Frequently Asked Questions
A more advanced move is to optimize your credit utilization ratio, possibly by adding cards or requesting higher limits. Your utilization ratio is the amount of total debt you’re carrying compared to your total credit limits. If you can responsibly manage multiple lines of credit, you can lower your utilization ratio even if you may be carrying a balance on one or two cards.
Also pay attention to all mail received from your credit card company. While your card may not have had an annual fee when you signed up, you may receive communication that the terms and conditions have changed. You can choose to cancel the card to avoid the fee, but only if you know it’s coming. Deciding to cancel a credit card is a big decision and shouldn’t be made lightly.
The most significant difference has to do with fraud. If someone makes fraudulent charges with your debit card, the money comes directly out of your bank account. Even if you are able to get a refund, it can take weeks or months to get that money back. With a credit card, you can dispute the charges and the funds never leave your account.
Note: These are generally asked personal loan FAQs. We also suggest you read the FAQs for the lender company you decide to move forward with.
Secured and unsecured loans are a more general way of categorising all loans. Business loans are split into different types of specialist loans to suit different circumstances, the most common of which are:
Start Up Loans: Designed to allow companies to access the capital they need to fund the development of their new business, these tend to be Government-backed.
Invoice financing: These allow businesses to borrow money based on invoice amounts owed. They're often seen as a solution to cash flow problems.
Asset financing: A funding solution that helps companies to purchase or lease the assets and tools they need to grow.
Asset financing: A funding solution that helps companies to purchase or lease the assets and tools they need to grow.
Bridging loans: Designed primarily for property investors and developers, bridging loans provide a lump sum of cash to enable the purchase of a property or a business before the buyer has freed up their own funds, for example through the sale of another property.
Tax loans: A loan solution that allows a business to meet its tax liabilities by spreading repayments across a period of months.
Credit lines: A form of on-going loan wherein businesses can borrow and repay money on a consistent basis up to a specific limit.
It's a good idea to choose a loan that is suited to your specific needs in some cases. For instance, you would use a commercial mortgage to purchase property, asset financing to fund the purchase of new tools and equipment, and a Start Up Loan to help you move into the world of entrepreneurship for the first time. This way you're working with repayment plans that cater to your circumstances.
Additionally, it's worth thinking about the term over which you would like to repay your loan. If you need a long-term loan, then certain loan types will not be appropriate, and vice versa on shorter terms. While examining terms and APRs, remember to ask about what happens to you if you default on repayments, and how you will be able to discuss concerns with your lender.
The severity of your credit history and the legal actions that your business has been exposed to will often dictate whether you can access business loans. Most loans will require no county court judgement to have been made against you, and if you have fallen into arrears in previous lending arrangements conventional channels may refuse you credit.
Note: These are generally asked business loan FAQs. We also suggest you read the FAQs for the lender company you decide to move forward with.
Your loan officer can also help you obtain a complete written credit approval, subject to an appraisal, before you make an offer on a house.
Your loan officer can also help you obtain a complete written credit approval, subject to an appraisal, before you make an offer on a house.
Prequalification can be done easily, quickly, and online. To take the next step and to get pre approved, you may be asked for:
Tax returns and W-2 forms from the most recent 2 years
Bank/asset statements from the most recent 2 months
Pay Stubs from the last 30 days
Valid photo ID
But remember, by furnishing any and/or all of this documentation, you are in no way obligated to accept the terms and conditions of the mortgage offered, nor do you have to provide these documents to receive a Loan Estimate (LE).
Don’t pack or ship any important documents, such as tax returns, bank statements, pay stubs, and W-2s.
Buying a house doesn’t have to be hard. Keeping all copies of your pay stubs, bank statements, tax returns, and W-2s can make a speedy prequalification even speedier. To further grease the wheels and keep your home loan process running smoothly, take care to make all your bill payments on time. We also suggest keeping a paper trail of any large deposits you make, as well as notifying your loan officer directly if you plan to use a down payment gift from your family.
Prequalifying for your home loan before you begin shopping for a house can save you hours of unneeded stress and heartache. When you know how much house you can afford in advance, you can meet with your realtor, well-informed and ready to make an educated buy. In the eyes of a seller, a pre qualified home buyer also appears more motivated.
- *Avoiding these actions before and during the financing process can prevent any unnecessary confusion.
How can you keep your credit clear while your new home loan is in the works? Please, don’t do any of these things:
- Apply for a new credit card, auto loan, or other types of credit.
- Co-sign a loan with someone.
- Change jobs, become self-employed, or quit your job.
- Skip payments on existing credit accounts, utility bills, or loans.
- Charge up your existing credit on big-ticket items, like furnishings for a new house.
If you think any of these don’ts are musts, talk to your lender before you take action. Your loan officer can help you figure out what to do so that your mortgage loan is the least negatively affected.
- *Avoiding these actions before and during the financing process can prevent any unnecessary confusion.
Debt ratio: Your total monthly housing expense plus any recurring debts, i.e., car payments, monthly minimum credit card payments, and other loan payments, divided by your monthly income.
Standard loan underwriting guidelines suggest a max 28 percent income ratio and 36 percent debt ratio, which may vary based on personal finances, loan program, and down payment.
