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How To Sell A Car With An Existing Loan – Forbes Advisor

How To Sell A Car With An Existing Loan

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You financed a new car a few years ago with a five-year loan. But your needs have changed, and you’ve decided to sell your vehicle—even though you still have time left on repaying the loan.

Selling a car with an existing loan is common practice; and with an ecosystem of professionals in the industry to call upon, you can get the help you need to smoothly navigate the process.

Can You Sell a Car with an Existing Loan?

Yes, there are a few ways to sell a car with an existing loan. Keep in mind that if the sales price is less than your loan balance, you will have to pay the remaining balance on the loan. With help from lending institutions and dealerships, along with the state’s department of motor vehicles (DMV), your options include some of the following:

  • Pay off the remaining loan
  • Sell ​​your vehicle to a used-car dealer
  • Sell ​​the vehicle in a private-party transaction
  • Trade the vehicle in at a new-car dealership

4 Tips for Selling a Car with an Existing Loan

It might seem daunting, but a little prep work can simplify the process of selling your car with a loan. Here are a few tips that could help:

1. Collect Information on Your Loan

First reach out to your lender, and find out the payoff amount on your loan. This might be slightly higher than the current balance printed on your monthly statement because of interest, prepayment penalties or other fees.

As long as you owe money on the car loan, the lender has possession of the title and effectively owns the vehicle, which is used as collateral in the event of default. You must satisfy the payoff amount before the lender will transfer the title to you.

Your lender can also help you understand what steps you’ll need to take to pay off your loan and sell your car, no matter how you choose to do so.

2. Know What Your Car is Worth

Next, you’ll need to research the current value of your vehicle. With the general supply-chain issues due to the Covid-19 pandemic, the industry is experiencing a scarcity of new cars—which means the market is hot for both new and used vehicles.

You can easily find out the present value of your car by visiting a vehicle valuation site like Edmunds, Kelley Blue Book or Cars.com. You’ll need to know the year, make, model, your zip code and overall condition of the vehicle. Vehicles less than three years old hold greater value, but even vehicles up to five years old are in demand.

3. Consider Your Car’s Equity

Equity is the difference between what you owe on your loan and what your car is worth. If your car’s value is more than your loan payoff amount, your car has positive equity. If you owe more than what your car is worth, your car has negative equity—this is also known as being “upside down” on a loan.

For example, if your vehicle is worth $20,000 and the payoff on your car loan is $25,000, then you’re upside down on your loan because you still owe $5,000

4. Prepare for the Transaction

Whether you have negative or positive equity, the transaction to sell your car typically involves you, the buyer and the loan officer, who will perform the transaction and sign over the car’s title to the buyer. Before this meeting, be sure to ask your lender exactly what you and the seller will need to provide—such as paperwork and money for the sale—to make the transaction as smooth as possible.

The buyer will then take the signed title and other relevant paperwork to their local DMV to get a new registration and title for the vehicle.

How a Private Sale Impacts Your Loan

Before the pandemic, a private sale usually fetched the best price for a used vehicle. But going this route also means you and the buyer will need to do the administrative heavy-lifting on your own. That’s why it’s so important to get the current payoff amount and the documentation the lender requires as well as to ask how the lender wants to handle the transaction.

Remember that the lender must receive the payoff amount in full before the loan officer can sign over the title to the buyer. If you have positive equity in the vehicle, the lender will write you a check for the difference. If you have negative equity, then you’ll have to give the lender the difference out of pocket before the representative will sign over the title to your buyer.

Trading in a Car with an Existing Loan

A dealer trade-in is a relatively easy transaction compared to a private-party sale. If your trade-in vehicle is worth more than the loan payoff amount, the difference will be credited toward the price of the new vehicle. If your payoff amount is more than the trade-in vehicle’s value, the dealer will add the difference into your new vehicle loan.

Alternatives To Selling Your Car

If you’re not sure whether selling your car is the right choice for you, there are some other options to consider.

Talk With Your Lender

Your lender holds the title to your vehicle, so they should be your first point of contact. They want to see the outcome of this transaction come out smoothly for you as their customer, as well as for themselves as the lienholder on the vehicle. Your lender can help you get your payoff amount, navigate the steps to sell to a private party or see the interest rate you qualify for if you decide to trade for a new or used vehicle.

Refinance Your Loan

By talking with your lender first, you might decide that your best course of action is to keep your current vehicle and refinance your loan instead of selling the car. Depending on your credit, refinancing might get you a lower interest rate—which could save you money on your monthly payments and potentially help you pay off your loan faster.

Or you might opt ​​to extend your repayment term to get a smaller monthly payment. Just keep in mind that if you choose a longer term, you’ll pay more in interest over the life of the loan.

Tap into Your Savings

If you have a sizable savings account and want to avoid taking on more debt, you might consider paying off your car loan with your extra cash. However, make sure you have enough emergency savings after paying off your car loan to cover any unexpected expenses.

