Financial Toolkit- Student Loan Repayment Worksheet

We all know that a financial goal is an intention we plan to save or plan our expenditure. The only way it differs from any other goal is that it is expressed completely based upon money. It varies from person to person for instances retirement planning, debt reduction, credit improvement etc.
Writing your financial goals is essential. Written goals bring transparency to your financial situation and make you focus. By reviewing your goals throughout the year, you will be definitely able to secure your future. A goal in written is a powerful reminder that you can track to achieve greater success in your financial life.
It is always advised you should take the least amount of debt possible so that you can start repaying for the student loan as soon as you get your graduation. Higher debt amount may impact on your credit score.  So is it worth paying it off early? Again your money grows with investments. It will be wise not put all your money towards debt payments. Like many experts, I recommend debt payments should be under 10% of your total monthly income.
student loan repayment plans

Student Loan Repayment Options

# Revised Pay As You Earn (REPAYE)

The REPAYE student loan repayment plan is an up gradation of the formerly called Pay As You Earn (PAYE) plan. The Revised Pay As You Earn plan eliminates certain restrictions with loan repayment in the PAYE plan and includes a number of additional benefits for students to pay off their loans while earning consistent income.
The REPAYE plan cops your monthly payments at 10% of your discretionary income and offers loan forgiveness after 20 years of making qualified payments (for undergraduate loans). The same plan provides forgiveness after 25 years for graduate loans.
Qualifying student loan types under this plan:

  • Federal Direct Loans
  • Stafford
  • Graduate Plus Loan

# Pay As You Earn (PAYE)

The Pay As You Earn (PAYE) plan was passed by President Obama to try and improve the existing restrictions and guidelines of the Income-Based Repayment (IBR) option.
The PAYE plan caps your monthly payments at 10% of your discretionary income and reduces the loan forgiveness term from 25 years (IBR) to 20 years in the PAYE.

# Income-Based Repayment

The Income-Based Repayment is a much older plan and offers lesser benefits as compared to the REPAYE and PAYE plans. Being one of the most popular student loan repayment options available, the IBR plan provides some of the strongest benefits to the borrower.
The IBR plan provides loan forgiveness on the first three years of any unpaid interest from the Income-Based Repayment enrollment time for the subsidized portion of your loan.
Students can take advantage of the IBR option, if and when:

  • You are facing a financial hardship.
  • You qualify for a zero loan payment or payment of less than the monthly interest payment on the loan.
  • You do not see a large shift in your income in the near future.
  • If you can see yourself making zero qualified payments always.

# Standard Repayment

In the standard repayment loan option, the loan payment is calculated just like any other normal loan. The term of the loan is based on the size of the loan and the calculation of the payment is based on both the term and size of the loan taken. The standard repayment option can be used when:

  • If you have less than 30 years left on the term.
  • You wish to pay off your student loan debts as soon as possible.
  • Your loan amount is small, in which case you can continue paying a minimal amount over a shorter period of time than elongating the time period for your payments.

# Graduated Repayment Plan

Very similar to the standard repayment plan, the Graduated Repayment plan works with a small difference. Students under the graduated repayment loan need to pay interest only on the loan, due to which you will have to pay smaller amounts as compared to the standard repayment loan option. For the first three years, you can pay interest only on the loan, after which the payment increases depending on the size and term of your loan. A graduated repayment plan can come to use when:

  • Your income is high enough for you to make the payments.
  • If you don’t qualify for the IBR repayment plan.
  • You want to start with paying minimal amounts initially and increase payments once your income increases in the future.

The biggest drawback of this student loan repayment option is that the total amount that you will have to pay at the end of it all will be much higher than that of a student repayment plan.

# Income Contingent Repayment

The Income Contingent Repayment takes into consideration a number of income-based factors to determine your payment during a student loan repayment. The Income Contingent repayment plan is calculated in two ways – Adjusted Gross Income (AGI that excludes your loan size) and AGI (that includes your loan size and value). You can opt for an Income Contingent repayment plan when:

  • You need financial relief
  • You wish to be legible for student loan forgiveness.
  • You do not see a higher income for yourself in the future.

