Beating The Rica

Archive for January 1st, 2012

If you took out multiple private student loans while in college, you are probably now swimming in a sea of paperwork each month. Having more than one student loan often means having to make payments to different lenders at different times of each month.

Another common challenge is that some your private loans may have variable interest rates, while others have fixed rates. And, it is highly likely that your loans are at different interest rates altogether.

Besides the complexity of having multiple private student loans to deal with, most grads also have trouble making the payments. Having to be responsible for multiple student loan payments is not something that many college students give much thought to during school. But, once graduation is over, reality sets in. And, the payments can easily run into the hundreds of dollars or more each month.

When Private Student Loan Consolidation Makes Sense

For graduates who have taken out multiple student loans and are now having trouble making their loan payments each month, private student loan consolidation can help.

Simply put, consolidation is the act of paying off all of one’s outstanding loans in full with the money received with from new, consolidation loan.

How Can Consolidation Help?

Consolidation loans can be helpful in many ways. First, they simply your life by making you responsible for just a single payment each month.

Next, they can actually lower your payments in one or both of two ways:

a. by lowering your rate

b. by stretching out your payments over more time, say from 10 years to 20 or 30 years

Finally, consolidation loans can be negotiated at a fixed rate, which means you can lock in your new low rate over the life of the loan.

How To Consolidate Private Student Loans With A Fixed Interest Rate

If you are wondering how to get the best deal on a fixed interest rate private consolidation loan, here are some tips that can help:

1.Calculate your current interest rate: In order to determine whether any would-be offer you get is worth going for, you are going to want to start by figuring out the weighted average of your existing loans’ rates. For example, if you currently have three loans at 5%, 3% and 2.5% interest rates, you would calculated the weighted average interest rate as follows.

First, figure out what percentage of your total outstanding balance is represented by each loan. Let’s say that the answer is 20%, 30% and 50%, respectively. Just multiply these percentages by the interest rate for each loan and add them together, as follows:

(20% x 5%) + (30% x 3%) + (50% + 2.5%) = weighted average interest rate

2. Figure out your ideal repayment period: Use an online loan calculator and plug in your current outstanding balance (total across all loans) and your desired new interest rate. Then, plug in different repayment periods like 20 years, 25 years and 30 years. See how each one affects both the monthly payment amounts and the cost of your loan.

3. Build a list of at least 5 private consolidation lenders: Now, it’s time to do your research. Make a list of at least 5 lenders. Don’t skip this step – remember, more offers is always better than fewer!

4. Contact and apply with all 5 lenders: Now, take the time to contact and actually apply for a consolidation loan with each lender. hint: be sure to apply for the same repayment period so that you can compare the offers equally.

5. Compare offers: Compare each offer you get separately, and be sure to read the fine print. The most important piece of information to look at is the interest rate of each offer.

Follow these tips to get the best-possible deal on a fixed interest rate loan.

In today’s business environment it is very difficult to survive if you do not take credit cards for payment. It doesn’t matter if you are selling a product or service. Credit cards are ubiquitous and used by most everyone. Even those who shun credit cards will use the credit card processing system for their bank debit cards. There is really no escaping the reality: you need to accept credit cards in your business or your competition will eat your lunch. So how do you get started? This article will address the basics of opening a merchant account, the bevy of merchants offering processing services and the associated costs.

BASICS
A credit card processor provides the service of accepting cards either through a swipe machine, over the phone or through a Virtual Terminal. Card processors charge a fee, known as an Interchange Fee, or Discount Rate. This fee ranges from 1 to 4 percent, depending on charging volume and if you have the physical card present or are taking the card information over the phone or through the computer. There are three ways you can take credit cards:
#1 Swipe Machine or
#2 Calling it into the Processor or
#3 Utilizing Proprietary Software of the Processor, known as a Virtual Terminal

Very often, retail businesses with high charge volume will use all three methods. Think of the virtual terminal as a web site you access that allows you to enter the card number and complete the transaction. Virtual Terminals are beginning to replace swipe machines.

GETTING STARTED
The best place to start is to reach out to your banker. Most commercial banks have a relationship with credit card processors. Your bank’s processor business partner will set you up with a Merchant ID from Visa and MasterCard. If you want to accept American Express you will need to reach out to Amex directly (800-528-4800) in order to obtain a merchant ID prior to reaching out to your bank. Alternatively, you can reach out to American Express instead of your banker and have American Express act as your primary processor. American Express will process most of the major credit cards, in addition to its own.

MERCHANTS
The following is a short list of the main credit card processors:
#1 Your Bank’s processor business partner
#2 American Express
#3 PayPal
#4 Google Checkout
#5 Intuit

COSTS
For business accounts, PayPal charges a monthly fee of $30 as well as a transaction fee that ranges from 2.4 to 3.1 percent. Google Checkout has no monthly fee and transaction fees range from 1.9 to 2.9 percent. one advantage Google Checkout has over other processors is its checkout guarantee. This guarantee protects 98 percent of your sales orders, on average, meaning you will get paid even if the transaction results in a chargeback. Intuit charges $13 per month plus a transaction fee of 1.9 to 2.9 percent. When American Express processes your credit sales it will credit your bank account with a net sales amount. This net sales amount is your gross sales reduced by their transaction fee. For most other processors your bank account will be credited with the gross sales amount and a separate charge will be automatically deducted from your bank account.