Category Apartment Decorating

How to Get a Low-Interest Personal Loan

When you’re struggling financially, sometimes the best option is to get a personal loan. Unfortunately, “cheap loans” in the form of low-interest rates are hard to come by if you don’t have the right credit score. The interest rate is the amount you’ll pay over the life of the loan on top of the loan amount requested. The higher the interest rate, the more expensive the personal loan will be, and the more you’ll come out of pocket to pay for it.

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What is a low interest rate on a personal loan? 

As of November 2020, the average interest rate on a 24-month personal loan is 9.65%, according to the Federal Reserve. Depending on your creditworthiness, your rate for a personal loan could be higher or lower than the national average.

Lenders use a risk-based model to determine individual interest rates on personal loans and other loan types. Financial institutions use several factors to determine your personal interest rate, including your:

  • Credit score
  • Payment history
  • Income information
  • Outstanding debts

The better your credit score and payment history and the less outstanding debts you have, the better your personal loan interest rates will be. However, if your credit score is lacking, you have trouble paying on time and maxed out your credit cards, don’t expect a low interest rate on your personal loan.

[ More: How to Raise Your Credit Score ]

How can I get a lower interest rate on my loan? 

If you’re looking for a cheap personal loan with a low interest rate, there are some things you can do before applying. If you can improve your creditworthiness, you can get a better-than-average interest rate on a personal loan, which can add up to big savings over the life of the loan.

Lower your debt to income ratio

The first thing to do before applying for a personal loan is to lower your debt-to-income ratio, or DTI. The DTI is the amount of debt you have compared to the income you bring in.

The higher the ratio, the less likely you’ll get a low interest rate on a personal loan. With a high amount of debt compared to your income, the risk of default is higher, which means the lender will want a higher amount of interest to take on the greater risk.

The easiest way to lower your debt-to-income ratio is to pay off some of your outstanding debt. If you have a lot of debt or aren’t sure about the best way to tackle your existing debt, there are debt relief options available.

Improve your credit score 

Your credit score is a three-digit number assigned to your debt and payment history that determines your creditworthiness. The better your credit score, the better chance you have of getting approved for a low-interest rate on your personal loan.

Here are some tips to use so you can quickly improve your credit score before applying for a loan:

  • Pay all your bills on time
  • Allow your utility and cell phone bills to boost your credit score
  • Pay off your debt
  • Keep low balances on revolving credit accounts
  • Only apply for new credit accounts if needed
  • Keep unused credit cards open and active instead of closing them
  • Avoid applying for new credit often, as inquiries can negatively affect your credit score
  • Review all your credit reports and dispute any inaccuracies

Shop around and compare rates 

Sometimes it pays to shop around. By getting multiple personal loan quotes, you can compare interest rates, fees and other terms to make the best decision.

When shopping, make sure the lender does a soft credit check, which won’t affect your credit score. Once you choose a lender, it will do a hard credit pull to verify your information and lock in the interest rate.

[ See: Three Ways to Build Credit Without Taking on Any Debt ]

Reach out to a credit union 

A credit union is much different from a bank or online lender. Credit unions are nonprofit entities owned by their members, so they can offer more competitive rates and better incentives than the big banks.

To apply for a personal loan with a credit union, you have to be a member first. Qualifying for membership varies by credit union, but you usually have to live in a certain area, work for a particular employer or be related to an existing member. If you belong to an organization, that may also be a qualifying factor that makes you eligible to join the credit union.

Pick a cheaper type of loan

Most personal loans available are unsecured loans, which means you don’t have to provide collateral to get approved. However, offering up a form of collateral could be a way to get a lower interest rate on a secured loan compared to an unsecured personal loan.

Lenders may allow the following forms of collateral for a secured loan:

  • Cash in checking or savings
  • Vehicle
  • House
  • Home equity

Though this route could get a better interest rate, proceed with caution. If you default on the personal loan, the lender can seize your collateral. If you end up down on your luck, losing your house or car could make your situation even worse.

[ Next: Secured Personal Loans vs. Unsecured Personal Loans ]

Get a co signer 

Some lenders offer the option of a co-signer, which can get you a low-interest rate personal loan. The co-signer should have excellent credit and a strong payment history to improve your chances of a better rate.

Make sure your co-signer agrees to taking on the responsibility. Once approved, the co-signer is equally responsible for the loan payments. If you default on the loan, they are on the hook to pay or risk damaging their own credit score.

Choose a shorter repayment period 

Longer loan terms means more risk for the lender, which translates to higher interest rates. Choosing a shorter repayment period can lower the interest rate, but it also increases the monthly payment. Be sure the higher payment fits into your budget over the life of the loan so you don’t default.

Sign up for an auto pay discount 

Some lenders offer incentives like an autopay discount to win over borrowers. With autopay, you attach a checking or savings account to the loan and the lender debits the monthly payment automatically. Not only does this ensure you pay on time each month, it lowers the risk of defaulting on the loan, which is why lenders offer it.

Most lenders offer a 0.25% discount on the personal loan interest rate. It sounds small, but the savings can add up over the life of the loan. Be mindful to have enough money in your account each month to avoid overdraft fees on your account and a returned payment fee with the lender.

Avoid fees 

Fees on loans are the difference between an interest rate and an annual percentage rate (APR). If the APR is higher than the interest rate, there are fees attached to the loan.

One of the biggest fees is the origination fee, also called an administration, processing or underwriting fee.. The origination fee can vary from 1% to 8% of the loan amount. Not all lenders have this fee — lenders including SoFi, Lightstream and Citizens Bank all do not charge this fee.

When shopping for personal loan quotes, check to see what fees, if any, apply to the loan. Just because a lender offers a low-interest rate doesn’t mean it’s always the best option available.

We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

Source: thesimpledollar.com

What You Need to Know When Buying Car Insurance for the First Time

Adulting sneaks up on everyone at one point or another. If you just purchased your first car, congratulations and welcome to the club! Now, it’s time to deal with all the tedious aspects of driving your new car, like getting car insurance for the first time. First-time car insurance is as exciting as going to the dentist, but it’s necessary to protect yourself financially. If you feel overwhelmed or confused about how it all works, don’t fret. We break it down for you — especially first-time driver insurance cost.

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How do I get car insurance for the first time?

Getting car insurance for the first time starts with how much you need. Each state has different requirements. Most insurance companies will know how much you need depending on where you live. The requirements are typically labeled as 25/50/10 liability insurance. This means that you’ll need liability insurance just in case you were at fault in an accident. The 25/50/10 stands for:

  • $25,000 in bodily injury coverage to pay for each person’s medical bills/injuries if you’re at fault in a crash.
  • $50,000 in bodily injury coverage per accident. This means your insurance will only pay up to $50,000 in medical bills for others you hurt in an accident. 
  • $10,000 in property damage to cover the costs of repairs and replacement of cars, fences, poles and any property you struck and damaged.

You can legally drive with the state’s liability minimums, but you may want to buy more than that. Think of the state’s requirements as the no-frills version of car insurance. The problem is that liability insurance only takes care of other people, also known as third parties. If your car was damaged or you were hurt, minimum liability insurance won’t cover you — you’d have to pay for them yourself.

In addition, a state’s liability minimums are usually not enough if you cause a more serious crash. Think about it this way, if you rear-end a new Tesla, do you think a state’s $10,000 property minimum coverage is enough to fix the Tesla you hit? If the bill for the repair is more than $10,000, your insurance will only pay up to that limit and you’d have to pay the rest out-of-pocket.

It’s best to shop around for car insurance by getting a few online quotes to find the best price. When you do, aim for liability coverage of 100/300/100. This should cover you in case of an accident with injuries involving newer, more expensive vehicles. Besides shopping around for liability insurance with the higher minimums, consider adding the following optional coverages:

Comprehensive insurance

As mentioned, liability insurance only pays for other people’s damages. Comprehensive will pay for repair or replacement of your car if it’s stolen, vandalized, lost in a fire or damaged by a falling tree limb or bad weather events such as hail and flooding. It also covers you if you strike a deer or animal while driving.

Collision insurance 

Add collision coverage to get reimbursed for repairs if your car is damaged because of the accident you caused. In addition to mandatory liability insurance, drivers typically buy comprehensive and collision coverage together. Comprehensive and collision car insurance join forces as wonder twin powers, also known as full car insurance. You’ll have coverage for the damages you cause to others and yourself.

