But before parting with your hard-earned funds – it is money you worked for, after all – focus on using your tax refund on things that will improve your finances, your future financial prospects, and overall well-being. 

 

Need inspiration? Here are seven smart ways to use your tax refund. 

 

1. Student loan lump sum payments

Student loan debt can be a substantial burden, causing you to put off other goals like saving for retirement, relocating to a new city, buying a home, or even getting married. 

 

Using your tax refund to make a lump sum payment on your debt could allow you to save money on interest fees and help you pay off your loans ahead of schedule. 

 

For example, let’s say you had $30,000 in student loan debt at 6% APR. With a minimum monthly payment, it would take you 10 years to repay your loans. And, you’d repay a total of $39,970; interest charges would cost you $9,970. 

 

But let’s say you received $2,869 as a tax refund. If you applied the entire amount to your student loans as a lump sum payment, you’d pay off your loans 15 months early and you would repay just $37,801. By using your tax refund to make an extra payment on your debt, you would save $2,169 in interest charges. 

 

You can make your tax refund work even harder for you by refinancing your student loans to possibly lower your interest rate. Use our Student Loan Refinance Calculator to see what you could save by refinancing your student loans.* 

 

2. Medical procedures

If you’re like many people, you may have put off going to the doctor or visiting a dentist because you simply couldn’t afford it. In fact, 25% of Americans reported putting off necessary medical procedures due to cost. However, skipping routine medical and dental care can cause more expensive issues later on, so it’s important to stick to a preventative care routine. 

 

If you haven’t been to the doctor or dentist because you were short on cash, using your tax refund to take care of your health is a wise investment. 

 

3. Car repairs

Cars are often money pits, causing many people to skimp on routine repairs because of the expense. AAA reported that the average car repair is $500 to $600, but can often cost much more. Keeping up with your car’s maintenance and making necessary repairs can improve your car’s lifespan and fuel efficiency, helping you avoid more costly issues later on. 

 

If you’ve been putting off any repairs or need to replace your tires, use your tax refund to finance that purchase so you can get to and from work safely. 

 

4. Professional development

With technology changing so quickly, it’s essential that you keep on top of the latest trends in your field so that you remain competitive in the job market. If you want to take your career to the next level, consider using your tax refund to invest in your professional development. You can attend a conference, take a class, or hire a career coach. 

 

5. Investments

If your finances are in otherwise good shape – meaning you don’t have high-interest debt or a pressing immediate expense – you can use your tax refund to build long-term wealth. Consider using your refund to invest your money by making contributions to your retirement accounts or an individual taxable account. 

 

Don’t think your tax refund can make that much of a difference? Think again. Over time, your money can grow significantly. 

 

For example, let’s say you’re 30 years old and deposit your $2,869 into an individual taxable account. If you don’t deposit another cent and your money earns an average annual return of 8%, that account will have grown to $31,374 by the time you’re 60. 

 

If you’re not sure where to start, check out robo advisors like Betterment® or WealthFront®. They automatically invest your money based on your goals and risk tolerance, so you don’t have to be an investment expert to reap the rewards. 

 

6. Exercise equipment

Investing in your health and wellness is a good use for your money. Over time, it can help you save on health insurance and medical bills, too. 

 

Consider using some or all of your tax refund to purchase exercise equipment you’ll actually use. Or, sign up for a gym membership or take a few sessions with a personal trainer to ensure you’re using the equipment correctly. 

 

7. A new computer

If you freelance or are thinking of starting a new side hustle, you may want to use your tax refund to purchase a new computer or software so that you can work more efficiently. With better tools, you may be able to improve your earning potential. And, you may be able to deduct the cost of a new computer or software on next year’s taxes (talk to a tax professional about your unique situation). 

 

How not to spend your refund

There are a lot of bad ways to spend a tax refund. But one of the worst is using it to purchase a car you can’t really afford. Unfortunately, using a tax refund to buy a new car is incredibly common. 

 

Using your tax refund as a down payment can help you qualify for a car loan. But car values depreciate rapidly, and you could end up with a car that is too costly for your budget, or you could end up owing more than the car is worth. That issue can put you in a precarious financial position, and it’s hard to dig yourself out of debt. 

