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If you miss a payment on a federal student loan, your loan will be considered delinquent. After missing payments for a certain amount of time (270 days for most federal loans), your loan will enter default.

While getting back on track after ending up in default might feel impossible, the good news is that there are a few ways to recover — including rehabilitation and consolidation. Refinancing your loans could also be an option in some cases.

If you’re considering student loan rehabilitation vs. consolidation, here’s what you should know:

Rehabilitation vs. consolidation: What’s the difference?Student loan rehabilitationStudent loan consolidationStudent loan refinancing with a cosignerConsequences of ignoring student loan defaultRecovering from student loan default: How is my credit affected?

Rehabilitation vs. consolidation: What’s the difference?

Student loan rehabilitation and consolidation are the two of the most common ways to recover from federal student loan default. Which one is right for you will depend on your individual circumstances and financial goals.

Keep in mind: You also have the option to pay off your loans in full to get out of default. However, this is unrealistic for most borrowers struggling with defaulted loans.

Here’s how rehabilitation and consolidation work:

Rehabilitation: With this option, you’ll need to make on-time payments for nine to 10 consecutive months, depending on the type of loans you have. If you successfully complete the terms of your rehabilitation agreement, the default status will be removed from your loan as well as your credit report.Consolidation: You could also choose to consolidate your federal loans into a Direct Consolidation Loan, which could extend your repayment term up to 30 years. Keep in mind that before you can consolidate, you’ll have to agree to either repay the loan under an income-driven repayment (IDR) plan or make three consecutive, on-time, full payments first. Also note, that while this will remove the default status from your loan, it will remain on your credit report.RehabilitationConsolidationHow it worksRemoves default status from existing loansCombines old loans into new Direct Consolidation LoanProcessDirect or FFEL Loans:
Must agree to make 9 voluntary, reasonable, and affordable payments over the span of 10 consecutive monthsPayments will typically be 15% of your annual discretionary income divided by 12 (lender might calculate lower payment if you can’t afford this)

Perkins Loans:
Must make full monthly payments within 20 days of your due date for 9 consecutive monthsMust agree to:
Repay consolidated loan on an IDR plan; ORMake 3 consecutive, on-time, full monthly payments before consolidatingHow long to complete9 to 10 months
(depending on loan type)30 to 45 days
(might take longer if you decide to make 3 payments before consolidating)Can use for multiple loans?No, must be done separately for each loanYes, can consolidate multiple loans at onceAllowed if wages are being garnished?Yes, but wages might continue to be garnished during the rehab processNo, you can’t consolidate unless the order is lifted or judgment is vacatedImpact on credit reportIf you successfully make the required payments:
Default status will be removed from loan and from credit reportLate payments could stay on your credit reports for up to 7 yearsAfter consolidation:
Default status will be removed from loan but not from credit reportLate payments could stay on your credit reports for up to 7 yearsCan do more than once?No, can only be done once for each loan No, can consolidate to get out of default only onceProsMight lower your paymentsWill restore eligibility for other federal benefits, such as access to IDR plans and student loan forgiveness programsHaving default removed from credit report could help your credit scoreFaster process than rehabilitationCan consolidate multiple loansCan extend your repayment term up to 30 years, which could lower your paymentsConsLonger process than consolidationIf you want to rehabilitate multiple loans, must enter separate agreements for each of themWon’t stop wages being garnishedDoesn’t remove default status from credit reportAny interest or collection costs from your old loans will be added to your new loan balanceCan’t consolidate if wages are being garnished

Student loan rehabilitation

Best for: Borrowers who want to start rebuilding their credit

To rehabilitate defaulted federal loans, you’ll have to make consecutive, on-time payments for nine to 10 months, depending on the kind of loans you have.

If you successfully complete rehabilitation, the default status will be removed from both your loans and your credit report — this could make rehabilitation a good choice if you want to begin rebuilding your credit.

Keep in mind, though, that any late payments could stay on your credit report for up to seven years.

Tip: Due to the COVID-19 pandemic, payments and interest accrual on federal student loans have been paused by the CARES Act through Jan. 31, 2022.

If you decide to enter a rehabilitation agreement during this administrative forbearance period, your suspended monthly payments will qualify as on-time payments — meaning you could get credit for rehabilitation without actually paying anything.

However, if you haven’t made each of the required rehabilitation payments before the forbearance ends, you’ll still need to make the remaining payments.

Learn More: Federal Student Loans and COVID-19: What You Need to Know

Pros of rehabilitation

Default status removed from credit report: After making each of the required payments, the default will be cleared from your loans and from your credit report.Might lower your payments: If you have Direct Loans or loans made under the Federal Family Education Loan (FFEL) Program, your rehabilitation payments will generally be limited to 15% of your discretionary income. If you can’t afford this, your servicer might calculate a lower alternative after you provide documentation of your income and expenses. If you have Perkins Loans, your payments will stay the same.Restores eligibility for other federal benefits: Having defaulted loans makes you ineligible for federal protections, such as access to IDR plans and student loan forgiveness programs. But if you rehabilitate your loans, you’ll regain these benefits.

Cons of rehabilitation

Long process: You’ll have to make consecutive, on-time payments for nine or 10 months to complete rehabilitation — a much longer process compared to consolidation.Only applies to one loan: A rehabilitation agreement only applies to one loan. If you have multiple loans you want to rehabilitate, you’ll have to set up an agreement for each one.Won’t stop wage garnishment: If your wages are being garnished, agreeing to rehabilitation won’t necessarily stop these involuntary payments.

Check Out: How to Find Your Student Loan Balance

How to rehabilitate a defaulted student loan

If your federal loans are held by the Department of Education, follow these three steps to apply for rehabilitation:

Mail or fax a copy of your latest tax return or transcript. The Department of Education will use this information to calculate your monthly payment. Keep in mind that if you are married, live with your spouse, and file taxes separately, you’ll also need to submit your spouse’s tax returns. Additionally, if your tax returns don’t accurately represent your income, you can fill out the Loan Rehabilitation Income and Expense Form.Sign and return the agreement. You’ll be mailed a loan rehabilitation agreement to review within 10 business days of the Department of Education receiving your income information. This will include your payment amount, payment options, and agreement terms. You’ll need to sign and return this form to officially begin rehabilitation.Make the required payments. After the rehabilitation agreement is in place, you’ll need to make the agreed-upon monthly payments. For Direct or FFEL Loans, this means you’ll have to make nine consecutive, on-time payments. Perkins Loans, on the other hand, require 10 full payments. If you successfully make each of these payments, the default status will be removed from your loans and credit report.Tip: If your federal student loans aren’t owned by the Department of Education, you’ll need to reach out to your loan holder to see what steps are required to apply for rehabilitation.

Learn More: Federal Student Loan Repayment Calculator

Student loan consolidation

Best for: Borrowers who want to get out of default quickly

Another option for getting out of student loan default is consolidating your federal loans into a Direct Consolidation Loan. A request to consolidate your loans could be processed within as little as 30 to 45 days, which makes it a faster option than rehabilitation.

Additionally, while consolidation won’t change your interest rate, you can extend your repayment term up to 30 years. This could greatly reduce your monthly payments — though keep in mind that it also means you’ll pay more in interest over time.

Check Out: How to Consolidate Your Student Loans

Pros of consolidation

Faster process: Consolidating your federal student loans could take as little as 30 to 45 days — a much shorter process compared to the nine to 10 months of payments required by rehabilitation.Can combine multiple loans: Federal consolidation lets you combine multiple federal loans — leaving you with just one loan and payment to manage.Could reduce your payments: Through consolidation, you can extend your repayment term up to 30 years. This could greatly reduce your monthly payments — though remember that it also means you’ll pay more in interest over the life of the loan.

Cons of consolidation

Default won’t be removed from credit report: Unlike rehabilitation, consolidation won’t remove your default status from your credit report.Capitalization of interest and collection costs: After you consolidate your loans, any interest or collection costs from your old loans will capitalize — meaning they’ll be added to your new loan balance.Can’t consolidate if wages are being garnished: If you’re subject to wage garnishment, you won’t be able to consolidate until the wage garnishment order is lifted or judgment is vacated.

Learn More: Pros and Cons of Consolidating Student Loans

How to consolidate defaulted student loans

If you want to consolidate your federal loans, follow these three steps:

Contact your loan holder. Before you can consolidate defaulted federal loans, you must contact your loan holder and agree to either repay your consolidated loan under an IDR plan or make three consecutive, on-time, full monthly payments first. If you choose to make the three payments, the payment amount will be calculated by your loan holder based on what you can reasonably afford according to your total financial circumstances.Apply for consolidation. You can fill out an online application at StudentAid.gov or a paper application from your servicer. When completing the application, you’ll need to provide your personal information, list the loans you want to consolidate, and choose your repayment plan. Afterward, you’ll need to sign and submit the application.Manage your payments. A consolidation request generally takes 30 to 45 days to process. Once your loans have been consolidated, you can begin making your new monthly payments.Keep in mind: If you have a defaulted Direct Consolidation Loan that you want to reconsolidate, you must have at least one other eligible federal loan to include in the consolidation.

However, if you have a defaulted FFEL Consolidation Loan, you don’t need to include any additional loans in the new consolidation as long as you agree to repay the loan on an IDR plan.

Check Out: Private Student Loan Consolidation

Student loan refinancing with a cosigner

Best for: Borrowers who know someone with good credit who is willing to act as a cosigner

Refinancing your student loans could also help you get out of default. With this process, your federal loans will be paid off with a new private student loan. You’ll typically need good to excellent credit to qualify for refinancing, which could be difficult if your loans are in default.

To increase your chances of approval, consider applying with a creditworthy cosigner. A cosigner can be anyone with good credit — such as a parent, other relative, or trusted friend — who is willing to share responsibility for the loan. Having a cosigner might also get you a lower interest rate than you’d get on your own.

Keep in mind: While you can refinance both federal and private loans, refinancing federal student loans will cost you access to federal benefits and protections — such as IDR plans and student loan forgiveness programs.

You’ll also no longer be eligible for the suspension of federal student loan payments and interest accrual under the CARES Act.

Learn More: Defaulted Student Loans: Can You Refinance?

Pros of refinancing

Might get a lower interest rate: Depending on your credit and if you apply with a cosigner, you might qualify for a lower interest rate. This could save you money on interest and even help you potentially pay off your loan faster.Could reduce your payments: If you choose to extend your repayment term, you could reduce your monthly payments. Just remember that this means you’ll pay more interest overall.Can combine multiple loans: Through private refinancing, you can consolidate multiple federal as well as private loans.

Cons of refinancing

Could be hard to qualify: Defaulting on student loans can severely damage your credit, which could make it difficult to qualify for refinancing.Loss of federal benefits: If you refinance your federal loans into a private loan, you’ll no longer have access to federal benefits and protections.Lack of repayment options: Private loans don’t offer federal student loan repayment options. For example, you generally won’t be able to sign up for an IDR plan after you refinance.

Check Out: Student Loan Consolidation vs. Student Loan Refinancing

How to refinance a defaulted student loan

If you decide to refinance a defaulted student loan, follow these steps:

Check your credit. When you apply for refinancing, the lender will review your credit to determine your creditworthiness — so it’s a good idea to check your credit beforehand so you know where you stand. You can use a site like AnnualCreditReport.com to review your credit reports for free. If you find any errors, dispute them with the appropriate credit bureaus to potentially boost your credit score.Compare lenders and pick a loan option. Be sure to compare as many lenders as possible to find the right loan for your situation. Consider not only interest rates but also repayment terms, any fees charged by the lender, and eligibility requirements. After comparing lenders, choose the loan option that works best for your needs.Complete the application. Once you’ve picked a lender, you’ll need to fill out a full application and submit any required documentation, such as tax returns or pay stubs. Also be prepared to provide information regarding each of the loans you want to refinance.Manage your payments. If you’re approved, continue making payments on your old loans while the refinance is processed. Afterward, you might consider signing up for autopay so you won’t miss any payments in the future — several lenders offer a rate discount to borrowers who opt for automatic payments.