Gap insurance

You probably know the moment you drove your sweet ride off the new car dealer you lost money. But if your car was totaled in a serious accident soon after you bought it, the trouble begins.

Your car insurance company will cut you a replacement check for your lost car based on its current market value and not what you paid for it, which is probably less than what you owe on the car loan. Meaning, the $40,000 car you’re making payments on that’s destroyed may only be worth $32,000 months later because of depreciation. Your insurance company paid you $32,000 to go get a new car, but once you hand that check over to the finance company, you still owe them another $8,000. Gap insurance pays the difference between what you owe and what your car was worth at the time it was totaled. And the coverage is way cheaper than the shortfall you could get hit with.

Do first-time insurance customers pay more?

Just because it’s your first time buying car insurance doesn’t mean it’s more expensive. Your rate depends on your age, driving record, where you live and a handful of other factors. According to the Insurance Information Institute, younger drivers pay more for car insurance. If you’re between the age of 16 to 25, be prepared to pay a little extra for car insurance.

The reason why first-time insurance may be higher for young adults is tied to the number of deadly accidents. The age group of 16- to 24-year-old drivers are responsible for 66.5% of fatal motor vehicle crashes. A lack of driving experience, more risk-taking, texting and drinking are some of the reasons young adults pose a higher risk of causing a serious crash. Therefore, drivers under 25 are more expensive to insure.

[ See: What’s the Average Cost of Car Insurance in the U.S.? ]

Where to find cheap car insurance for first-time drivers

If the cost of first time insurance could be a dealbreaker on whether you can afford your first car, consider the following tips to find cheap car insurance for first-time drivers.

Choose a more affordable car

Some cars are cheaper to insure than others. For example, a Honda will cost less in car insurance than a Tesla or a sports car. Do your research on insurance costs before you buy a car.

Stay on your parent’s car insurance

You may get a better deal on your car insurance if a parent can add you to their existing auto insurance. They may have loyalty discounts and a long-standing relationship with an insurance carrier and adding your vehicle to their policy could be cheaper than a first time insurance policy.

Shop around for quotes

The best and easiest way to find the best cheap car insurance for first time drivers is to get online quotes from a few car insurance companies. You’d be surprised at how much your car insurance could vary in cost for the same coverage, from one carrier to another.

Most insurance companies make it easy to get a quote. You’ll need an address, details about your car, such as make, model and year, and the type of coverage you’d like. Getting a quote is free and no-obligation. You’ll have an estimate to compare in just a few minutes.

Take advantage of car insurance discounts

Most car insurance companies entice new customers with discounts for a variety of reasons. The best part is, you can take advantage of more than one discount at a time. Some worth considering include:

  • Bundled coverage: Insure your car and your home or apartment with the same insurance company to get a discount on both.
  • Good student: If you’re enrolled in school, you could receive a discount on your car insurance while you study.
  • Military: Enlisted personnel get an automatic discount from most insurance carriers.
  • Telematics: Sign up for an insurance company’s driver tracking program and you could get as much as 25% off your car insurance premiums, based on your driving. You’ll need to download an app that monitors your mileage, speed and other factors to determine how safe of a driver you are and the size of your discount.
  • Defensive driving courses: Most carriers offer a decent discount of 10% or more if you complete an online defensive driving course. The courses can typically be completed over a weekend and can earn you savings over two to three years.

[ For You: Eight Ways to Save on Car Insurance ]

How to buy your first car insurance policy

Ready to buy first-time car insurance? Follow these steps to make sure you get it right.

  1. Get several online quotes: To find the best deal, get quotes from a few carriers and choose the one you like the best.
  2. Round up information: You’ll need your car’s Vehicle Identification Number (VIN) located on your title or on your driver side’s lower dashboard when looking from outside. Besides the VIN, have your vehicle’s mileage, driver’s license, contact information and home address ready. Have your bank information handy to set up automatic payments, as well as a debit or credit card to pay your first premium.
  3. Choose your policy: Enter details about the policy you’re buying, including liability insurance, dollar limits and add ons such as gap, comprehensive and collision coverage.
  4. Pick a deductible amount: The deductible is how much you’ll pay out-of-pocket in case of an accident or claim and before the insurance company steps in to pay the rest. A typical deductible is $500 or $1,000.
  5. Set an effective date: The effective date is the day your insurance starts. It can be as soon as the same day you buy the policy, although you should confirm it with the insurance company.
  6. Choose the length of your premium payment: You can pay your car insurance monthly or every six or twelve months. You could qualify for a small discount for prepaying six or twelve months or by signing up for automatic payments.
  7. Review your information: Make sure the policy, vehicle description and all the information you provided is correct.
  8. Pay for the policy: You can pay for your policy online using your banking information including routing number and bank account number. Or you could pay using a debit or credit card. Once you pay, your policy will be official, effective as of the date you chose. You’ll receive an insurance declaration page by email for your records, or you can download one.
  9. Print out your insurance card and place it in your vehicle: Print out a copy of the insurance declaration and digital insurance card and keep it in your vehicle. You may get a hard copy in the mail, but to be safe, print out a copy. You’ll need it in case of an accident or if you’re pulled over, to show as proof of insurance.

We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

Source: thesimpledollar.com

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What You Need to Know Before Exiting Mortgage Forbearance

Millions of people are struggling with their mortgage payments. It’s true that the total number of loans in forbearance did decrease in December to 5.48%, but that doesn’t mean that people are out of the woods yet. According to the MBA, there are 2.7 million people in active forbearance, who will soon reach their six-month mark and either apply for their one-time extension or resume their payments. 

Unfortunately, just because you run through your forbearance period doesn’t mean you’re financially ready to go back to paying your mortgage in full. Thankfully, you still have options. The FHA has provided a two-month extension of the eviction and eviction moratorium for single-family borrowers. Here’s what you need to know about mortgage forbearance during the pandemic. 

Forbearance under the CARES act

If you’re having a hard time paying your mortgage, the CARES act allowed homeowners to apply for a six-month forbearance period and an additional one-time six-month extension. That relief has been extended through February 28. To apply, you do not have to prove the pandemic has financially impacted you. Many private lenders are also offering forbearance, though terms may be different. 

Federally-backed mortgages include:

  • U.S. Department of Agriculture (USDA)
  • Department of Veteran Affairs (VA loans) 
  • Fannie Mae and Freddie Mac 

[ Read: What is Mortgage Forbearance?

Keep in mind that forbearance isn’t mortgage forgiveness. You will pay that money back in the end. Before you even enter forbearance, you should know the expectations and requirements of your servicer when the period ends. 

Common options for repayment after forbearance ends:

  • A lump-sum payment when you exit forbearance
  • A repayment plan that will spread the amount owed over a specified number of months Which will mean an increased monthly payment during that time
  • Your servicer offers the option of modifying your loan through a defined modification program
  • An extension of your loan term to account for the amount of time it will take to pay back the missed payments 

How does it impact your credit?

Missing your payments and being delinquent on your mortgage can be detrimental to your credit. A provision of the CARES act is that your forbearance period will not negatively impact your credit score. 

Ordinarily, your forbearance would be reported to creditors. Until the relief ends, your account will be reported the same from the start of your forbearance period until the end. So if you were current on your payments before, you’ll still be considered current. The same goes for delinquent accounts. That said, your forbearance is reported, so future lenders will see it.

[ Read: Why Have Credit Scores Increase During the Pandemic? ]

Mistakes do happen, even on credit reports. During your forbearance period, make sure you carefully read through your credit reports; that way you catch any errors. The same goes for your loan statements. Just because you are not actively paying doesn’t mean you should disregard your billing statements. 

In this article

Forbearance isn’t always the solution to the problem

Even with the help of forbearance, it doesn’t mean everyone is ready to resume payments. 54% of households say they are not confident they are able to restart their payments. Additional support is needed post forbearance. 

According to the Urban Institute, 85% of people who are delinquent on their mortgage payments are working with services to mitigate the losses — while 15% are not working with the options available. Researchers suggest that a considerable portion of the people who are delinquent on their mortgage and not doing anything about it is because they might not know about the options available to them. Navigating the ins and outs of the forbearance process can be difficult.

