They focus on graduates with good credit scores and steady incomes. Some of their target customers include medical and law school graduates.

ELFI Refi Review

Name: ELFI

Description: is an excellent student loan company offering private loans and refinancing at competitive rates. With stellar customer service and personal loan experts to assist through the refinancing process, they put their client's needs first. However, cosigners are permanently binding and you must have a bachelor's degree or higher. 

Overall

4.5

• Interest Rates
• Repayment Options
• Customer Service
• Refi Amounts

ELFI Refinancing Review

ELFI is an excellent student loan company offering private loans and refinancing at competitive rates. With stellar customer service and personal loan experts to assist through the refinancing process, they put their client’s needs first. However, cosigners are permanently binding and you must have a bachelor’s degree or higher. 

Pros

• Competitive and low APRs
• Stellar customer service
• Service offered across all 50 states
• Little to no fees
• No cap on how much you can refinance

Cons

• Must refi at least $15,000
• Cannot release the cosigner
• No refinancing for associate degrees
• No autopay discount

• Get Your Rate Now!

What Is ELFI?

Education Loan Finance (ELFI) is a student loan financial company founded in 2015 by SouthEast Bank. ELFI strives to provide a clean, simple-to-use application process that focuses on putting its student customers first and has financed over $1 billion in student loans. Furthermore, they have unique benefits, such as personal loan advisors, helping differentiate themselves from the surrounding competition. 

ELFI offers private student loans and student loan refinancing.

Besides, ELFI has a clean history and hasn’t run into any problems with the law. They’re rated “A+” by the Better Business Bureau and are an FDIC member. Overall, the firm is credible and offers fantastic student loan products. 

What Is Student Loan Refinancing (Refi)?

Say you had $10,000 in student loans with an interest rate of 10% per year. After one year of not paying off your debt, you’d owe $1,000 in interest. That’s a lot of moola.

Student loan refinancing (refi) is when a separate company pays off your loan but gives you a new loan at a (usually) lower interest rate. This is where lenders like ELFI, Earnest, or LendKey come in.

As an example, let’s say ELFI swoops in to refinance your student loan, offering first to pay off your $10,000 of existing loans and second to open a new $10,000 loan at a lower interest rate of 5%. If you took this refinancing option, you’d be able to save money on interest every year due to the lower interest rate. 

That’s a whole lot of savings. Now, imagine if this had gone on for several more years! You’d potentially be saving thousands of dollars.

Student loan refinancing can be one of the best ways to save money by decreasing the interest rates on your student loans.

ELFI Rates, Terms, and Fees Summary

ELFI is one of the best student loan refinancing options on the market right now, presenting competitive variable and fixed rates. Their refi products are only available to applicants with minimum credit scores of 680 who are looking to refinance $15,000 or more. These standards allow them to offer some of the lowest fixed APRs in the market and fantastic variable rates. 

ELFI also has excellent customer service, reflecting its focus on its clients. 

What Makes ELFI Unique?

ELFI stands out from its competitors by providing access to expert personal loan advisors during the refinancing process. Customers on Trustpilot have consistently noted that these advisors are extremely helpful during the process, making everything “stress-free,” “easy,” and “quick.”

These are accolades I don’t typically hear to describe student loan companies.

Pros & Cons Of ELFI Refi

Generally speaking, ELFI’s refinancing products are excellent. With a strong customer service team, personal loan advisors, and competitive APRs, it’s hard to beat them off. However, there are some minor issues with their refinancing options that you should know.

Pros

• Competitive and low APRs
• Strong customer service
• Personal loan advisors
• Service offered across all 50 states
• Little to no fees
• No cap on how much you can refinance
• All types of student loans are eligible

Cons

• Must refi at least $15,000
• Cannot release the cosigner (if you have one)
• Not flexible repayment plans (vs. Earnest)
• No refinancing for associate degrees
• No autopay discount

How Do I Qualify To Refinance With ELFI?

ELFI has several requirements you need to check to be eligible to refinance your student loans. It’s worth noting that you can refinance your loans in all 50 states, Washington D.C., and Puerto Rico. 

• You’re a U.S. citizen or a permanent resident
• You have a credit score higher than 680
• You’re refinancing at least $15,000 in student loans
• You’re pursuing or graduating with a bachelor’s degree or higher
• Your debt-to-income ratio is less than 50%
• You make at least $35,000 a year
• You’re attending classes at least half-time
• You have at least 36 months of credit history

If you check all these boxes off, you should be ready to rock and roll for refinancing!

If not, you’re not out of luck. ELFI allows cosigners, who are people that agree to pay back the loan if you default on it. Cosigners are typically your parents, close relatives, or friends who are willing to vouch their credit history for you. 

However, ELFI doesn’t allow you to release your cosigner, even if you demonstrate good repayment behavior. This rule might dissuade potential cosigners from helping you out and is worth noting.

Student Refi vs. Parent Refi

ELFI differentiates between student and parent refinancing. The rates and loan terms between the two groups are slightly different, where students have more term length options than parents. However, the variable and fixed rates are the same. If you’re a student reading this article expecting to make small monthly payments, it’s probably worth looking into refinancing your loans as soon as possible for the longer term. 

What Are ELFI Repayment Options?

ELFI repayments are standardized by year. There is no difference between monthly payments for students or parents.

Monthly payment ranges will vary depending on the length of your loan term, the size of your loan, and the interest rate. Though, the lower your monthly payment, the more you’ll end up paying in interest. So, if you can, make bigger monthly payments.

If you’re looking for more individualized repayment plan lengths, check out Earnest refinancing.

Who Should Get ELFI Refi?

ELFI refinancing isn’t for everyone, since they have ‘higher’ standards for who they work with.

If you meet all of the minimum requirements, then ELFI is generally a pretty solid option. After all, these standards are what allow them to offer highly competitive interest rates!

Though, make sure you take a look at its competitors to see what has the best rates and term length for you.

ELFI does have one of the lowest fixed-rate loans available.

However, if you don’t meet the criteria, then you likely won’t be eligible for refinancing anyways. ELFI wants to ensure that the risk of default is low so that they don’t lose a lot of money.

Though, if your credit score is still above 650 or 660, you could try looking at other shops like Earnest or CommonBond, respectively. 

How Much Does ELFI Refi Cost?

ELFI has little to no fees. They don’t charge an application fee, origination fee, nor prepayment penalties. Furthermore, their prequalification check can give you an accurate estimate of your refi rates in minutes.

The only fees that arise are if you make late payments. These occur after payments aren’t for 11 days and are either 5% of the amount past due or $50, whichever is smaller.

Is ELFI Safe?

Yes! 

As mentioned previously, ELFI has a clean track record and hasn’t run into problems with the law like other student loan companies have (looking at you Navient). 

Furthermore, several rating agencies rank ELFI highly. For instance, Trustpilot and Better Business Bureau give ELFI 4.9/5.0 and “A+” ratings, respectively. These stellar scores reflect the loan company’s trustworthiness.

Will ELFI Refi Hurt My Credit Score?

Well, yes and no.

Initially, during the prequalification process, ELFI will only do a “soft pull” for your credit score. “Soft pulls” do not affect your credit score.

However, if you decide to refinance your loans with ELFI, they will temporarily hurt your credit score. To finalize the refi, the firm needs to do a “hard pull” on your credit score to thoroughly determine your creditworthiness. “Hard pulls” look through your entire credit history to ensure that the prequalifying “soft pull” didn’t miss anything. 

Though, it’s worth noting that the effects of “hard pulls” are small. Your credit score only factors new credit applications and inquiries for 10%. Moreover, these hard inquiries only stay on your credit report for 24 months. Thus, your credit score will be back to normal pretty soon. 

Nothing to worry about!

You can check your credit score for free using Credit Karma or Credit Sesame!

How Is ELFI’s Customer Service?

Like we’ve briefly talked about, ELFI has excellent customer service. They are the only firm to offer personalized loan assistance throughout the refi process. 

ELFI provides several ways to contact their customer service. 

• Email them at [email protected]
• Fill out a contact form found on their website
• Call or text them at 1-844-601-ELFI (3534)

Their customer service calling hours (Eastern time) are as follows:

• Mon – Thu, 8am – 8pm
• Fri, 8am – 5pm
• Sat & Sun, 10am – 4pm

They even have Sunday hours for help, which is rare amongst these industries!

How Does ELFI Fare Against Competitors?

As a whole, ELFI does pretty well against its competitors. Although it requires a credit score on the higher end, it offers low APRs.

Top Student Loan Refinance Companies

Company	Variable APR	Fixed APR
	1.86-6.01%	2.43-5.99%	Get My Rate
	1.99-5.64%	2.98-5.79%	Get My Rate
	1.99-6.09%	2.99-6.09%	Get My Rate
	1.99-6.10%	3.00-6.20%	Get My Rate
	2.99-6.06%	2.99-5.99%	Get My Rate
	1.99-5.25%	2.99-7.75%	Get My Rate

How To Get Started On ELFI

ELFI prides itself on how easy it is to get started with refinancing.

All you really need to do is:

1. Get a quote via prequalification (~2 min)
2. Determine if the fixed or variable rate is the best option you have
3. Submit an application (~10 min)
4. Upload relevant documents (Government-issued ID, W2, previous month’s pay stub)
5. Sign your name
6. Wait up to one business day
7. Hear back!

If you are ever confused during this simple process, ELFI provides free access to personal loan support experts. Also, their customer service is open every day of the week. 

Are There Referral Bonuses?

For every friend who refinances their student loans with ELFI, the company will reward you $400, and your friend will get $100. In fact, referring your friend is easy too. You just need to refi your loans and then sign up for a personalized referral link that you can share. 

This is a pretty sweet deal!

Should You Use ELFI?

We believe ELFI is an excellent refinancing option. Given the company’s clean history, competitive APRs, and client-first attitude, ELFI proves itself as a top competitor. Furthermore, being the only firm to offer personalized assistance during the refi process is something worth noting. 

However, even if ELFI provides a reasonable rate, make sure to take a look at some other companies. Earnest, for example, offers innovational and individual APRs and loan term lengths that might suit you better. LendKey will try to match you to your perfect loan.

John Ta

John Ta is an undergrad at the University of Pennsylvania and the founder of Penn’s first undergrad personal finance club, Penn Common Cents. As a first-generation college student, he had to learn everything about personal finance on his own and seeks to mend the financial literacy knowledge gap seen almost everywhere. John is currently studying for an MS in Chemistry and a BA in Physics (business & tech concentration), Biochemistry, and Biophysics and is interested in the intersections of finance and healthcare.

The post ELFI Refinancing Review appeared first on Finance Plan Today.

What Is SoFi?

Started in August 2011, Social Finance (SoFi) was the first company to ever offer student loan refinancing (refi). Since then, they’ve grown to other products such as private, home, and personal loans. According to SoFi, they’ve helped finance over $45 billion in loans for over a million people.

They truly were the first of their kind, paving the way for student loan refinancing. At their beginnings, they were the uncontested refi champions.

However, do they still hold the crown of being the premier refi option? Although they offer some of the most competitive interest rates out there, they require top-of-the-line credit histories, incomes, and debt-to-income ratio. Though, they do also offer some nice perks and benefits.

How Does SoFi Refi Work?

SoFi’s application process is pretty standard, requiring the typical personal and financial information. 

Student loan refinancing (refi) is when a company like SoFi pays off your existing student loans but gives you a new loan at a (usually) lower interest rate. Refi can be one of the best ways to save money by decreasing the interest rates on your loans.

Should I Refi My Federal Student Loans?

On the surface, your new refi option could have a lower interest rate than your federal student loans. However, remember that federal student loans have a lot of benefits. 

For example, federal loans offer public service loan forgiveness, interest-free deferment and forbearance, discharge options, and income-based repayment plans. No other private lenders offer such perks.

The decision to refi should be carefully thought out. If you plan on taking advantage of any of the federal benefits, then refi might not be for you.

