Understanding School Loan Debt

If you are like most students who have loans, you fairly well ignore your school loan debt as it accrues. Most people simply figure that they can finish school and then worry about their outstanding loans when they have a job. That is assuming the job market will be open to their degree and skills.

Understanding School Loan Debt

If you are like most students who have loans, you fairly well ignore your school loan debt as it accrues. Most people simply figure that they can finish school and then worry about their outstanding loans when they have a job. That is assuming the job market will be open to their degree and skills.

You need to face facts. Sometimes it is hard to find a job or at least one that pays well enough to cover your monthly expenses as well as your outstanding school loan debt. Before you get into the repayment period on your loan, or fall into delinquent status you need to get a firm understanding of your debt and how to handle it. There are a few ways to handle debt without taking the ostrich approach.

Consolidation of your School Loan Debt

When you are unable to handle your loans individually, you can consolidate them into a single loan. This sounds like a great plan, and it works out great in many cases. You do need to realize that consolidation is not for everyone. In some cases you can save a great deal of money by simply making payment arrangements with the lenders and paying off the loans one by one. The consolidation loans offer low rates, but sometimes the rate you already have is so much lower that you will wind up spending thousands more. In addition, you can lose the grace period you had for repayment if you consolidate too soon or while you are in school.

It is always a good idea to investigate your repayment options before getting a consolidation loan. Your school loan debt is often best handled in increments rather than as a lump sum.

Other Types of School Loan Debt

Some students will go as far as charging some part of their education financing on credit cards. Obviously this can result in a number of problems. Credit cards typically carry incredibly high interest rates which compound monthly. As soon as you charge the amount it becomes due with the next month’s billing. If you waited to repay this type of school loan debt you can have tens of thousands of dollars to repay.

If you have this type of school loan debt you need to whittle it away quickly. Make arrangements with the company and pay off the debt soon. A good rule of thumb is that you pay off your highest interest debts first to get a handle on your finances.

Debt Consolidation

Debt Consolidation is a widely-used term to describe debt repayment plans* that allow you to combine your monthly payments to your creditors into one monthly payment, often combined with lower interest rates and other creditor benefits, to get you out of debt as quickly as possible.

There are really two types of debt consolidation plans available in order to provide these benefits – a Debt Management Plan or a Settlement Plan. Both plans feature the benefits of a combined monthly payment, but the way they reduce your debt is quite a bit different.

So which plan is right for you?

Determining which plan is right for you really depends on your specific situation including the type of debt you have, your income and ability to make consistent payments, and what you agree is affordable.

Within this guide, we’ll walk you through your options so that you can understand which path works best for you. We invite you to explore both programs and learn how they work, who they are designed for, and what are the pros and cons of each.

Reasons for considering Disability Insurance

Do you know how you would manage to survive if you suddenly could not work tomorrow? Would you have enough money saved up to live in the same house or apartment you’re currently living in? Could you still make car payments, send your children to the same private school they’re attending or even cover basic expenses like food and clothing? These are all questions that millions of Americans ask themselves each and every day. The truth is that many of them worry about what would happen if they were injured on the job or took ill and simply could not work for an extended period of time. The truth is that no one is built to overcome such adversity. However, there is a way to make sure that you are your family are covered, should the worst-case scenario arise. Disability insurance is one option. Disability insurance allows you to prepare yourself just in case you should fall sick or get injured and be able to work. It essentially allows you to insure yourself against such an instance and helps you to provide a steady income should the need ever arise. Like car insurance or flood insurance for your home, you can purchase an insurance plan for any disabilities that may affect your life at one time or another. That said, there are many varying opinions about disability insurance. Continue reading to find out why you may or may not wish to opt to purchase disability insurance.

What is the difference between installment and revolving credit accounts?

Installment loans are loans extended for a specific purpose, a specific time, and a specific rate of interest. Normally the buyer signs a security agreement giving the lender the right to take back the property being purchased in the event the borrower does not pay in full. Installment loans are used for major purchases such as homes, cars, major appliances, recreational vehicles, expensive furniture and other high value items. In the normal course of events installment loans involve monthly payments. At the end of the prescribed time the installments (payments) have been made as agreed, the loan balance is zero, and the buyer owns the property free and clear.

