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Should I Build Home Equity or Pay Down Student Loans?

Owning a home is a goal for many people. In fact, 40% of young millennials are saving to buy a home. If you already own a home, congratulations on achieving your goal! If you are now faced with a mortgage and student loans, you may wonder which debt you should prioritize. Should you build home equity or pay down your student loans? Here we will explain what home equity is, how to build it and when it’s better to focus on home equity or paying down student loans.

What is Home Equity?

When you pay on a mortgage, even if you haven’t yet paid it off completely, you’re building equity in your home. Home equity is the difference between the market value of the house and what you owe. Here’s an example of how to calculate it:

How to Calculate Home Equity

You can calculate your home equity by subtracting the balance of your mortgage from the current value of your home. The value of your home is determined by the fair market value of your house or the appraised value. This number is the true value of your asset (your house) since it takes into account the amount you owe on the loan. Your home equity is calculated in your net worth. You may have heard that home equity can be “tapped into.” This means you can borrow against the equity of your home and use the money in a variety of ways. A home equity loan can cover home renovations or pay off higher-interest debt. Your home is valued at $375,000 and your mortgage balance is $275,000. You determine the equity by taking the value of $375,000 and subtracting the mortgage balance of $275,000. The equity in your home is $100,000.

Home Equity and the Housing Market

Your home’s equity often increases when you make mortgage payments, especially when paying down the principal on your loan. Your home’s equity can also increase when its value rises. Although the value is determined primarily by the housing market, you can raise the value through home improvements. Just as the value of your home can increase based on the market, however, it can also decrease based on the market. The only sure way to increase your home equity is by paying down your mortgage loan. The more of the loan you pay off, the more your equity increases.

Building Home Equity vs. Paying Down Student Loans

If you follow the normal payment schedule, you’ll increase your home equity slowly. If you make extra payments towards your mortgage, you can build equity faster. However, if you also have student loans, should you build home equity or pay down your student loans instead? Let’s take a look at some factors that can help determine the best course of action:

Interest Rates

If either your mortgage or any student loan has a variable interest rate, you may want to focus on that loan first, because you are at risk that the rate can rise and leave you with a higher payment to make. In addition, if one of your loans has a much higher interest rate than the other, you may choose to focus on it first.

Security

With student loans, in certain instances, if you are facing financial hardships you can temporarily suspend payments. Mortgages offer less flexibility with payments, therefore missing payments can result in foreclosure and losing your home.

Loan Balances

If you have student loans with lower balances than your mortgage, you may be able to pay them off more quickly. Then, you can continue to build equity after paying down your student loan debt.

Tax Implications

You may get a bigger tax break by building equity versus paying off student loans. However, this doesn’t apply to everyone. Interest paid on student loans is deductible, however, there is a cap on how much. As of 2020 the cap is $2,500. Your income must meet the requirements to be able to deduct this amount. Interest paid on mortgages is also deductible, but only if you itemize your deductions. The mortgage interest deduction can be much higher than $2,500. To learn more about either of these options, consult with your tax advisor.

Refinancing Your Student Loans With ELFI

If you don’t want to choose between building equity or paying off your student loans, then consider refinancing your student loans with ELFI. Use our student loan refinance calculator* to see how much you may be able to save.

The Bottom Line

Each person’s financial goals and situation are unique, so you have to make the best decision for you. Hopefully, however, knowing more about both options and which is better in certain circumstances will help you make an informed decision.

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. *Subject to credit approval. Terms and conditions apply.

2020-10-20

Engineering School Student Loan Refinancing

Student loan refinancing is a fantastic option in many high-earning professions, and engineering is no exception. Most engineering students pursue bachelor’s degrees, and the average engineer’s student debt falls roughly in line with the national average of $35,173. While engineers work hard to earn their degrees, the payoff is oh, so worthwhile. The average entry-level salary for engineers is $57,506, and the average salary across all experience levels is $79,000. This varies by the type of engineering you choose, as well. Big data engineers are among the highest-paid in 2020, with a median salary of $155,000. Engineering students are often top candidates for student loan refinancing because of their low debt-to-income ratios. Here are a few more things you should consider refinancing your engineering student loans:

Benefits of Student Loan Refinancing for Engineers

Student loan refinancing is a strategy that can help engineers better manage and pay off debt. When you refinance your engineering student loans, a private lender will “purchase” your debt from your original lenders. You can request rate quotes from several different lenders, then refinance with the one that offers you the most competitive rate. Decreasing your interest rate means you’ll pay less over the life of the loan. Here are just a few of the benefits of student loan refinancing for engineers:

