Sierra Designs Divine Light 1P Tent Review

Thermarest Slacker Hammock Bug Net Review

How to Create Wealth and Make Your Life Easier

A common problem in America today is the growing wealth disparity between the rich and poor. We see it written and talked about all the time, in fact. And it is often pointed out that the odds are stacked against the poor and middle class, while the wealthy have many advantages.

It’s true that it is harder to build wealth than to maintain it. Those with wealth have many advantages that those without do not. However, the constant focus on wealth disparity and the difficulties faced by the poor and middle class can cause people to become hopeless and feel stuck. The mentality becomes a convenient excuse to not take necessary actions to change one’s circumstances. Thus, this often becomes a self-fulfilling prophesy.

There is a better approach for those looking to build wealth and improve their station in life. Instead of focusing on the negatives, study the factors that allow the rich to get richer and learn how they work together. Only then can we begin to put those concepts into action and accelerate our own wealth-building process.

Read More: 5 Things I Did In My 20s That Made Me Rich In My 40s

Interest

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” — Albert Einstein

Americans are burdened with many types of debt, including student loans, medical bills, mortgages, car payments, and credit cards. While things like medical emergencies can and do happen, far more often people consciously — and even eagerly — choose to make the mistake of going into debt. Only about 10% of car buyers use cash, for example, versus 90% who finance. Over 85% of homes are purchased with 30-year mortgages, too.

It is easy to calculate the direct costs of financing by adding interest to the cash price of a purchase. More damaging than the direct costs to use debt, though, are the unconscious effects. Even “good debt,” such as that used for education or purchasing a home, can quickly become “bad” when you overspend.

The average American home size has doubled since the 1950’s, even as families get smaller. College costs continue to grow far faster than the general inflation rate annually, and the debt of graduates grows with it, approaching $40,000 on average. At the same time wages are stagnant or shrinking. Does anyone doubt these phenomena are a result of easy credit?

Related: Making a 30-Year Mortgage as Smart as a 15-Year

On the flip side, the wealthy use the effects of interest to make life easier. They benefit from interest on savings and investments working for them.

When the wealthy use debt, it is often to carefully use “other people’s money,” leveraging lucrative opportunities into even bigger and better opportunities. Even in today’s low interest rate environment, the spread between having interest working for you rather than against you is a massive advantage when building wealth.

Related: How Will the Fed’s Rate Hike Impact You?

Insurance/Risk Management

There are worse things in life than death. Have you ever spent an evening with an insurance salesman? — Woody Allen

Every time you buy insurance, you spend money for a product you hope to never use. The irony is that the people that most need insurance are the least able to afford it, while those that can most afford it often do not need it.

It is important to understand that every time you purchase insurance, you are making a decision with negative expectancy. No company — at least not one that is planning to still be in business when you need them — will sell an insurance policy unless they are likely to make money in the process. Therefore, every insurance purchase you make is likely a losing bet for you, and a carefully calculated winning bet for the insurance company.

You never want to buy insurance unless you need it. However, when living paycheck to paycheck, you often need insurance to prevent financial ruin. Short-term disability, long-term disability, and life insurance can all be important to manage financial risks. Even very expensive types of insurance, like warranties on products that you can not afford to be without, may make sense.

Learn More: How Much Life Insurance Do You Need?

Adding insult to injury, you often have to buy insurance to protect lenders to allow you to live a lifestyle you cannot afford.

What do I mean by that? When you take out a mortgage, you are required to buy homeowner’s insurance. This protects the bank that actually owns your home. If you do not take out a conventional mortgage, you may have to buy private mortgage insurance (PMI) to protect the lender against the increased likelihood that you will default on your mortgage.

As your wealth grows, you can start self-insuring smaller things. The more wealth you build, the more you can self-insure and the less insurance you need to purchase. This accelerates the wealth building process.