 

If you need reliable transportation, use your tax refund to purchase an inexpensive, used car that you can comfortably afford. If you need to take out a loan, financial experts recommend that you choose a loan term no longer than 36 months; if you need a longer loan term than that to manage the loan payments, the car is likely more than you can truly afford. 

 

There’s seven things that you should spend your tax refund on, along with one that you shouldn’t! Regardless of your situation, focus on spending your refund responsibly. 

 

For more information, learn how to create a monthly budget.

 


 

*Subject to credit approval. Terms and conditions apply. 

 

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: February 21

Please note: Education Loan Finance does not endorse or take positions on any political matters that are mentioned. Our weekly summary is for informational purposes only and is solely intended to bring relevant news to our readers.

 

This week in student loans:

30,000 borrowers are being charged for student loans that were already discharged

30,000 borrowers of student loans from a private lender thought their loans would be discharged when they declared bankruptcy years ago – however the lender disagreed, and they are continuing to be charged. The borrowers are now suing the U.S. Bankruptcy court for the Eastern District of New York.

 

Source: Yahoo Finance

 


USC announces new tuition-free plan

The University of Southern California (USC) recently announced two major changes to its financial aid plan, one of which makes attendance tuition-free for applicants whose family’s household income falls at or below $80,000. Owning a home will also not be counted in the calculation to determine a student’s financial need.

 

Source: Forbes

 


Younger employees want help paying down student debt

A recent report from consumer research firm Hearts and Wallets revealed that younger workers would rather have employers assist them with repaying student loans than help them save for retirement. Two-thirds of workers of ages 21 to 27 said companies should help them pay down student debt, while just 27% said companies should help them save for retirement.

 

Source: Investment News

 


49% of Americans expect to live paycheck to paycheck this year

A new survey revealed that a whopping 49% of Americans expect to live paycheck to paycheck through each month of this year. It also revealed that 53% don’t have an emergency fund that covers at least three months of expenses. Despite the negative sentiment, 91% did say they wanted to develop better money habits in 2020.

 

Source: Forbes

 

 

That wraps things up for this week! Follow us on FacebookInstagramTwitter, or LinkedIn for more news about student loans, refinancing, and achieving financial freedom.

 


 

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 Great Investing Apps for Beginners

This blog has been prepared for informational purposes only and does not constitute financial or investing advice. You should always use caution when making investing decisions. Rates and fees for the apps listed were obtained as of February 21, 2020 and are subject to change.

 

There are several ways to go about building wealth – some focus on building their career and earning more, putting their money into traditional savings accounts, 401ks, and IRAs, while others may focus on putting their money to work for them through investing in stocks, bonds, and ETFs. While many young adults have previously shied away from the stock market and investing in the past, a recent study showed that seven in ten millennials are financially investing in some way, and that 85% of millennials do not feel too young to invest

 

Why the change? From national student loan debt reaching record highs, to the housing market being generally more expensive for buyers, there are certainly enough reasons for millennials to focus on finding new ways to build their wealth, rather than just using traditional savings. 

 

If you’re a believer that history repeats itself, you may find the stock market to be a good opportunity to grow your wealth. Since its inception in 1896, the Dow Jones Industrial Average has delivered an average return of 5.42% per year, and the S&P 500 index has delivered an average return of 7.96% from 1957 to 2018. 

 

For the new investor, however, getting started can be a bit overwhelming. Some questions beginners might ask: What should I invest in? Should I invest in stocks, bonds, or ETFs? Should I manage my portfolio or allow a robo-investor to manage it? What about cryptocurrency? Which is going to get me the best return? Which strategy is the safest? Should I be thinking long-term or short term?

 

Luckily, there are a variety of applications that serve well for individuals that are just getting started on their investment journey. Here are five great apps that all have unique benefits for individuals looking to start investing.

 

Robinhood®

Robinhood ® launched in 2013 and took the digital investing world by storm by offering commission-free trading along with a free trading account and providing users with a free stock for just signing up. Its simplified user experience may not suit the seasoned investor, however it’s a great starting point for individuals interested in investing in stocks, ETFs, and even select cryptocurrencies. You can search for stocks, add them to your watchlist, get some general information about the company, such as analyst ratings on the stock (buy, sell, hold), their earnings data from previous quarters, their dividend yield, among other useful numbers to guide your investing decisions. Upgrading to Robinhood Gold for $5 a month gives you access to extending trading hours, real-time market data on order volume, among other features.

