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Bankruptcy

How to Rebuild Your Credit After Bankruptcy

You’ve found the financial relief you were looking for and now you’re trying to figure out how to rebuild your credit after bankruptcy.

But since you’re well aware that bankruptcy filings linger on your credit reports for 10 years, you worry that your dinged up credit score will haunt you for years to come. Even worse, you fear there’s little to no chance of qualifying for a credit card or loan product in the near future if the need arises.

The good news is despite the lengthy reporting timelines for bankruptcies, the impact on your credit score will start to diminish far before the 10-year mark. And you’ll give your credit score an even better chance of improving sooner than later if you manage new credit responsibly as the positive information will minimize the negative impact of the negative information.

Read on to learn how to rebuild your credit after bankruptcy:

Is It Possible to Have a Bankruptcy Removed From Your Credit Report?

At this point, you may be asking yourself if there’s some miraculous way to have the bankruptcy removed from your credit report sooner than later so you’ll have decent credit. You always have the option to file disputes with the credit bureaus and hope that they rule in on your favor.

While it’s not totally impossible to get the result you’re wishing for, it’s best that you hire a credit repair company to analyze your situation and help you determine if this is the best course of action. Furthermore, they can handle the dispute process for you from start to finish and address other negative items in your credit report that appeared prior to the bankruptcy.

Is It Difficult to Qualify for Financing After a Bankruptcy?

Thanks to the growing market of subprime lenders, it’s now easier than ever to qualify for financing after bankruptcy. But just because a company says yes doesn’t necessarily mean you should bite the bait.

A better idea: devise a plan of action to improve your credit score and wait until you start to see that three-digit number rise before applying for new credit. Start by retrieving a free copy of your credit report from each of the credit bureaus – Equifax, Experian, and TransUnion – from AnnualCreditReport.com. Review all the contents and highlight or circle any inaccurate information. File disputes right away to ensure that your report is updated and your credit score is a reflection of accurate data. If you’re unsure of where to start with the dispute process, here’s a handy guide to help you out.

Also, consider getting a credit-builder loan to speed up the credit rebuilding process. A loan from Self Lender can help you start improving your credit score in just a few months without making a hefty securing deposit. You can also check with the local credit union or community bank to explore credit building loan products that may be available to you. But keep in mind that they usually require a hefty deposit that’s equivalent to the loan amount and help in a savings account while you make payments.

And if you can’t wait until you start to see improvements, shop around with multiple lenders until you identify the best rates and refinance the loan product as soon as you’re able to qualify for a better rate.

How to Qualify for a Credit Card After Bankruptcy

You have the option to choose from an unsecured or secured credit card product. The latter may be easier to qualify for but requires a deposit that’s equivalent to the credit limit to protect the interests of the creditor. But if your credit score is high enough to qualify for an unsecured credit card, it may be a better fit if the fees are lower.

Wondering how you’ll qualify with a fresh bankruptcy on your credit report? Select lenders offer credit card products that are geared towards consumers with credit woes, including bankruptcies, foreclosures, and charge-offs. Even better, most lenders have a pre-qualification tool on their website that allows you to see if you qualify for a credit card by entering a few details about yourself. And there’s no impact to your credit score.

To derive the greatest benefit from obtaining a credit card after bankruptcy, be sure to make timely payments as they account for 35 percent of your credit score and can quickly help you re-establish positive payment history. Also, try to keep the balance at or below 30 percent of the credit limit. Finally, confirm that the credit card issuer reports payment activity to the credit bureaus.

How to Qualify for an Auto Loan After Bankruptcy

Securing an auto loan after bankruptcy can be a bit more challenging than qualifying for a credit card. But it’s not impossible, and there are a few key actions you can take to restore the prospective lender’s trust in you and make you a viable candidate:

  • Make a hefty down payment. Doing so lowers the loan amount so you can borrow less, which poses a lower risk to the lender.
  • Establish positive payment history before applying. Make timely payments on all your existing debts for at least six months post-bankruptcy to show the lender that you’ve turned a new leaf.
  • Get a co-signer. As long as they good credit and a steady source of income, the lender may be more willing to approve you for a loan since the co-signer is responsible for making loan payments if you default.
  • Consider loan options from local financial institutions. The dealer will beg and plead with you to finance in-house, but you may be able to score a better deal with your local bank or credit union.

Because of the recent bankruptcy filing, you should expect a higher interest rate than normal. However, you have the option to refinance for a more competitive rate, which should lower your payment substantially, when your credit score improves.

How to Qualify for a Mortgage After Bankruptcy

In most instances, you’ll need to wait for at least two years following a bankruptcy to qualify for a mortgage loan. And depending on the lender and type of loan you’re seeking, it may be an even longer waiting period.

But once that two-year period has lapsed, your best bet for qualifying for a mortgage after bankruptcy is a Federal Housing Administration (FHA) Loan. You can qualify with a credit score as low as 500 with a 10 percent down payment, but a credit score of 580 gives you the ability to pay as little as 3.5 percent down.

USDA and VA loans are also viable government-backed loan options with less stringent credit criteria for consumers looking to buy in rural areas or who are current or retired service members, respectively.

You may qualify for a conventional loan if your credit score has reached 620. But as mentioned earlier, there may be a longer waiting period of up to four years. So you could always take the FHA, USDA, or VA loan now and refinance later.

How to Avoid Bankruptcy in the Future

Do you recall what caused your bankruptcy in the first place? If so, you’ll definitely want to take the proper measures to prevent history from repeating itself. The cause may have been out of your control, despite your diligent efforts to stay afloat and keep your financial house in order to the best of your abilities.

But if it was the result of compulsive overspending and excessive debt, you definitely want to develop a realistic spending plan and stick to it. That way, you’ll be telling your money where to go and not the other way around. Furthermore, you’ll have a concrete roadmap to help you achieve your financial goals.

And if you decide to apply for a credit card or loan product, only borrow what you can afford to pay back. This ensures you’ll be able to make timely payments and rebuild your reputation with creditors. Otherwise, the balances will start to pile up and you’ll do even more damage to your credit score with late payments and a sky-high debt utilization ratio.

You should also establish and start contributing to a cushion so you won’t have to resort to credit cards or loan products at the first sign of financial trouble. Having a cushion will also give you peace of mind knowing that you have something to fall back on.

Most importantly, you should consider seeing a professional therapist if your financial woes that led to bankruptcy resulted from an underlying emotional or mental health issue. The last thing you need to do is get overwhelmed and result in excessive retail therapy to cope, which will only land you right back in the hot seat with your creditors.

The Bottom Line

It’s possible to rebuild your credit after bankruptcy so you can secure credit cards and loan products. But it’s important to remember when starting from scratch to responsibly manage your debt obligations so you won’t find yourself right back in the same position.

Categories
Comparisons

Best Auto Refinance Lenders (The 2019 Edition)

Whether you’re upside down on your auto loan or stuck with high payments due to unfavorable loan terms, refinancing may be the best option to help you find relief. But are you guaranteed to get the results you’re seeking if your refinance? Not necessarily, which is why it’s pertinent that you analyze all the offers presented to you to ensure you receive the best terms possible. Keep reading for a list of the best auto refinance lenders out there. You’ll also discover the five-step process that can be used to streamline the process.

Auto Credit Express

Struggling with past credit issues and afraid you won’t be able to refinance your vehicle? Auto Credit Express may be able to lend a helping hand. They’ve been around for over 18 years and have a track record of connecting consumers with less than perfect credit to lenders so they can access the credit they need.

Accredited and rated A+ by the Better Business Bureau, Auto Credit Express is a lending network with more than 1,000 partners standing by waiting to help you refinance your automobile.

While each lender has their own minimum thresholds for qualifying, borrowers should generally meet the following criteria:

  • Have a loan with equity that’s in good standing
  • Owe at least $5,000 on the loan
  • Possess a vehicle (that’s attached to the loan) that has no more than 100,000 miles and is not older than 10 years of age

AutoPay

If your current auto loan rate is 5.49 percent, AutoPay may be able to save you some dough and get you into a lower payment. But don’t worry if you don’t have perfect credit as they won’t necessarily turn you away auto refinancing. In fact, you can use their pre-qualification tool found on the website to gauge your approval odds.

