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Donald Trump’s terrible stimulus package won’t go away

American workers and the elderly have had the toughest hands in decades this year. The 2019 coronavirus disease (COVID-19) ravaged the U.S. economy, sent the unemployment rate to levels not seen consistently in more than eight decades, and claimed the lives of nearly 160,000 Americans.

It was this turmoil that forced Congress to pass and President Trump to sign the CARES (Coronavirus Aid, Relief, and Economic Security) law on March 27.

President Trump standing behind the presidential podium. Image source: Official White House photo by Joyce N. Boghosian.

The CARES Act hasn’t done much for the average American

the CARES Law is an absolute monster in terms of size. At $ 2.2 trillion, that’s nearly triple the cost of the back-up plan designed to protect banks during the financial crisis. Ultimately, it provided much-needed cash to struggling industries, small businesses, hospitals, and the Unemployment Benefit program – the latter of giving the unemployed an extra $ 600 a week between April 1 and April 30. July.

However, the big draw of the CARES Act was the $ 300 billion earmarked for direct stimulus payments to the public. At their maximum, these economic impact payments could total $ 1,200 for an individual or $ 2,400 for a couple making a joint claim (depending on adjusted gross income), with dependents aged 16 and under adding $ 500 each. what a parent or guardian might receive.

While it has proven useful to throw a load of cash into businesses, it does little to help the average American who has financial difficulties. Three-quarters of stimulus recipients are estimated to have spent their payments in four weeks or less, which doesn’t help when there is no clear end in sight for the COVID-19 pandemic.

With another much-needed stimulus round, it should come as no surprise that Democrats and Republicans have relentlessly negotiated a new deal in recent days. As of the end of Thursday, August 6, no new stimulus deal had been reached.

Two social security cards placed on a W2 tax form.

Image source: Getty Images.

President Trump’s payroll tax cut proposal finds new life

The problem is that the legislative session of the Senate after the two-week recess on July 4 only lasts three weeks. After Friday August 7, the Senate will be on vacation for a full month. This means that lawmakers (at the time of writing) are driving these negotiations on the fly. Financial help is now needed for many American families, and delaying talks for another month due to the legislative recess could prove disastrous.

This inability of Democrats and Republicans to find sufficient common ground between Act on the HEROES and HEAL Take action is what is allowed Donald Trump’s terrible stimulus proposal to find new life.

As some of you may recall, President Trump was adamant, before the Senate returned from vacation on July 20, that he would not sign a new round of stimulus if he did not include a provision to temporarily suspend or reduce payroll taxes – that is, the tax paid by U.S. workers and employers who fund Social Security and Medicare programs.

The idea here is that if the payroll tax were temporarily suspended, the tax liability of workers and / or businesses would decrease. That would do put more money in the pockets of workers and businesses, thus helping to avoid a financial maelstrom.

While the Democratic-led House and Republican-led Senate remain deadlocked on a handful of key stimulus issues, President Trump has threatened to sign an executive order that would expand protections against evictions, improve unemployment benefits, provide student loan borrowers with repayment options, and. .. reduce social charges.

A visibly concerned elderly man resting his chin on his hand.

Image source: Getty Images.

Trump’s stimulus proposal would decimate social security

The concern is that if Trump gets his wish for a payroll tax cut, it would do nothing more than trade very short-term gains for long-term pain. Moreover, it is even questionable whether the short-term gains would be so noticeable.

First of all, lower payroll taxes would only bring an immediate benefit to those who are still working. Arguably, it is the people who have been forced out of the workforce who are most in need of financial assistance. A cut in payroll taxes would do nothing for the tens of millions of unemployed people who are looking from the outside.

But the biggest problem here is that the payroll tax is the main source of Social Security income. Last year, he was responsible for $ 944.5 billion (89%) of the $ 1.06 trillion raised. Reduce or stop this source of income, even for a short time would be disastrous for Social Security, which already faces around $ 16.8 trillion in unfunded bonds between 2035 and 2094, according to the latest Social Security Board report. In all likelihood, a payroll tax holiday of significant duration would bring forward the date on which Social Security should deplete its asset reserves. When these reserves are exhausted, a up to 24% overall reduction in benefits awaits retirees.

Of course, there is a viable legal question as to whether Trump has the legal power to lower taxes. The U.S. Constitution specifically authorizes Congress to impose and collect taxes, so it’s not clear whether a Trump executive order to reduce or suspend payroll taxes would have any legal merit.

The point is, drastically cutting payroll taxes is a terrible idea, and we should all hope that it doesn’t come to fruition.

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Average debt for 20 years

Select’s editorial team works independently to review financial products and write articles that our readers will find useful. We may receive a commission when you click on product links from our affiliate partners.

Debt is a part of the average American’s life, and you can start accumulating it in your 20s.