Taxes

“People who complain about taxes can be divided into two classes: men and women.” –Unknown

Taxes are one of the biggest challenges to the wealth building process. Our tax system is very complicated, causing many to throw up their hands in disgust and resort to complaining.

One aspect of building wealth is increasing income. However, as you increase from low income to middle income levels, your tax burden increases substantially.

Very low wage earners pay very little income tax. Very high earners do not have to pay social security taxes on income over $127,200. They also are commonly compensated in ways that allow them to further avoid income taxes.

People in the middle of these two extremes, who are trying to build wealth, face a serious challenge with our income tax system. As a percentage of gross income, a 10th-percentile taxpayer would wind up paying twice as much in payroll taxes as someone in the top 1%.

Limiting taxes is a very powerful wealth building tool. It is important to see the big picture and develop a comprehensive tax plan. However, this is difficult in the early stages of wealth building.

Decreasing your tax burden becomes progressively easier as you shift from wage earner to investor and/or business owner. This concept is explained in great detail in Richard Kiyosaki’s book, Cash Flow Quadrants.

The Power of Leverage

“Great things are done by a series of small things brought together” — Vincent Van Gogh

Each of the factors outlined above are powerful on their own. However, the real magic begins to happen when you stack the benefits to leverage the impact. Let’s close with examples of how to do this in the early and late stages of wealth building.

Early Stage

Someone living paycheck to paycheck is likely being crushed by interest, while having little interest working for them. They would need to insure nearly everything, and pay high premiums because they could not afford high deductibles. They would have little power to do any tax planning, as every dollar would be needed to pay current expenses.

Something as simple as an emergency fund can help them in all three areas. Someone in this situation could consider working extra on the side or even selling off some things until they saved up, say, $5,000. Then, they could use this money to fund a $1,000 high yield savings account for emergencies, as well as open a Roth IRA with the rest.

These relatively modest savings would allow them to start earning some interest. Much more important, having this emergency fund would prevent them from continuing the cycle of needing credit when bad things happen, allowing them to stop working against the effects of interest.

Having money in savings would mean that all but the biggest disasters would be able to be taken care of right away. This would allow a family to reduce insurance products like warranties. They could also pay lower premiums in exchange for higher deductibles. Then, they could put the money they save each month on those premiums into the savings account, earning even more interest and padding their safety net further.

Related: Are High Deductible Health Plans Worth It?

Using a Roth IRA would mean that they could access any after tax contributions without penalty. At the same time, money not needed could grow for life without being taxed. The monthly savings on interest and insurance payments could then be added to keep this money growing.

Advanced Wealth Building

In a previous article, I outlined a strategy commonly employed by early retirees. In it, they use tax rate arbitrage to avoid taxes in high earning years, then pay minimal-to-no tax in retirement. While that article focused on the tax benefits, this situation can highlight how all three factors work together.

The above strategy is dependent on a high savings rate. Accomplishing this type of savings is most easily done by rejecting a lifestyle of debt. Thus, interest is rarely or never working against you. Savings begin to add up quickly, allowing compounding to work in your favor.

The ability to build wealth rapidly means minimal need for insurance. A person who can save 50% of their take-home income can, by definition, save a year’s worth of living expenses in only one year. A person with this level of wealth can self-insure against short-term disability and easily afford to accept the risk of high deductible plans. Within a decade or two, they can eliminate the need for life and long-term disability insurance as their investments can provide enough income to cover normal living expenses.

Once a person is financially independent, they will be able to live indefinitely on the interest from their investments. They will also have a minimal need for insurance products and a very low tax burden.

Summing Up

It is often difficult to start the wealth building process because it feels like everything is working against you. Hopefully, the knowledge in this article can give some insight and encouragement to stop fighting against massive headwinds, learning instead to redirect your sails (however slight at first).

After some initial effort, the process becomes much easier and continues to snowball in your favor. As time goes on, interest, insurance, and taxes can be used and leveraged upon one another to provide a tailwind, making the process progressively easier. Your goal is mo’ money, less problems… and with just a few small steps, you can begin building your own wealth in no time.

