3 Ways to Stop Overspending During These Times

Given the current pandemic that continues, you’re most likely more mindful of your finances these days. Even if you have a budget set up, you may still find that money feels a little tight right now. The last thing you want to do in these current times, is rack up unnecessary debt or spend too much money. Here are 3 easy ways to stop overspending.

Cut back on takeout: It’s great to support local businesses right now, but don’t overdo it. Have you been consistently making trips to your favorite fast food drive thru or ordering takeout/delivery? If your takeout budget has increased, your grocery budget needs to decrease. Be mindful of what you are spending on food and if the takeout is taking over your budget.

Pay with cash: After you pay your bills for the month, try to use cash for anything else. Other than necessities that you may still want to purchase online for health and safety reasons, are you shopping online and using a card just to pass the time or buy items you don’t really need? Using cash may prevent you from adding that one extra item to your Amazon or other online shopping cart.

Make do with what you have: Delayed events are happening all over. Movies and concerts have either been pushed back or cancelled. As much as you might want to spend money you normally would spend on summer concert tickets on something else, keep it in your savings account. For now – watch a movie on Netflix you haven’t seen yet, or on your cable network’s free on demand movies. You can also login to YouTube and view a past live concert at no cost. There are many ways to improvise and save money!

 

Article Source: John Pettit for CUInsight.com

Student Loan Payment Changes During COVID-19

With unemployment levels rising and many employers cutting work hours, large numbers of college grads are now struggling to meet their student loan payments. Thankfully, the federal government has passed legislation to help ease this burden. However, many borrowers are confused about the terms and conditions of these changes. Here’s all you need to know about changes to student loan debt due to the coronavirus pandemic.

All federal student loan payments are automatically suspended for six months.

As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) signed into law on March 27, 2020 – all federal student loan payments are suspended, interest-free, through September 30, 2020. If borrowers continue making payments, the full amount will be applied to the principal of the loan. The suspension applies to all federal student loans owned by the Department of Education, some Federal Family Education Loans (FFEL), as well as some Perkins Loans. Students do not have to take any action or pay any fees for the suspension to take effect.

Additionally, during the suspension period, the CARES Act does not allow student loan servicers to report non-payments as missed payments to the credit bureaus. Therefore, the suspension should not have a negative effect on borrowers’ credit scores.

If you’re not sure whether your student loan is federally owned, you can look it up on the Federal Student Aid (FSA) website. Be sure to have your FSA ID handy so you can sign in and look up your loan. You can also call your loan servicer directly as well.

Contact information for federal student loan servicers:

CornerStone: 1-800-663-1662

FedLoan Servicing (PHEAA): 1-800-699-2908

Granite State (GSMR): 1-888-556-0022

Great Lakes Educational Loan Services, Inc.: 1-800-236-4300

HESC/Edfinancial: 1-855-337-6884

MOHELA: 1-888-866-4352

Navient: 1-800-722-1300

Nelnet: 1-888-486-4722

OSLA Servicing: 1-866-264-9762

ECSI: 1-866-313-3793

Suspended payments count toward Public Service Loan Forgiveness and Loan Rehabilitation. 

Public Service Loan Forgiveness (PSLF) is a federal program allowing borrowers to have their student loans forgiven, tax-free – with the stipulation that they work in the public sector and make 120 qualifying monthly payments. A disruption of these 120 payments would typically disqualify a borrower from the program. According to the CARES Act, suspended payments will be treated as regular payments toward PSLF. This ensures that borrowers who have been working toward these programs will not lose the progress they’ve made toward loan forgiveness.

The same rule applies to individuals participating in Student Loan Rehabilitation, during which borrowers who have defaulted on student loans – must make 9 out of 10 consecutive monthly payments in order to bring their loans out of default. The U.S. Department of Education will consider the six-month suspension on payments as if regular payments were being made toward rehabilitation.

Some states and private lenders are offering student loan aid for struggling borrowers.

If your student loan is not federally owned and you are struggling to make your payments, there may still be options available – such as loan deferment or forbearance. If you are in need of such assistance, contact your lender directly to discuss your options.

Consider an income-driven repayment plan.

If you have an FFEL that is ineligible for suspension, you may be able to lower your monthly payments by enrolling in an income-based repayment plan. This would adjust your monthly student loan payment amount according to your discretionary income. If your salary was cut as a result of COVID-19, or you are currently unemployed – these plans can provide relief by making your monthly payments more manageable.

Still have questions about your student loan payments during this time? It’s always a good idea to reach out to your lender and find out what options are available to you.

Article Source: CUcontent.com

How to Dispute and Pay for Large Medical Bills

If you’re looking at astronomical medical bills due to the coronavirus pandemic or another health emergency, you might think there’s no choice but to pay thousands of dollars for your treatment. This may not always be the case. Here’s some advice on how to bring down the numbers on your medical bills and tips on how to cover the remaining costs.