New discoveries from Experian Credit report 2020 report show that the average Gen Z consumer (aged 24 and under) has approximately $ 10,942 in debt, not including mortgages. Likewise, millennial consumers (aged 25 to 40) have an average of $ 27,251 in non-mortgage debt, likely across credit cardauto loans personal loans and student loans.

If you own a home, your debt balances may be above average: Homeowners in their 20s and early 30s have between $ 172,561 and $ 232,372 in additional mortgage debt.

Millennials and Gen Z represent a wide range of ages and credit profiles, but both include consumers in their 20s. Having over $ 10,000 in debt might seem like a lot to someone early in their career, but it’s not that bad as long as you’re strategic with your repayment plan.

Using the latest data from Experian, Select took a look at how much debt an average consumer is in their 20s so you can see how you stack up.

Conclusions on the state of credit in 2020

2020 results by generation Generation Z (24 years old and under) Millennials / Gen Y (25 to 40 years old) Generation X (41 to 56 years old) Boomers (57 to 74 years old) Quiet (75 years and over)
Average VantageScore® 654 658 676 716 729
Average number of credit cards 1.64 2.66 3.3 3.45 2.78
Average credit card balance $ 2197 $ 4651 $ 7,718 $ 6,747 $ 3,988
Average renewable utilization rate 30% 30% 32% 24% 13%
Average number of retail credit cards 1.64 2.1 2.59 2.63 2.21
Average retail credit card balance $ 1,124 $ 1871 $ 2353 $ 2100 $ 1558
Average non-mortgage debt $ 10,942 $ 27,251 $ 32878 $ 25812 $ 12,869
Average mortgage debt $ 172,561 $ 232,372 $ 245127 $ 191650 $ 159,517
Average delay rate of 30 to 59 days 1.60% 2.70% 3.30% 2.20% 1.20%
Average late payment rates of 60 to 89 days 1.00% 1.50% 1.80% 1.20% 0.70%
Average delay rates 90 to 180 days 2.50% 4.40% 5.30% 3.20% 1.90%

Data shows Gen Z credit card balances increased from $ 2,230 in 2019 at $ 2,197 in 2020, and younger consumers had fewer missed payments than their Millennial, Gen X and Baby Boomer counterparts.

Meanwhile, millennials have seen a 5% drop in their credit utilization rate and have an average credit card balance of $ 4,651 (compared to $ 4,889 in 2019).

How young consumers can prepare for the sequel

As our youngest Gen Z consumers show panels to have developed good credit habits, it is important to prepare for the future so that young people can stay the course.

Life gets a lot more demanding in your 30s, and last year’s Experian data shows just how bad it can impact your finances:

In 2019, these were the average debt balances by age group, including mortgages:

  • Generation Z (18 to 23 years old): $ 9,593
  • Millennials (24 to 39 years old): $ 78,396
  • Generation X (40 to 55 years old): $ 135,841
  • Baby boomers (56 to 74 years old): $ 96,984
  • Silent Generation (75 years and over): $ 40,925

As you can see, between 23 and 39, the potential for increasing debt is huge. During the decade from your mid-twenties to mid-thirties, your responsibilities increase as you prioritize your long-term goals. The desire to settle down, start a family, spend a memorable vacation and / or move higher cost of living areas with better job prospects might motivate your financial decisions more than in your early twenties, when priorities like getting a college degree, find your first apartment and learning how to get by on an entry-level budget were the most important.

To start prepare the way to go, it’s good to know where your finances are today. Start by pulling your free credit report and by registering for free credit monitoring service.

Experiential offers a free credit monitoring service that allows you to register without providing a credit card number and gives you a single overview of your entire borrower profile. See all your credit cards and loans, along with their balances, in one place. Keep track of your payments on time and monitor your accounts for fraudulent activity.

Experian Dark Web Scan + Credit Monitoring

On the secure Experian site

  • Cost

  • Supervised credit bureaus

  • Credit rating model used

  • Dark web analysis

  • Identity assurance

If you want a more robust service with better fraud protection, check out IdentityForce® UltraSecure and UltraSecure + Credit, which offers the most comprehensive security features that monitor your information across a variety of sites and services, including the dark web, court records, and social media (checks your accounts on sites like Facebook, Instagram, and Twitter engage in inappropriate activity which may be perceived as profane or discriminatory).

Consumers receive alerts about potential fraud on your bank, credit card, and investment accounts, as well as the use of your medical ID, social security number, and address.

IdentityForce® UltraSecure and UltraSecure + Credit

On the secure Identity Force site

  • Cost

    For a limited time, get 25% off UltraSecure + Credit Individual and Family, starting at $ 17.99 – offer ends 06/30/21. Click “Learn More” for more details.

  • Supervised credit bureaus

    Experian, Equifax and TransUnion

  • Credit rating model used

  • Dark web analysis

  • Identity assurance

See our methodology, conditions apply. To learn more about IdentityForce®, visit their website or call 855-979-1118.