Topics: Money and Life

The post How to Create Wealth and Make Your Life Easier appeared first on The Dough Roller.

from The Dough Roller http://ift.tt/2qWbj2c

ENTER for a Chance to WIN a FREE Exped Lightning 60 Backpack

Why a Solo 401(k) is the Best Retirement Plan for the Self-Employed

If you’re self-employed, you have several retirement plan options available to you as an individual or small business owner. The best of the lot, though, is probably the Solo 401(k).

It has similar advantages to the traditional, employer-sponsored 401(k) plans available to large companies. However, it brings with it even more benefits, because you’re self-employed.

How a Solo 401(k) Plan Works

A Solo 401(k) plan is essentially a 401(k) for a self-employed individual. But there are several features of the plan that distinguish it from the larger, employer-based 401(k) plans. These include:

• Since you are the business owner, you act as both employer and employee on the plan.
• A Solo 401(k) plan is just for the owner of the business and the owner’s spouse; it is not available for employees of the business.
• The amount of contributions that you can make to a Solo 401(k) are generally more generous than they will be for an employee participant in typical large company 401(k) plans.
• You can set up a Solo 401(k) even if you are an independent contractor or a freelancer.

As an employee of the business, contribution limits to a solo 401(k) plan are exactly the same as they are for a traditional 401(k) plan. You can contribute up to 100% of your salary or up to the contribution limit, whichever is greater. The current contribution limit for 2017 is $18,000 of your salary, or up to $24,000 if you’re age 50 or older.

But since you are also the employer in the solo plan, you can also contribute as much as 25% of your net income to the plan as a profit-sharing contribution. (See IRS examples of the employer matching contribution — it varies by business entity.)

One other important point about the solo 401(k) plan is that you must make your contributions to the plan no later than the end of the calendar year. That means that you must make your contribution no later than December 31 in order for the contribution to be deductible for the tax year in question. This is unlike contributions to IRA plans, which allow you to make deductions up until the filing deadline for the preceding tax year.

Read More: Why Your Roth IRA Should Be Used for Retirement and Nothing Else

Simplicity of Administration

One of the biggest advantages of a Solo 401(k) is that you can essentially set it up similar to a self-directed IRA. That means that you are free to choose your investment trustee. You can also select a discount investment broker. This will provide you with an opportunity for unlimited investments and very low fees.

This is unlike many traditional 401(k) plans, which often limit your investment options to a few mutual funds and charge high plan fees.

Very Generous Contributions

As I noted above, with the Solo 401(k) you can make both employee and employer contributions. So, let’s say you’re self-employed as a sole proprietor and report your income and expenses on Schedule C of your income tax return. If your net income from the business is $100,000, you can contribute $18,000 as an employee. But then you can also contribute 25% of the net profit as employer.

This means that your total contribution could reach $43,000!

That’s an enormous retirement contribution based on a $100,000 income. Let’s say you’re in the 25% tax bracket for federal income tax purposes. In that case, a $43,000 contribution will result in a tax savings of $10,750.

This is much more generous than other types of self-employed retirement plans. For example, let’s take the contribution scenario above. In it, you are contributing 43% of your income to your retirement plan using the Solo 401(k). Under an SEP IRA your contribution would be limited to 20% of the same income, or $20,000. (The SEP IRA provides for a deduction equal to 25% of your net income, after the deduction for the contribution is removed from your income... That means that the net contribution to a SEP IRA is effectively limited to 20% of your income.)

Under a SIMPLE IRA, your contribution limit is even lower. The maximum contribution that you can make as an employee is $12,500. (This bumps up to $15,500 if you are age 50 or older.) SIMPLE IRAs also provide for an employer match. As employer in the business, you can provide either a 3% matching contribution, or a 2% non-elective contribution (up to $5,000). That means that your total contribution to the plan is limited to a total maximum of $20,500 per year.