Before your refinance, remember to consider as many lenders as you can to find the right loan for you. Credible makes this easy — you can compare your prequalified rates from our partner lenders in the table below in two minutes.

LenderFixed rates from (APR)Variable rates from (APR)Loan terms (years)Loan amountsMin. credit score

Credible Rating>

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

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4.54%+N/A10, 15, 20$7,500 up to $200,000
(larger balances require special approval)Does not discloseFixed APR:
4.54%+Variable APR:
N/AMin. credit score:
Does not discloseLoan amount:
$7,500 up to $500,000Loan terms (years):
10, 15, 20Max. undergraduate loan balance:
$250,000 – $500,000Time to fund:
4 monthsRepayment options:
Immediate repayment, forbearance, loans discharged upon death or disabilityFees:
NoneDiscounts:
AutopayEligibility:
Must be a resident of KentuckyCustomer service:
PhoneSoft credit check:
NoCosigner release:
After 36 monthsLoan servicer:
Kentucky Higher Education Student Loan CorporationMax. graduate loan balance:
$250,000 – $500,000Credible Review:
Advantage Education Loan reviewOffers Parent PLUS Refinancing :
Yes

View details>
2.15%+
1.87%+5, 7, 10, 15, 20$10,000 up to $250,000
(depending on degree)690Fixed APR:
2.15%+Variable APR:
N/AMin. credit score:
Does not discloseLoan amount:
$10,000 to $400,000Loan terms (years):
5, 7, 10, 15, 20Repayment options:
Military deferment, forbearanceFees:
Late feeDiscounts:
AutopayEligibility:
Must have a credit score of at least 720, a minimum income of $60,000, and must be a resident of TexasCustomer service:
Email, phoneSoft credit check:
Does not discloseCosigner release:
NoLoan servicer:
Firstmark ServicesMax. Undergraduate Loan Balance:
$100,000 – $149,000Max. Graduate Loan Balance:
$200,000 – $400,000Offers Parent PLUS Refinancing:
Does not disclose

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2.44%+1
2.24%+15, 7, 10, 15, 20$10,000 to $500,000
(depending on degree and loan type)Does not discloseFixed APR:
2.44%+1Variable APR:
2.24%+1Min. credit score:
Does not discloseLoan amount:
$10,000 to $750,000Loan terms (years):
5, 7, 10, 15, 20Repayment options:
Immediate repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disabilityFees:
Late feeDiscounts:
Autopay, loyaltyEligibility:
Must be a U.S. citizen or permanent resident and have at least $10,000 in student loansCustomer service:
Email, phone, chatSoft credit check:
YesCosigner release:
After 24 to 36 monthsLoan servicer:
Firstmark ServicesMax. Undergraduate Loan Balance:
$100,000 to $149,000Max. Graduate Loan Balance:
Less than $150,000Offers Parent PLUS Refinancing:
Yes

View details>
2.99%+2
2.94%+25, 7, 10, 12, 15, 20$5,000 to $300,000
(depending on degree type)Does not discloseFixed APR:
2.99%+2Variable APR:
2.94%+2Min. credit score:
Does not discloseLoan amount:
$5,000 to $300,000Loan terms (years):
5, 7, 10, 12, 15, 20Repayment options:
Military deferment, forbearance, loans discharged upon death or disabilityFees:
Late feeDiscounts:
AutopayEligibility:
All states except for MECustomer service:
Email, phone, chatSoft credit check:
YesCosigner release:
After 24 to 36 monthsLoan servicer:
College Ave Servicing LLCMax. Undergraduate Loan Balance:
$100,000 to $149,000Max. Graduate Loan Balance:
Less than $300,000Offers Parent PLUS Refinancing:
Yes

View details>
2.16%+
2.11%+5, 7, 10, 15, 20$5,000 to $500,000

680

Fixed rate:
2.44%+1Variable rate:
2.24%+1Min. credit score:
680Loan amount:
$5,000 to $500,000Cosigner release:
YesLoan terms (years):
5, 7, 10, 15, 20Repayment options:
Academic deferment, forbearance, loans discharged upon death or disabilityFees:
Late feeDiscounts:
AutopayEligibility:
Available in all states, except MS and NVCustomer service:
Email, phone, chatSoft credit check:
YesLoan servicer:
FirstMarkMax. undergraduate loan balance:
$500,000Max. graduate loan balance:
$500,000Offers Parent PLUS refinancing:
YesMin. income:
$65,000 (for 15- and 20-year products)

View details>

1.8%+5
1.8%+55, 10, 15, 20$1,000 to $250,000700Fixed APR:
1.8%+5Variable APR:
1.8%+5Min. credit score:
700Loan amount:
$7,500 to $200,000Loan terms (years):
5, 10, 15, 20Repayment options:
Immediate repayment, academic deferment, forbearance, loans discharged upon death or disabilityFees:
NoneDiscounts:
AutopayEligibility:
Must be a U.S. citizen or permanent resident and submit two personal referencesCustomer service:
Email, phoneSoft credit check:
YesCosigner release:
After 36 monthsLoan servicer:
Granite State Management & Resources (GSM&R)Max. Undergraduate Loan Balance:
$150,000 to $249,000Max. Graduate Loan Balance:
$150,000 to $199,000Offers Parent PLUS Refinancing :
Yes

View details>
2.47%+3
2.39%+35, 7, 10, 12, 15, 20Minimum of $15,000680Fixed APR:
2.47%+3Variable APR:
2.39%+3Min. credit score:
680Loan amount:
No maximumLoan terms (years):
5, 7, 10, 12, 15, 20Repayment options:
ForbearanceFees:
NoneDiscounts:
NoneEligibility:
Must be a U.S. citizen or permanent resident, have at least $15,000 in student loan debt, and have a bachelor’s degree or higher from an approved schoolCustomer service:
Email, phoneSoft credit check:
YesCosigner release:
NoLoan servicer:
MohelaMax. Undergraduate Loan Balance:
No maximumMax. Graduate Loan Balance:
No maximumOffers Parent PLUS Refinancing:
Yes

View details>
3.47%+4
2.44%+45, 10, 15, 20$5,000 to $250,000670Fixed APR:
3.47%+4Variable APR:
2.44%+4Min. credit score:
670Loan amount:
$5,000 to $250,000Loan terms (years):
5, 10, 15, 20Repayment options:
Academic deferment, military deferment, forbearanceFees:
Late feeDiscounts:
AutopayEligibility:
Must be U.S. citizen or permanent residentCustomer service:
Email, phone, chatSoft credit check:
YesCosigner release:
YesMax undergraduate loan balance:
$250,000Max graduate loan balance:
$250,000Offers Parent PLUS refinancing:
Yes

View details>
2.24%+7N/A5, 7, 10, 12, 15, 20Up to $300,000670Fixed APR:
2.24%+7Variable APR:
N/AMin. credit score:
670Loan amount:
Up to $300,000Loan terms (years):
5, 7, 10, 15, 20Time to fund:
Usually one business dayRepayment options:
Academic deferral, military deferral, forbearance, death/disability dischargeFees:
NoneDiscounts:
AutopayEligibility:
Available in all 50 statesCustomer service:
Email, phoneSoft credit check:
YesCosigner release:
After 24 monthsMax. undergraduate loan balance:
$300,000Max. graduate balance:
$300,000Offers Parent PLUS loans:
YesMin. income:
None

View details>
3.05%+
3.05%+7, 10, 15$10,000 up to the total amount of qualified education debt670Fixed APR:
3.05%+Variable APR:
3.05%+Min. credit score:
670Loan amount:
$10,000 up to the total amountLoan terms (years):
7, 10, 15Repayment options:
Military deferment, loans discharged upon death or disabilityFees:
NoneDiscounts:
NoneEligibility:
Must be a U.S. citizen or permanent resident and have at least $10,000 in student loansCustomer service:
Email, phoneSoft credit check:
YesCosigner release:
NoLoan servicer:
AESMax. Undergraduate Loan Balance:
No maximumMax. Gradaute Loan Balance:
No maximumOffers Parent PLUS Refinancing:
Yes

View details>
2.89%+N/A5, 8, 12, 15$7,500 to $300,000670Fixed APR:
2.89%+Variable APR:
N/AMin. credit score:
670Loan amount:
$7,500 to $300,000Loan terms (years):
5, 8, 12, 15Repayment options:
Does not discloseFees:
NoneDiscounts:
NoneEligibility:
Must be a U.S. citizen and have and at least $7,500 in student loansCustomer service:
Email, phone, chatSoft credit check:
YesCosigner release:
After 12 monthsLoan servicer:
PenFedMax. Undergraduate Loan Balance:
$300,000Max. Graduate Loan Balance:
$300,000Offers Parent PLUS Refinancing:
Yes

View details>
3.29%+N/A5, 10, 15$7,500 up to $250,000
(depending on highest degree earned)680Fixed APR:
3.29%+Variable APR:
N/AMin. credit score:
680Loan amount:
$7,500 to $250,000Loan terms (years):
5, 10, 15Repayment options:
Academic deferment, military deferment, forbearance, loans discharged upon death or disabilityFees:
NoneDiscounts:
AutopayEligibility:
Available in all 50 states; must also have at least $7,500 in student loans and a minimum income of $40,000Customer service:
Email, phoneSoft credit check:
Does not discloseCosigner release:
NoLoan servicer:
Rhode Island Student Loan AuthorityMax. Undergraduate Loan Balance:
$150,000 – $249,000Max. Graduate Loan Balance:
$200,000 – $249,000Offers Parent PLUS Refinancing:
Yes

View details>
2.49%+6
2.25%+65, 7, 10, 15, 20$5,000 up to the full balance of your qualified education loansDoes not discloseFixed APR:
2.49%+6Variable APR:
2.25%+6Min. credit score:
Does not discloseLoan amount:
$5,000 up to the full balanceLoan terms (years):
5, 7, 10, 15, 20Repayment options:
Academic deferment, military defermentFees:
NoneDiscounts:
Autopay, loyaltyEligibility:
Available in all 50 statesCustomer service:
Email, phone, chatSoft credit check:
YesCosigner release:
NoMax undergraduate loan balance:
No maximumMax graduate loan balance:
No maximumOffers Parent PLUS refinancing:
YesAll APRs reflect autopay and loyalty discounts where available | 1Citizens Disclosures | 2College Ave Disclosures | 5EDvestinU Disclosures | 3 ELFI Disclosures | 4INvestEd Disclosures | 7ISL Education Lending Disclosures | 6SoFi Disclosures

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Consequences of ignoring student loan default

If you’ve defaulted on federal student loans, it’s important to address the default instead of ignoring it. This way, you have a better chance of avoiding or resolving some of the potential consequences of default, which include:

Damaged credit: Missing payments and defaulting on a student loan can severely damage your credit. The longer you continue to miss payments on your loan, the more harm will come to your credit. Keep in mind that having bad credit could make it hard to access more credit in the future.Loan acceleration: If you default on a loan, your entire balance could become due.Loss of hardship benefits: Loans in default no longer have access to federal hardship benefits, such as deferment and forbearance. You also won’t be able to access more federal financial aid.Wage garnishment: In some cases, your wages could be garnished, or your tax returns could be withheld.Collection costs: Your defaulted loan might be sent to a collections agency that will try to obtain payments from you. If this happens, you’ll be held responsible for covering the collection costs incurred by your loan holder.

Learn More: 6 Ways Student Loans Can Impact Your Credit Score

Recovering from student loan default: How is my credit affected?