 

Robinhood recently released fractional shares allowing you to invest in any company with as little as $1. Overall, Robinhood is a user-friendly app for those who want to be in full control of their investment strategy. 

 

Acorns®

If managing your portfolio isn’t for you, Acorns ® may be a more suitable option. Acorns is an app primarily focused on helping you save and grow wealth by investing your spare change. Once you link your bank account, Acorns will track your purchases and round them up to the nearest dollar, depositing $5 worth of spare change at a time. You can set the round up to double, multiply by five, or multiply by ten if you’re interested in stepping up the amount you invest. When you first begin, the app provides you with a questionnaire that helps determine your investment goals and strategy, allowing you to choose a more moderate or aggressive strategy. 

 

In addition, the app gives you small rewards for making purchases with specific companies, like Walmart, Chevron, Uber, and more. Acorns is a great way to passively invest your spare change.

 

Stash®

Allowing you to invest with as little as $5, Stash ® is a great app for learning how to invest effectively. Like Robinhood, it allows you to be in control of your investments, however it provides a bit more guidance as you move along by helping you pick your investments based on your goals. The app is filled with articles and tips that help strengthen your investment decisions, also providing themed categories of investments, such as innovation or environment. 

 

Betterment®

Betterment ® is a leader among robo-advisors, providing value to hands-off investors. The app charges just 0.25% for asset management annually, with no minimum amount to start investing. Betterment takes a traditional approach to investing by diversifying your portfolio based on your decided level of risk tolerance and your goals. They offer more portfolio options than some of the simpler applications, making it a strong tool for individuals who know what they want out of a robo-advisor. It’s generally less expensive than other robo-advisors and uses strong algorithms to manage assets effectively and provide strong returns. 

 

TD Ameritrade®

If you’re interested in doing more than getting your feet wet, TD Ameritrade ® is an app that borders between being suited for the beginner and intermediate-level investor. The app, offered by one of top US brokerage firms, offers a powerful trading experience, allowing you to customize dashboards and screens, access research and advice, receive market news and alerts, and watch educational videos on investing. It’s definitely more suited for the active investor who wants to make adjustments to their portfolio on a daily or weekly basis. While they previously charged $6.95 per online equity trade, they recently released commission-free trading as well. While it may not be the best place for everyone to start, it’s a great place to consider moving to once you’ve established your investment strategy and are working with a larger portfolio. 

 

With these apps, investing doesn’t have to be overwhelming. You can invest passively, schedule deposits, invest spare change, or dive in and control your investing destiny – whichever feels right for you. You should always use caution when investing your hard-earned money, however, getting started with a few dollars now and learning the ropes could be worth something to you in the future. We hope that at least one of these apps provides you with value and helps you get started in your investment journey.

 


 

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.

High Income, High Debt: How to Stop the Spiral

By Caroline Farhat

 

A lot of people think if you are earning a high income you must have lots of wealth and no debt. However, that is not always reality. In fact, for some people, earning a high income can mean higher amounts of debt. If you are in these circumstances, read on to find out how to stop the spiral.

 

High Income, High Debt

There are many reasons that higher-income households can have higher debt. One reason is higher earners like doctors and lawyers may have higher debt due to the amount of student loans needed to obtain their education.

 

But the big problem lies with the high earners who have high levels of debt and no assets to show for their income. A 2015 Nielsen study found 25% of American households earning $150,000 or more were living paycheck to paycheck. These are the earners who may be going down a spiral. There are reasons for this spiral that can be addressed to stop it. Some reasons include:

  • Desire to spend – A person earning a high income feels like they have a lot of money they can spend and deserve to spend. However, this can cause some to spend up to the total amount they bring home or worse exceed the amount, causing credit card debt or the need for personal loans.
  • Keeping up with the Joneses – Always trying to keep up with your group and show “wealth” you may not really have. This can be seen in the form of always buying the latest gadget, flashiest car or taking a trip to the latest popular destination. Even if you can afford some of these items now, feeling the need to keep up can be dangerous because you never know when a time may come that you may not be able to afford your lifestyle due to sudden job loss or a change in financial circumstances. 
  • Lifestyle creep – Increasing your expenses when your income increases because of your wants or perceived new needs. For example, the thought that now you need a more expensive and larger house because you can afford it with your higher income.