While not taking on any debt and paying for everything with cash seems like a logical choice if you feel you can’t afford your lifestyle, no credit also means bad credit in the eyes of a lender. There’s bound to be a time when you can’t buy something with cash, like buying a house (in most cases). So, we recommend opening at least three credit card accounts and making occasional purchases with each card.
To manage your debt and maintain healthy credit, keep credit card balances to less than 30 percent of your credit limit. Also, don’t close long-term credit lines, even if they’re not being used. Your longest standing credit card account might be a huge contributor to your credit score health — and the mortgage rate you qualify for.
After you’ve applied for a home loan, you can expect to receive a Loan Estimate (mentioned above) from your lender. If you applied for more than one type of loan, an LE will be broken down for each loan type. The APR for a loan will be listed on page 3 of the LE, in the comparison section. Most of the time, you’ll notice the difference between your APR and your loan interest rate right away. An APR is often higher than an interest rate because of added fees. An APR is essentially a comparison tool. Interest rates, loan fees, and points may be all over the map, but the APR can always be used to accurately compare multiple loan products. And in cases where an interest rate looks a little too attractive, the APR can tell you the real story.
You can use this handy trick to separate the good from the bad when choosing a mortgage: Compare a loan’s APR to its advertised interest rate. An APR that’s noticeably higher than the interest rate may be a red flag that added costs are attached to the loan. Your loan officer can also help you compare and better understand loan fees.
If you have a low credit score or have filed bankruptcy in the past, you can work toward improving your credit. When in doubt, contact your loan officer.
Don’t let something as intimidating as a credit score keep you away from the information you’re entitled to. Checking your free credit report yearly, available from one of the three nationwide credit reporting agencies, can help you to keep tabs on your financial status — which becomes especially important when you’re buying a house. Yearly credit checks can also help you catch any problems that pop up early on, like mistakes on your credit report or instances of fraud (potentially related to the 2017 Equifax breach).
Once you get your annual report back, here’s how to understand your FICO score, ranging from 300 on the low end to 850 on the high end. There are five factors that make up your credit rating:
Types of credit. Taking out a variety of credit lines, like credit cards, a car loan, and other credit accounts, could increase your score. FICO score impact: 10 percent.
New credit accounts. On the other hand, having a lot of credit inquiries could lower your credit score — with the exception of home and auto loan inquiries that may be lumped together as one inquiry within a 30-day period. FICO score impact: 10 percent.
Length of credit history. It’s not necessarily bad to have a short credit history, if you’ve been handling your money well. And having one or two good credit accounts is better than having no credit at all. FICO score impact: 15 percent.
Payment history. Delinquent and overdue bills can lower your credit score. FICO score impact: 35 percent.
Outstanding balances. Keeping the amount you owe to creditors to under 30 percent of your credit limits shouldn’t affect your credit score. FICO score impact: 30 percent.
We mentioned this before, but it bears repeating: Your credit score matters when you’re trying to buy a house. Your credit score has a direct impact on your mortgage interest rate. A great credit score with a rating higher than 740 could qualify you for the lowest available interest rates, compared to a credit score under 620 that might make it harder to get a loan. Talking to your mortgage lender about how you can fix some blemishes in your credit score is well worth the time and effort to get a lower interest rate — lowering even one percentage point on a 30-year mortgage could save you thousands over the life of your loan.
You’ll be provided with a written Rate and Price Determination Agreement, detailing interest rate, loan terms, and time period for the rate lock.
This rate lock time period may range from 10 to 60 days, depending on your projected closing date.
When mortgage-backed securities (MBS) rise, interest rates drop. Industry experts have considered MBS safer investment options for global investors. That’s why interest rates have hit record lows in recent years, with some fluctuations seen after the 2016 election. Signs of economic improvement will cause MBS to sell and interest rates to rise.
In some cases, your lender may recommend a no-cost home loan to keep upfront costs as low as possible. As a borrower, you won’t have to pay any loan points, closing costs, or fees for credit reports, appraisals, and other lender charges normally lumped in at closing. This may look like opting to add your closing costs on to the total amount of the loan. Or, you may opt to increase the interest rate on your loan by three-eighths to seven-eighths of a percentage point, depending on the loan amount. If you have a larger loan, you’ll see a smaller increase. For example, instead of paying a 4.5 percent interest rate and $2,500 in closing costs, you’ll pay nothing at closing with an increase to a 5 percent interest rate.
When asking about interest, take a moment to talk to your lender about other out-of-pocket expenses, like down payment, closing costs, and loan-related fees. Other expenses that come with buying a house may include: taxes, homeowners’ association dues, utilities, homeowner’s insurance, and any home improvements you intend to make.
Any funds needed at closing must be brought as a wire transfer or cashier’s check made out to the title company.
As the Consumer Financial Protection Bureau explains it, “The ‘closing’ is the last step in buying and financing a home. The ‘closing,’ also called ‘settlement,’ is when you and all the other parties in a mortgage loan transaction sign the necessary documents.” Sign these documents, and you take ownership of your home loan. You’ll then be the proud owner of a new house.
Leading up to closing, consider using an app to make things extra-easy. Our free LoanFly app has an exclusive Borrower Portal that you can use to upload borrower documents and track your loan’s progress. That’s a little less paperwork to worry about before closing day.