Step 1: Review your bill(s).

Typically, you’ll receive an Explanation of Benefits (EOB) from your insurance company along with the actual bill, which tells you how much you’re responsible for paying. It’s important to hold onto both of these documents and to review them carefully.

The EOB is a document provided by your insurance company explaining your insurance benefits as it pertains to a bill. It will usually include the following information:

  • Amount Billed by Provider (this refers to the amount the doctor or hospital charged)
  • Plan Discounts (this refers to a discount negotiated by your insurance company)
  • Amount paid by insurance company
  • Amount you owe the provider

Most EOBs will also include information about your deductible, co-pay and co-insurance. If a procedure or treatment is not covered, the EOB should include a short explanation about why it’s not covered. If your statement includes charges for COVID-19 testing or related expenses, like co-payments and deductibles, your insurance should be covering the entire amount, as per the Families First Coronavirus Response Act.

Review your bills carefully and make sure the EOB and the medical bill correspond with each other. If there is a discrepancy between the two documents, it may be a billing error. If you suspect an error, you may want to ask for itemized bills. This will provide you with a detailed breakdown of all costs charged to you for services and/or inpatient stays.

If you’re being billed for a hospital stay, review the charges carefully to be sure you’re not getting billed for a treatment you haven’t actually received.

Step 2: Review your insurance coverage.

It’s a good idea to familiarize yourself with your health insurance policy before disputing any charges. Most health insurance providers will present their members with a detailed manual that outlines exactly which treatments and charges are covered and which are not. Here, you can refer back to the EOB to see if the insurance paid for all the procedures it claims to cover.

Step 3: Dispute any errors.

If your insurance billed you incorrectly or did not cover a procedure or treatment that is covered under your plan, call a company representative to ask about the charge. Be sure to have your bill in front of you when you make the call, note the time of your call, the contents of the conversation, and the name of the representative you speak to in case you need it for future reference.

If the error is with your doctor’s office, ask to speak to an office billing representative and explain your position. Here too, keep a record of the conversation for future reference. Be prepared to make multiple phone calls until you reach a party who can make the change. It’s also a good idea to follow up with a written request to challenge any charges in question.

Step 4: Negotiate the remaining bill.

If the bill is unimaginably high after all the errors were corrected, you still have options. Consider negotiating with the billing department at your doctor’s practice for a lower price on the treatments rendered. You may want to do this in person, and most practices will allow you to schedule an appointment with a representative of the billing office. Bring all your bills and other supportive documents, such as receipts from the pharmacy and information from your insurance provider. If you believe a charge for a procedure has been unreasonably inflated, it’s a good idea to research the going rate of coverage through sites like HealthcareBluebook.com and My Healthcare Cost Estimator first.

At the meeting, explain that you are having difficulty with your bill and that you’re looking for a way to lower the costs. Here are some open-ended questions to guide your negotiations:

  • What discounts do you offer for financial hardship?
  • Which of these fees can be waived?
  • Many hospitals have charity relief plans for patients having difficulty meeting their payments, can you tell me about yours?
  • Can you charge me what Medicare would pay for this service?
  • Can you lower some charges if I pay this off sooner?

Step 5: Create a payment plan or seek funding.

Once you have your final bill amount, you’ll need to choose to pay it now or work on creating a payment plan to make it more manageable.

If you’d rather not have a huge bill hanging over your head for awhile, or your doctor’s office insists on immediate payment – consider some other options. One way to help pay your bill is by applying for a personal loan from First Financial.* This method will provide you with the funds you need to pay your bill, along with a payback plan offering flexible terms and manageable monthly payments. Another option would be using your emergency savings fund, if it will help cover any expenses.

Step 6: Going forward.

To avoid an unexpectedly large medical bill in the future, you may want to consider switching your insurance plan to one that provides more robust coverage and less expensive co-pays and deductibles – if at all possible. Your premiums will likely increase, but the change may be financially worthwhile if you know you may have ongoing medical expenses.

Another long-term option to consider is setting up a Health Savings Account (HSA). The funds you contribute to this account are tax-deductible, grow tax-free and can be withdrawn to cover qualified medical expenses.

If you’d like to talk to us about personal or consolidation loan options, contact us! We’re here for you.

*APR = Annual Percentage Rate. Rates are subject to change. Maximum loan is $25K and maximum term is 60 months. Not all applicants qualify, subject to credit approval. A First Financial membership is required to obtain a personal loan, and is open to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan. See credit union for details. 

Article Source: CUContent.com

Should You File for Bankruptcy?