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Elon Musk is looking to finance Twitter acquisition without loans backed by Tesla shares as price falls

Elon Musk is looking to finance Twitter acquisition without loans backed by Tesla shares as price falls

Elon Musk is reportedly looking to secure more equity for the acquisition of Twitter in order to proceed without billions of dollars worth of loans back by Tesla shares. It comes as Tesla’s share price has fallen to significantly.

Last month, Twitter’s board officially accepted Elon Musk’s acquisition offer. It still needs to go to a shareholder’s vote and some details are still being figured out but in the meantime, Musk has proven that he has the funding ready for the transaction.

However, it looks like it might be changing things up a bit.

Ahead of the offer being accepted, Musk showed that he managed to secure $25.5 billion of fully committed debt and margin loan financing, most of which is backed by his stake in Tesla, and he is going to provide an additional $21.0 billion in equity himself, with money from previous sales of Tesla shares.

Over the last few weeks, he revealed several partners proving over $8 billion in equity, including Tesla board member and Oracle founder Larry Ellison providing $1 billion. With the new funding, Musk reduced the number of loans backed by his Tesla shares to $6.25 billion.

Now, Musk is apparently looking to raise enough capital through other investors to avoid Tesla-backed loans completely (Bloomberg):

Elon Musk is in talks to raise enough equity and preferred financing for his proposed buyout of Twitter Inc. to eliminate the need for any margin loan linked to his Tesla Inc. shares, according to people with knowledge of the matter.

The billionaire’s advisers, led by Morgan Stanley, have begun soliciting interest from potential investors for as much as $6 billion in preferred equity financing, the people said, asking not to be named discussing a private transaction.

The moves come after Tesla’s stock crashed to levels not seen since last summer:

Tesla’s stock is going down amidst a broader market correction, and it is bad timing for Musk’s acquisition of Twitter.

FTC: We use income earning auto affiliate links. More.

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Personal loan rates tick up: 3-year loans still lower than same time last year

Personal loan rates tick up: 3-year loans still lower than same time last year

Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders who compensate us for our services, all opinions are our own.

The latest trends in interest rates for personal loans from the Credible marketplace, updated weekly. (iStock)

Borrowers with good credit seeking personal loans during the past seven days prequalified for rates that were higher for both 3-year and 5-year fixed rates compared to the previous seven days.

For borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender between May 5 and May 11:

  • Rates on 3-year fixed-rate loans averaged 11.11%, up from 10.82% the seven days before and down from 11.98% a year ago.
  • Rates on 5-year fixed-rate loans averaged 13.13%, up from 12.83% the previous seven days and 12.88% a year ago.

Personal loans have become a popular way to consolidate and pay off credit card debt and other loans. They can also be used to cover unexpected expenses like medical billstake care of a major purchase or fund home improvement projects.

Rates for 3-year and 5-year fixed personal loans rose over the past seven days. Rates for 3-year terms went up by 0.29%, while rates for 5-year terms saw a slightly larger increase of 0.30%. Despite these increases, rates for 3-year loans are lower than this time last year. Borrowers can take advantage of interest savings with a 3-year personal loan right now.

Whether a personal loan is right for you often depends on multiple factors, including what rate you can qualify for. Comparing multiple lenders and their rates could help ensure you get the best possible personal loan for your needs.

It’s always a good idea to comparison shop on sites like Credible to understand how much you qualify for and choose the best option for you.

Here are the latest trends in personal loan interest rates from the Credible marketplace, updated monthly.

Personal loan weekly rates trends

The chart above shows average prequalified rates for borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender.

For the month of April 2022:

  • Rates on 3-year personal loans averaged 10.69%, up from 10.36% in March.
  • Rates on 5-year personal loans averaged 13.36%, up from 12.73% in March.

Rates on personal loans vary considerably by credit score and loan term. If you’re curious about what kind of personal loan rates you may qualify for, you can use an online tool like Credible to compare options from different private lenders. Checking your rates won’t affect your credit score.

All Credible marketplace lenders offer fixed-rate loans at competitive rates. Because lenders use different methods to evaluate borrowers, it’s a good idea to request personal loan rates from multiple lenders so you can compare your options.

Current personal loan rates by credit score

In April, the average prequalified rate selected by borrowers was:

  • 8.42% for borrowers with credit scores of 780 or above choosing a 3-year loan
  • 29.46% for borrowers with credit scores below 600 choosing a 5-year loan

Depending on factors such as your credit score, which type of personal loan you’re seeking and the loan repayment term, the interest rate can differ.

As shown in the chart above, a good credit score can mean a lower interest rate, and rates tend to be higher on loans with fixed interest rates and longer repayment terms.

How to get a lower interest rate

Many factors influence the interest rate a lender might offer you on a personal loan. But you can take some steps to boost your chances of getting a lower interest rate. Here are some tactics to try.

Increase credit score

Generally, people with higher credit scores qualify for lower interest rates. Steps that can help you improve your credit score over time include:

  • Pay bills on time. Payment history is the most important factor in your credit score. Pay all your bills on time for the amount due.
  • Check your credit report. Look at your credit report to ensure there are no errors on it. If you find errors, dispute them with the credit bureau.
  • Lower your credit utilization ratio. Paying down credit card debt can improve this important credit scoring factor.
  • Avoid opening new credit accounts. Only apply for and open credit accounts you actually need. Too many hard inquiries on your credit report in a short amount of time could lower your credit score.