Should you choose to do business with AutoPay, they offer the following forms of auto refinancing:

  • Cashback- this form of refinancing will allow you to wallet away with funds
  • Lease payoff- this form of refinancing will pay off your lease prematurely, but you still get to retain the vehicle and steer clear of any early-termination penalties from the dealer
  • Traditional- this form of refinancing will grant you a lower interest rate (assuming you qualify) which in turn reduces your monthly payment

Car Finance

Car Finance is a lender with flexible eligibility criteria, specifically with regards to credit.

When evaluating your auto refinance application, they pay close attention to how you’ve managed your current loan over time, along with any other outstanding debts you may have. They also look at the monthly payments on your other debts and how they stack up to your income to determine if you can comfortably afford the loan offer that they’re able to extend to you.

You’ll also want to meet the following criteria to strengthen your chances of being approved:

  • Have positive payment history with your current auto lender
  • Owe at least $7,500 on your current loan
  • Have a car that is 8 years of age or younger with fewer than 100,000 miles

Lending Club

Lending Club connects consumers from all financial backgrounds with lenders to help them find competitive auto refinance offers. To qualify, you must owe between $5,000 and $55,000 on your current loan. The loan must also be at least 30 days old and you need to have at least 24 months remaining on your loan term. (Keep in mind that some lenders have more stringent qualification criteria, but these are just a benchmark to get you through the first set of red tape).

To get started, all you have to do is complete a brief questionnaire to get loan offers from lenders in the network. If you choose to move forward, you’ll have to upload requested documents to the lender and work with them to finalize the loan.

Lending Tree

Lending Tree is another network of lenders that can help you navigate auto refinance offers across the board at the tap of a fingertip. Loan amounts and terms vary by lender, but you can use the online prequalification tool to narrow down prospective lenders by zip code and view loan offers with no impact to your credit score.

LightStream

Operating under the SunTrust Bank umbrella, LightStream offers rates as low as 3.34 percent on auto refinancing. Loan amounts range from $5,000 to $100,000 and are geared towards those with good or excellent credit. And you can generally expect to receive a loan term that spans between 24 and 72 months.

Another major benefit of refinancing with LightStream is their Rate Beat Program. In a nutshell, it’s a guarantee to beat any rates you find on the market to demonstrate their commitment to earning you as a customer.

And you don’t have to worry about your car being too old or having too many miles since there aren’t any restrictions to qualify. Even better, the entire process can be completed from start to finish in as little as one business day.

rateGenius

As long as you have decent credit, you may be able to obtain auto refinancing through rateGenius. They have an extensive network of more than 150 lenders in all 50 states waiting to serve you. And what makes them unique is flexible refinance products that can also be tailored to meet your boat, motorcycle, or RV lending needs.

You will meet the minimum qualification criteria is your vehicle is 10 years or younger, has 150,000 miles or less on it, and has an outstanding loan balance between $10,001 and $89,999.

With regards to income, it should be at or above $2,000 on a monthly basis. And the minimum credit score requirement is 525 to qualify for consideration.

How to Refinance Your Auto Loan in 5 Simple Steps

Are you ready to move forward with the auto loan refinance process? This five-step process will steer you in the right direction.

Step 1: Assess your credit.

Your credit plays a major role in whether or not you’ll be approved for refinancing, and at what interest rate. Generally, the lowest rates go to the consumers with the highest credit scores because they pose less risk in the eyes of the lender.

So, you want to start by retrieving a free copy of your credit report. Why so? Well, this information is where your FICO score, which is used by 90 percent of lenders to make a decision, is derived from. And the more positive data in your credit report, the better your score will be.

But if your credit score is a bit low due to past financial missteps, the rate you qualify for may not the most competitive one offered by the lender. This could also mean that the cost of refinancing your ride outweighs the benefits. If you’re in this situation, it may be worthwhile to return to the drawing board and work on your credit rating before moving forward.

To get your credit report, visit AnnualCreditReport.com and request a copy from each of the three credit bureaus – Equifax, Experian, and TransUnion. Examine the contents from top to bottom, paying close attention to specific account details and circling or highlighting any inaccuracies you notice. Once you’ve done so, file disputes as soon as possible to rectify any errors (if applicable) to ensure your report is updated and your FICO score is an accurate reflection of your credit history.

Step 2: Explore your options.

Considering walking into your financial institution and accepting the first refinancing offer they place on the table? That may not be such a good idea. With so many options, both brick-and-mortar and online to choose from, there’s a possibility that you may be able to score a better deal elsewhere.

You can also explore online lenders as many are licensed to work with consumers across the nation. Some lenders also have a pre-qualification tool on their website that allows you to see what rate you qualify for with no impact to your credit score.

And if you’re still not having much luck because of your credit rating, consider checking out loan offers from credit unions and local community banks. They tend to have more flexible terms than traditional financial institutions and may be able to set you up with a competitive loan offer that best suits your needs.

Step 3: Complete and submit applications with your top lenders.

At some point during the application process, the lender will request that you submit supporting documentation to substantiate the information you entered on the application. So, it’s best to compile the following items before applying:

  • A valid copy of your driver’s license
  • A copy of your last pay stub or federal tax returns for two years if you’re self-employed or an independent contractor
  • Documentation from the original purchase of the vehicle
  • Proof of insurance and registration on the vehicle

The next step is to submit applications to your top lenders, which can usually be done online whether you’re applying with a brick-and-mortar bank or online lender.

Quick note: it doesn’t hurt to shop around with multiple lenders during this step. In fact, you’ll increase the odds of saving more money on your auto refinance loan and your score will only be impacted by one credit inquiry by FICO because you’re rate shopping.

Step 4: Run the numbers.

Before moving forward, you want to run the numbers to determine if refinancing is ideal for your financial situation. You may find that refinancing will give you a lower monthly payment, but you’ll ultimately pay more over the life of the loan because an extended loan term allows the lender to collect more in interest from you.

Step 5: Sign on the dotted line.

At last. You’ve reached the finish line and are ready to choose the best offer and sign on the dotted line. But before you do so, read the entire agreement so you’ll know exactly what you’re getting into. Request that the lender answers any last minute questions that you may have and confirm when the first payment on the new loan will be due.

Once the new loan has been fully approved and executed, the new lender will pay off the existing lender and you’ll now be obligated to follow their terms and conditions.

How to Deal with Rejected Loan Applications

What if you apply with multiple lenders and can’t seem to find one that will work with you? As mentioned earlier, it may be worthwhile to take a step back and figure out what’s stopping you from getting approved. Look at your credit report, along with the notice of rejection from the lender, to determine what you can do to improve your chances the next time around. Also, feel free to take a look at this handy guide on credit repair to help you fast-track your efforts.

The Bottom Line

Refinancing your auto loan could save you a lot of money, but you have to shop around and run the numbers first to ensure you’re getting the best deal. Otherwise, you’ll save a few bucks now but end up paying way more than you should over time.

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Uncategorized

The 3-Step Process to Get Preapproved for a Mortgage

When shopping for a new home, the seller will want to know that you’re serious about making a purchase and have the funds to make it happen if the home’s a good fit. That’s where the mortgage pre-approval comes in.

In a nutshell, it’s a document, or good faith estimate, from your prospective lender that states the loan amount you’ve been preapproved for so you can shop in confidence. In addition, loan specifics, including the interest rate, term, and any other important information details about the loan programs you qualify for, will be included in the letter.

You should also know that mortgage pre-approvals or only valid for a set timeframe, usually between 60 and 90 days. This you’ll have to move forward with an offer or start construction to even the pre-approval from lapsing and having to start from scratch.

The Case for Getting Pre-Approved

Maybe you’re in stellar financial shape and don’t foresee having any issued qualifying for a loan to fund the home of your dreams. Consequently, you don’t see the point of obtaining a mortgage pre-approval before starting your search.

While you may be correct, it doesn’t hurt to go ahead and get pre-approved, anyhow. Reasoning? As mentioned earlier, it gives sellers confidence that you can follow through on your promise should you make an offer on the home that they’re willing to entertain.

Furthermore, some realtors won’t work with sellers that don’t take the extra step to get pre-approved because they don’t want to waste their time with buyers who aren’t ready to make a purchase or who could have trouble securing financing later on down the line.

Getting pre-approved will also provide you with a more concrete range of affordability, along with how much you can expect to fork over in payments each month. And you may find that the home price you had in mind is far more than you can comfortably afford each month in payments.

Does a Pre-Approval Guarantee That You’ll Get Approved for a Loan?

Unfortunately, getting pre-approved for a mortgage doesn’t mean the lender is on the hook to follow through with what they propose. It’s just the first step of many in the process, and you still have to clear a series of red tape before the lender can give you a firm yes and close on the loan.

