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How to Choose the Right Career For You

Step 1: figure out your ideal work environment

Do you dream of being in the office of a fast-paced startup, or would you prefer to spend your days working outdoors? Do you enjoy interacting with people, or would you rather have a more solitary job? Consider what your perfect workday looks like to get started on finding the right career to fit it.

Step 2: determine how high of a salary you’d need

Next, take a look at your financial goals and what level of salary you would need in order to reach them. Do you have debts to pay off? Do you want to buy a home? Is being able to afford regular vacations important to you? Have a range in mind for the type salary your goals will require and the lowest salary amount you’d be willing to accept.

Step 3: weigh all factors to decide what’s most important

When you’re choosing a career, some factors may weigh more heavily than others. Would you be willing to take a lower salary if it meant being in a job you’re truly passionate about? Do you love being around people, but would rather have a more isolated job if you got to be outside all day? Rank all the aspects that are important to you and know which ones you would forgo if you had to.

Step 4: research jobs to find ones that match your needs

Research is crucial for finding a career that fits you and your needs. Search online at sites such as Payscale and the Bureau of Labor Statistics for jobs that match your ideal scenario, and then read more about each one to make sure it’s actually what you’re looking for and if there are enough job opportunities near you. After all, you don’t want to go through all the work of entering a new career, only to find out the day-to-day isn’t what you thought it would be or that job prospects around you are slim.

Step 5: note any education/experience requirements

Finally, once you’ve determined what careers are right for you, you’ll want to make sure you know about any education or training levels required by the job. Some might require a doctorate and several years of training, while others may only require a certification and less than a year of training. The last step in finding out the best career path for you is to understand how to get there!

#career #jobseekers #climb credit

How to Choose a Tuition Payment Method That Works for You

Upfront, in full

If you have enough money in savings to cover tuition and living expenses, you may want to pay out of pocket. While this option does have the highest upfront cost, you won’t owe any money in interest, and you won’t have to worry about making monthly payments!

Highest upfront cost — full tuition paid at once

No interest

No credit check

Pro-tip: if you’re able, paying upfront is the best option — you won’t owe interest, you won’t have to worry about remembering payments, and your credit won’t be impacted. Since education programs can cost thousands of dollars, check out if there are any scholarships available to use for your program that can help ease the tuition amount!

Interest-free payment plan

For students who are unable to pay the full cost of tuition at one time, many schools offer payment plan options that spread payment out over the duration of a course.

Because these plans come with zero interest, you’ll pay less overall than with a loan. However, the payments are usually spread over a much shorter period of time, so your monthly payments will be higher.

Payments spread over a short period of time — higher monthly payments than a loan

No interest

No credit check

Student loan

A student loan can be a good option for people who need to make smaller monthly payments, rather than in larger payments or all upfront. While many career training programs don’t offer federal student loans, private student loans can still be available. Depending on the products available for your program, you may have the option of full deferral, interest-only deferral, or immediate full repayment.

There are some things you’ll want to keep in mind — these loans come with an interest rate, so you’ll ultimately pay more than the tuition amount. Your credit will also be pulled once loan funds are sent, so your credit score may be impacted.

Payments spread over a longer period of time — lower monthly amounts than with payment plans

Usually has an interest rate

Includes a credit check

Pro-tip: even with a deferred loan, interest will build up while you’re in class. If you’re able, a good idea is to make interest payments during your program, so you won’t be faced with a larger principal amount once your repayment period begins!

#student loans #financial literacy #climb credit

Where to Learn to Code for Free

App Academy Open

In signing up for App Academy Open, you’ll access more than 1,500 hours of completely-free curriculum that includes machine learning, data science, data structures, computer programming languages, and building frameworks for iOS and Android mobile apps — as well as how to apply these skills, step-by-step, in real-world applications. And if you’d like additional support, you’ll also have the option of utilizing the $29.99/month mentorship program for features such as an instructor-led chatroom with the opportunity to work alongside other App Academy Open students!

Visit App Academy Open

Codecademy

Codecademy is a popular platform for beginning a coding journey. You can start from square one, or you can evaluate your skills to find the level that suits you the best. And their instant-testing of coding skills (including HTML & CSS, JavaScript, PHP, Python, Ruby, Angularjs, The Command Line, and more) allows you to learn and practice in real-time to make sure you’re understanding concepts correctly.

