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Increasing Student Loan Payments

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Nothing like being kicked when you’re down, right?

Well, I’ve had a good run. After 3 years of Income Based Repayment where our student loan payments were only a couple hundred a month (it varied, but was never over $300/month in total), I knew there would be some changes in store after updating our income info using last year’s tax information (this update is required annually). What I did not know or expect, was that the change would be SOOOOOO extreme.

Overnight, we went from a minimum payment of $300….to a minimum payment of over $1,000. THAT’S MORE THAN OUR MORTGAGE!!!! My take-home pay is under $5,000/month, so we’re talking over 20% of our income!!! AHHH!!!!!

After my update, I was notified that we no longer qualified for IBR based on last year’s income. Unfortunately, this occurred during summer when all our finances just went straight to hell so I didn’t give it much thought like I should have.  No thought, that is, until the payment was auto-drafted and my account ended up being overdrawn.

To say I “freaked out” would be an understatement. It was my own fault for not paying closer attention, but I felt totally blind-sighted!

So I did something that maybe (probably?) messes up my credit. But I felt I had no option. I called and asked for my student loans to go into forbearance status for a few months. It was approved the same day. I’ve continued making smaller-sized payments (in the $200-$300 range), but no payment is actually due until January. I’m trying to reapply for IBR with our current income (since the update was based on our tax information from last year, it showed a much higher salary than what we have this year given that hubs no longer works and I dumped my part-time job, too).

Re-doing our current income paperwork is a whole process, as you can imagine.  I haven’t completed it yet but my hope is that this voluntary forbearance gives us the time to get all the paperwork submitted and processed and – fingers crossed – maybe we can get approved for a more reasonable-sized payment. It will still likely be larger than in the past. But we just cannot afford $1,000/month right now as a minimum payment. We’d be much more comfortable in the $300-ish range. I did talk to a representative who said there are other programs available, too (e.g., I was told we could apply for the “standard extended payment”). I’d love to get back on IBR if we can qualify but, if not, I’m glad other options exist. The one problem is the TIME it takes for all that stuff to be processed. I felt backed into a corner with the forbearance because I needed a lower payment NOW and didn’t have time to wait a month (or however long) for a new application to be processed and approved (or potentially rejected).

So that’s where we’re at with my student loans. Another piece of the messy financial puzzle.


New Debt and a New to Us Car

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I am going to sit down this weekend and put together a post on all my existing debt, I realize it is long overdue.  Unfortunately, I did have to accrue some new debt this past weekend.  I had to buy a car.

Back Story

About two years back, I got a great deal on a used car. We put miles on that car with all the back and forth between Virginia and Georgia over the past year, almost daily trips to the gym and now about 100 miles a day between my work commute and an hour drive one way to the gym…our used car served us well.  But about 7 weeks it died.  We have been making due with one car (my son’s 1996 Honda Accord) and borrowing a car (my Grandmother’s) one time a week when three of us had to be in different places.

The Search

I’ve spent the last 7 weeks trying to get by, and trying to determine the best plan moving forward and trying to save more money thinking I might could by a used car with cash. I have learned that I HATE car shopping and I hate the game of car shopping.

The Car

I settled on a 2011 Chevy Impala with 63K miles on it for $10K out the door (including everything, no other out of pocket costs.)  My uncle found it for me, knows the previous owner and made sure it was in good shape. It has new tires, new brakes and so on. Rather than cleaning out the emergency savings I have, I financed the entire $10K at 7% interest for 3 years.  My goal is to pay it off in 2.  I have scheduled payments of $400 a month automatically to start and will go up from there. (The required monthly payment is just at $308.) My uncle delivered it to me from Virginia and I am paying him back the $178 he paid for the tow trailer rental.

Conclusion

This is not the car of my dreams. It’s not one I would have even considered. But the price is right, it came with full service records, it’s a good size for our family while being reasonable on gas for all my driving and I am assured I can get 200K miles out of it if taken care of.  I spent a lot of time figuring out the best plan.

2011 Chevy Impala

Literally within the hour of driving away with this car this past Saturday, another tragedy struck our little family. More on that tomorrow.


Get Your Business Rolling!