This could include manual underwriting, which means your application will have to undergo more scrutiny before moving on to prepare for closing. The lender may also decide to impose additional restrictions on your loan, especially if your financial situation undergoes in changes during the process, which could mean that you ultimately won’t qualify for financing.

Pre-Approval vs. Pre-Qualification

If you’ve already started researching lenders, chances are you’ve heard the terms “pre-approval” and “pre-qualification” used interchangeably. But they aren’t the same. In fact, one holds significantly more weight than the other.

When speaking with the lender, you can request that they pre-qualify you for a loan. All this entails is a general discussion and about your credit history and finances, including income, assets, and debts. The loan officer will also be interested in know what type of loan product you’re seeking (if you have any particular loan programs or types in mind), along with the amount you’re willing to put down at the time of purchase.

But since there’s no hard credit check or verification of documentation, the lender will not grant you an official offer off your word alone. However, a loan pre-approval is the next step in the process that requires a more in-depth look at your income and finances, along with a review of your credit profile, so the lender can better gauge what type of loan product you’re most likely to qualify for.

Which Lender Should You Use to Get Pre-Approved?

There are several lenders to choose from when seeking a mortgage pre-approval. But what matters most is that you get the best bang for your buck or the best terms that they have to offer for your financial situation. And for this reason, it’s worthwhile to shop around extensively and obtain pre-approvals from more than one lender.

Why so? Well, an interest rate reduction of as little one percent could save you thousands of dollars of the life of the mortgage. Furthermore, some lenders have more flexible loan options to choose from than others, which could come in handy if you have unique financial circumstances.

You also want to consider whether or not the lender goes the extra mile to earn your business. Are they available and willing to assist you with any questions you may have before starting the process? What incentives do they have to lower the cost of the loan for you? Are they using high-pressure tactics in an effort to convince you to do business with them? These are just a few key factors to keep in mind when exploring lenders because you’ll be doing business with them for years to come and want to strengthen your chances of having a seamless experience.

Even better, the FICO credit scoring model allows you to rate shop without dinging your credit score repeatedly. But if you don’t feel comfortable getting pre-approvals from multiple lenders, pre-qualifications are also a viable option to help you narrow down lenders and loan types.

The Mortgage Pre-Approval Process

Step 1: Check your credit profile and rating.

While this technically isn’t a part of the mortgage pre-approval process, it’s a crucial step you shouldn’t overlook. The lender will be interested in your employment situation as they need to ensure you have the means to pay. And they’ll also factor in any outstanding debts to determine if you’re currently overextended.

Your credit rating holds significant weight in the eyes of the lender as it gives them an idea of the risk you’ll pose to them as a borrower. The higher your credit score, the lower the interest rate you’ll qualify for assuming everything else checks out.

So, start by retrieving a free copy of your credit report from AnnualCreditReport.com. You’re entitled to one free copy from each of the credit bureaus – Equifax, Experian, and TransUnion – on an annual basis. Review the reports from top to bottom and take the necessary steps (or file disputes) to rectify any issues you notice.

With regards to your FICO score, it’s not available for free on AnnualCreditReport.com. But you may be able to retrieve it from your credit card statement or financial institution’s dashboard if it’s a feature they offer. Otherwise, you can visit sites like Credit Karma, Credit Sesame, or myBankrate to view your score for free. The figure you see will probably be different from what the lender uses, but you’ll get a good idea of where you stand.

Step 2: Make an appointment with the lender.

It may be tempting to simply pick up the phone or drop into the bank to obtain a pre-approval. But it’s best to set an appointment to confirm the loan officer is available to walk you through the process during a time that’s convenient for you. Plus, some banks only have mortgage officers on hand on select days of the week, so the day you call or drop in may be a day that they’re not available.

Step 3: Compile the necessary documentation.

During your appointment, the loan officer will run a credit check to determine what types of loan programs and rates you qualify for. They will also request documentation to substantiate the information you entered about your employment, income sources, and finances on the loan application. This includes, but may not be limited to:

  • A copy of your driver’s license and Social Security Card
  • Copies of your two most recent pay stubs
  • Copies of your two most recent W-2s
  • Copies of your two most recent federal tax returns
  • Copies of your two most recent bank statements

Keep in mind that each lender has their own set of documentation criteria, so it’s best to reach out to confirm what you need prior to your appointment.

How Long Does It Take Get Pre-Approved?

Assuming you provide the lender with everything they need, you should receive a response within a few business days. But it could take much longer to hear back if you’ve had recent credit issues or financial hurdles that must be overcome before they can issue the official stamp of approval.

What to Do If Your Pre-Approval Application Is Denied

You have three choices:

  • Keep applying until you find a lender that’s willing to work with you. This could mean you’ll have to settle for less favorable loan terms and a higher interest rate and possibly refinance at a later date. But if you’re crunched for time, you may not have any other alternatives.
  • Return to the drawing board and patch up your credit and finances to become a more attractive borrower. The lender can provide you with more details on why you were denied. Request that they do so and draft up a plan of action to rectify the issues so you can strengthen your approval odds and qualify for the best rate they have to offer.
  • Give up and try again at a later date. If you’re not pressed for time and have time on your hands before it’s a must that you get a home loan, you may decide it’s best to walk away for the time being.

The Bottom Line

If you’re serious about buying a new home in the near future, you may want to consider getting pre-approved for a home loan. That way, you’ll have a peace of mind knowing your finances and credit rating are in stellar enough shape to qualify for the funding you need. Most importantly, you won’t have to scramble later on down the line to find a loan product to fund your new home purchase.

Categories
Comparisons

Best Student Loan Refinancing Companies

Whether you’re drowning in student loan debt or simply searching for a way to save money during the repayment period, refinancing may be your best option. However, there are several lenders to choose from, and some offer loan products that could lower your monthly payment but end up costing you more in the long-term. So, in an effort to take the guesswork out of finding the best student loan refinancing companies on the market, we’ve compiled a list of the top options.

Here are our top picks:

Citizens Bank

If you owe at least $10,000 in student loan debt, you may be able to refinance through Citizens Bank to get a lower rate. The borrowing thresholds for the Education Refinance Loan are as follows:

  • Bachelor’s degrees and lower: up to $90,000
  • Graduate and doctoral degrees: up to $225,000
  • Law degree: up to $300,000
  • Professional degree: up to $350,000

To qualify for refinancing, you must not be enrolled in school and the loans must be in repayment status. You should also know that federal loans under the income-driven repayment plan model are not eligible for inclusion in the Education Refinance Loan program.

You can use the “Get My Rate” tool found on the website to determine what refinancing terms you qualify for without impacting your credit score. And the online application can be completed relatively quickly, and you’ll have an offer in as little as two minutes.

When you’re ready to apply, be sure to have the following on hand:

  • A copy of your driver’s license and your Social Security Number
  • Your most recent pay stub or documentation that substantiates other forms of income
  • Recent billing statements for the loans you’re looking to refinance

CommonBond

CommonBond boasts rates as low as 2.5 percent APR on student loan refinancing. You can see what rate you qualify for in a matter of seconds by answering a few questions. There’s no impact on your credit score and you’ll only be asked to complete the entire application and upload any required supporting documentation should you decide to accept the loan offer.

They offer the following loan refinancing products:

  • Fixed rate loans with APRs between 3.67 and 7.07 percent, and terms of 5, 7, 10, 15, or 20 years
  • Variable rate loans with APRs between 2.47 and 6.74 percent APR, and terms of 5, 7, 10, 15 or 20 years
  • Hybrid rate loans with APRs between 4.35 and 6.30 percent APR, and terms of 10 years

Another major perk is loan forbearance, which allows you to delay repayment of up to 24 months if you hit a rough financial patch. Furthermore, you will not be assessed origination fees when taking out a loan, and there’s no penalty should you decide to pay off the loan early.

And if none of the loan products fit for your financial situation, you may be able to tailor a loan that best suits your needs.

Credible

Credible is an online loan marketplace comprised of 8 lenders that are committed to helping you land better rates on your student loans. With rates as low as 4.5 percent, they boast an average cost savings of $18,668 per customer and allow you to tailor a loan product that you can afford.

Both federal and private loans qualify for refinancing through the lenders in their network. And you can use the free rate-checker tool to gauge what you qualify for without dinging your credit score. With this feature, you can also view personalized offers from each lender directly from Credible’s dashboard.

Even better, they offer a built-in “Best Rate Guarantee” that will put $200 in your pocket if you qualify for a lower rate elsewhere.