Choose a loan shorter term

Personal loan repayment terms can vary from one to several years. Generally, terms shorter come with lower interest rates, since the lender’s money is at risk for a shorter period of time.

If your financial situation allows, applying for a shorter term could help you score a lower interest rate. Keep in mind the shorter term doesn’t just benefit the lender — by choosing a shorter repayment term, you’ll pay less interest over the life of the loan.

Get a co-sign

You may be familiar with the concept of a co-signer if you have student loans. If your credit isn’t good enough to qualify for the best personal loan interest rates, finding a co-signer with good credit could help you secure a lower interest rate.

Just remember, if you default on the loan, your co-signer will be on the hook to repay it. And co-signing for a loan could also affect their credit score.

Compare rates from different lenders

Before applying for a personal loan, it’s a good idea to shop around and compare offers from several different lenders to get the lowest rates. Online lenders typically offer the most competitive rates – and can be quicker to disburse your loan than a brick-and-mortar establishment.

But don’t worry, comparing rates and terms doesn’t have to be a time-consuming process.

Credible makes it easy. Just enter how much you want to borrow and you’ll be able to compare multiple lenders to choose the one that makes the most sense for you.

About Credible

Credible is a multi-lender marketplace that empowers consumers to discover financial products that are the best fit for their unique circumstances. Credible’s integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options ― without putting their personal information at risk or affecting their credit score. The Credible marketplace provides an unrivaled customer experience, as reflected by over 4,500 positive Trustpilot reviews and a TrustScore of 4.7/5.

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Business Owners Waited Years for Covid Loans—and Now It’s Too Late

Business Owners Waited Years for Covid Loans—and Now It's Too Late

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Jaja Chen and her husband Devin Li were elated when they signed a lease for their new bubble tea shop, Cha Community. Both Asian-American immigrants (her from Taiwan, him from China), they said it was a struggle to find authentic Asian food in their new home of Waco, Texas. So they eventually decided to host a pop-up at a farmer’s market. Later, they moved on to a food truck. Finally, they opened an actual brick-and-mortar storefront where they could serve customers tea and dumplings.

Chen signed the lease and got on a plane the next day to visit family in Taiwan. While there, she began to hear “inklings of Covid.” A few months later, with the couple back in Waco readying their grand opening, pandemic shutdowns hit. Cha Community remained shut for another two months. All told, they lost about $20,000 right off the bat.

At the time, Chen decided to apply for emergency aid under a bevy of new programs being offered by the US Small Business Administration. The couple applied for both a 3.75% fixed-interest loan under the Economic Injury Disaster Loan program as well as a $10,000 advance grant, getting their application in a day before it opened to the public on March 20, 2020.

After two weeks passed, they checked in with the SBA and were told the advance grant was coming, Chen said. She said they had also been approved for a $20,000 loan, but turned it down since the grant was supposedly on its way. But more than two years later, the grant still hasn’t arrived. “To this day, we have no idea what happened,” Chen said.

Chen is one of hundreds of small business owners who say they’ve been waiting for the better part of two years for help from the SBA. In a new survey released Thursday by the Small Business Majority, a national network of small businesses and community organizations, about one-third of 201 small business owners polled who applied for an EID loan said they never got an answer, or any money, from the SBA.

And now the SBA says funding for the program is likely to run out in the next few days.

As part of the federal government’s initial response to Covid-19 and the sudden stop experienced by the US economy during the first lockdown, the SBA was tasked with rolling out relief for businesses of many sizes. The EIDL program actually predated the pandemic, albeit on a much smaller scale (it disbursed $3.6 billion in disaster loans in 2018 compared to more than $369 billion over the past few years).

The agency quickly ran into problems, said Brian Pifer, vice president of programs and research at the Small Business Majority. The pandemic required “a huge ramp up for the agency on a national scale,” he said. The agency had “a capacity and staffing issue” so small businesses “just kind of fell through the cracks.”

In a statement, the SBA didn’t address complaints by small business owners who say they never received a determination on loan or grant applications. The agency said it increased capacity for processing pandemic-related EIDL loans and accelerated the rate at which application decisions were made. The agency also said that a backlog of more than 600,000 loan increase applications has been cleared.

During the pandemic, the SBA has also raised the cap on EID loans, allowing businesses to apply for an increase of up to $500,000. But of the respondents to the Small Business Majority survey, almost one-third of those who applied for an increase said they haven’t heard anything yet. And of that group, almost one-third said they’ve been waiting more than a year.

“Although Congressional appropriations for the Covid EIDL program will soon be exhausted, SBA will continue to help our small business owners navigate this challenging transition by utilizing our existing resources,” the agency said. The agency said would-be borrowers in the process of completing applications have until May 16 to complete any documentation or signature requirements on the portal, while existing borrowers have until then to download their files.