Conclusion:

By selecting any of the above key student loan repayment plans, you can easily secure your education and have a successful financial situation. Don’t be pressed for money when it comes to your graduation or post-graduation. In cases of excessive confusion, you can contact student debt relief organizations to understand the best loan repayment option for you.

Top 7 Myths About Comprehensive Car Insurance

For some, insurance is an unfamiliar concept. Thus, it is natural for them to have doubts. What adds to these doubts are the myths that are associated with insurance policies. These myths are fueled by hearsay and add to the existing confusion.
Car Insurance
The following are top 7 myths that are associated with Comprehensive Car Insurance. Let’s have a look at these myths and find out the truth.

Myth 1 – Availing Comprehensive Car Insurance is a tedious process

Reality
Few years ago, when the entire insurance business was conducted on paper, it would’ve been right to consider availing Comprehensive Insurance Car Insurance as a tedious process. Now, in the digital age, purchasing a policy has become extremely easy. Information is provided in an easy-to-understand manner on websites and the purchasing process is similar to online shopping sites that people are used to.
Also, the inclusions and exclusions of the Comprehensive Car Insurance Policy are clearly mentioned in the policy document. The plan is presented in a structured way. It can also be purchased through the App on your phone. Insurance companies have made efforts to make their products transparent and their processes convenient.

Myth 2 – Comprehensive Car Insurance Policy does not cover Third-Party Liability

Reality
Availing a Third-party Liability Insurance is mandatory by law. It is a basic insurance policy that one can avail to stay on the right side of the law and protect the interests of various third-parties that might be affected by an accident caused by your car. Comprehensive Car Insurance is termed as ‘comprehensive’ as it covers the basic, Third-party Liability insurance, as well as provides Own Damage cover.
Thus, a Comprehensive Car Insurance Policy includes a Third-party cover. It also protects the insured from financial losses in case of damages to the car or any injury to self. Co-passengers can also be insured with the help of Add-ons that offer extra coverage.

Myth 3 – Comprehensive Car Insurance only covers accidents

Reality
Comprehensive Car Insurance Policy not only covers accidents but also provides insurance cover against risks such as theft, calamities, etc. This policy offers wide insurance coverage. Third-party Liability and Own Damage are covered, and there are several other Add-ons that further enhance your car’s insurance cover.

Myth 4 – Only new drivers should go for Comprehensive Car Insurance

Reality
This myth stems from the thought that new or first-time drivers might need more cushioning, thus they should opt for a Comprehensive Car Insurance. No doubt it is beneficial for first-time drivers to enhance their insurance cover however, continuing with it when they gain more experience is a wise decision instead of degrading to just a Third-party Liability Policy.
Gaining experience as a driver can help one enhance their driving skills but experience does not provide financial protection against major threats. It does not have any relation to threats such as fire, calamities and theft. As a Comprehensive Car Insurance Policy provides a wide cover, experience drivers should also opt for it.

Myth 5 – Old cars do not need Comprehensive Insurance

Reality
More than the age of the car, the need for Comprehensive Car Insurance will depend upon the usage of the car and the way it is driven. If an old car is used extensively and driven in a rash manner then it goes without saying that it needs Comprehensive Insurance. If the car is in the parking spot for most of the time and the owner plans to sell it in the near future, then the need for Comprehensive Car Insurance needs to be assessed accordingly. Even in that case, the car is vulnerable to risks such as theft and damage due to natural calamities.

Myth 6 – In case of an accident, we have to compulsorily pay first to get the car repaired

Reality
Top insurance providers have tie-ups with garages. Whenever there is an accident, it is advised that the insured car is taken to a partner garage. The expenses are adjusted between the insurance company and the garage internally. The owner of the insured car has to just pay the deductible amount.
If the car is repaired at a garage that is not a part of the insurance company’s network of garages, then the insured has to first pay the expenses for repairs and then get it reimbursed from the insurance company.