Ability to consolidate student loans into one monthly payment
Option to choose between fixed and variable student loan refinancing interest rates
Chance to earn a lower interest rate, potentially lower than federal student loans
Opportunity to change your student loan repayment term

To see how much you could save by refinancing your engineering student loans with Education Loan Finance, try our Student Loan Refinance Calculator.*

How to Refinance Engineering Student Loans

Refinancing your student loans is normally a quick and simple process, and you can apply in minutes at home. If you’re curious about the process of refinancing, take a look at our student loan refinancing guide. Researching lenders has very few downsides. Most lenders prequalify applicants using a soft credit check, which won’t hurt your credit score. Just know that before you can officially refinance your loans, your lender will likely need to do a hard credit check. Here are the next steps to take if you’re thinking about refinancing your engineering student loans:

Figure out which how much or which loans you’d like to refinance.
Make sure you meet student loan refinancing eligibility requirements.
Shop around and compare pre-qualified rates from multiple lenders.
Submit an application to refinance your student loans
Finalize the loan application by reviewing the loan terms & signing the documents provided by the lender.

Alternatives to Pay Off Engineering Student Loans

If student loan refinancing doesn’t seem like the right fit, you have plenty of alternatives to explore. From student loan assistance to student loan forgiveness, engineers may qualify for a variety of repayment options.

Student Loan Forgiveness for Engineers

Select engineers may qualify for Public Service Loan Forgiveness (PSLF). If you do qualify, you’ll make payments for a specified amount of time, normally 10 years, then the remaining balance will be forgiven. You will, however, still have to pay taxes on the forgiven amount. Here are a few ways in which engineers may qualify for Public Service Loan Forgiveness:

Working in areas of national need could provide up to $10,000 in loan forgiveness over five years of service
Working for a non-profit, government agency, or other eligible employers could provide loan forgiveness after 120 payments (10 years)
Working as a teacher could provide up to $17,500 in loan forgiveness if working at a low-income school or other eligible agencies

If you aren’t sure which is right for you, research student loan refinancing vs. PSLF. While both may help decrease your debt, it’s important to know how they compare before taking the next steps.

Income-Based Repayment Plans

If you don’t qualify for Public Service Loan Forgiveness, you may also choose to pursue an income-based repayment plan. These types of plans set a monthly payment as a percentage of your income. Income-based repayment may be a good fit for entry-level engineers who are still working toward higher salaries. Here are a few types of income-based repayment plans available to engineers:

Pay-as-You-Earn (PAYE): PAYE plans are based on a percentage of your adjusted gross income and family size. They are available to individuals who borrowed after 10/1/2007, or those who received eligible Direct Loan disbursements after 10/1/2011.
Revised Pay-As-You-Earn (REPAYE): REPAYE plans are similar to PAYE plans, but do not have date restrictions on the loans. They do take your state of residence into consideration, however.
Income-Based Repayment (IBR): IBR plans require you to be experiencing financial hardship. If you qualify, they are based on a percentage of your adjusted gross income and family size.
Income-Contingent Repayment (ICR): Many individuals who can’t qualify for PAYE or IBR plans apply for ICR. These start as a percentage of your adjusted gross income, then grow as your income grows.

State Student Loan Assistance Programs

Engineers are highly valued in the professional world. Some states and private organizations have created student loan repayment assistance programs for STEM professionals, with the goal of encouraging students to pursue these careers. If you’re an engineer looking for student loan assistance, here are a few examples of state-driven programs you may be eligible for:

Harold Arnold Foundation
Wavemaker Fellowship
North Dakota DEAL Loans

Employer Student Loan Repayment Assistance Programs

Some employers provide student loan repayment assistance as a job benefit, which operates similarly to a 401(k). You designate a certain dollar amount to your student loan payments each month, and your employer matches your contribution up to a cap amount. These types of benefits can help improve employee retention rates while supplying necessary financial aid.

Refinance Your Engineering Student Loans with ELFI

If you’re ready to refinance your engineering student loans, ELFI can help. By refinancing your engineering student loans with ELFI, you’ll enjoy benefits including:

No application fees
No origination fees
No penalty for paying loans off early
If approved for refinancing, ELFI has a referral bonus program

Ready to get started? Learn more about student loan refinancing with ELFI and apply today: https://www.elfi.com/student-loan-refinancing/.*

2020-10-19

Current LIBOR Rate Update: October 2020

This blog provides the most current LIBOR rate data as of October 19, 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 – October 2020

As of October 19, 2020, the 1 month LIBOR rate is 0.15%. If the lender sets their margin at 3%, your new rate would be 3.15% (0.15% + 3.00%=3.15%).

