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Chart representing LIBOR rate fluctuations
2020-06-18
Current LIBOR Rate Update: June 2020

This blog provides the most current LIBOR rate data as of June 9, 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 – June 2020

As of June 9, 2020, the 1 month LIBOR rate is 0.19%. If the lender sets their margin at 3%, your new rate would be 3.19% (0.19% + 3.00%=3.19%). The chart below displays fluctuations in the 1 month LIBOR rate over time.

  Chart Showing Current 1 Month LIBOR Rate – June 2020

(Source: macrotrends.net)

 

Current 3 Month LIBOR Rate – June 2020

As of June 9, 2020, the 3 month LIBOR rate is 0.31%. If the lender sets their margin at 3%, your new rate would be 3.31% (0.31% + 3.00%=3.31%). The chart below displays fluctuations in the 3 month LIBOR rate over time.

  Chart displaying Current 3 Month LIBOR Rate – June 2020

(Source: macrotrends.net)

 

Current 6 Month LIBOR Rate – June 2020

As of June 9, 2020, the 6 month LIBOR rate is 0.46%. If the lender sets their margin at 3%, your new rate would be 3.46% (0.46% + 3.00%=3.46%). The chart below displays fluctuations in the 6 month LIBOR rate over time.

  Chart displaying Current 6 Month LIBOR Rate – June 2020

(Source: macrotrends.net)

 

Current 1 Year LIBOR Rate – June 2020

As of June 9, 2020, the 1 year LIBOR rate is 0.63%. If the lender sets their margin at 3%, your new rate would be 3.63% (0.63% + 3.00%=3.63%). The chart below displays fluctuations in the 1 year LIBOR rate over time.

  Chart displaying Current 1 Year LIBOR Rate – June 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.

Colleagues touching elbows as they return to the office following the COVID-19 pandemic.
2020-06-18
Tips for Adjusting Back to Office Life

After months of remote work, workplaces are finally opening up again. To some this is exciting. At last, one can interact with their coworkers and work in a more traditional environment. Some might feel the opposite. Regardless, the switch back to the office environment will take some adjustments in your daily routine. To help you make that switch seamlessly, we’ve made this list of 6 tips that will ensure that you have no issues on your way back into the office.  

Prepare Mentally

After all the time of just being able to roll out of bed and get to work, it may seem like a drag to get ready each day to go back to the workplace. You should prepare yourself mentally to not only wake up earlier and get dressed for work but also prepare for the many things that come along with being in the office. It’s important to note studies show that communication is vitally important to productivity, and despite the boom in work from home technology, nothing beats face to face communication, even if it’s from six feet apart. A conversation through a screen just isn’t the same. So if you’re dreading returning to work, focus instead on the benefit of returning – a better teamwork experience.  

Stick To What Routines You Can

Without a doubt, the switch back to office work will dramatically change your routine. As such, it is even more important to stick to the things that you can. Studies show that routines are essential to sound mental health. If you have a cup of tea at 10:30 every morning, continuing to do that will bring a sense of much-needed consistency to your routine. Similarly, if you have begun to start your day with a half-hour of industry news, continue doing that. Even the smallest pieces of your routine play large roles in keeping you feeling stable and will help you in the transition back to office life.  

Plan Out Your House Work

It’s easy to forget the days where you couldn’t just crush a load of laundry or do the dishes in between conference calls, but those days are back. It’s going to be harder to get all those household chores done. In order to get back on the metaphorical chore wagon, it may be worth setting up a plan to help you get what you need to be done around your home. Not only will it keep your home clean, but it could have health benefits  

Remember Your Commute

It’s easy to forget how your workdays used to be. That commute now seems so far in the past. Unfortunately, it and all the other elements of the workday are back. Commutes can add significantly to your day.  The average American commutes for 26.1 minutes one way. Over a five day work week, this is about four hours that you’ll be losing. As such, it is important to take into account the effect the commute will have on your day. Likely you will have to get up a little earlier than before, and it may be worthwhile to map out your commute before your return to the office. Your after-work time is also cut due to the commute, so post-work activities will subsequently have to be shortened. But don’t despair – a commute is a perfect time to learn something new with your favorite podcast or an audiobook.  