Myth 7 – Purchasing insurance online is not safe

Reality
Purchasing insurance online is as safe as buying any product online. Insurance companies take great care to ensure that their payment gateways are secure. While transacting, make sure that the website or the mobile app through which the transaction is conducted is official.

What’s the Conclusion?

Purchasing a comprehensive car insurance will give you wide insurance coverage. Make an informed decision keeping in mind, your car, driving technique, and majority risks that you are exposed to. Also, it is suggested to go for Add-ons that are most-suitable. Such Add-ons will further enhance the insurance coverage offered by your comprehensive car insurance policy.

All You Wanted To Know About Bitcoin, the Most Popular Cryptocurrency

Digital Currency

One thing no one ever thought of was the idea of digital currency. It sounds interesting but who would have thought it was viable. The newest form are cryptocurrencies and they range from a different wide-range of use-cases. Cryptocurrencies are a new form of currency that is taking the world by storm. It has grown so quickly that governments are scrambling to come up with laws and regulations around it. One thing to note is these are not virtual currencies. Virtual currencies are money used in online multi-player games that do not have value other than that inside the game. You cannot spend it outside in the real world but digital currency is more like cash in the digital sense.
bitcoin-coin
Many countries like South Korea and Australia have already legalized Bitcoin as a legal currency. Bitcoin is the de-facto digital currency and the one with the most hype since it was the first one of its type.

What are Cryptocurrencies

Cryptocurrencies are only done online and they are usually a peer to peer currency. This means two people can share or exchange money between each other without a central authority coming in between them. If you go to the store and use your Visa card to purchase something, you are getting authorization from Visa and the seller is paying around 3-4% of that transaction back to Visa. With cryptocurrencies, currencies are pretty much all a decentralized network that do not need authorization. As of writing this, there are over 1200 cryptocurrencies.

How are they Different than Fiat?

Fiat currency is always backed by a central bank like the dollar backed by the Federal Reserve. We know how this works out when the government gives bail outs or when money is tight. They just print more. This leads to inflation.

What is Bitcoin?

Bitcoin is the main cryptocurrency that leads the pack of all cryptocurrencies. Currently, Bitcoin is hovering around the $7,400 mark with a $122 billion market cap and taking over 60% of cryptocurrency dominance. Bitcoin has also been noted to be Gold 2.0. With so many different digital coins coming out, Gold is more of a store of value as time goes on.

How it Works?

The way Bitcoin works is very simple. You either get paid in Bitcoin for something you sell or you can go to an exchange and purchase it. Exchanges are usually online but an influx of Bitcoin ATMs have been flooding the market too so you might have one right next to you. In order to exchange or buy goods or services with it, simply put the Bitcoin address of whoever you want to send it too. They should receive it shortly.

Benefits of Bitcoin

Obviously it would not make sense to use a new form of currency when the other forms are working but what if they’re not? Many people are fed up with the banks and central governments way of controlling our money. Bitcoin was created by Satoshi Nakamoto in 2008 in response to the banking financial crisis. It doesn’t make sense for us citizens to work hard and pay taxes then turn around and give the banks the ultimate power. Not only did they lose trillions of dollars because of the financial crisis but they still got bailed out by the government.

  • Transparency: Bitcoins network is built on the blockchain. The blockchain is the backbone of cryptocurrencies. It is a digital ledger where all the transactions are recorded for everyone to see. This helps with transparency so no one can move money without someone knowing. Contrary to popular belief, Bitcoin is not anonymous, it is pseudonymous. This means if a country was to sell nukes to another country, the value of the exchange would be written all over the blockchain. This can eventually lead us to the buyer and seller.
  • Transaction Fees: When you purchase with a credit card, you are not responsible to pay the fees on the card but the seller is. Not only does the seller have to pay for the stores expenses but they need to pay taxes on top of each sale and still pay a merchant fee of around 4%. Bitcoin relieves some stress from the seller because transaction fees are paid by the buyer. Transaction fees are also very small compared to credit card fees. Bitcoins fees are less than a percent.