And, of course, a traditional IRA or a Roth IRA limits your annual contribution to $5,500, or $6,500 if you are 50 or older.

The maximum contribution to any and all tax-sheltered retirement plans, including the Solo 401(k) plan, is $54,000 for 2017. However, with a Solo 401(k) plan, you can reach that maximum much more quickly than you can with other self-employed retirement plans.

There is one important limitation pertaining to S corporations: distributions paid from an S corporation are considered dividends, and are therefore not considered earned income. For this reason, you cannot make contributions to a Solo 401(k) plan that include your distributions from the S Corp.

You Can Add a Solo Roth 401(k) to the Mix

Just as with a traditional 401(k), you can allocate part of the plan to a Solo Roth 401(k) plan. That will enable you to allocate up to $5,500 of your employee contribution to the Roth portion. If you are age 50 or older, up to $6,500 can go toward the Roth portion. The remainder of your allowed contribution will go into the regular portion of your Solo 401(k) plan.

The employer matching portion can only go into the regular part of your Solo 401(k), and not the Roth portion.

You Can Include Your Spouse

Although a Solo 401(k) is intended for the owner of the business, and not any employees, the owner can nonetheless include his or her spouse in the plan. Your spouse can make contributions based on his or her earnings from the business.

For example, let’s say that you have an S corporation. You take a salary of $50,000 per year, and your spouse takes an equal amount. You can each make a contribution of up to $18,000 on your respective salaries. As employer, you can then match up to 25% of the same amount.

Converting the Solo 401(k) to a Traditional 401(k)

Most businesses start out as one-person affairs. The owner starts out working for himself and only adds employees as the business grows.

One of the major advantages of a Solo 401(k) plan is that it can easily be converted to a traditional 401(k) plan as soon as you begin adding employees. This is where it is once again important to remember that a Solo 401(k) plan is simply a traditional 401(k) plan for a self-employed person.

When you start adding staff, you can easily convert your Solo 401(k) to a traditional plan. As you do, you can enable your employees to participate in the plan. That’s a big advantage, because offering a 401(k) plan — particularly as a small business — is an attractive advantage for drawing potential talent. Many employees prefer to work in a business where they will be covered by a retirement plan. With the Solo 401(k), you will already have a plan in place when that day comes.

Read More: What to Do When Your Employer’s Retirement Plan Stinks

Given all the benefits that you can get from a Solo 401(k), this is one self-employed retirement plan that’s well worth considering when the time comes to add a retirement plan to your business.

If you’re self-employed, do you utilize the Solo 401(k)? How would it change the way you save for retirement?

Topics: Retirement Planning

The post Why a Solo 401(k) is the Best Retirement Plan for the Self-Employed appeared first on The Dough Roller.

from The Dough Roller http://ift.tt/2pXQ2Qz

GaiaGPS App Setup and Battery Management Tips

How to Refinance Any Debt

When most people hear the word “refinance,” they automatically think “mortgage.” You, too?

It’s not unusual, since mortgage refinancing is the most common type of refinancing talked about online and elsewhere. There’s a reason for that: refinancing your mortgage can save you big money, even if you’re only saving a fraction of a percent on interest. But in reality, you can refinance any debt you can think of.

In fact, I’d encourage you to go grab a pen and paper right now. Write down every debt you have, including its interest rate. With this list in hand, read the rest of this article to learn how you can save money by refinancing some–or even all–of these debts! Here’s how.

What is Refinancing?

Refinancing is trading one debt for another. If you refinance your mortgage, you’re trading your original mortgage for a new mortgage, ideally with better terms that save you money. You could also trade your credit card debt for a lower-interest home equity loan, which is refinancing. Or you could move your car loan to a new lender to get a better interest rate.