How your credit is affected will depend on the method you choose to get out of default. Here’s what you can generally expect:

Rehabilitation: If you successfully rehabilitate your loan, the default status will be removed from your loan and your credit report, which could have a positive impact on your credit. Any late payments you made on your loan will remain on your credit report for up to seven years — but the more time that passes, the less effect these will likely have on your credit.Consolidation: Unfortunately, consolidating your federal loans doesn’t remove the default from your credit report — like late payments, a default can stay on your credit report for up to seven years. But if you’re careful to make on-time payments on your consolidated loan, you might see an improvement in your credit score over time.Refinancing: When you apply for refinancing, the lender will perform a hard credit check to determine your creditworthiness. This could cause a slight drop in your credit score — though this is usually only temporary, and your score will likely bounce back within a few months. Additionally, refinancing might actually help your credit in the long run. For example, consistently making on-time payments on your refinanced loan could help you build a positive payment history and raise your credit score.

If you decide to refinance your student loans, remember to consider as many lenders as possible to find the right loan for your needs.

This is easy with Credible: You can compare your prequalified rates from multiple lenders in two minutes — without affecting your credit.

Find out if refinancing is right for you

Compare actual rates, not ballpark estimates – Unlock rates from multiple lenders in about 2 minutesWon’t impact credit score – Checking rates on Credible won’t impact your credit scoreData privacy – We don’t sell your information, so you won’t get calls or emails from multiple lendersSee Your Refinancing Options
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Real Estate

Nursing School Cost and How to Pay For It

Becoming a nurse generally isn’t as expensive as becoming a doctor, but it still isn’t cheap.

The exact cost of nursing school will depend on the kind of schooling you choose but could range anywhere from $3,000 up to $100,000, according to NurseJournal.

If you’re wondering how much nursing school is and how to pay for it, here’s what you should know:

How much is nursing school?Additional costs of nursing schoolHow to pay for nursing school8 student loans for nursing schoolStudent loan forgiveness for nursesStudent loan repayment for nursesIs it worth it to go to nursing school?

How much is nursing school?

There are several types of education programs available for becoming a nurse. These programs will range in price depending on how advanced they are as well as whether you choose to attend an in-state or out-of-state school.

Here’s a look at the typical nursing school costs you can expect by program:

ProgramAverage costProgram lengthPractical Nursing Diploma$4,000 to $15,0001 yearAssociate Degree in Nursing$6,000 to $20,0002 to 3 yearsBachelor of Science in Nursing$40,000 to $100,0004 yearsMaster of Science in Nursing$35,000 to $70,0001 to 2 yearsDoctor of Nursing Practice$30,000 to $70,0002 to 3 years

Practical Nursing Diploma

Average cost: $4,000 to $15,000

One of the quickest ways to begin working as a nurse is to become a licensed practical nurse (LPN) or licensed vocational nurse (LVN).

These nurses work as assistants to physicians and registered nurses (RN) in various healthcare facilities, such as hospitals, long-term care facilities, and nursing homes.

To begin your career as an LPN or LVN, you’ll need to earn a Practical Nursing Diploma — these programs usually take one year to complete.

ssociate Degree in Nursing

Average cost: $6,000 to $20,000

If you choose to earn an Associate Degree in Nursing (ADN), you’ll be trained to work as an RN over the course of two years. RNs with associate degrees can work in hospitals, doctor’s offices, outpatient care centers, and various other healthcare facilities.

Keep in mind that with the recent push for nurses to obtain a bachelor’s degree, your career options could be limited by some employers if you pursue an ADN instead.

Bachelor of Science in Nursing

Average cost: $40,000 to $100,000

Another way to become an RN is by earning a Bachelor of Science in Nursing (BSN), which generally takes about four years.

Like an ADN, a BSN will train you in the skills you need to perform nursing care — however, you’ll also receive more extensive education in research, social sciences, leadership, and management as well as public and community health.

Generally, a BSN-prepared nurse will be better equipped to handle more complex procedures compared to an ADN-prepared nurse. Because of this, BSN nurses can earn $80,000 or more per year while ADN nurses earn an average salary of just over $74,000, according to NursingProcess.org.

Tip: Some hospitals and other healthcare facilities prefer nurses with BSNs as the additional education provides lower mortality rates for patients and fewer medical errors.

However, an ADN could still be a good place to start your nursing career. Many students choose to earn their ADN so they can begin working as a nurse before returning to school to pursue a BSN.

Master of Science in Nursing

Average cost: $35,000 to $70,000

Having a Master of Science in Nursing (MSN) can open more career doors for a nurse — for example, graduates could find employment as nurse practitioners, nurse researchers, nurse administrators, or nurse educators.

Most traditional MSN programs are designed for students who have already earned their BSN and take one to two years to finish. There are also three- to four-year bridge programs available for nurses who don’t have their BSN.

Doctor of Nursing Practice

Average cost: $30,000 to $70,000

You could also choose to continue your education through a Doctor of Nursing Practice (DNP) program. With a DNP program, you can focus on learning advanced skills or pursuing advanced research.

If you’ve already earned a master’s degree, a DNP program will generally take about two to three years to complete. There are also BSN-to-DNP bridge programs available, which usually take three to five years to finish.

Learn More: How to Use Student Loans for College Living Expenses

dditional costs of nursing school

In addition to tuition, there are also other costs to consider when it comes to paying for nursing school. Some of these expenses include:

Uniform and accessories: $20 to $90Textbooks: $1,000 to $3,000Nursing supplies: $300 to $500Health insurance: $1,000 to $4,000National Council Licensure Examination (NCLEX): $200NCLEX review courses: $25 to $400

Check Out: Tuition & Room and Board: On-Campus vs. Off-Campus Costs

How to pay for nursing school

While nursing school can be expensive, there are several options that could help you cover the cost. Here’s how to pay for nursing school:

1. Fill out the FAFSA

Your first step when it comes to paying for nursing school should be completing the Free Application for Federal Student Aid (FAFSA).

Your school will use your FAFSA results to determine what federal student loans and other federal financial aid you qualify for.

Tip: It’s a good idea to fill out the FAFSA as early as possible. You can submit the FAFSA for the 2021-2022 academic year starting Oct. 1, 2020, up until June 30, 2022.

Make sure not to miss the deadline so you don’t miss out on any federal financial aid you might qualify for.

2. Apply for scholarships and grants

Unlike student loans, college scholarships and grants don’t have to be repaid — which makes them a great way to pay for school.

There’s no limit to how many scholarships and grants you can get, so it’s wise to apply for as many as you can. You might also qualify for school-based scholarships based on your FAFSA results.

There are several organizations that offer scholarships and grants to nursing students, including:

Nonprofit organizationsLocal and national businesses (such as Johnson & Johnson)Professional nursing associations

You can also use sites like Fastweb and Scholarships.com to easily search and apply for scholarships.

3. Explore employer tuition assistance

Many employers provide tuition assistance programs to nurses — for example, Intermountain Healthcare will reimburse up to 100% of tuition costs (up to $5,250 per year) for eligible nurses earning BSNs.

If you’re already employed as a nurse, be sure to check with your employer to see if they offer any tuition assistance.

Tip: Even if your employer doesn’t have an official program, it doesn’t hurt to ask. They might be willing to help you with your education costs in return for the benefits of improving your current skill set.

4. Take out federal student loans

If you need to borrow for school, it’s usually best to start with federal student loans. This is largely because these loans come with federal benefits and protections, such as access to income-driven repayment plans and student loan forgiveness programs.

There are three main types of federal student loans available to nursing students:

Direct Subsidized Loans: These are available to undergraduate students with financial need. The government will cover the interest on these loans while you’re in school — so it’s often a good idea to take out subsidized loans first before turning to other types of loans.Direct Unsubsidized Loans: These are available to undergraduate, graduate, and professional students regardless of financial need. Unlike with subsidized loans, you’re responsible for all of the interest that accrues on unsubsidized loans.Direct PLUS Loans: There are two kinds of Direct PLUS Loan — Grad PLUS Loans for graduate students and Parent PLUS Loans for parents who want to cover their child’s education costs. PLUS Loans typically have higher interest rates than Direct Subsidized and Unsubsidized Loans. They also require a credit check.Keep in mind: Federal loans come with student loan limits based on the type of loan you get as well as what year you are in school.

5. Use private student loans to fill the gaps

After you’ve exhausted your scholarship, grant, and federal student loan options, private student loans can help fill any financial gaps left over.

Keep in mind that private loans don’t come with the protections of federal loans, which means they should be a last resort when it comes to borrowing for school.

However, private student loans do offer some benefits of their own, such as:

Higher loan limits: You might be able to borrow up to your school’s cost of attendance with private student loans.No application deadlines: Unlike with federal loans, you can apply for private student loans at any time while you’re enrolled in school.Tip: You’ll typically need good to excellent credit to qualify for private student loans — a good credit score is usually considered to be 700 or higher.

There are also some lenders that offer student loans for bad credit, but these loans tend to have higher interest rates compared to good credit loans.

If you’re struggling to get approved for a private student loan, consider applying with a creditworthy cosigner to improve your chances. Even if you don’t need a cosigner to qualify, having one could get you a lower interest rate than you’d get on your own.

Learn More: Private Student Loan Repayment Options

8 student loans for nursing school

If you decide to take out a private student loan for nursing school, be sure to consider as many lenders as possible. This way, you can find the right loan for your needs.

Here are Credible’s partner lenders that offer private student loans for nursing school:

LenderFixed Rates From (APR)
Variable Rates From (APR)Loan amountsLoan terms (years)

View details>
2.91%+
1.48%+$2,001 to $200,0007 to 20Fixed APR:
2.91%+Variable APR:
1.48%+Min. credit score:
540Loan amount:
$2,001 to $200,000 Loan terms (years):
5, 7, 10, 12, 15, 20Repayment options:
Full deferral, fixed/flat repayment, interest only, academic deferment, military deferment, forbearance, loans discharged upon death or disabilityFees:
NoneDiscounts:
0.25% to 1.00% automatic payment discount, 1% cash back graduation rewardEligibility:
Must be a U.S. citizen or permanent resident or DACA student enrolled at least half-time in a degree-seeking programCustomer service:
Email, phoneSoft credit check:
YesCosigner release:
After 24 monthsLoan servicer:
Launch Servicing, LLC

View details>
3.23%+1
1.03%+1$1,000 to $350,000 (depending on degree)5, 10, 15Fixed APR:
3.23%+1Variable APR:
1.03%+1Min. credit score:
720Loan amount:
$1,000 to $350,000Loan terms (years):
5, 10, 15Loan types:
Any private or federal student loanRepayment options:
Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disabilityFees:
Late feeDiscounts:
Autopay, loyaltyEligibility:
Available in all 50 states (international students can apply with a creditworthy U.S. citizen or permanent resident cosigner)Customer service:
Email, phone, chatSoft credit check:
YesCosigner release:
After 36 monthsLoan servicer:
Firstmark Services

View details>
2.99%+2,3

0.99%+2,3$1,000 up to 100% of the school-certified cost of attendance5, 8, 10, 15Fixed APR:
2.99%+2,3Variable APR:
0.99%+2,3Min. credit score:
Does not discloseLoan amount:
$1,000 up to cost of attendanceLoan terms (years):
5, 8, 10, 15Repayment options:
Full deferral, full monthly payment, fixed/flat repayment, interest only, immediate repayment, academic deferment, forbearance, loans discharged upon death or disabilityFees:
Late feeDiscounts:
AutopayEligibility:
Must be a U.S. citizen or permanent resident and be making satisfactory academic progress.Customer service:
Email, phoneSoft credit check:
YesCosigner release:
After 24 monthsLoan servicer:
College Ave Servicing LLC