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As a small business owner, one of the many challenges that I faced was financing. I think I speak for others when I say that business loans are one of the biggest challenges for SMBs today.

The reason I say this is that banks are tightening their requirements when it comes to approving individuals for business loans. Regardless, you need capital to grease the wheels of your business.

So, I got thinking. Where is the best place to apply for a business loan?

Remember, chance favors the prepared mind. So, I set about doing my research on precisely what I need the money for, what loan would best suit my needs, and which lender could best accommodate me.

Every business needs liquidity to stay operational. But when you’re applying for a loan, you need to have a blueprint of how that loan is going to help your business grow.

As a small business owner, I have to think carefully about the specific type of loan that I need. Since there are so many lenders out there, cost becomes an important consideration.

The terms and conditions of the loan (payback period, interest rates, early payoff penalties etc.) are paramount. Naturally, your credit score is going to come into the reckoning as well.

Fortunately, I maintained a credit score of around 770 for quite some time, thanks to regular repayments of my bills, low credit utilization, and a rather limited number of inquiries for additional lines of credit.

Over the years, I learned that one of the best ways to manage your credit score is to diversify the types of credit that you have available. In this vein, mortgages, auto loans, student loans, credit cards, and store credit will help you.

When you are managing your credit, you want to be sure that you shop around for the most appropriate business loan. I like to use credit loan aggregators services since these allow me to do comparative shopping.

Once you’ve got a short list of lenders, you can start to narrow them down even further according to the types of services they offer.

As I said earlier, I am in the process of expanding my business operations. I want to branch out into other cities by marketing my home-based business on the web. To do this, I need to create video retargeting content, increase my marketing budget, and employ the services of SEO experts.

Fortunately, I’ve been in business for several years now and this makes it easier to apply for a loan. As soon as you have a history of revenue streams, you are looked at more favorably by banks and non-bank lenders.

I’ve seen many of my friends being turned down because they were relative newcomers to the scene, and still operating in their first year of business. Remember this: Lenders want to see your ability to repay the loan, and this is why startups face so much pressure all the time.

If you’re wondering about different types of small business loans, consider that you can use different types of credit facilities. These include crowdfunding, microloans, business credit cards, and even loans from friends and family.

I don’t recommend the latter option since you don’t want your personal relationships to sour if your business does. My for-profit business has been fairly stable over time, and I needed to expand operations to keep on growing.

I didn’t want to go the bank route since I didn’t want to provide collateral. Banks typically take a little bit longer to approve loans than non-bank lenders, and that may work for some people.

The average SBA loan ranges between $5,000 on the low end and $5 million on the high-end. Small businesses like mine find it a little more difficult to get loan approval because our revenue streams are so much lower.

That’s the reason decided to go with a non-bank lender over the Internet. When you’re looking for quick funding options and smaller lives of credit, you can certainly go with an online lender. I secured a loan of $45,000 through online lenders at a rather favorable repayment term.

My business’s turnover is $65,000 per annum, which fits rather snugly into the requirement zone of $50,000 – $150,000. Be sure that you are within that range when you are applying for a small business loan.

FYI: before you apply for your small business loan, I recommend getting a free copy of your credit report from any of the top 3 credit reporting agencies. You can also use your credit card provider’s website to check your personal credit score.


You Told Me So

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When we were going through the process of getting a mortgage, we shopped around with a lot of different lenders and ended up with a company that we were…luke-warm about after it was all said and done.

The experience, itself, wasn’t exactly pleasurable. I know it’s stressful anytime you buy a house, etc. etc., but there were some things I didn’t share that were really frustrating. But the one GREAT thing this lender had that no one else could compete with was a stellar interest rate. We got our loan at a 2.75% APR!!!

At that time, a handful (maybe 2 or 3?) of commenters mentioned the option of perhaps rolling some of our student loan debt into the house. Our loan was for well below the appraisal price of the home, so this could have been an option (note: not for all the student loans, but a portion of it).

Hubs and I talked about it and decided against it. Ultimately, we both just felt a little “yucky” at the thought of rolling student loan debt into the house. It just didn’t sit right with us and we took that as a sign that we should probably do something different. The plan was always to look into student loan consolidation companies after the mortgage went through.