Sometimes you refinance with the same lender. In this case, you’re changing the terms of your original loan based on new financial factors, such as a better credit score on your part or lower overall mortgage interest rates. Sometimes, you may take out a new loan to pay off the old loan, getting better loan terms in the process.

Read More: How to Get Out of Debt… and Fast

The goal of refinancing your mortgage is usually to save money over the life of the loan, either by paying it off more quickly or by lowering your interest rate. Sometimes, though, you might refinance for different reasons. For instance, you may need to refinance a student loan to remove your parents as cosigners on the loan. But even if you have a different end goal in mind for refinancing, you should always try to save as much money as possible during the process.

As an aside, a loan consolidation is a bit different. With consolidation, you turning multiple loans into a single loan. This process is a form of refinancing, but involves trading multiple debts for one. Sometimes consolidation can save money by lowering your interest rates, but it may actually cost you more money by lengthening your repayment period. It all depends on the terms of the loan.

When Should You Consider Refinancing?

Usually the goal of refinancing is to save money, especially on interest paid over time and on monthly payments. But you could also choose to refinance to change your loan terms or to remove a cosigner from your loan.

For instance, you might refinance your mortgage from a 15- to a 30-year loan. A longer term gives you lower (often much lower) monthly payments, which are great if you’re in a financial pinch. Even if you’re paying your 15-year mortgage with ease, you might want to take a longer term and invest the extra money each month, hoping to come out ahead financially in the long run.

On the flip side, you might choose to refinance your 30-year mortgage to a 15-year mortgage. If you want to be debt-free faster, this is a way to make it happen without making extra mortgage payments. Plus, 15-year mortgage rates tend to be much lower than rates on 30-year mortgages. With the lower rate and shorter term combined, you may save tens of thousands of dollars on interest over the life of your loan, and you’ll pay down the principal much more quickly.

If you owe less on your home than it’s worth, you might want to do a cash-out refinance, in which you remortgage it and take the difference in cash. You can use a cash-out refinance to borrow money for your child’s education or to renovate your home, for example. When mortgage interest rates are particularly low, a cash-out refinance can be a much cheaper loan option than a personal loan or traditional student loan.

Related: 4 Ways to Pay For Your Remodel

(Just remember that when you do a cash-out refinance to tap into your home’s equity, your home is acting as collateral for these expenses! Make doubly sure you can handle the terms of the new mortgage before you take this step.)

One more option is to switch from a variable-rate mortgage to a fixed-rate mortgage. A set interest rate and predictable payments can make it much easier to plan your personal finances.

What if you’re dealing with loads of credit card debt? In this case, refinancing to a lower interest rate can help you knock out the principal much more quickly, and could save you hundreds or thousands of dollars.

As you can see, there are many instances in which you might consider refinancing your debts. Be sure you run the proper calculations, especially if you’re refinancing a larger debt like a home or a car.

Learn More: Good Debt vs Bad Debt

Refinancing often costs cash up front. For instance, refinancing a mortgage often involves closing costs similar to when you originally purchase a home. Refinancing a car may have similar up-front costs, and using a balance transfer credit card to refinance your credit card debt may involve a balance transfer fee. Even refinancing personal and student loans can cost you in the form of finance charges.

Larger debts are likely to cost more up-front to refinance, while refinancing smaller debts may not be as expensive. Still, always make sure you understand the terms of the refinance loan or credit card balance transfer. Plus, you need to definitely make sure that you’re not spending more money than you’ll save.

How to Refinance All Your Debts

As I said earlier, you can refinance any debt with the proper steps. Let’s look at some of the ways that you can refinance various types of debt.

Straight-up refinancing

Although any of these methods is “refinancing,” let’s first talk about traditional refinancing. This term is most likely to be used for mortgage loans, auto loans, and student loans. Basically, you either get a loan with better terms from your current lender or from a new lender. The key to this is to shop around for your new loan.