View details>3.75%+1.08%+$1,000 to $99,999 annually
($180,000 aggregate limit)7, 10, 15Fixed APR:
3.75%+Variable APR:
1.08%+Min. credit score:
Does not discloseLoan amount:
$1,000 to $99,999 annually>($180,000 aggregate limit)Loan terms (years):
7, 10, 15Repayment options:
Full deferral, immediate repayment, interest-only repayment, flat/full repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disabilityFees:
NoneDiscounts:
AutopayEligibility:
Not available to residents of AZ, IA, or WICustomer service:
Phone, emailSoft credit check:
YesCosigner release:
After 36 monthsLoan servicer:
American Education ServicesMin. income:
Does not disclose

View details>
3.0%+7
2.17%+7$1,000 to $200,0007, 10, 15Fixed APR:
3.0%+7Variable APR:
2.17%+7Min. credit score:
750Loan amount:
$1,000 to $200,000Loan terms (years):
7, 10, 15Repayment options:
Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, loans discharged upon death or disabilityFees:
Late feeDiscounts:
AutopayEligibility:
Must be a U.S. citizen or permanent resident and have a minimum income of $30,000.Customer service:
Email, phoneSoft credit check:
YesCosigner release:
After 36 monthsLoan servicer:
Granite State Management & Resources (GSM&R)

View details>
3.83%+8
1.69%+8$1,001 up to 100% of school certified cost of attendance5, 10, 15Fixed APR:
3.83%+8Variable APR:
1.69%+8Min. credit score:
670Loan amount:
$1,001 up to cost of attendanceLoan terms (years):
5, 10, 15Repayment options:
Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, forbearanceFees:
Late feeDiscounts:
Autopay, reward for on-time graduationEligibility:
Must be an Indiana resident or a U.S. citizen attending an eligible Indiana schoolCustomer service:
Email, phone, chatSoft credit check:
YesCosigner release:
After 48 monthsLoan servicer:
American Education Services

View details>
3.75%+N/A$1,500 up to school’s certified cost of attendance less aid15Fixed APR:
3.75%+Variable APR:
N/AMin. credit score:
670Loan amount:
$1,500 up to cost of attendance less aidLoan terms (years):
10, 15Repayment options:
Full deferral, interest only, immediate repayment, academic deferral, forbearanceFees:
NoneDiscounts:
NoneEligibility:
Must be a U.S. citizen or permanent resident and be making satisfactory academic progress.Customer service:
Email, phoneSoft credit check:
YesCosigner release:
After 48 monthsLoan servicer:
American Education Services (AES)

View details>
3.5% – 12.6% APR9
1.13% – 11.23% APR9Up to 100% of the school-certified cost of attendance15Fixed APR:
3.5% – 12.6% APR9Variable APR:
1.13% – 11.23% APR9Min. credit score:
Does not discloseLoan amount:
$1,000 up to cost of attendanceLoan terms (years):
10 to 15Repayment options:
Full deferral, fixed/flat repayment, interest only, academic deferment, forbearance, loans discharged upon death or disabilityFees:
Late feeDiscounts:
AutopayEligibility:
Must be a U.S. citizen or permanent resident. Also available to non-U.S. citizen students (including DACA students) attending a school located in the U.S. who apply with a qualifying cosigner.Customer service:
Phone, chatSoft credit check:
YesCosigner release:
After 12 consecutive on-time paymentsLoan servicer:
Sallie MaeCompare private student loan rates without affecting
your credit score. 100% free!

Compare Private Loans Now

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Student loan forgiveness for nurses

There are several student loan forgiveness programs available to nurses with federal student loans. Some of these programs include:

Public Service Loan Forgiveness

If you work for a nonprofit or government organization, you might be eligible for Public Service Loan Forgiveness (PSLF). You can apply for PSLF after making qualifying payments for 10 years.

Perkins Loan Cancellation

If you have a federal Perkins Loan and work as a full-time nurse for an eligible employer, you might qualify to have up to 100% of your loan canceled after five consecutive years of service.

Income-driven repayment forgiveness

If you sign up for an income-driven repayment (IDR) plan, your payments will be based on your income — typically 10% to 20% of your discretionary income.

Additionally, you could have any remaining balance forgiven after 20 to 25 years, depending on the plan.

Check Out: Private Student Loan Forgiveness Alternatives

Student loan repayment for nurses

In addition to student loan forgiveness programs, there are also several loan repayment programs available to nurses, including:

National Health Service Corps Loan Repayment Program

Nurses who work at an NHSC-approved location in a Health Professional Shortage Area might be eligible for up to $50,000 in loan repayment assistance. In return, you must agree to at least two years of service.

Nurse Corps Loan Repayment Program

Qualifying nurses could have up to 85% of their student loans repaid through this program. In return, you must work full time at a Critical Shortage Facility or eligible nursing school for at least two years — you’ll receive 60% repayment over two years and could have another 25% repaid if you serve for a third year.

ctive Duty Health Professions Loan Repayment Program

Nurses who enlist and serve in the U.S Army Nurse Corps for at least three years could have up to $120,000 paid toward their qualifying student loans through this program.

Indian Health Service Loan Repayment Program

This program offers up to $40,000 in student loan repayment for Advanced Practice Nurses. In return, you must agree to work for two years in a health facility that serves American Indian and Alaska Native communities.

Disadvantaged Faculty Loan Repayment Program

Nurses who work as faculty members at eligible academic institutions could receive up to $40,000 in student loan repayment in return for a two-year service commitment.

To be eligible, these faculty members must also come from economically and environmentally disadvantaged backgrounds.

Tip: Many states also offer their own student loan repayment programs. You can find more information on your state’s website.

Learn More: College ROI: 6 Tools to Gauge the Return on Your Degree

Is it worth it to go to nursing school?

This depends on your individual goals. If a career in nursing will be fulfilling for you, then it might be worth it regardless of the expense.

Keep in mind: Nurses can earn $74,000 or more per year, which could make it easier to repay any student loans you end up with.

If you decide to take out a private student loan for nursing school, remember to consider as many lenders as you can to find the right loan for you.

Credible makes this easy — you can compare your prequalified rates from multiple lenders in two minutes.

Compare student loan rates from top lenders

Multiple lenders compete to get you the best rateGet actual rates, not estimated onesFinance almost any degreeSee Your Rates
Checking rates will not affect your credit

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The post Nursing School Cost and How to Pay For It appeared first on Credible.

4 Steps to Becoming Finance Fit

Due to the COVID-19 pandemic, payments and interest accrual have been paused on federal student loans by the CARES Act through Jan. 31, 2022.

If you have federal student loans, this means you only have a short time until your payments resume — which is why it’s important to get your finances in shape so you’ll be prepared.
Are you ready to start making federal student loan payments again? Take the quiz below to find out — plus get the chance to win a $50 e-gift card*!

Find Out If You’re Financially Fit

NO PURCHASE NECESSARY TO ENTER OR WIN. The Financially Fit Survey Sweepstakes begins on Oct. 5, 2021 at 12:01 a.m. PT and ends on Oct. 19, 2021 at 11:59 p.m. PT. Open to legal residents of the 50 United States & D.C., who are at least 18 years of age at time of entry. One entry per user. Void where restricted or prohibited by law. See Official Rules for eligibility/ restrictions/ Entry Periods/ prize descriptions and complete details. Void where prohibited. Privacy Policy is located at https://www.credible.com/privacy.

Here are four ways to get financially fit before you start making federal student loan payments again:

Create a budgetRefinance high-interest debtPay down high-interest debtBuild an emergency fund

1. Create a budget

Creating a budget is a great way to track your monthly income and expenses. Additionally, you can see how federal student loan payments will fit into your current budget and make adjustments if necessary.

For example, if your payments will strain your budget, you can look into trimming expenses, such as canceling unused subscriptions.

To set up a budget, you’ll need to:

Calculate your monthly income. This might include traditional employment as well as other non-traditional sources, such as a side hustle.Calculate your monthly expenses. List out your essential expenses (such as rent and utilities) as well as your non-essential spending (such as entertainment or dining out).Subtract your expenses from your income. This amount is the extra room you have in your budget — as well as how much you can afford to pay on your student loans.Tip: Creating a budget can also help you plan for your short-term and long-term financial goals.

For instance, if you want to pay off your student loans in five years, you can check your budget to see how much you can afford to pay on your loans each month and then set a payoff date.

2. Refinance high-interest debt

If you have high-interest debt, you might be able to get a lower interest rate through refinancing. This could save you hundreds or even thousands of dollars on interest — freeing up money in your budget to put toward your student loans.

Or you could opt to extend your repayment term to reduce your monthly payments. Just keep in mind that this means you’ll pay more in interest over time.

Here are a few ways to refinance depending on the kind of debt you have:

Student loan refinancing

Student loan refinancing interest rates are hovering near record lows. If you have private student loans as well as good to excellent credit, you might be able to take advantage of these low rates by refinancing your student loans.

This could save you money on interest and even potentially help you pay off your loans faster.

Keep in mind: While you can refinance both federal and private loans, refinancing federal student loans will cost you access to federal benefits and protections — such as income-driven repayment plans and student loan forgiveness programs.

You’ll also no longer be eligible for the suspension of federal payments and interest accrual under the CARES Act.

If you decide to refinance your student loans, be sure to consider as many lenders as possible to find the right loan for your needs. Credible makes this easy — you can compare your prequalified rates from multiple lenders in two minutes.

Find out if refinancing is right for you

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Debt consolidation loan

A debt consolidation loan is a type of personal loan used to pay off various kinds of debt, such as credit cards or other loans. Consolidating your debt will leave you with just one loan and payment to manage, which could make it easier to budget for your student loan payments.

Keep in mind that personal loan interest rates have remained at record lows — so depending on your credit, you might qualify for a lower interest rate than what you’re currently paying.

Balance transfer card

Another way to consolidate credit card debt is with a balance transfer card. With this option, you can move your balance from one credit card to another.

Some balance transfer cards come with a 0% APR introductory offer. This means you could avoid paying interest if you can repay your balance before this period ends.

However, keep in mind that if you can’t pay off the card in time, you could be stuck with some hefty interest charges.

3. Pay down high-interest debt

If you have multiple debts and can’t refinance them for a lower interest rate, you might need to simply concentrate on paying them off as soon as possible.

Repaying some of your debt over the next few months and lessening this strain on your budget could also make it easier to manage federal student loan payments when they resume.

Here are a couple of strategies that might help you do this:

Debt avalanche method

With the debt avalanche method, you’ll focus on paying off your debt with the highest interest rate first. Here’s how it works:

Tip: While the debt avalanche method can be a good way to save money on interest over time, it can also take a while to see your savings.

If you’re more motivated by small wins, you might consider following the debt snowball method instead.

Debt snowball method

If you use the debt snowball method, you’ll start by paying off your smallest debt first. Here’s how it works:

Tip: The debt snowball method typically offers more immediate success, which could be helpful if you’re driven by small wins.

But if you’d rather save more money on interest and don’t mind waiting to see your results, the debt avalanche method might be a better option for you.

4. Build an emergency fund

Having an emergency fund can help you pay for unexpected costs and avoid racking up more debt.

In general, it’s a good idea to save enough in an emergency fund to cover three to six months’ worth of expenses — including student loan payments.

Here are a couple of savings options you might consider:

High-yield savings account: This type of savings account generally offers above-average interest rates. This means you could get a higher rate of return compared to regular savings accounts. Several high-yield savings accounts don’t require an initial deposit, which could be helpful for starting an emergency fund.Money market account: This is another savings option that typically provides a higher rate of return than regular savings accounts. Money market accounts often come with higher initial deposits and maintenance requirements compared to high-yield savings accounts, so could be a good option if you already have some money stashed away.Tip: To get started on your emergency fund, you might save as little as $5 or $10 per week.

As you get used to saving, you can gradually increase the amount you plan to save in your budget.

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if(nFinancially Fit Survey Sweepstakes
Official Sweepstakes Rules

Financially Fit Survey Sweepstakes
Official Sweepstakes Rules

NO PURCHASE OR PAYMENT NECESSARY TO ENTER OR WIN. MAKING A PURCHASE DOES NOT INCREASE YOUR CHANCES OF WINNING.