Visit Codecademy

freeCodeCamp

freeCodeCamp.org is a nonprofit that offers around 3,000 hours of coding curriculum, but they also go beyond that. Once you’ve finished learning to code, they’ll give you the opportunity to work on projects for other nonprofits. This way, you’ll get hands-on, real-world experience while earning your free certification.

Visit freeCodeCamp

Khan Academy

Like freeCodeCamp, Khan Academy is also a nonprofit — however, rather than focusing on tech, they instead offer a wide range of programs. While their selection of coding classes may not be as robust as other platforms, they are a great place for beginners and even provide courses for young children, to begin building their skills early!

Visit Khan Academy

Coursera

Coursera also opts not only to offer courses in which to learn to code, but also a range of programs provided through other colleges, universities, and companies. Although, while there are several free courses available in addition to paid, any certifications would only be accessible through their paid options.

Visit Coursera

Udemy

Similar to Coursera and Khan Academy, Udemy offers courses covering a variety of topics, which includes a section on coding. And although most of their courses are paid (costing roughly $20–$200 each), they do have some free options available as well — although you’ll only be able to view the video content. Any certifications or instructor interactions are only included in their paid programs. Additionally, you’ll want to make sure to check star ratings, reviews, and instructor credentials, since anyone can add a class to Udemy’s site!

Visit Udemy

#csedweek #learn to code #computer science #coding #coding bootcamp #coding resources #climb credit

How to Read a Credit Report

First off, it's important to know that there are actually three different credit bureaus: TransUnion, Experian, and Equifax. Each of these generates their own report, and a lender will report entirely to one bureau but only partially report to the others. So, they may have different information contained within them. Just because TransUnion says you’ve paid all your bills on time necessarily doesn’t mean Experian agrees. If a company wants to pull your credit report, how many and from which ones will depend on the individual company. So you’ll want to be sure TransUnion, Experian, and Equifax all have accurate information on you.

Personal information

The first section of your credit report is dedicated to who you are. Here, you’ll see the various pieces of information that have been used to identify you, both currently and in the past. So, if have two phone numbers associated with you, both might be on the report. And if you often go by your middle name, this will show up under “Also Known As.” Identifying features which may be located here are:

Name (legal, aliases, and alternative spellings)

Address (current and former)

Phone number (current and former)

Year or date of birth

Employer names

Spouse name

Driver’s license number

Social security number

Note: You may see some slight variations in this section, such as name misspellings or a second, mistyped social security number; sometimes letters and numbers get transposed when reported and they’re simply left on the report to maintain consistency. These are often nothing to worry about, but if you have a concern, you can absolutely contact the credit bureau to find out more and check if it’s something that should be corrected.

Credit history

After your personal information, there’s your credit information. This is what you’ll really want to pay attention to, and if you see a mistake, you definitely want to get it corrected. Here you can see information on all of the individual accounts (or “trade lines”) in your name and whether they’re in good standing or in poor standing. Relevant information will be listed for each account, and this may include:

Creditor name

Account number

Date account was opened

Responsibility (whether the account is just in your name or if you have a co-borrower)

Account type (loan/installment, real estate, rental, revolving credit, line of credit, or collection)

Balance (how much is still owed)

Date updated (date the account was last reported)

The total amount of the loan or the credit limit

Monthly payment amount (how much is due each month)

Recent payment amount (how much was paid on your last reported payment)

High balance (the highest balance reached on a credit card)

The status of the account (open, paid, refinanced, etc.)

Past due (do you have late/missed payments)

Payment status (whether the account is current or late)

Payment history (payment status for each month)

Once again, since there are three separate credit bureaus with different reports, the formatting of this section and even the information contained within will often be different. Reading through this section carefully, though, helps ensure that there are no mistakes on your credit, trades you have forgotten about, or — most importantly — identity theft that would adversely affect your credit!