SoFi Rates, Terms, and Fees Summary

Offering some of the most competitive rates available, SoFi also has stringent requirements. They typically only accept those with good or excellent credit history. Though, if you make the cut, they offer many awesome perks and benefits.

SoFi also allows cosigners, but they cannot be released. In addition, you can get a rate quote completely free of charge. 

What Makes SoFi Unique?

SoFi’s unique twist is their free career coaching. They are the only lender with a focus on advancing their client’s careers. By providing access to coaches and networking opportunities, SoFi can help borrowers through the job search.

Pros & Cons Of SoFi

SoFi is an excellent choice if you can meet their requirements. According to prior loan data, they typically refinance loans for those with advanced degrees in law and medicine. One of the nice things is that they refi across all 50 states, which is something not all lenders offer. 

However, SoFi doesn’t offer cosigner release, which can be a significant deterrent for cosigners. Moreover, their customer service isn’t great.

Pros

• Competitive and low-interest rates
• Refi available in all 50 states
• Many forbearance and deferment options
• Career development opportunities

Cons

• High credit score needed
• High income needed
• Poor customer service

How Do I Qualify For SoFi Refi?

Like we’ve mentioned, refinancing your student loans with SoFi isn’t an easy task. Having top refi options, they come with high entry barriers. You’ll need to make sure your credit score is in tip-top shape.

Financial Requirements

• Minimum credit score of 680, but most approved lenders are in the 700s
• No minimum income stated, but data shows average salary to be about $100,000
• No recent bankruptcies or delinquent loans in the past seven to 10 years
• Meet debt-to-income (DTI) requirements; specific limits unknown

Given that some of SoFi’s financial requirements can be a bit steep, it’s not bad to take a look into lenders like Earnest or ELFI. These both take lenders with lower credit scores. Furthermore, Earnest also looks at more than just your credit score to determine your eligibility. 

Individual Requirements

• US citizen or a permanent resident
• Must have an associate’s degree or higher
• Must have graduated from a Title IV public or private institution authorized to receive federal financial aid

What Does The Average Applicant Look Like?

According to a 2018 report for private loans, the typical SoFi applicant met the following average financial requirements:

• FICO Score of 762
• Gross yearly income of ~$177,000
• Monthly cash flow of ~$7,300

These levels are by no means easy to meet. It’s worth remembering that SoFi’s main target seems to be high earners from top schools in the country. Applicants with advanced degrees also seem to be approved more often than those without. 

What Are SoFi Repayment Options?

SoFi offers typical loan terms of 5, 7, 10, 15, and 20 years for both their standard and medical refi. No fees arise if you want to pay off your loan early or make a larger monthly payment. 

They also offer a 0.25% discount on your interest rate if you sign up for automatic payments. 

Generally, the shorter the loan term, the lower the APR. Thus, you’ll end up paying less money in the long run. 

SoFi also offers a plethora of deferment and forbearance options.

For borrowers going back to school, entering the military, or going under disability rehabilitation, you can postpone your payments. Moreover, those who lose their jobs may be eligible to postpone their payments for three months, for a maximum of 12 months. In fact, SoFi offers many ways to find jobs or networking opportunities to help you get back on your feet.

Medical and dental residents are eligible to only pay $100 per month throughout their residency for four years. 

Since everyone’s situation is different, it’s vital to contact SoFi’s customer service to ensure that you meet their various deferment and forbearance eligibility requirements. 

Is SoFi Safe?

It’s not my right to be the judge on this, but I can provide facts to help you make a good decision. 

Unfortunately, SoFi was indicted in 2018 by the Federal Trade Commission for lying about how much money borrowers can save. The ruling forces SoFi to make any loan claims backed with ample evidence. Perhaps you can feel more comfortable knowing that the government is watching SoFi closely. 

SoFi has yet to report any data breaches. However, there’s always a risk when entering your sensitive personal and financial info online, even to the most trustworthy and safe companies. 

Their customer ratings are “eh” to say the least. While the Better Business Bureau rates the firm an “A,” TrustPilot consumer reviews place SoFi 3.6/5.0 stars. That TrustPilot rating places SoFi among the lowest-rated refi options out there. 

TrustPilot users say that SoFi is “unresponsive, disappointing” and “uncaring” given the 2020 coronavirus pandemic. 

Will SoFi Hurt My Credit Score?

Yes and no. SoFi won’t hurt your credit score if you simply get a quote, but if you proceed with signing the loan, then your credit score may be affected. 

In the first steps, SoFi will only do a “soft pull” on your credit score. “Soft pulls” don’t affect your score. However, in finalizing the loan, SoFi will do a “hard pull” for your credit history. “Hard pulls” can hurt your score.

However, credit inquiries play a small part in your total credit score (10% in FICO score). Moreover, they disappear after only 24 months. Nothing much to worry about if you don’t open too many credit cards or loans rapidly.

How Is SoFi’s Customer Service?

Given that they are based entirely online, SoFi offers a variety of ways to reach out to them. You can reach them by phone or email. Moreover, you can submit your payments via mail-in check. 

However, TrustPilot notes that SoFi customer service is “unresponsive” and offers “terrible service.” If you’re looking for better customer service, check out Earnest.

What I Wish Was Different About SoFi

SoFi is no doubt one of the best options for lenders coming from strong credit histories and high incomes.

I do wish SoFi would be more open to a wider variety of applicants. If you don’t make the cut for SoFi, it’s a good idea to look into other lenders like Earnest or ELFI.

However, I think the biggest problem with SoFi is their customer service. Frankly speaking, their ratings aren’t the best compared to others. While SoFi loans offer many perks and benefits, there have been many complaints about their customer service.

How Does SoFi Fare Against Competitors?

Top Student Loan Refinance Companies

Company	Variable APR	Fixed APR
	1.86-6.01%	2.43-5.99%	Get My Rate
	1.99-5.64%	2.98-5.79%	Get My Rate
	1.99-6.09%	2.99-6.09%	Get My Rate
	1.99-6.10%	3.00-6.20%	Get My Rate
	2.99-6.06%	2.99-5.99%	Get My Rate
	1.99-5.25%	2.99-7.75%	Get My Rate

How To Get Started On SoFi

SoFi’s application process is entirely online. First, you can get a quote entirely free of charge. You’ll need to enter basic info, such as your name, SSN, and income.

If you prequalify, you can see your rates and loan terms. Once you confirm that these loan rates are the best for you, you can finalize the loan. SoFi will then do a “hard pull” on your credit history. They may also request documents to confirm some numbers. 

You can refi end-to-end on SoFi’s website. Being entirely online has its benefits. 

Should You Use SoFi? 

Since getting a quote from SoFi is completely free, I don’t think there’s any harm in applying to SoFi to see your rates. Though, SoFi seems to be intended for those with high credit scores and income. Given that their refis offer so many perks and benefits at low rates, this trend would make sense.

I think you should apply for a SoFi loan—it’s free. However, if you are looking for excellent customer service, Earnest or ELFI might be better. Moreover, if you want better loan term options, then Earnest is by far your best option.

Even if your application gets approved and you like your SoFi quote, it’s always a good idea to look through all your options. You wouldn’t want to miss out on lower rates because you didn’t check out Earnest or ELFI. In fact, pretty much every online lender offers free rate quotes. It’s worth the effort since you’ll be with the lender you choose for years to come. 

Check out LendKey to be matched to your perfect loan. And if you’re considering finding business loans, then FundEra might be a great next stop!

FAQs

If I only have a credit score of 700, should I bother applying?

Absolutely. There’s no reason to not apply because getting a quote is free. If you get denied, SoFi will explain why. There are no obligations, and you’ll never know unless you try!

John Ta

John Ta is an undergrad at the University of Pennsylvania and the founder of Penn’s first undergrad personal finance club, Penn Common Cents. As a first-generation college student, he had to learn everything about personal finance on his own and seeks to mend the financial literacy knowledge gap seen almost everywhere. John is currently studying for an MS in Chemistry and a BA in Physics (business & tech concentration), Biochemistry, and Biophysics and is interested in the intersections of finance and healthcare.

The post SoFi Refi Review appeared first on Finance Plan Today.

Say you’re interested in getting your first car. Or your first house. Your credit score plays a significant factor in these decisions. And a difference of just 25 points could save you tens of thousands of dollars. Moreover, a low score can make it impossible to get approved. 

You might want to work on building your credit score. However, the task can be daunting. Getting a credit card is one of the best ways to improve your score. But if you can’t get approved for one because of your score, then how can you even work on your credit score? 

Here arrives the secured credit card. Lenders are more likely to offer secured credit cards since they are much less risky than normal cards. Getting a secured credit card helps kickstart your credit-building journey.

What Is A Secured Credit Card?

A secured credit card is a credit card protected by a deposit. This deposit acts as the “collateral,” protecting the lender from any risks that you don’t repay your card. 

For example, say you open a secured credit card and deposit $500 towards your account. Your lender will let you spend up to $500 on your credit card. Say you end up spending up to $500 of your limit and now can’t pay the lender back. The lender essentially hasn’t lost any money since you paid $500 beforehand.

Since secured credit cards are basically no risk for lenders, they are usually willing to issue them for anyone. Even as someone with poor to no credit history, you’ll likely be able to open one. 

If you show good repayment habits with your secured card, you’ll eventually graduate into a standard credit card and get your initial deposit back. This deposit simply serves to protect the lender until you either (1) graduate or (2) close your card. In both cases, you’ll get your money back. 

However, if you fail to repay your secured credit card, you won’t be getting that deposit back.  

Why Are Secured Credit Cards Useful?

Remember that credit cards are one of the best ways to start building your credit score. By getting a credit card, you can possess good repayment habits, increase your total credit limit, and improve your credit mix. These factors all help to improve your score. 

However, if you have poor or no credit history, it can be hard to get a standard credit card.

Secured credit cards are so useful because they allow anyone to get back on their feet even if they have a poor credit score. Since lenders face virtually no risk in giving these cards out, it’s really in your hands to use them wisely. 

You control your destiny once you get your first secured credit card. They are the first steps you take in setting your credit score in the right direction for the future. 

Secured Credit Cards Vs. Unsecured Credit Cards

The main difference between the two is the collateral. You don’t need a deposit to open an unsecured credit card. However, secured credit cards require some initial investment to begin. Simply put, unsecured credit cards are your typical, run of the mill standard credit cards. 

The reason comes down to risk. The higher your credit score, the less likely you are to default on your credit cards. Thus, lenders are more likely to approve top of the line credit cards for those with good or excellent credit. 

However, with a poor credit score, lenders fear you might not pay back the money you owe. Thus, they’re not as likely to approve you for a standard card. Instead, they’d like to minimize their risk by approving you for a secured credit card instead. 

Broadly speaking, secured credit cards are for those with poor to no credit history. Unsecured cards are for those with good to excellent credit. 

Other differences between them are that secured cards almost always have fewer perks than unsecured cards. Some of these standard credit cards even offer 5% cashback for your purchases or free flights. You won’t get any of these fantastic benefits with a secured credit card. 

Unsecured credit cards are worth the effort.

Secured Credit Cards Vs. Debit Cards

If you know how debit cards work, they should sound eerily similar to secured credit cards.

In brief, a debit card is just cash in the form of a plastic card. For a debit card, you can only spend up to the amount of money you’ve deposited into your checking account. Similarly, for a secured credit card, you can only use up to the amount you’ve placed into your account beforehand. 

So, if they work the same in principles, what differs?

The primary thing you need to remember is that secured credit cards can help improve your credit score. Your debit card doesn’t influence your credit score. Remember that when you use your credit card, you’ll still have to make monthly repayments. These behaviors factor heavily in your credit score. 

In fact, timely payments take up 35% of your FICO Score 8 calculations. Maintaining good habits with your secured credit card can help your credit score over time. 

Who Are Secured Credit Cards Best For? 

Secured credit cards are best for those with poor to no credit history. Remember that lenders are willing to approve secured credit cards for even those with little credit history. 

If you’re looking to start your credit score rebuilding journey, secured credit cards are one of the best ways to begin.

