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Refinance your student loans now to save thousands of dollars in interest

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Student loan refinancing rates are continuing to drop. Should you refinance yours or hold off longer? (iStock)

Refinancing your student loans is a smart way to reduce your monthly payment, lower your loan interest rate, or — in many cases — both. That’s especially true in today’s low-rate environment, where private student loan rates dropped as much as 37% in the last two years.

Many people have been asking: Is now a good time to refinance student loans?

Some argue now is the best time to refinance student loans and save money, thanks to the Fed’s emergency rate cuts that dropped rates to zero and gave borrowers some much-needed relief. If you’re financially stable (have excellent credit and steady income), then refinancing student loans now could save you thousands of dollars in interest.

But before you refinance student loans, there are several things to consider.

  1. Today’s student loan refinance rates
  2. Your credit score and income
  3. The type of student loans you have

1. Today’s student loan refinance rates

Interest rates have been dropping for some time on student loans — but the more important factor is the rate you currently have on your existing loans. How does it compare to what’s being offered by lenders today?

As Randy Lupi, regional vice president of Equitable Advisors, explained: “With interest rates at all-time lows, it makes perfect sense for people to take a look at the current interest rate on their student loans and see if they can refinance to a lower rate. It’s almost always worth refinancing, even for a half a percentage point savings.”

Credible can reveal what rates you qualify for when refinancing. You can compare student loan refinancing rates from up to 10 lenders without affecting your credit. Plus, it’s 100% free!

10 OF THE BEST STUDENT LOAN REFINANCE COMPANIES

Then, use that data — plus your current loan interest rate — and calculate out the savings using an online student loan refinancing calculator. This will let you know if securing a lower interest rate will help you save money long term.

2. Your credit score and income

Having a good handle on your personal finances is critical before refinancing student loans, too. As Craig Borkovec, a financial advisor with Miracle Mile Advisor, put it, “A borrower’s financial situation is extremely important. At the end of the day, a lender needs assurance that the loan they are offering will be paid back — plus interest.”

There are two things you should check before starting the application process:

  1. Credit score
  2. Income

Credit score: If you have bad credit, you’ll want to work on improving it before applying for your refinance or, at the very least, consider a high-credit cosigner release.

“Student loan refinancing loans are considered super-prime,” said Kevin Walker, CEO at CollegeFinance.com. “They’re available only to those with relatively strong credit and income. Borrowers will typically need a credit score above 680, and to get the best rates, their score will likely need to be close to 800.”

If you have an excellent credit score and are confident in your credit history, then you can plug that information into Credible’s free online tools to check your rates instantly.

HOW MUCH DOES IT COST TO REFINANCE YOUR STUDENT LOAN?

Matt Logan, a certified financial planner based in Greensboro, N.C., agreed.

“Currently for borrowers with good credit, student loan rates and refinancing options can be found in the low threes, which is highly competitive for borrowers,” Logan previously explained.

Income: Having a steady and proven income source is another way to offer assurance you’ll get approved to refinance your student loans, Borkovec said, as is avoiding new debt (loans, credit cards, etc.) in the six months before applying for the loan.

If you have a good credit score and steady income, then the application process should be smooth. You can get started on Credible.com now.

3. The type of student loans you have

Finally, know what type of student loans you have: there are federal and private student loans.

If you have a federal student loan — or those offered through the U.S. government — then you’ll need to consider its perks (which private student loans don’t have).

These perks include things like loan forgiveness if you go into a public service career, income-based repayment plans, and the current payment and interest waiver created through the CARES Act. This allows federal student loan borrowers to skip their monthly payments through at least December 31, 2020, due to the coronavirus pandemic.

HOW TO CHOOSE THE BEST STUDENT LOAN REFINANCING OFFER

Refinancing your federal loans into a private loan would mean forfeiting those benefits. As Lauren Anastasio, a certified financial planner with SoFi, explained, “Many student loan borrowers choose to refinance to obtain a better interest rate or lower monthly payment, but those benefiting from the waiver won’t find a rate better than 0% or a payment lower than $0, which is what they temporarily have today.”