Your debt feels impossible. New bills and past due notices are showing up constantly. Creditors won’t stop calling. As you feel like throwing your hands in the air, you wonder – should I file for bankruptcy?

Due to the COVID-19 pandemic, this is a reality that many might be facing. Millions of Americans across the country have been unemployed since earlier this year. It’s incredibly easy to get behind on bills when the money isn’t coming in, but the bills are still showing up. It’s an overwhelming feeling.

The longer this pandemic continues, the more likely it is that you’ll see an attorney on a TV commercial asking if you’re thousands of dollars in debt, feeling overwhelmed by creditors and looking for a solution. Next – they’ll present the option of filing for bankruptcy, which who wouldn’t want to have their debt forgiven, right? Not so fast.

Filing bankruptcy might help you get rid of your debt, but it’s important to understand the serious, long-term effects it can have on your credit. When you file bankruptcy, it remains on your credit report for 7-10 years as a negative remark, and it affects your ability to open credit card accounts or get approved for loans with favorable rates.

What exactly is bankruptcy? Bankruptcy is a legal process designed to help individuals and businesses eliminate all or part of their debt, or in some cases – help them repay a portion of what they owe. There are several types of bankruptcy, but the most common types are Chapter 7, Chapter 11 and Chapter 13.

Chapter 7 forgives most of your debt and allows you to keep all of your assets with a few exceptions, depending on state and federal laws. During the process, you and your creditors are invited to a meeting where they are allowed to make a case as to why a federal bankruptcy court shouldn’t forgive your debt. Once your case is approved, your debt will be forgiven, and none of your creditors will be allowed to hassle you over the forgiven debt.

Chapter 11 is generally for small business owners. It allows small business owners to retain their business while paying back debts according to a structured plan. With this option, business owners give up a certain amount of control to court officials, debtors, or counselors assigned to help them rebuild their credit. Despite losing some control of the business, owners are able to keep their business running while working on their financial future.

Chapter 13 is different than Chapter 7 in that it requires you to come up with a plan to repay your creditors over a 3-5-year period. After that, your debt will be forgiven.

Things to consider if you’re thinking about filing bankruptcy:

It’s important to note the serious impact bankruptcy can have on your credit report. Bankruptcy effectively wipes out everything on your credit report – good and bad remarks, and will stay on your credit report for 7-10 years.

This also means any account you’ve paid off or left in good standing that could positively impact your credit score, is also wiped out. Any hard work you’ve put into building your credit is basically nonexistent once you file bankruptcy. All the negative remarks will be gone as well, but you will also be considered high-risk when it comes to lending moving forward.

Bankruptcy affects your ability to open lines of credit – credit cards, mortgages, auto loans, personal loans, etc. Because you will be labeled high-risk, most banks will likely deny any application you submit for a line of credit – even though your credit score might have gone up when your credit report was initially wiped out. If you are approved for a line of credit, you’ll likely get a much higher interest rate which will make your monthly payments higher too.

Should you file for bankruptcy?

When it feels like your debt is caving in on you, bankruptcy might seem like the only way to reach financial peace. Here are a few steps to consider taking before you consider filing.

  • Take a moment to talk to your creditors. Negotiate and see if there are options to make your debt more manageable. Can you lower the interest rate? Is it possible to settle for less than you owe? Can you set up a payment plan?
  • Talk to us about your financial picture. We might have options that will allow you to consolidate your debt into one, more affordable payment.
  • Go through your house. Do you have things you don’t use or need that you can sell? If so, sell some of those items and apply that money to your debt.

Also, it’s important to note that not all debt is eligible for bankruptcy. While bankruptcy can eliminate a lot of your debt, some types of debt cannot be forgiven:

  • Most student loan debt.
  • Court-ordered alimony.
  • Court-ordered child support.
  • Reaffirmed debt.
  • A federal tax lien for taxes owed to the U.S. government.
  • Government fines or penalties.
  • Court fines and penalties.

Bankruptcy should be the last option you consider. Look through your debt, see what you owe and carefully weigh all your options. Again, make an appointment to come in and talk to us and we can help you review your options. We’re your credit union, and we’re here for you!

What to Do After Paying Off Debt

Depending on the amount of debt you have, paying it off can feel like a huge accomplishment. If you use your credit card regularly, paying on the bill each month may not be an activity you think too much about. If your credit card debt is on the larger side, finally paying it off can feel like a big weight off your shoulders. Besides being an accomplishment, it’s also time to be proactive so going into debt doesn’t happen again. Here are some steps you should take after paying off a large debt.