Current 3 Month LIBOR Rate – October 2020

As of October 19, 2020, the 3 month LIBOR rate is 0.24%. If the lender sets their margin at 3%, your new rate would be 3.24% (0.24% + 3.00%=3.24%).

Current 6 Month LIBOR Rate – October 2020

As of October 19, 2020, the 6 month LIBOR rate is 0.25%. If the lender sets their margin at 3%, your new rate would be 3.25% (0.25% + 3.00%=3.25%).

Current 1 Year LIBOR Rate – October 2020

As of October 19, 2020, 2020, the 1 year LIBOR rate is 0.35%. If the lender sets their margin at 3%, your new rate would be 3.35% (0.35% + 3.00%=3.35%).

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.

Woman struggling with student loan refinancing misconceptions

2020-10-16

7 Common Student Loan Refinancing Misconceptions

Refinancing is kind of like leveling up. After months or even years of working hard to become debt-free, you then gain access to a higher tier of borrowing - better terms, a lower interest rate or a smaller monthly payment. Many people have misconceptions about student loan refinancing, however, which keep them from taking advantage of the benefits that student loan refinancing has to offer. If you're new to borrowing, it's easy to get scared of changing anything about your loan repayment process - even if that means losing out on the money that refinancing can save you. Here are some of the most common student loan refinancing myths - and what you need to know instead.

Refinancing Student Loans Takes Too Long

Don't fall prey to the misconception that student loan refinancing is a lengthy, tedious process. In fact, refinancing student loans is usually very straightforward. You fill out an application and wait a couple of days for the lender to run your credit report and verify your personal information. Once that’s been completed, you’ll be presented with the refinance offers you qualify for. The total length of time from beginning to end should take a couple of weeks. This also depends on how quickly you respond to questions from the lender and provide any additional forms or information they request.

Student Loan Refinancing Has Expensive Upfront Costs

Unlike mortgage refinancing, student loan refinancing has no upfront costs like application or origination fees. That’s also why there’s no downside to applying for a student loan refinancing multiple times. Plus, most lenders don’t charge a prepayment penalty, which is a fee for repaying the loan ahead of schedule. The only fee you’ll pay is the stated interest rate. You may owe a late fee if you make a payment after the due date, but that can be avoided if you set up automatic payments.

You Need a High Income to Refinance Student Loans

While some lenders require that borrowers have a high income to qualify for student loan refinancing, others are more lenient. All lenders, however, care about the debt-to-income (DTI) ratio, which is your monthly debt payments divided by your gross income. Most lenders want a DTI percentage below 50%. To calculate your DTI, add up your monthly debt payments including mortgage, car loan, personal loan, credit card payment and any other loans. Include a rent payment if you don't own your property. Then, divide that total figure by your gross or pre-tax monthly income. If your DTI is below 50%, then you’re likely a good student loan refinancing candidate. If it’s higher, then you need to increase your income, decrease your monthly housing payment or pay down some of your debts

You Need a Perfect Credit Score to Refinance Student Loans

Another misconception about student loan refinancing is that you need an excellent credit score to qualify, but lenders often accept borrowers with credit scores as low as 660. This is great news for young borrowers who haven’t built a strong credit history yet, or who ran up some credit card debt in college. What may hurt your chances of being approved are any recent late payments, bankruptcies, defaults, liens or recent applications for other loans or lines of credit. Before applying to refinance your student loans, check your official credit report at AnnualCreditReport.com. About one in five people have a mistake on their credit report, which can lead to an application being denied. Look at your credit report from all three credit bureaus - Experian, Equifax and TransUnion - and make sure you recognize all the accounts. If you notice a mistake, file a dispute directly with each of the credit bureaus. It may take a few weeks to have it removed from your credit report. Make sure to follow up and verify that it’s been deleted. You can check your credit score for free through a bank or credit card provider, or a service like Credit Karma. If your score is 660 or higher, you can feel free to apply for student loan refinancing. You can increase your shot of being approved by applying with a cosigner. A co-signer is someone who agrees to assume legal liability for your debt if you stop making payments and default. The loan will also show up on the cosigner’s credit report. Even if you can be approved to refinance by yourself, you may receive lower interest rates if you apply with a cosigner.