When to wait it out

Low rates or not, refinancing isn’t right for everyone, particularly if you have:

  • Bad credit
  • Federal student loans
  • No income (between jobs)
  • Credit card debt

There are other situations when waiting might make sense, too. “If you’re between jobs, definitely hold off unless there are other income sources offsetting the liabilities in your life,” Borkovec said. “If you have higher credit card balances but know a bonus is coming in the near future that could help pay that down, waiting to apply after paying those credit cards or loans down is the smart thing to do.”

At the very least, check your rates and consider several student loan refinancing companies before refinancing student debt (Credible can do this without hurting your credit).

HOW TO REFINANCE HIGH-INTEREST RATE STUDENT LOANS

Paying for college doesn’t have to be stressful. Take advantage of low rates now to save money and time paying off your student debt. Use a student loan refinancing calculator to see how lower rates and switching repayment plans could help save money.

You might also want to consider speaking to a financial advisor or credit counselor, depending on your financial situation.

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Possible Raises Series B and Moves Fully Remote | State

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SEATLLE, Oct. 20, 2020 /PRNewswire/ — Possible raises $11 million in new equity funding to expand the team and to provide additional products for its customers. Union Square Ventures led the round, with participation from existing investors Canvas Ventures, Unlock Venture Partners, Columbia Pacific Advisors, Union Bay Partners, Tom Williams, and FJ Labs. The company has also secured $80 million in new debt financing from Park Cities Advisors.

Furthermore, the company is now fully remote and recently onboarded software engineers from across the US and the globe. Possible is committed to distributed work and actively recruiting for a number of other remote roles.

Possible provides friendly access to capital and a simple way to build credit for people who otherwise would get a payday loan or get hit with a bank overdraft fee. The company uses real-time financial data, rather than a credit score, to qualify customers and provide funds instantly through its iTunes and Android apps. Unlike payday loans or overdraft fees, Possible loans are paid back in small installments over multiple pay periods to allow customers to catch their breath. By reporting on-time payments to the credit bureaus, Possible enables its customers to build credit history and eventually qualify for cheaper, longer term financial products. On average, customers with low credit scores see their scores increase by 70 points within 4 months.

Tony Huang, Possible’s CEO explains, “So many people who live paycheck to paycheck can’t afford to build credit history. We’re helping them do it for the first time while providing them with a friendlier and more affordable small-dollar loan.”

Since launching in June 2018, Possible’s given out loans to hundreds of thousands of customers, helping meet short-term cash needs while building credit history or establishing credit for the first time. These customers, often with bad credit or no credit history, are underserved by traditional banks. Possible fills that gap and provides financial access to those who need it most while giving them the means to climb their way out.

Gillian Munson, Partner at Union Square Ventures, explains the thesis behind their new investment, “Through tech innovation, data-driven insights, and a focus on the customer, Possible is well on its way to winning the hearts and minds of both consumers and regulators alike, and building a trusted brand that endures.”

A 2019 Experian study shows 34.8% of consumers are subprime and can’t access money when they need it. They pay $106 billion in punitive fees each year to the existing financial system for short-term credit products. These consumers are trapped in predatory debt cycles of payday loans and overdraft fees without the means to rebuild their credit or improve their financial health. While there has been a number of new tech-enabled products in this space, most lead to similar debt cycles and don’t address the harder issue of improving long-term financial health. That’s where Possible comes in.

Since the company is now fully remote, Possible is actively hiring talent across the globe. Tyler, Possible’s CTO, explains, “Being fully distributed allows us to access the talent pool of the entire world. Our success so far is a reflection of the quality of our people, and we believe hiring globally will allow us to find exceptional people to join us in achieving our mission.”

About Possible

Possible is a fintech company based in Seattle, Washington. The company provides a friendlier and easier way for customers to access capital while also building credit history and improving long-term financial health.

About Union Square Ventures

Union Square Ventures is a thesis-driven venture capital firm based in New York City. USV manages over $1 billion in capital across seven funds and focuses investments in portfolio companies with the potential to transform important markets.