Wait—Why Is My Credit Score So Important Again?

Your credit score plays a critical role in deciding your approval odds and interest rates. For example, a minor 25 point credit score boost could save you thousands of dollars on your mortgage. 

Let’s glance at the table below, showcasing the average fixed interest rates for a 30-year $100,000 mortgage at different credit scores.

As we can see, bumping your credit score up just 25 points from 640-659 to 660-679 could save you thousands of dollars. That’s a lot of savings! And a pretty small improvement overall. 

Now, say you worked hard and pushed your score up somewhere to 760-850. This move alone could save you about $20,000. 

Does this logic apply to credit cards? Absolutely. 

Credit card issuers will award the best credit cards to those with top credit scores. These amazing credit cards can grant you free gift cards, hotel stays, and even flights. However, you’ll never be able to tap into these excellent benefits with a poor credit score. 

Also, a low credit score makes it challenging to get approved for a mortgage, auto loan, and more. It might even make it difficult to rent an apartment. Thus, monitoring and improving your credit score is vital. 

You can start building your credit score with a secured credit card today!

Best Secured Credit Cards

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Frequently Asked Questions

John Ta

John Ta is an undergrad at the University of Pennsylvania and the founder of Penn’s first undergrad personal finance club, Penn Common Cents. As a first-generation college student, he had to learn everything about personal finance on his own and seeks to mend the financial literacy knowledge gap seen almost everywhere. John is currently studying for an MS in Chemistry and a BA in Physics (business & tech concentration), Biochemistry, and Biophysics and is interested in the intersections of finance and healthcare.

The post Secured Credit Cards appeared first on Finance Plan Today.

One of their original founding principles was to redesign the loan application process to be as streamlined as possible. As a top option for student loans, how do they stack up against the competition? This review will outline CommonBond’s pros and cons to help you make the right decision on whether you should refi your loans with CommonBond. 

How Does CommonBond Refi Work?

Student loan refinancing (refi) is when CommonBond pays off your existing student loans and then gives you a new loan at a (typically) lower APR or interest rate. Refinancing is an excellent way to save money by lowering your student loan interest rates. 

Should I Refi My Federal Student Loans?

Although your refi option could have a lower APR than your federal student loans, federal loans have many benefits. 

For instance, federal loans offer public service loan forgiveness, interest-free deferment and forbearance, discharge options, and income-based repayment plans. No private lenders provide all these benefits.

If you’re deciding to refi your federal student loans, make sure to carefully think through your decision. Refi might not be the best choice for you if you plan on taking advantage of the federal benefits.

CommonBond Rates, Terms, and Fees Summary

CommonBond refi has some awesome interest rates. Moreover, they charge no origination or application fees. 

I think the coolest part about CommonBond is that they offer the only “hybrid loan” available on the market. This product combines fixed and variable rate interest loans. The hybrid loan will lock a rate for the first five years, after which it becomes a standard variable rate loan. 

Though, they do require you to refi at least $5,000. 

Pros & Cons Of CommonBond

Generally speaking, CommonBond is a good option for the average applicant. If you fear you might face economic hardship in the coming years, CommonBond is a top choice, offering extensive forbearance options. In fact, from what I’ve seen, they have the most robust forbearance tools available. 

One of the remarkable things about CommonBond is its partnership with Pencils For Promise. For every loan they refi, they promise to sponsor a child’s education. This is an incredible social cause. 

Unfortunately, CommonBond doesn’t offer loans across all 50 states. They also don’t have the most competitive rates available. Though they provide co-signer release after 36 mo, we didn’t list this as a pro or a con since it depends on your perspective. 

Pros:

• Low-interest rates
• Unique “hybrid” loan product
• Amazing social cause to sponsor education
• One of the best forbearance programs
• Refi Parent PLUS loans

Cons:

• Loans not offered in Mississippi and Nevada
• No refi for associates degrees

How Do I Qualify For CommonBond Refi?

CommonBond refi statistics are, for the most part, undisclosed. However, in comparison to some other lenders such as SoFi, Laurel Road, or Earnest, I think it’s reasonable to guesstimate that they’d have less stringent entry barriers than these top of the line lenders. 

For example, SoFi has some of the best rates around. The average income and credit score there seems to be about $100,000 and 750. Since CommonBond doesn’t have rates or benefits as good as SoFi’s, we would probably say that the average applicant here has a lower income and credit score. 

Guesstimation is your friend here. Though, note that getting a rate quote is entirely free of charge. Thus, it’s worth a shot.

Financial Requirements

• Minimum credit score of 660
• Unknown income requirements
• Undisclosed debt-to-income ratio minimum
• Co-signers eligible
• Must refinance between $5,000 to $500,000 

Individual Requirements

• U.S. citizen or a permanent resident with a green card
• Working professional with four-year undergrad (or higher) degree
• Must have graduated from a Title IV public or private institution authorized to receive federal financial aid
• Not living in Mississippi or Nevada

What Are CommonBond Repayment Options?

CommonBond has typical loan terms of 5, 7, 10, 15, and 20 years. These are pretty standard options available across the loan industry. If you’re looking for more flexibility in your loan terms, Earnest offers personalized options.

While CommonBond provides the standard fixed and variable rate loans, they also have a unique hybrid option. This ten-year hybrid takes the best of both worlds and combines them into one. A hybrid loan holds a fixed rate for the first five years and converts to a variable loan for the remaining five. 

Generally speaking, it’s worth remembering two rules of thumb across all lenders:

1. The longer your loan term, the less your monthly payment. However, you’ll pay more overall.
2. The shorter your loan term, the lower the interest rate. This means that you’ll pay less overall.

Thus, the shorter your loan term, the more beneficial it will be for you. However, you’ll be expected to meet higher monthly payments. Choose your options wisely!

They also offer a 0.25% interest rate reduction promotion if you enable automatic payments. 

Deferment & Forbearance

Like I’ve hinted at, CommonBond has some of the best forbearance options around. 

Borrowers can request up to a total of 24 months of forbearance in three-month intervals. This is about double the average forbearance options around. A great perk to keep in mind if you fear some economic hardship will arise.

In terms of deferment, CommonBond also has excellent options. They provide academic, medical residency, and military deferment with proper proof. Moreover, you’ll be forgiven of all loans in the case of death or disability. It’s comforting to know that they are willing to be explicit about their views here.

Is CommonBond Safe?

It’s not my right to be the absolute voice on this matter, but I will give facts to help you make a logical decision.

While CommonBond hasn’t run into any trouble with the government, it isn’t accredited by the Better Business Bureau (BBB). Worryingly, the BBB rates CommonBond a “B.” Consumers note that there have been frequent credit report mishaps and rate misunderstandings.

Thankfully, CommonBond hasn’t reported any major data breaches. However, there’s always a risk when entering your sensitive info online. 

Will CommonBond Hurt My Credit Score?

This question isn’t as simple as yes and no. 

CommonBond won’t touch your score if you only get a rate quote. Though, if you finalize the loan, your credit score may be affected. 

In these first steps, CommonBond only does “soft pull” on your credit score. “Soft pulls” don’t affect your credit score. However, in the final steps, CommonBond will do a “hard pull” for your full credit history. “Hard pulls” could harm your credit score.

Though, credit inquiries play a small part in your score (10% in FICO score). Also, inquiries leave after only 24 months. Nothing much to worry about!

How Is CommonBond’s Customer Service?

CommonBond knows that being entirely online can make things difficult for borrowers. Consequently, they offer several ways to contact their customer service teams. You can either give them a call, email, or live chat with them. 

Nicely enough, some have even mentioned that CommonBond’s customer service is far superior than SoFi’s. That’s always a nice note to hear. 

What I Wish Was Different About CommonBond

Unfortunately, CommonBond is by no means perfect. 

The first thing that comes to mind is that they should work on their Better Business Bureau ratings. A “B” rating isn’t going to cut it these days and can be a little worrisome for potential borrowers. 

Moreover, it would be nice if they offered loans across all 50 states. On top of that, they should be a little bit more transparent about the refi requirements. Their competitors give more information about the entry barriers, while CommonBond provides very little info. 

How Does CommonBond Fare Against Competitors?

Top Student Loan Refinance Companies

Company	Variable APR	Fixed APR
	1.86-6.01%	2.43-5.99%	Get My Rate
	1.99-5.64%	2.98-5.79%	Get My Rate
	1.99-6.09%	2.99-6.09%	Get My Rate
	1.99-6.10%	3.00-6.20%	Get My Rate
	2.99-6.06%	2.99-5.99%	Get My Rate
	1.99-5.25%	2.99-7.75%	Get My Rate

How To Get Started On CommonBond

CommonBond’s application is designed to be simple. To first get a rate quote, you’ll have first to fill out a short form. This form will ask for basic personal and financial information. Afterward, you’ll see if you’re pre-approved for the loan. 

If you’re approved, and you like your rates, then you can proceed with finalizing the loan. In these final steps, you’ll submit documents to prove your identity, income, and student loans. 

If you have any questions, reach out to their customer service. 

Should You Use CommonBond? 

I think CommonBond is worth trying out. They have great forbearance and deferment options available and have a good cause in sponsoring education. Considering you can get a rate quote for free, it’s worth exploring to see if you’ll get approved. 

The best way to deal with all these lenders is to apply for a bunch of them. You can then compare your rates across and choose the optimal one. Remember: you can get a rate quote completely free of charge from refi lenders such as ELFI, Earnest, or SoFi. 

It’s always a good idea to look through all your options. You wouldn’t want to miss out on lower rates simply because you didn’t look through other lenders. In fact, almost every online lender offers free quotes after just 15 minutes or so. Definitely worth the effort since you’ll be with the lender you choose for years.

FAQs

John Ta

John Ta is an undergrad at the University of Pennsylvania and the founder of Penn’s first undergrad personal finance club, Penn Common Cents. As a first-generation college student, he had to learn everything about personal finance on his own and seeks to mend the financial literacy knowledge gap seen almost everywhere. John is currently studying for an MS in Chemistry and a BA in Physics (business & tech concentration), Biochemistry, and Biophysics and is interested in the intersections of finance and healthcare.

The post CommonBond Refinancing Review appeared first on Finance Plan Today.

Manifesting money isn’t merely thinking about dollar bills. It’s also not wishing you had that Lexus or BMW that your friend has. Moreover, it’s not dreaming you could suddenly win the lottery. 

Instead, manifesting money is a way of thought to help you become wealthy and achieve financial freedom. Don’t envy others. Focus on yourself, and forge your own path through the world.

I’ve had the opportunity to fix how I manifest money throughout my lifetime. Coming from humble beginnings myself, I always dreamt of owning a private jet. Sought to travel the world. Studying at an Ivy League only furthered these “rich” thoughts. Thus, I thought I was manifesting money with these thoughts.

However, as I grew older, I realized that I was manifesting money incorrectly. I discovered it wasn’t something that I had to dream about. Furthermore, I found it was something I could do, something I could get started with.

And so, I did. This article covers the tangible, real techniques that I used to manifest money.

Think Wealthy, Not Rich

Your mindset is the first thing to work on to manifest money. 

There’s an enormous difference between being rich and wealthy. Not every millionaire is wealthy. Not every millionaire is rich.

Go ahead: ask your friends what the difference is. You’ll be met with blank stares.

At first, I didn’t know the difference between the two. However, as I grew older, I realized the critical distinctions.

In brief, the difference between rich vs. wealthy is that the former focuses on investing, while the latter focuses on spending.

What Does Being Wealthy Mean?

Wealth is the accumulation of assets. Those who are wealthy focus on investing.

To begin, a wealthy individual follows most of the principles in this beginner’s guide to personal finance.

They save at least 15% of their paychecks, owe little to no debt, have their retirement portfolio in smart investments, and live well within their means.

But the most important distinction is that a wealthy person has a huge net worth. Wealthy people use their assets to generate passive income for them. 

What Does Being Rich Mean?

Being rich simply means having a high income without corresponding assets.