What to do if you exit forbearance but still need help

Talk to your lender

If you still need help past your forbearance period, talk to your lender. “Credit unions in particular, as nonprofit member-owned financial institutions, are more likely to work with their members to try to help them out,” says CUNA Senior Economist Jordan van Rijn.

“This may including flexible installment plans, refinancing, or restructuring the loan. In most cases that we are aware of, the skipped payments are simply added to the end of the mortgage such that the borrower doesn’t have to pay the entire amount that was missed while he/she did not make payments,” van Rijn adds. 

Consider refinancing 

If you have a relatively strong credit score, you may consider refinancing your mortgage, which would earn you a lower monthly payment and a shorter loan term. That said, the closing costs for this option can be high –– often ranging from 2% to 5% of your loan. 

[ Read: Mortgages in Forbearance Will be Eligible for Refinance

Generally, it’s best to only refinance if you plan to stay in your home for at least five years and would save 0.5%, van Rijn advises. Given the upfront costs, this option is ruled out for many people during the pandemic. 

“Housing prices have increased at a dramatic pace during the pandemic with the Case-Shiller National Home Price Index reaching record levels. Over the past year through October 2020, the index increased an incredible 8.4%, the fastest since 2014. This, in turn, has led to increased equity in people’s homes, allowing for more mortgage refinancing,” says van Rijn

FAQs

When my forbearance period ends, will I have to pay it all back at once?

How you repay the back payments on your mortgage will be determined by your lender. Common methods include adjusted repayment schedules, a loan extension to account for that time, or a lump sum payment. 

Will applying for forbearance hurt my credit score?

Normally, your forbearance would be reported to creditors. However, in response to the pandemic, a provision of the CARES act states that your forbearance period will not negatively impact your credit score. 

Will I pay more in interest if I get forbearance?

No. Your interest rate will remain the same during your forbearance period, though it will still be occurring. If you do not pay by the time your forbearance ends, it will be added to your balance. 

Can I apply for forbearance for my rental property?

You can apply for forbearance for a rental property if the mortgage is federally-backed. Talk to your lender to find out the terms of repayment for your forbearance period. 

Expert Cited

Jordan van Rijn is Senior Economist for the Credit Union National Association (CUNA) and Associate Lecturer at the University of Wisconsin-Madison’s Department of Agricultural and Applied Economics. He has 10 years of experience in international development, micro finance, and economic research in Latin America, Africa, Southeast Asia and the United States. Jordan conducts statistical and economic analysis to support CUNA’s advocacy efforts.

We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

Image credit: Gaudi Lab / Getty Images

Source: thesimpledollar.com

Best Installment Loans of 2021

Installment loans are a great financial tool for people who want to make a large purchase and don’t have the cash to do it. Unlike credit cards, which you might use to borrow revolving amounts and pay them back as you go, installment loans involve borrowing one single sum and repaying it over time in scheduled payments. Installment loans can be advantageous over credit cards because they’re more predictable and usually offer lower interest rates.

Check Your Personal Loan Rates

Answer a few questions to see which personal loans you pre-qualify for. It’s quick and easy, and it will not impact your credit score.

Refreshing data.

We found results in California.

In this article

The best personal installment loans can finance the major purchases in your life, from home renovations to that really expensive vet bill after your dog ate a sock. We rated the best installment loan providers using our proprietary SimpleScore methodology to compare interest rates, loan amounts, customer satisfaction, support, and fees.

Why trust The Simple Dollar?

The Simple Dollar keeps personal finance simple to help you make the best decisions for you and your money. We gather the latest information on products and services to help give you our top recommendations. Whether you’re curious about loans or banking, The Simple Dollar has everything you need to keep you up to speed on all things related to personal finance.

We only use the most recent data and information to help us form ratings and recommendations. Our very own SimpleScore helps us fairly evaluate financial products and services. The scores and findings are bound to give you everything you need to make smart investments, purchases and savings decisions to make the most of your dollars.

The 7 best installment loans of 2021

The best installment loans at a glance

Lender APR Terms Loan Amount
LendingClub 10.68%–35.89% 3–5 years $1,000–$40,000
PersonalLoans.com 5.99%–35.99% 90 days–3 years $500–$35,000
Avant 9.95%–35.99% 2–5 years $2,000–$35,000
Prosper 7.95%–35.99% 3–5 years $2,000–$40,000
OneMain 18.00%–35.99% 2–5 years $1,500–$20,000
Best Egg 5.99%–29.99% 3–5 years $2,000–$35,000
LightStream 2.99%–20.49% with out AutoPay 2–12 years $5,000–$100,000

Best online installment loan – LendingClub

LendingClub offers online installment loans that make it easy to make payments from your bank account without prepayment penalties.

APR Range

10.68%–35.89%

Term

36–60 months

Loan Amount

$1K–$40K

SimpleScore

3.2 / 5.0

SimpleScore LendingClub 3.2

Loan Size 5

Customer Satisfaction 3

LendingClub is an online installment loan provider that eases the process of borrowing and paying back installment loans. You’ll be able to borrow up to $40,000 with a low, fixed interest rate. And, best of all, you can make fixed payments on the loan directly from your bank account without worrying about checks or other payment portals. You also won’t face prepayment penalties if you choose to pay your loan off early. However, like other lenders, you’ll have to keep in mind that LendingClub charges an origination fee of 2% to 6% on top of its interest rates. LendingClub also has fairly strict credit requirements and won’t let you apply if your credit score is under 600. If you have a credit score on the higher end, you might be able to get a very competitive rate.

In the News

LendingClub was recently given the green light to acquire Radius Bank by the Office of the Comptroller of Currency (OCC) after leaving the peer-to-peer lending space. LendingClub’s CEO, Scott Sanborn spoke about the deal in a recent press release.

“This is a transformative acquisition for the company and a watershed moment for the industry as we become the only full-spectrum fintech marketplace bank in the U.S.”

The deal is expected to close by the beginning of February 2021.

recent podcast while discussing Avant’s new financial product offerings. Paris would like to focus on refinancing existing auto loans to help customers have better savings. Avant also plans to continue to expand its focus in the credit card industry and consider deposit products.

LightStream has recently received several awards for its personal loans and customer service. The lender recently ranked No. 1 for customer satisfaction by the J.D. Power 2020 U.S. Consumer Lending Satisfaction Study. The award was given based on Lightstream’s loan offerings, terms and management.

personal loan that involves borrowing a lump sum and paying it back in regular payments — aka, installments — over a predetermined period of time, usually several years. Personal loans are a common and versatile type of installment loan, although mortgages, student loans and car loans are all types of installment loans.

Installment loans typically have a fixed interest rate that is determined at the time of application so you’ll always know exactly how much you need to pay back. Common uses of personal installment loans including debt consolidation, home remodeling and medical bills.

[ Read: How to Pay for Home Improvements ]

How installment loans work

When you take out an installment loan, you’ll tell the lender exactly how much you want to borrow and how much time you’d like to pay it back. Based on this information and your personal creditworthiness, the lender will issue you a loan with clearly laid out terms for repayment. You’ll be expected to make set monthly payments for the full duration of the agreed-upon time period until the loan is repaid in full. If you miss payments, you’ll be charged late fees and your credit score may be affected.

Terms

Installment loan terms work similarly to terms on other types of loans. Loan repayment terms specify the amount of time a borrower has to pay back the amount they borrowed plus interest; with personal installment loans, this can be anywhere from a few months to several years. Your loan terms will specify the APR, or the interest rate you’re charged based on your credit score. Late fees and any other types of fees are also considered terms of a loan.

Monthly payments

Although you’ll be given a set period of time to repay an installment loan in the loan’s terms, that doesn’t mean you can just make payments whenever you feel like it. Installment loan providers expect that borrowers will make monthly payments on time and in full every time. This monthly payment will go partially towards the principal balance, or the amount you initially borrowed, and will also cover some of the interest you owe.

Types of installment loans 

There are different types of installment loans based on your needs. Keep in mind that each type of loan comes with its own terms and rates. You may also have a few restrictions and requirements from your lender including what the loan cannot be used for and what’s up for grabs if you don’t repay.