The following promotion is intended for participants in the fifty (50) United States and Washington D.C. only and shall be construed and evaluated according to the laws of the United States. Do not proceed in this promotion if you are not a legal U.S. resident residing in the fifty (50) United States or Washington D.C. Further eligibility restrictions are contained in the official rules below.

1. SWEEPSTAKES DESCRIPTION: The Financially Fit Survey Sweepstakes begins on Oct. 5, 2021 at 12:01 a.m. PT and ends on Oct. 19, 2021 at 11:59 p.m. PT.

The sponsor of this Sweepstakes is Credible Labs, Inc. (“Sponsor”). Sweepstakes void where prohibited or restricted by law. THIS SWEEPSTAKES IS IN NO WAY SPONSORED, ENDORSED, ADMINISTERED BY, OR ASSOCIATED WITH TWITTER OR INSTAGRAM.

2. ELIGIBILITY: The Sweepstakes is open only to legal residents of the fifty (50) United States and the District of Columbia who are physically located and residing therein and who are at least eighteen (18) years of age and the age of majority in their state of primary residence at the time of entry (“Entrant”). Entrants are limited to one entry each. Employees, shareholders, officers, directors, agents, and representatives of Sponsor, Presenter, Administrator (collectively, “Sweepstakes Entities“), and each of their respective parent companies, affiliates, divisions, subsidiaries, agents, representatives and promotion and advertising agencies are not eligible to participate in the Sweepstakes. Immediate family and household members of such individuals are also not eligible to enter or win. For purposes of the Sweepstakes “household members” shall mean those people who share the same residence at least three months a year and “immediate family members” shall mean parents, step-parents, legal guardians, children, step-children, siblings, step-siblings, or spouses. Void in Puerto Rico, all U.S. territories and possessions and overseas military installations, and where prohibited.

3. HOW TO ENTER: During the Entry Period, eligible Entrants may participate by completing the Financially Fit survey.

Online Entry:

Entrant must complete the following steps for Online Entry:

Visit https://hxfu0nh43pu.typeform.com/finance-quiz (the “WebsiteFollow the onscreen instructions to complete the survey.Affirmatively accept the Official Rules and click “Enter”.

Limit one (1) Submission per Entrant, per Entry Period. Any attempt by an Entrant to obtain more than the stated number of entries by using multiple/different identities, registrations, logins, and/or any other methods will void such Entrant’s Submission and that Entrant may be disqualified from the Sweepstakes.

Entries generated by a script, macro or other automated means will be disqualified. Incomplete, unreadable, or unintelligible entries will be disqualified. ELIGIBLE ENTRANTS MUST SUBMIT THEIR ENTRY IN ACCORDANCE WITH THESE OFFICIAL RULES. NO ALTERNATE FORM OF ENTRY WILL BE ACCEPTED. Participation in the Sweepstakes constitutes Entrant’s understanding of and full and unconditional agreement to and acceptance of these Official Rules. Sweepstakes Entities reserve the right to disqualify any Entrant that they determine to be in violation of any term contained in these Official Rules. Sweepstakes Entities reserve the right to move, change or extend deadlines or dates in their sole discretion. Such changes, if applicable, will be communicated on the Website, on the Sponsor’s Instagram account, and on the Sponsor’s Twitter account.

4. WINNER SELECTION & NOTIFICATION: Following the conclusion of each Entry Period, in accordance with the dates and times as detailed in the Entry Period Chart above, Administrator will randomly select one (1) potential winner from all eligible entries for the corresponding Entry Period. Potential winner notification will vary according to the channel of Sweepstakes entry:

Online Entry

If the potential winner entered via Online Entry, he or she will be contacted via the email address provided on the entry form.

Winners will be responsible for any and all federal, state and/or local taxes resulting from acceptance of the Prize. No cash or prize substitution is allowed except at the discretion of Sweepstakes Entities. If a prize cannot be awarded due to circumstances beyond the control of the Sweepstakes Entities, a substitute prize of equal or greater retail value may be awarded; provided, however, that if Prizes are awarded but unclaimed/forfeited by recipient, Prize may not be re-awarded, in Sweepstakes Entities’ sole discretion. Other restrictions may apply.

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7. ARBITRATION PROVISION: By participating in this Sweepstakes, each Entrant agrees that any and all disputes the Entrant may have with, or claims Entrant may have against, the Released Parties relating to, arising out of or connected in any way with (i) the Sweepstakes, (ii) the awarding or redemption of any prize, and/or (iii) the determination of the scope or applicability of this agreement to arbitrate, will be resolved individually and exclusively by final and binding arbitration administered by the National Arbitration Forum (the “Forum”) and conducted before a sole arbitrator pursuant to the Code of Procedure established by the Forum. The arbitration shall be held at a location determined by the Forum pursuant to the Code of Procedure, or at such other location as may be mutually agreed upon by the Entrant and Sponsor. The arbitrator’s decision shall be controlled by the terms and conditions of these Official Rules and any of the other agreements referenced herein that the applicable Entrant may have entered into in connection with the Sweepstakes. There shall be no authority for any claims to be arbitrated on a class or representative basis; arbitration can decide only the Entrant’s and/or Sponsor’s individual claims and the arbitrator may not consolidate or join the claims of other persons or parties who may be similarly situated. The arbitrator shall not have the power to award special or punitive damages against the Entrant or Released Parties. For more information on the Forum and/or the Forum’s Code of Procedure, please visit their website at www.arb-forum.com. If any part of this Arbitration Provision is deemed to be invalid or otherwise unenforceable or illegal, the balance of this Arbitration Provision shall remain in effect and shall be construed in accordance with its terms as if the invalid or illegal provision were not contained herein.

8. PRIVACY POLICY: Any personal information supplied by you to Sponsor will be subject to Sponsor’s privacy policy posted at [URL] By entering the Sweepstakes, you grant Sponsor permission to share your social media handle, email address and any other personally identifiable information with the other Sweepstakes Entities for the purpose of Sweepstakes administration and prize fulfillment. Sponsor will not sell, rent, transfer or otherwise disclose your personal data to any third party other than as described herein or in accordance with Sponsor’s privacy policy.

9. SPONSOR: Credible Labs, Inc. 115 Sansome Street, Suite 600, San Francisco, CA 94104

The Sweepstakes is in no way sponsored, endorsed or administered by Instagram or Twitter. Instagram and Twitter are completely released of all liability by each Entrant in this Sweepstakes.

The post 4 Steps to Becoming Finance Fit appeared first on Credible.

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Contingent vs. Pending: What’s the Difference?

When you’re looking at real estate listings, you might come across homes described as “pending” or “contingent” instead of “for sale” or “active.” If you’re wondering whether you should consider these listings in your home search, you’ll need to understand the difference between the two terms.

Here’s what contingent and pending mean in real estate, and whether you can place an offer on homes with one of these statuses:

What is the difference between pending and contingent?What does contingent mean in real estate?What does pending mean in real estate?Common contingency clausesCommon pending clausesCan you put an offer on a house that is contingent?Can you put an offer on a house that is pending?

What is the difference between pending and contingent?

The difference between pending and contingent lies in how many things still need to happen before the home sale can close. Both terms mean that the seller has already accepted an offer, however the difference lies in how far along the home is in the sale process:

Pending: A pending home indicates that all contingencies have been met by the prospective buyer.Contingent: A home listed as contingent still has certain contingencies open.

The seller of a pending or contingent home may or may not be open to receiving additional offers. It depends on how likely they think the transaction is to close.

Important: Since a pending home is closer to closing, you’re more likely to have your offer accepted on a contingent home than a pending home. Technically, either type of listing represents a home that hasn’t actually been sold yet, so it’s worth inquiring to the seller’s agent if it’s your dream home and you’re serious about buying it.

What does contingent mean in real estate?

Contingent means that certain conditions — aka contingencies — need to be met before the deal can close. A homebuyer will often include contingencies in their offer to make sure they can get their earnest money back if the home does not appraise high enough, their mortgage isn’t approved, or another specified condition can’t be met.

A contingent listing is less likely to end up sold than a pending listing because of these conditions. If the purchase contract contingencies can’t be met, then the buyer or seller can terminate the contract without penalty.

What does pending mean in real estate?

Pending means the home has not sold yet, but the deal is likely to go through. Either the contract did not have any contingencies, or all the contingencies have been met and the sale is being processed.

Tip: Some multiple listing services use the term “under agreement” instead of pending. Homes listed as pending are so likely to close that the National Association of Realtors uses the number of pending home sales to gauge how well the housing market is performing.

Common contingency clauses

Here are five common contingency clauses homebuyers and sellers often include in purchase agreements.

ppraisal contingency

An appraisal contingency allows you to back out of the deal if your lender determines that the home’s value is less than the purchase price.

For a home purchase, a professional home appraiser typically evaluates the home inside and out to determine its fair market value.

Financial contingency

A financing contingency, also called a mortgage contingency, allows you to exit the contract if you can’t secure a mortgage.

Ideally, you’ll get pre-approved for a mortgage before making an offer on a home. However, even with pre-approval, the lender may uncover additional information during underwriting, your financial situation may change for the worse, or mortgage rates may go up and make it harder for you to qualify.

In situations like these, you may be unable to secure a mortgage and, therefore, unable to buy the home.

With Credible, you can find prequalified rates and generate a streamlined pre-approval letter in a matter of minutes. Our online tools allow you to easily compare loan options from all of our partner lenders to find a mortgage that’s right for you.

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Instant streamlined pre-approval: It only takes 3 minutes to see if you qualify for an instant streamlined pre-approval letter, without affecting your credit.We keep your data private: Compare rates from multiple lenders without your data being sold or getting spammed.A modern approach to mortgages: Complete your mortgage online with bank integrations and automatic updates. Talk to a loan officer only if you want to.Find Rates Now

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Inspection contingency

An inspection contingency involves you — the buyer — hiring a professional home inspector to look for major problems that could affect the home’s value, safety, or livability.

If the home inspection reveals significant issues, you and the seller can negotiate a solution to keep the deal intact. For example, the seller might make the necessary repairs or lower the purchase price by the estimated cost of the repairs so you can have the work performed after closing.

Contingency with a kick-out clause

A kick-out clause in a home purchase contract means the seller and buyer have agreed that the seller will continue accepting backup offers because the buyer’s offer is contingent upon the sale of their property.

A kick-out clause goes hand-in-hand with a sale contingency, described below. The listing might have a “48-hour kick-out clause” or “72-hour kick-out clause,” indicating how long the buyer currently under contract has to waive their sale contingency and provide proof of financing before the seller can accept a backup offer.

Title contingency

A title search is an important part of any real estate transaction. You’ll pay a title company to make sure the seller is the only one with any legal claim on the home.

A title contingency allows you to walk away if the title search reveals title defects that cannot be resolved. For example, if the home has a contractor’s lien from work the seller hasn’t paid for, a title contingency would require the seller to pay off that lien if they want to sell the home to you.

Sale contingency

A sale contingency allows you to exit the contract if you cannot sell your current home. Let’s say you are moving from New Orleans to Nashville and you only want to move your belongings once. But to get the money to buy a new place in Tennessee, you’ll need to first sell your current place in Louisiana.

You’d want to put a sale contingency in your purchase agreement for the Nashville home so you won’t lose your earnest money if your New Orleans home doesn’t sell within the time period stated in the purchase contract.

Tip: You can avoid having to use a sale contingency by getting a bridge loan.

Closing contingency

Let’s say you’ve found a buyer for your New Orleans home, but the deal isn’t final. A closing contingency, also called a settlement contingency, would allow you to get out of your Nashville contract without penalty if your buyer can’t close within a specified time.

Common pending clauses

If you see a home that’s listed as pending, it might come attached with one of these additional descriptions.