Public record

Then, there’s the public record portion. This section includes everything in your public record that’s related to financial issues. So that time you got a bit too carried away celebrating your team’s World Series win and ended up spending the night in jail? That won’t show up. However, a bankruptcy filing, tax lien, wage garnishment, or judgement will. Information shown under your public record are:

Date filed

Reference number

Court

Plaintiff

Amount

Loan vs. Payment Plan

Inquiries

The final section of your report is inquiries. This is every time your report has been pulled by a company per your request for credit. Say you take out a private student loan; the loan company will make an inquiry on your credit and pull a report. Next year, you apply for a credit card, and that company also pulls your credit. Under the Inquiries section on the report pulled by the credit card company, the student loan company will show up along with anyone else who has pulled your credit in the last two years. When you look at this section, be sure to note who has pulled your credit and if they had a reason to:

Name

Contact information (address and phone number)

Date of inquiry

Type of business

Date the inquiry will be removed

#financial literacy #climb credit

What to Do if Your Loan Application Isn't Approved

Step 1: Figure out why the application wasn’t approved

First, you’ll want to figure out what caused the application to not get approved. Private lenders may look at various factors when underwriting an application, so it’s a good idea to reach out and ask for more information. Items which can impact whether or not an application is approved may include:

Credit score

Negative items on a credit report

Debt-to-income ratio

Note: when an application is not approved, Climb sends out an “Adverse Action Notice,” which gives an overview of which factors prevented approval. So be sure to check your email!

Step 2: read through your credit report

You’ll also want to be sure to check your credit report to see what, if any, negative items are on there — you might even find inaccurate information that needs to be fixed! If you find any negative items, there are a few options for what you can do next.

Remove the negative items

Submit a dispute to the credit bureau: If the negative item is inaccurate, you can submit a dispute to the credit bureau who provided the report, either online or through the mail. To submit a dispute online, you need a recently-obtained copy of your credit report. For a mailed dispute, you must include a letter describing your credit report, along with any supporting documentation.

Submit a dispute to the business that reported to the credit bureau: Additionally, you can send your dispute in writing to the company that reported the negative item. When disputes are made, businesses are required to investigate the claim.

Send a pay for delete offer to the credit bureau: If there is a delinquent or past due item on your report that is accurate, you can offer to pay off the full amount in exchange for having the negative item removed. While there is no guarantee that this will be effective, some creditors may take you up on the offer.

Request a goodwill deletion: If you’ve already paid off the account and don’t have a payment to bargain with, you might try asking for a goodwill deletion. In this case, you’ll write a letter to the credit bureau asking for the negative reporting to be amended, describing why you were late and how you’ve since made consistently on-time payments. As with a pay for delete offer, creditors are not required to amend your report, although some may.

Wait for the time limit to expire: If none of the above methods work, you can simply wait for the negative items to fall off your credit report. This will take some patience, though — most negative items are on your report for seven years (except for bankruptcies, which last for ten years). Fortunately, negative items carry less weight as time goes on and other, positive items are added to your report.

Take steps to strengthen your score

Pay bills on time: Making on-time bill payments is one of the most important habits you can practice, and luckily there are ways to help make it easier for you. You can connect your bank account to ACH and schedule automatic payments, so you don’t have to worry about procrastinating or missing a due date because you forgot about it. Or, if you don’t want to connect your bank information, you can simply schedule reminders for yourself to pop up every time you need to pay a bill.

Reduce your debt: This is another way you may be able to secure a good credit standing. Yes, we know, reducing debt is much easier said than done. But even small increments help, and the payoff is decidedly not small. Figure out what’s the most effective method for you and keep working at it.

Stay below your credit limit: Showing you’re not spending beyond your means each month can also give your credit a boost. So, make sure you stay below the limit on your credit cards. Don’t whip out a card for every purchase (or maintain a budget to keep all spending to a minimum). If you really need to, you can also increase the limit on your credit card — as long as you don’t subsequently increase your spending in proportion to it.

Note: AnnualCreditReport.com provides a free credit report per year, from each of the three major credit bureaus!

Reapply with a co-borrower

Many lenders allow applicants to apply with a co-borrower. This is someone who signs onto a loan with you and in doing so, agrees to take responsibility for repayment should you become unable to make the payments on your own.

Note: want to learn more about student loan co-borrowers? Check out our article and informational video here!