When the mortgage was finally funded in early November, I started shopping around just a couple weeks later.

First I was denied by a place. (update: the “negative mark” was, indeed, my delinquent account I’d mentioned in this post. It’s old enough that it should be off my report – and it has, indeed, fallen off of 2 of the 3 credit agencies, but it’s still sitting on the third. I’ve completed a formal dispute so hopefully this will be rectified soon).

And then I discovered that other places really couldn’t offer better rates at all! Here’s a sampling of rates that I was offered:

6.99%

6.49%

5.37%

My current student loan interest rates range from 5.8 – 6.5, so there’s not even really much of a savings compared to what I currently pay.

And now I just kind of feel foolish. I feel like I should have listened to YOU and put some of that student loan debt in with the house debt. Ugh! I guess hindsight is 20/20, right?

This has stalled plans a bit in regard to the student loan consolidation. I’m just not crazy about a 5.37% APR. Yes, it’s lower than my current interest rate. But is it low enough to go through all the paperwork hassles and the fact that I’d now have one GIANT loan instead of multiple, smaller loans to tackle?

I don’t know.

And, that must be balanced against the fact that I truly despise our current lender, Navient.

Again, I just don’t know.

I’ve been doing these balance transfers on a credit card I don’t use. It has a limit of $7,500 and allows me to do balance transfers at a 0% APR for 12 months at a 3% initiation fee (note: this is the current “deal” as of today. In the past, I’ve been able to score as low as a 2% initiation fee, but for a shorter amount of time – I believe 6 months; That “deal” isn’t showing up anymore so it may have been discontinued).

Anyway – that’s the best rate I can get. But that’s only $7,500 at a time and I still have a MOUNTAIN of debt to contend with (most recent debt update here).

So I’m kind of at a loss. Here’s what I’m thinking in terms of a plan moving forward (though I’d love to hear your thoughts, too, so please chime in!):

  • I’ll keep all the subsidized loans with Navient (I’m receiving forgiveness on unpaid interest through August). I’ll pay minimums on those to reap the interest-forgiveness benefits.
  • I’ll continue doing these balance transfers to reap the benefits of the lower interest (with the note that I’m always EXTRA CAREFUL to ensure they are fully paid off by the deadline so I don’t get hit with penalties and sky-high interest). As each balance transfer is paid in full, I plan to continue to initiate new transfers up to the $7,500 limit as allowed.
  • Finally, I’ll continue paying aggressively toward the remaining (unsubsidized) loans.

This seems like the best course of action for now. Unless someone can offer me a better interest rate on a consolidation, that is.

Thoughts?

 


We Bought A House!!!!!

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We did it!

After endless back-and-forth negotiations, a variety of snags and snafus, and having to change our closing date not once but TWICE, we are officially home owners! YAY!!!!!

 

KONICA MINOLTA DIGITAL CAMERA

Image source. Note – this is an image that came up in a search of “Arizona houses.” This is NOT our house. As I said before, I won’t be showing a picture of our actual house.

 

We actually closed about a week ago. It was nice because it was a couple days before our 6th wedding anniversary, so we joked that this year for our anniversary we bought ourselves a house! Lol! Go big or go home, right? : )

Shout out to our families who have been so helpful! My Mom helped us with a portion of our down payment and both of our moms have been here recently (first hubs’ mom came out, then my mom) so they have helped with packing, entertaining the girls, and getting everything ready for the move. Hubs has also done a ton. Funny story – this isn’t the first time that the bulk of moving duties have fallen to him. At least twice before I’ve been gone/out of town during moves. I have left with things in disarray and returned with everything moved into a new space! Ha! This time I wasn’t entirely absent (I haven’t gone out of town), but I’ve been pretty busy with work so hubs has definitely taken the lion’s share of packing and boxing and moving. He started with cleaning and moving pretty much immediately after closing but it didn’t become official (aka: we didn’t sleep in the new house) until this weekend. Now I can’t wait to get out the holiday decorations and go to town! : )

This is random but….does anyone remember this ancient blog post? The post (almost 2 years old at this point) was about the thought of having hubs get a vasectomy. GUESS WHAT’S HAPPENING TOMORROW, Y’ALL!!!!!!!!!! ((insert giant grin here))

Sorry, let me try to contain my excitement (hehehe!)

