Student Loans

Most Common Student Loan Scams (And how to avoid them!)

There are quite a few different student loan scams that you will want to be aware of, because the last thing you want is to get ripped off in any way. Each year thousands of people fall for these scams, and they can cost you a lot of money if you don’t know how enough about them. A lot of student loan scams can seem legitimate at first, which is all the more reason to arm yourself with knowledge. By doing this you will be able to greatly reduce your chances of getting taken advantage of.

The Advanced Fee Scam

This particular scam involves a student loan company that tells you they will be able to get you the very best interest rate and loan terms, provided you are willing to pay a “small fee” upfront for the service. This fee can be anywhere from 1 to 5 percent of the total loan amount. Sometimes the fee is a flat upfront fee of a thousand pounds.

If someone tries to run this scam on you, or anything like it, you will want to avoid it completely. There are absolutely no circumstances in which you will ever need to spend any money to get money. Any legitimate student loans will never require any upfront fees, so you will need to keep this in mind.

There are two common fees that will be paid with a legitimate student loan, but they are never paid up front. You will find that federal student loans charge a 1% default fee, but there are no origination fees. If you are working with a third-party company to help you with student loan debt, they might take a fee up front. But even in this case, the fee will go into an escrow account, and the company does not get paid until they have helped you sign up for a program.

Loan Consolidation Scam

There is also the classic loan consolidation scam, which far too many people fall for every year. This scam involves a company charging a consolidation fee but not actually doing anything. This fee is sometimes referred to as a “processing fee” or “administrative fee.” If you happen to have a federal student loan, there are no fees for student loan debt consolidation. If you have a private student loan, there are many different lenders who will refinance it. Refinancing differs from consolidation in the sense that you are taking out a separate loan with a new lender who pays off your existing loans.

Law Firm Lawsuit Scam

Yet another student loan scam that a lot of people fall for involves a law firm claiming that they can settle your student loan debt. There are many variations of this scam, but usually a borrower is referred to a law firm by a “student aid company”. The student aid will promise you that this law firm will be able to take care of all your student debts for thousands less than you actually owe.

A lot of times the law firm will ask you to make your full student loan payment to the law firm itself. The firm says they will negotiate a settlement with your lender. What usually happens is that the law firm doesn’t end up making any payments while negotiating with your lender, and as a result you default on your student loans. At this point, the law firm claims you cannot pay the bills and tries to negotiate a settlement based on that. Many people end up falling for this scam, simply because they are so desperate to find out a way out of debt.

How to avoid getting scammed

The more information you have about common student scams, the more difficult it will be to fall victim to one of them. There are quite a few of these scams out there, so you will need to make sure that you do everything in your power to not fall for them. The more time you take to learn about these student loan scams, the easier it will be to recognize them. Sometimes these scams are so ingeniously designed that it can be very hard to identify them for what they are right away.

Personal Finance

Important Personal Finance Tips for Young Adults

It is particularly important for young adults to have all the personal finance tips they can get. If you want to give yourself the best possible chances of a successful future, you will need to know the dos and don’ts of the financial world. Personal finance is a crucial part of adulthood, so you will therefore need to do everything you can to prepare yourself. These tips should help you to get to where you need to be when it comes to your finances.

Go to College

One of the best things that you can do to ensure a bright financial future for yourself as a young person is to go to college. While you may not know exactly what you want to do, that’s okay. The important thing is that you get started. The average college student changes their major more than three times, so it’s okay if you aren’t dead set on pursuing one thing in particular right from the start. You should look at going to college as an investment, and it can be a very good one. A degree from a reputable college will open up a lot of doors for you after graduation.

Start planning for retirement with your first job

Make sure that you start planning for retirement early on with your very first job out of college. The sooner you start saving up money for retirement, the more secure your financial future is going to be. A lot of young people make the mistake of putting off saving as long as possible, and this is the last thing you want to do. When you start to save for retirement early on, you will be able to avoid having to work into your golden years.