Unsecured personal loans 

Unsecured personal loans are generally easier to get with a good or excellent credit score. Usually, collateral isn’t required by your lender. Rates vary based on your debt-to-income ratio and other credit factors, but you’ll want a rate lower than the current national average of 9.46%. Unsecured personal loans can be used for almost anything except to launch a business, education costs or investments. However, you can use them to consolidate or pay off debt.

Secured personal loans

Secured loans offer the same spending flexibility as unsecured loans, but lenders will often require you to list assets or equity that can be used as collateral. This could be your home, car or other valuable assets. Secured personal loans often have lower interest rates than unsecured loans, and you may get to borrow more. But the lender will have some of your possessions as collateral to retrieve if you don’t pay back the loan.

Mortgages 

Mortgages are the most common type of installment loan used to finance a home, business or property. However, if you don’t repay your mortgage, the lender has the right to take your home. The average interest rate for a 30-year fixed mortgage in 2020 was 3.11%. Before you get a mortgage, lenders usually require you to pay a percentage of the property’s value. The more you can put down, the better. But usually, lenders require at least 3%–5%.

[ More: Should I Make Principal-Only Payments on My Personal Loan? ]

Auto loans

Auto loans are used to purchase cars. Dealerships often work with a number of preferred lenders to get you the best rates based on your credit and other personal finance factors. You can also apply with your preferred lender or bank. Keep in mind that if you don’t pay back your auto loan, the lender has the right to repossess your car. Auto loan rates vary depending on if your car is new or used. By the second quarter of 2020 the average interest rate for a new car was 5.15%, while the rate for a used car was 9.69%.

Alternatives to installment loans

There are a few other low-risk options to get money instead of applying for an installment loan.

  • Get a side gig: A second job can help make extra cash and boost your skill set. See what best fits your schedule and experience to determine what works for you.
  • Help from friends or family: Borrowing from a trusted friend or family member doesn’t have any impact on your credit score. Make sure you work out the details to pay them back— including how much you’re borrowing and when you plan to pay them back in full.
  • Ask about a payment plan: If you need an installment loan for a purchase or to cover another bill it’s best to ask about a payment plan. Most payment plan options offer 0% interest and won’t hurt your credit. The payments can also automatically be drafted from your account for convenience.
  • Use your credit card: If you already have a credit card that can cover your purchase, it may be best to use it instead of applying for a loan. Remember not to exceed your card’s limit and try to keep usage below 30% to prevent it from hurting your score.

[ See: What Credit Score Do You Need for a Personal Loan? ]

Installment loans for bad credit

When you have a low credit score, you might wonder whether you’ll be able to qualify for an installment loan. Some lenders consider applications with bad credit, but there are a few considerations.

First, the interest rates on installment loans can vary significantly. And in general, you’ll pay a higher rate with a low credit score. You can end up paying more than 100% in interest, so it’s important to figure out ahead of time how much the loan is going to cost you.

Installment loans often come with other costs as well. Depending on the type of loan, you can expect to pay an origination fee, as well as late fees if you fail to miss a payment.

[ Read: Best Installment Loans for Bad Credit ]

How to choose the best installment loan for you

  1. Decide how much you need to borrow and for what purpose. Since installment loans are a one-time loan, you don’t want to underestimate the amount you need, but borrowing too much means you’ll have to pay more in interest. Try to get as accurate as you can.
  2. Check your credit. It’s always a good idea to look at your credit report before applying for any type of loan to make sure there aren’t any errors. Incorrect information could bring your credit score down and cause you to end up with less favorable loan terms.
  3. Shop around for loans. Different lenders will offer you varying rates depending on your creditworthiness. For installment loans, make sure you compare rates with a few different types of lenders, such as peer-to-peer networks and lender marketplaces.
  4. Choose a lender. You’ll have to submit a formal application to be approved for a loan, and this process can take anywhere from a couple seconds to several days. Once you’ve been approved, you should have your funds within a few business days.

Check Your Personal Loan Rates

Answer a few questions to see which personal loans you pre-qualify for. It’s quick and easy, and it will not impact your credit score.

Installment loans FAQs

Installment loans are highly versatile and can be used for many purposes. People often use installment loans to buy cars, pay medical bills, consolidate other types of debt or cover unexpected major expenses. Some lenders may ask you what you intend to use your installment loan for.

Your credit score tells lenders how likely you are to pay back your loan. Borrowers with a higher credit score will get better terms, but those with poor credit will have to pay more in interest. This is because lenders expected to get compensated for the amount of risk they take on in issuing you a loan.

There’s no limit to the number of installment loans you can have, although some lenders may discourage this practice by limiting you to a certain number of loans from their particular institution. Keep in mind that every time you apply for a new installment loan, the hard inquiry will show up on your credit report and bring your score down. It’s best to limit the number of loans you have at once.

A no-credit-check loan is a product wherein the lender doesn’t take your credit into account for the application and doesn’t result in a hard inquiry on your credit report. While they might seem like a good idea for someone with poor credit, they can be problematic in many cases. These loans often come in the form of payday loans and have interest rates of nearly 400%.

Installment loans can be an effective tool to help you make a large purchase that you can’t afford out of pocket — often a home or a car. If you’re considering an installment loan, make sure you fully understand the terms of the loan and that the monthly payment easily fits within your budget.

Last editorial update – January 22, 2021 – updated lender information and installment loans buying guide.

We welcome your feedback on this article and would love to hear about your experience with the installment loans we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

Source: thesimpledollar.com

The Best Renters Insurance in Chicago, Illinois

It’s hard to deny the appeal of Chicago — the culture, the sports teams and the deep dish pizza. And with 2.7 million Americans now calling Chicago home, this beloved Midwestern city continues to draw in more people each year. This also means increased rental housing and a greater demand for renters insurance in Chicago. While renters insurance may not be the compelling reason people flock to Chicago, it is still a much-needed financial tool for Chicagoans.

Thankfully, renters insurance remains affordable in the Windy City, and we used our SimpleScore methodology to compare prices and features of both national and local renters insurance companies in Chicago.

America’s top-rated renters insurance

  • Policies starting at just $5/month
  • Sign up in seconds, claims paid in minutes
  • Zero hassle, zero paperwork
In this article

The best renters insurance companies in Chicago, Illinois

Best for low premiums – Lemonade

As refreshing as the summertime classic, Lemonade offers a straightforward, affordable approach to renters insurance in Chicago.

J.D. Power Rating

5/5

AM Best Rating

N/A

Standard & Poor’s

N/A

SimpleScore

3.6 / 5.0

SimpleScore Lemonade 3.6

Discounts 1

Coverage Options 3

Customer Satisfaction 5

Accessibility 5

If you thought all renters insurance was boring and predictable, think again. Lemonade is an online-only insurance company offering the convenience of digital tools and low premiums for renters. Plus, your personal belongings are insured anywhere in the world, whether it’s a friend’s apartment in Paris or a storage unit in Wicker Park. If you’re looking for a basic renters insurance policy, coverage through Lemonade costs as little as $5 per month.

Another standout feature of Lemonade is how it operates with an entirely different business model versus other providers. Once Lemonade pays out expenses and claims, any leftover money is donated to charity.

Best for customer service – State Farm

A hundred years later, State Farm still offers great customer service and convenient tools for managing your renters insurance policy.

J.D. Power Rating

5/5

AM Best Rating

A++

Standard & Poor’s

AA

SimpleScore

4.2 / 5.0

SimpleScore State Farm 4.2

Discounts 3

Coverage Options 5

Customer Satisfaction 5

Accessibility 4

Since 1922, State Farm has operated as a giant in the insurance industry. Strong financial ratings, overall customer satisfaction and multiple policy options are a few reasons why State Farm is the largest insurer in the United States. Plus it’s easy to purchase a policy online, the app, through an agent or customer service. 

The renters insurance through State Farm offers the standard protections, including personal property, loss of use, inflation coverage and liability — plus a range of additional options and discounts. You can even add coverage for specialty items, such as cyber events, to round out your policy.

Best for add-on coverage options – Nationwide

Nationwide is a great carrier to have on your side. You can pick from numerous policy options to get the exact coverage you need in Chicago.