Pending – taking backups

“Pending – taking backups” means that the seller isn’t confident the deal with their current buyer will close. The buyer might be having trouble obtaining financing, for instance. Whatever the case may be, this status indicates the seller is willing and contractually able to accept backup offers should the current deal fall through.

Pending – short sale

This listing status describes a situation where the owner wants to sell but must get their mortgage lender’s approval first. That’s because in a short sale, the property’s market value is lower than the mortgage balance, and the lender will have to take a loss.

“Pending” in this case does not mean that the transaction is about to close. It means the seller has accepted an offer and is waiting for their lender to approve it. You’re more likely to see these types of listings during a recession or after a major housing market decline.

Good to know: Depending on which listing service you’re using to search for homes, you might also see a home in this situation listed as “contingent short sale.” And with some listing services, “pending short sale” does indeed mean that the seller is under contract with a buyer and the bank has approved the short sale.

Pending – more than 4 months

This is a self-explanatory status that means a property has been listed as pending for longer than four months. The property might still be under contract but experiencing delays, or it might have been sold and the listing status is incorrect. A public records search can determine whether the home was recently sold if the listing agent can’t be reached.

Can you put an offer on a house that is contingent?

It is sometimes possible to place an offer on a house that is contingent. One way sellers can indicate that they’re open to additional offers is to have their agent change the property’s listing status from “active” to “active under contract.” Active under contract means the seller has accepted an offer, but that offer has contingencies, and the seller may consider additional offers.

Ask your real estate agent to contact the seller’s agent for more information. Then, your agent can guide you through the process of making an offer on a contingent listing if it seems worthwhile.

Can you put an offer on a house that is pending?

You probably won’t be able to make an offer on a house that is pending because this status means the house has a scheduled closing date and everything is on track to close. Plus, the seller’s contract with their existing buyer may prohibit them from accepting additional offers.

If the seller is not accepting backup offers and it’s your dream home, you might want to contact the listing agent. You can always express your interest and ask them to get in touch with you if the home ends up back on the market.

The post Contingent vs. Pending: What’s the Difference? appeared first on Credible.

USDA vs FHA Loans: Which Loan is Better?

Mortgage loans from the United States Department of Agriculture (USDA) and Federal Housing Administration (FHA) are generally easier to qualify for than a conventional mortgage. This makes them good options for first-time homebuyers and low- to moderate-income borrowers.

While both of these loans are backed by government agencies, there are several key differences between the two that you’ll need to consider before applying for one. For instance, USDA loans require you to live in a rural setting and meet your area’s income limit.

Here’s a closer look at each loan program so you can decide which one best fits your needs:

USDA vs. FHA eligibilityUSDA vs. FHA vs. conventionalUSDA pros and consFHA pros and cons

USDA vs. FHA eligibility

The USDA and FHA both offer home loans for single-family residences.

For an FHA loan, you’ll apply for a 203(b) basic home mortgage loan to purchase your primary residence.

However, there are two USDA home loan programs to choose from and the eligibility standards are slightly different:

USDA Guaranteed Loan: For low- to moderate-income households that a private lender issues but the USDA backs. You won’t have a borrowing limit or property restrictions for this loan.USDA Direct Loan: For low- and very-low-income borrowers that need additional underwriting. The USDA funds the loan and it has stricter income and property qualifications. Also, the borrowing limit is $285,000 in most counties.

Here are the basic requirements you’ll need to meet for each loan:

USDA loansFHA loansMin. down payment0%3.5% (with a credit score of 580 or above)
10% (with a credit score between 500 and 579)Min. credit score640500Income limitsUp to 115% of median household incomeNoneDebt-to-income ratio (DTI)Up to 29% of monthly housing costs
Up to 41% of monthly debt paymentsUp to 31% of monthly housing costs
Up to 43% of monthly debt paymentsLoan limitsNone for Guaranteed Loans
Up to $285,000 for most Direct Loans$356,362 for single-family residences in most areasLocation requirementsUSDA-eligible rural areas onlyNoneQualifying property typesSingle-family primary residences onlyPrimary residences between 1 and 4 unitsMortgage repayment terms30-year fixed30-year fixed, 15-year fixed, and adjustable-rateUpfront fee1% guarantee fee1.75% upfront mortgage insurance premiumAnnual fee0.35% annual feeUp to 0.85% annual mortgage insurance premium

Also See: Conventional Loan Requirements

USDA home loans have stricter income limits than FHA loans and also require you to live in an eligible rural area. Your home address and annual household income determine your borrower eligibility for USDA loans.

FHA borrower requirements, on the other hand, are more lenient as you can have a lower credit score. Multi-unit properties are also eligible. However, you’ll need to make a down payment with an FHA loan.

USDA vs. FHA vs. conventional

Many homebuyers will use a USDA, FHA, or conventional mortgage to purchase their home. Here’s a closer look at how these three loan types differ.

USDA loans

These loans are only available to rural homebuyers with low or moderate incomes. The income limits vary by region but are relatively strict. USDA loans don’t require a down payment but you’ll need a minimum credit score of 640 and have to pay an upfront 1% guarantee fee plus an annual fee equal to 0.35% of your loan amount.

FHA loans

Of the government mortgage programs, you may have the easiest time qualifying for an FHA loan. You’ll only need a 3.5% down payment when your credit score is at least 580.

With that said, you’ll most likely pay mortgage insurance for the life of the loan unless you can put down at least 10%. Doing this allows you to waive your remaining payments after 11 years.

Conventional loans

Conventional mortgages have the strictest credit requirements but they also offer competitive rates and can end up being cheaper in the long run. For example, you can avoid private mortgage insurance with a minimum 20% down payment.

Credible doesn’t offer FHA or USDA loans, but we can help you find a great rate on a conventional loan. Simply enter some basic financial information, and you’ll see several prequalified rates in minutes. After that, you can explore your loan options and find one that best fits your budget.

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USDA pros and cons

USDA loans offer several advantages for borrowers, but you’ll need to consider some of the drawbacks as well.

USDA pros

Here are some of the best reasons to consider a USDA loan:

No minimum down payment: Conventional loans and FHA loans both demand some form of down payment, but USDA loans have no such requirement.May not need cash reserves: Lenders may not require cash reserves to secure financing. However, including your qualifying balances might make it easier to qualify.No set maximum purchase price: USDA loans don’t have a borrowing limit. Instead, your maximum loan amount depends on your repayment ability.Lower mortgage insurance fees: Your upfront USDA guarantee fee is 1% of the loan amount and the annual fee is 0.35%. Both rates are lower than the FHA mortgage insurance premiums. Seller can pay closing costs: The seller can contribute up to 6% of the sales prices. You can also receive unlimited gift funds to reduce your loan amount.

USDA cons

These are the main disadvantages of this loan program:

Good credit required: You’ll need a minimum 640 credit score to be eligible for this loan, similar to conventional lenders. FHA lenders may only require a score of 580 or less.Geographic restrictions: You must live in a rural area to qualify for USDA financing. Thankfully, the definition is flexible and many suburban and bedroom communities can be eligible if the population is below a certain amount.Maximum income limits: For a USDA Guaranteed Loan, your household income cannot exceed 115% of your county’s median household income (MHI). Households with an income 80% below the MHI will need to apply for a USDA Direct Loan. Direct Loans can have stricter property and application requirements but, like Guaranteed Loans, they don’t require a down payment.Lifetime guarantee fee: All USDA loans require an upfront and annual guarantee fee for the life of the loan. Unlike FHA and conventional loans, making a qualifying down payment won’t have any effect on whether or not you’ll pay mortgage insurance.Single-family homes only: Single-family homes are the only eligible property type. This includes townhouses and condos, as long as you use the unit for your primary residence. Investment properties are ineligible.

FHA pros and cons

FHA loans are a good option, especially if you have low credit or a lot of debt. But they come with their own set of drawbacks too.

FHA pros

Some of the best reasons to apply for an FHA home loan include:

Lenient credit requirements: You can generally qualify for maximum FHA financing with a credit score of 580 versus a 640 score for a USDA loan. You might also be eligible with a credit score between 500 and 579 if you can make a 10% down payment.Higher debt-to-income ratios: Your back-end DTI — that is, your total monthly debt obligations — can be as high as 45% for FHA loans, but only 41% for USDA loans.Potentially lower interest rates: FHA interest rates can be lower than rates for USDA loans because you have the option to choose shorter repayment terms, including a 15-year fixed interest rate. The USDA only offers 30-year fixed loans, which naturally have higher rates.Multi-family units can qualify: Properties with up to four units can qualify for financing with an FHA loan when one unit is your primary residence. For example, purchasing a duplex with an FHA loan is allowed as long as you live in one half of the property. Like USDA loans, however, second homes and investment properties are ineligible.

FHA cons

Higher down payment requirements: Depending on your credit score, you’ll need to make a 3.5% or 10% down payment. USDA loans require no down payment.Higher mortgage insurance premiums: Your upfront and annual mortgage insurance premiums are higher than the USDA guarantee fee and annual fee.Difficult to cancel mortgage insurance: You’ll pay an annual mortgage insurance premium for the life of the loan unless your down payment is at least 10% — in which case, you’ll only pay mortgage insurance for the first 11 years.Mortgage limits: The maximum loan amount in 2021 is $356,362 for most counties. You can qualify for a higher limit if you live in a high-cost area.

Keep Reading: FHA vs. Conventional Loans: Which One’s Right for You?

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How to Refinance an Inherited Property to Buy Out Heirs

In addition to the sorrow of losing a loved one, inheriting a house with a mortgage can be a stressful time, especially when there are several heirs. If you want to claim full possession of the house, you’ll need to buy out the other heirs. One way to do this is by refinancing the inherited property.

Here’s a closer look at how to refinance an inherited property to buy out heirs:

Refinancing an inherited property explainedHow to refinance an inherited property to buy out heirsOther optionsTips on refinancing inherited property

Refinancing an inherited property explained

The inheritance rules can be more flexible for surviving spouses and children. Mortgage loans have what’s called a “due-on-sale” clause that requires the loan to be paid in full if it transfers to a new owner. However, lenders are prohibited by federal law from enforcing this clause in the event of a borrower’s death.

When inheriting a property with a mortgage, there are two possible scenarios you’ll have to plan for:

Inheriting the estate as the lone heir: This is the most straightforward scenario. You can simply transfer the mortgage to your name and assume payments. Inheriting the estate with multiple heirs: You and the co-heirs will need to work with the executor of the estate and mortgage lender to decide what will happen to the property. If you want to own the property but don’t have the funds on hand to buy out each heir, you can opt for a cash-out refinance and use the proceeds from that to buy out the heirs.Tip: It’s essential to determine the estate value for each heir early during the refinancing process so you can estimate the total buyout cost. You and the heirs will also need to pay off any outstanding balance on the mortgage before you can receive the home.

Read: What Happens to Your Mortgage When You Die?

How to refinance an inherited property to buy out heirs

You can follow these steps to refinance your loved one’s property:

Review the estate plan: The deceased’s will should list the heirs entitled to a share of the property. The heirs and the estate executor can estimate how much each heir receives from the estate.Communicate with co-heirs: It’s important to discuss your mortgage transfer and refinance options with the other inheritors to avoid disputes. Determine the property value, expenses, and buyout amounts to estimate your borrowing needs.Transfer the mortgage deed: You’ll need to continue making mortgage payments during the transition to prevent foreclosure. However, it’s possible to add your name to the deed and assume the current payment terms. Contact the mortgage servicer for more info.Review due-on-sale clauses: Most mortgages have a due-on-sale clause requiring the remaining loan balance to be paid in full on transferred mortgages. The Garn-St. Germain Act of 1982 prohibits lenders from enforcing this clause when a borrower dies and a family member inherits the property.Calculate your refinancing terms: Prequalifying for a mortgage refinance will provide you with an estimate of your new monthly payment and payment schedule. If mortgage rates are lower than the current rate, refinancing can help you save money on interest.Complete the refinancing process: After finding the best lender, it’s time to apply for a refinance and secure a new rate and term. The lender will require a home appraisal to determine the value of the home (and, in turn, the available equity). Other closing costs will also apply.Pay each heir: If you get a cash-out refinance, you’ll receive a lump sum payment which you can use to pay the remaining heirs. As the refinanced mortgage is in your name, you’ll be responsible for making all mortgage payments going forward.