You Can Only Refinance Once

A common misconception is that you have only one opportunity to refinance your student loans. In reality, however, there’s no limit on how many times you can refinance. Many choose to refinance every time the Federal Reserve decreases interest rates because they can get a better deal on their student loans. The only thing that might affect how often you can refinance is your credit score. If your credit dips below a certain threshold, then a lender may not approve your application. Also, you may be denied if you lose your job or your income drastically plummets.

You Refinance All Your Student Loans

Many borrowers have a mix of federal and private student loans and assume they have to refinance all those loans at the same time. But borrowers can choose to refinance the loans they want. They can keep their federal loans as they are and only refinance their private loans. If they have a private loan with a low interest rate and one with a high interest rate, they can choose to only refinance the latter. In some cases, borrowers may have a better chance of being approved if they only refinance some of their loans instead of all of them.

Student Loan Refinancing is a Confusing Process

When you apply to refinance with ELFI, you’ll be matched to a member of the Personal Loan Advisor team. Every time you call ELFI, you can speak to that same person. This minimizes the confusion and frustration involved with the refinancing process. As of 10/19/2020, ELFI has a 4.9 rating on Trustpilot with more than 1,200 reviews. More than 90% of those are five-star reviews. ELFI also has an A+ rating from the Better Business Bureau.

Man feeling overwhelmed by student loans

2020-10-15

What to do When Your Student Loan Payment is Overwhelming

Having student loans is not unusual. In fact, 45 million people have them. It’s also incredibly common to feel overwhelmed by your student loan payments. A survey of student loan borrowers found that almost 65% of respondents said they lose sleep because of the stress caused by their loans. If you find yourself overwhelmed by your monthly student loan payment, there are some options you should consider to lessen the burden. Before you can explore alternatives, however, you need to know the types of loans you have. Certain options are only available for federal loans as opposed to private loans. Check the Federal Student Aid website to determine any federal loans you may have, and request your free credit report to see any private loans. Once you’re familiar with your loans, you can consider new courses of action.

Create a Budget

If you don’t already have a budget, create one! This will allow you to see if you can afford your current student loan payment. It will also show you areas where you’re spending unnecessarily. If you find there just isn’t enough income to cover all your necessary expenses, then you can begin working on different ways to reduce your student loan payment.

Research Different Payment Plans

If your federal student loan payment is overwhelming, consider switching to a different payment plan. When you initially begin repayment, your loans are automatically put on the standard repayment plan. On this plan, your payments are based on a ten-year repayment term. A Direct Consolidation Loan can help you change your payment plan to help make your payment more affordable. It can also help consolidate multiple federal loans into one loan. (Note: Consolidating your federal loans is different from student loan refinancing, discussed below.) This will help you qualify for certain longer repayment plans, resulting in a lower monthly payment. One of the drawbacks of extending your payment term is you will end up paying more in interest costs over time.

Income-Driven Student Loan Repayment

Certain loans are eligible for income-driven repayment plans. They can help make your payments more affordable and are based on your income and family size.

Graduated Student Loan Repayment

If an income-driven repayment plan does not work for you, you can change to a graduated repayment plan. Your payment will begin low and increase over time for a ten-year term.

Extended Student Loan Repayment

Another option is an extended repayment plan. To qualify, you must have certain loans over at least $30,000. Your payment may be fixed or may increase over time for a 25-year term.

Look Into Refinancing

If you have overwhelming private or federal student loan payments, consider student loan refinancing. Refinancing may lower your interest rate and reduce your monthly payment. This is a good option even if your current payment fits your budget. Refinancing can help lower your monthly payment, and can also save you thousands of dollars in interest over the life of the loan. Refinancing means obtaining a private loan to pay off your existing student loan or multiple loans. Student loan refinancing differs from consolidation, which is only for federal student loans and may not necessarily reduce your interest rate. You can refinance private or federal loans, or both, and can also change your student loan repayment term to better fit your needs. Here is an example of how refinancing can save you money: If you have $65,000 of student loans with a 6% interest rate and have 10 years remaining on your loans, you will pay approximately $722 per month. If you refinance and qualify for a lower interest of 3.61%, your monthly payment would be reduced to approximately $646 per month. This equals savings $76 per month in savings. You will also save more than $9,000 in interest over the life of the loan. To see how much you could save, try ELFI’s Student Loan Refinance Calculator.*

Increase Your Income

Of course, increasing your income is easier said than done. If your student loans payments are becoming overwhelming, however, it may be a necessary step. Increasing your income through overtime hours or a side hustle can make your payments more manageable. A side hustle can be as easy as babysitting or dog walking, or more involved like starting a side business based on a passion. If you haven’t begun repayment on your loans, but know you will face a significant loan payment after graduation, consider these steps:

Build a Budget Early

Start a budget before repayment begins that includes your future student loan payment. This will allow you to see if you will be able to comfortably afford your payment. It will also help you build an emergency fund and a strong financial foundation.