Poor hubs – he’s not so excited. What a way to be rewarded for all of his hard work in the past week! But I, on the other hand, could not be more thrilled!!! We’ve known that we are done having kids for awhile, but having the little snip-snip is the last thing to make it really super-duper official and I can’t wait! I’m taking off early tomorrow so I can drive him to the appointment, as he’s got a prescription sedative to help him relax and he’s not supposed to drive on it (for a man whose usually cool as a cucumber, he’s pretty anxious over the whole thing). Then back to business as usual.

I’m really looking forward to the end of the semester! I feel like such good things are on the horizon – new house, hubs starting back to school, a new year, etc. It just feels like a fresh start or a re-set of some sort. Not that this year has been bad (in fact, there’s been a lot of good), but I did call summer 2016 the summer of death and I’m excited to see what new adventures lie ahead for us as a family.

On the financial front – I may have lied. I said I was going to refinance my student loans THE SECOND that the house deal went through. But now that I’ve been thinking about it, I’m not so sure. I still have 9 months left of interest-forgiveness for my subsidized student loans (through IBR), so now I’m thinking I might only consolidate the unsubsidized loans and leave the subsidized ones for the time being so I can get all 9-months worth of interest-forgiveness before I throw them into the consolidation? However, I have issues with Navient every time I turn around, so I’d love to rid them from my life. In the end, I think I’ll do nothing this month. Over the winter break I’ll start my investigation into student loan consolidations/interest rates/etc. and probably make a more concrete decision before the end of the year (because that will greatly impact our financial goals for 2017).

Anywho, I gotta jump back into work! I hope your Mondays are off to a good start (look at me actually blogging on a Monday – pat on my back) ; )

Talk soon!

~A


Grin and Bear It!

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Hi all!

I hope your weeks are off to a nice start! It’s still stifling hot here in Tucson (mid 90’s over the weekend), but we’ve been packing in lots of fun fall activities! This weekend we went to a pumpkin patch and the kids had an absolute blast! As they get older it’s so fun to really celebrate and enjoy the holidays together!

Today I just wanted to give you the latest on my Navient grievance that I aired last week. Basically….it’s gotten worse (is that possible? yes, yes it is).

My payment due date is the 10th. Recall I was being overcharged by $500/month and was told they would not have it resolved by my October payment, but it should be shortly thereafter. So I logged into my account like a fun little game – how much have I been charged???

Only I see a long line of red exclamation marks and this message:

PAST DUE!

PAST DUE!

PAST DUE!

PAST DUE!

PAST DUE!

On every one of my Department of Education loans (strangly, the federal loans were fine).

Ummmmm…..how can that be? I’ve been on auto-pay for over 2 years!

I call up to Navient and am informed that – somehow that no one can quite explain – my auto payment withdrawal has been removed from my Department of Education account. ALL of those loans are past due.

I asked if this was related to their overcharging me to the tune of $500/month?

They don’t know.

I asked if this would affect my income based repayment?

They don’t think so.

I asked if the monthly debit has been corrected?

They don’t know.

Then they ask if there’s anything else they can help me with.

Ummmm…..you didn’t really help me with anything, now did you???

(Ultimately, I was instructed to make a one-time payment for the month of October, then wait a week and call back again to see if everything has been fixed. Yeah, won’t be holding my breath holding out hope for anything positive to come of this).

And as if Navient’s nonsense isn’t enough to make me rip out my hair – our house closing has been pushed back. After the inspection we’d negotiated for some additional repairs to be done and I guess it’s taking longer than expected. So our closing has been pushed from the 14th to the 28th, pending everything getting done in time. Bummer.

On my last Navient post a couple people commented and asked about private student loan consolidation companies. Just to reiterate – I’m not doing anything until the house deal is closed. But I’ve been researching and looking at SoFi. They’ve got good user reviews and seem to be a reputable company. But we have such a broad readership here, I’d love to ask for your opinions!

Have you ever done a student loan consolidation through a private company? What were your experiences like? Good, bad, ugly, etc??? Would you recommend your company? Why or why not? I’d love any info you can provide!