If you’re considering a cash-out refinance, be sure to look at as many lenders as possible. Credible makes finding a great deal easy — you can compare options from our partner lenders and see prequalified rates in as little as three minutes.

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Other options

Refinancing may not be the best option if you cannot find favorable terms or raise enough funds to buy out your co-heirs.

1. Rent or sell the property

Renting or selling the property can be the best option when your family cannot agree on a settlement amount or the court requires the estate to sell the home.

You may also have to sell the inherited property if it has a reverse mortgage as there may be insufficient equity to refinance or buy out the heirs.

Tip: If you cannot afford to refinance right now, turning the house into a rental property can help you continue to pay the mortgage and build equity. You can always decide to refinance or sell later when your circumstances improve.

2. Assume the mortgage

You might be able to assume the current mortgage payments by meeting the lender’s minimum standards. This can be the smarter option if the current loan terms are better than your refinancing options.

If you’re a co-borrower or cosigner, assuming the mortgage requires minimal effort as you are already on the mortgage and responsible for payments. The guidelines, however, can be different for conventional and government-backed mortgages.

3. Request loan modification

After adding your name to an inherited home loan, you’re considered a “successor in interest,” which essentially means you have an ownership stake in the property but you aren’t required to repay the loan. If the current loan terms are difficult to afford, you can request a loan modification.

A loan modification allows you to permanently change the terms of your mortgage. Your mortgage modification might involve:

Extending the repayment termReducing the interest rateSwitching to a fixed interest rate

Federal guidelines don’t require the lender or servicer to determine your ability to repay the mortgage before you can take it over and modify the terms. As a result, a loan modification can be easier to qualify for than a mortgage refinance.

4. Use a home equity line of credit (HELOC)

If the remaining mortgage balance on the inherited property is small — and assuming you own a home with equity — you can use a home equity line of credit to pay off the mortgage and other heirs.

A HELOC generally has lower closing costs than a cash-out refinance (and some lenders may even waive these costs), making it a good choice if you’re limited on cash. HELOCs are also more flexible than cash-out refinances in that you can borrow any amount (up to your limit) at any time — and you’re not charged interest for any unused funds.

Downsides of a HELOC to consider: Some drawbacks to this option are that HELOCs tend to come with an adjustable interest rate and a shorter repayment period. You’ll also be responsible for two loans instead of just one.

5. Inherit a house free and clear

Depending on the estate plan instructions, you might be able to inherit the property free and clear — that is, without any debts or liens attached to the home. In this situation, the estate uses liquid assets — like investments or cash — to pay off the mortgage.

If any balance remains, you have the ability to pursue refinancing or make a lump sum payment from your savings.

6. Consider hard money loans

Hard money loans from private lenders can be easier to qualify for than traditional mortgage refinancing and often have a quicker closing process. But, unfortunately, these loans typically have short repayment terms and come with much higher interest rates.

If you need to pay the heirs fast and can’t qualify for a home equity loan or cash-out refinance, you might consider this loan. Many hard money loans can close in just a few business days.

Important: Hard money loan interest rates can range from 7% to 15%, and maybe even higher depending on the lender. While they are a viable option if you’re in a pinch, make sure to consider other, less-riskier options first.

7. Pursue foreclosure

Foreclosure might be the least desirable option. With foreclosure, you’ll lose possession of the house and cannot tap the home equity.

Current laws don’t require survivors to continue making mortgage payments unless they are a co-borrower or cosigner on the mortgage.

If neither you or another heir wants to take over the mortgage payments, the mortgage servicer can pursue foreclosure without damaging your finances.

Good to know: A court may also order foreclosure if the estate plan doesn’t detail how to pass on the property or the heirs cannot reach a distribution agreement.

Tips on refinancing inherited property

These suggestions can make the estate settlement and refinance process go more smoothly:

Identify co-borrowers and cosigners: Co-borrowers and cosigners are automatically responsible for making payments. It can be easier to inherit the property if you already have one of these designations when the estate plan instructions are unclear about how to liquidate a property.Determine who pays the refinancing costs: Unfortunately, closing costs can reduce the available equity or require out-of-pocket payment. You must decide if you’ll pay all the costs or split them between the other heirs.Try to reduce the mortgage balance: Look for ways to reduce the mortgage principal so you won’t have to refinance as much. One option is to sell off the estate’s liquid assets.Compare lenders: Getting quotes from several mortgage refinance lenders can help you find favorable loan terms and also minimize your closing costs.Determine how to use the home equity: Calculate the percentage each heir will receive from the cash-out refinance payment in advance.Estimate inheritance taxes: Federal and state inheritance taxes may apply for any inheritance you receive. There can be exemptions for surviving spouses and children. A tax professional can provide additional guidance. Hire an estate lawyer: It can be difficult to probate an estate with outstanding debt. An estate lawyer can help you settle disputes between heirs, advise you on taxes, and navigate you through the refinancing process.

The post How to Refinance an Inherited Property to Buy Out Heirs appeared first on Credible.

Loans Serivces

How to Pay Off $80,000 in Student Loans

Paying for college can be expensive. While the average student loan debt for college students is $39,351, it isn’t uncommon for students to leave school with $80,000 or more in education debt.

Tackling this amount of student loan debt can be difficult and time consuming. For example, if you had $80,000 in federal student loans made payments on the standard 10-year repayment plan with a 6.22% interest rate, you’d end up with a monthly payment of $897 and a total repayment cost of $107,643.

The good news is that there are multiple strategies that could help you pay off $80,000 in student loans more easily — and sometimes, more quickly as well.

Here are five ways to pay off $80,000 in student loans:

Refinance your student loansConsider using a cosigner when refinancingExplore income-driven repayment plansPursue loan forgiveness for federal student loansAdopt the debt avalanche or debt snowball method

1. Refinance your student loans

If you refinance your student loans, you’ll take out a new private loan to pay off your old loans, leaving you with just one loan and payment to manage. Depending on your credit, you might qualify for a lower interest rate through refinancing — this could save you hundreds or even thousands of dollars on interest as well as potentially help you pay off your loans faster.

Or you could opt to extend your repayment term to reduce your monthly payments and lessen the strain on your budget. Just keep in mind that by choosing a longer term, you’ll pay more in interest over time.

If you decide to refinance your student loans, be sure to consider as many lenders as possible to find the right loan for you. Credible makes this easy — you can compare your prequalified rates from our partner lenders in the table below in just two minutes.

LenderFixed rates from (APR)Variable rates from (APR)Loan terms (years)Loan amounts

View details>
4.54%+N/A10, 15, 20$7,500 up to up to $200,000
(larger balances require special approval)Fixed APR:
4.54%+Variable APR:
N/AMin. credit score:
Does not discloseLoan amount:
$7,500 up to $500,000Loan terms (years):
10, 15, 20Max. undergraduate loan balance:
$250,000 – $500,000Time to fund:
4 monthsRepayment options:
Immediate repayment, forbearance, loans discharged upon death or disabilityFees:
NoneDiscounts:
AutopayEligibility:
Must be a resident of KentuckyCustomer service:
PhoneSoft credit check:
NoCosigner release:
After 36 monthsLoan servicer:
Kentucky Higher Education Student Loan CorporationMax. graduate loan balance:
$250,000 – $500,000Credible Review:
Advantage Education Loan reviewOffers Parent PLUS Refinancing :
Yes

View details>
2.15%+
1.87%+5, 7, 10, 15, 20$10,000 up to $250,000
(depending on degree)Fixed APR:
2.15%+Variable APR:
N/AMin. credit score:
Does not discloseLoan amount:
$10,000 to $400,000Loan terms (years):
5, 7, 10, 15, 20Repayment options:
Military deferment, forbearanceFees:
Late feeDiscounts:
AutopayEligibility:
Must have a credit score of at least 720, a minimum income of $60,000, and must be a resident of TexasCustomer service:
Email, phoneSoft credit check:
Does not discloseCosigner release:
NoLoan servicer:
Firstmark ServicesMax. Undergraduate Loan Balance:
$100,000 – $149,000Max. Graduate Loan Balance:
$200,000 – $400,000Offers Parent PLUS Refinancing:
Does not disclose

View details>
2.44%+1
2.24%+15, 7, 10, 15, 20$10,000 to $500,000
(depending on degree and loan type)Fixed APR:
2.44%+1Variable APR:
2.24%+1Min. credit score:
Does not discloseLoan amount:
$10,000 to $750,000Loan terms (years):
5, 7, 10, 15, 20Repayment options:
Immediate repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disabilityFees:
Late feeDiscounts:
Autopay, loyaltyEligibility:
Must be a U.S. citizen or permanent resident and have at least $10,000 in student loansCustomer service:
Email, phone, chatSoft credit check:
YesCosigner release:
After 24 to 36 monthsLoan servicer:
Firstmark ServicesMax. Undergraduate Loan Balance:
$100,000 to $149,000Max. Graduate Loan Balance:
Less than $150,000Offers Parent PLUS Refinancing:
Yes

View details>
2.99%+2
2.94%+25, 7, 10, 12, 15, 20$5,000 to $300,000
(depending on degree type)Fixed APR:
2.99%+2Variable APR:
2.94%+2Min. credit score:
Does not discloseLoan amount:
$5,000 to $300,000Loan terms (years):
5, 7, 10, 12, 15, 20Repayment options:
Military deferment, forbearance, loans discharged upon death or disabilityFees:
Late feeDiscounts:
AutopayEligibility:
All states except for MECustomer service:
Email, phone, chatSoft credit check:
YesCosigner release:
After 24 to 36 monthsLoan servicer:
College Ave Servicing LLCMax. Undergraduate Loan Balance:
$100,000 to $149,000Max. Graduate Loan Balance:
Less than $300,000Offers Parent PLUS Refinancing:
Yes

View details>
2.16%+
2.11%+5, 7, 10, 15, 20$5,000 to $500,000Fixed rate:
2.44%+1Variable rate:
2.24%+1Min. credit score:
680Loan amount:
$5,000 to $500,000Cosigner release:
YesLoan terms (years):
5, 7, 10, 15, 20Repayment options:
Academic deferment, forbearance, loans discharged upon death or disabilityFees:
Late feeDiscounts:
AutopayEligibility:
Available in all states, except MS and NVCustomer service:
Email, phone, chatSoft credit check:
YesLoan servicer:
FirstMarkMax. undergraduate loan balance:
$500,000Max. graduate loan balance:
$500,000Offers Parent PLUS refinancing:
YesMin. income:
$65,000 (for 15- and 20-year products)

View details>
1.8%+5
1.8%+55, 10, 15, 20$1,000 to $250,000Fixed APR:
1.8%+5Variable APR:
1.8%+5Min. credit score:
700Loan amount:
$7,500 to $200,000Loan terms (years):
5, 10, 15, 20Repayment options:
Immediate repayment, academic deferment, forbearance, loans discharged upon death or disabilityFees:
NoneDiscounts:
AutopayEligibility:
Must be a U.S. citizen or permanent resident and submit two personal referencesCustomer service:
Email, phoneSoft credit check:
YesCosigner release:
After 36 monthsLoan servicer:
Granite State Management & Resources (GSM&R)Max. Undergraduate Loan Balance:
$150,000 to $249,000Max. Graduate Loan Balance:
$150,000 to $199,000Offers Parent PLUS Refinancing :
Yes

