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How to Pay Off Debt When You’re on a Fixed Income



Paying off debt can be a real burden for anyone, but it can be especially challenging for those living on a fixed income from month to month. Fixed-income Americans include groups like retirees who no longer receive a regular paycheck and instead rely on a pension or Social Security income.

While paying off debt on a fixed income may be more difficult, it is possible. Give these three tips a try to help say goodbye to debt and hello to more financial freedom.

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1. Redo your budget

The easiest of the three options is to simply redo your budget. Revisit where you’re allocating and spending your fixed income each month and see if there are changes you can make. Are you paying $120 a month for a cable plan you barely use, or $100 for unlimited cellular data even though you’re always on wifi? Or perhaps you’re paying $100 for the highest-speed internet when you only pop open your laptop to read the news? These scenarios leave lots of room for reworking your budget.

You could, for example, cancel that costly cable plan and opt for a Netflix subscription ($8.99 to $17.99 per month, depending on the plan you choose) until you make a dent in your debt. That’s over $100 a month you can reallocate to debt payments. Take this scenario even further and say you also opt for one of the cheaper cellphone plans floating around. One popular carrier is offering $35 a month per line for two lines of unlimited data for those 55 and older. There’s another $65 saved. And finally, you can probably cut your internet price in half — or at least get a sizable deduction — by downgrading your speed. All-in, you’re looking at about $200 a month in savings just by making these three changes.

The scenarios above don’t even touch on other budget categories you could look at, like lowering your grocery bill, dining out less, or cutting back on trips to the salon. Every dollar you can save in your budget can be put toward freeing yourself of debt. And the sooner you are debt free, the sooner you can welcome back some of those luxuries you cut.

2. Consolidate your debt

Debt consolidation is a great option for a couple of main reasons:

  1. It lumps all your debt together so that you make just one payment instead of several.
  2. You generally pay much less in interest on consolidated debt.

Eliminating the need to keep track of and pay multiple debt payments each month takes a lot of the stress out of the equation. Instead of paying four credit card companies and a personal loan or two, you can instead make one lump-sum payment covering all of these debts at once.

There are multiple ways to consolidate your debt, including:

One of these options might work better for you than the others. Personal loans are a popular option because they usually charge much lower interest than credit cards. There are personal loans for people of all credit scores, from personal loans for bad credit scores to personal loans for excellent credit scores. Also, unless you take out a secured personal loan, unsecured personal loans don’t require you to put anything on the line to get your loan. That makes them a fairly safe option for consolidating your debt.

If you have an amount of debt you think you can easily pay off within a year or so, then a balance transfer credit card with a 0% introductory rate might be the perfect solution. As long as your credit limit is high enough to cover all your debts and you pay the debt off within the intro period (usually 12 to 18 months), you won’t pay any interest using this method.

If your debt amount is higher, but you own a home with a decent amount of equity (the amount of your home you own outright), you could take out a loan against that equity. You put your home on the line with a home equity loan, however, so you must be sure you can make the payments on time. Home equity loans also typically come with much lower interest rates than what you pay with credit cards, so they might be a good option for you.

3. Get a side hustle

Side hustles aren’t only for the young and unencumbered. There is side hustle work available for all walks of life. Do you like to take a daily neighborhood stroll? Add a couple furry pals to that walk and get paid to do so. Do you like giving your opinion on products and services? Sign up for a survey or review site and get paid for submitting your thoughts. Have a couple free hours in the evenings and love to knit? Whip up some mittens or blankets and sell them for cash. Any dollar you can bring in that adds to your fixed income can contribute significantly to paying down your debt.

Becoming debt free is no easy task, and it can be made even more difficult with limitations like a fixed income. But as much as it may feel like it, your situation isn’t hopeless. There are still ways to dig out. Put one or more of these tactics into action today — your personal finances will thank you.

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Are Sallie Mae Student Loans Federal or Private?



When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances



Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit



Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.



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