 

How to Stop the Spiral

Did any of this resonate with you? If so, don’t panic. You can always stop the spiral of high income and high debt. Below are some actionable steps you can start today.

 

1. Determine your fixed expenses

Fixed expenses are the expenses that are mostly out of your control and remain constant every month. They include your rent or mortgage, car insurance, internet bill, cell phone bill, utility expenses (although these may not be the same each month you can figure out the average), and loan payments. Knowing these expenses will help you complete the next step.

 

2. Create a budget

You knew this was coming! Now that you know your fixed expenses you can create a budget. There are different methods you can use to create a budget. One budget that many people find easy to follow is the 50/20/30 rule. The basic principle is subtract your fixed expenses from your take-home pay. Then put money in savings for your emergency fund, retirement, or whatever you determine is most important to you. The rest of your income is used to pay your variable expenses. These are the expenses you have the most control over, like your food budget, restaurants, and clothing shopping. 

 

3. Try to reduce your expenses.

The easiest expenses to try to reduce will be the ones completely in your control, like eating out less. But there are some ways to reduce your fixed expenses.

 

Refinance student loans – Have a high monthly payment? Refinancing may be a good option. Refinancing student loans can reduce your monthly payment and save you in interest costs over the life of your loan(s). You can refinance private student loans and federal student loans. Check out our student loan refinance calculator to determine what your potential savings could be.*

 

Negotiate your bills – Have a high internet bill? Or maybe you are still paying for cable. Check for any deals with your provider and compare with competitors. Better yet, think about whether you really need the service. If you are a die-hard Netflix fan, it may be time to cut the cable cord.

 

4. Pick a method to attack your debt.

There are two methods financial experts recommend to pay off debt: the snowball method and the avalanche method.

 

Snowball method – Use any extra money to pay off your lowest loan first. Once the lowest loan is paid off you take the payment you were making to that loan and apply it to the second-lowest loan. Here is an example of how it works:

  • If you have a student loan of $25,000 with a payment of $290 and an auto loan of $15,000 with a payment of $275 you would focus on paying the auto loan off first. You would make both minimum payments but if you have an extra $25 per month to apply to a loan you would apply it to the auto loan. Once the auto loan is paid off you would apply the payments of $275 and $25 to your regular minimum student loan payment of $290 and now be paying $590 per month to your student loan ($275+25+290 = $590). You would continue this until all debts are paid off.

 

Avalanche method – List your debts in order of interest rates and start paying off the debt with the highest interest rate first. Add any additional payments to the loan with the highest interest rate. Continue paying the minimum on all other loans. Once the highest interest rate loan is paid off you apply that minimum payment to the next highest interest rate loan. 

 

5. Put salary increases into savings

Don’t give into the lifestyle creep. If you were able to pay all your expenses before your salary increase, you can continue to live off your old income amount and save the increased amount. The difference can be put into a retirement account or savings account, thereby increasing your wealth. The best way to do this is to set up an automatic transfer so that the extra money never hits your bank account. If you can’t see it, you can’t spend it!

 

Bottom Line

If you have realized you are in a high income, high debt spiral, there is hope of stopping it. With some work, you can get your finances in order and begin to see your savings grow.

 


 

*Subject to credit approval. Terms and conditions apply.

 

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.

Why Experiences are the New Measure of Wealth

By Caroline Farhat

 

For the past half-century of American history, material objects have been a primary source of value to the working class of Americans. Following World War II, many Americans dreamt of owning a suburban home, driving a car, and joining in on the baby boom. The U.S. saw significant expansion through the 40s and 50s, gross national product rose dramatically, as did personal expenditures on things. By the end of the 50s, the majority of families owned a television, a car, and a home. By 1960, blue-collar workers became avid buyers, enjoying more disposable income through the 1970s.