Once you know where your credit is, take action to get your finances back in order. Make a plan to pay off your debt, read tips on saving for retirement and learn the essentials the basics of credit card. That way, when you decide on the next step in your financial journey, you are well prepared for what lies ahead.

To learn more about IdentityForce®, visit their website or dial 855-979-1118.

Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.

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What is the average debt of medical schools and how can we reduce it?

It’s no secret that medical school is expensive. According to Association of American Faculties of Medicine, the average medical school debt of students who graduated in 2019 was $ 201,490.

If you are planning to study medicine or are already in the thick of it, it’s important to understand what to expect from the financing process and what your options are for repayment and debt reduction.

What is the average debt of medical schools?

The average student loan debt of physicians and other medical school graduates is $ 201,490, an increase of 3% from the previous year. That’s a far cry from the $ 28,950 average student loan debt for all students graduating in the same year, according to the Institute of College Access and Success.

Here are some more details about the average debt after medical school:

  • Seventy-three percent of graduates have medical school debt.
  • Almost one in five medical graduates has student loan debt of more than $ 300,000.
  • The median debt for pre-med studies is $ 25,000.
  • Forty-four percent of medical school graduates plan to participate in a student loan cancellation or repayment program.
  • Medical school graduates also have other debts, including a median of $ 5,000 on credit cards and a median of $ 10,000 in home and relocation loans.

In comparison, the average student loan balance for graduates with professional doctorates for the 2015-2016 school year (the latest data available) was $ 186,600, according to the National Center for Education Statistics. Graduates with research doctorates and masters graduates with $ 108,400 and $ 66,000 in debt, respectively.

What are the average interest rates on medical school loans?

If you have federal student loans, including undergraduate and graduate loans, the interest rates are updated annually. Private student loans, on the other hand, generally offer a range of interest rates, which depend on the creditworthiness of the borrower.

Here is a history of federal student loan interest rates over the past few years:

School year Direct loans for undergraduates Direct loans for graduate students and professionals Direct PLUS loans for parents, graduate students and professionals
2020-21 2.75% 4.3% 5.3%
2019-20 4.53% 6.08% 7.08%
2018-19 5.05% 6.6% 7.6%
2017-18 4.45% 6% 7%
2016-17 3.76% 5.31% 6.31%
2015-16 4.29% 5.84% 6.84%

Since November 2020, private student loan interest rates vary from just under 2% to around 14%, depending on the lender and your creditworthiness.

It is important to understand that most student loans accumulate interest while you are in school, even if you choose not to make payments, and if you choose to continue this deferral during residency, the interest will accrue. Once you’re ready to make payments, the lender will capitalize the interest, add it to your principal balance, and increase your monthly payment.

How long does it take to pay off medical school loans?

The standard repayment term for federal student loans is 10 years. If you’re struggling to keep up with your monthly payments, you can extend your repayment schedule up to 30 years with alternative repayment plans:

Repayment plan Repayment period
Consolidation loan Up to 30 years
Expanded 25 years
Pay as you earn 20 years
Remuneration as you earn Up to 25 years
Income Based Up to 25 years
Income-Quota Up to 25 years

Private student loan companies set their own repayment terms, but most loans to private medical schools will allow the choice of terms of five to 20 years. Of course, you can always refinance your loans on new terms, thereby extending the repayment period. How long it takes you to pay off your medical student loan debt ultimately depends on your salary and other expenses.

How can I reduce the debt of my medical school?

You may find it difficult to work even part-time while studying medicine, so you may need to rely on scholarships and grants to reduce your reliance on debt to complete your college education.

However, once you finish your studies, you will have several options to reduce your student loan balance, or at least the amount of interest you pay on the debt.

Student loan exemption programs

The federal government offers student loan forgiveness borrowers who work for a government agency or qualifying non-profit organization. To qualify for the public service loan forgiveness program, you will need to work full time for an eligible employer while making 120 eligible monthly payments.

Once you have fulfilled all the conditions, your remaining debt will be canceled without any tax consequences.

You can also get a discount by signing up for an income-based repayment plan and sticking to the repayment term. After 25 years of payments, your remaining debt will be canceled, although the paid-up balance is considered taxable income.

Student loan repayment assistance programs

Federal agencies and state governments offer a variety of student loan repayment assistance programs. These programs are not technically forgiveness programs because the benefit does not come from the lender, which is the US Department of Education.

However, depending on the program, you could get tens of thousands of dollars in repayment assistance. The Association of American Medical Colleges maintains a list of state and federal programs you may be able to take advantage of it.

One thing to keep in mind is that these programs generally only provide assistance to borrowers with federal loans. If you have private student loans, they may not be eligible.

Student loan refinancing

Refinancing a student loan involves replacing one or more existing loans with a new one through a private lender. Depending on your income and credit history, you may be eligible for student loan refinance rate lower than what you are currently paying, which can save you money and lower your monthly payment.