Stay Safe

Sadly, the COVID-19 epidemic is not over, and even though you’ve returned to work, it is still important to ensure not only your safety but the safety of your colleagues and customers. Your workplace has likely sent out a list of guidelines and instructions to help keep the workplace safe – follow these as closely as you can, as they are in place to help you. Many will require you to wear a mask. While masks are undoubtedly uncomfortable, they are an important piece in the COVID-19 prevention guidelines. Also, remember to wash your hands and use hand sanitizer. They may seem like small things, but they make the difference.  

Enjoy Yourself

After months in relative isolation, you’ll now be returning to the workplace. Now is the time to bask in the human contact you’ve so missed. Interact with your colleagues. Enjoy leaving the house. This is in many ways a return to the much-missed normalcy. Make the best of it.    While the return back to work certainly won't be easy, eventually you will become used to it as you were before. It is an essential part of returning to normalcy. But it isn’t the only path to choose – more and more companies seem to be allowing their companies to work from home following the pandemic. If you’re curious about the future of working from home, check out this article.  
  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.
2020-06-17
Should You Prequalify With Multiple Student Loan Refinancing Lenders?

Depending on what kind of student loans you have, you could be stuck with high interest rates. For example, federal Grad PLUS Loans are currently at 7.08%. At such a high rate, you could end up paying thousands in interest charges.    By Kat Tretina   Refinancing your student loans can help you save money, but you should think twice before submitting a full loan application with multiple lenders. According to myFICO, the organization behind the FICO credit score, each hard credit inquiry can drop your credit score by up to five points.    Submitting several loan applications isn’t wise, but should you prequalify with multiple student loan refinancing lenders? Absolutely! By rate shopping with just a soft credit check, you can ensure you get the best deal.   

How student loan refinancing works

With student loan refinancing, you apply for a loan with a lender like Education Loan Finance for the amount of existing education debt you have, including federal and private student loans. The new loan has completely different terms than the old debt, including the interest rate and term length, and you use it to pay off the other loans. Moving forward, you have just one loan to manage with only one easy monthly payment.    What’s the advantage? With good credit — or with a parent, relative, or friend with good credit who acts as a cosigner — you can qualify for a loan with a lower interest rate. Over the course of your loan repayment, you can save a substantial amount of money by refinancing your debt.    For example, say you graduated from graduate school with $35,000 in PLUS Loans at 7.08% interest. If you made the minimum payments on a 10-year repayment term, you’d pay $13,939 in interest charges.    If you refinanced your loans and were willing to shorten the loan term to seven years, you could qualify for a 4% interest rate. You’d have a slightly higher monthly payment, but you’d be debt-free three years earlier. And, you’d pay just $5,186 in interest charges. By refinancing your loans, you’d save over $8,000. That’s a significant amount of savings you could put toward other goals, like building an emergency fund, buying a home, or starting a retirement nest egg.   Chart displaying the repayment examples for an original loan and refinanced loan, showing monthly payments, total interest paid, and total repaid.
Note: Figures are rounded to the nearest whole dollar.
  Use the student loan refinance calculator to find out how much you could save.*   

What is loan prequalification? 

With private loans, lenders decide whether or not you qualify for a loan — and determine your interest rate — based on your credit, income, and other factors.   Lenders often list a range of interest rates on their websites. While the lowest rates are tempting, you may not qualify for the lowest advertised rates.  The lender’s advertised lowest rates aren’t an indication of what rates you’ll actually get.    Only a select number of borrowers will qualify for the best terms. The lowest interest rates are typically reserved for candidates with the highest credit scores who opt for the shortest loan terms.   To give you a real idea of what rate to expect, some student loan refinancing lenders — like Education Loan Finance — offer prequalification tools. By entering basic information about yourself, you can get a rate quote without undergoing a hard credit inquiry. You can see what rates and loan terms you’d qualify for before submitting a full loan application.   

Should you prequalify with multiple student loan refinancing lenders? 