 

Today is a different story. A study found 74% of Americans value experiences over things. The reason for this shift in ideology can be tied to a number of things, such as younger adults having watched the effects of the 2008 recession and, as a result, feel less of a need to be tied to material objects. This is leading to many millennials skipping the mall to attend music festivals, skipping homeownership to live in the city, and putting off having children for added freedom. Rather than defining wealth by what they have, many young adults are measuring wealth by what they can experience.

 

Typical Measure of Wealth

Wealth is typically measured by calculating a person’s net worth. This is calculated as assets – liabilities = net worth. Assets can include homes, cash, retirement accounts, and stocks. Liabilities can include all debts such as student loans, auto loans, and mortgages. Take a look at this example to calculate net worth: 

  • If a person owns a home valued at $500,000, a car valued at $22,000, they have $15,000 saved in a bank account and $33,000 saved in a retirement account, they would have a total of $570,000 in assets.
  • If there is a mortgage on the home for $200,000 and a car loan for $5,000 and student loan debt of $30,000, this person would have liabilities totaling $235,000.
  • This person’s net worth would be $570,000 – $235,000 = $335,000.

The net worth that is considered “wealthy” is subjective, however, a survey conducted by the Federal Reserve in 2017 found that the median net worth of families was just $97,300. Calculating net worth allows a person to see numerically how much wealth they have, but it is not the only way people define wealth. 

 

Why Millennials Value Experiences

Calculating net worth may be considered an old measure of wealth by millennials (people born between 1981 and 1996), but why?

 

To begin with, millennials value relationships with others more than material objects. The benefit of being able to experience things with their friends and significant others seems to outweigh the benefit of accumulating wealth.

 

While millennials do seem to understand the value of saving money, they also understand the need for work-life balance. A study conducted by Deloitte found 57% of millennials say traveling is their top aspiration. This supports the notion that being able to enjoy life and experiences is a measure of wealth to millennials. This supports the notion that being able to enjoy life and experiences is a measure of wealth to millennials.

 

Another reason for the shift in measuring wealth is millennials are facing financial struggles that previous generations did not experience. According to a study by the Pew Research Center, more millennials have student loan debt compared to previous generations, and the amount of student loan debt they have is also greater. If you are dealing with student loan debt and high monthly payments, you may feel you are not able to purchase a home, start a family, or build the traditional standard of wealth. But even with a low net worth, millennials can partake in great experiences that add value to their life and make them feel wealthy. 

 

Options to Build Your Wealth

If you have student loan debt, whether federal or private student loans, you may be feeling you will never be able to grow your net worth or have the life experiences you want – but that is not the reality. Student loans do not have to hinder you from growing your wealth. Check out these options to build your wealth:

  • Start a side hustle. Earning extra money outside of your day job allows you the freedom to use the money how you want. It doesn’t have to pay the bills, it’s extra money that you can use to travel or put away for retirement. Plus your side hustle may lead you to passions and causes that are important to you which only further enhances your life!
  • Refinance your student loans. When you refinance your student loan you may be able to lower your monthly payment and save interest over the life of the loan. The extra money you have monthly could go towards experiences to enrich your life and extra savings in the bank for emergencies. How much savings can you expect a month? Check out our student loan refinance calculator on our site to get an estimate of your savings.* Student loan refinancing is easy with the right lender. With ELFI you never pay an application fee or origination fee. You also receive a personal loan advisor who guides you through the process of refinancing.
  • Create a zero-based budget. What if you were told to “spend” all of your income each month?  This might sound crazy at first, but many financial experts regard this method as the most effective one out there. The concept of zero-based budgeting is that your monthly income minus your expenses should equal zero. The idea is that each dime you make should have a “job” and fall into a certain category in your budget. For example, if your take-home pay is $5,000, you have exactly $5,000 to spend, save, or invest. This can help you take control of your finances and ensure every dollar is put to good use.
  • Use an effective debt-payoff strategy. Using the debt snowball or debt avalanche method of paying off debt can make payoff simpler and more effective. The debt snowball involves paying off debts with the lowest balances first, then moving onto the next smallest balance. The debt avalanche method involves paying off the largest debt first, then moving on to the next largest balance. Both strategies have their pros and cons, but both will also lead to a debt-free life.