Congratulations on closing on your new house! And remember, moving to a new home because of a job transfer or change could qualify you for a moving expense deduction, in many cases. To get the break, the distance between your old home and new job must be at least 50 miles more than the distance between your old home and your old job. If you qualify, you’ll get to deduct the cost of moving your belongings and the expense of moving you and your family, including lodging but not meals.
Note: These are generally asked home loan FAQs. We also suggest you read the FAQs for the lender company you decide to move forward with.
4-year public institutions for students enrolled in-state: $10,440
4-year public institutions for students enrolled out-of-state: $26,820
2-year public institutions for students enrolled in-state: $3,730
4-year private institutions: $36,880
Holding a bachelor’s degree can boost an individual’s median weekly earnings to $1,173, according to the Bureau of Labor Statistics. For those with an associate degree, that number is $836 and for those with a high school diploma and no college, that number is $712.
Ultimately, the formula for whether college is worth it is similar to any investment. What are your initial costs and what’s the payoff later?
You can make sure college is a smart investment by keeping college costs under control. And make sure you’re maximizing your opportunities and earnings after graduating.
That’s why it’s a smart idea to check in with yourself and ask, “Is college right for me?”
While some studies may show that earning a college degree might come with higher earnings, there are still many Americans who did not pursue higher education but are earning a decent salary and hold satisfactory careers.
There are opportunities outside of college for you to gain marketable skills and experience, from vocational school to online tutorials.
Financial support from parents or family member federal aid, including need-based grants and student loans your own personal income and savings scholarships and grants employers benefits like tuition reimbursement
The majority of student loans in the U.S. are federal loans. However, private student loans can also be an option.
You can take out student loans for each semester in school, and funds are typically disbursed through your college’s financial aid office.
Some student loans charge interest. In some cases, your loans will accrue interest as soon as you borrow them. Even if you’re still in school.
You usually won’t have to make any payments on your loans until six months after your last semester. Then student loan payments will begin. A standard repayment schedule is 10 years or more.
Consolidating student loans can be a way to simplify student debt, get a lower interest rate, reduce monthly payments or release a cosigner of responsibility for an existing loan.
However, depending on the terms of your new loan, consolidating student debt can cost more over time. Be sure to do the math before making your decision on consolidation.
Note: These are generally asked student loan FAQs. We also suggest you read the FAQs for the lender company you decide to move forward with.
Business Credit Cards
- Limit the number of cards you take out
- Keep your credit limit well within your account's credit limit
- Pay off card balances rather than transferring debt to other cards
- Check your credit report at least once a year to ensure it's error-free
Note: These are generally asked Business credit cards loan FAQs. We also suggest you read the FAQs for the lender company you decide to move forward with.
Age: The cost of a policy increases each year you age. This is because as you age, the likelihood an insurer will have to pay out on your policy increases.
Gender: In general, men pay more than women for comparable policies. This is due to the average difference in life expectancy between both genders.
Hobbies: Dangerous hobbies, like skydiving, scuba diving, racing cars or mountain climbing may raise your rates.
Policy Details: Depending on the policy you choose (term or whole life), along with its respective coverage amount, the cost of your policy is affected
Health History: Risk is a big factor in life insurance. A history of medical conditions, especially serious illnesses such as heart disease or cancer, will increase your premiums. Therefore, the healthier you are, the cheaper your premium will be. It is best to buy life insurance when you are feeling your healthiest.
Aviation: If you are a non-commercial pilot or don’t pilot flights regularly for strong experience. For example; a pilot that flies private jets instead of commercial flights.
Hazardous Occupation or Hobbies: This can be give or take depending on the insurer. Some insurers exclude this and some just increase your premium rates.
War and Military Service: With the high fatalities of war, it would not be feasible for any life insurance to support you if you are in this field. The military provides veterans with their own form of life insurance.
- Are recently married or divorced
- Have or adopt a child (or became a grandparent)
- Have children or grandchildren who are about to enter college
- Provide care or financial help to a child or elderly parent
- Receive an inheritance
- Retire (or your spouse retires)
- Start a business
- Change or lose your job or salary
Note: These are generally asked life insurance FAQs. We also suggest you read the FAQs for the insurance company you decide to move forward with.
Start by assessing your needs. If you’re prone to illness, play high impact sports, or have a risky profession, it may be better to have a co-pay plan rather than one with a high deductible.
If you have children, the plan that is most beneficial to you may be different from the ideal plan for someone who is single with no kids. If you have a favorite doctor, make sure that doctor is “in-network” if you opt for an HMO.
You also need to think about your budget, and whether a plan that involves coinsurance or higher deductibles makes the most sense for you. By assessing your needs and comparing plans, you can find an affordable healthcare plan that meets your needs.
Many people don’t know where to start because the number of plans and variety of coverage options is very confusing. An agent who specializes in health insurance is an excellent resource.
These agents can help individuals and families to review a range of plans from different health insurance companies and choose one that will help with preventive care and major medical care at an affordable cost.
An agent can help you understand the tax implications you will face and compare them to the costs and benefits of having insurance.
When too many people are uninsured, the result is that tax payers must shoulder the burden of healthcare costs for those who are not able to pay for care.
One problem is that by the time uninsured individuals feel sick enough to warrant a doctor's visit, their health conditions have frequently progressed to the point that the necessary treatments are more prolonged and expensive. These costs are often too excessive to be handled by the patient, they frequently go unpaid.
