My life has changed a lot over the last 18 months. I got married, bought a home, and now my wife and I are expecting our first baby. With all of the joy has come a lot more responsibility, and while all of the changes are exciting, we're always looking for ways to be better about saving money for our future. I've always been a good saver and had a decent credit score, but I never realized that I could be pocketing big savings on my car payments until a coworker told me about RateGenius. RateGenius is a service that negotiates with lenders to secure you lower monthly payments on your car loan.
They transferred my loan to a new lender, leading to lower monthly payments.
I went online and saw that RateGenius works by transferring ownership of your car payment from one creditor to another. The old loan gets paid off and is replaced with a new one that has monthly payments that are more affordable. In addition to having lower interest rates, they can shorten the life of their clients' loans by a lot! Their experts work with over 150 lenders nationwide to find a fit that works best for your financial situation. Sounded like a simple and effective way to put a little more money in the bank for my growing family.
Their pre-qualifying application was quick and had no impact on my credit score.
My credit score has been something I've taken seriously since I got my first credit card at 19, so I've always been wary of any application that requires a credit check, because I heard it can lower your score. So I really liked that RateGenius' initial application didn't require a credit check. The only information they needed was my name, date of birth, address, yearly income, and vehicle type. Once I was done, they showed me a rate table that outlined various options and estimates on how much I would be saving depending on which plan I picked. Seeing the rate table was helpful because it gave me a better idea of how much I could be saving, before going through the full application process.
The full application process only took minutes.
After I decided that refinancing my car loan was a good fit for me, I was immediately impressed with how simple the full application process was from start to finish. I deal with numbers and computers all day long at work, so the fact that it didn't cause me a headache was a real plus. Everything was done online and only took me a couple of minutes. I was able to shop around for the best rates, and their online calculator gave a good estimation of what my new monthly payments would look like.
They don't get paid unless they save me money
After I went through the whole process and was matched with a new creditor, I was pleasantly surprised to learn that RateGenius doesn't charge a fee unless they successfully secure you lower monthly payments. I loved this risk free payment structure, and that I wouldn't have to pay a cent unless they found me a great deal. They ended up matching me with a creditor that is saving me a huge chunk of change every month, and the one time fee was nothing in comparison to what I'm pocketing.
I'm on track to save almost $1,000 this year.
RateGenius was able to secure me a new repayment plan that saved me $78 a month. Now I'm only paying 2% interest -- that's a huge improvement from my old loan. That means I'm pocketing almost $1,000 in savings a year. That's some serious cash for a first time dad with a new mortgage!
I'm so glad I discovered RateGenius -- it's a relatively quick and worthwhile way to refinance your car loans and reduce your interest rates. Their experts did all of the hard work for me, and now my payments are much more manageable for my family. I'm putting all of the money RateGenius has saved me straight into a college fund for my son. We haven't even met him yet, but it feels good to be getting a head start on his future.
When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.
A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.
One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.
The Federal Reserve
The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.
This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.
The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
Frugal gifting often gets a bad reputation. However, this shopping method does not make you cheap — it makes you practical. Frugal gifts often avoid waste and overspending and can be just as meaningful (if not more so) as any other present.
With the National Retail Federation predicting each consumer this holiday season to spend upwards of $1,000 on holiday gifts amidst an economic recession —this year might be the perfect time to reconsider your spending budget. We've formulated the ultimate list of frugal gift-giving ideas to get you started.