Earnest

You may be able to qualify for a rate as low as 2.57 percent (variable) if you refinance your federal or private student or ParentPLUS loans through Earnest. If you prefer a fixed rate, they start a 3.99 percent, but a 0.25 percent discount applies if you enroll in Auto Pay.

Borrowers are allowed to select a payment amount and due date that works best for them. And there are no prepayment penalties should you decide to pay the loan off early. Earnest also extends a skip-a-payment option that allows you to forgo making a payment and take care of it later if you encounter financial trouble.

When evaluating your loan application, Earnest looks beyond your credit score and also considers your savings account balance, education background, and earning potential to determine if you’re a good fit for their loan. You should also know that the checking your rate does not generate a hard inquiry or your credit report, so your credit score won’t be impacted.

If you’re considering applying, keep in mind that you’ll need to have at least $5,000 federal or private student loans (or a combination of both to qualify). Earnest also requires a minimum credit score of 650, and a steady source of income through employment (or a qualifying job offer). You can find the detailed list of qualification criteria here.

Education Loan Finance

Education Loan Finance is one of the leaders in the student loan refinancing industry with over 30 years of experience under their belt. Servicing customers throughout the US and Puerto Rico, they have personal loan advisors standing by to assist you with your refinancing needs.

On average, their customers save $309 monthly and $20,936 over the life of the loan through their refinance program. If you qualify, you can choose from a variety of repayment plans and complete the entire application process from start to finish on your smartphone.

Variable and fixed rates are as low as 2.55 and 3.09 percent, respectively. Furthermore, you can choose from a repayment period of 5, 7, 10, 15 or 20 years.

You can determine if you pre-qualify for a loan from Education Loan Finance by using the online tool. It only takes a few minutes to complete the online form, and there is no impact on your credit score.

LendKey

LendKey is an online marketplace that can connect you with over 300 community banks or credit unions to help you find the best rates on your federal and private student loans. There are no origination fees, and you may be able to secure a loan that is interest-free for the first four years of the repayment period.

If you refinance your student loans through LendKey, you could qualify for APRs as low as 2.51 and 3.49 percent on variable and fixed-rate loans, respectively. And you’ll have anywhere between 5 and 20 years to repay what you owe.

Checking your rate won’t impact your credit score, and you will not incur origination fees should you choose to move forward with the application process and accept a loan offer.

Laurel Road

On average, Laurel Road customers have saved $20,000 on their student loans. Parent PLUS loans also qualify for refinancing. They offer fixed and variable rate loans with terms of 5, 7, 10, 15, and 20 years. Rates start at 3.05 and 3.50 percent for variable and fixed loans, respectively. Even better, you can save 0.25 percent by enrolling in AutoPay.

There’s also a special program for dental or medical residency customers that enables them to remit payment of $100 per month for the duration of their assignment. Another added perk is the referral program, which puts up to $400 in your pocket each time you refer a friend and they are approved for a Laurel Road loan product.

It only takes five minutes to complete the online form and explore your loan options, and checking your rate won’t affect your credit score.

SoFi

Known as one of the top student loan refinancing companies on the market, SoFi has served over 250,000 customers and refinanced over $18 billion student loans. SoFi also allows you to explore multiple loan options and select the one that is more cost-efficient on a monthly basis or over the life of the loan.

To qualify, you must have a credit score of at least 650. But if you’re unsure about your credit score, you can always use the online pre-qualification tool to determine if you’re eligible, and if so, for what rates. And it only takes two minutes to get a response. Best of all, you can apply, upload any supporting documentation, and sign your loan documents directly from your mobile device.

Splash Financial

Splash Financial offers very competitive rates on their student loan refinancing products. If you’re a well-qualified borrower, you may be able to secure a rate as low as 2.96 or 3.75 percent on variable and fixed student loan refinancing, respectively.

They also offer a $250 referral bonus if you refer friends and family and they refinance their student loans through Splash Financial. The new loan recipient will also receive a bonus.

To get started, use the online tool found on the website to check your rate with no impact to your credit score. Upon completion of the questionnaire, you should receive a response in as 3 minutes or less.

Should You Refinance Your Student Loans?

While there are several perks to student loan refinancing, it’s not always the best solution for borrowers looking to find relief. It depends heavily on your credit score, the current rate on your loans, and if they are federal or private.

With regards to your credit score, student loan refinancing companies will take it into consideration when evaluating your loan application. And if your score isn’t up to par, they will either offer you a higher rate than you already have, request that you get a cosigner, or deny your loan application altogether. Therefore, it may not be in your best interest to refinance your student loan until you improve your credit score.

You should also consider the current rate you have on your loans and if the new offers on the table are substantially lower. Keep in mind that some lenders will offer you a slightly lower rate but extend the repayment term, which will cause you to pay more in interest over the life of the loan.

Another important consideration is if your loans are federal or private. The latter doesn’t offer nearly as many perks as what’s available through the federal government, like income-based repayment programs. So, a lower rate may very well be worth a shot. But if you refinance your federal loans through a private lender, you automatically lose all the benefits and protections that were once afforded to you.

The Bottom Line

It’s better to be proactive when dealing with your student loans so you can minimize the financial blow to your wallet. And by exploring the best student loan refinancing companies on the market, you could be on your way to paying off your debt in record time.

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Debt

Debt Validation

Are debt collectors chasing you down about a delinquent account? While you may be inclined to just pay them what they owe to make the constant calls and letters stop, there’s a better option: debt validation.

Read on to learn more about why you should validate your debts before paying up, and how to do so using a debt validation letter.

What Is Debt Validation?

Per the Fair Debt Collection Practices Act (FDCPA), the burden of proof is on the debt collector to prove that you actually owe what they say you do. This means that they must have documentation on hand that confirms that they not only are legally obligated to collect on the debt, but it actually belongs to you and is within the statute of limitations for collection.

Otherwise, they cannot legally report the information to the credit bureaus for inclusion in your report. Furthermore, their collection efforts must come to a halt. And if the debt is already being reported, it must be removed promptly.

But how do you go about validating your debt? It starts by sending a letter to the collection agency, which halts the phone calls, texts, and possibly reporting (depending on when the letter is sent).

Why Should You Validate Your Debt?

If you have the funds to pay off the collection account, shouldn’t you just pay what the debt collectors say you owe and move on? Not necessarily.

For starters, if the debt doesn’t belong to you, there’s no need to pay it as the responsibility to cover someone else’s financial burden should not fall on you. And while it may be easier to just pay the debt, especially if it’s for a small amount, the FDCPA protects you from having to pay for debts that don’t belong to you.

Furthermore, you want to make sure that you’re not paying more than what’s actually owed. Debt collectors can be sneaky and inflate outstanding balances or tack on miscellaneous fees without having the legal right to do so. But by validating the debt, they’ll be forced to adjust your bill if there are errors to reflect the accurate balance.

Most importantly, debt validation either confirms or denies that you actually owe that particular collection agency because the account is now in their hands. In other words, anyone can pick up the phone or send a letter to you demanding that you pay off a particular account. But are they really the company that was designated by the original creditor to do so? Or did they actually acquire the debt from the original creditor or are they just a fraudster pretending to be someone they aren’t? If you do happen to encounter a con artist and you pay off the debt without validating it first, you’ll still be on the hook and they will be long gone with your hard earned money.

How to Validate Your Debt

When the collection efforts initially commenced, you should have received a notice in the mail from the debt collector within the first five days of initial contact. This notice should have included key details about the debt and communicated that the debt collector has legal rights to collect on the debt. It should have also contained verbiage stating that you have 30 days to dispute the validity of the debt before they take further action, including reporting it to the credit bureaus.

But what if the letter didn’t come in the mail? You still have a right to send a letter requesting that the collection agency validate the debt.

Draft up a debt validation letter.

Your debt validation letter should include:

  • Your full name and address
  • The date and time the collection agency initially reached out to you
  • A statement requesting that they provide proof that you owe

View this handy template to help you get started.

Send the letter to the collection agency.

Once you’ve written your debt validation letter, it should be sent to the collection agency attempting to collect on the debt. Be sure to only forward over a copy of the letter and retain the original for your records. Also, send the letter via Certified Mail with a Return Receipt so you can know when it arrives at the debt collector’s physical location.

Await a response.

As mentioned earlier, collection efforts will come to a halt when the letter is received until they send you the proof you’re requesting. And don’t be surprised if the debt collector decides to take a step back and forward the account back over to the original creditor. This could happen if they don’t have the proof they need to legally collect on the debt.