1. Get Your Credit Reports

If you aren't already keeping a close eye on your credit report, you may not become aware of a problem until you are denied credit. Whether you are preventing that situation or trying to fix it, the first thing is to get your credit reports from TransUnion, Equifax, and Experian – the major credit bureaus. You can get your report from each company once each year at no charge through Annual Credit Report Service, or pay a fee to receive it directly from the bureaus. Just keep in mind the information on each report since your creditors may not report to every bureau.

2. Understand What Can Be Removed

Just because something is negative doesn't mean it should not be on your report. Your credit report must contain all credit and debt data so long as it is accurate and up-to-date. You may dispute wrong information, duplicate information, and old negative information. “Wrong” information includes accounts you never opened, lawsuits you were never a part of, and data relating to someone else's name. Duplicate information sometimes happens out of error – you may wish to have it removed so creditors don't count it twice. Last, most information on your credit report should not be older than seven years. Some data, such as bankruptcy, student loans, and child support arrears stay longer. Check your state's statute of limitations on those items, as they can vary from state to state.

3. Take Action to Remove Inaccuracies

You will need to file your dispute with the bureau via website, phone, or mail. They will need some kind of identification (typically your social security number), a description of the inaccuracy, and what the information should reflect. If you have any documentation on your side (like court papers or copies of cashed checks) you should include those too – and don't forget to make copies and send it via certified mail. After 30 days a dispute notation should have shown on your credit report and the creditor given a chance to prove their case. If the creditor fails to verify the information, the bureau will have to stop reporting it – but that does not mean it has been deleted. If you receive a letter stating the item has been deleted along with an updated copy of your credit report, then the item has been permanently purged from your report. Otherwise, do not assume the change has been made.

Important Last Steps

Most of the time the above steps are enough to remove inaccuracies. However, if your case is different, write a letter to the creditor explaining why the information they are reporting should be changed along with any documents which support your case. If you still haven't been able to get the change you would like, you can write a letter of explanation which will be attached to your report. This is 100 clearly written words explaining your side with supporting facts and sent to the three major credit bureaus. You never know, those 100 words could make or break your credit application.

Why Correcting Your Credit Report is Beneficial

Most Americans want to own a home, buy a new automobile at some point and apply for a new job sometime in the future. Unfortunately, many of these same people will never get to enjoy these simple luxuries in life because of their substandard credit report and the credit score that goes along with it. That said, there are plenty of people out there who have a less than appealing credit score simply because their credit report does not accurately reflect what their score should really be. In other words, they’re using a credit report that needs to be corrected—and needs to be corrected immediately if they want to turn their financial well being around immediately. If you are one of these people, you might think that correcting your credit report is complicated. However, the truth is that you can correct it on your own (or, to seek help with the correction, see the list of companies who offer to help you correct your problem at the bottom). Start learning about how you can correct your credit report immediately and get started now.

Making your tax audit nominally painful

Preparing a tax audit can be both difficult and intimidating. On the one hand, you’re essentially being investigated by the IRS to insure that you filled out your tax forms properly and paid the proper amount of taxes for a given year. On the other, there’s something in your initial tax filing that has caused a red flag to go off for the Internal Revenue Service. However, it’s also important to remember that not all tax audits are indictments against your tax preparation process. Rather, they are simply to make sure that you’ve filled out your paperwork properly. Therefore, the best way to approach an audit is to be sure you have all you information organized. Below are ten tips from the IRS to help you prepare for an efficient audit. Check out the IRS website for more information on each tip and keep reading to get general ideas on how to make your audit go more smoothly.