This results in higher insurance rates as hospitals raise costs for treatments to cover their losses. Healthcare reform is designed to get everyone covered so they are managing their health before health conditions get out of control and so that hospital receive the payments they are due and can lower costs across the board.
The Affordable Care Act, and its insurance requirement, is designed to get as many people covered as possible so that people are managing their health and avoiding expensive hospital costs that could have been prevented.
This, in turn, will result in lower costs for everyone, thus making it easier you to get the health insurance you need at a price you can afford.
Furthermore, most people who purchase their coverage through their state's healthcare exchange qualify for government subsidies, which can make their premiums even more affordable.
Additionally, if you purchase your coverage through the healthcare exchange, you may qualify for government subsidies based on your household income.
On average, individual policies cost anywhere from $150 to $200 per month and family policies can cost $350 to $425 per month. With some plans, you will pay these premiums entirely out of pocket and for others, the majority of premiums are covered by an employer.
You can adjust your premium based on your coverage amounts as well as your deductible amount. If you need more affordable healthcare but aren’t sure where to start, you can shop for a lower cost plan through an independent agent in our network.
A health savings account (or HSA) is used in conjunction with a high deductible health plan. You typically must buy these plans from an employer, although they are also offered through private insurance companies. Any amount of money that you contribute to your HSA account, up to a certain limit, is tax-deductible.
Deductibles will renew each year, and most preventive care services, such as annual gynecological appointments and routine age-appropriate testing, will be covered in full regardless of whether or not you have met your deductible amount.
You can save a lot of money on your monthly premiums by choosing a plan with a very high deductible; just be sure that you have the funds set aside to pay your healthcare costs in the event that you need major medical care.
Note: These are generally asked health insurance FAQs. We also suggest you read the FAQs for the insurance company you decide to move forward with.
Note: These are generally asked auto insurance FAQs. We also suggest you read the FAQs for the insurance company you decide to move forward with.
That way you can get the financial compensation you need to repair or rebuild after a loss. Not only that, but your home coverage can help to protect you financially in the event of a liability claim that leads to a lawsuit.
- If you’re insured, any significant repairs or rebuilding after a disaster can potentially be covered by your insurance policy, up to your set limits.
- If you owe money on your mortgage and your home is completely destroyed, you will still be required to pay your home loan, unless you have adequate homeowners insurance. Homeowners insurance can help pay for the rebuilding cost. If you insure your house at full replacement cost value, you will have the means to fully rebuild, if needed.
- Liability coverage is arguably the most important aspect of homeowners insurance. If something happens to a visitor on your property, your liability coverage can cover that person’s medical costs, well as your legal fees if you are sued. Lawsuits are expensive and hiring a lawyer can cost thousands of dollars. If you’re found responsible, you could be ordered to pay large sums of money in a personal injury suit, a cost that can be offset by your liability coverage.
Another important factor is the state you live in, as average costs can vary significantly from state to state.
Because there are so many factors that affect the cost of homeowner insurance, a typical annual premium can range anywhere from $400 to $1500, or more for a high-value home. If you choose additional coverage, you may pay a higher premium, but you will also have better protection.
It’s always important to comparison shop for the best homeowners insurance rates and the best value. An independent agent in the Trusted Choice network can compare prices from several different insurance companies to find the right policy for you at the right price.
If you’re a landlord or a homeowner who uses part of your home for business purposes, you may be able to deduct a portion of your homeowners insurance. A tax advisor is your best resource in determining what you can and cannot deduct on your taxes.
Additionally, your mortgage insurance is typically included in your mortgage payment. This is paid if your loan exceeds 80 percent of your home’s value. Mortgage insurance does not insure your home. It insures the bank if you default on your loan.
When you are dropped by your insurance provider, your insurance policy is not renewed at its expiration date and you must pursue another provider. You will be informed if your policy is going to be dropped so you have adequate time to shop for new coverage.
Your Homeowners insurance can be canceled at any time as long as you are notified that it will be occurring. In some states, the insurance company can cancel during the first 60 days for any reason.
After 60 days, the reason for cancellation must be due to a specific circumstance such as non-payment, misrepresentation or increase in risk. You’ll typically receive a cancellation notice 10 to 30 days in advance of cancellation, depending on the reason your insurer cites.
- Structure of home: Insure your home for its replacement value. This is how much it would currently cost to build your home from scratch. (Be sure you have an accurate estimate of your home’s value.) The amount it would cost to sell your house is not a good indicator of the replacement value.
- Personal belongings: Most policies cover your personal belongings at 50 to 70 percent of your home’s value. This may not be enough coverage if you have many valuable items. Conduct an inventory of your personal belongings to find out how much coverage you need and insure them at replacement cost. For antiques or high value items, you may need to purchase a personal articles policy or additional “rider” that can provide more complete coverage.
- Liability:A basic policy might include $100,000 to $300,000 of liability coverage. Considering the cost of personal injury lawsuits, you may want to purchase liability insurance with higher $300,000 to $500,000 limits.
For additional protection and peace of mind, consider buying an umbrella liability policy, which can add another $1 million or more in liability coverage.
An umbrella policy is an excellent way for anyone to increase liability protection, but it's an especially good idea for anyone with more valuable than average assets to protect, or particular liability concerns.