You will also have the option of shortening or extending your loan repayment term – lenders typically offer terms ranging from five to 25 years.

Note, however, that if you have federal loans, refinancing may not be the best option if you are working toward a rebate, a repayment assistance program, or an income-based repayment plan.

Whatever you do, it’s important to be proactive in paying off your medical school debt. Research your options, especially forgiveness and repayment assistance programs, and choose the one that best suits your needs and financial goals.

Learn more:

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Payday Loan Chain Defies State Closures to Collect Pandemic Debt – Mother Jones

Payday Loan Chain Defies State Closures to Collect Pandemic Debt – Mother Jones

This Cash Store in Albuquerque, New Mexico, is open during the COVID-19 pandemic.Eddie Moore / Albuquerque Journal / Zuma

The coronavirus is a rapidly developing news item, so some of the content in this article may be out of date. Check out our most recent coverage of the coronavirus crisis, and subscribe to Mother Jones Daily bulletin.

In response to the coronavirus pandemic, more than 20 states have shut down non-essential businesses so far, and like clockwork, an increasingly unlikely parade of companies is claiming to be essential. The latest is Cash Store, an “alternative to payday loan” chain that has ranked its more than 100 locations in Illinois, Michigan, New Mexico and Wisconsin as essential businesses. All four states have placed shelter-in-place orders, but at Cash Store, life goes on.

Critical business listings for some states, such as Illinois, include “banks and financial institutions.” But payday loan stores aren’t considered financial institutions – in fact, at least one circuit court has specifically held that they are not. Still, Cash Store said it remains open as a core financial service, meaning all of its storefronts are staffed and open at regular times, including for borrowers who wish to “invest funds for periods of time.” long and short “or” transfer financial risk between clients. ”

Payday lenders are notorious for finding clients in difficult circumstances and leaving them in the worst. Deferrals, misleading advertisements and unrealistic repayment schedules push desperate borrowers to debt traps, where many pay thousands of dollars in interest on a few hundred loans and always end up going bankrupt. Borrowers take out new loans so as not to default on old ones; according to a Pew Charitable Trusts report, paying off an average payday loan “requires about a third of the average borrower’s salary, leaving not enough money to cover daily living expenses without borrowing again.” Likely to borrow for critical needs: Medicaid expansion in California cut payday loans ( Guaranteed Approval Loan ) by more than 10%, in 2017 Health affairs study find. And “alternatives” to payday loans, such as car title loans, often end in repossession.

But it’s an incredibly lucrative industry: short-term borrowers, i.e. bankrupt people with bad credit,paid over $ 60 billion in fees and interest in 2015. Things got worse with Donald Trump go back consumer protections of the Obama era, as well as its evisceration of the only federal agency built to fight predatory lending.

Cash Store is the retail face of Cottonwood Financial, a major retail credit player, which has spent over $ 50 million in advertising only in the 2000s. Cottonwood CEO and Chairman Trevor Ahlberg (also an enthusiastic big game hunter, according to a detailed survey speak Texas Observer) has donated over a million dollars to conservative causes, and thousands to PACs supporting Trump — and he’s far from alone in industry. As early as 2013, the Texans for Public Justice found that Ahlberg was “by far the most politically active payday lender”. according to at D Magazine.

by Cottonwood Better Business Bureau page is a litany of complaints (and often replies by form letter) from consumers who claim that they have been asked to pay the same debt, or part of it, more than once; that Cash Store has made unauthorized direct withdrawals from their current accounts; and, of an employee identifying himself as a benefits specialist, that Cash Store said he would not add his young child to his employer’s health insurance without a court order. (Cottonwood responded, acknowledging that he ultimately added the child.) In his own backyard in Texas, Cash Store practices appear to bypass local laws that limit loan amounts and payments, the Observer reported.

It is not immediately clear why Cash Store would keep hundreds of physical stores open. Many payday lenders offer cash advances online, including through apps that you can access over the phone. Some claim to deposit your funds remotely within minutes. And if you want to donate your money to Cash Store from home, no problem – you can make a loan payment by phone, mail, or electronically, through its coronavirus webpage. But need to borrow money? You will need to get there. Unlike some competitors, Cash Store will only take money from a distance, not distribute it., despite evidence that small cash loans can be approved remotely. This means thousands of workers are walking into hundreds of stores, helping Cottonwood collect debts, at the cost of exposure to COVID-19.

The Cash Store website claims to have “implemented additional cleaning and disinfection protocols” and sent its stores “additional cleaning supplies to increase health safety.” Their blog has several articles related to COVID: “We decided to check the facts on some of the top stories related to the coronavirus, to help you overcome the stigma and get straight to the point! We say. Another offer dismissed job seekers a list of companies currently hiring, from CVS to Papa John’s. After all, you can’t get a payday loan without a payday. With 5 million jobs or more on the chopping block in March alone, Americans will need money in the months to come. But the typical requirement for a payday loan is a steady stream of income, and massive job losses could lead to problems for payday lenders.