Debt Counseling Help

It’s hard enough being in debt without having to worry about choosing the right debt help product. You do not need a finance degree to understand the different options. Here is a quick guide. Debt counseling agencies help you negotiate a payment schedule with your creditors. This can lower your monthly payments by spreading them out over a longer period of time. You usually have to pay a one-off enrollment fee to the agency, plus a monthly fee. This may be a good option if you do not qualify for a debt consolidation loan. Debt consolidation With debt consolidation, you take out a new loan to cover all of your smaller, high interest debts like credit cards and car payments. You use that money to settle the debts and are left with one monthly payment. The interest rate on the debt consolidation loan is lower than on the smaller debts, which means that you can pay it off sooner. The interest rate will depend on the amount you need to borrow, the duration of the loan and your credit history. Home equity loan If you own your home, you can use it to secure a home equity loan. With a home equity loan, your house is used as collateral. You can get this type of loan from a large bank or from a smaller lender. This is a good option if you need to borrow a large amount of money. However, if you do not keep up with repayments, the lender may foreclose on your home, leaving you with nowhere to live.

Fair Debt Collection Practices Act (FDCPA) - Consumer Credit Protection Act (CCPA)

(August 17th, 2007)

The Fair Debt Collection Practices Act (FDCPA) was initiated in 1978 as a statute of law under the Consumer Credit Protection Act (CCPA). It was voted as Law by the Congress to protect consumers from harassment by debt collectors. When original creditors sell their accounts receivable to debt collectors, it is often reported that consumers are harassed to an extreme extent by debt collectors. Harassing phone calls to their homes, workplaces as well as on their cell phones was the case. This extreme verbal abuse led to the filing of record level personal bankruptcies, and Congress had to act on this matter. The uniqueness of the FDCPA is that it allows consumers to dispute debts that they owe as well as request validation of these debts from the collection agencies. This was not possible before the FDCPA became law.

Definition of Debt Collector?

Debt collectors can also name themselves as "Factoring Company" or "Collection Agency" in order to confuse consumers and immune themselves from the rules of the Fair Debt Collection Practices Act. A debt collector is anyone regularly collects debts from consumers on behalf of the original creditors or third parties. Debt collectors use the 2 main communication methods: mail and phone.

What Kinds of Debt?

The Fair Debt Collection Practices Act (FDCPA) is applicable to the following types of debt:

• Auto loans
• Medical care debts
• Mortgages
• Credit card debt
• Retail business loans

The FDCPA does NOT apply to the following types of debts:

• Agricultural or farming debts
• Business debts

Code of Conduct

The FDCPA strictly prohibits debt collectors from conducting any of the following activities:

1) Phoning up consumers outside of the hours 8:00am to 9:00pm (consumer's local time).

2) Contacting consumers in any other way after receiving written notice that the consumer disputes the debt and refuses to make payment. The only way the debt collector can hereafter contact the consumer is via litigation or a court judgement.

3) Contacting consumers at their workplace (after receiving written or phone notice that the consumer does NOT wish to be contacted at his/her workplace)

4) Pursuing futher collection efforts after consumer sends a debt validation request which has not been fulfilled by the debt collector.

5) Misrepresentation of the debt or inflating the debt

Debt Consolidation

Credit Card Maximum
Is the most debt that can accumulate on any given credit card or can be applied to another revolving credit account. What is revolving credit? Basically just an open credit line. They are not attached to your other bank accounts such as chequing account or a savings account but more or less just a line of credit. Most companies will allow you to go slightly beyond your maximum but this amount can vary from one credit card to another and this amount may not be stated on your statement. What is available on your statement is what your credit limit is and what available credit is left. You obviously can continue to make purchases on your credit card until the maximum is reached (but as mentioned you can usually go a little over without penalty) Once the ultimate maximum is reached, your credit card will no longer work until some of it is paid off. This does not have to be once your bill actually comes in either. You can put money down on what is owed at any time. Either visit the bank that issued the card or go online to your account and transfer some money towards it. As time goes on, your credit card provider will often start to increase your credit allowed. While this may seem great to some, for others this becomes a trap as they start to increase their expenditures. If your credit card's limit is being increased and you do not want this to be the case, contact your cards provider and ask for the limit to be reduced. A higher credit line could actually end up costing you from getting a loan too. Even if you don't charge up nearly as high as the card will allow, the loan lending institution may see this as a potential for a large debt to be accumulated thus not being able to pay off the loan.

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