Seek Employer Student Loan Benefits

Look for an employer that offers student loan assistance. The number of companies that are offering student loan benefits is increasing, although the benefit is still rare. Some offer monthly benefits that can help you pay your loans off faster. Others offer a yearly benefit amount for a certain number of years. Either way, extra money from an employer to help pay loans will help you reduce your loan amount faster.

Work Toward Public Service Loan Forgiveness

Apply for employment that may qualify for forgiveness. If you have federal loans, certain employment can qualify for forgiveness under the Public Service Loan Forgiveness program. Certain loans and types of employment are required so be sure to pay close attention to the requirements.

Bottom Line

If you have an overwhelming student loan payment, explore your options to reduce your payment while furthering your debt-free journey.

*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.

Employer student loan repayment benefits keep employees happy

2020-10-13

How to Help Your Employees Pay Off Student Loans

Traditionally, employer benefit programs are focused on two things: investing and healthcare. Keeping your employees healthy and financially secure helps decrease turnover and increase productivity. But when employees are buried in student debt, investing in retirement feels fruitless. Before they can focus heavily on planning for the future, they need to decrease their current student loan balances. As an employer, you have the power to make a significant difference in your employees’ debt repayment timeline. Here are a few ways to do just that - and why helping your employees become debt-free is a smart business decision.

How Student Loan Benefits Work

Currently, employers offer a variety of student loan repayment assistance methods. These include:

Educational Support

The least expensive method is offering financial education to employees. This would typically involve hiring an outside expert to offer group meetings or one-on-one coaching. These can be done in-person or online. These sessions can be helpful, especially if done repeatedly throughout the year. They may be offered on their own or in conjunction with direct monetary support.

Sign-up Bonus

Some employers pay a lump-sum toward an employee’s student loan balance when they join the company. This is a one-time benefit used to attract new employees, but it can also be seen as unfair to existing employees who never received a sign-up bonus.

Matching 401(k) Contributions

Many companies offer matching contributions to an employee’s 401(k) account. In these cases, the individual contributes their own money and the employer matches a certain amount. One way that companies are combining student loan and 401(k) benefits is by matching student loan payments with a 401(k) contribution. Here’s how it works. The employee makes a student loan payment, and the money comes directly out of their paycheck. In exchange, the employer contributes that same amount to their 401(k) account. This allows the employee to balance student loan repayment with saving for retirement.

Matching Student Loan Contributions

Employers may also offer a dollar-for-dollar matching payment to the employees’ student loans. If the borrower pays $200 to their student loans, the employer adds an additional $200. This is the most straightforward way to help your employees become debt-free. Most companies that offer a matching student loan payment option will have an annual and lifetime limit. For example, the office chain Staples pays $100 a month for three years for eligible employees. Insurance company Aetna pays up to $2,000 a year for full-time employees, up to $10,000 total. Part-time employees receive up to $1,000 a year, up to $5,000 total. Like 401(k) contributions, some companies require employees to work for a certain number of months before they become eligible for student loan repayment benefits. As part of the CARES Act passed in March 2020, any student loan repayment benefits, up to $5,250, made by an employer between March 27, 2020 and December 31, 2020 will not count as taxable income. Unless this provision is extended, student loan repayment benefits will then be taxed after that date.

How Student Loan Repayment Benefits Employers and Employees

The total US student loan balance grows at a rate of about 7% every year. In 2019, the average graduate had $35,397 in student loans. New hires often bring mountains of student loan debt with them, and student loan repayment benefits can make a huge difference.

Decreasing Student Loan Stress

A recent study found that more than 85% of individuals with student loan debt name it as a major source of stress, and 33% call it out as one of their top three stressors. A 2019 survey from Marketplace-Edison Research found that those with student loans had two-thirds more economic anxiety than those without student loans. “When I was paying off student loans I was very anxious and stressed,” said Melanie Lockert, host of “The Mental Health and Wealth” show. “I don't think it affected my productivity per se, but it affected my quality of life and how I felt while doing the work. Of course, those feelings can indirectly affect work as well.” Employers reap the rewards when workers have less financial stress. According to a study from the International Foundation of Employee Benefit Plans (IFEBP), about 60% of employers said they noticed workers found it hard to focus because of personal financial problems. Another 34% of employers said they noticed absenteeism and tardiness also related to financial stress. This isn’t a new revelation - it’s basic psychology. Maslow’s Hierarchy of Needs states that humans need to feel physically safe before they can improve their psychological well-being. The same is true with financial stress. If your employee is worried about defaulting on their student loans, they may be too preoccupied to concentrate on work, and too emotionally drained to come up with innovative ideas or brainstorm new solutions.