“There’s definitely livelihoods hanging in the balance.”

What the end of the program means for those applicants who say they’ve been waiting for months and years remains unclear. But Pifer contends “there’s definitely livelihoods hanging in the balance.”

Chen did eventually get a $6,700 loan under the Paycheck Protection Program, but it wasn’t enough to avoid a financial crisis. She and her husband were forced to open a line of credit with a local bank and maxed out their business credit cards. They also had to lay off a full-time employee, which in turn slowed their business growth and put a strain on remaining workers.

“None of that would have happened” if we received the grant, Chen said. “If we had all the different federal aid we could have qualified for and gotten it in a timely fashion, we would not be in debt right now.”

Some applicants who had waited for months or years did eventually get a decision.

Tabota Seyon owns InfusedLife, a vegan café and boutique in Minneapolis that included spaces for women of color to sell their products. She opened the doors in January 2020. By summer, when she reopened following lockdown, Seyon struggled to attract customers. The city was roiled by protests over the murder of George Floyd by Minneapolis police. Afterwards, she kept running into obstacles thanks to the pandemic: Every time she or a family member contracted Covid-19, she was forced to shut down again.

By the end of 2020, Seyon said she lost thousands of dollars, and even became homeless for a time. She applied for an EID loan late that year, but didn’t get a decision until March 2022—and it was a rejection due to her credit score. In the interim, she had missed a lease payment and the landlord moved to evict her.

Other business owners were rejected more quickly, but contend they were wrongly denied and have never heard back on their appeals. KB Brown, who owns a Minneapolis printing company, Wolfpack Promotionals, said he received a $49,000 EID loan in 2020, but that it wasn’t enough. Even with the money, his business fell off more than 90% and he was forced to furlough all of his employees. Brown’s application for a PPP loan was rejected, too, so he applied for an EID loan increase after the SBA raised the cap. He hoped to receive at least $100,000, he said, so he could stay afloat.

In response, the SBA said that parts of his application made it “question the validity of certain information,” according to a copy of the letter. Brown said he sent in additional proof of his business, including a letter of good standing from the state, but the rejected the increase.

“We needed the help,” said Brown, who appealed the decision in early February and said he has yet to hear back. Now, Brown said he’s down to two employees, and that one of his two embroidery machines is broken. He recently went to a bank to apply for an equipment loan so he could buy a new one—the extra EIDL money would have covered that as well as allow him to hire another employee, he said.

In total, the lack of additional funding has cost him about $70,000 in potential business, in part because his remaining workers are stretched too thin, Brown said. He’s started a commercial cleaning business on the side to bring in extra money.

There is no clear plan to add more funds to the EIDL program, but members of Congress have urged the SBA to shift existing funds to partially continue it. Senators Chris Van Hollen and Ben Cardin, both Maryland Democrats, said they wrote SBA chief Isabella Casillas Guzman asking her to free up money for pending applications and appeals.

“The senators urged the SBA to use its transfer authority to accommodate borrowers who want to submit for a modification, rehearing, or appeal,” according to a May 6 statement. “By prematurely shutting down the program, the agency appears to have prioritized its own administrative needs over those of the thousands of borrowers that await decisions on their applications. Furthermore, it has done so in a way that has needlessly confused borrowers and raised expectations.”

Pifer of the Small Business Majority had said he “would like to see those dollars remain allocated to those programs to ensure that those folks who were left behind, still waiting—that those dollars do get to them.”

For now, business owners like Seyon, Brown and Chen have been forced to muddle through somehow. Chen said loyal customers and supportive local organizations are the only thing keeping Cha Community alive. “I have realized that the city of Waco, the locals and the nonprofits here, have helped us more in aid than the federal government—which is sort of unfortunate.”

(Updates with additional comment from the two Maryland US senators in the 24th paragraph. An earlier version corrected the amount of Chen’s PPP loan and the type of credit card used for her business.)

More stories like this are available on bloomberg.com

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Former Clarke County sheriff accused of lying about loans

Former Clarke County sheriff accused of lying about loans

MOBILE, Ala. (WALA) – Former Clarke County Sheriff Ray Norris, who resigned last year amid allegations of wrongdoing, is now facing federal charges.

A state court judge in March dismissed charges against Norris after determining that the Alabama Attorney General’s Office had agreed not to prosecute him if he resigned from office. But that same day, a federal grand jury in Mobile handed up an indictment. That indictment, which a federal judge recently made public, accuses Norris of applying for loans under false pretenses.

Four of those loans from 2017 and 2018, totaling $48,400, purportedly were for jail food and the Clarke County Sheriff’s Office. But prosecutors alleviate the sheriff actually used the money to pay off overdrawn personal accounts, gambling expenses and other personal expenses – including loan payments for a boat.

The indictment also alleviates that Norris got a loan for $68,887 to purchase a Boush Cutter. Instead, prosecutors maintain, he used the money to pay a past due account.

Norris is due in federal court on Wednesday for an arraignment. Mobile lawyer Gordon Armstrong said he anticipates representing Norris, but he added that he has not reviewed the charges closely enough to comment.

