Your Low Credit Score Could Cost You $45,000

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Your credit score is one of the primary items that lenders check when they consider loaning you money. A lower score means greater risk, and lenders will charge you a higher interest rate because of that difference – but how much could it cost you over the lifetime of a loan?

According to a new study from LendingTree, if you have only fair credit instead of very good credit, the difference can cost you over $45,000.

LendingTree analyzed loan data from their database to assess the costs of a lower credit score as applied to five different sources of borrowing (credit card debt, personal loans, auto loans, student loans, and mortgages). Interest was calculated based on the average loan amount for each type of credit. Combined, the loans totaled $310,263 – dominated by the average mortgage loan of $234,437.

At interest rates available with very good credit (740-799), the total interest payment over the lifetime of all five credit sources was $212,498. At t…

Credit-Builder Loans 101

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Applying for credit for the first time is a bit like applying for your first job. People are hesitant to hire you because you don’t have any job experience, and you can’t get any job experience because nobody will hire you. In the case of credit applications, creditors are leery of extending credit if they don’t have any evidence that you will pay your bills on time.

Credit-builder loans are designed to help those with little or no credit history to build their credit. Loan amounts are relatively small (typically between $500 – $1500) to minimize the lender’s risk. The lender reports your activity to the credit bureaus, thus establishing your credit history.

There are three basic types of credit-builder loan:

  • Standard Secured – The amount of your loan is backed by money that you already have in a savings account. That collateral is frozen, and …

5 Worst Mistakes of Online Borrowing

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Getting a personal loan online has grown into a multi-billion-dollar industry, with lenders ranging from individuals in peer-to-peer programs to big banks. Although countless Americans have been helped by the ability to borrow money without leaving home, others have hurt themselves by being ill prepared for the process.

“Because the loans are being evaluated remotely, the chances of making a mistake are increased,” warns Todd Nelson, Business Development Officer of LightStream.com, which offers personal loans from $5,000 to $100,000. In an exclusive MoneyTips interview, Nelson reveals the 5 worst mistakes you can make when borrowing money online.

  1. Ignoring inaccuracies on a credit report
    Credit bureaus constantly receive information about your credit use and history, contributing to a profile that lenders …

Refund Advance Loans And Refund Anticipation Checks 101

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Are you counting on your tax refund to pay off bills? You may need the cash before your refund arrives.

The IRS website states that typical refunds take less than 21 calendar days if you e-filed your return. However, if you are claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) your refund may be delayed further.

Tax preparers may offer a solution in the form of refund advance loans (RALs) and refund anticipation checks (RACs). What’s the difference between the two, and is either one right for you?

Refund advance loans are just what they sound like – a loan issued by a lender for the amount of your anticipated tax refund. You are loaned the money up front and your refund is used against the loan balance.

Predatory, older-style RALs were basically eliminated by rule changes in 2010 and 2012 due to high interest rates and other charge…

Video: The Dangers Of Co-Signing A Loan

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They say, “No
good deed goes unpunished,” and that certainly applies to kind-hearted
people who co-sign for a loan. In our exclusive video above, Nav Head of Market
Education Gerri Detweiler explains what you’re risking when you co-sign a loan.

If you are interested in a personal loan, visit our curated list of top lenders.

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More Than Half Of Us Have Seen Friendships End Over A Loan

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What’s one of the easiest ways to end a friendship? Loan your friend a significant amount of money. According to a recent survey from Bank of America, money was the fourth greatest cause of stress in a friendship, behind jealousy, gossip, and disagreements. We would rather talk to our friends about family drama, weight, or even love lives than discuss money matters.

Other survey results make it clear why money concerns end friendships. More than half of survey respondents (53%) have seen a friendship end due to money owed, and one-third of respondents are personally fearful of losing a friendship because of a debt.

Those respondents are wise to be fearful, because 43% of Americans are willing to end a friendship over not paying back a debt. Within that group, 74% have their breaking point on debt of $500 or less – and 38% would end the friendship for an unpaid debt of $100 or less.

By more than a 6:1 margin, respondents belie…

More Protection for the Military

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If you are one of the brave men and women serving our country in uniform, you face enough dangers. You do not need anyone attempting to take financial advantage of you by capitalizing on the unique challenges of military life.

Unfortunately, you can find many payday loan lenders and other purveyors of short-term, high-interest loans near any military base. Bases are full of young service members with a regular and reliable paycheck — fertile ground for lending groups. According to The Wall Street Journal, payday loan organizations target families with service members at twice the rate at which they target civilian families.

The Military Lending Act of 2006 was designed to prevent lenders from taking advantage of military families by capping the effective interest rate at 36%. However, only three credit products were covered: closed-end

6 Situations Where A Personal Loan May Be Better Than A Credit Card

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When you have a relatively large expense that you can’t cover with cash on hand, you generally have two choices to consider: revolving debt such as a credit card, or installment debt such as a personal loan. Which option works best for you?

Consider the difference between the two types of debt. Revolving debt has no finite payment — you can pay as much or as little as you want, but realize that you are paying interest for the privilege of carrying that debt. Installment debt allows you to set up a regular repayment plan over time, and the terms of repayment (the interest rate and length of repayment period) will dictate how much you repay per installment and over the total course of the loan. You can budget your interest costs with certainty, assuming that you make regular payments.

Typically, credit cards come with higher interest rates than personal loans. Introductory offer…

Lenders Pulling Back on New Subprime Loans

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It’s tough living on the lower end of the credit score scale. If you have a credit score below 640 or so, you are generally given “subprime” lending offers for any form of credit that you request. From credit cards to auto loans and mortgages, you will be hit with higher interest rates and potentially other restrictions and fees.

According to credit bureau TransUnion’s Q2 2017 Industry Insights Report, you now have another problem to deal with – difficulty in getting credit at all.

TransUnion found that overall originations for subprime consumer credit have dropped sharply over the past four quarters. Total subprime originations dropped from a post-crisis peak of just under 6 million consumers in Q2 2016 to just under 4.6 million in Q1 2017. The last two quarters represent the first consecutive year-over-year decreases in overall subprime ori…