But what if the debt collector never responds? Follow-up sending another letter requesting a response and re-iterating your rights under the FDCPA. In the package, be sure to include a copy of the original letter you sent over and a copy of the return receipt so they can know that you’re aware they received it.

Still no response? Notify the credit bureaus in writing that the collection agency has failed to respond to your validation requests so the entries can be removed from your credit report. Be sure to include any supporting documentation in the package you send over.

You can also file formal disputes with the credit bureaus. This will prompt them to reach out to the information provider (whether it be the original creditor or debt collector) to investigate your claim. If they fail to respond to the credit bureaus within the allotted 30-day window, the item must be removed from your credit report.

How to Move Forward If You Owe the Debt

You’ve taken all the necessary steps to validate the debt and the collection agency has provided proof that the debt is indeed yours and they have the right to collect on it. What’s next? Well, you have a few options:

  • Ignore the debt. This is a common approach if the statute of limitations is almost up or you simply don’t have the funds to remit payment at the moment and would rather face the risk of being sued than paying up.
  • Request a payment arrangement. Most debt collectors will work with you if you would like to break up what you owe into smaller chunks. Remember, chances are they only paid pennies on the dollar for the right to collect, so some income is better than none on their behalf.
  • Request a settlement. If you have a lump-sum of cash on hand, the debt collector may agree to settle the debt for a fraction of what you owe. Just be sure to get this in writing so you can avoid being sued later on down the line.
  • Negotiate a pay-for-deletion. Under this arrangement, the collection agency will remove the negative mark from your credit report in exchange for payment. This agreement should also be executed in writing so you’ll have proof in case the debt collector doesn’t uphold their end of the bargain.

The Bottom Line

Debt validation is one of the more effective tools in your arsenal of consumer protections under the FDCPA when dealing with debt collectors. And by taking the time out to draft up letters and do your due diligence, you could save yourself time, money, and headaches when dealing with delinquent debts that may or may not belong to you.

Categories
Comparisons

Best Mortgage Loans for Bad Credit

Are you in the market for a home loan but worried that your credit will keep you from getting approved? A less than perfect credit score is not the end of the world, and it surely isn’t enough to keep you from getting approved for a mortgage. Check out this list of the best mortgage loans for bad credit to help make your dreams of homeownership a reality.

Carrington Mortgage Services

Carrington Mortgage Services offers several mortgage products to prospective borrowers with credit scores as low as 500. Bad credit mortgage products include the following:

  • Adjustable Rate Mortgage (ARM) Loan- minimum credit score of 500 and ideal for customers looking for a lower interest rate for the first few years of the loan term and plan to refinance later on down the line to secure a fixed rate. This loan grants you a lower interest rate and monthly mortgage payment for the first five years of the loa.
  • Carrington Flexible Advantage Loan- minimum credit score of 500 and Ideal for prospective borrowers with serious credit issues, including a recent bankruptcy, foreclosure, late payments, or short sale. You can borrow up to $2 million with this loan.
  • Federal Housing Administration (FHA) Loan- minimum credit score of 500 and ideal for first-time homebuyers. FHA loans allow a low downpayment and have flexible qualification criteria.
  • US Department of Agriculture (USDA) Loan- minimum credit score of 500 and ideal for prospective low-income homebuyers looking to build or purchase in a rural area. The qualification criteria are flexible and 100 percent financing available. Furthermore, cash reserves not required to qualify and close the loan.
  • Veterans Affairs (VA) Loan- minimum credit score of 500 and ideal for active and retired members of the armed forces and their family members. VA loans are accompanied by low-interest rates and 100 percent financing is available.

To learn more about their loan products, use the “Find An Expert” tool on their website to search for loan officers by state. You can also find the physical address, phone number, and hours of operation of their offices around the U.S. They currently have offices in Arizona, California, Connecticut, Florida, Indiana, and Maryland.

CitiMortgage

CitiMortgage also offers mortgage products to help credit challenged borrowers fulfill their dreams of owning a new home. They include:

  • FHA loans- a good fit for first-time home buyers with less than perfect credit. This loan product is also ideal for those who have only been employed for a limited period of time or who are self-employed.
  • HomeRun mortgage- a good fit for individuals looking for high-valued (up to $453,100 and $679,650 in more expensive areas) loans that don’t have excellent credit. Borrowers can put down as little as 3 percent, and mortgage insurance is not required.
  • VA Home loans- a good fit for current and retired members of the U.S. Armed Forces and their family members. Qualified borrowers have access to competitive financing, lower closing costs, and affordable (if any) down payment options.

Homebridge Financial Services

With an FHA Loan from HomeBrdige Financial Services, you can purchase the home of your dreams even if you fall into the low-income bracket and your credit isn’t perfect. And if you’re a veteran, you may also qualify for a VA loan that is financing at 100 percent.

They also have mortgage loan originators standing by to help you find the best mortgage product for your financial situation. And by completing a brief online questionnaire that only takes a few minutes and does not impact your credit score, you’ll prompt their customer support team to connect you with a loan officer that will work with you to secure the funding you need.

Navy Federal Credit Union

Navy Federal Credit Union offers an array of mortgage loan products to servicemembers, veterans, and their family members even if they have bad credit. You must become a member to apply. And upon acceptance, you can explore several loan options that are ideal for borrowers with bad credit, including:

  • Adjustable-Rate Mortgages (ARMs)- grants you lower interest rates and monthly payments for the first few years of the loan term.
  • FHA Loans- caters to first-time homebuyers and doesn’t require a hefty down payment.
  • Military Choice Loans- 100 percent financing available, and the 1.75 percent funding fee can be rolled into the loan. Borrowers can also borrow up to $1 million through the Jumbo loan product.
  • VA Loans- caters to veterans and offers 100 percent financing.
  • 100% Financing HomeBuyers Choice- flexible loan option that can be tailored to fit a borrower’s needs.

New American Funding

Headquartered in Orange County, California, New American Funding is a direct mortgage lender that’s been around for over 15 years. They have over 185 branches around the U.S. and currently service over 108,000 loans worth $27 billion. Furthermore, they see each prospective borrower as more than just a piece of paper and go the extra mile to ensure their needs are met.

With their veteran experience in success in the mortgage lending marketplace, they have several options to help consumers with credit woes secure the funds they need to buy a home. Their offerings include:

  • ARMs- allows you to take advantage of lower interest rates and more affordable payments for a set period of time.
  • Conventional Loans- lower down payments and flexible terms.
  • FHA Loans- designed for first-time home buyers with limited income or less than perfect credit and offers lower down payments.
  • Home Improvement Loans- ideal if you’re planning to purchase a fixer-upper.
  • I CAN Morgage- allows borrowers to tailor their loan term (from 8 to 30 years) to best suit their financial needs.
  • USDA Loans- available to borrowers with less than perfect credit and doesn’t require a down payment.
  • VA Loans- designed for active duty service members and veterans, and 100 percent financing available for qualified applicants.

You can apply online or use the tool found on their website to speak with a mortgage professional to explore loan options and determine which one is the best fit for you.

Pacific Union Financial

Pacific Union Financial is another direct lender that sees their prospective customers as more than just a credit score. They firmly believe that securing a mortgage shouldn’t be yet another arduous process, and they offer tailored solutions even if your credit is less than perfect.

They even go the extra mile to provide online tools that will help you understand your loan options and select a product that is right for your financial situation. You can visit one of their locations in Arizona or Texas to speak with a loan officer or call 800-809-0421 to learn more about their loan offerings and determine if they can serve you.

Vylla

Vylla has tailored loan solutions that cater to low credit buyers. In fact, you can get approved for a mortgage with a credit score of 500 and down payment of 10 percent if your employment and income checks out. And if your score is at least 580, that 10 percent drops to 3.5 percent.

With offices around the nation, they have loan officers standing by to assist you with your mortgage needs. Or you can call 888-278-9552, submit an inquiry online, or send an email to support@vylla.com and a customer service representative will be in touch with you right away.

The Bottom Line

Even if your credit is blemished, it may be possible to get approved for a mortgage. And by starting your search far in advance before you need to move, you’ll give yourself the best possible chance of finding a lender that will work with you.