Having a lot of money doesn’t make you wealthy because rich people also spend a lot. Someone who earns $1 million per year while spending $999,000 on a flashy lifestyle will have less money at the end of the year than you. That expensive car looks nice in the driveway but could spell disaster since they have so many other bills piling up. 

Rich lifestyles spend most of their income, resulting in little investing activities.

That’s the stereotype you think of with professional athletes. Instead of investing their money, they buy expensive cars and jewelry, frequently using loans.

You’d be better off only making $60,000 and saving half of it!

Never judge a book by its cover. I can’t tell you how many times I’ve seen people see a brand new Lexus and be like, “wow, they must have a lot of money.” They might have a lot of income, but that doesn’t mean they have any money saved.

How Do I Think Wealthy And Not Rich To Manifest Money?

You can start thinking wealthy by changing how you view the world. 

Going back to my example, every time you see a BMW cross the road, don’t think that they’re necessarily wealthy. For all you know, they could have spent their entire yearly paycheck for just the down payment. They could even be struggling to pay their monthly bills as a result.

If you want to explore more about how to deepen your wealth mindset, continue reading into our rich vs. wealthy article. In short, it’s essential to:

1. Remember that this is a long term game
2. Cut unnecessary expenses
3. Put yourself in a supportive environment
4. Envision a successful life
5. The longer you wait, the harder it is

By thinking like a wealthy person, you’ll realize that you can achieve your dreams of financial freedom. 

Is This Mindset All I Need?

Having the correct mindset is one thing. Being positive and energetic about achieving your goals is another. 

If you foster negative thoughts, they can become realities. For example, there’s a world of difference between saying:

“I’m not smart enough to do this assignment,”

versus

“I have the power and capability to complete this task.”

Positive affirmations are statements that can help you overcome negativity. You can literally “speak it into existence.” Research has even revealed that thinking about your best traits can improve performance before a high-pressure meeting.

Your mind is an extraordinarily powerful tool. By simply thinking positively, you can kickstart your journey towards manifesting money more effectively.

There will be highs and lows throughout your journey. However, it’s crucial to stay positive throughout and keep your eyes on the prize: manifesting money for financial freedom. Otherwise, you’ll stop believing in yourself and your dreams. 

Establish Short And Long Term Goals

Now that you’ve started thinking with a wealthy, positive mindset, it’s vital to make goals for yourself. These targets shouldn’t be impossible to reach but should be hard enough that you have to work for them. 

You want to make these goals difficult enough that when you hit them, you can pat yourself on the back and smile. You’ll only then realize how much money you’ve manifested along the way. 

Making monetary goals can best be solved with a budget. Using a 50% needs / 30% wants / 20% savings split, you can aim to save a certain amount of money within a few months. 

For example, say you make $1,000 every month, and you set a goal to save $600 in the next three months. You might set aside $200 every month in your budget for the next three months and add it to your high-yield savings account. Once you hit that goal, you’ve built a savvy emergency fund. Well done!

Goals on a monthly timeframe are pretty short-term. What about long term goals? Do you want to start saving money for your kid’s college aspirations? We can do that too!

I know my parents did their best to set aside some of their paychecks every year to help get me to college. Maybe you want to aim to save $25,000 over the next ten years. While that might be a daunting number, the math makes it more achievable.

To save that amount of money, you’d need to set aside $2,500 every year. Or about $210 every month. Not including the interest you’ll earn or the profit from investing smartly.

These goals can seem lofty at first, but break them down and realize that they can be achievable.

A Key To Manifesting Money Is Surrounding Yourself With Positivity

“Surround yourself with only people who are going to lift you higher.” – Oprah Winfrey

Few things impact our lives as much as those that we surround ourselves with. Being at an Ivy League university, I’m immediately surrounded by classmates who study around the clock, push themselves, and talk about their dreams.

It inspired me to work harder and to explore what I want to do with my life. So as you look around, find people that encourage you and lift you.

You’ll manifest money more easily if you surround yourself with the right people. These people can help keep you motivated, serve as a resource, and ensure you stay on the right path. 

Be An Investor

An investor is someone who puts their money into things intending to make a profit.

They would never leave their money under a pillow or in a piggy bank. Instead, they’re always looking for ways to make their money grow. Investors are constantly researching and putting their cash to hard work. They typically think long-term as well. 

How can you be an investor to start manifesting money?  

The first thing to realize is that investing is not as daunting as it can be. Movies like “The Wolf of Wall Street” or “The Big Short” make investing seem risky and chaotic. However, in reality, investing can be simple. 

In fact, you don’t even need a finance degree or to have worked in Wall Street to invest wisely. I speak from experience here!

One of the easiest ways to get started is to invest long-term in your retirement. By choosing to invest in retirement, you’ll ignore many of the challenges that make investing hard. Moreover, by thinking about retirement early, you’ll manifest enough money to retire comfortably. 

Remember: this is a long-term game. Nothing in life comes instantaneously, and the rule holds for manifesting money. 

Perhaps the next easiest way is to invest long-term into exchange-traded funds (ETFs) or index funds. We talk more about them in our index funds article, but in simple terms, they are a very safe investment that even an investor like Warren Buffet recommends. 

I highly recommend you start thinking about what you can do with your existing cash. Make sure you’ve thought about putting your funds towards retirement. Explore what and how exchange-traded funds (ETFs) and index funds can be used to your advantage. 

By acting like an investor, you can manifest money right before your eyes.

Get A Hold Of Your Current Situation

To manifest money, it’s paramount to look at what you have now and make sure you’re covering all the gaps. Why?

You wouldn’t want to miss out on easy opportunities to manifest the most money possible. For example, moving your money from a standard to high-yield savings account will instantly grant you interest rates about 15-20x higher than the norm. And this simple action takes less than 15 minutes to do. 

Manifesting money can be as simple as looking through your current situation and seeing what easy things you can do to maximize your passive income. That might mean cutting debt interest rates or finding better savings accounts. 

Tackle Your Debt

Do you have debt with extraordinary high-interest rates that strip all your monthly income? Private student loans that ask for every dime of money you have left? Is there credit card debt hitting you hard?

If any of these apply to you, then you aren’t alone. About 55% of all Americans say they have some degree of credit card debt. About 10% even report having over $5,000 in credit card debt. Considering that most credit cards have interest rates ranging between 10 to even 25%, that’s a lot of interest.

To manifest money the most money possible, you must remember to lower your expenses and monthly debt repayments. 

Your first play should be to look into loan refinancing (refi). Refi can help you save tens of thousands of dollars. Furthermore, just looking at your options is generally free and only takes a few minutes. 

Consider refinancing your student loans with Earnest, LendKey, or ELFI. They offer low rates, and you can get a quote for free.

Open High-Yield Checking, Savings, And CD Accounts

As I like to put it, not opening a high-yield checking, savings, or CD account is quite literally like leaving free money on the sidewalk. 

If you don’t have a high-yield account right now, I recommend you open one right after reading this section. They have interest rates 15-20x higher than standard accounts.

To put that rate in perspective, say you and your friend both had $10,000.

You open a high-yield savings account with a 2.00% APY, whereas your friend opens a typical savings account with a 0.05% APY. Over 10 years alone, you’ll have made about $2,100 more than your friend. 

The only difference? You read into high-yield savings account for 15 more minutes than your friend. There’re no differences in maintenance, reliability, or security. 

High-yield variants exist for checking, and certificate of deposit (CD) accounts as well. By placing your funds in these accounts, you’ll start manifesting money.

Build An Emergency Fund

We’ve been talking a lot about ways to physically manifest money. However, it’s important to secure yourself against the unexpected. Otherwise, you won’t be manifesting anything.

An emergency fund is simply money set aside in case of an emergency. An emergency is a bill or unexpected expense that can’t be delayed. Like needing to fix your car so you can go to work. Or paying for a medication that you need to stay healthy. 

To manifest money, you must build yourself from the foundation. Consider opening the CIT Bank Savings Builder account to embrace a high-yield account that encourages good savings habits. 

Pop a tire in a huge pothole driving to work? Your emergency fund can help cover the cost. An unexpected event can cause a lot of trouble. If your car breaks down and you can’t cover the repair costs, you may lose the ability to get to work and lose your job. This incident alone will cause a flurry of other problems we won’t delve into. 

The point of emphasis is clear: to manifest money, you must fill in all the gaps. That includes making sure you can stay firm against the storm of life. 

Act Now

None of what you’ve read will come to life if you don’t act on it.

The most crucial step to manifesting money is to do something today. Looking through this article is simply the first step. Remember the short and long term goals section: you have to set yourself up for success.

Don’t just say you’ll do it tomorrow. Chances are you won’t do it tomorrow, next week, or in a month. I know I’ve said this to myself before and never acted on it. 

The easiest time to start something is now, but the most effective day was yesterday. Don’t fall another second behind. This is your life we are talking about.

John Ta

John Ta is an undergrad at the University of Pennsylvania and the founder of Penn’s first undergrad personal finance club, Penn Common Cents. As a first-generation college student, he had to learn everything about personal finance on his own and seeks to mend the financial literacy knowledge gap seen almost everywhere. John is currently studying for an MS in Chemistry and a BA in Physics (business & tech concentration), Biochemistry, and Biophysics and is interested in the intersections of finance and healthcare.

The post How To Manifest Money appeared first on Finance Plan Today.

What Is Laurel Road?

Founded in 2013, Laurel Road is an online-only lender with a strong presence in the loans market. Offering products ranging from student loan refinancing to personal loans, they’ve since refinanced over seven billion dollars. Laurel Road has developed a simple application to make the loan process as smooth as possible.

How Does Laurel Road Refi Work?

Student loan refinancing (refi) is when a firm like Laurel Road pays off your existing student loans but assigns you a new loan at a (usually) lower interest rate. Refi is one of the best ways to save money by reducing the interest rates on your old student loans.

Laurel Road’s refi process is designed to be as easy as possible. You can get a rate quote in minutes and completely free of charge. Customer service is available along the way to assist you if you need it at any step. 

Should I Refi My Federal Student Loans?

On the surface, your new refi option could have a lower interest rate than your federal student loans. However, remember that federal student loans have a lot of benefits. 

For example, federal loans offer public service loan forgiveness, interest-free deferment and forbearance, discharge options, and income-based repayment plans. No private lenders provide such benefits.

You must think through the refinancing decision carefully. If you plan on taking advantage of the federal benefits, then refi might not be the best choice for you. 

Laurel Road Rates, Terms, and Fees Summary

Laurel Road offers some of the best rates available on the market and doesn’t cap the amount you can borrow. Furthermore, they also charge no origination nor application fees. 

Though, they do require you to refi at least $5,000 and favor those working in the healthcare industry.

Note: the rates displayed below are for nonhealthcare student loan refi. Check out Laurel Road’s website to find rates for residents, Parent PLUS loans, or healthcare professionals.

Pros & Cons Of Laurel Road

Generally speaking, Laurel Road is one of the best refi options around. With competitive rates, excellent benefits, and a great customer service team, there’s a lot to like. In fact, Laurel Road has some of the best perks for medical and dental students that I’ve seen. Furthermore, they’re available across all 50 states.

However, they do require high credit scores and incomes. In addition, they seem to favor healthcare workers, which could be a pro or con, depending on your background. 

Pros:

• Low and competitive interest rates
• Awesome perks for medical and dental students
• Available across all 50 states
• Great customer service
• No application or origination fees
• Co-signers allowed
• Free and easy rate quotes

Cons:

• High income required
• Low DTI required
• Minimum credit score of 700
• Need to refi at least $5,000
• Co-signer release after 36 months

How Do I Qualify For Laurel Road Refi?

Laurel Road favors people with great credit scores and incomes. Unsurprisingly, Laurel Road also likes to see low debt-to-income (DTI) ratios. Though, being a top lending option, they have somewhat high entry barriers. Moreover, it seems like Laurel Road prefers to refi loans for those in medical or dental school.