Step back and take a look. Paying down on your debt each month is something to be proud of. It probably wasn’t easy, but you did it. In order to make this happen, you probably had a budget in place that maximized your debt payments in order to pay it off. Now that you no longer need to make payments on this bill, it’s time to look over your budget again and figure out what needs to be changed moving forward. Maybe you had to cut back in other areas while you were working on paying down that debt. Or maybe there’s a big ticket item you’ve been waiting to save up for. Now you can adjust your budget and you’ll probably find that you have a bit more wiggle room.

Save money. When sacrifices are made to become debt-free, your savings can often take a hit. If things weren’t too tight while you were working on paying down your debt, it might be a good idea to take that same amount of money – but now put it into your emergency savings account. If you have direct deposit, you can even take that monthly amount and set it to go right into your savings account so it’s automatic.

Set a goal. Whether you’re thinking about planning a future vacation or making a big home improvement that you’ve been putting off, using the money you’ve already budgeted for your previous debt payments is an easy way to save quickly. Consider opening up a separate savings account just for this goal, and keep transferring the money in until you have enough saved.

Stop going into debt. Don’t pay off one large debt and then start racking up more. Every time you log into your mobile banking app or check your account balance online, let it remind you to stay out of debt and how good it feels to pay it off. Stick to your budget and be disciplined!

 Article Source: John Pettit for CUInsight.com

Questions to Ask Before Applying for a Personal Loan

Personal loans are a popular alternative to credit cards, because like credit cards – they are paid in monthly installments and come with a low interest rate if you have a good credit score. From debt consolidation to paying for life events, personal loans give borrowers money which can be paid back over time. Typically, payments are the same amount each month – as opposed to credit card payments that might vary depending on your balance. Keep reading to get all your questions about personal loans answered, and find out if this is the best financial option for you before you apply.

Is a personal loan right for me?

Personal loans are a way to consolidate high-interest debt at a lower rate. A personal loan can be used for just about anything – a home improvement project, wedding, debt consolidation, or other costly undertaking when you don’t have cash on hand or in the bank. Personal loans give borrowers money up front to be paid back in monthly installments over a fixed period, usually at a rate much lower than a credit card would have.

How much can be borrowed with a personal loan?

This amount will be based on your income, employment, financial history, and how much debt you currently have.  A lender will look closely at your debt-to-income (DTI) ratio, which is the percent of debt you currently have in relation to your before tax income. A favorable DTI is 43% or less, typically.

How much should I borrow?

Just because you get approved for a certain loan amount, doesn’t mean you should accept it. You also need to look at the other items you spend money on each month. Borrow the amount you know you will need to fund what you need the loan for, and don’t acquire extra debt. For help deciding what amount you should borrow or what your monthly payments might be, check out our financial calculators. Make sure your personal loan gets factored into your monthly budget and that you can comfortably afford the payments.

How can I get the best loan rate?

Do your homework ahead of time, and shop around. Often a loan with a shorter term will cost you less over the life of the loan, than one with a longer term will – though your monthly payments will be less on a loan with a longer term. Your credit score (the number that tells lenders if you are credit worthy and the financial risk you would pose) is another important component in receiving a competitive rate. The higher your score, the better your rate will be.

Is there a way to pay off my loan faster?

If you have room in your budget, it’s always a good idea to make extra loan payments when you can. Perhaps you can make bi-weekly payments instead of just once per month, or an extra payment every so often. This will only help you pay your loan off faster and you’ll also pay less in interest. Even rounding your monthly payment up can also help you pay your loan off quicker. For example, say your monthly payment is $173. If you round this amount up to $200 you’ll continue to pay the loan down and will ultimately pay less in interest over the life of the loan. Just be sure your loan doesn’t include any pre-payment penalties before you begin making extra payments.

Can a personal loan help my credit rating?

Part of your credit score is based on credit utilization, and lenders usually like to see that you’re not using more than 30% of your available credit. If you’re planning to use a personal loan to pay off credit card debt, you can actually lower your credit utilization – which should boost your credit score. Because a personal loan is considered an installment loan, whereas credit cards are considered revolving debt – adding it to your credit profile can demonstrate that you can successfully handle other loan types.

How can I apply?

If you live, work, worship, volunteer or attend school in Monmouth or Ocean Counties in New Jersey – check out our personal loan options! Our personal loans have a fixed rate, start at $500, have flexible terms up to 60 months, and no pre-payment penalties.* You can apply over the phone or right online, and we even have electronic closings available.

A personal loan is a great option that can help you save money instead of going through the high cost of retail financing or racking up high-interest credit card debt. Do your research and find the best option for your budget!

*APR = Annual Percentage Rate. Actual rate will vary based on creditworthiness and loan term. Subject to credit approval. A First Financial Federal Credit Union membership is required to obtain a Personal Loan, and is open to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan. Federally insured by NCUA.

Article Source: Gobankingrates.com