About Park Cities Advisors LLC

Park Cities Advisors LLC (“PCA”) is a privately held, SEC-registered alternative credit manager based in Dallas, Texas. PCA is focused on private lending across the specialty finance and FinTech sectors and provides debt capital to companies across a variety of industries through asset-based financing transactions.

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Possible Raises Series B and Moves Fully Remote | State News

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SEATLLE, Oct. 20, 2020 /PRNewswire/ — Possible raises $11 million in new equity funding to expand the team and to provide additional products for its customers. Union Square Ventures led the round, with participation from existing investors Canvas Ventures, Unlock Venture Partners, Columbia Pacific Advisors, Union Bay Partners, Tom Williams, and FJ Labs. The company has also secured $80 million in new debt financing from Park Cities Advisors.

Furthermore, the company is now fully remote and recently onboarded software engineers from across the US and the globe. Possible is committed to distributed work and actively recruiting for a number of other remote roles.

Possible provides friendly access to capital and a simple way to build credit for people who otherwise would get a payday loan or get hit with a bank overdraft fee. The company uses real-time financial data, rather than a credit score, to qualify customers and provide funds instantly through its iTunes and Android apps. Unlike payday loans or overdraft fees, Possible loans are paid back in small installments over multiple pay periods to allow customers to catch their breath. By reporting on-time payments to the credit bureaus, Possible enables its customers to build credit history and eventually qualify for cheaper, longer term financial products. On average, customers with low credit scores see their scores increase by 70 points within 4 months.

Tony Huang, Possible’s CEO explains, “So many people who live paycheck to paycheck can’t afford to build credit history. We’re helping them do it for the first time while providing them with a friendlier and more affordable small-dollar loan.”

Since launching in June 2018, Possible’s given out loans to hundreds of thousands of customers, helping meet short-term cash needs while building credit history or establishing credit for the first time. These customers, often with bad credit or no credit history, are underserved by traditional banks. Possible fills that gap and provides financial access to those who need it most while giving them the means to climb their way out.

Gillian Munson, Partner at Union Square Ventures, explains the thesis behind their new investment, “Through tech innovation, data-driven insights, and a focus on the customer, Possible is well on its way to winning the hearts and minds of both consumers and regulators alike, and building a trusted brand that endures.”

A 2019 Experian study shows 34.8% of consumers are subprime and can’t access money when they need it. They pay $106 billion in punitive fees each year to the existing financial system for short-term credit products. These consumers are trapped in predatory debt cycles of payday loans and overdraft fees without the means to rebuild their credit or improve their financial health. While there has been a number of new tech-enabled products in this space, most lead to similar debt cycles and don’t address the harder issue of improving long-term financial health. That’s where Possible comes in.

Since the company is now fully remote, Possible is actively hiring talent across the globe. Tyler, Possible’s CTO, explains, “Being fully distributed allows us to access the talent pool of the entire world. Our success so far is a reflection of the quality of our people, and we believe hiring globally will allow us to find exceptional people to join us in achieving our mission.”

About Possible

Possible is a fintech company based in Seattle, Washington. The company provides a friendlier and easier way for customers to access capital while also building credit history and improving long-term financial health.

About Union Square Ventures

Union Square Ventures is a thesis-driven venture capital firm based in New York City. USV manages over $1 billion in capital across seven funds and focuses investments in portfolio companies with the potential to transform important markets.

About Park Cities Advisors LLC

Park Cities Advisors LLC (“PCA”) is a privately held, SEC-registered alternative credit manager based in Dallas, Texas. PCA is focused on private lending across the specialty finance and FinTech sectors and provides debt capital to companies across a variety of industries through asset-based financing transactions.



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Business Loans – Make The Right Choice!

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Your business needs funding and there’s no denying that! ‘You need money to make money’ and this is most applicable in the business world! While it is fairly easy to start with an awesome idea, to make a business profitable, you need to invest a good chunk of capital.