Financial Requirements

• Minimum credit score of 660
• DTI ratio less than 43%
• Co-signers eligible

Individual Requirements

• U.S. citizen or a permanent resident with green card
• Working professional with four-year undergrad or graduate degrees OR an associate’s degree working in specified medical fields
• Must have graduated from a Title IV public or private institution authorized to receive federal financial aid

Laurel Road specifically differentiates eligibility for those graduating with associate degrees. If you’re looking to refi associate degree loans, you must have worked for at least 12 months in one of the following fields of study:

• Cardiovascular Technologist (CVT)
• Dental Hygiene
• Diagnostic Medical Sonography
• Paramedics
• Nuclear Technician
• Nursing
• Occupational Therapy Assistant
• Pharmacy Technician
• Physical Therapy Assistant
• Radiation Therapy
• MRI Technologist
• Respiratory Therapy
• Surgical Technologist

Make sure you fully understand the eligibility reqs. They vary for the type of degree you’re looking to refi. 

What Are Laurel Road Repayment Options?

Laurel Road provides standard loan terms of 5, 7, 10, 15, and 20 years. Interestingly, Laurel Road seems to have options to have alternative loan terms as long as you contact customer service. This fact makes Laurel Road the only other firm outside of Earnest to offer non-standard terms. Though, if you’re looking for personalized loan terms, make sure to check out Earnest!

Furthermore, Laurel Road offers the automatic electronic fund transfers (ETF) incentive. If you choose to enable auto payments through ETF, your interest rates decrease by 0.25%. 

Generally speaking, you’re expected to make monthly payments. If you want to make additional payments, no fees are applied. Instead, your extra payments will apply to your principal balance. This is a great way to shred through your loans.

Deferment & Forbearance

Laurel Road has great deferment and forbearance options. 

Since they seem to favor medical and dental students, it’s no surprise that they offer so many perks and benefits. Laurel Road allows doctors and dentists in residency to defer making full payments on their loans up to 6 months after they complete their residency and fellowship. In fact, they only have to pay a minimum of $100 per month until they finish. Unfortunately, interest will accrue during this period and must be paid off at the end of the reduced payment period. 

Furthermore, Laurel Road allows borrowers to apply for forbearance in times of economic hardship. These forbearance periods are pretty standard. They allow for you to meet forbearance payments for periods of one to three months, totaling less than 12 months over the lifetime of the loan. 

In the event of death or permanent disability, Laurel Road will forgive all remaining student loan debt. This is a nice note since some other competitors don’t explicitly mention this. 

Unfortunately, I didn’t see any notes about academic deferment. 

Is Laurel Road Safe?

It’s not my right to be the judge or jury on this matter, but I can provide facts to help you make a justified decision. 

Since its launch, Laurel Road hasn’t run into any problems with the Federal Trade Commission. Furthermore, they haven’t experienced any data breaches. Despite their clean record, there’s always a risk when submitting your sensitive personal and financial information online. Given today’s day and age, there’s no real way to avoid this problem. Trust the security holds up.

Laurel Road’s customer reviews are pretty good overall. The Better Business Bureau rates them “A-” and TrustPilot consumers rate the firm 4.3/5.0 stars. Reviewers have said that Laurel Road is “quick and easy,” “excellent,” and the “best experience [out there].” 

Will Laurel Road Hurt My Credit Score?

Yes and no. Laurel Road won’t hurt your score if you only get a rate quote. However, if you proceed with finalizing the loan, your credit score may be affected. 

In these first steps, Laurel Road only does “soft pull” on your credit score. “Soft pulls” don’t affect your credit score. However, in finalizing the loan, Laurel Road will do a “hard pull” for your full, in-depth credit history. “Hard pulls” can hurt your credit score.

Though, inquiries play a small part in your credit score (10% in FICO score). Moreover, they disappear after 24 months. Nothing much to worry about if you don’t rapidly open too many credit cards or loans.

How Is Laurel Road’s Customer Service?

Seeing their TrustPilot reviews, it seems like Laurel Road has excellent customer service. Consumers mention that they are “friendly” and are an “excellent loan company.” 

Laurel Road is well aware that running completely online can make things difficult for borrowers. Thus, they offer customer service via phone or email. 

What I Wish Was Different About Laurel Road

As a whole, Laurel Road offers some of the best rates and perks available.

However, I wish they’d have more robust academic deferment and forbearance options. While they offer many benefits for their medical and dental students, they lack opportunities for other advanced degrees. 

Moreover, they seem to like those in the healthcare industry. It would be nice if Laurel Road would be more open to refinancing associate degree loans for other sectors. 

How Does Laurel Road Fare Against Competitors?

Top Student Loan Refinance Companies

Company	Variable APR	Fixed APR
	1.86-6.01%	2.43-5.99%	Get My Rate
	1.99-5.64%	2.98-5.79%	Get My Rate
	1.99-6.09%	2.99-6.09%	Get My Rate
	1.99-6.10%	3.00-6.20%	Get My Rate
	2.99-6.06%	2.99-5.99%	Get My Rate
	1.99-5.25%	2.99-7.75%	Get My Rate

How To Get Started On Laurel Road

Laurel Road’s application process is designed to be simple and straightforward. To first get a rate quote, you’ll have to fill out a short form. The initial process is split into several brief portions, asking for your personal, academic, and employment info. 

If you end up liking your rate and loan term, then you can proceed with finalizing the loan. In these next steps, you’ll submit documents to prove your identity, income, and existing student loans. After proper submission, waiting time until approval ranges from three to six days.

If you have any questions, reach out to Laurel Road’s great customer service.

Should You Use Laurel Road? 

I think Laurel Road is an excellent choice for anyone working within the healthcare space. With awesome rates and perks for medical and dental students, not many other options can compete.

Even if you don’t think you’ll meet their criteria, it’s worth getting a rate quote anyways. Getting a quote is entirely free of charge and takes minutes. 

And even if you feel like your rate quote is good, make sure you look into other options like Earnest, ELFI, or SoFi. Each offers free rate quotes that might end up being a better fit for you. You wouldn’t want to spend thousands more because you didn’t check out Laurel Road’s competitors. 

You’ll be working with your lender for years to come. It’s worth checking out all your options before committing to anyone of them. 

FAQs

John Ta

John Ta is an undergrad at the University of Pennsylvania and the founder of Penn’s first undergrad personal finance club, Penn Common Cents. As a first-generation college student, he had to learn everything about personal finance on his own and seeks to mend the financial literacy knowledge gap seen almost everywhere. John is currently studying for an MS in Chemistry and a BA in Physics (business & tech concentration), Biochemistry, and Biophysics and is interested in the intersections of finance and healthcare.

The post Laurel Road Refinancing Review appeared first on Finance Plan Today.

What Is A Credit Score?

Your credit score is a number that lenders use to gauge your credit risk, or how likely you are to repay your loans. A high credit score shows lenders that you will probably pay back your debt, whereas a low credit score suggests the opposite. 

A low score also indicates that you have a high risk of default, which is when you decide that you can’t pay back the loan you took out. Defaults are bad for both you and the bank. They will ruin your credit score, and the lender loses a lot of money—a lose-lose situation.

Defaults and missed payments can cost lenders a lot. Thus, they are willing to give extra benefits to those with high credit scores because of the low default risk.

Your credit score plays a significant role in your life, especially when you’re about to apply for student loans, mortgages, auto loans, or credit cards. 

What Credit Scores Exist?

Unfortunately, there’s not just one magical credit score out there. That would make life too easy.

Lenders tend to focus on three:

• FICO Score 8
• VantageScore 3.0
• Their own credit score models

The FICO Score 8 is the gold standard credit score and is used by about 90% of the top lenders. Comparably, the VantageScore 3.0 is newer and isn’t used as much as the FICO Score, but has gained prominence in recent years. 

Moreover, most lenders also have in house credit score models that are hidden from the public eye. Therefore, we will only cover the FICO Score 8, and VantageScore 3.0 since information about these models are public.

While a 700 FICO Score and 700 VantageScore don’t mean the same thing, changes to one score will likely cause similar changes in the other. 

Why Is Your Credit Score So Important?

Your credit score plays a critical role in deciding your approval odds and interest rates. Furthermore, in terms of mortgages, a minor boost of 25 points to your credit score could save you thousands of dollars. 

Let’s glance at the table below, which showcases the average fixed interest rates for a 30-year $100,000 mortgage at differing ranges of credit scores.

Bumping your credit score just about 25 points from 640-659 to 660-679 could save you about $8,000. That’s a lot of savings for such a small bump to your credit score.

Now, say you pushed your score to somewhere to 760-850. This move could end up saving you about $20,000. Crazy!

We’ve been talking about mortgages, but what about credit cards?

The best credit cards are available to those with higher credit scores. Lenders are willing to reward their consumers with the lowest risk of default since the defaults cost far more than a few more cashback percentage points.

Moreover, a low credit score could make it hard to get approved for a mortgage, credit card, and student loan. It might even make it difficult to rent an apartment or get a job. Consequently, being proactive about your credit score is vital. 

What Is A Good Credit Score?

What defines a “good credit score” honestly differs from lender to lender and from model to model. However, a good score is typically considered “middle-of-the-pack.” Not as good as an excellent score, but better than a poor score.

What Is A Good FICO Score?

FICO Scores are subdivided into the following five tiers:

• Exceptional: 800-850
• Very good: 740-799
• Good: 670-739
• Fair: 580-669
• Very poor: 300-579

In 2019, the average FICO Score in the United States was 703, meaning the typical American had a good credit score. According to Experian, only 8% of those with good scores are likely to default on their loans. Thus, those with good scores generally start tapping into some of the better products available on the market. 

What Is A Good VantageScore?

VantageScore 3.0 is also similarly divvied up into groups:

• Excellent: 781-850
• Good: 661-780
• Fair: 601-660
• Poor: 500-600
• Very poor: 300-499

Notice that the range for good VantageScores varies much more than that for good FICO Scores. Despite both scores ranging from 300 to 850, this differentiation just goes to show just how much the two models differ from one another. 

Since good VantageScores seem to take the upper end of the spectrum, it’s no surprise that applicants with these scores can get approved for more competitive products. 

Wait, Aren’t There More Credit Scores? 

Yes, there are many more types of credit scores with their own definition of “good.” However, given that these models’ scoring systems are kept under wraps and aren’t as widely used as the FICO and VantageScore, it’s not worth worrying about them too much. 

Most major swings in your FICO or VantageScore will reflect across all your scores. Don’t start watching every score possible with eagle eyes. It’s not worth your time and energy.

What Is A Good Score For A Mortgage?

Lenders typically see FICO scores above 760 as enough to qualify for the best rates and terms available. At this level, you’ll get the lowest interest rates. Lenders view you as a safe investment and treat you nicely.

Any score above 760 won’t help you that much. It’s just extra credit at that point. 

Mortgages also come in all shapes and sizes, and your credit score still plays a significant role in influencing factors. For example, FHA loan down payments depends on your credit score. 

• Credit score greater than 580: 3.5% down payment
• 500-580: 10% down payment

Moreover, you can apply for USDA mortgages with a good credit score. USDA loans offer low-interest rates, don’t even require a down payment, and have other great perks.

A good credit score will save you money and help you qualify for the best mortgage options available. 

What Is A Good Score For An Auto Loan?

Most people will need to take out a loan when getting their first car. Thus, your credit score unsurprisingly plays a significant role in deciding your approval odds and interest rates.

Generally speaking, having a credit score of 660 at minimum will qualify you for competitive rates. A bad credit score will lead to much higher interest rates and make car insurance premiums skyrocket. 

Once again, a good credit score will save you thousands of dollars in the long run.

What Is A Good Score For A Credit Card?

Although it’s hard to quantify precisely what score is needed to get the top credit cards available, the trend is that the higher your score, the easier it is to get the best cards around. 

However, you’re eligible for some great credit cards once you start hitting a score around 700. 

What Affects My Credit Score?

Several factors are involved in calculating your credit score. However, since the FICO Score and VantageScore are different models, they use various components and weights. 