Refinancing your mortgage may take more legwork, because you’ll likely need to talk with loan officers about refinancing offers and the potential costs of the process. When refinancing a secured loan, like your home or auto loan, you may not be able to refinance if you owe more than the home or vehicle is worth. A loan for more than an item is worth is riskier for lenders.

We talk elsewhere about how to refinance a home in which you don’t have a lot of equity. One option is to refinance through the Home Affordable Refinance Program, a government program that can help you get better mortgage terms even if you’re underwater on your home or don’t have much equity.

To qualify for the HARP program, you need to have a good recent repayment history, own your home as your primary residence, and have a loan owned by Freddie May or Fannie Mac. Your loan much have originated on or before May 31, 2009, and you need to have a current loan-to-value ratio of at least 80%.

Another option if you don’t qualify for this program is to take out two loans — one for the part of your loan that’s over your home’s current value, and another for the rest of your home loan.

If you have negative equity in your vehicle, you may need to take out a separate, unsecured loan to pay down part of the car loan. For instance, if you owe $15,000 on a car worth $11,000, take out an unsecured loan (or use a low-interest credit card) to pay off $4,000, and then refinance the remaining auto loan. Or you could keep paying on the vehicle until you build more equity.

Finally, let’s talk about straight-up refinancing of student loans. It used to be that these unsecured loans were very difficult to refinance, but more lenders are jumping into this space. Currently, several lenders exist almost solely to refinance student loans, including SoFi. Traditional banks, like Citizens Bank, are also getting into student loan refinancing.

Related: How to Pick the Best Student Loan Repayment Plan

Here’s the thing, though: since student loans are unsecured and are often quite large, you’ll probably need great credit and a solid source of income to qualify for this type of refinancing. If you’re not quite there yet, take some time to work on your credit score before you apply for student loan refinancing. Even if it takes a couple of years to get there, refinancing could save you thousands over the life of your loan.

Can’t find a lender who will let you refinance your student loans or other unsecured loans for a lower rate? Consider one of these options, instead:

Using your home’s equity

If you have equity in your home, you can use that to refinance some of your other debts, such as school loans, credit cards, or other personal debts. There are three options for doing this, including a home equity loan, a home equity line of credit, and a cash out refinance.

• Home Equity Loan: This is an installment loan based on your home’s equity. It’s also known as a second mortgage. If your home, for instance, is worth $500,000 and you owe $300,000 on your first mortgage, you could borrow $150,000 against your home’s value as a second mortgage. You’d pay back this type of loan in set installments, just like your first mortgage. All other things being equal, however, the interest rate on a second mortgage will be higher than your first mortgage.
• Home Equity Line of Credit: This is similar to a home equity loan, except that it’s a revolving debt like a credit card. With a HELOC, you can write a check or use a debit card attached to the account, pay back some or all of the charge, and then charge again. Because HELOCs are revolving loans, they often have an adjustable interest rate (though some lenders allow you to convert to a fixed rate). Unfortunately, that rate is often higher than the rate for a home equity loan.
• Cash Out Refinance: Instead of taking out a second mortgage as a home equity loan, you might consider a cash-out refinance, which will leave you with one mortgage payment. In the home equity loan scenario above, you could just refinance your first mortgage as a $450,000 mortgage, and take the excess $150,000 in cash. The advantage of a cash-out refinance is that the whole mortgage will benefit from a lower rate, especially if you take advantage of today’s still-low rates on fixed-rate mortgages.

On That Topic: How Will the Fed’s Rate Hike Affect Your Loans?

Using your home’s equity to refinance other debts can be a good option because a secured loan against your home’s equity will likely have a much lower interest rate than the rates on other debts.

The rates you’ll pay on a home equity loan are typically much lower than you’re likely to pay on any credit cards. It’s also likely to be a lot lower than the interest rate on federal student loans. So, you could lower your overall debt payments and reduce the time it takes to pay off debts by using your home’s equity to pay off the balance of other loans.