Increasing Focus and Employee Retention

When employees feel financially secure, they’ll be more productive and attentive while on the clock. Even if it seems like your employees are producing decent results, they could likely accomplish even more if their attention wasn’t split between work and their student debt balance. Student loan repayment assistance programs could also improve employee retention. 41% of surveyed companies offering student loan assistance have found it improves recruitment and 38% believe it has improved employee retention rates. The data backs up those responses. Healthcare company Trilogy offers $100 a month in student loan repayment assistance to both full-time and part-time employees. Employees who utilize this program stay at the company 2.5 times longer than those who don’t. Since it costs several thousand or even tens of thousands of dollars to train a new employee, it may actually be less expensive to pay their student loans. That’s not even considering the intangible benefits that come from having a roster of experienced, loyal employees.

Offer Employer Student Loan Repayment with ELFI for Business

If your company is interested in adding student loan repayment assistance as a workplace benefit, they can join ELFI for Business. ELFI will create a student loan repayment program designed for your employees, managing the actual payments so your accounting department doesn’t get bogged down with the details.

Avoid common medical resume mistakes for interview success

2020-10-12

Common Resume Mistakes for Medical Professionals

If you search for “medical resume template” online, you’ll find thousands of options, all very different. Which choice, though, will give you the best chance of earning your dream job? Keep these common resume mistakes for medical professionals in mind when you’re putting together your application, and you’ll already be a step ahead of many other candidates.

Write Your Resume for the Job You Want

Too many medical professionals make the resume mistake of assuming all jobs are looking for the same thing. This is, in fact, a huge logical fallacy, because although two jobs may be in the same industry, it doesn’t mean they’re looking for the same candidate. One danger of using an online medical resume template is winding up with a resume that's a little too generic. Pay attention to make sure the format you're using really highlights your medical skills. For example, if you’re interested in becoming a physician at a hospital, you’ll want to show you’re comfortable with a variety of medical tasks, especially within a hospital setting. You’ll need to prove leadership experience, discipline, problem-solving skills and strong time-management capabilities. In a hospital environment, it’s important to be familiar with your tasks, but also to be prepared to pivot when the situation calls for it. On the other hand, if you’re applying to become a podiatrist at a group medical practice, your day will likely be more specialized and structured. You’ll need to show experience in the field of podiatry, as well as the ability to provide exceptional patient care. Any hiring manager or supervisor will want to know you’re detail-oriented and that you can clearly explain to patients how to maintain at-home care and general wellness practices. Some jobs even use an applicant tracking system to screen applications for specific keywords. Do some research before submitting your resume to a potential employer to make sure your resume is optimized. If the hiring manager is looking for keywords like “patient care” or “medical records,” you won’t want to miss these important bullet points.

Talk About Your Experience, Not Your Goals

Another common resume mistake for medical professionals is focusing on goals and objectives versus real-world experiences. You'll want to be sure you're formatting your medical resume to showcase your hard-earned experience. In some professions, employers may be looking for someone trainable that can learn most of their job skills on-the-go. In the medical field, however, employers need the opposite. Because you’ll be providing healthcare to patients, knowing your field is far more important than having the ability to learn new skills from scratch. Most jobs do require learning as you go, however, medical professionals are expected to bring some level of experience with them, even to entry-level positions. After all, you’ve put years of time and effort into earning a high-level degree, so you’ve likely graduated with a significant amount of knowledge. Unlike other professionals who learn many of their job skills after graduation, medical professionals graduate with the knowledge necessary to hit the ground running. Employers need candidates whose experience prepares them to do just that.

Share Quantifiable Evidence of Success

If you received an award, increased productivity by 10% or worked with 250 trauma cases during your residency, list those numbers on your resume. One common resume mistake for medical professionals is listing vague experiences without backing them up with quantifiable information. Be sure the way you present your experience highlights your medical skills and shows the impact of your work. Here’s an example of how to share your experience, as well as an example of how not to share:

How Not to Describe Your Medical Experience

“Spoke with several patients about their ongoing medical needs” doesn’t work, because it isn’t specific or quantifiable. Did you speak with five patients or 50? What did you discuss about their ongoing medical needs? While this likely describes months of hard work, without details, the hiring manager may miss what you’re trying to say.