When you refinance student loans, rates and terms can vary widely from lender to lender. Some things to keep in mind when shopping around include: 
  • Interest rates: Your interest rate will have the biggest impact on your total repayment. When rate shopping, pay attention to the total APR to see what you’ll repay over the life of your loan. 
  • Rate type: While some lenders only offer fixed interest rates, which stay the same for the entire repayment period, other lenders also offer variable-rate loans. Variable interest rates often start off very low but can fluctuate over time. Education Loan Finance has both fixed and variable-rate loans.*
  • Loan term length: The shorter the loan length, the lower your interest rate. However, a shorter loan term also means a higher monthly payment. Depending on the lender, your loan term could range from five to 20 years.
  • Hardship policies: Not all lenders offer forbearance, so double-check the lender’s economic hardship policies. With Education Loan Finance, you may be eligible for up to 12 months of forbearance if you lose your job or face another financial emergency. 
  • Customer service: The quality of customer support is important as you make payments and have questions. ELFI has an award-winning customer service team and a 4.9 rating on TrustPilot.
There’s no downside to shopping around. With loan prequalification, there’s no impact on your credit, so you can get several rate quotes and find the best rates and loan terms for your situation.   Use the Find My Rate tool to get personalized rates without impacting your credit score.*   
  *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.
Team of medical students in residency considering refinancing student loans
2020-06-15
Should You Refinance Student Loans After Medical Residency?

Congratulations! You’ve graduated from medical school and completed your residency. You are most likely earning substantially more than you were as a medical resident. If you are focusing on paying down your student loans now that you are earning more, you might be wondering whether refinancing your student loans following residency is a good idea. In many cases, it can be a smart move. But there are important things to consider when deciding whether to refinance following medical residency.     By Caroline Farhat   In 2018 the average student loan debt for a new medical graduate was $196,520. With the average medical resident salary of $61,200 per year in 2019, it may seem impossible to chip away at the debt balance. But after residency when the average salary for a family physician is $239,000, paying off your student loans can become much more manageable. But once you start thinking about your other financial priorities such as purchasing a house, starting a family, or saving for retirement, suddenly the loans seem like they will never be fully paid off. To combat this, refinancing student loans after you complete your residency can be a great way to reduce the loan amount you owe, making it easier to pay them off more quickly.    

What to Consider When Deciding Whether to Refinance After Residency

Here are the factors to consider when deciding whether to refinance your student loans after medical residency.  

Student Loan Forgiveness

If you completed your residency at a non-profit hospital and think you will continue to work for a non-profit or government entity, you may be eligible for student loan forgiveness. If you have federal loans and are considering entering the Public Service Loan Forgiveness (PSLF) program, refinancing your federal student loans to private loans would not be a good option for you since private loans are not eligible for forgiveness under that program. With only 46% of medical graduates planning to work towards student loan forgiveness, this may not be a big factor for many, but it is something to be aware of. The PSLF requires 120 on-time payments while you work in a qualifying non-profit organization or government entity. Only certain federal loans and payment plans qualify for the program. Once the criteria are met, the remaining balance of your student loans is forgiven. At this time, taxes would not be owed for the forgiven amount, however, legislation is frequently introduced to change the program terms.   

Your Loans During Residency

How did you handle your student loans during your medical residency? Did you put them in deferment or forbearance? Did you already refinance them? If your loans were in deferment or forbearance they most likely accrued interest, meaning you will be facing more debt to contend with. Although the balance may seem intimidating you may be able to stop the high interest from accruing by refinancing and qualifying for a lower rate. If you have already refinanced, you may qualify for a lower interest rate now since you have increased your income.  

Your Financial Goals

Your financial goals and timeline are factors that will determine if refinancing after residency is a smart decision for you. Will you continue to live like you are in residency and be able to use your additional income to quickly pay off your student loans? Or is it your financial goal to purchase a home once your residency is completed? If you have other financial goals you want to focus on in addition to paying off your student loans, refinancing would be beneficial to save you extra money per month. Retirement savings is important to focus on since new physicians may be in their 30s when they finish residency. Refinancing earlier and having extra money to save for retirement while you are still young allows you to catch-up on your retirement savings and take advantage of compounding interest.       In addition, refinancing can allow you to shorten the length of your loan. This will not only save you in interest costs over the life of the loan, but it also helps you pay off your loans faster.    

Your Current Financial Status

When deciding whether now is the time to refinance, take into account your financial status. Do you have a strong credit score and a good credit history? These are just some factors that are analyzed by lenders to determine your interest rate on a new loan. Lenders usually require a minimum credit score in the 600s, at ELFI the minimum required score is 680. But if you are looking to score a lower interest rate you want a credit score in the high 700s. Lenders will also want to see three years of good credit history. If your finances need a little improvement, refinancing right after residency may not be a good time because you may not see much savings. However, a financially prudent cosigner may be able to help you qualify for a lower rate. If you are already rocking a high credit score and strong credit history, refinancing after residency could save you money now.   