#student loans #financial literacy #climb credit

What's a Student Loan Servicer?

A servicer handles the loan from origination to full repayment. They’re the ones who will send you monthly statements and collect and keep track of your payments. They will also be the point of contact if you want to switch your repayment method, alter account information, or apply for deferment or forbearance. In order to ensure your repayment stays on track, you’ll definitely want to get to know your loan servicer!

If you have a federal student loan, your servicer will be one of these entities: CornerStone, FedLoan Servicing (PHEAA), Granite State — GSMR, Great Lakes Educational Loan Services, HESC/Edfinancial, MOHELA, Navient, Nelnet, or OSLA Servicing. Upon taking out a federal loan you are assigned (or, in some cases, reassigned) to a servicer. Of course, if you’ve taken out a private loan, your servicer might still be someone else entirely, such as University Accounting Service (UAS), Student Assistance Foundation (SAF) or Sallie Mae, depending on the company from whom you’ve taken out a loan.

When repaying your loan, you want to make sure you know who your student loan servicer is and what options they can provide for you. Information on your servicer for federal loans can be found by logging into the Financial Aid Review of the National Student Loan Data System. For private loans, students can see their loan servicer by looking at their student loan statements or their credit reports. Then, if you’d like to know more, take a look at the information on their website and at what’s been written about them. This way, you’ll stay informed on an important aspect of your finances and will be able to make the best decisions for you!

#student loans

The Tech Tribune staff has compiled the very best tech startups in Las Vegas, Nevada. In doing our research, we considered

#climb credit #startup

Know the difference between a servicer and a lender? Understand interest rates? Prove your money smarts with our financial literacy quiz!

#finance #financial literacy

What's a Student Loan Co-Borrower?

A co-borrower is someone who signs onto a loan with a borrower (the main applicant). By doing so, they agree to take responsibility for repayment should the borrower become unable to make the payments on their own. Although specific loan underwriting criteria vary from lender to lender, a co-borrower will generally have to provide documentation showing a stable income and have a strong credit history.

What does this mean for you?

Oftentimes, applying for a loan with a co-borrower means a better chance of being approved, as only one person on the application may need to qualify in order to receive an approval. If the co-borrower has a stronger credit history than the borrower, that could also get the student a lower interest rate than what they would be offered alone.

For the co-borrowers themselves, though, there are other things to consider. They aren’t simply vouching for the borrower — they’re also agreeing to make payments in the event that the borrower can’t. The signing of the loan may affect their credit, and any negative activity by the borrower, such as late payments, will also appear on the co-borrower’s credit report. So if you’re co-signing a student loan, it’s important to fully understand what you’re signing and to be sure you’re confident that the borrower will make payments on time.

#student loans #finance #climb credit

Budgeting Tips for Students

Determine how much money you'll have each month/how much money you'll have to spend

First, you want to figure out how much money you’ll have available each month, as well as what expenses (like rent, utilities, and groceries) you’ll have. Your money could come from an income, a loan, or your savings — but if it comes from a lump sum, such as a loan or savings, be sure to take into account that you’ll need it to last for at least the duration of your program.

Use an app to keep yourself on track

Luckily, there are plenty of tools out there to help you maintain a budget. With both free and paid options available, you can find the app that best fits your lifestyle and needs. Check out our post on popular budgeting tools to see just some of the options available!

If possible, pay off student loans during deferment

You may have taken out a loan to pay for your program, and depending on which, you may not be required to make payments until after your program is finished. However, interest starts accumulating as soon as a loan is disbursed — so if you don’t make any payments at all, the amount will pile up. Starting to make payments early will help keep your total payments down.

Find free or cheap events

From events to free days at museums to something you plan yourself, it’s not difficult to have fun on a budget. For example, you can check sites like Meetup or Eventbrite for things happening in your area!

Make dinner at home and bring lunch to work/class

This is one that’s been said over and over again, but it’s true: making meals or brewing coffee at home could save you lots, as opposed to eating out or buying a latte every day.

Don't be too hard on yourself

And last but not least of our budgeting tips, don’t be hard on yourself if you don’t do all these things all the time. You’ll be busy learning new skills, and there’s no need to add more stress by feeling bad about that restaurant dinner or concert ticket. You’re still allowed to enjoy things, even if you’re on a budget!