Place value on money

While money may not buy happiness, it can make you comfortable. It is important that you understand the true worth of money. Money is what you earn in exchange for your time, so you need to act accordingly. When you are trying to decide whether or not to purchase a new television or something else, you will need to ask yourself if it’s really worth it. Another big mistake that many younger people are making these days is to not place any real value on the money they earn. The more value you put on your money, the wiser you will be when it comes to spending it.

Use your credit cards wisely

If you don’t want to end up with a ton of credit card debt later on in life, you will want to get into the habit of using any credit cards you have sparingly. Only use your credit cards for emergencies as opposed to using them like they are free money. These days most people have some amount of credit card debt, and it can easily pile up quickly. The more responsible you are with credit cards, the less likely you will be to end up in debt at some point.

Choose your partner wisely

The person that you decide to be in a relationship with should be financially responsible. Choosing to be with someone who is reckless when it comes to their finances can end up having a very bad influence on you. One of the best ways to remain financially free is to choose to be with someone who is responsible with their money. The last thing you want is to get married to someone who is going to make it even more difficult to manage your money together in a responsible way.

Final Thoughts

As a young person you will definitely need to make a point of following all of the tips in this article so that you don’t end up flat broke later on in life. There are a lot of mistakes that a person can make with their finances, and it’s crucial that you develop good habits as early on as possible. The more responsible you are with your finances, the better off you are going to be in life. In the end you will be very glad that you took the time to get this information and follow it.

Loan Types

Different Types of Loans and how to decide which one to apply for

With all of the different types of loans there are, you will certainly need to make a point of looking into your options before deciding which kind to apply for. The more time you take to do this research, the better your chances are going to be of getting exactly what you need without any problems or complications. If you need to borrow money for any reason, you will definitely want to take out the right type of loan.

Secured Loans

A secured loan can be very helpful when it comes to getting money quick, but it will require collateral of some kind. One example of a secured loan is an auto loan. If you fail to pay back a secured loan on time and in full, the asset(s) you put up as collateral will be repossessed or foreclosed on. If you take out an auto loan and don’t pay it back, the vehicle will be repossessed and auctioned off to the highest bidder to pay back the total amount of the loan. Make sure that you know what you are doing when taking out this type of loan. One of the great things about secured loans is that they tend to be easier to get for those with bad credit.

Unsecured Loans

An unsecured loan can also be a wonderful option to explore, but it can be difficult to get if you don’t have good credit. You will find that unsecured loans do not require any collateral to be put down, which is why the credit requirements are significantly higher than with secured loans. If you haven’t taken a look at your credit score in a while, it is highly recommended that you do so before applying for one of these loans.

Guarantor Loans

A guarantor loan will require you to have another person to sign on in the event that you are not able to pay back the full amount for whatever reason. The person you choose as your “guarantor” must be reliable and trustworthy. This person must also have a stable and adequate income as well as good credit and collateral they can put down. Guarantor loans have become very popular in recent years, and it is highly recommended that you take the time to look into them before making a final decision.

Payday Loans

A payday loan could be the very best way for you to get the money you need for some sort of emergency expense. If you have a medical bill, home repair, auto repair or something else that needs to be paid right away, you will definitely need to take a close look at this option. A lot of people are taking out payday loans because they can provide borrowers with a way to get the money they need within 24 hours of getting approved. It is generally pretty easy to get approved for one of these loans, even if you don’t have the best credit.

It is important to keep in mind that approval is never guaranteed, but a lot of people do get approved for payday loans. If you have been rejected for other types of loans in the past because of your credit, you will want to consider applying for a payday loan. You will be able to apply online, and the process doesn’t take very long at all. In the end you will most likely be glad that you did this. Getting a payday loan could be the financial solution you need.

Final Thoughts

The type of loan that you apply for will depend on your specific needs as well as what your credit is like, and it’s crucial that you are aware of all your options before filling out a single application. It’s also important to remember that you don’t want to fill out too many applications in a short period of time because of how it could affect your credit score. If you need to borrow money for any reason, you will have to make sure that you choose the right one to take out. You will definitely be glad that you did your homework.