Whether to buy equipment or hire the right minds, you need capital! And the best way to go about it is to search for the ‘right’ business loan solution. Finding the ‘right’ one amongst the plethora of available options is a tricky decision.

You’ll be under stress to match the repayment frequency. And thus, your business will suffer. Hence, finalizing the right business financing solution after analyzing your business structure, repayment terms, cash-flow, and urgency is the best practice.

Here’s a detailed breakdown of which business financing solution or small business loan will help your business better!

1. For Real Estate – SBA

SBA loan is one of the most popular loans for small business owners. This is pretty straightforward to understand but involves extensive paperwork. If you need a place to kickstart your business, this is most suited for you.

It is issued by a private lending party or a bank. But the interesting part is that this loan can be guaranteed up to 85% by the federal agency—Small Business Administration (SBA). Hence, lending institutions are free and content to give the loan.

The best things about this loan are the lowest down payments and low-interest rates. If you wish to pay in the very long term, you can do so. An SBA loan involves a lot of flexibility. The condition being you should have the right financial service provider to guide you.

2. For An Equipment Or Any One-Off Loan – Equipment Financing, Term Loan

Do you need a new computer, or a tablet for your employee, or maybe a vehicle for your business’ delivery needs? Equipment financing is best suited for such kinds of needs. You can also get up to 100% financing solutions.

But there is one drawback that you should be aware of. As long as the repayments are done on time, you’ll continue to have access to the equipment. But the moment you fail short of your commitment, the lending institution has completed control over ceasing it.

A business term loan is another solution for this kind of requirement. Term loans are based on the ‘term’ that can be anywhere from 1 to 5 years. So, the repayment has to be made in that time-frame. If you’re looking for business loans in Edgewater, NJ, this will be just about right for you!

3. Need To Balance Cash Flow – Business Line of Credit

Business Line of Credit is the best financing solution that can help you with balancing your cash flow or handling any emergencies.

You get access to a limited amount of funds for a set period of time that you need to pay with interest and as soon as you pay it back, your specific balance sheet is turned back to ‘0’. This indicates that you’re again eligible for using that fund.

You can do it repetitively. There is no drawback to this mechanism. So every time you have an emergency fund need, you can look towards the business line of credit.

The only shortcoming of this system is that the interest rate is high and may require collaterals for approval. However, it is one of the most appealing choices if you need capital and have a bad credit score!

4. Credit Card Based Businesses – Merchant Cash Advance

Do you own a business that involves payments via credit cards? If yes, then the merchant cash advance is the right solution for you.

A business like retail or food chain that makes use of credit card transactions the most, can utilize merchant cash advance to boost its business. The way this financing system works is, the lender will enquire about your daily credit card transactions to the terminal provider and get your exact details. Then, he will compare it with the asked amount. If both are in accordance, you’ll become eligible for the advance.

The repayment term is interesting for this financing solution. Instead of getting a fixed rate, the advance provider will give you the figure in percentage. So every day if you make $1000 and the decided percentage is 5, then $50 will be ‘withheld’.

A merchant cash advance acts more like an investment than a loan!

5. Have No Collateral – Invoice Financing, Equipment Financing

Not all businesses have the luxury of putting collateral on the line and getting access to the desired fund. If you fall into the same category, you do not need to worry! Invoice financing can help you out even in this crunch situation.

Your account receivables serve as collateral in this financing solution and can help you get a loan up to 85% of its worth.

The only downside is the interest rate that is marginally higher than the traditional solutions.

Bonus: For A Small Duration – Short Term Loan

What if you need a loan just for 18 months? You have some debt or need to manage the cash flow, but your requirement is small. Which loan is right for you?

Well, you can opt for a short term loan. This loan gives you instant access to a lump sum of money that should be paid within the next 18 months.

The best part about this loan is that bad credit doesn’t bother the process!

This can also support businesses that need temporary loans to manage or settle a few things. Businesses that do not need some loan that lasts for years!

But just like all other financing solutions, this loan as well comes with a few drawbacks.

The first one being the annual cost will be slightly towards the higher side and the second being that a few businesses may find it hard to cope-up with the weekly payments.

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