Though drastic changes to one score will lead to similar changes in other scores. For example, making a late payment 30 days past the due date will hurt your FICO and VantageScores. 

FICO Score

The FICO Score is the oldest and most widely used credit score model. It’s broken down into five different categories:

• Payment history (35%) – have you missed any payments?
• Credit utilization (30%) – do you use less than 30% of your total credit limit?
• Average account age (15%) – how old is the average age of your credit? 
• Credit inquiries (10%) – how many credit cards have you opened in the past year?
• Credit mix (10%) – do you have a good combination of credit cards, loans, and other accounts?

One of the biggest factors differentiating between the FICO and VantageScore models is that your FICO Score factors in all open and closed accounts in your account age. The VantageScore 3.0 only looks at open accounts. This factor can lead to stark differences between the two scores, especially after closing an older account. 

VantageScore

The VantageScore 3.0 is a model that has more factors and awards individuals for good debt-paying behaviors. For example, by paying off your mortgage, you’ll reduce your debt, boosting your VantageScore 3.0 but not your FICO Score. 

• Payment history (40%) – have you missed any payments?
• Average account age and type of credit (21%) – how old is the average age of your credit?
• Credit utilization (20%) – what percent of your total credit limit do you use? 
• Total balances/debt (11%) – how much debt do you owe?
• Recent credit behavior and inquiries (5%) – how many credit lines have you opened in the past year?
• Available credit (3%) – how much credit do you have?

How Can I Monitor My Credit Score?

Watching your credit score is one of the best ways to start improving it. By keeping your eyes on your credit score, you can:

1. See your credit score building efforts come to life
2. Guard against identity theft
3. Find mistakes in your credit score

Some credit monitoring companies like Credit Karma and Credit Sesame offer their services completely free of charge. They also provide additional services and tools, such as debt monitoring, credit score simulators, and free tax filing.

How Can I Get A Good Credit Score?

We all want to improve our credit score, but it can seem like a daunting task. 

If you’re trying to increase your credit score, it’s essential to make sure you first fully understand how your credit score works. Then, make sure you have looked into tools such as Credit Karma and Credit Sesame to ensure you have ways to watch your credit score. 

Once you’ve done those two steps, you can start exploring ways to help your credit score.

Getting your credit score up to a good range could save you thousands of dollars and give you lower interest rates. You can use a few techniques to easily boost your credit score, but they vary by how much time you have before you plan on using your credit score. See the timeline below! 

Check Your Credit Report For Errors

Sometimes the credit bureaus make mistakes on your credit report. The Federal Trade Commission estimates about 20% of consumers have errors in their credit scores. 

Unfortunately, it takes months for errors to be corrected.

Thus, if you plan on using your credit score, make sure to thoroughly examine your credit six months beforehand. This timeframe will give you plenty of time to file a dispute.

Pay Off Your Credit Cards

Your credit card utilization is worth 35% of your FICO score. This ratio is representative of your credit use divided by your total credit limit. 

The lower your credit utilization, the higher your credit score.

The great thing about this utilization ratio is that it resets every month. Therefore, you can minimize your utilization in the months before using your credit score.

One to three months beforehand, pay off all your credit cards weekly. This move will keep your utilization ratio near 0% when your card company reports your utilization to the credit bureaus.

A 0% utilization ratio makes the FICO and VantageScore algorithms very happy, and you’ll see your credit score quickly rising. 

Become An Authorized User

Say you have a poor credit score, but your dad has an excellent one. He has had a credit card for over 30 years, hasn’t missed a single payment, and has a giant credit limit.

If your dad adds you as an authorized user (AU) to his credit card, all of his credit cards’ history add to your credit report. This excellent history will give your score an enormous boost. Simply put, your credit score will piggyback off of other’s excellent credit histories. 

Becoming an AU will affect your credit score either immediately or in a few weeks. Given that AUs can really help your score, it’s best to become one at least a month beforehand to ensure the effects settle down. 

Use Credit Score Boosting Tools

Disclaimer: some of these tools may cause unintended consequences. For example, Experian Boost has been noted to worsen your debt-to-income ratio.

Experian Boost is a free tool that factors on-time utility and telecom payments that aren’t typically used in credit score calculations. This method will likely give your VantageScore 3.0 an immediate boost.

Experian Boost effects aren’t permanent, and you can remove them from your score at any time.

What Can I Do To Get Excellent Credit?

You’re shooting for the stars now. If you want to achieve an excellent credit score, make sure you have read the previous section first. The techniques here will hopefully help you fill in the cracks. 

Open A Credit Card With Good Habits

Opening another credit card on your history can be beneficial. Presuming you maintain excellent credit card habits, you’ll rake in credit score boosts.

Firstly, your credit utilization ratio will decrease. This new card will increase your total credit limit and increase the denominator in your credit card ratio. Thus, your ratio becomes smaller. 

Next, if you maintain a good repayment history, then the payment history portion of your credit score will also improve.

Finally, adding a credit card could improve your credit mix.

However, opening too many credit cards could hurt your credit score. Every time you apply for a credit card, the lender will do a “hard pull” on your credit report, which will temporarily ding your score for 24 months.

Getting a new card has a tangible effect on your credit score after just a few weeks, but positive effects increase the longer you wait. Note that everything we’ve just described also applies to secured credit cards.

Ask For Credit Limit Increases

Remember that your credit utilization comprises 35% of your credit score. 

By contacting your existing credit card issuers and asking for a credit limit increase, you will effectively decrease your credit utilization ratio. The lower your ratio, the higher your credit score.

It also doesn’t hurt to try. The worse they can say is no, and these few extra points could help bump your credit score.

Do Lenders Only Look At Your Credit Score?

Definitely not. Depending on what you’re applying for, lenders will typically ask for more information. Other factors include your debt-to-income ratio, income history, down payment, and loan-to-value ratio, which are critical additional measures to gauge your default risk. 

For instance, when applying for a mortgage, lenders will request for everything. Considering they’ll be giving you hundreds of thousands of dollars, they want to make sure that they can get that money back. 

Whereas when applying for a credit card, the lender typically won’t be giving you too much money. Thus, they’ll generally only delve into your credit score and income. 

Frequently Asked Questions (FAQ)

John Ta

John Ta is an undergrad at the University of Pennsylvania and the founder of Penn’s first undergrad personal finance club, Penn Common Cents. As a first-generation college student, he had to learn everything about personal finance on his own and seeks to mend the financial literacy knowledge gap seen almost everywhere. John is currently studying for an MS in Chemistry and a BA in Physics (business & tech concentration), Biochemistry, and Biophysics and is interested in the intersections of finance and healthcare.

The post What Is A Good Credit Score? appeared first on Finance Plan Today.

What Is Credible?

Credible is an online-based loan marketplace similar to Upstart, and was founded in 2012 simplifying the loan hunt process. Based in San Francisco, they’ve since established themselves as one of the top competitors in the industry. Credible prides itself on creating a streamlined and straightforward application to make it easy to find your perfect loan.

It’s important to remember that Credible is not a lender, credit union, or bank. Instead, they serve as a middleman to connect you to a loan that best suits your needs.

What’s A Loan Marketplace?

Imagine applying for a job. You look at the info and see if it would be a good fit for you. You then fill out one application after another, submitting 10, 25, maybe even 100 applications. It can get tedious and mind-numbing.

What if you had a tool to fill out one application submitted to over 100 companies at once?

Finding a loan is almost exactly like finding a job. Except Credible exists to make the entire process as simple as one application.

All you need to do is fill out one form, and then Credible connects you to potential lenders. This method saves a ton of time and makes the loan-hunting process as stressfree as possible. Furthermore, Credible lenders offer some of the lowest and most competitive rates available.

What Products Does Credible Offer? 

Credible helps connect consumers to a variety of loans, including: 

• Private student loans
• Student loan refinancing (refi)
• Personal loans
• Mortgages
• Mortgage refinancing
• Credit Cards 

One of the remarkable things about Credible is that they charge no fees for their services. Literally, you can try their loan marketplace for zero dollars. 

Credible divvies up the entire loan hunting process into three, easy steps:

1. Fill out a short prequalification form to see individualized rates and find loan options that best fit your situation

Credible asks a few simple questions to estimate what your credit profile looks like. For example, they’ll want to know what school you’re attending, what your income looks like, and how much you want to borrow. Afterward, Credible’s technology matches you with the best options available.

Filling out this form has absolutely no obligations. You won’t have to pay a dime, nor will it touch your credit score. 

2. Compare loan options and select ones that best fit your requirements

Once you’ve completed the prequalification form, you’ll be able to see personalized loan options from up to eight lenders. These numbers are quotes based on the information you provided Credible earlier. 

3. File a full application with the lender

Although you might see the perfect loan based on rate and term length alone, consider your options carefully. Explore whether the lender offers forbearance and deferment options to help you through tough times. Moreover, since Credible doesn’t provide loans from every lender possible, we recommend you check out your options on ELFI and Earnest. 

Credible also has “Best Rate Guarantee,” where they’ll give you $200 if you close a loan with a better rate without Credible. That’s how confident Credible is about their loan matching process. No other competitor does this, cementing Credible’s reputation. 

What Are Credible’s Basic Requirements For Loans And Refi?

Generally speaking, it’s hard to sum up all of Credible’s requirements to qualify for a loan or refi because it consolidates so many lenders in one space. Each lender is unique, so it would be impossible to put everything into a few bullet points. 

However, generally speaking, Credible requires applicants to:

• Be 18 or older
• Be a U.S. citizen or legal resident with a Social Security number (SSN)
• Have a minimum credit score between 670 to 700 for refi
• Meet minimum income requirements
• Have a low debt-to-income ratio
• Loan a certain amount at a minimum

Each loan has some specific or stringent requirements, but these are the ballpark requirements. For example, private student loans and refi require you to be an eligible student, whereas mortgages will need more information about your income and credit history. 

Private Student Loans

Finding the perfect private student loan you need for tuition, room and board, transportation, food, or the latest tech has never been easier. Credible loans have some of the lowest and most competitive rates in the market. They also offer a ton of guaranteed benefits by finding loans with them, such as:

• No origination fees
• Zero prepayment fees

Besides, you can apply alongside a co-signer, which Credible claims to boost your qualification chances threefold. Many lenders offer co-signer release, which is excellent news for anyone considering co-signing for their loan. An additional innovative feature is the ability to compare your rates with different co-signers. 

Credible offers loans from well-known and trusted lenders such as Ascent, Citizens Bank, College Ave, Discover, and Sallie Mae. 

Student Loan Refinancing (Refi)

Credible makes the refi process as simple and streamlined as possible. The entire process is entirely free as well, charging no origination, service, and prepayment fees. 

You can refi federal student loans, private student loans, or Parent PLUS loans. Refinancing your loans can save you thousands of dollars.

For example, imagine you currently had a $100,000 private student loan with a 5% APR and a loan term of 10 years. Every month you’d be paying around $1,000 to pay your loan off in time. 

However, if you refi your loan successfully to a 3% APR with the same loan term, you’d end up saving about $11,000. For just an hour or two of applying and researching refi options, you could save thousands of dollars. 

Credible refi can help relieve co-signer obligations on your existing loans as well. 

While refi might sound exciting, it’s crucial to remember that these are big decisions and that you should thoroughly research your options. Always check out other lending marketplaces to see if they have better choices!

Should I Refi My Federal Student Loans?

On the surface, your new, shiny refi option could have a lower interest rate than your federal student loan. Despite this, it’s key to keep in mind that federal student loans have many benefits. 

For example, these government loans offer public service loan forgiveness, interest-free deferment and forbearance, discharge options, and income-based repayment plans. No private lender provides such assistance. 

A decision like this should be carefully thought out in terms of whether you plan on taking advantage of any of the federal benefits, and the savings you could get from refinancing your loans.

Read more about whether you should refinance your student loans!

Personal Loans

Have you been searching for ways to consolidate your debt, refinance your credit card debt, or improve your home? Credible can help match you to the perfect personal loan.