Your Current Income

If you are now earning a physician’s salary, instead of your medical resident salary it may be a great time to refinance. When you apply to refinance student loans, your debt-to-income ratio is calculated and helps determine your interest rate. The lower your ratio the better. All your debt is taken into account, including mortgage, car payment, student loans and credit cards. Most lenders will require a ratio of 50% or lower to qualify for refinancing.    For example: if your debts are student loans of $2,000 per month, mortgage of $3,000 per month, auto loan of $500 per month, and credit cards of $200 per month, your total monthly debts are $5,700 per month. If your monthly income is $14,000 per month your debt to income ratio is $5,700/$14,000 = 40.7%.     If you want to see how much you could save by refinancing, use our Student Loan Refinance Calculator to get a custom calculation of your potential savings.* You can also see how shortening the loan term could help pay your loans off faster and save you more interest over the life of the loan.   

Conclusion

For many physicians, refinancing student loans after residency will be advantageous. But be sure to consider your own circumstances and finances to determine what would be most beneficial for you. Either way, having a plan to tackle student loan debt is always a good start!  
  *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.
man reading student loan news
2020-06-12
This Week in Student Loans: June 12, 2020

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:
will there be a second student loan stimulus package?

Will There Be A Second Student Loan Stimulus Package?

The CARES Act passed in wake of the coronavirus pandemic provided relief to many federal student loan borrowers, but the payment suspensions are set to end on September 30. However, the newly proposed HEROES Act included provisions that will provide relief to borrowers through September of 2021. This Forbes article provides detail as to whether their will be a second stimulus package for borrowers.  

Source: Forbes

 

low rates on federal student loans

Take Advantage of Low Student Loan Interest Rates

The interest rate on federal direct student loans for undergraduates for 2020-2021 is 2.75%. These historic lows can be attributed to the coronavirus pandemic, and this U.S. News article explains why those planning to attend college should take advantage.  

Source: U.S. News & World Report

 

question mark

Should You Continue Paying Private Student Loans if Payments Are Suspended?

With many wondering whether they should continue to pay federal student loans during the CARES Act suspensions, there has also been some question around private student loans, as a multi-state pact that emerged recently provides relief to private student loan borrowers.  

Source: Fox Business

 

debt relief

Student Loan Debt Relief: What Are Your Options Now?

With many changes happening in the world of student loans as of late, from the CARES Act passed months ago to the newly proposed HEROES Act, this Forbes article outlines the current options available for student loan borrowers to obtain relief.  

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.

2020 graduate cap
2020-06-10
Tips for 2020 Graduates Entering the Job Market

While your last semester may have been online, you’ve graduated nonetheless, and you’re finally ready to head out into the world and face the job market. After graduating amidst a global pandemic, you may feel a bit uncertain about your job prospects coming out of college. The fact is you’re entering the job market at a somewhat inopportune time – job openings on Glassdoor have dropped 20.5% after all, and articles are published weekly on the status of the 2020 graduate. However, there’s no need to panic. We’re here to tell you that you’re more prepared than you think, and there are still jobs out there for you. But just in case you feel uncertain, we’ve compiled 5 tips to help you seamlessly enter the job market.  

Be Practical

It’s no secret that the economy is on somewhat shaky footing, making it a little more difficult than usual to get that perfect job. Obviously, that perfect job is the ideal, but now is the time to be practical and expand your job search. Look in areas that you may not have considered before or in fields other than your major. These may be lower-paying than you’d hope for, but the work experience is still valuable, and stepping out of your comfort zone won’t go unnoticed when pursuing future opportunities. Search on job sites like Indeed for entry-level jobs and work from there. Your college also likely has a career center that can help you find employment. Reach out to them to see what help they can offer. Many colleges have partnered with platforms like Handshake that serve to link students with employers.  

Acquire Skills

If you want to hold out for a job in your chosen field, that is not necessarily a bad thing. Now is the perfect time to acquire skills that your employers will find valuable and that will benefit you in the long run. You might take this time to practice job interviews to improve your interview skills. The more interviews you do, the more comfortable you will be during them. As such, never turn one down, even if you aren’t interested. It’s still worth gaining the experience. As for skills that will make you more appealing to prospective employers, sites like Linkedin Learning can help you brush up on things you know or help you pick up new skills. Online classes can also serve as a way to pass the time while acquiring new skills. While building new skills doesn’t bring in immediate income, these skills will serve to make you more valuable to a prospective employer and could improve your income in the future.  