 

Bottom Line

Wealth is more than just the possessions you own or the car you drive. Experiencing a full life with great relationships and experiences can lead to happiness overall. By getting a handle on your student loans not only will your typical financial wealth increase, but so can your experiences in life. No matter how you measure wealth, you can achieve it while paying your student loans!

 


 

*Subject to credit approval. Terms and conditions apply.

 

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.

Current LIBOR Rate Update: February 2020

This blog provides the most current LIBOR rate data as of February 10, 2020, along with a brief overview of the meaning of LIBOR and how it applies to variable-rate student loans. For more information on how LIBOR affects variable rate loans, read our blog, LIBOR: What It Means for Student Loans.

 

What is LIBOR?

The London Interbank Offered Rate (LIBOR) is a money market interest rate that is considered to be the standard in the interbank Eurodollar market. In short, it is the rate at which international banks are willing to offer Eurodollar deposits to one another. Many variable rate loans and lines of credit, such as mortgages, credit cards, and student loans, base their interest rates on the LIBOR rate.

 

How LIBOR Affects Variable Rate Student Loans

If you have variable-rate student loans, changes to the LIBOR impact the interest rate you’ll pay on the loan throughout your repayment. Private student loans, including refinanced student loans, have interest rates that are tied to an index, such as LIBOR. But that’s not the rate you’ll pay. The lender also adds a margin that is based on your credit – the better your credit, the lower the margin. By adding the LIBOR rate to the margin along with any other fees or charges that may be included, you can determine your annual percentage rate (APR), which is the full cost a lender charges you per year for funds expressed as a percentage. Your APR is the actual amount you pay.

 

LIBOR Maturities

There are seven different maturities for LIBOR, including overnight, one week, one month, two months, three months, six months, and twelve months. The most commonly quoted rate is the three-month U.S. dollar rate. Some student loan companies, including ELFI, adjust their interest rates every quarter based on the three-month LIBOR rate.

 

Current 1 Month LIBOR Rate – February 2020

As of Monday, February 10, 2020, the 1 month LIBOR rate is 1.66%. If the lender sets their margin at 3%, your new rate would be 4.66% (1.67% + 3.00%=4.66%). The chart below displays fluctuations in the 1 month LIBOR rate over the past year.

 

Chart displaying current 1 month LIBOR rate as of February 10, 2020.

(Source: macrotrends.net)

 

 

Current 3 Month LIBOR Rate – February 2020

As of Monday, February 10, 2020, the 3 month LIBOR rate is 1.71%. If the lender sets their margin at 3%, your new rate would be 4.71% (1.71% + 3.00%=4.71%). The chart below displays fluctuations in the 3 month LIBOR rate over the past year.

 

Chart displaying current 3 month LIBOR rate as of February 10, 2020.

(Source: macrotrends.net)

 

Current 6 Month LIBOR Rate – February 2020

As of Monday, February 10, 2020, the 3 month LIBOR rate is 1.72%. If the lender sets their margin at 3%, your new rate would be 4.72% (1.72% + 3.00%=4.72%). The chart below displays fluctuations in the 6 month LIBOR rate over the past year.

 

Chart displaying current 6 month LIBOR rate as of February 10, 2020.

(Source: macrotrends.net)

 

Current 1 Year LIBOR Rate – February 2020

As of Monday, February 10, 2020, the 1 year LIBOR rate is 1.80%. If the lender sets their margin at 3%, your new rate would be 4.80% (1.80% + 3.00%=4.80%). The chart below displays fluctuations in the 1 year LIBOR rate over the past year.

 

Chart displaying current 1 year LIBOR rate as of February 10, 2020.

(Source: macrotrends.net)

 

Understanding LIBOR

If you are planning to refinance your student loans or take out a personal loan or line of credit, understanding how the LIBOR rate works can help you choose between a fixed or variable-rate loan. Keep in mind that ELFI has some of the lowest student loan refinancing rates available, and you can prequalify in minutes without affecting your credit score.* Keep up with the ELFI blog for monthly updates on the current 1 month, 3 month, 6 month, and 1 year LIBOR rate data.