The insurance payment is placed into an escrow account where it is held by the mortgage company until the annual premium is met. At that point, the mortgage company pays the homeowners insurance annual premium to the insurance company.
This allows you to break your insurance premiums into smaller payments and you only work with one company. Escrow may not be available for everyone, though, so check with your lender.
Protecting your investment doesn’t mean breaking the bank. You can get a range of quotes and options from an independent Trusted Choice member agent.
When you work with an independent agent, you’ll never have to wonder if you should have looked at more policies from different companies. You will have the opportunity to compare several options from top companies and find the best policy and value for your needs, all while letting your agent do the legwork.
Note: These are generally asked Home Owners Insurance FAQs. We also suggest you read the FAQs for the insurance company you decide to move forward with.
After you have entered your Trip Cost, indicate in the next drop-down menu whether the Trip Cost entered was a total amount for all travellers or the cost per person.
Note: These are generally asked Travel Insurance FAQs. We also suggest you read the FAQs for the insurance company you decide to move forward with.
With a debt consolidation loan, you work with a lender to take out a personal loan that is large enough for you to pay off all of your various debts at once. Once you pay all of those debts off, then the only debt payment you have to worry about is paying off the loan. In other words, you’ve consolidated your debt.
Debt consolidation is an attractive way to manage and get out of debt for individuals who owe a lot of debt to multiple different creditors. That’s because, in general, it makes that debt much easier to manage. Instead of making multiple different payments with different interest rates and minimums to a bunch of different creditors, you just have to keep track of a single payment. That makes it easier to keep track of your debt and makes you much less likely to miss a payment and fall behind.
Though there are more forms of debt consolidation than just debt consolidation loans, they all share this quality: a single monthly payment instead of multiple payments each month.
Debt consolidation makes sense if you owe a lot of debt to several different creditors. It should be enough debt that you struggle with keeping up with it but not so much that you’d never be able to get a personal loan in order to pay it off. Large forms of debt like student loans can sometimes be consolidated, but they usually need to be dealt with separately from other forms of debt.
Often, the kind of debt that’s well-suited for debt consolidation is credit card debt. It’s all too possible to open up multiple different credit cards and run them up without realizing what you’re doing. Your main credit card, your emergency credit card, the cards you have with different stores that you opened up for discounts – each one can get out of control if you’re not careful, and dealing with all of these different payments can be a nightmare. In this case, then debt consolidation might be right for you.
Debt consolidation can also help to save you a lot of money in the short term and the long term. In the short term, you might end up paying less each month than you did with multiple different minimum payments, keeping more money in your pocket. In the long term, you might get a more forgiving interest rate and pay less interest over time as well.
Debt consolidation can also help you to see a light at the end of the tunnel when it comes to your debt. When you’re juggling a bunch of minimum payments, it can feel like you’re not making any progress towards becoming debt-free. With debt consolidation, as long as you keep up with your payments, you’ll have a clear path towards eliminating your debt.
Debt consolidation is also a means to an end, not a solution by itself. All you’re doing is making your current debt easier to deal with. If you can’t get your financial house in order and stop using credit, you’ll just end up in the exact same position you are now: heavily indebted to multiple different creditors.
With unsecured loans, the lender is lending to you based on your creditworthiness. They take a look at your credit score and financial history and determine that you’re a good investment for them to take on, so they offer you a decent loan package with a high degree of certainty that you’ll be able to pay it back.
With secured loans, the lender isn’t quite so certain. Perhaps your credit history isn’t perfect or they see something in your financial picture that gives them reason to doubt that you’ll be able to pay off your loan in a timely manner. So they ask you to “secure” the loan by putting up a piece of collateral, like your car or your home. If you can’t keep up with your payments, they’ll take the collateral instead. It’s security that they’ll at least get something out of the deal.
While secured loans can often have lower interest rates than unsecured loans, they’re riskier due to the collateral requirements. If you can’t keep up with your payments for whatever reason, you could end up much worse off than you were before.
On one hand, you could save money on your monthly payments. Consolidating all of your debt into one payment will make for a fairly hefty sum, but it still might be less than the sum total of your monthly minimum payments. Plus, you’ll be making much quicker progress towards actually paying off your debt.
On the other hand, debt consolidation packages often have more forgiving interest rates than some credit cards. This lower interest rate means you’ll accrue less total interest every month on the debt that you owe, meaning you’ll pay less in interest over time while you’re paying down your debt.
All of this means that you’ll actually hang on to more of your income than you were before you consolidated your debt.
You are what gets you out of debt. Debt consolidation just makes it easier. But it’s up to you to hold back on overspending with credit and get your finances in order.
An alarmingly high proportion of individuals who seek debt consolidation either don’t realize this or can’t keep up with it. They use debt consolidation to make managing their debt easier. But once all their credit is freed up, they can’t help themselves from using it. They run up a bunch of credit cards just like they did before, and within two years, they’re back to where they started but worse.
If you can reign in your spending, though, debt consolidation has a good chance of helping you to become more financially stable and debt-free.
You do have options if you have bad credit, though, and they can obtain similar results to debt consolidation. Two of the most popular: debt management and debt settlement
Often, debt management can take the form of credit counseling. A credit counselor, often working for a non-profit, takes on your case and counsels you on how to get your finances in order and pay off your debts. They may actually work with your creditors to restructure your debt, or they might just help you to get a better handle on things.