Polish What Employers Will See

Employers see a wide variety of things when looking at a prospective candidate. The resume is perhaps one of the most important. Now is the time to perfect your resume. Add in any relevant work experience you may have forgotten to add. Do some research on what employers are looking for on a resume. This should be an ongoing process. Your resume should be constantly evolving as you acquire new skills and experiences. Likewise, this is the perfect time to get your social media profiles polished. Many employers use social media as a vetting tool for prospective employees. Remove any material that could hinder you from being hired, and, in particular, get your Linkedin profile as professional and complete as possible. Employers love Linkedin, and as more and more of the hiring process is moved online, it has become an invaluable tool for them to look at prospective hires. Thus, it is important for your Linkedin to be filled out and representative of you and your workplace skills  

Expand Your Circle

As important as your skills, networking is essential is you are in the job market. Particularly in these uncertain times, an effective network can mean the difference between being employed and not. Reach out to people in your field via Linkedin or other social media outlets. Ask questions and demonstrate your interest. You may be able to get an interview with them. Even if a job doesn’t come of it, your demonstrated interest will place you in the back of their minds as well as provide you with valuable interview experience. Similarly, interacting with people within your prospective field on any of your social media platforms is beneficial to you. Employers want to see that you are engaged within the wider community of the field. Also, be sure to attend virtual industry meetups and conventions. The importance of becoming involved cannot be understated.  

Persevere

It’s important to treat your job search as a job because, for a time, it is your job. Stay at it, and constantly be reaching out to prospective employers. It can be hard to stay motivated in the job search, but remember that this is necessary. Plan out your job search and keep track of the contacts you make. They could be useful later on. Make sure to take breaks when necessary. Like any job, the job search is tiring and can lead to burnout, so make sure that you rest between sending out those surges of applications. Eventually, you will make it.   Congratulations on graduating. Now for your next challenge. It would be a lie to claim this as a great time to enter the job market, and it is certainly an unfortunate time for you to graduate. The job search will be difficult, but by working hard and following these five tips, you could certainly still succeed. You can do it. If you’re looking for more post-graduation tips, we’ve got you covered. Check out this article on saving money after graduation.  
  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.
Young woman working from home
2020-06-10
Will Working From Home Become the New Norm?

For a long time, there has been a stigma around working from home. Worries over efficiency, teamwork, and distractions all made working from home seem to be a detriment to any good business. Instead, it was only reserved for those with a history of responsibility. But the Coronavirus has changed all that, forcing many individuals to work from home, and the experience has undoubtedly changed the way we think about working from home. Several companies, Twitter prominently among them, have decided to allow their workers to work from home permanently if they so desire.

 

With changes in work structure as such becoming more common, the question is, will the switch to working from home be a widely accepted change, traveling further than just the Silicon Valley companies?

 

The Great Work-From-Home-Experiment

According to a 2016 Gallup survey, 43% of employees worked from home in some capacity, but this was generally once or twice a month. The Coronavirus crisis has changed those numbers dramatically. Gallup data from April shows 63% of employees have been working from home in the last seven days. But the switch to remote work has not been seamless. Concerns about efficiency and technical issues abound. Platforms like Zoom have been chastised for their lack of security, and the quick switch has resulted in some drops in efficiency.

 

Despite these concerns, the remote work business has boomed, much of it due to an incredible supply of powerful work-from-home tools. Tools like Slack® and SmartSheet® have made the transition much easier, and as a result, have seen an avalanche of new and recurring users. Microsoft® reported that the number of calls through their Microsoft Teams® had increased 1,000 percent, a number too staggering to signal a stop. They also claim that the percentage of users turning their cameras on has increased dramatically. Both of these statistics show a growing comfort with using virtual meetings. While some of the awkwardness of talking through a computer screen remains, these are undoubtedly the first steps to normalizing remote work and video conferencing.

 

The Effects

The worries about the effectiveness of remote work have long prevented it from entering the public sphere in a major way. It is a difficult question about how to manage accountability, and common wisdom would claim that working from home makes it easier than ever to slack off. After all, the person who was once leaning over your shoulder or popping by your workspace is now gone. There is nothing to prevent you from browsing Facebook for an hour. However, studies have proven that working from home is largely effective and good for the morale of employees. A recent study of 3,500 remote workers found that the majority prefer working remotely, with 98% claiming they were willing to recommend working remotely to others. One of the largest boosts to morale that working from home provides is freedom from the commute. Researchers have found that adding 20 minutes to a commute can make you as miserable as getting a 19% pay cut.