Personal loans range from $1,000 to $100,000 and could save thousands of dollars, depending on the situation. Typically, once you complete the loan application and qualify, you get your money within the next business day or week. 

Credible offers personal loans from trusted banks, lenders, and credit unions such as Goldman Sachs, SoFi, LendingPoint, and Avant. 

Mortgages

Credible makes the mortgage hunt process as “pain-free” as possible. As a mortgage broker, they help you find the best options possible. 

Their application process is similar as usual, but Credible mortgages can be completed end-to-end through their website. All you need to do is submit some additional documents, including your tax returns, and let them process the mortgage.

They even offer loan officers with decades of experience to assist you. These officers are not commissioned, so they have no reason to try to upsell you a mortgage. 

Other benefits include data privacy, automatic updates, and bank integration. The Credible mortgage process is simple and straightforward, modernizing the typical lengthy application process.

Mortgage Refinancing

If you currently are in a bad mortgage situation with high rates and lengthy loan term, you may want to consider mortgage refi. Per the theme of this article, Credible strives to make that process as streamlined as possible, minimizing the forms involved.

Amazingly, you can complete the entire process end-to-end on Credible’s website. You begin by completing the prequalification form to uploading documents as the final step. 

Unfortunately, Credible lenders typically charge a 2-6% commission for refinancing your loan. Other fees such as origination charges, appraisal fees, mortgage or homeowners insurance, and application fees may arise, depending on the lender. It’s important to look through the other charges carefully since they vary wildly by the lender. 

However, using Credible to find your loan is entirely free. It’s just the process of finalizing the refi that could incur charges. 

Is Credible Safe?

It’s not our right to be the judge and jury on this. Though, we can provide you the facts to help you make a justified decision. 

Credible hasn’t run into problems with the law nor has reported any major data breaches since its founding. However, there’s always an inherent risk when giving your sensitive personal and financial information online, even to trustworthy companies. 

Moreover, Credible is highly rated, furthering its trustworthy reputation. The Better Business Bureau rates the firm an “A+,” and TrustPilot consumer reviews rank Credible 4.7/5.0 stars. 

Will Credible Hurt My Credit Score?

Credible itself won’t hurt your credit score, but the lender they connect you with can touch your credit score. 

Remember that Credible is merely the middleman in the transaction. While Credible will only do a soft pull on your credit score, the actual lender will do a hard pull to fully gauge your credit history.

However, credit inquiries play a small part in your total credit score (10% in FICO score), and hard pulls only last 24 months. 

How Does Credible Make Money?

It’s probably hard to believe that Credible is offering all these well-designed services for free. Heck, even their user interface is crisp, clean, and easy-to-use. But where are they getting their money?

Credible makes money for every successful loan. Think of Credible as a merchant selling art. If the merchant sells the art, then they can take some commission for their marketing services.

It’s actually in Credible’s best interest to try and match you to the best possible loans. Remember that every signed dotted line makes them the most money, not necessarily just showcasing random loans.

Thus, you can see Credible’s keen efforts to make the loan hunting process as streamlined as possible. Beautiful graphics and a pleasing dashboard make everything feel as friendly and open as possible. 

How Is Credible’s Customer Service?

Being an online-only service provider, it’s vital to have good, accessible customer service options. Credible offers a few different options:

• Email them at [email protected]
• Call them at 866-540-6005
• Online chat on their website

What I Wish Was Different About Credible

To be honest, after thinking about this for a while, there’s not a whole lot Credible can change to become better. They’re currently one of the best loan marketplace tools out there. 

Some of their negatives are problems that every other loan marketplace faces, including requirements on U.S. citizenship and that quotes can differ between the actual lender offer. The latter is because Credible only acts as a middleman, and sometimes, information between them and the lender can get a little messy, leading to misunderstandings and misinformation.

Perhaps they could extend their lending partners to provide more options, but then again, no lending marketplace is perfect in this aspect either. Thus, we’d recommend using other lending marketplaces, such as LendKey, to get a wide variety of options. 

How To Get Started With Credible

Credible is incredibly easy to get started with. All you need to do is first fill out the quick and simple prequalification form, explore through your options, and submit a full application to close the loan.

Credible’s entire website is beautifully designed, and the user experience is as sleek as it can be. Remember that the whole service is free and doesn’t hurt your credit score, so it’s worth checking out if you’re considering getting a loan for anything. 

Should You Use Credible?

If finding the perfect loan is on your mind right now, we believe Credible is one of the best ways to be matched to a loan best suiting your needs and credit history. Given that the tool is entirely free-to-use and that many previous consumers have rated them highly, they are a great place to start.

Though, it’s worth mentioning that Credible doesn’t offer loans from every lender possible. Thus, it’s still an excellent idea to look into LendKey, Earnest, and ELFI to see some other loan options. You wouldn’t want to miss out on potentially lower rates because that lender wasn’t in Credible’s network. 

John Ta

John Ta is an undergrad at the University of Pennsylvania and the founder of Penn’s first undergrad personal finance club, Penn Common Cents. As a first-generation college student, he had to learn everything about personal finance on his own and seeks to mend the financial literacy knowledge gap seen almost everywhere. John is currently studying for an MS in Chemistry and a BA in Physics (business & tech concentration), Biochemistry, and Biophysics and is interested in the intersections of finance and healthcare.

The post Credible Review appeared first on Finance Plan Today.

In 2016, over 10% of people over the age of 16 reported that they were victims of identity theft last year. In fact, identity theft can ruin your life. Having the ability to watch your credit score is vital to fight identity theft. 

Free tools such as Credit Karma and Credit Sesame have come out in the past decade providing robust credit score tracking. However, which one comes out on top? What are each’s pros and cons? Are they safe to use? 

In this article, we’ll compare the two platforms and decide if either is better than the other.

Overview: Credit Karma Vs. Credit Sesame

	Credit Karma	Credit Sesame
TransUnion Reports
Equifax Reports
Experian Reports
FICO Score Updates
VantageScore Updates
Monthly Credit Score Updates
Identity Theft Insurance
Tax Filing Service
Credit Simultator
Credit Improvement Tool
Debt Analysis Tool

Read our full Credit Karma review!

Read our full Credit Sesame review!

What Is Credit Karma?

Credit Karma is a personal finance company offering robust tools and benefits such as:

• Free monthly TransUnion and Equifax credit scores 
• Yearly free full credit reports
• Credit cards, loans, and other product recommendations
• Free-to-use tax filing tools
• Credit simulators 
• Calculators
• High-yield savings account

Founded in 2007, they’ve since then amassed over 100 million users and established a firm footing in the personal finance world. You’ve even probably seen some of their ads on TV. Moreover, all of their products are entirely free to use. 

What Is Credit Sesame?

Launched in 2010, Credit Sesame is a rapidly growing credit and loan company that provides:

• Free monthly TransUnion credit score (VantageScore 3.0)
• Alerts when your credit score changes
• Free credit monitoring
• Free identity theft insurance covering up to $50,000
• Debt tracking and recommendations

Their tools are handy, helping to both safeguard and estimate your credit score in a pinch. 

What Types Of Credit Scores Exist?

Unfortunately, there’s not just one magical credit score out there. Though, lenders typically focus on three:

• FICO Score 8
• VantageScore 3.0
• Their own personal credit score models

The FICO Score 8 is the most widely used credit score. Comparably, the VantageScore 3.0 isn’t used as much as the FICO Score but has gained prominence in recent years. The most important takeaway here is that they use entirely different models and weights to calculate your numerical credit score. 

For example, FICO weighs payment history at 35%, whereas VantageScore only holds it at 32% of your credit score.

Furthermore, many lenders also have in house credit score models that are hidden from the public eye. Therefore, we will only cover the FICO Score 8, and VantageScore 3.0 since information about these models are public.

While a 700 FICO Score and 700 VantageScore don’t mean the same thing, changes to one score will likely cause similar changes in the other. 

Pros & Cons Of Credit Sesame

Credit Sesame offers useful and free-to-use credit monitoring services. Moreover, their unique identity theft insurance helps differentiate them from their competitors. 

However, their free version only offers VantageScore 3.0 credit scores, which aren’t used as often as the FICO Score 8. Moreover, they only offer credit scores from one of the bureaus, TransUnion. Since each bureau is independent of each other, you can’t see mistakes on your Experian and Equifax credit reports.  

They also don’t offer FICO Scores, but this is a problem almost every free-to-use credit monitoring platform faces. 

Pros:

• Free to use
• Mobile app is user friendly
• Excellent credit score update features
• Identity theft protection
• Provides information about your debt

Cons

• Only provides information from TransUnion (VantageScore 3.0)
• No FICO Scores
• Only one TransUnion credit report a month

Pros & Cons Of Credit Karma

Generally speaking, Credit Karma is a great way to monitor your credit score. Though, not only do they offer a wide variety of tools for you to use to build your credit score but also provide countless other perks.

Even their cons are some problems that almost every other free-to-use credit monitoring company faces. For example, no free-to-use credit monitoring company has free FICO scores. 

However, one of Credit Karma’s flaws is its advertising. Since targeted ads help them make money, they will put them in front of you until you bend. A small price to pay for their endless free-to-use tools.

Moreover, they only offer credit scores and reports from two of the bureaus. You won’t be able to catch mistakes on your Experian credit report here. 

Pros:

• Free credit score monitoring and reports
• Robust and free-to-use credit score tools 
• Free tax filing software
• Calculators
• Personalized product recommendations
• Premium version has a lot of benefits

Cons

• Relentless advertising
• Doesn’t provide Experian scores
• No FICO scores

Head-To-Head: Credit Karma Vs. Credit Sesame

Credit Karma and Credit Sesame both have their fair share of strengths and weaknesses. 

Where Credit Karma Bests Credit Sesame

Credit Karma offers far more perks and benefits for using their platform. For example, while both provide excellent credit monitoring tools, Credit Karma also has Penny, the robo personal finance advisor, and a credit score simulation tool. 

If you’re looking to buy a home, open a credit card, or save money, Penny can help guide you. Likewise, if you plan on making financial moves that you think could impact your credit score, the simulation tool can give you a sense of what’ll happen. 

Moreover, Credit Karma has free-to-use tax filing. Credit Karma Tax lets you electronically complete your federal and state tax returns. They even provide tips and tricks, audit defense, and a tax support team, all for no additional costs. 

Credit Karma also has a unique feature where you can search your name through government databases to find unclaimed money. According to Credit Karma, there’s more than $40 billion sitting with state governments, and it’s up to you to claim that money.

Considering they even offer a high-yield savings account that’s FDIC insured up to $5,000,000 just goes to show the wide variety of free products Credit Karma offers. This deposit account has an APY that is much higher than a standard savings account, charges no annual fees, and integrates well within Credit Karma’s platform. 

Where Credit Sesame Beats Credit Karma

Credit Sesame’s most unique feature is its free identity theft insurance. Once you sign up for free credit monitoring, Credit Sesame automatically grants you $50,000 identity theft insurance and access to speak to identity restoration specialists. This insurance is a fantastic feature that no other credit monitoring company offers. 

Also, Credit Sesame focuses on your debt, offering automated advice on managing your debt, and providing debt tracking tools. Your “Debt Analysis” screen also breaks down your current debt into its various categories, where you can also click on each to learn more. Credit Sesame gives you detailed information on your debt and tips on improving your current situation.

It might be worth noting here that Credit Sesame is currently developing its own high yield savings account. Although you can’t sign up now, you can join their waitlist to be among the first. 

How Much Do They Cost?

The theme of this article is that Credit Karma and Credit Sesame literally cost zero dollars to open an account and receive free credit monitoring.

Though, Credit Sesame does offer a premium service in which you can receive a lot more impressive benefits.

Premium Options

Credit Sesame offers three premium paid tiers. 

Are these premium tiers worth their price tags? Personally, I don’t think the average Joe needs any of the paid subscriptions. 

However, if you fear your identity might or will be stolen, it wouldn’t hurt to invest a little money to help keep peace of mind.