And, just for fun, do you have any fun Fall plans on the docket this month?? I wish we lived closer to an orchard! There’s one about 90 minutes away, but our weekends are pretty full. Maybe in November we could make it out there – I’d love to take the girls to pick apples and just enjoy the experience! Do you have any annual Fall traditions as a family?


Navient is Back At It Again

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Just the latest in my long, long history of grievances with Navient.

When I realized I’d missed that extra debt payment in September, I was carefully reviewing my account history and something jumped out at me that caught me off-guard:  I’m being over-charged roughly $500 per month.

I’m embarrassed to admit that I hadn’t noticed the egregious error earlier. I blame it on my busy schedule, but really there’s no excuse to have not noticed such a HUGE discrepancy.

Here’s the short of it (I’m trying to run out the door for work, so sorry this is a little rushed)….

My minimum payment is about $130/month. When I re-did my paperwork for Income-Based-Repayment over the summer I was notified it would go up a little bit (like $20 or $40….I can’t remember now, but not much). Only, that’s not what happened. For the past two months (August & September), my auto-debit withdrawal has been over $650. I  always make extra debt payments on top of the minimum and pay – in total – over $1,000 each month. So it didn’t make a big difference in terms of actual money spent because I always put well extra into Navient anyway. But what it did is take my money and mis-appropriate how it was spent. Instead of putting all the extra (over and above my true minimum of about $150-ish) toward the unsubsidized loans, it was being equally distributed across all loans. That’s not at all how I would appropriate it myself.

So I called up there to ask what the deal was. And I was told that apparently there was some issue. The system “shows” that my payment should only be the $150-ish payment, but the auto-debits are actually around $650ish (yes, I know. That’s why I called). It was a total error on their part. They would put in paperwork to get it fixed. It probably won’t be fixed by the October debit, but then it will go back to normal in November.

The representative was all happy with herself for putting in whatever notes to bring it to their internal auditor’s attention. Happy that she had resolved the problem.

 

Ummmm……lady. You get this means you’ve been overcharging me to the tune of $500-ish per month for what will now be 3 months. That’s an extra $1500 you have basically stolen from me. Illegally. You think that’s just going to fly??? (yes, I would have given them that extra money anyway with my extra payments but, again, I would appropriate it completely differently than they have done; also, with the way they’ve done it, a great deal of that money has gone straight to interest instead of toward principal reduction).

The best I could get out of the representative was a promise that after the situation has been resolved, I can call back and they will allow me to re-allocate those extra funds toward the loans of my choice. Doesn’t really make me feel to warm and fuzzy inside. I also have about zero hope that this actually gets resolved as promised. I mean, Navient has quite a long history of lying to me. Repeatedly. All the time.

So there’s that.

Today, though, I’m going to choose to focus on the positives. I’m thankful that we have that extra money. that the extra $500 Navient is literally stealing from me does not force us to go without food, housing, or utilities. That we have the money to spare.

I’m going to try to let it go. I’ll call back toward the end of the month as they’ve requested and see if it makes a difference at that time. In the meantime, I just have to let go of the anger and the frustration. I don’t have any space or time for that negativity in my life.

But you better believe…..as SOON as the house stuff is done (currently set to close on Oct 14th! EEEK!!!), I’m consolidating with a private company as fast as humanly possible. I’m SO STINKING SICK of Navient and their absolute incompetence (at best) and downright illegal activities (at worst). Sick of it. Also, my last ACS loan has notified me that it’s going to be migrated to Navient, too. Fabulous. Last time that happened my loan “switched” from being subsidized to being unsubsidized. An issue that I spent months dealing with and countless hours (and even wrote my legislatures and involved a 3rd party group for problem resolution) and, ultimately, nothing happened. They just f-ed me. And they got away with it. So I’m pretty excited to rid Navient from my life once and for all. As SOON as the closing is behind us, I’m done with them.

Have you ever experienced serious over-charging by a student loan company? Trying to focus on the positives, what’s something good that’s happened recently or something fun you’re looking forward to this week? To share one of mine, we had an awesome weekend! Saturday was packed full of fun stuff – two different kids’ birthday parties. Sunday was full of relaxation. A nice mix of fun/activities and family time/relaxation. The perfect weekend balance!