Refinancing with Earnest
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As spring approaches and the weather starts to warm up, we start to feel a bit like this:
Throwing open windows, getting rid of items we no longer need, and storing items we won’t need again until next winter are hallmarks of the season. Spring cleaning can be an invigorating way to streamline your life. Unfortunately, not all clutter is tangible.
How to organize your finances
What about your financial clutter? Here’s how to organize your finances, and possibly save some money in the process.
1. Streamline your student loans
How many different servicers, due dates, and minimum payments are you dealing with on a monthly basis? Tracking all that can be a pain, not to mention you might also have different interest rates on your various loans, which could be close to double digits depending on when you took them out.
If you qualify, refinancing your loans can accomplish a number of things:
- Consolidate multiple loans into one
- Lower your interest rate
- Reduce your monthly payments
- Ease burdensome tracking requirements.
Keep in mind, however, that refinancing federal student loans with a private lender forfeits all of your federal repayment options, such as income-driven plans, deferment, and forbearance.
Refinancing is a great option to streamline your student loan situation if you have good credit, solid income, and no trouble making payments — but wouldn’t mind saving money with a lower interest rate.
2. Evaluate and consolidate your bank accounts
Many times, the number of bank accounts someone has increases over time. Maybe you were chasing rates, or you opened an account at a credit union with convenient ATM locations, but never got around to closing your old account.
Whatever the reason, your money ended up spread out among various financial institutions, and now you’re tracking it across all those accounts.
Moving all your money to linked checking and savings accounts at a single bank can make everything easier to track and access. So analyze your various accounts — which one do you use the most? Which one pays the highest interest rate or has the least stringent usage requirements?
Consider what criteria are most important to you, transfer all your funds to the winning bank, and close those other accounts for good.
If you have a side gig, you might want to keep a separate business checking/savings account in addition to your personal accounts. This will minimize your personal liability and make sure your taxes are accurate.
If the bank where you have your personal accounts doesn’t offer the best business accounts for your needs, it’s okay to make your peace with needing two different institutions.
3. Get rid of costly credit cards
Similarly, the number of credit cards most people have also creeps up as the years go by — balance transfer offers, sign-up bonuses, rewards programs, and better interest rates are all potential reasons to open new accounts.
Closing them, however, can be a pain, often requiring phone calls to “customer retention specialists” and/or sending requests by snail mail.
Unfortunately, your desire to avoid the hard sell or track down a stamp can cost you in the form of high interest rates on lingering balances, annual membership fees, or both.
While closing several cards can potentially harm your credit (more on that below), you probably don’t need them all, either. Depending on how many cards you have, you might decide to keep open your oldest account, the account with the rewards program that gives you the most value, and the card with the lowest interest rate — and close any cards with expensive annual fees.
A word of caution, however: don’t close any accounts if you have a significant outstanding balance. Reducing your total available credit by closing one or more credit cards, while keeping the same amount of debt, will increase your credit utilization ratio and lower your credit score.
If you’ve got a balance running on any card, pay it off before closing accounts. While you’re at it, you can also check out these easy ways to improve your credit score.
4. Review your insurance policies
If it’s been awhile since you took a close look at your renter’s, homeowners, or auto insurance policies, you might be paying too much. While contacting other companies may lead to the most savings, even calling your current company may reveal new savings program you qualify for, or uncover the fact that your coverage needs have changed.
5. Cancel unneeded subscriptions
Whether it’s cable, your gym membership, or that monthly snack box subscription, if you don’t use it (or can live without), cancel it! That’s more money you can save or use to make extra student loan payments.
It can seem like more trouble than it’s worth to organize finances, but the mental clutter and wasted money of a financial situation that’s not optimized can cost you — literally. So open a window, let the fresh air in, and spring clean your finances today!
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Laurel Road.
Laurel Road Disclosures
2 Important Disclosures for SoFi.
3 Important Disclosures for CommonBond.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.57% – 5.87%||Undergrad & Graduate||Visit Earnest|
|2.80% – 6.38%1||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 7.52%2||Undergrad & Graduate||Visit SoFi|
|2.47% – 7.99%||Undergrad & Graduate||Visit Lendkey|
|2.57% – 6.65%3||Undergrad & Graduate||Visit CommonBond|
|2.72% – 8.17%4||Undergrad & Graduate||Visit Citizens|