The indictment also includes three criminal counts against Gulf Shores resident Danny Lee Beard Sr., a longtime friend of Norris.

The indictment charges both Beard and Norris with falsely stating that a $75,000 loan they applied for in 2019 was to purchase rental equipment. But $25,000 went to make payments on existing loans the same bank had made to Norris and his wife.

The indictment charges Beard, separately, with making a false statement in order to induce Sweet Water State Bank to loan him $51,606 in 2020. He signed a statement certifying that he owned construction equipment he put up as collateral, a 2011 JD 437D Loader and a 2000 Freightliner, and that he did not intend to sell them. In fact, the indictment alleges, he did not own the Loader and intended to sell the Freightliner to a company called Conserv Equipment Leasing.

The final count accuses Beard of fraudulently obtaining a $74,207 loan under the Paycheck Protection Program on behalf of HADDCO LLC, a company he organized in 2011. At the time of the application in 2021, the company had not reported wages since the third quarter of 2019 .

Beard pleaded not guilty to the charges on Wednesday. His attorney, Dennis Knizley, called his client’s banking relationship “hometown banking.” Although he represented that he owned a piece of equipment that he did not, Knizley said, “The security was never at risk.”

As to why his client co-signed a loan with Norris, Knizley said the two were longtime friends. He said it was part of the “good ole boy network” of Clarke County.

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Cape independent bookstores; loans for seniors, free bike

A warm, inviting quiche can be made crustless as in the recipe below.  (Dreamstime/TNS)

Write your problem, sign your name, give your address, telephone number, and send to: Write to Know, Cape Cod Times, 319 Main St., Hyannis, MA 02601, or email [email protected] Please note: We accept listings for giveaway items only, no items for sale. No telephone inquiries are accepted.

Cape Cod has 23 independent bookstores

Dear Write to Know: I recently moved to the Lower Cape and would love to find out where the best bookstores are in my area. Also, how many indie bookstores are on Cape Cod? Thank you.

CM, Orleans

Dear CM: We suggest you start with Sea Howl Bookshop, 46 Main St., Orleans, for new and used books. The hours are Tuesday through Saturday, 10 am to 5 pm and Sunday, 11 am to 4 pm You can check them out at www.seahowlbookshop.com. Another great bookstore is The Brewster Book Store, 2648 Main St., which specializes in books, games, puzzles, unique gifts, etc. In the off-season, hours are Monday through Saturday, 10 am to 5 pm and Sunday, 10 am to 5 pm During July and August, the store’ hours are Monday through Saturday, 9 am to 6 pm and Sunday, 10 am to 5 p.m. Visit their website at www.brewsterbookstore.com. According to a recent Cape Cod Times article, there are23 independent bookstores on Cape Cod. Happy bookhunting!

Seniors seeking low-interest home loans

Dear Write to Know: My wife and I are looking to renovate our house and would like to know if there are low-interest loans for seniors. Thanks for your help.

GJ, Mashpee

Dear GJ: Mass Housing offers loans for homeowners to refinance your mortgage, apply for a septic system repair loan or a home improvement loan. The interest rate on all HILP (Home Improvement Loan Program) loans is 5% with loan amounts ranging from $7,500 to $50,000 with loan terms of 15 years. Borrowers must meet income eligibility limits. The house must have been your primary residence for at least one year and potential borrowers must have good credit and stable income. For more information, visit www.masshousing.com or call 1-888-843-6432. You might also want to contact your local senior center for help. The Mashpee Senior Center can be reached at 508-539-1440.

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How To Refinance Sallie Mae Student Loans – Forbes Advisor

How To Refinance Sallie Mae Student Loans

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors’ opinions or evaluations.

If you took out Sallie Mae student loans to pay for college, you might want to refinance to get better terms than what you have right now. Refinancing can help you save money by lowering your interest rate, monthly payments or both.

What Is Sallie Mae?

Sallie Mae is a consumer banking company that offers savings accounts, credit cards and private student loans. If you’ve exhausted all your federal aid options, including scholarships, grants and federal student loans, you can take out private student loans with a lender like Sallie Mae to fill in any funding gaps.

Sallie Mae no longer offers refinancing on student loans, but you can refinance Sallie Mae loans with other lenders.

Should I Refinance My Sallie Mae Loans?

Refinancing can be a smart option for a lot of student loan borrowers—but it doesn’t mean it’s the right choice for everyone. You should consider refinancing your Sallie Mae loans if you:

  • Can get a lower interest rate. With excellent credit, you might qualify for the lowest interest rate available with some lenders. But if it doesn’t lower your current interest rate, you might want to wait. Otherwise, you could refinance at a higher rate, which makes your loan more expensive.
  • Want to combine all your loans into one. You might have a few loans with different lenders, which makes it hard to stay on top of your debt. Refinancing will pay off all of your existing loans and combine your debt into just one loan—with one payment to make. This makes it easier to make payments and track your payoff progress.
  • Aren’t eligible for forgiveness. If you have federal student loans that are on track for forgiveness through Public Service Loan Forgiveness (PSLF) or you’re on an income-driven repayment (IDR) plan, you will lose those benefits if you refinance. Refinancing will make all your loans private, and forgiveness is only available with federal loans.
  • Are comfortable losing federal protections and benefits. Along with losing the opportunity to qualify for forgiveness, you’ll miss out on flexible forbearance as well. In 2020, the government paused federal student loan payments and set interest rates to 0%. Payments still haven’t started back up, more than two years later. But if you refinance now, your new private student loan won’t be considered for the Covid-related forbearance.
  • Can lower your monthly payment. If you’re struggling to make payments on your current student loans, refinancing can be a good way to lower monthly payments. But keep in mind that refinancing means you’ll lose the opportunity to enroll in IDR plans if you’re considering that route.
  • Want to change lenders. If you haven’t had a good experience with Sallie Mae as your student loan lender, you can refinance your student loans to switch lenders. Then, you’ll make payments to your new lender instead of Sallie Mae.

Related: 8 Pros and Cons of Refinancing Federal Student Loans

How to Refinance Sallie Mae Student Loans

If you’re considering refinancing your Sallie Mae student loans, you’ll need to explore other lenders, since Sallie Mae doesn’t offer student loan refinancing. Here’s how to refinance your student loans.

1. Research and compare lenders

Since not every private lender offers refinancing, you’ll need to find ones that do and see which you qualify for. Every lender has different eligibility requirements, so review which lenders are best for you based on credit score and income requirements.

Also, look for lenders that offer hardship assistance or financial help in case you can’t make payments, fewer fees and interest rates lower than what you’re paying now.

2. Get prequalified

Once you’ve found some lenders you like, you can prequalify to see if you’re eligible. Prequalifications don’t cause a hard inquiry on your credit, but instead use a soft credit check. This is to see if you’re eligible for a refinanced loan based on your self-reported credit score and income. You can also view estimated interest rates that you may qualify for.

3. Complete an application

Once you find the best lender for your needs, you’ll complete a full application. Make sure you have the appropriate paperwork and documents prepared, like tax returns, pay stubs and identification.

4. Continue to make payments while you wait for the transfer

It can take a few days for your application to get approved and a few weeks to transfer your debt to the new lender.

You won’t start making payments on your refinanced loan until your new lender tells you to do so. Continue making payments on your Sallie Mae loans until you can confirm that the refinancing is complete. If you end up overpaying, you’ll get a refund for the overpaid amount.

Stay on top of your payments! If you fall behind on payments during the transfer, your credit score will drop. This can hurt your chances of borrowing in the future, whether it’s another loan or a credit card.

Find the Right Lender

Remember that refinancing your student debt makes all of your loans private. Compare all your options, including federal repayment plans, before opting to refinance your Sallie Mae student loans—and only refinance your student loans after you’ve reviewed all the risks.

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India’s top lender SBI Q4 profit misses, new bad loans rise

India's top lender SBI Q4 profit misses, new bad loans rise

A man checks his mobile phones in front of State Bank of India (SBI) branch in Kolkata, India, February 9, 2018. REUTERS/Rupak De Chowdhuri

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MUMBAI, May 13 (Reuters) – State Bank of India (SBI) (SBI.NS) missed fourth-quarter profit estimates despite record earnings as higher overhead costs and interest expenses weighed, with a rise in new bad loans sending shares falling to lowest levels in over two months.

Shares of SBI, India’s biggest lender widely seen as a bellwether bank, reversed course and closed 3.9% lower at 444.65 rupees ($5.74) apiece – the lowest level since March 8 2022, after rising as much as 3.1% earlier.

SBI’s net profit for the quarter ended March 31 was 91.14 billion rupees, up from 64.51 billion a year earlier but short of the 101.60 billion expected by 14 analysts on average, Refinitiv IBES data showed.

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Slippages, or new bad loans, increased to 0.43% of SBI’s overall loan portfolio, versus 0.37% in the previous quarter. Interest expenses grew 4% while overhead costs were 6% higher.

“On a sequential basis, slippages were slightly higher and broader markets are under pressure, so all of that dragged the stock down,” said an analyst with an Indian brokerage firm.

The decline in SBI shares dragged the broader indices including the NSE Nifty 50 and the S&P BSE Sensex, which closed lower after rising more than 1% earlier in the session.

Chairman Dinesh Khara attempted to calm investors in a post-earnings address, saying the bank was “fully insulated” against future shocks, adding that he expected to keep slippages in check.

Khara pointed to higher net interest margin, a key indicators of bank’s profitability, as evidence of “improved asset quality.”

Its net interest margin rose by 1 basis point compared with the last quarter to 3.36%. Higher interest rates – which the central bank raised by 40 basis points last week – would have a “positive impact” on its margins, he said.

India’s central bank is expected to consider more interest rate hikes, as it wants to keep rising inflation in check. read more

SBI set aside 32.62 billion rupees to account for soar loans, two-thirds lower than the same period a year earlier. Interest income grew 8.65%, while overall lending grew 11% driven by growth in retail loans.