Categories
Credit guide

How to Get Out of ChexSystems

Were you recently denied a checking or savings account at a financial institution? Unless it was a direct result of your credit rating, chances are there’s an issue with your ChexSystems report. But what is ChexSystems, and how do banks use it to make decisions on who gets approved for accounts and who doesn’t? More importantly, is it possible to clean up your act so you can open new bank accounts? The good news is a negative ChexSystems report isn’t a death sentence with regards to qualifying for a new bank account. And in this guide, we’ll answer the questions posed above and walk through a step-by-step process detailing how to get out of ChexSystems.

What Is ChexSystems?

In a nutshell, ChexSystems is the credit bureau of banks. It operates as a specialty consumer reporting agency by compiling negative banking data attributed to specific individuals into a report that can be reviewed by financial institutions to determine how much of a risk he or she poses to the bank.

The information furnishers are the financial institutions that the consumers do business with. And the negative items reported include but are not limited to bounced checks, recurring overdraft fees, and involuntary account closures that are the direct result of a long-standing negative balance or excessive fees.

ChexSystems Reports

As mentioned earlier, all the data gathered from financial institutions can be found on your ChexSystems Report. And if you’ve been turned away for checking or savings account, it’s not a bad idea to request your report sooner than later to determine the cause for the denial. But even if you haven’t been turned away but are planning to apply for an account in the near future and are interested in what information is in your report, you should also peruse your report to ensure it’s accurate and free of errors.

To retrieve a free copy of your report:

  • Visit ChexSystems.com and complete the online Consumer Disclosure questionnaire.
  • Call 1-800-428-9623 to request a copy or have any questions you may have about ChexSystems reports answered by phone.

Either option should only take a few minutes, and you can expect to receive a hard copy of your ChexSystems Consumer Disclosure report by mail in five business days or less.

Another way to get a free copy of your report is if you’re denied for a bank account on the grounds of what’s in your Consumer Disclosure report.

A Four-Step Process to Get Out of ChexSystems

Are you ready to roll up your sleeves and do what it takes to get out of ChexSystems? Below is a fairly-straightforward four-step process to get you moving in the right direction.

Dealing with Errors

  • Step 1: Analyze your Consumer Disclosure Report again and highlight or circle any incorrect information that catches your attention. It doesn’t hurt to give the report a few looks to confirm you didn’t miss anything.
  • Step 2: Highlight or circle any items listed on your report that should not be presented because they’ve surpassed the five-year reporting timeline.
  • Step 3: Retrieve a “Request for Investigation” form from the ChexSystems website. Print it out and complete it in its entirety.
  • Step 4: Gather any documentation that will help you substantiate your claim.
  • Step 5: Submit the “Request for Investigation”, along with the supporting documents gathered in step four via mail or fax.

If you choose to mail in your dispute package, be sure to send it via certified mail with a return receipt so you can confirm when it is received. From that point, you must receive a written response within 30-days or the item(s) in question must be removed from your ChexSystems’ Consumer Disclosure Report.

Dealing with Negative, But Accurate Information

Has a string of past financial missteps landed you in ChexSystems, leaving you with a tarnished report? Even if you’ve turned a new leaf, you will still have to plead your case to the banker or let the entries age off your report if you’re having trouble getting approved for checking or savings accounts.

A better option: try filing a dispute to determine if the bank will bother responding to your request. You may find that they don’t and you’ll be off the hook. Or you can request a removal of the negative information on the grounds of turning a new leaf financially or in exchange for payment. More on that shortly.

How to Handle Denied Dispute Requests

In the event your request for a dispute is denied, you have a few options. For starters, you can choose to let the negative entries run their course for five years and try again at that point. Many who choose this route turn to Non-ChexSystems or Second Chance Banking options. Credit unions and community banks may also be open to doing business with you as they generally have less stringent qualification criteria.

You can also step it up a notch by taking your previous dispute and beefing it up with additional details to make a stronger case. If you choose to do so, it doesn’t hurt to include more supporting documentation as well if you have it on hand.

Another way to handle denied dispute requests is by reaching out to the financial institution that reported the negative data and requesting that they remove it. You may need to offer some form of payment if the account was negative at the time it closed, but simply making a request and explaining your reasoning may be enough to get them to act.

What If You Don’t Receive a Response from ChexSystems?

As mentioned earlier, information tied to disputes must be removed if you don’t receive a response within 30 days. However, it’s possible that your dispute slipped through the cracks or ChexSystems still hasn’t received a response from the information furnisher, or the bank.

While you have the right to escalate your complaint in the court of law, a better option is to contact ChexSystems to follow-up. If they still fail to issue a written response, it may be worthwhile to communicate your intent to sue them in the court of law. This should be enough to evoke a response.

The Bottom Line

While it’s possible to get out of ChexSystems sooner than later, you must be prepared to do the legwork to give yourself the best chance of getting the results you seek. This is particularly true if the data in your report is negative but true and hasn’t quite reached the five-year threshold. But if all else fails, you can always ask the branch manager or lead banker for an override to open an account or explore comparable options elsewhere.

Categories
Comparisons

Best Prepaid Debit Cards

Prepaid debit cards are a hot commodity for unbanked consumers looking for alternatives to traditional debit cards. They’re also a safe option if you’d prefer not to carry cash, and can help even those who have checking accounts better manage their budgets. And there’s no credit check required, so you won’t have to worry about being denied for a card on the grounds on your less than perfect credit history.

As a prepaid debit card holder, you’ll also have many of the same privileges as you would with their debit cards without tying the card to their bank account. This includes consumer protections (in some instances), ATM withdrawal capabilities, and the ability to swipe your card to make purchases at the point of sale or use it to pay for products or services ordered online.

Keep reading for a list of the top prepaid debit card options on the market:

American Express Serve Cards

American Express Service cards can be obtained online free of charge but cost up to $3.95 when purchased in-store. These personalized prepaid debit cards afford you the same fraud, purchase, and travel protections that you’d receive if you were an American Express credit card holder. You should also know that funds on permanent Express Serve cards are covered under the Federal Deposit Insurance Corporation by up to $100,000, which is the maximum balance allowed.

As a cardholder, you’ll be able to make free withdrawals from the extensive network of over 24,000 MoneyPass ATMs. However, there’s a fee of $2.50 plus surcharges if withdrawals are made at out-of-network ATMs.

Other key benefits include:

  • Free direct deposit with the ability to receive your paycheck up to two days early
  • Free online bill pay with participating merchants
  • The ability to send and receive money without incurring any additional fees
  • Access to exclusive offers on dining, entertainment, and shopping from Amex Offers and Amex Experience
  • Free card replacement
  • No minimum balance requirements
  • Worldwide cash transfers through Ria ($9.49 for cash pickup and $16.99 for outgoing transfers limited to $2,500)

There are three Amex Serve options to choose from:

  • American Express Serve- $1 monthly fee (free with qualifying direct deposits of $500 or more), and cash reloads available for a fee of $3.95 or less
  • American Express Serve FREE Reloads- $4.95 monthly fee, and free cash reloads at over 45,000 participating 7-ELEVEN, CVS, Dollar General, Family Dollar, and Rite Aid, Walmart locations
  • American Express Serve Cash Back- $5.95 monthly fee and cash reloads at select retailers for a fee of up to $3.95. You can also earn 1 percent cash back on select online and in-store purchases made with your American Express Serve Cash Back card.

BBVA Compass ClearSpend Visa Card

BBVA Compass offers the Clear Spend Visa Card free of charge but you must load $25 in order to activate and start using it. There’s no monthly service charge if you meet the minimum monthly deposit requirement of $400. (Otherwise, you’ll be assessed a fee of $4).

What makes this card stand out from the masses is the ability to earn cash back on select purchases. It also extends FDIC coverage to the maximum balance of $6,500 allowed on the card.

Free cash withdrawals can be made from BBVA Compass ATMs or teller at physical locations, but $2.00 fee applies for ATM withdrawals made out of the BBVA Compass network (additional surcharges may apply from the ATM operator). And if you need to cut a check, bill pay is another service offered free of charge.

You will never incur overdraft or purchase transaction fees as long as you’re a cardholder. You’ll have access to the ClearSpend budgeting tool that helps you get your spending under control so you can meet your financial goals.

The card can be loaded free of charge at any BBVA Compass location. You can also load your card by initiating an ACH transfer from your financial institution or by withdrawing funds from your BBVA Compass debit card. You can also use an external funding source, including ClearSpend, PayPal, Popmoney, and Venmo to load your card. Outgoing transfers are allowed, but it takes two to three business days for the transaction to complete and for the funds to be available.