How to Describe Your Medical Experience

“Conducted medical interviews with 34 new patients, with a 96% patient retention rate” is much more specific. It explains that you spoke with an impressive number of new patients, collecting details about their medical histories and ongoing needs. As a general practitioner, retaining this many patients is a huge win, as most patients stay with the same doctor for a long time.

Grammatical Mistakes: Missing the Forest for the Trees

Sometimes, when you’re so focused on getting the tiny details of your medical resume right, it’s easy to miss larger mistakes like spelling errors. Even if the information in your resume is fantastic, a misspelled word negates all your hard work. Several employers will immediately toss resumes with grammatical errors, so be sure to proofread. For good measure, ask a friend or family member to look it over, as well.

The Bottom Line

Applying for jobs is hard work. If you can avoid these common resume mistakes many medical professionals make, however, you’ll stand out as a stronger candidate. Putting in extra time and effort on your resume will pay off when you receive follow-up calls for fantastic jobs. It will also differentiate you from other candidates, as well as from those using medical resume templates. After crafting the perfect resume, be sure to check out our tips for graduates entering the job market, as well.

2020-10-09

How to Start Investing: A Millennial’s Guide

One of the best things you can do for your finances is start investing. Over time, investing is one of the likeliest ways you’ll build enough wealth to reach your financial goals — and even achieve financial independence. While investing can seem like a daunting task, the good news is that it’s easier than ever to get started. Here’s what you need to know about how to start investing.

Decide how much you can invest

Figure out how much you can invest each month. The key to long-term investing success is consistency. Even if it’s a small amount, you can start investing. Look at your income and expenses. Review which items can be reduced to create some room for investing. Even if you can only invest a few dollars per week, it will help you get started.

Paying down debt vs. investing

One of the big issues facing millennials is whether to pay down debt or invest. In the end, it depends on your preference, but having debt doesn’t mean you can’t invest. For example, if you have student loans, you might put 70% of your available money toward paying down those student loans and the other 30% toward investing. However, if you have high-interest debt like credit cards, it might make sense to put 90% toward debt reduction and 10% toward investing. Depending on your situation, you might want to tweak where you put the money, but you don’t have to let being in debt stop you from investing if you want to start building wealth.

Know your goals

Next, decide on your goals. What do you want your money to accomplish on your behalf? What you plan to use your money for, as well as your timeline, can determine how you invest your money.

Short-term goals: If you want to save for a down payment on a house, a vacation or a similar goal in the next one to three years, consider putting your money in high-yield savings vehicles, or, depending on your situation and risk tolerance, bond investments. Even for short-term goals, in some instances, a mix of stocks and bonds can work.
Long-term goals: For longer-term goals like saving for a child’s college education or your retirement, you might decide to invest more heavily in stock funds, real estate investment trusts (REITs) and other higher-yielding assets.

Your risk tolerance

As you learn to start investing, make sure you understand risk tolerance. You need to be familiar with how much risk you’re prepared to take on. For example, if you’re relatively young, you have more time to withstand and recover from market downturns, economic problems and investing mistakes. You should also consider your emotional risk tolerance. Even if, financially, you can handle the ups and downs of the market, you must be able to handle them emotionally, as well. If you struggle with the idea of using a stock index ETF to meet your short-term goals, then look for something that better suits your needs.

Get help to learn how to start investing

There’s nothing wrong with asking for guidance as you learn a new skill. A number of online investment brokers can offer you professional help as you make your plans. Betterment, Wealthfront and Wealthsimple can help you build a portfolio that matches your risk tolerance and goals. Additionally, it’s possible to get help from human advisors as you create a portfolio.

Basic tips to help you start investing

Start ASAP

It’s all about compounding returns, so the earlier you start, the better off you’ll be in the long run. Many investing experts talk about “time in the market instead of timing the market.” For many investors, starting early and being consistent about investing, while increasing contributions over time, is most likely to result in long-term success. You can start investing at any time. If you haven’t started already, begin now. It’s relatively easy to open an account and begin investing.

It’s fine to start small

You don’t need a lot of money to start investing. In fact, there are a number of apps that allow you to invest using pocket change. Check out our recommendations for the best investing apps here. It’s true that investing a few dollars each week isn’t likely to fully fund your retirement or other financial goals. However, starting small gets you in the habit of investing and growing your wealth. As your finances improve, you can increase how much you invest, growing your contributions to meet your goals. But, for now, start with whatever amount you can. The money you do invest in will grow over time, and you can keep adding to your portfolio in the future.