 

But the question remains of whether or not one can truly be productive working from home. Many studies say yes, but still, some conventional wisdom says the opposite. Less interaction with coworkers, less pressure from a supervisor, among other benefits associated with being in the same place a business is a team effort after all. If people are separated, how is it possible that they can be anywhere near as effective as people who are face to face and working hand in hand?

 

The Disrupters

True to their names, many of the companies that have begun to allow employees to work from home full-time are Silicon Valley companies, and they seem to disagree with conventional wisdom. At the beginning of May, Twitter stated that they would allow any employees who wanted to work remotely to do so. Facebook has made a similar statement, allowing their employees to work through the end of the year remotely. However, they have an interesting catch. Depending on where their employees live, their pay will be affected. Someone living in North Dakota will be making less than someone living in San Francisco. This accounts for the different costs of living in the two areas. This highlights one of the many benefits to employers of remote work – the option to pay based on location. Not everyone needs a $100,000 salary for a one-bedroom apartment.

 

Speaking of expensive buildings, another benefit of remote work is that employers are able to cut down on their office space. Office space in big cities like New York or San Francisco is colossally expensive. In New York, office space costs about $6.16 per square foot, totaling about $14,000 for each employee a year. Knowing this makes it easy to see why it is tempting for employers to take their employees online. Even more traditional businesses like Morgan Stanley have decided to take advantage of the boom in work from home technology. Who can resist saving the amounts of money that a reduction in office space can provide in expensive cities? These companies are setting trends for the work of the future, and it is likely that some other companies will follow in their footsteps. After all, it makes hiring the best employees easier by offering them more freedom, and other companies will have to compete with that freedom in other ways if they do not offer remote work.

 

Here to Stay: Probably

The Coronavirus pandemic has made the benefits of remote work clearer than ever, despite the concerns of lost productivity. Some benefits, such as the need for less office space and the recruiting benefits are simply too hard to ignore, and with the rise of dozens of new productivity tools, working from home has never been easier.

 

If you are looking for a new work from home job, check out our list of 8 legitimate work from home jobs.

 
 

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.

Piggy banks symbolizing the amount you can save by refinancing student loans
2020-06-08
How Much Can You Save By Refinancing Student Loans?

When you refinance your student loans, you are obtaining a new loan with a private lender, often with a new interest rate, loan term, and monthly payment. You can refinance both federal and private student loans, and you can also refinance some or all of your current student loans.      By Caroline Farhat   Refinancing is advantageous for many reasons. It can save you money on your monthly payment, reduce your term length and save you in interest costs for the life of the loan. Interest savings can be in the thousands in some circumstances. It also simplifies your student loans because it allows you to consolidate multiple loans into one.    A question often asked when someone is considering refinancing is, "how much can you save by refinancing student loans?" Here are some of the primary factors that affect savings, some data showing the average savings that people have seen, along with a concrete example of how the savings come to be.  

Factors that Affect Savings

When refinancing, everyone will experience different savings because the savings are based on several factors. Here are some of the factors that will affect the amount of savings you will see when refinancing student loans. 
  • Current interest rate and new interest rate - The amount you can save by refinancing student loans is significantly affected by the interest rate. If you have a high interest rate on your current student loans and now qualify for a much lower rate you would see a higher savings rate. However, if you do not qualify for a lower rate, your savings will be small, if you get any savings at all.
    • Note: if you are looking to reduce your monthly payment and are not as concerned with saving money in the long term, you can refinance and extend your loan term to reduce your monthly payment. The interest costs over the life of the loan will increase in most cases, but you can always refinance your loan again in the future to save in interest costs. 
  • Credit score - A higher credit score indicates more credit trustworthiness. Therefore, the higher the credit score the lower the interest rate you may qualify for, thus increasing the amount you can save by refinancing your student loans. A cosigner may help you qualify for refinancing if your score is not that high.
  • LIBOR rate - Private student loan interest rates are tied to the LIBOR rate. Therefore, if the rate is lower you can expect that interest rates for private loans will be lower. A lower rate equals more savings when refinancing.  
  • Term length - Increasing and decreasing your term length from your original term length can affect the savings. 
    • For example, if you have 10 years left on your loans and refinance to a 7 year term, you may not experience any monthly savings (unless your interest rate is significantly lower) because you are shaving 3 years off your loan term. The payment would have to be larger to make up for the difference in time. But you could save significantly in interest costs over the life of the loan. 
    • If you refinance to the same term or longer, you may experience significant monthly savings.  
  • Income - A higher income may qualify for a lower rate because the debt-to-income ratio may be lower. Debt-to-income ratio is one factor lenders consider to see how much payment you can afford.   
  • Amount of loan being refinanced - A larger amount of student debt to refinance has the potential for more savings. 
  • Different lender requirements - Each lender has their own specific minimum requirements and offers rates based on their individual factors. Therefore, lenders may offer different interest rates to you based on their individual requirements. 
 