If Cash Store is at risk of losing business, why stay completely open? A clue: Americans have about $ 10 billion in outstanding payday loans. Many borrowers default on high interest loans, and stores like Cash Store are building this into their model; Cottonwood Financial sells its unpaid debt to collectors for pennies on the dollar. But third-party debt collectors are about to get more business than they can handle, most better than payday loans. “At this point, we’re a glorified collection agency,” one cash advance lender wrote on Facebook. On social media, small lenders are rushing to fundraise from individuals and small businesses, swapping stories about lenders who won’t help them lend more, but are still waiting for their money.

Unlike independent lenders of small fingerlings, Cottonwood is not indebted to anyone. The company is promoting itself as “one of the largest private lenders” in the country; it is cash rich, has no debt and is much less risky by closing some or all of its over 300 stores. Even if they were made redundant, frontline Cash Store workers could collect extended unemployment benefits under the CARES Act; instead, they risk COVID-19 for the sake of Cottonwood’s investments. (Cottonwood did not respond to requests for comment.)

Other types of lenders offer breaks on the high interest rates and short terms of most cash advances. The American bank has lower rates on his short-term cash loans, which he presents as an alternative to the payday loan. Barclays waives fees on (usually expensive) credit card cash advances. Cash Store, meanwhile, offers borrowers affected by the tidal wave of closures and layoffs a chance to… borrow again. A web-based FAQ for the business states that you can get “cash back refinance” on your “alternative” payday loan, but you “still need to visit your local Cash Store to complete the loan agreement.” . Fortunately, if you’ve already paid off one Cash Store loan, you’re pre-approved for another.

In fact, the five largest banking and financial regulators in the country have unanimously pushed banks and credit unions to offer serious payday loan alternatives during the coronavirus crisis – cheaper alternatives, not as expensive loans in a slick package. Even borrowing with your credit card, if you have one, could costs less in interest and will not force you into a store.

Cash Store isn’t the only store that remains open under the dubious guise of an essential service. GameStop, Guitar Center, and Lobby also informed Americans that we cannot live without them. Joann Fabrics and Crafts, loan by Thoreau, initially defied state orders close, although he is now giving in mask making kits for good Samaritan couturiers. And some tried to make extra money during the crisis: the Menards hardware chain was ordered last week to stop drive up prices on cleaning products and masks. States have seen a wave of price abuse complaints, and the cost of protective equipment has skyrocketed among online retailers.

Do you have any other examples of businesses refusing to close despite better judgment, cutting corners on safety, or simply profiting? Help Mother Jones track corporate fund seizures during the pandemic with an email to [email protected]. If you can, include photos, links, or documentation.

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Average interest rate by credit score, year

The average interest rate for the most popular 30-year fixed mortgage is 2.98%, according to data from Global S&P.

Mortgage interest rate are constantly changing and there are many factors that can influence your interest rate. While some of these are personal factors over which you have control and others are not, it’s important to know what your interest rate might look like when you begin the process of getting a loan. immovable.

What are the mortgage rates today?

Although mortgage rates fluctuate daily, 2020 was a record low year for mortgage and refinancing rates in the United States. They started to increase in early 2021, but remain relatively low overall.

While low average mortgage and refinance rates are a good sign for a more affordable loan, remember that they never guarantee the rate a lender will offer you. Mortgage rates vary by borrower, depending on factors such as your credit, the type of loan, and the down payment. To get the best rate for you, you will need to collect rates from several lenders.

Average mortgage interest rate by type

There are several types of mortgages available, and they usually differ in the length of the loan in years and whether the interest rate is fixed or adjustable. There are three main types:

  • 30 year fixed rate mortgage: The most popular type of mortgage, this mortgage reduces monthly payments by spreading the amount over 30 years.
  • 15 year fixed rate mortgage: Interest rates and payments will not change on this type of loan, but it has higher monthly payments since the payments are spread over 15 years.
  • 5/1 year adjustable rate mortgage: Also known as ARM 5/1, this mortgage has fixed rates for five years and then an adjustable rate thereafter.

Here’s how these three types of mortgage interest rates stack up:

Find out more and get offers from several lenders »

Average mortgage interest rate per credit score

National rates aren’t the only thing that can influence your mortgage rates – personal information like your credit history can also affect the price you pay to borrow.

Your credit rating is a number calculated based on your borrowing, credit usage, and repayment history, and the score you receive between 300 and 850 acts as a cumulative grade point average of how well you use credit. You can check your credit score online for free. The higher your score, the less you will pay to borrow money. Usually 620 is the minimum credit score required to buy a home, with a few exceptions for government guaranteed loans.