J.D. Power Rating

2/5

AM Best Rating

A+

Standard & Poor’s

AA+

SimpleScore

3.8 / 5.0

SimpleScore Nationwide 3.8

Discounts 4

Coverage Options 5

Customer Satisfaction 2

Accessibility 4

Nationwide offers numerous policy options, including coverage for damage to personal property and contents from events like fire, lightning, windstorms, hail, frozen plumbing, theft, vandalism or even vehicle impacts. Personal liability, medical payments to others and building alterations are included in policies, too. Your Chicago renters insurance policy from Nationwide covers unauthorized credit card charges and forged checks, which isn’t standard with other carriers.

You can further customize your policy with Nationwide with add-ons such as Valuables Plus (for your high-value items not covered by a basic policy), water damage, theft extension and Brand New Belongings coverage.

Best local agent network – Erie

Erie may not be as well-known as other carriers on this list, but the coverage options and customer service reputation are worth getting familiar with.

J.D. Power Rating

3/5

AM Best Rating

A+

Standard & Poor’s

N/A

SimpleScore

2.4 / 5.0

SimpleScore Erie 2.4

Discounts 1

Coverage Options 2

Customer Satisfaction 3

Accessibility 3

Erie requires customers to work through a local agent for all quotes and policy purchases, but Erie continues to receive some of the highest overall customer satisfaction ratings for renters insurance, indicating this approach works. Erie offers basic coverages for renters insurance, but allows you to customize your policy extensively with options such as full value replacement and disaster protection.

Other policy add-ons include sewage and drain backup coverage, earthquake and watercraft damage. If you bundle with an auto policy with Erie you can save an additional 20%, which can offset the additional cost of your renters insurance.

Best coverage for high-value items – COUNTRY Financial

Country Financial combines strong customer service with a wide range of coverage options for your rental in Chi-town.

J.D. Power Rating

N/A

AM Best Rating

A+

Standard & Poor’s

N/A

SimpleScore

3 / 5.0

SimpleScore COUNTRY Financial 3

Discounts 3

Coverage Options 4

Customer Satisfaction N/A

Accessibility 3

Country Financial is an A+ AM Best-rated carrier offering renters insurance to Chicagoans. You can expect the multiple policy coverage options and discounts from this regional carrier. It’s worth noting while Country Financial is not named in the JD Power 2020 Home Insurance Overall Customer Satisfaction rankings for renters insurance, Country Financial does score the highest marks for the homeowners insurance ratings — earning 855 on a 1,000-point scale.

Country Financial offers the standard renters coverage, such as personal belonging protection and liability. But you can customize your policy with add-ons such as identity theft, flood insurance and earthquake coverage. The high-value coverage is available for a wide variety of items, including watercraft, jewelry and recreational motor vehicles.

Choosing your provider 

When choosing the best renters insurance in Chicago, it’s best to compare policies and quotes from several providers, including national and local carriers if possible. Sure, price is an important factor, but comparing coverage options and customer service response to your policy are equally important.

Local carrier 

Pros 

  • Understand the unique challenges of local market
  • Strong customer service record
  • Use of a local agent network

Cons 

  • Lack of digital assets

National carrier 

Pros

  • Multiple coverage and discount options
  • Numerous digital assets

Cons 

  • Not as personalized

How much does renters insurance cost in Chicago? 

For less than the price of a large deep dish pizza per month, you can protect your personal belongings against damage and personal injury with renters insurance. The national average for renters insurance is $180 per year, but Illinois falls well below the average at $167 per year.

The rate for renters insurance one Chicagoan pays versus another is impacted by a number of factors, in addition to location. Factors such as the value of your personal belongings, how much personal injury coverage you need and other options you select will all affect the price of your Chicago renters insurance policy.

[ Read: How Much Renters Insurance Do I Need? ]

What you need to know about renters insurance in Chicago 

A basic renters insurance provides coverage in several areas, including:

  • Personal property coverage: This coverage protects personal items inside your rental and in other locations, such as a storage unit or inside your car.
  • Liability coverage:This coverage helps pay for the cost of lawsuits and your defense if you are involved in an accident or incident that harms others or causes property damage.
  • Medical payments to others: Pays a guest’s medical costs if they’re injured while visiting you in your rental property.
  • Loss of use: This coverage pays for your expenses to live elsewhere if your rental becomes uninhabitable due to a covered peril or loss.

Frozen water and blizzard coverage in Chicago

Renters in Chicago might be concerned about damage from frozen water and blizzards and if renters insurance covers damage from these perils. Damage from hail, wind and storms is typically covered in a renters policy, but it’s important to make sure it includes frozen water and blizzards in the list of covered perils. If it’s not, consider adding this supplemental coverage to your policy.

[ Read: The Cheapest Renters Insurance Companies]

Chicago renters insurance FAQs

No, renters insurance is not legally required in Chicago. However, your landlord can require you to carry renters insurance in order to sign a leasing agreement.

The average cost of renters insurance in Illinois is about $167 per year, but Chicagoans may pay more than that due to location. Furthermore, the price of renters insurance in Chicago can vary depending on several factors, including how much personal injury coverage you choose, add-ons to your policy and the replacement value you select for personal belongings.

Lemonade offers the lowest premiums, starting at $5 per month, and provides easy sign up for coverage through an app or online. In addition to renters insurance with Lemonade, you can customize your policy by adding selections such as a no-deductible option or pet insurance.

We welcome your feedback on this article and would love to hear about your experience with the insurers we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

Methodology

SimpleScore

The SimpleScore is a proprietary scoring metric we use to objectively compare products and services at The Simple Dollar.
For every review, our editorial team:

  • Identifies five measurable aspects to compare across each brand
  • Determines the rating criteria for each aspect score
  • Averages the five aspect scores to produce a single SimpleScore™

Here’s a breakdown of the five aspect scores and their rating criteria for our renters insurance reviews.

Why do some brands have different SimpleScores on different pages?

To ensure the SimpleScore is as helpful and accurate as possible, we developed unique criteria for every category we compare at The Simple Dollar. Since most brands offer a variety of financial solutions, their products and services will score differently depending on what we’re scoring on a given page.

However, it’s also possible for the same product from the same brand to have multiple SimpleScores. For instance, if we compare State Farm’s home insurance according to our criteria for the best home insurance, it scores a 3.8 out of 5. But when we compare State Farm according to the criteria for the best auto insurance, it scores higher, since the features the company offers can vary by the type of insurance.

Discounts

We awarded higher scores to insurance providers with more discounts available on their website.

Coverage Options

We gave providers with more renter insurance coverage options a higher score because they’re more likely to have a policy that best meets your needs.

Support

We awarded higher scores to renters insurance providers with the most channels for customer support.

Customer Satisfaction

We leveraged the J.D. Power Home Insurance Satisfaction Study℠ to see how customers rated their experience with each insurance provider. (If a provider wasn’t included in J.D. Power’s study, we skipped this aspect and averaged the four remaining aspect scores.)

Accessibility

We awarded higher scores to insurance providers that have more online and mobile features to easily manage your policy and claims.

Source: thesimpledollar.com

2019 Tax Tips for Understanding 2020 Income Tax Filing

February 19, 2020 &• 7 min read by Josh Smith Comments 0 Comments

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Note: Due to the COVID-19 coronavirus pandemic, the IRS has extended the federal tax filing and payment deadline to July 15, 2020. The recent relief package passed by Congress may have additional tax implications. Please contact a tax adviser for information you may need to complete your taxes this year. Learn more.

Note: The following is for informational purposes only and should not be considered tax advice. Please contact a tax adviser for questions about your personal tax situation.

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Tax time will be here again before you know it: Tax Day 2020 is Wednesday, April 15. We’re about two months away from one of the most stressful days for most Americans. Luckily, tax reform legislation in 2017 has simplified the tax code and changes for the taxes you file in 2020 may further increase your tax savings.

If you haven’t filed your taxes yet, review our tax tips for the 2019 tax year.

1. Check Your Information

The first thing to do is check that your employers have the right address. If you’ve moved without putting in a change of address, you may miss important tax document delivery. The IRS requires that W2s and other tax documents be postmarked by January 31, so you should have received all of your tax documents by now. If you didn’t receive something, start following up with them right away.

2. Get Ready

Gather and organize all your tax documents early. And by early we mean now. You’ll need personal information for you and your dependents, income and investment documents, business and self-employment records, receipts for medical bills and charitable donations and home ownership records. Make a checklist to be sure you cover everything.