($1 = 77.4330 Indian rupees)

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Reporting by Nupur Anand; writing by Sudarshan Varadhan; editing by David Evans, Jason Neely and Louise Heavens

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Think Twice Before Taking Out a Private Student Loan

Think Twice Before Taking Out a Private Student Loan

Factors like customer service should also be considered, Mr. Kantrowitz said. Is there a help line if you need to reach someone on the weekend? Can you update your address or contact information online?

Private lenders include Sallie Mae, which originated loans to more than 397,000 families in 2021 (“more than any other private loan lender,” according to its regulatory filings), and Citizens Bank, as well as online lenders like College Ave and SoFi.

At least a dozen states offer student loans through special programs as well, typically to state residents attending college in state. Borrowers shouldn’t assume that rates and terms from state agencies are better than those from private for-profit lenders, Ms. Streeter said. Be sure to check the details.

Here are some questions and answers about student loans:

Mr. Kantrowitz recommends that your total student debt should be less than your expected first-year salary. If your debt is less than your annual income, you should be able to repay your student loans in 10 years or less, he said. If you anticipate earning $55,000 — the average starting salary for a four-year college graduate in 2021 — the total of your loans should fall below that amount. A similar rule applies to parents, he said. They should borrow no more, for all of their children combined, than their annual income.

Interest rates on federal student loans are set annually and apply to all new loans made during a given academic year. The rate is fixed for the life of the loan. Rates for undergraduate direct loans are currently 3.73 percent. But they are expected to jump to 4.99 percent for loans made starting July 1 through June 2023. (Rates on federal loans are set each spring and are tied to the 10-year Treasury note, using a formula set by law. The Education Department hasn ‘t officially announced the new rates, but Mr. Kantrowitz and others are projecting them based on the 10-year Treasury bond auction that took place on Wednesday.)

While that sounds like a big jump, the effect on a borrower’s monthly payment is only about $3 more for a student borrowing the first-year maximum of $5,500 and repaying the debt over a standard 10-year term, according to Bankrate.com’s loan estimator .

Rates on private loans vary by lender. Many are currently advertising fixed rates ranging from 3.2 percent to more than 14 percent, and variable rate loans starting around 1 percent. But rates on both fixed and variable rate private loans are expected to rise as the Federal Reserve continues raising its benchmark interest rate, said Greg McBride, chief financial analyst at Bankrate. “Private student loans are on the way up as well.”

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Everything You Need To Know Before Signing – Forbes Advisor

Business Loan Agreements: Everything You Need To Know Before Signing

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Business loan agreements govern relationships between borrowers and lenders by detailing key information like repayment terms and collateral. The loan agreement protects all parties on the contract by ensuring everyone understands their rights and responsibilities. For that reason, it’s important to understand the most common sections and terms of a loan agreement.

What Is a Business Loan Agreement?

A business loan agreement is a legally binding document that outlines the details of a loan between a lender and borrower. Loan agreements typically include information like the loan amount, repayment term and due dates, interest rates and other costs.

Not only do the best small business loans boast competitive rates and terms, but they also come with transparent loan agreements that business owners can understand.

How a Business Loan Agreement Works

Business loan agreements generally are provided by the lender—especially when working with banks, credit unions and other financial institutions. However, business owners who take out a private loan from an individual may need to provide their own agreement. In this case, there are a number of forms and agreement templates available online.

Keep in mind, however, that it’s best to consult with a business attorney when drafting a loan agreement. Likewise, it’s important to understand the most common sections of a loan agreement before it’s time to get a business loan.

Sections of a Business Loan Agreement

Most business loan agreements include the same general sections. The majority of variation occurs within these sections, where lenders can set their own terms and establish loan details as well as the mechanics of repayment, nonpayment and default. These are some of the most common parts of a business loan agreement:

Effective Date

The effective date of a business loan agreement is the date on which it becomes binding on all parties. With a loan agreement, this is usually the day the loan funds are disbursed.

Parties, Relationship and Loan Amount

Every loan agreement should include the names of the lender and borrowers at the beginning of the document, including each party’s address or other identifying information, as well as the relationship between the parties.

If there’s a co-signer on the loan, also include identifying information and describe their relationship under the contract. Finally, state the loan amount in this first part of the agreement.

Promissory Note or Mortgage

A promissory note is a portion of a loan agreement stating that the borrower agrees to repay a set loan amount at a set interest rate. As the name suggests, a promissory note is simply a promise to pay.


For a secured loan, the loan agreement should include a section that describes the collateral—generally referred to as the security agreement. In the case of a mortgage, the underlying collateral is the land and/or building being purchased. However, collateral may also be the financed vehicles or equipment, or other company assets.

Terms and Conditions

This section of a business loan agreement generally includes the details of an installment loan, including the installment agreement, as well as basic information like the loan amount, term and interest rate. This section also may state whether prepayment is permitted under the terms of the agreement.

Penalties for Nonpayment

The nonpayment section of a loan agreement describes what happens if the borrower misses a payment. Typically, this section indicates whether there is a grace period during which the borrower can make a late payment without being penalized.