#finance #money

Student Loan Terms to Know

Student loan terms to know before you apply:

Co-borrower

Someone (relative, spouse, friend, or anyone!) who signs onto a loan with the main borrower and agrees to make payments if the borrower becomes unable to do so.

Underwriting

The process by which an applicant is either approved or denied for a loan. The factors that are considered vary from lender to lender, but many look at credit score, payment history, and debt-to-income ratio.

Origination

On the lender’s side, the process of a loan application. This includes the application’s submission, loan underwriting, processing any documentation you’ve submitted, and sending the loan funds.

Origination fee

The fee lenders charge for processing a loan application. Depending on the lender, this can be paid as an upfront cost, or it can be added to the total amount of the loan and paid back monthly as part of the loan payments. (At Climb, our origination fees are added to the loan and paid back over time).

Debt-to-income (DTI)

Your monthly debt payments compared to your monthly income.

Principal

The amount that you currently owe out of the original amount you borrowed. If you take out a $10,000 loan, your principal at the beginning will be $10,000. Then, the principal will be reduced as you pay back the original amount you borrowed and the additional interest on the loan!

Interest rate

The amount you are charged to borrow money. This is usually expressed as a percentage of the principal amount you pay over the course of a year, typically in monthly installments.

Annual percentage rate (APR)

The amount you’re charged annually to borrow money. Like interest rate, this is expressed as a percentage, but unlike interest rate, it takes any additional loan fees into account.

Student loan terms to know as you pay back:

ACH

Short for Automated Clearing House, setting up ACH on your student loan allows payments to be automatically withdrawn from your bank account each month. Connecting your account for ACH auto-payments not only makes it easier to make payments on time, but often lenders will offer an interest rate reduction as long as ACH is connected!

Disbursement

When a lender sends the funds for a loan.

Loan servicer

A company used by the lender to handle payments and billing after a loan is funded.

Deferment/forbearance

A temporary reduction or pause in your student loan payments. While these differ in the case of federal student loans, with private student lenders availability and terms vary and interest always accrues during the deferment/forbearance period. You may also need to provide documentation showing your need of assistance.

#student loans

How to Find Student Loan Counseling

Assess how serious your situation is

You may just be looking to spruce up your financial situation, but you may be struggling with debt that other student loan counseling hasn’t been able to cover. Understanding how much assistance you need will help you decide where to go for help.

Determine how much you’re willing to pay

Some services charge no fees, while others can be expensive (a private counseling session, for example, can cost hundreds of dollars). Depending on your circumstances, you may either want to opt for a free- or low-cost option, or you may decide it’s worth it to invest more money in counseling.

Free services:

Federal government

Only available for federal student loan applicants

Loan servicers

Only available through your own loan servicer

National Foundation for Credit Counseling

Some member agencies charge no fees

Paid services:

Clearpoint

After a free consultation, their full student loan counseling plan costs $99

National Foundation for Credit Counseling

Some member agencies charge small fees

Private student loan counselors

Student loan lawyers

Be wary of potential scams

While vetting prospective services, pay attention to what they’re promising and if it seems too good to be true. And never give out your personal information to a counselor who hasn’t been vetted. NerdWallet suggests these questions to ask:

What are your qualifications? (Ask if the organization is accredited through the National Foundation for Credit Counseling or the Council on Accreditation, or about the specific counselor’s experience and training.)

How can you help me reach my financial goals?

What do your services cost?

How do you provide your services? (In person, over the phone, or online?)

How are these services funded? (Knowing if the agency you’re talking to receives compensation from outside organizations will make you aware of any conflict of interest and increase transparency.)

How will your services affect my credit score?

How often will we work together? (Find out beforehand how often you’ll meet and whether that’s enough time to help you reach your goals.)

#student loans

#codingbootcamp #Youtube

Steps to Take Before Getting a Student Loan

Check your credit report

Many private lenders use credit history as a main factor in determining whether or not someone qualifies for a loan or what interest rate they receive. Before beginning an application, you might want to take a look at your credit report to see where you stand, while also reviewing it to make sure there are no inaccuracies. You may also consider finding a student loan co-borrower to apply with you, as most private lenders allow for this option!