Consider index mutual funds and ETFs

When trying to decide what to invest in, some people are overwhelmed by the prospect of sifting through individual stocks and trying to pick “winners.” For many beginners, it makes more sense to focus on vehicles that offer “instant diversity.” Index investments offer exposure to hundreds — or even thousands — of securities at once. Rather than trying to choose individual stocks, you can get access to a wide swath of the market. If you decide later that you want to invest differently, you can change your portfolio makeup. For beginners, however, index investments offer a way to start building wealth while you research other choices.

Learn the basics

Finally, make sure you learn the basics. Read about how investing works, how different assets perform and when they might be appropriate. While you can start small with index investments, use that time to learn when (or if) it’s time to try other investing strategies. In the end, no one knows your situation as well as you do. Before investing, carefully consider your own situation and consider requesting help from an investing professional.

2020-10-08

7 Ways to Celebrate Paying off Your Student Loans

At last, you’ve done it! You’ve been diligent in paying off your student loans, and now you’re finally free of them. Being free from student debt means you can start tackling other financial goals. Before you go back to the money-saving grind, however, why not celebrate paying off your student loans? After all, with student loan debt reaching 1.2 trillion in the United States, every time someone pays their debt off it’s worth celebrating. While it may be a little more difficult to celebrate during the ongoing COVID-19 pandemic, you can still have a good time. Here are 7 great ways to celebrate paying off your student loans without acquiring new debt on the way:

Relax

Simple as that, sit on the couch and enjoy being debt-free. Paying down student loan debt is stressful, but you’ve done it. Good job. Imagine we’ve given you a high-five and a pat on the back.

Throw a Digital Party

Include all your friends or family in a video call and enjoy each other’s company. Maybe even schedule several separate video calls so you can focus on celebrating with each group.

Treat Yourself

It’s time to treat yourself to something nice. Choose an item or experience that is meaningful to you: a new outfit, a new pair of shoes, go out to dinner, whatever makes you happy. Take some time to enjoy whatever you’ve gotten. You’ve certainly worked for it. Just make sure it’s not something that’ll put you into credit card debt!

Treat Someone Else

What better way to celebrate your paying off your student loans than by including those who helped make you successful? Take your parents out to a nice dinner or have a good time with some close friends. Make sure they know how much you appreciated their support throughout your student loan repayment journey, especially if they’ve helped pay along the way. Another great option is charitable giving. You can celebrate paying off your student loans by giving to a worthy cause. Whether as a one-time gift or a monthly series of donations, your money will go toward something that you feel is important. Not only will you feel great for having given to something worthwhile, but you may also be able to deduct your charitable donation from your taxes.

Plan a Trip

Even if you’re planning for the future, now is the perfect time to consider where you’d like to travel. Take a look at some spectacular destinations. Decide where to go. Start saving now, and when the departure date arrives, you’ll be ready to go. If you’re already saving toward other financial goals and want to be careful of your budget, consider a road trip. There’s still plenty of time for a cross-country odyssey before winter, and the countryside will look particularly beautiful in the fall. If you’re looking for more vacation ideas, here are a couple of vacation ideas that won't break the bank.

Plan Your Next Financial Conquest

For those who are goal-oriented, now is the perfect time to decide what financial goal you’ll tackle next. Is it time to get a new car? Eliminate the rest of your credit card debt? Maybe it’s even time to buy a house. Ultimately it’s up to you to decide, but you should set up a plan to tackle that next big financial goal in a timely and efficient manner. The good news is, since you’ve already bested your student loan debt, you’re not only experienced but also prepared to face whatever comes next.

Save Your Student Loan Payment

They say the best time to start saving was yesterday. The second-best time is today. Celebrate paying off your student loans by investing in your future financial health. Put the amount of your student loan payment in a savings account each month or consider investing it. Your future self will thank you. You’ve already proven you can live without it, so why stop now? But as always, make sure to do your research before you launch any type of investing strategy! Congratulations on eliminating the last of your student loan debt. You should be incredibly proud of the effort you’ve put into seeing your payments through. Before you start the next step in your financial journey, take some time for yourself. Enjoy that feeling of success and use it to push yourself toward your next goal. Now is the time to celebrate! If you haven’t yet paid off your student loans, you may want to consider student loan refinancing. Take a look at what student loan refinancing could do for you here.