STOP! Did you check your information and gather all your documents? Do this right now! If you wait until April 14 to see if you have all the documents you need, you’re really going to regret not taking our advice now.


3. Understand Your 2019 Tax Bracket for Filing in 2020

Tax brackets change regularly to keep up with inflation. A tax bracket is the range of taxable income you fall into. Your taxable income is your adjusted gross income (AGI) minus applicable tax deductions. In order to understand your tax bracket, you really need to understand what deductions are available to you.

4. Consider the Standard Deduction

Deductions work to decrease your taxable income. By bringing this number down, you may be able to fit into a lower tax bracket. That means you qualify for lower tax rates so you owe less in taxes.

The standard deduction is a preset dollar amount that’s subtracted from your AGI to help determine your taxable income. Your filing status—single, married filing together, married filing separately, head of household or widow(er) with a child—determines the amount you may deduct. With the higher standard deduction amounts established by the Tax Cuts and Jobs Act (TCJA) of 2017, this route may make more sense than itemizing.

Standard Deductions for Tax Year 2019

Filing Status

Standard Deduction Amount

Single

$12,200.00

Married Filing Jointly

$24,400.00

Married Filing Separately

$12,200.00

Head of Household

$18,350.00

Qualifying Widow(er) with a Dependent Child

$24,400.00

Like anything that has to do with taxes, though, there are some restrictions regarding who is eligible for the standard deduction. If you’re married filing separately and your spouse itemizes, for example, you are not eligible for the standard deduction.

5. Review Eligible Itemized Deductions

The TCJA changed and eliminated a lot of eligible deductions, including the personal deduction—which used to be $4,050! These changes may make it harder to itemize your deductions for bigger savings. To benefit from itemizing, your personalized deductions should be more than your standard deduction. For example, if you’re married and filing jointly, you must have more than $24,400 in itemized deductions. 

But if you pay a mortgage, have high medical bills and make charitable donations, itemizing may work for you. Here are some common eligible deductions that you can write off on your 2019 taxes.

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  • Medical expenses
  • Charitable donations
  • Mortgage interest
  • Mortgage insurance premiums
  • State and local taxes
  • Personal property taxes

Most of these deductions are limited and must meet specific qualifications, so double check those qualifications before filing.

Note that if you’re married filing separately, you and your spouse must choose to either itemize your deductions or take the standard deduction. You cannot choose to do this differently.

6. Take Advantage of Available Credits

Tax credits are different from deductions. Deductions lower your taxable income. Tax credits directly impact the tax amount you owe. They reduce the amount dollar for dollar.

For nonrefundable tax credits, you can only reduce your tax liability to zero. With refundable tax credits, you can receive a refund of the excess amount.

Tax Credit Example

You file Head of Household with an adjusted gross income of $55,000. You take the standard deduction of $18,350, which makes your taxable income $36,650. That puts you in the 10% and 12% brackets.

  • The first $13,850 is taxed at 10%—$1,385
  • The remaining $22,800 is taxed at 12%—$2,736
  • Before applying any credits, you owe $4,121 in federal income tax.
  • You take a child tax credit of $500.
  • This credit lowers the tax amount you owe to $3,621.

Popular Tax Credits

Tax credits can lower the amount of tax you owe. But you must meet specific qualifications, including established AGI limits.

For example, if you’re a single filer, your AGI must be below $32,501 to qualify for the Saver’s Credit. Your AGI also determines whether you can claim 10%, 20% or 50% of your contribution. Other limits apply for Married Filing Jointly filers and Head of Household filers.

Be sure to review the criteria for eligibility to learn whether you qualify for any of these popular tax credits:

  • Adoption Credit
  • American Opportunity Credit and Lifetime Learning Credit
  • Child Tax Credit
  • Child and Dependent Care Credit
  • Earned Income Tax credit
  • Residential Energy Efficient Property Credit
  • Saver’s Credit

7. Remember Key Tax Cuts and Jobs Act Changes

The 2017 TCJA has only impacted two tax filing years so far. So, you may not remember all the TCJA changes that could affect you when you file taxes in 2020. This recap can help.

  • The standard deductions have nearly doubled.
  • There is no longer any personal exemption.
  • For itemizers, the 5% of your AGI spend on medical expenses has expired. The floor is back to 10% for 2019.
  • If you itemize, the maximum deduction for charitable cash donations to qualified organizations is 60% of your AGI. Some other eligible groups qualify, but you may only claim up to 30% of your AGI.
  • There’s no penalty for lack of health insurance coverage.
  • The child tax credit maximum is $2,000 per qualifying child.
  • When you itemize, your deductible mortgage interest is capped for loans up to $750,000.
  • You may no longer deduct moving expenses for job relocation, unreimbursed employee expenses or employer-subsidized parking and transportation reimbursement.
  • Deductions for casualty and theft loss, tax preparation costs and other miscellaneous deductions subject to the 2% AGI ceiling are no longer available.
  • You can no longer deduct alimony payments.
  • If you receive alimony, you don’t have to claim it as income anymore.
  • Capital gains taxes are lower for all but those in the highest income brackets.

8. Watch Out for Scams

As tax time approaches, be on the lookout for tax scams. A popular scam this year is robocalls from scammers claiming to be able to suspend or cancel your social security number. Ignore them and report the call! If you are concerned that you may actually owe taxes and be at risk, view your tax account information online or call the IRS at 800-829-1040.

Be wary of anyone who calls or emails you claiming to be from the IRS and demanding money. That’s not how the government operates.

9. Hire a Tax Professional

Taxes are complicated. If you want to get the most out of your tax return, consider hiring a tax preparation service that understands 2019 tax rules and regulations and can help you maximize your 2019 tax return.

10. File for Free

Some individuals may be able to file taxes for free through the IRS, including those whose adjusted gross income was $69,000 or less last year and active duty military personnel and their spouses.

Even if you don’t fall into one of those categories, there are many other ways to file your taxes for free as well, so do your research!

11. Don’t Delay

Don’t be a victim of tax identity theft. This kind of fraud is often only detected after you try to file your tax return but can’t—because someone else has already done it for you and claimed your tax return! To limit your susceptibility to this, file your taxes early.

If you owe taxes, don’t put off paying your tax debt. It’s not going away, and the IRS will come after you—one way or another. Unpaid tax bills can even hurt your credit eventually. If you need help paying your taxes, you have options. Request an extension, apply for an installment agreement, or use an alternate payment method.

Learn More about Filing Your 2019 Taxes in 2020

If you have questions, need more guidance or just want some helpful resources for 2019 tax tips, turn to the experts. Read these informative blogs and articles to learn more about your taxes and how you can make tax filing work for you.

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Here’s What Homeowners Insurance Doesn’t Cover

Homeowners insurance may seem like an extra expense added to your mortgage each month, but you’re stuck with it since lenders make it a requirement. And with the average cost at $1,211, or about $100 a month, you may think everything in your home is covered. Unfortunately, this isn’t true. There is a range of scenarios homeowners insurance doesn’t cover. It’s best to familiarize yourself with these areas to find out how you can protect them in other ways. Otherwise, you could be saddled with surprise expenses that break your budget.

In this article

What home insurance doesn’t cover 

Let’s jump right in by uncovering which area is not protected by most homeowners insurance, along with a quick explanation of perils and whether or not your policy covers them.

  • Flood damage:  A standard homeowners insurance policy doesn’t cover any damage caused to your home’s structure or personal property by flooding. When picking your homeowners insurance policy, you may be able to add on up to $250,000 in coverage.
  • Pest infestations: Homeowners insurance doesn’t cover pest infestation like termite damage and supplemental coverage isn’t available. Instead, you must keep up with routine maintenance with annual pest control visits and other proper care.
  • Earthquake damage: An earthquake is another natural disaster not covered by your insurance policy. But if you live in an area prone to this type of phenomenon, you can add extra coverage.
  • Sewer backup: You should make sewer maintenance part of your routine home maintenance because you won’t get reimbursed for damage with a standard insurance policy. Sewer backups are increasing at 3% each year, so it’s smart to pay attention to your systems’ age and plan to rectify any outdated lines before they damage your home. Alternatively, consider adding a sewer backup policy to your existing insurance — just check to see how limited coverage may be.
  • Normal wear and tear or neglect: Your insurance company expects you to keep up with routine care of your home. Any type of negligence or wear and tear of appliances and systems aren’t covered. Keep up with care on areas like siding and crawlspaces to avoid rot and mold. If you have aging appliances, a home warranty could help offset repair and replacement costs.
  • Attacks by certain dog breeds: You’ll likely be asked about your dogs when applying for home insurance because certain breeds aren’t always covered. You can either compare quotes from multiple insurance companies to see if they ask you about your dog’s breed. Or you can add on extra liability coverage specifically for your pup.
  • High-value items: Personal property is covered when damaged by named perils. But different categories of property have their own limits of how much is covered. Look for the best homeowners insurance that either comes with higher limits or get supplemental coverage to insure your higher value items.
  • Certain types of high-risk property: Ask your insurance company if there are any limits on damage caused by certain high-risk items, like trampolines or pools. Because injuries are more likely, you may need additional liability insurance if someone is injured while on your property.