Debt management works best for people who are financially capable of tackling their debts, but just don’t know how. It’s not the same kind of big step that taking out a debt consolidation loan is, but it can still be effective in the right circumstance.
While you can approach debt settlement on your own, it’s more likely that you’d work with a professional debt settlement company to complete the process. Debt settlement companies know how to approach creditors and negotiate favorable outcomes on your behalf and can help to make the debt settlement process seem less scary.
Why would your creditors accept less than what they’re owed? Basically, to ensure that they get anything at all.
With debt settlement, you often stop making payments to your creditors at all, instead making payments to a savings account managed by your debt settlement agency. Your creditors won’t like this, but hopefully the agency can help you to manage the threatening phone calls and letters that you’re sure to get.
At the end of the payment period, the debt settlement agency approaches your creditors, offering them the lump sum in the savings account instead of the full repayment of your debt. Often, the creditors accept, happy to get something instead of nothing, and your debt is eliminated.
Second, do your research. Google the company and see if there have been any legal actions or negative news reports against them. Pay special attention to ratings and reviews from independent third parties like the Better Business Bureau and past customers. These sources often paint a picture of what it’s like to work with a company from the point-of-view of an objective third party.
Note: These are generally asked Debt Consolidation FAQs. We also suggest you read the FAQs for the Debt Solutions company you decide to move forward with.
Note: These are generally asked Debt Settlement FAQs. We also suggest you read the FAQs for the Debt Solutions company you decide to move forward with.
Note: These are generally asked Home Equity FAQs. We also suggest you read the FAQs for the Debt Solutions company you decide to move forward with.
Bonds—investments in which you loan money to a corporation or government at a fixed interest rate—are another major asset category. They tend to offer lower returns than stocks, but there’s typically also less associated risk because their prices are largely based on the creditworthiness of who’s issuing the bond, as well as the bond’s interest rate, and not market fluctuations.
Generally, the longer you have before needing the money, the more risk you may be able take on; this might mean that you hold more stock investments (like stock index funds) in your portfolio. But as you draw closer to withdrawing, the more you may want to skew toward conservative assets, like bonds, because you want to decrease the volatility in your portfolio the closer you get to needing the money.
Beyond stocks and bonds, Blaylock says, there are alternative investments, such as real estate or commodities. In the past, if you wanted to invest in real estate, you’d probably have to buy property—but you can now consider investing in real estate investment trusts, also known as [REITs].
The same is true for commodities, like precious metals or oil—you don’t have to buy bars of gold or barrels of oil. You can invest in exchange-traded funds, or [ETFs], that track commodity markets. Mutual funds are also a way to incorporate a variety of assets into your portfolio, because they can hold stocks, bonds, real estate *and* commodities.
One of the main reasons to consider investing in commodities is that “they serve as inflation hedges,” Blaylock says. “During times when there’s higher-than-normal inflation, these investments tend to do pretty well. And the closer [you are] to withdrawing your money, the more inflation becomes a concern.”
The bottom line: You don’t have a crystal ball. “I think we are very naïve if we feel like we have the secret to selecting which companies will perform [well] and which will fail,” says Blaylock.
You can help gain a more quantifiable measure of your risk tolerance by taking quizzes to help you figure out whether you’ve got a more aggressive or conservative mindset. Just remember that your time horizon will also be pivotal when figuring out how much risk to take on. As we mentioned earlier, the closer you are to needing the money, the more likely you should consider shifting to conservative investments.
For example, if you invest in just one company whose stock goes bust, then your portfolio will go bust. “If I own 2,000 companies in my portfolio, and 10% go bankrupt, I’m still going to be fine,” Blaylock says. “For me, it comes down to the law of large numbers. I’d rather own small pieces of 2,000 companies than 100% of one company.”
Being diversified also applies to the industries and asset classes you invest in. It’s important to consider not only being invested in different sectors of the economy, but also investing in a mix of stocks and bonds. Index funds are one way you might further diversify your portfolio because they can track both stock and bond indexes. Bottom line: The broader your portfolio is, the likelier you are to weather a market storm.
- An employer-sponsored plan is provided to you at work; how you qualify to be able to contribute to the plan is dependent on your employer. The most common employer plan type is a 401(k). Typically, you can only contribute to these via paycheck deductions, not by transferring money. Of course, there's no reason you can't use the money already in your bank account for expenses and deduct that much more from your paycheck if you would like to do so.Many employers will "match" some of your contributions: if you put a portion of your paycheck into your retirement savings, they'll put a similar amount in.In 2020, the limit is $19,500 for individual contributions to these accounts. The match from your employer *does not* count towards this limit. The individual limit is higher if you're over 50.
- An Individual Retirement Account (IRA) is one that you provide, independent of an employer. The limit in 2020 for contributions is $6000 (higher if you're over 50).
Both of these accounts commonly have the two different types of tax treatments available to them (see next question), although not every employer offers a Roth 401(k).
If you’re still a while away from retirement and you qualify for one, a Roth IRA could be more beneficial because you’re taxed on the money you put in versus the money you take out, and it can be hard to predict what your tax situation will be like decades down the road. Plus, because Roth IRA withdrawals in retirement are tax-free, you have an opportunity to build up your account of mostly tax-free earnings, assuming your investments have performed well.