Make sure you’re going to the right school

No one wants to pay tuition, fees, and interest (not to mention spending time and effort) on a program which doesn’t actually benefit them in the end. Before you commit to a school and take out a loan to pay for it, research things like cost, faculty, alumni, and online reviews to see if it’s really worth it.

Figure out what you need

While you may not want to take out a loan for less than you need, you also definitely don’t want to over-borrow. Know what your budget is, what you’ll need to pay in tuition, and how much cost-of-living (like rent and groceries) you’ll have beyond what you can afford on your own. Ultimately, you'll want to be sure you have enough to cover all expenses, but not so much that you end up paying way more in interest than you really needed to.

Talk to your school about options

There are plenty of different financial aid options out there, and your school is a great resource when it comes to finding them. Many schools offer scholarships, are eligible for federal student loans, partner with private lenders, or offer payment plans. Beyond helping you learn about potential scholarships and the different types of student loans that are available to you, they may also be available to help students along the application process!

Research lenders and ask questions

Before agreeing to a loan, research all your options and decide which would be the best for you. Just like with schools, you’ll want to read what others have written about them and reach out to ask any questions you may have. You’ll also want to read their FAQ page, note their loan term lengths and rates (both interest rate and APR), and get a feel for what their application processes are like.

Gather the necessary personal information

During your initial application, you’ll be asked to provide some information, so you’ll want to have everything you need handy. This can vary by lender, but most will ask for info like name, address, social security number, and more. If you’re adding a co-borrower to your application, you’ll also be asked to enter their personal information as well. So make sure you have their contact info and social security number available when you apply!

Read loan documents carefully

The next step in your loan application checklist is to go through all the documents in order to fully understand the agreement you’re entering into. It’s important to understand every aspect the terms you’re consenting to follow — this way, you’ll be better able to avoid any surprises or pitfalls later on down the road. It may seem tedious, but it’s worth the extra time reading (or rereading, if need be) in order to really know what you’re agreeing to.

How to Negotiate Your Salary

Do your research

Visit websites like Salary.com, Indeed, Payscale, and Glassdoor to find information on standard salaries for your role. You can also discuss salaries with people — either someone who used to work in your role or someone who works in your role at another company. This way, you won’t ask for more than is reasonable or too far below what's standard.

Use a specific number, but know your range

According to researchers at Columbia Business School, using a very precise number (e.g. $70,250) rather than a round number (e.g. $70,000) is more effective when negotiating salary. This gives the other person the impression that you’ve done research on what your salary should be, and they’ll be more likely to agree to a number closer to your initial request.

At the same time, you’ll need to know what your upper and lower limits are. Start your negotiation at the top of that range, and keep in mind how low you’re willing to go.

Consider other benefits as well as salary

While salary is obviously important, it’s not the only approach you can take. You may want to note that some companies also offer other benefits like retirement contributions, health insurance, schedule flexibility, or even discounts to movies or gyms. Consider requesting some benefits and perks in addition to a salary increase.

Know the right time to make your request

Before asking for a raise, you’ll want to be sure the timing is right. If you’ve been at the job for at least a year, have taken on additional responsibilities, or have had successes on major projects, it may be a good time to talk about a salary increase. (Bonus: compiling these points into an organized, bulleted list will help you make your case for why you deserve a higher salary or more benefits.)

And while many people think yearly reviews are the best time to talk about a raise, HR professional Suzanne Lucas told LearnVest that this might be too late: “Start talking to your boss about getting a raise three to four months in advance.” In many cases, “[t]hat’s when they decide the budget.” Get a head start and begin the discussion before decisions have been made.

Practice

Just as with job interviews, practice makes perfect. Work with a friend or family member or watch yourself in the mirror to hone your negotiation technique. This way, you’ll feel more comfortable and confident during the actual negotiation.

Don't make threats

Finally, don’t make threats — you want to avoid potentially burning bridges. Saying you’ll quit if your salary isn’t agreed to can strain the relationship between you and your employer, or they may even call your bluff and say you should take that other job. Be firm and assertive, but not aggressive or threatening.