[ Read: The Complete Guide to Home Insurance ]

What home insurance covers

  • Covered perils allow you to get reimbursed up to your policy limit for both personal property and the structure of your home. There are several types of homeowners insurance, but most include the same covered perils.
  • Many natural disasters are covered, including damage to your home or belongings caused by fire, lightning, windstorms, hail, volcanic eruptions, smoke or the weight of snow or ice.
  • Other events caused by humans are covered, including rioting, vandalism, theft or damage caused by aircraft or vehicles.
  • There’s also some coverage for your home’s systems, such as damage caused by frozen pipes or accidental surges from your hot water heater or air conditioning.

Here’s what’s covered in your home when damage is caused by one of those covered perils.

  • Home’s structure: Also known as dwelling coverage, the structure of your home should be insured for the amount it would cost to completely rebuild it. You should take into account any upgrades you’ve made, total square footage and construction costs.
  • Personal belongings: You can choose how much coverage you want for your belongings, which is usually between 50% and 70% of the amount of your dwelling coverage. Add more if you have certain expensive items, like jewelry or electronics.
  • Liability protection: Liability covers you in case someone gets injured on your property and sues you. The minimum amount required in your policy is usually around $100,000 but the Insurance Information Institute recommends $300,000 to $500,000.
  • Additional living expenses: Additional living expenses cover the cost to stay elsewhere while your home is being repaired from a covered event. Consider having this part of your policy amount to about 20% of your dwelling coverage.

[ More: Homeowners Insurance Discounts Through Home Improvement ]

How to check your coverage 

It’s smart to understand your homeowners insurance policy, what’s covered and for how much. You should receive a copy of your policy when you first take it out and then receive annual updates on any changes to your coverage or premium amount. Ask your insurance company for another copy if you can’t find yours, or check to see if it’s available online.

With your policy in hand, the first part to look at is the declarations page. This includes details like the property address, policy number, types of coverage and the limits to each section of your policy. For example, the declarations page lists property coverage, including subcategories like dwelling, other structures, and personal property — then a limit on how much you may receive in a claim.

You’ll also see the amount of your deductible, which is your financial responsibility anytime you file a claim. The amount you pay for your annual premium will be listed, and so will any policy discounts you receive. Finally, any type of supplemental insurances (like flood or extra liability) will be listed as well.

Review each line carefully. If you discover the premium amount is higher than you anticipated, consider finding a cheaper home insurance company.

[ Next: What Common Home Repairs Cost ]

Types of home insurance

There are multiple types of homeowners insurance, each of which covers (and doesn’t cover) certain perils.

HO-1: Basic form for homeowners. This policy only covers 10 perils and is the most basic type of homeowners insurance. However, it’s not very common to find anymore because its coverage is so lacking.

HO-2: Broad form for homeowners. This is a budget-conscious policy that is more robust than the HO-1. It covers the structure, personal belongings and sometimes personal liability, but only for named perils.

HO-3: Special form for homeowners. This policy is different in that it has open-peril coverage. That means any event is covered except for those specifically listed as exclusions. Personal property is usually only covered by named perils. It’s the most common type of policy among homeowners.

HO-4: Tenant’s form for renters. Also known as renters insurance, this policy doesn’t cover the structure since that should be handled by the landlord. Instead, it covers your personal belongings and may also offer liability coverage.

HO-5: Comprehensive form for homeowners. This higher-end policy includes open-peril coverage of both your home’s structure and personal belongings. You may also get higher limits for your personal property. Expect it to be more expensive than other types of homeowners insurance.

HO-6: Condo form for condo or co-op owners. This covers the interior structure of your condo, personal property and personal liability. The interior structure of your home is covered, while the exterior is generally covered by the homeowners association. Personal property and liability are also included.

HO-7: Mobile home form for mobile home owners. This policy acts like HO-3 coverage but is specifically designed for manufactured homes.

HO-8: Older home form for homeowners. If your home is 40 years or older, you’ll need this specialized policy to account for a higher replacement cost for the property’s structure.

We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

Source: thesimpledollar.com

Step-by-Step Guide for How to Do Taxes Yourself

January 20, 2021 &• 6 min read by Josh Smith Comments 0 Comments

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Disclaimer

As of November 2020, the IRS had received more than 168 million tax returns for the 2019 tax year. More than 72 million—roughly 42%—were self-prepared tax returns. Discover how to do taxes yourself in the guide below so you can decide if self-preparation is the way to go for you.

10 Steps for Doing Taxes Yourself

1. Understand the Filing Deadlines
2. Ensure You Need to File
3. Review Your Documents from Last Year
4. Gather All the Documents You Need
5. Choose Standard or Itemized Deductions
6. Add a State Tax Filing if Needed
7. Check All Your Forms and Data
8. Request an Extension if Necessary
9. File Electronically
10. Check to Ensure the Returns Were Received

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1. Understand the Filing Deadlines

The federal tax filing deadline is typically on April 15. If that day falls on a mail holiday, it may be moved to the next business day. Tax returns must be e-filed or mailed by the federal tax deadline to avoid late-filing penalties.

In 2020, the federal government extended the filing and payment deadlines for 2019 taxes until July 2020. This was to provide some relief during the COVID-19 pandemic. As of now, the filing deadline for 2021 is Thursday, April 15. Whether or not such a change might be made in 2021 for the 2020 tax year is not yet known. So, keep an eye on IRS and tax news to understand when you need to file in 2021. 

State deadlines may be different from the federal deadline, so be sure to check the filing requirements in your state.

2. Ensure You Need to File

Not everyone is required to file taxes each year. For example, if your income is below a certain threshold, you don’t need to file a tax return. Dependent children and adults also may not need to file a tax return.

If you’re not sure whether or not you need to file, you can find out using the IRS’s online Interactive Tax Assistant. This wizard asks you some questions about income, filing status, and whether you had federal taxes withheld the previous year. It uses that information to help you understand whether you need to file.

3. Review Your Documents From Last Year

When doing taxes yourself, you might want to review the information from your previous year’s federal and state tax returns. Much of the information will be the same, including employer federal ID numbers, children’s Social Security numbers, and even some of your credit or deduction options. The IRS also uses your prior-year AGI to verify your identity when you e-file, which means you’ll want to make sure you have the information you submitted last year on hand.

Starting with an old return can help you enter information quickly and accurately. One great tip for doing your own taxes is to use a software program that can import old tax data. That way you don’t have to enter it again, which can reduce the potential for typos and other errors.

4. Gather All the Documents You Need

Gather the forms and documents you have that indicate income, expenses, and other tax-related figures. Some common forms you might have include the following:

  • W-2s, which report wages from employers.
  • 1099s, which report income from contract work, royalties and rents, unemployment, interest, dividends, retirement distribution and other sources.
  • 1099-Cs, which report forgiven debt, which the IRS considers income in many instances.
  • 1098s, which indicate payments that may be tax-deductible.

These aren’t the only forms you might need. You may also want copies of receipts and other documents proving you made tax deductible purchases or charitable donations if you’re going to take itemized deductions.

5. Choose Standard or Itemized Deductions

When you file your taxes, you can choose to claim the standard deduction ($12,400 for those filing individually this year) or itemize your deductions. Claiming the standard deduction is easier, and for many people it is more than the itemized deduction they would be able to claim.

If, however, you had large, out-of-pocket medical and dental expenses, paid mortgage interest on your home, had large uninsured losses, or made large contributions to qualified charities, it may be worthwhile to itemize your deductions and determine whether they amount to more than the standard deduction you qualify for.