By contrast, with a traditional IRA or 401(k), you get a tax break in the year you make the contribution, but you will have to pay taxes later on the withdrawals.
Regardless of what you choose, make sure to keep tabs on the various IRS rules and restrictions for retirement accounts. All of them currently have a contribution limit that can change from year to year, which means you may need to invest in more than one type of account if you want to contribute more than the maximums allowed. Note: The Roth IRA also has income restrictions.
- Contribute to your workplace plan up to the employer match.
- Contribute to your desired IRA up to the limit.
- Contribute to your workplace plan up to the IRS limit.
If there is still money you wish to invest towards retirement after this, you need to go with other accounts.
This is not a hard-and-fast rule; for example, if your income is such that you cannot use either form of IRA (and if, for whatever reason, you aren't going to use the backdoor Roth IRA loophole), you won't use the second step. Alternately, if your workplace has better mutual funds than you can get in your IRA, and that is your preferred investment vehicle, you might want to max that before using the IRA.
- Roll the plan to an IRA. It is typically advised to keep the money within the same tax treatment - move traditional 401(k) funds to a traditional IRA (sometimes labeled a "rollover IRA") and Roth 401(k) to a Roth IRA. This is the most common choice.
- Leave it where it is. If your old plan has great funds, or if your new plan doesn't accept rollovers and you would like to avoid having a traditional IRA, this is typically the choice used.
- Move the funds to your new employer plan. This is typically done if the new plan has fantastic fund choices.
- Cash out the money; note that this involves paying tax on the money brought out *and* early withdrawal penalties. This is almost always a bad decision.
- Online bank transfers. Log in to your online account and select the option for making a payment.
- Telephone transfers. Call your bank's telephone banking service.
- In-branch bank transfers. If you have the money in cash, you can pay it into the account of the person you owe it to in-branch.
- Don't access your bank accounts on public Wi-Fi.
- Avoid saving your login information.
- Use strong passwords and change them often.
- Use two-factor authentication whenever possible.
- Keep your computer updated.
- Always type your bank's web address into your browser yourself.
- Monitor your account regularly.
- Get a ton of traction in the marketplace
- Have a world-class management team
- Have meaningful growing revenues
- Have truly innovative technology with a big market opportunity
- Get a personal introduction to one of the VC firm partners from a respected colleague
- Shortage of capital and cash flow
- Having a good business plan
- Coming up with a great product or service
- Sticking to it
- Working more than you expected
- Getting through the frustrations of being constantly rejected by customers
- Hiring good employees
- Knowing when to fire bad employees
- Having to wear so many hats
- Managing your time
- Maintaining some kind of work/life balance
Note: These are generally asked Business FAQs. We also suggest you read the FAQs for the Business company you decide to move forward with.
A new study of income tax rates in 85 countries by economists at the World Bank and Harvard University found a strong effect of both statutory and effective corporate tax rates on FDI as well as entrepreneurship. For example, the average rate of FDI as a share of GDP is 3.36 percent. But a 10 percentage point increase in the statutory corporate rate can be expected to reduce FDI by nearly 2 percentage points.
One factor that affects capital formation is differences in the cost of capital between nations. In today’s global marketplace, capital increasingly flows freely across borders. When a country lowers corporate taxes, it attracts capital.
Recent research has focused on the lower corporate tax rates enacted by OECD nations over the past two decades to explore the link between corporate taxes and wages. This research has found that wage rates have gone up the most in countries with the largest reduction in corporate taxes. This finding is important because is tells a story whereby the corporate tax is borne by workers, through lower real wages, rather than by owners of capital. The intuition is simple: a tax will generally be borne by the input that is the least mobile. In today’s world economy, capital flows freely across borders, while labor does. Thus, the corporate tax lowers workers’ real wages relative to where they would be set otherwise.
By standing still, the United States can expect to see reduced inflows of foreign capital and investment because the United States will be a less attractive place in which to invest, innovate and grow. U.S. firms will face a higher cost of capital than foreign firms, making it more difficult to compete in foreign markets.
Taxes also influence the level and location of investment decisions made by foreign firms. Research has suggested that a 10 percent increase in taxes reduces a country’s inflow of foreign direct investment (FDI) by 6 percent. One might expect multinationals’ location decisions to be similarly sensitive to tax rates, but the economic literature on that issue is mixed.
A more disturbing possibility emerges as the disparity grows between corporate taxation in the United States and its trading partners: a slower pace of innovation in the United States. A key determinant of economic growth, innovation tends to take place where the investment climate is best. Firms and their workers reap no benefits from technological advances until they’re brought into production. For example, new technologies are often “embedded” in new types of capital; an important innovation such as a faster computer chip does not confer any benefit on firms until they purchase new computers. Higher investment spurs innovation by raising the demand for these new technologies. This interplay between innovation and capital accumulation makes failure to reform the U.S. business tax system more damaging to the economy. As the U.S. corporate tax becomes ever more burdensome, the United States may fall behind in innovation and productive capacity.
What are the potential economic benefits of reform? The recent Treasury report, *Approaches to Reform of the U.S. Business Tax System for the 21st Century*, found that wholesale replacement of the U.S. corporate income tax with a consumption-based tax would increase economic output by between 2.0 percent and 2.5 percent in the long run.