Advanced Credit ($9.95/mo)

For those looking for additional and more broad credit score monitoring, the Advanced Credit plan provides the following:

• Daily TransUnion VantageScore 3.0 updates
• Monthly full credit reports from all three bureaus (TransUnion, Experian, and Equifax).  

Pro Credit ($15.95/mo)

For an extra $6 a month on top of the Advanced Credit plan, Pro Credit provides all the benefits of Advanced Credit and gives users the following:

• Access to 24/7 credit report help
• Credit monitoring with alerts from all three bureaus

Platinum Protection ($19.95/mo)

If you’re looking to secure your credit, then Platinum Protection is here to save the day. Not only do you get access to all of the Pro Credit perks, but you now also get:

• $1,000,000 identify theft insurance
• 24/7 stolen/lost wallet protection
• Black market, public records, and social security monitoring. 

How Do They Make Money? 

This question is likely something you’ve been thinking about throughout this article. 

Considering how many free products and services both offer, it must seem crazy to think that they even make money.

Turns out Credit Karma makes a lot, generating about $1 billion in revenue in 2019. Their primary source of income is through advertising and affiliate marketing. 

When you successfully sign up for a product through Credit Karma or Credit Sesame, they get paid a commission. And with over 100 million users combined, this money quickly adds up. 

This is why they charge nothing for their services. Both Credit Karma and Credit Sesame operate under the assumption that a free-to-use tool will attract more users that will eventually open up products that will generate revenue. 

It’s a brilliant strategy that even brought Intuit to acquire Credit Karma for $7.1 billion. Moreover, Credit Sesame has raised over $100 million in start-up funding as well. Something must be working if they’re raising this much money!

Are Credit Karma And Credit Sesame Safe?

Generally speaking, we believe both Credit Karma and Credit Sesame are safe and legitimate. However, as with providing personal and financial information online, there’s always an inherent risk. 

While Credit Sesame has had no problems, Credit Karma doesn’t have a clean track record with the law. In 2014, they settled charges with the Federal Trade Commission after failing to secure their users’ personal information. 

As a result of the ruling, Credit Karma must undergo security assessments every other year until 2034. Credit Karma knows that they are being watched, which is good to know as a consumer. Ironic that the credit score monitor is being monitored. 

Moreover, if someone were to hack your account and try opening a credit card, both Credit Karma and Credit Sesame ask personalized questions from your credit history to ensure it’s you. These questions are hard for hackers to answer since they cite specific details that only you’d remember. 

What’s The Verdict? 

Although Credit Karma and Credit Sesame both have their strengths and weaknesses, I believe the most sensible option is to use both of them. Why?

Well, consider the facts:

• Both are entirely free-to-use (unless you get Credit Sesame’s optional premium plans)
• Both offer robust and excellent credit score monitoring tools
• You can delete either if you don’t like them with no obligations
• Each offers unique perks that the other doesn’t necessarily have

For example, Credit Sesame has $50,000 identity theft insurance just for being a user, whereas Credit Karma has free tax filing software. Moreover, Credit Karma also has its free credit simulation tool, which can help you figure out the consequences of closing a credit card or signing up for a loan. 

I think it makes the most sense to use both since you can then cover all your bases. Furthermore, both are really easy to sign up for, taking only minutes to do so. There aren’t any downsides to downloading one or the other—only benefits. 

It also doesn’t hurt to have two tools providing you alerts in the case of any potential identity theft. However, if you’re looking for more in-depth identity theft insurance and protection, check out LifeLock. 

FAQs

John Ta

John Ta is an undergrad at the University of Pennsylvania and the founder of Penn’s first undergrad personal finance club, Penn Common Cents. As a first-generation college student, he had to learn everything about personal finance on his own and seeks to mend the financial literacy knowledge gap seen almost everywhere. John is currently studying for an MS in Chemistry and a BA in Physics (business & tech concentration), Biochemistry, and Biophysics and is interested in the intersections of finance and healthcare.

The post Credit Karma Vs. Credit Sesame appeared first on Finance Plan Today.

What Is Upstart?

Upstart is an online lender that uses unique metrics to determine your creditworthiness. Launched in 2012 by ex-Googlers, they use artificial intelligence (AI) to underwrite loans for more Americans. Upstart has since originated $6.7 billion in loans and automated 70% of all loan applications. 

Their technology has proven enormously successful, leading to 75% fewer defaults at the same approval rate as other firms. Moreover, they’ve been able to approve 27% more borrowers than other lenders using the standard models. 

Upstart is truly an innovative and entrepreneurial firm seeking to break the standard loan industry traditions. They offer personal loans for all sorts of purposes, ranging from home improvement to medical to wedding loans. 

How Does Upstart Work?

For the most part, Upstart’s loan application process is pretty standard. They’ll ask you for your credit score, income, debt, and assets. However, their novel twist is their machine learning algorithm.

Upstart separates itself from its competition through its AI-based model that gauges more than the typical lender. For example, Upstart also asks for your education, job history, major, and residence to introduce new variables that could swing approval odds and interest rates in your favor. 

For instance, say you have no credit history, but you study a major with a high median salary. Upstart might still approve you, predicting that you should have the repayment capabilities in the future. Regular lenders would probably just straight up reject you. 

Now say you had a good credit history, excellent grades, and past employment history. You’ll be more likely to be given a more competitive loan with lower rates than what other lenders can offer. 

Upstart has a reputation for approving those with little to no credit history. Typical credit scoring models would almost immediately ax these applicants. Differently, Upstart’s algorithm allows these people to be appropriately analyzed and judged for factors outside just their credit score. 

As a firm, they believe that you are more than just your credit score.

Through their innovative tech, Upstart has been able to bring more loans to a wider variety of Americans. Truly a forward-facing firm seeking to break the traditional lending methods.

Upstart Rates, Terms, and Fees Summary

While Upstart has introduced new, innovative perspectives into the lending market, they charge hefty fees. Origination fees can range from 0 to 8%, and they have one of the highest maximum APRs we’ve seen. For example, someone with a poor credit history could end up with a loan with an APR around 35%—that’s a ridiculously high rate. 

Moreover, Upstart doesn’t allow co-signers; they only let you loan for three and five-year term lengths and for amounts between $1,000 and $50,000. Be aware of the various limitations imposed when trying to get an Upstart personal loan.

According to Upstart, the average three-year loan APR was about 20%. 

Pros & Cons Of Upstart

Upstart’s novel credit algorithm has allowed them to issue loans to a wider span of applicants. However, they have competitive rates on the low end and horribly high APRs on the other side. Though, a huge pro is their ability to parse through applicants with little to no credit history.

They also have one of the best customer ratings we’ve seen as well. Unfortunately, Upstart doesn’t offer loans in every state.

Pros:

• APRs as low as 4.66%
• Maximum loans of $50,000
• Applicants with little to no credit history can apply
• No prepayment fees
• Stellar customer reviews

Cons:

• APRs as high as 35.99%
• Loans not offered in West Virginia or Iowa
• Must loan a minimum of $1,000*
• Origination fees from 0 – 8%
• Late payment fees, greater of 5% due or $15
• Minimum credit score of 600 needed
• No co-signers

*Minimum loans vary slightly by state. The minimums in MA, OH, NM, and GA are $7,000, $6,000, $5,100, and $3,100. 

How Do I Qualify For Upstart Loans?

Remember that the beautiful thing about Upstart is that they’re willing to look at applicants with little to no credit history. However, if you do have sufficient credit history, generally, a score of 600 is required at a minimum.

Financial Requirements

• Must have a regular source of income or prove you have a job offer in the coming six months making at least $12,000
• If you have a credit history, a score of 600 is generally required at minimum
• Look to get a loan of at least $1,000*
• No recent bankruptcies or delinquent loans 
• No more than six recent hard inquiries 

Individual Requirements

• US citizen or a permanent resident
• Don’t live in Iowa or West Virginia

*Minimum loans vary slightly by state. The minimums in MA, OH, NM, and GA are $7,000, $6,000, $5,100, and $3,100.

What Are Upstart Repayment Options?

Unfortunately, Upstart offers limited loan terms for only 3 and 5 years. You can make your payments monthly electronically or via mail-in check. Furthermore, if you want to pay off your loan early or make larger payments, there are no fees.

Generally speaking, the shorter the loan term, the lower the APR you’ll end up with, and the less money you’ll end up paying in the long run. 

Who Should Use Upstart?

We think that Upstart is best for those with average credit scores or little to no credit history. Since Upstart will look at you even if you have a nonexistent credit history, they might approve your loan if no other lender will.

However, if you have a more robust credit history, you should gauge all your options. Upstart has extensive origination fees and somewhat high-interest rates that can be unappealing if you have better options.  Firms like Earnest and LendKey might have lower fees.

Will Upstart Hurt My Credit Score?

The answer is yes, and no.

During the loan matching process, Upstart only does a “soft inquiry” on your credit history. “Soft pulls” do not affect your credit score.

However, if you choose to finalize a loan and sign the dotted line, you could temporarily hurt your credit score. The lender will do a “hard inquiry,” which gives a thorough and complete report on your entire credit history. 

Though, “hard inquiries” have a small effect on your credit score. Your credit score only factors inquiries for 10%. Moreover, these pulls only stay on your credit report for a maximum of 24 months. Therefore, your credit score will go back to normal pretty quickly.

How Is Upstart’s Customer Service?

Upstart has some of the best consumer reviews we’ve seen.

Over 6,000 Trustpilot reviews rate Upstart 4.9/5.0 stars. Clients noted that Upstart’s process was “quick, easy, and wonderful,” and that everything went “smoothly.” Moreover, Upstart has been an accredited business with the Better Business Bureau since 2015, even scoring the elusive “A+” rating. 

They are indeed a business that emphasizes the customer experience.

You can contact Upstart via email or phone. Their calling hours are as follows:

• Mon – Fri, 9 AM – 8 PM ET
• Sat & Sun, 9 AM – 8 PM ET

What I Wish Was Different About Upstart

Generally speaking, Upstart is a fantastic platform and company. There’s not too much I would change except for a few minor things:

• A slightly more transparent website displaying more information
• Better rates for those with excellent credit scores
• Lower origination fees

Though Upstart is still an excellent place for those with average or nonexistent credit scores.

How To Get Started On Upstart

Like previous consumers have cited, Upstart is really easy to use.

The entire process is online, and you’ll need to give them your personal information, including your name, social security number, and income. Given Upstart’s unique model, you’ll also need to provide them with your academics, major, GPA, and prior employment history to weigh if you’re eligible for better rates or approval. 

If you prequalify, you can see your quote and then proceed with finalizing your loan. The final steps may require you to submit documents to prove some information, such as your transcript. Finally, you just need to sign the dotted line. 

You can apply for your loan end-to-end on Upstart’s website. A smooth, clean process.

Are There Referral Bonuses?

Unfortunately, this doesn’t seem to be the case. If you’re looking to take advantage of referral bonuses, you might want to take a look into the likes of Earnest.

Should You Use Upstart

I think Upstart is an excellent choice, especially if you have an average or little to no credit score. Most traditional lenders might not even approve you or provide terrible rates, whereas Upstart will weigh non-traditional variables to help your approval odds and rates.

Furthermore, given that you can get a quote free of charge, there’s no real downside to not at least trying out Upstart. Their customer service is truly incredible, and they’re more than willing to help you through the process.

However, even if you get an offer with Upstart, make sure you look through all your options. You never know if a competing lender like Earnest or LendKey has better personal loan options. 

FAQs

John Ta

John Ta is an undergrad at the University of Pennsylvania and the founder of Penn’s first undergrad personal finance club, Penn Common Cents. As a first-generation college student, he had to learn everything about personal finance on his own and seeks to mend the financial literacy knowledge gap seen almost everywhere. John is currently studying for an MS in Chemistry and a BA in Physics (business & tech concentration), Biochemistry, and Biophysics and is interested in the intersections of finance and healthcare.

The post Upstart Review appeared first on Finance Plan Today.