View details>
2.47%+3
2.39%+35, 7, 10, 12, 15, 20Minimum of $15,000Fixed APR:
2.47%+3Variable APR:
2.39%+3Min. credit score:
680Loan amount:
No maximumLoan terms (years):
5, 7, 10, 12, 15, 20Repayment options:
ForbearanceFees:
NoneDiscounts:
NoneEligibility:
Must be a U.S. citizen or permanent resident, have at least $15,000 in student loan debt, and have a bachelor’s degree or higher from an approved schoolCustomer service:
Email, phoneSoft credit check:
YesCosigner release:
NoLoan servicer:
MohelaMax. Undergraduate Loan Balance:
No maximumMax. Graduate Loan Balance:
No maximumOffers Parent PLUS Refinancing:
Yes

View details>
3.47%+4
2.44%+45, 10, 15, 20$5,000 – $250,000Fixed APR:
3.47%+4Variable APR:
2.44%+4Min. credit score:
670Loan amount:
$5,000 to $250,000Loan terms (years):
5, 10, 15, 20Repayment options:
Academic deferment, military deferment, forbearanceFees:
Late feeDiscounts:
AutopayEligibility:
Must be U.S. citizen or permanent residentCustomer service:
Email, phone, chatSoft credit check:
YesCosigner release:
YesMax undergraduate loan balance:
$250,000Max graduate loan balance:
$250,000Offers Parent PLUS refinancing:
Yes

View details>
2.24%+7N/A5, 7, 10, 12, 15, 20Up to $300,000Fixed APR:
2.24%+7Variable APR:
N/AMin. credit score:
670Loan amount:
Up to $300,000Loan terms (years):
5, 7, 10, 15, 20Time to fund:
Usually one business dayRepayment options:
Academic deferral, military deferral, forbearance, death/disability dischargeFees:
NoneDiscounts:
AutopayEligibility:
Available in all 50 statesCustomer service:
Email, phoneSoft credit check:
YesCosigner release:
After 24 monthsMax. undergraduate loan balance:
$300,000Max. graduate balance:
$300,000Offers Parent PLUS loans:
YesMin. income:
None

View details>
3.05%+
3.05%+7, 10, 15$10,000 up to the total amount of qualified education debtFixed APR:
3.05%+Variable APR:
3.05%+Min. credit score:
670Loan amount:
$10,000 up to the total amountLoan terms (years):
7, 10, 15Repayment options:
Military deferment, loans discharged upon death or disabilityFees:
NoneDiscounts:
NoneEligibility:
Must be a U.S. citizen or permanent resident and have at least $10,000 in student loansCustomer service:
Email, phoneSoft credit check:
YesCosigner release:
NoLoan servicer:
AESMax. Undergraduate Loan Balance:
No maximumMax. Gradaute Loan Balance:
No maximumOffers Parent PLUS Refinancing:
Yes

View details>
2.89%+N/A5, 8, 12, 15$7,500 to $300,000Fixed APR:
2.89%+Variable APR:
N/AMin. credit score:
670Loan amount:
$7,500 to $300,000Loan terms (years):
5, 8, 12, 15Repayment options:
Does not discloseFees:
NoneDiscounts:
NoneEligibility:
Must be a U.S. citizen and have and at least $7,500 in student loansCustomer service:
Email, phone, chatSoft credit check:
YesCosigner release:
After 12 monthsLoan servicer:
PenFedMax. Undergraduate Loan Balance:
$300,000Max. Graduate Loan Balance:
$300,000Offers Parent PLUS Refinancing:
Yes

View details>
2.69%+N/A5, 10, 15$7,500 up to $250,000
(depending on highest degree earned)Fixed APR:
2.69%+Variable APR:
N/AMin. credit score:
680Loan amount:
$7,500 to $250,000Loan terms (years):
5, 10, 15Repayment options:
Academic deferment, military deferment, forbearance, loans discharged upon death or disabilityFees:
NoneDiscounts:
AutopayEligibility:
Available in all 50 states; must also have at least $7,500 in student loans and a minimum income of $40,000Customer service:
Email, phoneSoft credit check:
Does not discloseCosigner release:
NoLoan servicer:
Rhode Island Student Loan AuthorityMax. Undergraduate Loan Balance:
$150,000 – $249,000Max. Graduate Loan Balance:
$200,000 – $249,000Offers Parent PLUS Refinancing:
Yes

View details>
2.49%+6
1.99%+65, 7, 10, 15, 20$5,000 up to the full balance of your qualified education loansFixed APR:
2.49%+6Variable APR:
1.99%+6Min. credit score:
Does not discloseLoan amount:
$5,000 up to the full balanceLoan terms (years):
5, 7, 10, 15, 20Repayment options:
Academic deferment, military defermentFees:
NoneDiscounts:
Autopay, loyaltyEligibility:
Available in all 50 statesCustomer service:
Email, phone, chatSoft credit check:
YesCosigner release:
NoMax undergraduate loan balance:
No maximumMax graduate loan balance:
No maximumOffers Parent PLUS refinancing:
YesCompare personalized rates from multiple lenders without affecting your credit score. 100% free!

Compare Now

2. Consider using a cosigner when refinancing

Most lenders require you to have good to excellent credit to qualify for student loan refinancing — a good credit score is usually considered to be 700 or higher. There are also several lenders that offer refinancing for bad credit, but these loans typically have higher interest rates compared to good credit loans.

If you have poor credit and are struggling to get approved, consider applying with a creditworthy cosigner to improve your chances. Even if you don’t need a cosigner to qualify, having one could get you a lower interest rate than you’d get on your own.

Tip: A cosigner can be anyone with good credit who is willing to share responsibility for the loan. For example, you could ask a parent, another relative, or a trusted friend to cosign.

Just keep in mind that if you can’t make your payments, your cosigner will be liable — this could also damage their credit.

Learn More: Best Student Refinance Companies: Reviewed and Rated

3. Explore income-driven repayment plans

If you have federal student loans, signing up for an income-driven repayment (IDR) plan could make your loan payments easier to manage. On an IDR plan, your payments are based on your income — usually 10% to 20% of your discretionary income. Additionally, you could have any remaining balance forgiven after 20 to 25 years, depending on the plan.

Here’s how the four main IDR plans compare to a few other federal repayment plan options:

Repayment planWho’s eligible?Monthly paymentRepayment termsEligible for loan forgiveness?Standard repayment planAny borrower with Direct or FFEL LoansAmount when payments are spread equally over 10 years (usually $50 minimum) 10 yearsNoGraduated repayment planAny borrower with Direct or FFEL LoansDepends on loan amount
(payments start low and increase every 2 years)10 yearsNoExtended repayment planAny borrower with more than $30,000 in Direct or FFEL LoansFixed: Spread evenly over up to 25 years

Graduated: Depends on loan amount (start low and increase every 2 years)Up to 25 yearsNoIncome-Based Repayment (IBR)Borrowers with partial financial hardship

(no Parent PLUS Loans)For borrowers who took out loans after July 1, 2014: 10% of discretionary income
(never more than 10-year plan)

For borrowers who took out loans before July 1, 2014: 15% of discretionary income
(never more than 10-year plan)For borrowers who took out loans after July 1, 2014: 20 years

For borrowers who took out loans before July 1, 2014: 25 yearsYesPay As You Earn (PAYE)Must have partial financial hardshipMust have borrowed on or after Oct. 1, 200710% of discretionary income
(never more than 10-year plan)20 yearsYesRevised Pay As You Earn (REPAYE)Any borrower
(no Parent PLUS Loans)10% of discretionary income
(no cap)20 years
(25 years if repaying grad school debt)YesIncome Contingent Repayment (ICR)Any borrower
(Parent PLUS Loans must be consolidated)20% of discretionary income
(or income-adjusted payment on 12-year plan)25 yearsYes

Check Out: PAYE vs. REPAYE: Which Repayment Plan Is Right for You?

4. Pursue loan forgiveness for federal student loans

There are several forgiveness programs available to federal student loan borrowers. These programs generally require you to be employed in a certain field and to make qualifying payments for a specific period of time.

For example: If you work for a nonprofit or government organization, you might be eligible for Public Service Loan Forgiveness (PSLF) after making qualifying payments for 10 years.

Other professions that might qualify for federal forgiveness programs include:

DentistsDoctorsLawyers NursesPharmacistsTeachersKeep in mind: Unfortunately, private student loan forgiveness doesn’t exist. However, there are other options that could help you more easily repay your private loans — such as refinancing.

Learn More: Private Student Loan Consolidation

5. Adopt the debt avalanche or debt snowball method

There are also some situations where you might simply have to concentrate on paying off your loans as quickly as possible — such as if you have multiple loans and aren’t eligible for forgiveness. Here are a couple of payoff strategies that could help:

Debt avalanche method

With the debt avalanche method, you’ll focus on paying off your loan with the highest interest rate first while making the minimum payments on your other loans.

Once this first loan is paid off, you’ll move on to the loan with the next-highest interest rate — continuing until all of your loans are repaid.

Tip: The debt avalanche method can help you save money on interest — but it can also take a while to see your results. If you’re more motivated by small wins, you might want to consider the debt snowball method instead.

Debt snowball method

With the debt snowball method, you’ll target your smallest loan first as you continue making the minimum payments on your other loans.

After this first loan is repaid, you’ll move on to the next-smallest loan — continuing until all of your loans have been paid off.

Tip: The debt snowball method typically provides faster results than the debt avalanche, which can provide motivation through your payoff journey.

But if you don’t mind waiting to experience a win and want to save more on interest, the debt avalanche method might be a better fit.

Check Out: How Often Can You Refinance Student Loans?

Frequently asked questions

Here are the answers to a few commonly asked questions about paying off $70,000 in student loans:

How long does it take to pay off $70,000 in student loans?

This will mainly depend on the type of student loans you have and your repayment plan.

Federal student loans: Depending on the repayment plan you choose, it could take 10 to 25 years to repay your federal loans. You could also choose to consolidate your loans into a Direct Consolidation Loan and extend your term up to 30 years.Private student loans: Repayment terms on private loans usually range from five to 20 years, depending on the lender. You might also be able to reduce your repayment time by refinancing to a shorter term or by making extra payments on your loans.

Can I file for bankruptcy to eliminate my student loan debt?

Yes, you can file bankruptcy for student loan debt. However, it could be hard to actually have your loans discharged. If you file for Chapter 7 or Chapter 13 bankruptcy, you’ll have to prove to the court that repaying your loans would cause an undue hardship for you and your dependents.

If the court decides in your favor, your loans could be:

Fully dischargedPartially discharged with you responsible for the remainder of the balanceAdjusted with different terms to make repayment easier (such as a lower interest rate)Tip: Bankruptcy will severely damage your credit and should be considered a last resort. If you’re thinking about filing for bankruptcy, it’s a good idea to discuss your situation with a lawyer first so you can be sure it’s the right decision for your finances.

re student loans forgiven after 20 years?

This depends on the type of loans you have.

If you have federal student loans and sign up for an IDR plan, you could have any remaining balance forgiven after 20 to 25 years. There are also other programs that offer forgiveness sooner — for example, if you’re eligible for PSLF, you could have your loans forgiven after 10 years.If you have private student loans, you aren’t eligible for forgiveness. If you have good credit, it could be a good idea in this case to refinance for a lower interest rate so you can save money on interest and possibly shorten your repayment time.

Do children inherit student debt?

Typically no. Here’s what generally happens with student loan debt after death:

Federal student loans are discharged upon the death of the primary borrower. If you have a Parent PLUS Loan, it will be discharged if you or the student who benefitted from it passes away.

Private student loans are often discharged similarly to federal loans — though keep in mind that this is at the discretion of the lender. If the lender doesn’t discharge the loans, they’ll be considered part of your estate and paid off by your assets.

The post How to Pay Off $80,000 in Student Loans appeared first on Credible.

Loans Serivces

How to Pay Off $70,000 in Student Loans