Defaults and Acceleration Clause

This section describes what happens if the borrower defaults on the loan, including fines and other penalties. Likewise, the contract may include an acceleration clause that states that the entire loan balance becomes immediately payable if the borrower fails to meet all requirements set forth in the agreement.

Jurisdiction and Governing Law

Because law varies from state to state, every business loan agreement should include a section that specifies which state law is controlling. This is especially important in the case of a contract dispute, but it also dictates how the overall contract is drafted. For that reason, it is best to hire a local attorney who can ensure the loan agreement complies with applicable state law.

Representations of the Borrower

As part of a loan agreement, the borrower is expected to make a number of representations. This may include asserting that the borrower can legally do business in the state, that all financial representations made are true and correct, and that the business is in compliance with tax law.


A covenant is a promise made between the parties to a loan agreement. In general, the lender covenants to disburse funds in a certain amount and at a specified rate of interest, while the borrower promises to repay the loan according to the terms of the agreement. However, there are several more specific covenants found in business loan contracts, including a promise to:

  • Provide proof of insurance for pledged collateral
  • Acquire key person insurance on the life of the business owner
  • Show evidence of payment for taxes and fees, including property taxes and vehicles licenses
  • Pay lender expenses in the case of loan default
  • Periodically produce financial statements during the loan term
  • Refrain from taking on additional business debt during the loan term

Business Loan Agreement Terms

With all of the legal jargon present in business loan agreements, it can feel like documents are written in another language. However, understanding a few common terms can make it easier to interpret these contracts. Familiarize yourself with these terms before signing a loan agreement:

  • Amortization. Loan amortization refers to the way a fixed-rate loan is scheduled into equal payments over the repayment term. Typically, each payment includes interest and payment toward the loan principal.
  • Annual percentage rate (APR). The APR on a loan represents the annualized cost of borrowing, including the rate of interest and additional charges and fees.
  • Automated Clearing House (ACH). In the context of business lending, automated clearing house payments are a type of loan payment that’s made through automatic withdrawals from the borrower’s bank account.
  • balloon payment. Typically, term loan payments include a portion of accrued interest and a portion of the loan principal. In this case, the principal is entirely repaid over the course of the loan term. However, some loans are structured so that all or a portion of the loan principal remains at the end of the term and must be repaid as a single balloon payment.
  • Blanket link. A blanket lien covers all of a business’ assets, not just a specific piece of collateral. In case of borrower default, this type of bond allows the lender to attach to any of the borrower’s assets to recoup the outstanding loan balance.
  • Co-sign. A co-signer is someone who can improve a prospective borrower’s chances of loan approval by agreeing to pay back the loan if the primary borrower defaults. Where applicable, the co-signer to a business loan is identified in the loan contract along with their responsibilities under the agreement.
  • Curtailment. Curtailment refers to when a borrower pays more on their loan than is currently due in a month—or more than the monthly payment established in the loan agreement. A partial curtailment occurs when the borrower makes an extra payment but does not pay off the entire loan; a full curtailment involves paying off the loan in full.
  • Default. Defaulting on a business loan occurs when the borrower does not make payments in accordance with the loan agreement. If a borrower defaults, the lender can take legal steps to recoup the outstanding loan balance from the borrower or co-signer.
  • Deferred payment loan. Under a deferred payment loan, the lender and borrower agree that payments start on a specified future date—not immediately, as is the case with traditional term loans.
  • factor rate. Certain types of business financing, like invoice factoring and merchant cash advances, have a factor rate instead of a traditional interest rate. In contrast to traditional interest rates, factor rates are expressed as a decimal that represents the factor of the total loan amount that will be repaid in total. For example, if the factor rate on a $10,000 loan is 1.2, the borrower will repay a total of $12,000.
  • Interest-only payment loan. An interest-only loan payment is one that only covers a predetermined portion of interest accrued on the loan—not the loan principal itself. When the loan term is up, the loan principal is repaid in full or refinanced.
  • Loan-to-value (LTV) ratio. The loan-to-value ratio of business financing represents the portion of an asset’s value covered by a loan. This is especially relevant to businesses that want to finance the purchase of equipment or real estate.
  • loan underwriting. Underwriting is the process a financial institution uses to evaluate how much risk a borrower poses to the lender.
  • Prepayment penalty. Some lenders charge borrowers a prepayment penalty for paying off a loan before the end of the full loan term. Because lenders expect interest to accrue over the entire loan term, paying off a loan early can result in a loss of those funds. Prepayment penalties are meant to make up for that loss.
  • Major. The loan principal is the amount a business borrows—the loan amount—exclusive of increased interest. A portion of each loan payment covers interest, with the remainder covering some of the principal.
  • Refinancing. The process of refinancing involves taking out a loan to pay off the balance of another loan. Refinancing is often used to access lower interest rates or to lower the monthly payment on an existing loan.
  • Servicing. Loan servicing is a broad term that refers to the management of a loan, including how loan funds are disbursed, how payments are collected and what happens in the case of borrower delinquency.

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