Loans

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Is Interest Rate and APR the Same Thing?

If you’re in the market for a mortgage, car loan or considering a different credit card, you pay attention to the low rates advertised. Interestingly though, it’s never mentioned what kind of rate the ad is referring to: the basic interest rate or the annual percentage rate (APR). Only one rate tells the full story of how much borrowing that money will cost you. It’s the APR. Here’s the difference: Interest rates reflect the cost you pay each year to borrow $25,000 for a car or $100,000 for a home. It’s a percentage of that principal and it’s determined by many factors, namely how much it costs the lender to borrow money from the Federal Reserve, as well as your credit score. APRs represent the real cost to you in repaying the required amount each year. This rate includes the interest rate on the principal (above) plus any extra interest…

Borrowing Money? What Loan is Best for You?

Most people need to borrow money at some point. Americans owe more than $13 trillion in total debt. Borrowing is clearly an expensive proposition for many American families. If you do find yourself borrowing to buy a home, a car, an education, or anything else, it is important to look at the pros and cons. It’s all about making the right long-term decisions and minimizing out-of-pocket costs. Let’s look at what you need to know to best evaluate loan options available to Americans today. Common Types of Loans Loans come in many names and forms. When looking at consumer loans (loans to people and not businesses) there are four main categories: mortgages, student loans, personal loans and auto loans. While these are the most common ways to borrow, there are some substitutes for traditional loans to use instead. Those include credit cards, lines of credit, home equity lines of credit…

A Debt-Free College Degree? Yes, It’s Still Possible

Chances are your Facebook feed is lined with cute pictures of the first day of school. And everywhere you turn, there’s a back-to-school promotion. Too bad there aren’t any sales on college education. Quite the opposite, in fact. The average cost of tuition, room and board at American four-year colleges has more than doubled in the past 20 years, while the Consumer Price Index rose only 35 percent. With average costs at $11,970 (public 2-year), $20,770 (in-state public 4-year), $36,420 (out-of-state public 4-year) and $46,950 (private 4-year) per year, it’s no wonder Americans carry a larger student loan debt burden than ever. About 44 million people are on the hook for over $1.48 trillion in student loan debt. For perspective, total U.S. credit card debt is “only” $860 billion. If you or your college-bound child want to avoid the average $35,000-plus debt burden on graduation day, here are 10 ways…

5 Things to Consider When You Have Student Loans and No Job

What happens when you graduated months ago, but haven’t found a job and are starting to feel your student loans breathing down your neck? First of all, don’t panic. Start by figuring out exactly what you owe, by when. Many students loans, including direct subsidized and unsubsidized loans and Federal Stafford loans, have a six-month grace period after graduation, dropping out of school or dropping below half-time status before you need to start making payments. PLUS loans have no grace period. Grace periods on private loans and Federal Perkins loans vary wildly, so it’s important to know what exactly you owe, beginning when. These grace periods are designed to give you time to get a job after graduation. Don’t worry – you aren’t the only graduate who is reaching the end of the grace period with no employment in sight. Don’t Ignore Your Student Loans Before making any other decisions,…

Cash in on Your Marriage

With the fall wedding season right around the corner, what better time to think about the financial benefits of holy matrimony? These five perks make a strong case for joining lives – and wallets – with your significant other. Joint Income Tax Returns Tax rates for married taxpayers filing joint income tax returns are lower than for single or married taxpayers filing separately. And the standard deductions of a married tax filer are typically higher than itemized tax deductions. Filing jointly also helps if one of you earns a much higher income than the other. Why? Because your tax rates as a couple will effectively average out your total household income. Speaking of averages, combining income and expenses often helps lower the tax liability for married taxpayers filing jointly. Increased Credit Scores Provided that you and your spouse have good credit to begin with, combining your incomes will usually result…

What They Don’t Teach You

If one or more of your kids have graduated from college in the past year, then you probably know all too well how difficult it is to land a job right out of school these days. According to the US Department of Labor, the unemployment rate for graduates with bachelor’s degrees rose from 11.5 percent in 2013 to 14.9 percent in 2014. And a 2011 online poll conducted by the National Endowment for Financial Education revealed that nearly 60 percent of parents in the US provide financial support to adult children who are no longer in school. But before you start to panic (or regret spending all that money on tuition), here are five easy ways to help your college grad learn what they don’t teach you in school: namely, how to become financially independent. Help Them Distinguish Between Wants and Needs Most college grads are inclined to spend money…

Auto and Home Tax Write-Offs You Never Knew About

While most of us are aware of certain tax write-offs like charitable donations and medical expenses, car and homeowners are entitled to more deductions than they often realize. That’s why SelectQuote Auto & Home has compiled this list of commonly overlooked auto- and home-related expenditures, all of which can be deducted from your income tax bill. Just be sure to consult a financial professional or visit the official IRS website before filing. Auto  Your New Car. Yep, you read that correctly. If you’re self-employed, you may be able to write off the purchase price of a new vehicle. Got your eye on an SUV? You may be looking at an ever bigger tax benefit.  Your Commute. On a project that requires more driving time than usual? The IRS lets you write off 56.5 cents for every mile that you drive for your job – provided that you’re on a temporary assignment.…

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