 


 

*Subject to credit approval. Terms and conditions apply.

 

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.

We’re In Love with These 7 ELFI Customer Reviews

Whether you’re spending time with the girls for ‘Galentine’s Day’ or spending the holiday with that special someone, today is a day to share some love with those you care about!

 

At ELFI, we show our love to our customers through top-notch customer service paired with low rates and flexible terms for refinancing their student loans – and sometimes they show us love back through great TrustPilot reviews. In light of Valentine’s Day, we’re sharing 7 ELFI customer reviews that we’re simply in love with!

 

All reviews below were given by real Education Loan Finance customers on TrustPilot. Results may vary.

 

Review #1:

“Loved the personal loan advisor experience … When she called me and left me a voicemail, she sounded like a friend, not a scary loan robot, and it really put me at ease through the process.”

No one likes a scary loan robot! It’s great to see that our personal loan advisors help put our customers at ease through the refinancing process by giving them guidance, answering questions, and keeping them informed of updates along the way!

 

 

Review #2:

“I wish I’d done this sooner! The refinance process was fairly straightforward and easy to manage, and having the added benefit of a loan advisor was super helpful. The rates are competitive and they have plenty of options for every person.”

We hear “I wish I’d done this sooner” pretty often from customers, but it’s always nice to see how happy they are once they’ve made the decision to refinance. If you still have a significant amount of student loan debt, it’s probably not too late to refinance!

 

Review #3:

“Promote this woman!! Candace was so knowledgeable, prompt, and helpful during every step of the process- made the experience seamless.”

So much enthusiasm from this customer! They don’t need to worry – we take great pride in the service given by our personal loan advisors and we love showing people how great they are. They truly do make the refinancing process as seamless as possible.

 

Review #4:

“Did not expect to be assigned to an actual representative so good on elfi for that.. Further.. I can tell that Ivan knows what he’s doing. He’s professional, with prompt responses. It’s one thing to put a representative in place, but another for that person to actually provide value. Sometimes with companies, you don’t even know who to contact to begin with, let alone, the company reaching out to you first, with a representative who’s coherent and professional.”

This means so much to us! We aimed to reshape the student loan refinancing industry by offering every customer with a single personal loan advisor that can understand their situation and guide them through the process… Receiving reviews like this truly make us blush because it shows that our process works!

 

Review #5:

“Andrea was incredibly helpful! It was nice to have someone take the time to answer all of my questions, provide explanations and keep me apprised of next steps. Refinancing was a breeze…thanks ELFI and Andrea!”

Kudos to Andrea for making refinancing a simple process for this customer! Regardless of your lender, there are always going to be several steps involved in the refinancing process – but having someone there to show you the path ahead really makes it a breeze.

 

Review #6:

“Great rates and very helpful customer service. Didier walked me through the process and made it very easy to me to get my loans set up quickly and painlessly. I highly recommend ELFI to anyone looking to refinance their student loans. I compared payment options to several other companies, and Education Loan Finance by far had the best options. I was able to reduce my monthly payments and now I will be paying off my loans in 7 years, rather than 10. Five stars!”

This customer cut three years off of their repayment term by refinancing with ELFI, and they sure seemed happy about it!

 

Review #7:

“I’ve been afraid to refinance for years. ELFI was rated well on NerdWallet so I decided to apply. They actually made it easy to understand what I needed to refinance, how the process works etc. I also had someone assigned to help me and answer any questions. I’m so happy to have my loan with a company designed for the modern age who is actually transparent and helpful.”

Shucks! This customer was putting off refinancing for years, and we couldn’t be happier to be their refi match made in heaven. Our transparent process and personalized customer service really made the difference here!

 

 

What else can we say? We love our customers, and these reviews show us that the feeling is mutual. Our average TrustPilot rating currently stands at 4.9/5 stars, with over 800 reviews! Don’t just take our word for it – check our all of our reviews here.

 

Interested in finding your student loan refinancing match in ELFI? Our personal loan advisors are just a call, text, or email away. 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!*

 

Oh, and Happy Valentine’s Day from ELFI!

 


 

*Subject to credit approval. Terms and conditions apply.

 

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.