How Much Can You Save by Refinancing Student Loans? 

Although many factors affect savings when refinancing student loans, here are some examples of what others have saved: 
  • A 2016 report shows borrowers who refinanced student loans lowered their interest rate by an average of 1.7%. They also reduced their term length by five years and saved an average of $18,668 over the life of the loan. If you had an extra $18,000 dollars, what would you do with it?
  • Some professions are more likely to be burdened by student loan debt because of the amount of schooling it takes to achieve the required degrees. One such profession is nursing. The average nursing graduate in 2019 expected to have a median debt between $40,000 and $54,999. Many nursing graduates who refinanced student loans of $50,000 experienced savings of $110 to $170 per month.  
  • Here at ELFI we pride ourselves on great customer service and saving our customers money. The average savings for ELFI customers in 2020 is $272.00 per month. The total average savings in interest costs over the life of the loan is $13,940.1  
  Need more inspiration? Here is a scenario illustrating how refinancing can save you money:    If you have student loan debt of $75,000 with 10 years remaining at an interest rate of 8% APR you would be paying an estimated $910.00 per month. After refinancing you may be able to qualify for a much lower interest rate and have a new payment of $754.00, a savings of $156.00 per month. This would yield you a savings of $18,672 over the life of the loan.    When you refinance with ELFI there are no application fees, no origination fees, and no prepayment penalty, so you will most likely see the savings from refinancing is worth it. Interested in seeing how much you could potentially save? Check out our Student Loan Refinance Calculator.* With the calculator, you can get an estimate of savings and test different scenarios to determine if shortening or lengthening the loan term works better for your financial situation.    
  1Average savings calculations are based on information provided by SouthEast Bank/ Education Loan Finance customers who refinanced their student loans between 2/7/2020 and 2/21/2020. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon a number of factors.   *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.
young adult reading student loan news for June 5 2020
2020-06-05
This Week in Student Loans: June 5, 2020

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:
around 1.5% of applicants were approved for public service loan forgiveness.

Why 147,000 People Were Rejected For Student Loan Forgiveness

Out of 150,545 borrowers who have applied for Public Service Loan Forgiveness, just 2,215 borrowers (about 1.5%) have been granted forgiveness. Forbes writer Zack Friedman breaks down the details behind this low approval rate in the article linked below.  

Source: Forbes

 

Government and mass debt cancellation

Student Loan Expert on Mass Debt Cancellation: ‘We don’t need these blunt solutions’

With around 44 million borrowers across the country holding more than $1.6 trillion in student loan debt, there is much talk about mass student loan forgiveness or cancellation. Jason Delisle at the American Enterprise Institute explains why he believes mass debt cancellation isn't the answer for the U.S. economy.  

Source: Yahoo Finance

 

college student upset about not being able to afford college due to the financial impact of the coronavirus.

More than Half of Students Probably Can’t Afford College Due to COVID-19

According to a new survey by OneClass, the coronavirus crisis has already had a significant impact on many families’ ability to pay for college. The survey found that more than half, or 56%, of college students say they can no longer afford their tuition. Nearly half of those surveyed said they needed to find a new way to pay for college due to the impact of the coronavirus on their financial situation.  

Source: CNBC

 

millennial debating whether to pay student loans during CARES Act suspension of loan payments

Student Loan Borrowers In CARES Act Forbearance Can’t Buy Or Refi Homes

According to this Forbes article, certain mortgage lenders are considering the forbearance caused CARES Act suspensions on federal student loans a reason to deny mortgages or mortgage refinancing, during a time where mortgage rates are lower than they have been in years.  

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.