Credit rating company data FICO shows that the lower your credit score, the more you will pay for credit. Here is the average interest rate by credit level:

Check Your Rates Now and Get Offers From Refinance Lenders »

According to FICO, only people with a credit score above 660 will truly see interest rates at the national average.

Average mortgage interest rate per year

Mortgage rates are constantly changing, largely influenced by what happens in the economy in general. Usually, mortgage interest rates move independently and in advance the federal funds rate or how much banks pay to borrow. Things like inflation, the bond market, and general housing market conditions can affect the rate you’ll see.

Here’s how the average mortgage interest rate has evolved over time, according to data from the Federal Reserve Board of Saint-Louis:

Throughout 2020, the average mortgage rate has dropped significantly due to the economic impact of the coronavirus crisis. Rates throughout 2020 and through 2021 were lower than rates in the depths of the Great

Recession
. Thirty-year fixed mortgage interest rates hit a low of 3.31% in November 2012, according to data from the

Federal Reserve
of Saint-Louis.

Average mortgage interest rate by state

The condition in which you buy your home could influence your interest rate. Here is the average interest rate by type of loan in each state according to data from Global S&P.

What to know before getting a mortgage

What is a mortgage?

A mortgage is a type of secured loan provided by a financial institution to cover the cost of buying a home if you don’t have enough money to prepay. You repay the lender over an agreed period of time, including an additional interest payment, which you can think of as the price of a loan.

Because a mortgage is a secured loan, it means that you are putting your property as collateral. If you fail to make your payments over time, the lender can foreclose or repossess your property. Learn more about how a mortgage works here..

How Much Can I Borrow for a Mortgage?

The amount you can borrow for a mortgage varies from person to person and depends on your financial situation: your credit, your income, and how much money you have available for a down payment. The general rule of thumb for a compliant mortgage (the type most people get, backed by a private company instead of the government) is a 20% deposit. On a $ 400,000 house, that would mean you need $ 80,000 up front.

Note that this calculation may be different if you qualify for another type of mortgage, such as a FHA or VA loan, which require smaller down payments, or if you are looking for a “jumbo loan” greater than $ 548,250 in most parts of the United States in 2021 (excluding Alaska, Hawaii, Guam and of the US Virgin Islands).

You don’t have to go to the first bank to offer you a mortgage. Like anything else, different providers have different fees, closing costs, and products, so you’ll want to get some estimates before you decide where to get your mortgage.

What is a mortgage rate?

A mortgage rate, also called an interest rate, is the fee your lender charges for lending you money. Your principal (payments on the amount you borrowed) and interest are consolidated into one payment each month.

What is the difference between the APR and the interest rate?

the Mortgage APR is the interest rate plus the costs of things like discount points and fresh. This number is higher than the interest rate and is a more accurate representation of what you will actually pay on your mortgage each year.

Why is it important to understand the difference between the interest rate and the APR? When looking for lenders, you might find that one of them charges a lower interest rate, so you think this company is the obvious choice. But you might actually find that the APR is higher than what you can get with another lender because they charge high fees. In reality, it might not be the best deal.

What is a good mortgage interest rate?

In general, you can think of a good mortgage rate as the average rate in your state or below. This will vary depending on your credit score – better scores tend to get better mortgage rates. Overall, a good mortgage rate will vary from person to person, depending on their financial situation. In 2020, the United States saw record mortgage rates across the board, and they are expected to remain low through 2021.

What is a reduction point?

A point of call is a commission that you can choose to pay at closing for a lower interest rate on your mortgage. A point of discount typically costs 1% of your mortgage and reduces your rate by 0.25%. So if your rate on a $ 200,000 mortgage is 3.5% and you pay $ 4,000 for two discount points, your new interest rate is 3%.

How do I get a mortgage?

Getting your finances in order first. Having a strong financial profile will a) increase your chances of being approved for a loan and b) help you get a lower interest rate. Here are some steps you can take to strengthen your finances:

  • Calculate how much house you can afford. The general rule of thumb is that your monthly household expenses should be 28% or less of your gross monthly income.
  • Find out what credit score you need. Each type of mortgage loan requires a different credit score, and the requirements may vary by lender. You will likely need a score of at least 620 for a conventional mortgage. You can increase your score by making payments on time, paying off debt and letting your credit age.
  • Save for a down payment. Depending on the type of mortgage you get, you may need a down payment of up to 20%. Putting even more could earn you a better interest rate.
  • Check your debt ratio. Your DTI ratio is the amount you pay for your debts each month divided by your gross monthly income. Many lenders want to see a DTI ratio of 36% or less, but it depends on the type of mortgage you get. To lower your ratio, pay off your debts or consider ways to increase your income.

Then it’s time to shop around and get quotes from several lenders before deciding which one to use.

How do you compare current mortgage rates?