Bluebird

If you frequently shop at or reside in an area with Walmart stores, the Bluebird by American Express and Walmart prepaid debit card may be a good fit. You can retrieve one for free if ordered online but it’ll cost you $5 if you purchase the card from a retail location.

There are no activation, setup, or monthly maintenance fees and you can opt to have your paychecks or government benefits deposited on the card without spending a dime. Even better, you can make fee-free withdrawals from MoneyPass ATMs. Free bill pay is also available.

But what’s the reasoning for recommending this card to frequent patrons of Walmart? Well, it can be reloaded free of charge via cash or debit card at Walmart locations. You can also reload the card online when using a debit card from your financial institution.

If you prefer to use the mobile check deposit feature that’s available through Ingo Money, you’ll pay ranging between one and five percent of the check’s value if you want the money instantly Otherwise, the free standard option that gets you access to funds in 10 days)

Other perks include purchase and fraud protections, along with roadside assistance and global assist. You’ll also have access to deals on dining and shopping, just to name a few through Amex offers, along with exclusive entertainment deals through the Amex Experience.

Chase Liquid

Are you a Chase customer looking for a better way to manage your finances? The Chase Liquid prepaid debit card may be ideal to help you get the job done while protecting your money with zero liability coverage.

It is available free of charge and does not have a monthly maintenance fee if the card is linked to select Chase checking account ($4.95 if not). You can load funds for free at Chase locations or ATMs and make withdrawals at Chase ATMs. and there’s no fee for incoming transfers.

Fifth Third Access360° Reloadable Prepaid Card

Fifth Third Access360° Reloadable Prepaid Card is another option offered by a major financial institution that gives you all the benefits of a traditional debit card. There’s a $4 monthly fee unless you’re a Fifth Third Bank checking account holder or receive deposits of at least $500 per month onto your reloadable prepaid card.

Cardholders can make fee-free withdrawals at a network of over 50,000 ATMs around the US, but there’s a fee of $2.75 for out-of-network ATM withdrawals. You can also make free withdrawals at Fifth Third Bank Branches.

To reload the card, you will have to do so using a Fifth Third checking or savings account or by visiting a branch. But there’s no minimum load amount.

PayPal Prepaid MasterCard

While you don’t have to have a PayPal account to obtain this card, it helps to have one if you want to use the interactive mobile app. The PayPal Prepaid MasterCard is available to consumers free of charge.

You can load funds for free via direct deposit or PayPal transfers (from your account), or reload checks or cash for a fee at over 130,000 locations nationwide that are in the NetSpend Reload network.

There’s a $4.95 cardholder fee, but it’s a small price to pay to earn cash back rewards offered on select purchases (through exclusive cardholder promotions. Even better, you’ll have the option to open a Savings Account through The Bancorp Bank and earn up to 5.00 percent APY on balances of $1,000 or less. You can also participate in the Refer-a-friend program that gets you and them $5 if they sign up and load $10 or more on their card

Western Union NetSpend Prepaid MasterCard

When you retrieve a Western Union NetSpend Prepaid MasterCard, you’ll have three plans to choose from:

  • Pay-as-You-Go Plan- no monthly service charge, but signature and PIN purchase transaction fees of $1.00 and $2.00 apply, respectively
  • Monthly FeeAdvantage Plan- $9.95 per month
  • Premier FeeAdvantage Plan- $5.00 per month. This plan also includes the Purchase Cushion feature, which covers overdrawn balances by up to $10.

Regardless of which plan you choose, you’ll have access to the following benefits:

  • Direct deposit up to two days earlier than the scheduled posting date
  • Account alerts sent directly to your mobile phone to notify you of account activity
  • Cash back rewards can be earned on purchases from participating retailers
  • The Refer-a-Friend program gets you a $20 credit to your card if they get a car and load it with $40 or more
  • The ability to send or receive money via Western Union Money Transfer (incoming transfers fee but outgoing transfers cost)
  • If you reload at a retail location or by bank transfer, a fee will apply
  • Online bill pay (select merchants charge a fee)
  • Earn up to 5.00 percent APY if you opt-in to the attached savings account (only valid on balances up to $1,000)
  • Access to funds via ATM (subject to a $2.50 ATM withdrawal fee)

The Bottom Line

If you’re looking for a product that grants you access to the same benefits as you’d derive from a debit card tied to a checking account, a prepaid debit card may be worth considering. They are relatively easy to obtain, personalized to minimize the chance of fraud and can be used in all locations that the major branded-cards are accepted. Best of all, there’s no credit check so a less than perfect FICO score won’t keep you from getting your hands on one.

Categories
Comparisons

Best Money Market Accounts (The 2019 Edition)

If you’ve recently searched for a checking or savings account, chances are you may have also spotted money market accounts on the list of offerings from the financial institution. But how do they work? And are they an option you should consider if you want to make your money work harder for you.

Keep reading for the answers to these questions, along with a comprehensive listing of the best money market accounts out there.

What is a money market account?

Simply put, a money market account is a savings account accompanied by checking account features. How so? Well, most are accompanied by a debit card and checks, unlike traditional savings accounts. The key difference is that they pay a higher rate of return than savings accounts, and you may find that the minimum opening deposit and daily balance requirements are substantially higher.

However, they are a great way to earn a return on your money if you happen to be sitting on a large stash and would look to rake in some interest without investing or parking it into a Certificate of Deposit. Even better, you’ll have access to your cash at any time without incurring any early withdrawal penalties or having to wait for the financial institution to cut you a check or wire the funds.

And as mentioned earlier, you’ll have debit card and check writing privileges without an actual checking account. Plus, you’ll earn a return that blows the interest rate on checking accounts out the water.

Top Money Market Accounts

With so many money market accounts to choose from, it’s easy to get overwhelmed when exploring your options. So, we’ve compiled a list of the top products to help you get started on your search.

Ally Bank Money Market Account

The APYs on the Ally Bank Money Market Account are as follows:

  • A minimum daily balance of $0 to $24,99- 0.90 percent
  • A minimum daily balance of over $25,000- 1.00 percent

Even better, you’ll never pay a monthly fee for the duration of the account. You’ll also have access to thousands of fee-free Allpoint ATMs across the US. And in the event you do incur surcharges from ATMs that are out of the Allpoint network, Ally Bank will reimburse you for up to $10 in fees for that particular statement cycle.

You should also know that there are no caps on the number of deposits or ATM withdrawals you can make per month. In addition, remote check deposit with Ally eCheck Deposit or you can elect to use their postage-paid envelopes to deposit funds.

BBVA Compass Clear Choice Money Market Account

The BBVA Compass Clear Choice Money Market Account pays an APY of 1.80 percent to account holders. All you need is a minimum opening deposit of $25 to open an account, and there are no balance requirements for you to meet before you can start earning a return on your money.

However, a monthly service charge of $15 does apply but can be waived if you meet one of the following criteria:

  • Schedule a recurring monthly transfer of at least $25 from your BBVA Compass checking account
  • Maintain a daily balance of at least $10,000

You can make up to six withdrawals per month without incurring any fees, and the account can also be used for overdraft protection if it is linked to your checking account.

Capital One 360 Money Market Account

Capital One is known for its fee-free checking and savings accounts, but the 360 Money Market account is even more impressive. Not only is it also free of monthly service charges, but this account allows you to earn an APY of 2.00 percent on balances of $10,000 or more. And if your balance is below this amount, you’ll still earn 0.85 percent APY without spending a dime to keep the account open.

Deposits can be made via the mobile app, by setting up a recurring transfer from another bank or your Capital One checking or savings account, or at a physical location. Incoming wire transfers are also permitted. And if you need to make a withdrawal, you can do so online, on the mobile app, or by phone. But only six withdrawals are permitted on a monthly basis.

Account holders can also use the digital savings tools to help them map out, execute, and reach their savings goals faster.

CIT Bank Money Market Account

With an opening deposit of $100 or more, you can be on your way to earning an APY of 1.85 percent with the CIT Bank Money Market Account. There are no monthly maintenance fees, but you will incur a fee of $10 per transaction (capped at $50) once you exceed six transactions in a month.

A unique feature of this account is the ability to not only transfer funds to external accounts but to also send funds to PayPal. Although this amount is limited to $50 per transaction and daily, you also have the option to transfer funds to an external account using the Bill Pay feature (up to the maximum balance in your account). And should you decide to wire funds elsewhere, you can do so free of charge if your daily average balance is less than $25,000. Otherwise, you’ll pay $10 per transaction.