Importantly, because this estimate does not fully capture the positive effects of free-flowing capital in a global setting or technological change, it is likely to be a conservative estimate of the potential benefits of reforming the U.S. business tax system.
Another problem is that that the effective marginal tax rate on investment, a measure which captures most of the features of a tax system— the corporate tax rate, the tax depreciation systems, tax treatment of debt, investor level taxes, etc.—is also somewhat higher in the U.S. as compared with G-7 countries. This more complete measure suggests there are broader aspects of the tax system that need to be considered as part of a reform. Also, in some respects, the comparison to the G-7 may be more important from an economic perspective because the U.S. has very large capital and trade flows with these larger economies.
Finally, what drives the average corporate rate in the United States below the average for the OECD or the G-7 is that the U.S. corporate tax base tends to be more narrow than in these other countries. Two types of provisions explain the more narrow U.S. corporate tax base. First, the United States provides accelerated depreciation for business investment. According to a recent Treasury report, *Approaches to Reform of the U.S. Business Tax System for the 21st Century* accelerated deprecation accounts for roughly one-half of the more narrow tax base. Importantly, accelerated depreciation helps mimic an important aspect of the consumption-based VATs prevalent in other countries: removing the tax penalty on saving and investment.
Second, the U.S. tax base includes myriad special tax provisions from the research and experimentation tax credit to the new markets tax credit that are targeted to specific types of projects and corporate activities. While these provisions lower the average corporate tax rate, they only do so only for firms engaged in these particular activities. Because of these targeted provisions, other taxpayers must face higher taxes to raise a given amount of revenue.
An often underappreciated feature of the U.S. income tax system is that it shares, to some degree, a key aspect of VATs: a lower tax on the return to saving and investment. Tax-free saving accounts (e.g., IRAs, 401(k)-type plans, pension plans, etc) eliminate or reduce investor level taxes on the return to saving and accelerated depreciation for business investment lowers the effective tax rate on business investment. Indeed, the U.S. income tax is not an income tax at all, but a hybrid income-consumption-based tax system.
The key to making the United States more competitive in the global marketplace is making the U.S. a more attractive place to invest. This can be accomplished through various types of reforms, such as allowing faster write-off of business investment, which also makes the U.S. tax system more VAT-like, or lowering the corporate tax rate. Thus, some types of business tax reforms that would help improve the competitiveness of the United States are also consistent with the trend elsewhere of increasing the emphasis on consumption-based taxes.
There are a number of approaches to reform of the business tax system that would make the United States more competitive in the global marketplace. Reducing the cost of capital for business investment is crucial for enhancing the competitiveness of the United States. This can be accomplished through a combination of lowering the corporate tax rate, allowing faster write-off of business investment, and keeping investor-level taxes on returns low.
Note: FAQs gotten from taxfoundation.org
- You are passionate about
- Doesn’t take a kazillion dollars to fund
- Has the potential to grow into something big in a reasonable time frame
- You have some experience in (avoiding the problem of “you don’t know what you don’t know”)
- You would enjoy doing (don’t build a business that you will dread going to every day)
- One that can cause meaningful improvement in users’ lives
Note: These are general Business Registration FAQs. We also suggest you read the FAQs for the Business Registration company we work with.
Note: These are generally asked Sba Business FAQs. We also suggest you read the FAQs for the Company you decide to move forward with.
Commercial Real Estate
A purchaser could decide to see properties on the web, which doesn't need a broker. There might be trouble in discovering a portion of the properties on the web, nonetheless, and you will not have as detailed information as a broker can get.
Then again, you could decide to converse with a seller straightforwardly to access extra information or to be conceded admittance to enter the actual structure. While this is plausible, not all seller will be accessible on occasion that are helpful for you, or may decide to just allow buyers to visit through their broker
As a rule, governments require business and land owners to finish up tax documents that will give them information about the pay and worth of your property. The factors that sway the measure of taxes you should pay for your commercial real estate can incorporate the following: income generated from the property, costs of the property, area of the property, and more.
Note: These are generally asked Business Real Estate (Commercial) FAQs. We also suggest you read the FAQs for the Company you decide to move forward with.
We suggest that you talk with a CPA concerning tax guidance, before going into any monetary concurrence with anybody.
We recommend you buy top quality in the first place and match the term with the life expected of the equipment.
This can diminish your regularly scheduled installment as well as term. It can likewise be useful for a situation where the credit isn't so strong.
Note: These are generally asked Business Equipment Financing FAQs. We also suggest you read the FAQs for the Company you decide to move forward with.
- Money: View paycheck detailed summaries. Access important tax information and W-2 forms.
- Time off:See available time off balance and history. Request, schedule, and approve time off.
- Benefits:Check elections including carriers and group policy numbers.
- Security:Protect information with multi-step authentication.
- Company information:Access company contact details.
The service provided by an ASO does not establish a co-employment relationship. The ASO does not process payroll and remit and report taxes under its own FEIN, nor can it provide access to benefits as a sponsor of a benefits plan. The client company remains the sole sponsor when working with an ASO.
These FAQs are directly taken for our partner TriNet. For more information, visit https://www.trinet.com/faqs.