Since mortgage rates are so individual to the borrower, the best way to find available rates is to get quotes from multiple lenders. If you are at the beginning of the home buying process, apply for prequalification and or prior approval with several lenders to compare and contrast what they are offering.

If you want a broader idea without speaking directly to lenders, you can use the tool below to get a general idea of ​​the rates you might be offered.

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A terrible time for a minimum wage increase

President Biden has proposed doubling the federal minimum wage from $ 7.25 an hour to $ 15 an hour. Democrats are pushing to include their $ 1.9 trillion relief bill increase debated in Congress. But with millions of unemployed and struggling small businesses, now would be a terrible time to impose such an expensive mandate.

Biden’s wage directive would eliminate jobs for younger, less-skilled workers whose economic contribution is worth less than $ 15 an hour. There is debate over the extent of possible job losses, but the Congressional Budget Office estimated that a federal minimum of $ 15 would cost 1.3 million jobs.

Biden campaign website promised it would create jobs for young adults to “achieve full employment as quickly as possible”, but his minimum wage plan would do the opposite. Workers aged 24 or under are 58 percent minimum wage workers. They need entry-level jobs to start moving up the career ladder, but raising the minimum wage would break the lower steps.

During the pandemic, more low-paying jobs disappeared that well paying jobs. A labor statistics office Analysis found that “occupations with lower wages are more common in closed sectors than elsewhere in the economy.” Thus, Biden’s salary mandate would particularly hurt those parts of the economy damaged by the crisis.

Biden too promised, “Building back better means helping small businesses and entrepreneurs emerge strong from this crisis. But again, Biden’s minimum wage plan would do the opposite. Many small businesses are suffering from declining revenues and higher security costs due to the pandemic, and they cannot afford a sharp increase in labor costs.

Small businesses tend to have lower wage structures than large businesses. Average salary in private sector establishments with less than 100 employees are twice as low as in establishments with more than 1,000 employees. Almost half minimum wage workers are employed in companies with fewer than 100 employees. This means that an increase in the minimum wage would particularly hit small businesses.

A statistic Analysis by Sudheer Chava, Alexander Oettl and Manpreet Singh examined minimum wage increases and small business finances. They found that “increases in the minimum wage … lead to lower bank credit, higher defaults, lower employment, lower entry and higher exit rate for small businesses.” The exit rate refers to the closure of businesses.

Over time, small businesses would adjust to a higher minimum wage by cutting low-skilled jobs, replacing workers with machines, cutting benefits, raising prices, and other changes. But in the short term, a salary mandate would be a blow to the finances of many small businesses, and that would be after small businesses took the lead. the biggest of recession.

Looking ahead, we need a wave of business start-ups to fill the void of jobs and production lost as a result of the recession. We need, for example, more than 110,000 restaurant startups to replace restaurants that have closed in the past year. But an increase in the minimum wage would undermine corporate efforts by making restaurants and other startups more expensive.

A statistic study by Xiaohui Gao found that minimum wage increases reduce the survival rate of start-ups. The problem noted by Gao is that “new and start-up companies tend to have a labor force with [a] higher proportion of workers at minimum wage. They often tend to operate with slim or even negative profit margins, leaving them exposed to mandatory increases in labor costs during their early years. “

The damage to small businesses and job opportunities caused by Biden’s proposal would vary from state to state due to very different economic structures. In 2019, average hourly wage in Massachusetts at $ 31.58, for example, were 64 percent higher than average wages in Mississippi at $ 19.27. A uniform minimum wage imposed in all states with such different wage levels makes no sense.

States are free to impose higher minimum wages themselves, and 29 states currently have rates higher than the federal minimum. All states could impose a $ 15 wage rate if they wanted to, but most chose not to. There is no reason to think that federal rulers have better judgment than state rulers about their own economies, so there is no basis for overriding state choices.

In summary, Biden’s national salary mandate makes no sense in such a diverse country, and it makes even less sense right now as the country desperately needs small businesses to create new jobs for millions of workers. displaced. We all wanna get back to the broad base Income the growth and historic decline in poverty that we enjoyed before the pandemic, but which was based on market-led growth, not federal interventions.

Chris Edwards is the Director of Tax Policy Studies and Editor-in-Chief of DownsizingGovernment.org at the Cato Institute

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What is the average interest rate for a personal loan?

  • The average interest rate over 24 months Personal loan was 9.34% in August 2020, according to data from the Federal Reserve.
  • However, the interest rate you see on your personal loan may be different, depending on the state you live in, your credit score, and the type of lender you are borrowing from.
  • Before deciding on a personal loan, check your credit score. Then shopping around and getting pre-approved from multiple lenders could help you find the best deal.
  • Sign up for the Personal Finance Insider email newsletter here »

The average interest rate for a 24-month personal loan was 9.34% in August 2020, according to data collected by the Federal Reserve.