Discover Bank Money Market Account

You’ll need to have a bit more skin in the game to take advantage of all this account has to offer as the minimum opening deposit is $2,500. And if your account balance falls below this amount, you’ll incur a monthly service charge of $0.

However, the Discover Bank Money Market Account pays a generous APY of:

  • 1.85 percent on balances less than $100,000
  • 1.90 percent on balances that exceed $100,000

Upon opening an account, you’ll be able to access your cash if needed in a jiffy from the network of over 60,000 fee-free ATMs. You’ll also be able to use the funds in your account by swiping your debit card or writing a check.

Another added benefit is the first fee forgiveness feature, which will let you off the hook for the first mishap on an annual basis.

Sallie Mae Bank Money Market Account

While Sallie Mae is thought to only specialize in servicing student loans, they also have a hidden gem in their arsenal. The money market account grants you the ability to make your money grow without incurring any monthly maintenance fees.

The Sallie Mae Money Market Account pays a whopping 2.20 percent APY, and there’s no minimum balance to start earning a return. You will also have check-writing capabilities, and select transfers can be initiated without paying an additional fee.

TIAA Bank Yield Pledge Money Market Account

The TIAA Bank Yield Pledge Money Market Account is another fee-free way to grow your money. Not only will you avoid monthly account fees, but there’s also no cost to use online bill pay or make mobile check deposits.

To open an account, you’ll need to make a deposit of $5,000 or more. While this may seem a bit hefty, you’ll earn an introductory APY of 2.15 percent in the first year. For subsequent years, their tiered earnings structure is as follows:

  • 1.10 percent APY on balances between $0.00 and $9,999.99
  • 1.15 percent APY on balances between $10,000 and $24,999.99
  • 1.60 percent APY on balances between$25,000 and $49,999.99
  • 1.70 percent APY on balances between $50,000 and $99,999.99
  • 1.90 percent APY on balances between $100,000 and $10,000,000

If your daily balance exceeds $4,999, you will not incur any ATM fees. But for accounts that do not meet this minimum threshold, TIAA Bank will reimburse up to $15 per month in ATM fees.

UFB High Yield Money Market Account

The UFB High Yield Money Market Account pays an APY of 1.60 percent on all balances. A monthly service fee of $10 applies if your balance is below $4,999.99. However, this fee can be avoided if you maintain a daily balance of $5,000 or more.

Mobile deposit is available free of charge, or you can use UFB’s free postage-paid envelopes to get funds to your account without spending a dime. You’ll also receive a debit card when you open an account to use for everyday purchases.

The Bottom Line

A money market account is a great way to take advantage of all the benefits savings accounts have to offer, but also have check writing and debit card privileges. But since not all accounts are accompanied by the same perks, you’ll want to do your homework before moving forward.

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Comparisons

Best Savings Accounts (The 2019 Edition)

Savings accounts are instrumental in helping you fund short-term purchases or meet long-term objectives. While most banks offer savings accounts to complement their checking products, some are more enticing than others. Read on to learn more about the best savings accounts on the market:

Brick-and-Mortar

You can’t go wrong with a traditional brick-and-mortar bank when looking to open a savings account. But since not all savings accounts are created equal, you want to do your homework to ensure you’ll earn the hefty return you’re seeking. Some of the best options on the market include:

Chase Savings

While Chase Bank doesn’t boast an impressive APY like some of the other brick-and-mortar banks, they do offer a generous $150 bonus when you open a new savings account and meet the following criteria:

  • Make a minimum opening deposit of $10,000 within 20 days
  • Maintain a daily balance of $10,000 for 90 consecutive days

You can also earn $200 more with a new checking account, bringing your total in sign-up bonuses to a whopping $350. And all you have to do is set up direct deposit to your new checking account.

As an account holder, you’ll earn 0.01 percent APY, and there’s a minimum deposit requirement of $25 to get started. But the monthly service fee is only $5, which can be avoided with qualifying activities.

HSBC Bank USA

When you open a Direct Savings account with HSBC Bank USA, you can earn 2.01 percent APY on your money. All you need is $1 to open your account, and a monthly maintenance fee does not apply.

As an account holder, you’ll also have access to HSBC’s money management tools that help you get your finances in order. It includes goal setting, budgeting, and savings tools to ensure you hit the key benchmarks you set for yourself.

Credit Union

Credit unions offer consumers the best of both worlds by allowing them to be account holders while owning a share of the credit union. Some credit union savings accounts that will allow you to earn a generous return on your money:

Alliant Credit Union

You can earn up to 1.95 percent APY with a High-Rate Savings Account from Alliant Credit Union if you maintain an average daily balance of at least $100. There are no earnings maximums on interest, and the monthly fee can be waived if you enroll in eStatements.

To open a savings account, you’ll need to make a $5 deposit. And you must maintain a balance of this amount each month for your account to remain open.

Online Banks

Perhaps you’re searching for an online savings account because you’re always on the go. Or maybe you prefer an online option because it’ll prevent you from immediately accessing funds, which helps you become an even better saver. Either way, here are a few options to consider:

Ally Bank

Ally Bank offers an online savings account that will pay you a return of 2.00 percent APY on your money. This is a whopping 20 times higher than the national average.

There are no monthly maintenance fees, cashier’s checks, and ACH transfers are available free of charge. You can also deposit checks via the mobile app or by using a postage-paid envelope.

American Express Personal Savings

The Personal Savings High Yield Savings Account from American Express pays 2.00 percent APY on your earnings. But since these accounts are geared towards saving and not everyday spending, ATM cards and checks are not distributed. Instead, you’ll need to make telephone and online withdrawals. (Note that these are collectively limited to six per month).

Fund transfers from an outside bank account to your American Express High Yield Savings Account generally take one to three business days to appear. However, if the transfer is initiated from your Amex savings account expect to wait for three to five business days for the proceeds to be reflected in your account balance.

Barclays Online Savings Account

The Barclays Online Savings Account boasts one of the highest return on your money with an APY of 2.05 percent. They also offer a Savings Assistant tool directly from the online dashboard that allows you to set a savings goal and calculate how much you’ll need to get there within your desired timeframe.

There is no minimum opening deposit required. And as an account holder, you’ll never be assessed monthly maintenance fees. Furthermore, you don’t have to maintain a minimum daily balance to earn a return on your money.

Deposits to your Barclays Online Savings Account can be initiated via Remote Deposit using your computer or mobile device, direct deposit, ACH transfer or postal mail. Once the funds hit your account, they are subject to a five business day hold.

When you need to withdraw funds, you can initiate an outgoing transfer online or call the customer service outline and request that a check is mailed to you. (Quick note: online transfers take two to three business days to be reflected on the receiving in).

Capital One 360 Savings Account

Capital One 360 is a viable savings account option for consumers looking to earn a decent rate of return on any amount they have saved. It is accompanied by a 1.00 percent APY, and there are no monthly maintenance fees.

And unlike other savings account products on the market, there is no minimum opening deposit requirement. Even better, your account can remain open even if the balance reaches zero.

Account transfers are free between Capital One accounts or from outside financial institutions. There are also automatic savings plans to help you meet your financial goals quicker. And funds can be deposited directly from their state-of-the-art mobile app.

Discover

The Online Savings Account from Discover is another straightforward savings options devoid of monthly maintenance fees and monthly balance minimums. As an account holder, you’ll earn an APY of 2.00 percent and there’s no minimum opening deposit requirement.

In addition, all incoming transfers are free, and official bank checks are available free of charge. There’s also no fee for deposit items that are returned.

Another major perk is the ability to have your first fee forgiven. This could apply to excessive withdrawal fees (if the number of monthly withdrawals exceeds six), stop payment orders, NSF, and outgoing wire transfer fees.

Marcus by Goldman Sachs

Marcus by Goldman Sachs pays an APY of 2.05 percent to its account holders without assessing transaction fees. However, this online bank does not offer checking accounts, so you’ll have to initiate deposits elsewhere or you can enroll in direct deposit so funds are sent directly to your account. The good news is inbound and outbound wire transfers do not incur fees.

While it is not necessary to make a minimum deposit when opening an account, you must maintain a daily balance of $1 to earn a return on your money. Furthermore, it is not equipped with a built-in saving tool to help you strategize and execute a plan to help you meet your savings goals faster.

The Bottom Line

It may be overwhelming to sort out all the savings account options out there, so start by considering the options on this list. And should you decide to explore offers from other financial institutions, pay attention to their APY, monthly maintenance fees, and conduct a cost-benefit analysis to ensure the benefits outweigh the potential drawbacks.