Again, though, you need to be careful with this option. If you can’t pay on other unsecured debts, lenders typically can’t come after any of your assets to pay off the debt. But if you become unable to pay on your mortgage, lenders could foreclose on your home. This is always the biggest risk of converting unsecured debt into secured debt through refinancing.

Refinancing with credit cards

The most common way to refinance credit card debt is a balance transfer. You transfer the balance from one credit card to another, normally one with a much lower interest rate.

Your best bet is to consider a zero interest credit card set up to encourage balance transfers. Note that some balance transfer credit cards come with fees, even if they have a limited-time zero interest rate on balance transfers.

Are They Worth It? Credit Cards With Annual Fees

There are some no-fee balance transfer cards available, so you should check out these options first. Some cards have an option for either zero interest with a balance-transfer fee (which is usually a percentage of the balance you transfer), or a zero transfer fee with a low interest rate. You’ll have to do the math to figure out which works best for you.

If you get a really great deal on a credit card and have enough available credit, you can use a credit card to refinance other higher-interest debts, as well. For instance, you could pay off a very high-interest personal loan with a lower-interest credit card, effectively using your credit card to refinance it.

Always check your credit card contract first because different types of purchases, transfers and payments may result in different interest rates. Also, be sure to read the card’s terms in full. If the interest rate will skyrocket to 15%, 20%, or more before you can pay off the balance of the loan, a balance transfer may cost you more than it saves. Take a realistic look at your payment plan, and run the numbers to make sure a balance transfer will save you money.

Debt consolidation

If you’re swamped in debt and are unable to make minimum payments on everything, debt consolidation could be a good option. You’ll get a lump sum to pay off part or all of your other debts, consolidating them into one loan with a single monthly payment.

The advantage of debt consolidation is that it often lowers your overall monthly payments — a relief for hard-hit consumers. Depending on the interest rates of the loans you’re carrying, consolidation may lower your overall interest rate and total interest payments.

According to the FTC, using your home’s equity is the most common way to consolidate debt, but you may also be able to get a consolidation loan. However, some disreputable, so-called debt relief organizations will offer debt consolidation loans that aren’t a great deal. They may increase the overall interest paid, extend your repayment time to decades, or charge fees that increase your overall debt load.

It’s very common to consolidate student loan debt, and this is usually an easy option with federal student loans. If you took out student loans for several years in a row, you probably have several loans from several lenders. It’s a pain to make so many separate payments, and your minimum payments are probably quite high.

In this case, you can consolidate all your loans into one by a single lender. Consolidating federal loans usually means that you lock in your interest rate, which may otherwise vary from year to year. Plus, you could lower your overall monthly payments and gain access to several repayment plans. And, of course, making just one payment instead of five or six or more is much more convenient.

You’ll have to consolidate private student loans separately, but there are several lenders who will do it. You can read more about how to consolidate student loans here.

Using LendingClub or Prosper

LendingClub and Prosper are peer-to-peer lending marketplaces. Basically, you can get a fairly low rate on an unsecured personal loan that comes from other individual lenders. LendingClub statistics say that nearly half their loans are used to consolidate debt or pay down credit cards with a lower interest loan.

Question: Will P2P Lending Continue to Be a Good Investment?

Peer-to-peer lending options generally come with competitive interest rates that depend on your credit history. On top of that, they’re relatively quick to get. However, the loan limits are usually around $25,000, though you may be able to take out multiple loans at once. They can be a good option if you need to refinance debt quickly.

The Bottom Line

Refinancing some or all of your debts may or may not be a good idea. Look at your balances, interest rates, and minimum payments. If you could reduce interest rates significantly, refinancing is usually a great option. Also, if you can lower your monthly payments, you could kick the money you save into paying off your principal balances more quickly or into investment accounts that allow you to save for the future.

Topics: debt

The post How to Refinance Any Debt appeared first on The Dough Roller.

from The Dough Roller http://ift.tt/1GnoVka