How to Switch Your Gas and Power Tariffs in the US

Switching your gas and electricity tariff can be an alien concept for people all over the world, especially if you have been used to having just one energy company in your area until recently. This is especially true in the United States, where up until recently all states across the nation had been regulated by just one local energy company. Well, that has now changed in 32 states.

In these states, in varying degrees, you can choose from a number of different tariffs, companies and supplies, all ranging greatly in price, giving you much more control of your bills. In this article you can find out exactly how to switch your deal.

Gas and Power Tariffs

Which states can switch? 

Below is list of all the states in which you can switch your energy to some degree. If you don’t see your state yet on the switching list, don’t worry, it’s likely that deregulation is on its way soon.

Can’t switch Power only Natural gas only Power and natural gas
Washington
Idaho
Utah
Colorado
Kansas
Nebraska
South Dakota
North Dakota
Minnesota
Wisconsin
Louisiana
Mississippi
Alabama
Tennessee
Kentucky
North Carolina
South Carolina
Vermont
Oregon
Arizona
Oklahoma
Arkansas
Connecticut
New Hampshire
Maine
 
Wyoming
Iowa
Missouri
Indiana
West Virginia
Georgia
Florida
California
Texas
Montana
Nevada
New Mexico
Illinois
Michigan
Ohio
Virginia
Pennsylvania
New York
District of Columbia (DC)
Delaware
New Jersey
Maryland
Rhode Island
Massachusetts
 

How to switch tariff 

Switching your tariff is extremely easy and has been built on various case studies across the world, primarily within Europe, the United Kingdom especially. Companies like Selectra  have been operating for years, providing customers with unbiased, full market comparisons so that you can choose the cheapest tariff to switch to. As such, there has been websites pop up across the US such as ‘Choose Energy’ and ‘Power 2 Switch’.
Your part ends fairly early: all you need to do is provide a few personal details, such as your name, address and bank details. Once you have indicated which tariff you would like to switch to, the switching company will take care of the rest. In addition, don’t worry about cancelling the contract that you’re currently on, because the switching company will take care of that too! Everything within this process really is simple for the customer.

What type of tariff should I get? 

There are a few types of tariffs that you should be aware of. This will determine the way that you pay for your energy, what you receive and how long you need to be tied down to that deal.
Here’s your options:
Standard variable – the most flexible of tariffs, a standard variable means that you don’t have any contract length: you can switch and swap as you wish. The downside is that your unit rate, the amount that you pay per unit of energy, can rise and fall with the wholesale prices worldwide. The idea of it decreasing might sound nice, but this won’t happen to very many, believe us!
Fixed – The most popular tariff type, a fixed tariff will generally result in being cheaper than a variable, but will tie you down to a contract for a predetermined amount of time, usually in years. This could be seen as a good and a bad thing. On the one hand, it protects you from any price increases in the coming years. On the other hand, if you wish to cancel your contract, you will have to pay an exit fee, which can be pretty hefty.
Green – Applicable to the two tariff types above, the renewable deal is comprised of 100% renewable energy. More and more companies are offering this type of tariff in a bid to reduce the amount of fossil fuels that we used in the generation process and switch our attention to clean, sustainable energies. These can sometimes be a little more expensive, but it is more than worth it for the environmental benefits.

Will my supply change? 

No, your physical supply will not change. The reality behind it is that all you are really changing is the price, your customer service number and the name on the top of your bill. Each of these companies will buy energy and pump it into the grid same as the one that you are on now. The wire and pipeline network will remain intact just as it is now, meaning there will be no changeover or downtime in your connection while the switch is being made.