What's the difference between interest rate and APR?

What an interest rate is

The interest rate is the amount you’re being charged to borrow money. At the beginning of a loan, you borrow a certain amount — this is called the loan principal, and an interest rate is expressed as a percentage of the principal. As an example: if you took out a $10,000 loan to buy a car, and have to repay 3% interest on that loan, $10,000 is the original principal amount, and 3% is the interest rate. In that example, at the end of the year, you would have owed $300 in interest — essentially, you’ve paid $300 over the course of the year in exchange for borrowing the $10,000. It should be noted, though, that an interest rate only takes into account the amount of principal being borrowed. As described below, there are often other costs associated with taking a loan that you should consider.

What an APR is

The annual percentage rate is also expressed as a percentage. However, it differs from an interest rate in that it represents the entire cost over the term length. This means it includes loan fees or any other additional cost of borrowing. Lenders can vary widely in the structures of their loans and the fees they include. Having a standard calculation such as APR means that you can easily compare what different loans will actually cost you.

What this means for you

Because interest rate only refers to the interest on the principal and APR takes other costs into account, the latter tends to be higher. It’s important to keep in mind the rate of your interest, as that will impact your regular, periodic payments; however, APRs are what you should compare when looking at two different loan options. By law, lenders are required to disclose the annual percentage rate in order to ensure transparency and a clear understanding of the agreement on the part of the borrower; this way, you can’t be given a quote for a low interest rate and then be surprised later by fees that result in a high APR. When it comes to interest rate vs. APR, you definitely want to know both!

#student loans #finance

Student Loan Repayment Tips

Before you apply

Plan out your finances Whether you’re enrolling in an education program to start a new career or to boost your current one, keep in mind what your potential new salary could be and when it might take effect. This way, you can have a financial strategy for a possible job hunt period or for some time before any raise takes effect. Knowing what timeline you might be looking at, and the impact of the education you’re investing in, will get you prepared financially.

Know how much you really need to borrow in tuition and living expenses You may find that you have the option to borrow for living expenses in addition to tuition financing. Look closely at what you have, and what you really need, in order to be sure you’re taking out the right amount for your situation. While you don’t want to borrow so little you can’t cover tuition, you also don’t want to borrow so much you’ll have trouble paying it off. Remember: everything you borrow, you’ll have to pay back with interest.

Make a budget Once you’ve got a good idea of your financial situation, it’s time to make a budget. Doing so will help build up your savings, cut costs, and give you lots of buffer to make loan payments — especially for any potential period before you receive income benefits.

During your application

Read loan documents carefully and know your monthly payment due dates and amounts No one likes getting caught off-guard, especially when it comes to due dates and monthly payment amounts. So, it’s crucial to read over all your loan documents carefully and ask questions if you need any clarification. Note what you’ll owe each month and when, as well as if there’s a fixed or variable interest rate.

Get to know your lender and loan servicer Sure, you may know the name of your lender, but do you know who your loan servicer is? That’s the company who sends you your monthly bills and manages your account after the loan has been disbursed, and it’s not always the same as your lender. If you have questions about payments or want to make changes to your account, your loan servicer is who you'll want to contact!

During loan repayment

Make payments on-time Of course, the most important student loan repayment tip is to make those payments on time. Check your balance frequently, and set reminders on your phone or calendar for your payment dates. This will not only prevent your principal from piling on, but you’ll also keep your credit score up. Besides your loan application, a strong credit score could benefit you with insurance companies, potential employers, landlords, and even cell phone companies!

Set up automatic payments If you find it difficult to remember to make all your payments by the time they’re due, a very effective way to help ensure your bills are paid on time is setting up autopay. By connecting your bank, you’ll have the amount due withdrawn each month automatically, so you won’t have to worry about remembering it yourself.

Prepay, or pay more than the minimum amount due Finally, if you’ve been making on-time payments and have some room to spare, we suggest prepaying or paying more than the minimum amount due. This will reduce your principal quicker, and the faster you pay off your principal, the less you’ll pay in interest overall. Try making loan payments every two weeks instead of once a month, and use every windfall (bonuses, tax refunds, gift money, etc.) to pay down your loan.

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