Good tax software prompts you to enter all your information and does the calculations for you. The software tells you whether itemized or standard deductions will save you the most money, taking the guesswork out of this process.

6. Add a State Tax Filing if Needed

After you enter all your federal information or complete federal forms, don’t forget that you may need to file a state return too. Most states require a separate state tax return to be filed, and it can be easier to do this all at the same time. Some free tax filing services let you add a state return too.

State tax rates may be different from federal tax rates, and some states don’t have an income tax at all. They include Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. However, New Hampshire and Tennessee do tax some types of dividends and interest income, so individuals in those states may still need to file a return in some cases.

7. Check All Your Forms and Data

However you choose to prepare your taxes, take time to double check everything. Print the forms out or review the information on screen. Pay special attention to numbers, including income and expenses, as well as Social Security numbers and other ID numbers. Make sure you didn’t reverse numbers with a typo or make another error that could hold up your return.

8. Request an Extension if Necessary

Taxes are due April 15, but if you need more time to file your federal taxes, you can apply for an extension. If you file an extension request, the IRS gives you until October 15 of that year to file. That does not change the due date for taxes owed, though. You are still required to estimate the taxes you will owe and pay those by April 15. If you think you will be unable to pay your taxes in full, you can request an installment agreement from the IRS.

9. File Electronically

According to the IRS, around 90% of all individuals file their tax returns electronically. Reasons for filing electronically include a faster time to refund, convenience, and security. You may also be able to ensure the IRS received your return within minutes or just one day, which can provide some peace of mind.

10. Check to Ensure the Returns Were Received

After you’re done filing your taxes yourself, check back to ensure your return was received. You may get an email confirming the return was accepted. Alternatively, if you used a tax preparation software, you might be able to log in to the software to check the status of your return.

Tax Filing Made Easy

Filing your taxes yourself doesn’t have to be difficult. If you follow these steps and file via a user-friendly tax software, you can be done in a couple of hours.


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Zippyloan Personal Loan Review

If you’ve struggled to find the right personal loan, Zippyloan might be able to help. Zippyloan provides an online marketplace where borrowers can find a loan based on their financial situation. Be aware that some Zippyloan offers come in the form of personal loans, with short terms and high interest rates. That being said, this lender marketplace might be an option for someone who has struggled to find a loan elsewhere. When we compare personal loan companies, we use our in-house, evidence-based SimpleScore methodology to consider factors such as interest rates, loan size, customer satisfaction, support, and fees.

Best for small loan amounts – Zippyloan

Zippyloan is like a matchmaker, connecting you with the right lender for your needs.

APR Range

Varies

Loan Amount

$100–$15,000

Term

Up to 5 years

SimpleScore

N/A / 5.0

SimpleScore Zippyloan N/A

Loan Size N/A

Customer Satisfaction N/A

Support N/A

  • Loans as low as $100
  • Personal loans for poor credit
  • Loans aren’t through Zippyloan
  • High interest rates
  • Poor customer satisfaction
unsecured personal loan to help them consolidate debt, cover an unexpected emergency or cover any other type of financial burden. Zippyloan believes that everyone should have access to loans, even when their credit isn’t exactly stellar. The company helps borrowers with bad credit to find lenders willing to work with them.

[ Read: Pros and Cons of Taking Out a Personal Loan ]

Things to consider

Loans aren’t through Zippyloan

Zippyloan isn’t a personal loan lender. Instead, the company is an online marketplace that matches prospective borrowers with personal loan lenders. On one hand, this could mean you have more options available to you. But it also means that Zippyloan doesn’t provide customer service on the loans you borrow, and it doesn’t answer for poor service or bad loan terms from lenders.

High interest rates

When you get a personal loan through Zippyloan, the company isn’t the one actually lending you the money. Instead, they help to match you with other lenders. As a result, Zippyloan can’t control the exact interest rate you’ll be offered. That being said, some Zippyloan personal loans partners can often be considered payday lenders and may come with particularly high interest rates.

Poor customer satisfaction

There isn’t much information available online when it comes to Zippyloan’s customer satisfaction. Unfortunately, the company has an F rating from the Better Business Bureau, with an average customer rating of 1 out of 5 stars. As a result, you might be best served by looking into alternative options before applying for a loan with Zippyloan.

[ Next: How Personal Loans Work ]

Zippyloan personal loans vs. the competition

Best for flexible lending – PersonalLoans.com

PersonalLoans.com is an online marketplace connecting borrowers and lenders.

APR Range

5.99%–35.99%

Loan Amount

$500–$35K

Term

90 days–72 months

SimpleScore

3.8 / 5.0

SimpleScore PersonalLoans.com 3.8

Loan Size 5

Customer Satisfaction N/A

Borrowers can get a personal loan through the PersonalLoans.com marketplace for anywhere from $500 to $35,000. PersonalLoans.com offers short-term loans for just 90 days, though it also offers terms of up to 72 months. PersonalLoans.com doesn’t directly decide the interest rate you can get, but it generally connects borrowers to lenders with rates ranging from 5.99% to 35.99%. PersonalLoans.com doesn’t directly charge any fees, but borrowers might pay fees to the specific lender they end up with.

Best for bad credit – BadCreditLoans.com

Bad credit? You’re not out of luck — BadCreditLoans facilitates personal loans specifically designed for those with bad credit.

APR Range

5.99%–35.99%

Loan Amount

$500–$5K

Term

3–36 months

SimpleScore

3 / 5.0

SimpleScore BadCreditLoans.com 3

Loan Size 1

Customer Satisfaction N/A

If you’ve struggled to get a personal loan because of a bad credit score, BadCreditLoans may be able to help. The company is an online marketplace that helps to connect lenders with borrowers with poor credit. Specific loan terms will depend on the lender that BadCreditLoan matches you with. But depending on your credit, you may get a loan for rates as low as 5.99% lasting from anywhere from 90 days to six years. It’s worth noting that while you can get a larger loan through BadCreditLoans, it often limits loans for borrowers with bad credit to $1,500 or less.

Best peer-to-peer marketplace – Peerform

Peerform is a peer-to-peer lending platform offering personal loans from individual investors.

APR Range

5.99%–29.99%

Loan Amount

$4K–$25K

Term

Up to 3 years

SimpleScore

2.8 / 5.0

SimpleScore Peerform 2.8

Loan Size 3

Customer Satisfaction N/A

Like Zippyloan, Peerform helps to connect borrowers and lenders. But with Peerform, individuals and institutions can join the marketplace as a lender, using the loans as an investment opportunity. Peerform offers fixed loan rates ranging from 5.99% to 29.99%. Peerform terms go as high as five years, though the company notes that those opting for a five-year loan term can expect to pay a higher interest rate. One big downside of Peerform is that loans come with origination fees, which you can avoid through many other lenders.

How much does a Zippyloan personal loan cost?

It’s impossible to know ahead of time how much your Zippyloan personal loan will cost. Because Zippyloan is a third-party marketplace and not a lender, it can’t publish rates and fees on its website. That being said, here are a few costs you may expect to incur:

  • Interest: Regardless of your lender, you’ll pay interest on your personal loan. The lender you borrow from and your credit score will largely determine your interest rate.
  • Origination fee: Many lenders charge origination fees on loans, ranging anywhere from 1% to as high as 8%.
  • Late payment fee: Most financial institutions charge a fee when you make a late payment on a loan. Some online lenders no longer charge these fees.
  • Prepayment penalty: While they aren’t super common, some lenders charge a fee to borrowers who pay off their loans early.

[ Read: Secured Personal Loans vs. Unsecured Personal Loans ]

Check Your Personal Loan Rates

Answer a few questions to see which personal loans you pre-qualify for. It’s quick and easy, and it will not impact your credit score.

Cheaper alternatives to Zippyloan personal loans

Zippyloan connects borrowers to many different lenders, so it’s impossible to know exactly how much your loan will cost. That being said, Zippyloan personal loans are often payday loans, meaning they’re short-term loans with extremely high interest rates. As a result, they may not be the best choice for many borrowers.

Depending on your credit score, there may be far better deals available to you. Lenders such as SoFi and LightStream offer personal loans at low interest rates and with no origination fees.

Source: thesimpledollar.com