Personal loans can be used for a variety of reasons, including paying for large purchases and covering emergencies. Often times, personal loans are also used for debt consolidation, where a loan is used to consolidate credit card debt into a loan and a monthly payment. Personal loans can sometimes have a lower interest rate than credit cards – the average credit card carried an APR of 16.61% in 2020.

Before getting a personal loan, consider all the factors that could change your interest rate. A lower credit score could mean paying more for your loan, making it less useful for your purchase. Comparing offers from several different lenders could also help find the lowest interest rate.

Average rate of personal loans per year

The average interest rate on personal loans has fluctuated over time and is now at its lowest level in five years. Several factors influence the average interest rate on personal loans and the interest rate on individual loans, including the federal funds rate or the amount that banks pay to borrow money. Other factors include the reason for the loan and the length of the loan.

* Rate for a 24 month personal loan.

Since 2015, the average interest rate for personal loans has gone up and down. Since 2019, the average interest rate on personal loans has fallen by almost a percentage point to 9.34% in August 2020.

Average interest rate for personal loans by state

Where you live will also have an effect on the interest rate on your personal loan. State loan laws can influence the average interest rates available on personal loans. Across the country, personal loan interest rates can vary by more than 5 percentage points, depending on where you live. Here is the average interest rate for personal loans in each state, according to: Global S&P October 2020 data.

* Unsecured personal loan of $ 5,000, 36 months

Hawaii had the lowest personal loan interest rates of the 50 states at 7.07%, while West Virginia has the highest interest rate, with an average personal loan carrying an interest rate of 11.39%.

Average rate of personal loans by lender

Personal loans are sometimes available from traditional banks like Wells fargo. They can also be offered by credit unions, member-owned banking institutions that often offer lower interest rates.

According to data from the National Association of Credit Unions,

credit unions
could offer lower interest rates on personal loans:

* Rates in effect in June 2020.

Credit unions often have membership requirements, but they are usually straightforward to complete and are based on living in a certain area. If you are already a member of a credit union, it may be worth checking out how the interest rates on your personal loans compare to other offers from banks and online lenders. It might be more affordable to borrow from a credit union.

Average rate of personal loans by credit score

Your credit rating will play a large role in how much you will need to pay to borrow. A credit score is like a cumulative grade point average of financial scores, incorporating information, including your borrowing and repayment history. Credit scores are reported as a number between 300 and 850.

As with many other types of loans, the higher your credit score, the less interest you will pay over the life of a personal loan.

Based on data from The bank rateThe amount you will pay for your personal loan will vary widely depending on your credit score, from around 10% APR for those with the highest scores to over 20% for those with the lowest scores.

Since your credit score can have such a big effect on your interest rate, checking your credit score is a good way to start your search for a personal loan. Checking Your Credit Score should always be free. Once you know your credit score, start shopping for personal loans and compare the interest rates and loan terms available from several different lenders.

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Relief en route to restaurants and food aid providers | 2020-12-30

WASHINGTON – A collective sigh of relief could be heard in Washington and across the country on the news On December 27, President Donald Trump signed the Consolidated Appropriations Act of 2021, which included $ 900 billion for debt relief. COVID-19 as well as funding for federal agencies and programs to ensure there is no government shutdown.

The new COVID-19 relief program includes provisions that will provide much-needed additional support to the restaurant industry as well as nutritional assistance programs and providers.

Support for the much larger $ 2.2 trillion Coronavirus Aid, Relief and Economic Security Act (CARES), which became law in March 2020, has been slashed, rendering the securing the current relief program all the more urgent. Still, it was likely that Congress will have to consider additional relief legislation in the new year.

The paycheck protection program established under CARES has been extended and revised under the current relief program. The PPP provides forgivable loans to small businesses to help them keep their facilities open and their workforce employed.

Businesses that have received a PPP loan under CARES are eligible to apply for a second loan, or a second draw, under the renewed PPP as long as they have used or will use the full amount of their first loans and they meet the other revised eligibility conditions. Companies that did not receive a PPP loan under CARES were invited to apply for a loan under the renewed program.

One of the main goals of the National Restaurant Association was to expand the PPP. The renewed PPP includes some changes sought by the NRA that were to make it a more effective tool for troubled restaurants.

First, the revised PPP will provide a loan amount up to 3.5 times the average monthly wage costs recorded in the year before the loan, or the previous calendar year, for companies in the accommodation industries. and catering, such as restaurants, compared with loan amounts up to 2.5 times the average monthly wage costs for businesses in other industries. The maximum loan amount in any case was $ 2 million.

Second, the revised PPP has increased accessibility. Catering and accommodation businesses with 300 or fewer employees per location are eligible to apply for a PPP loan. This is compared to the requirement for other companies to have 300 employees or less in total, spread across all of their sites.

Under the original PPP rules as established by CARES, businesses with less than 500 total employees could apply for a loan.

The NRA said the changes to the eligibility requirements in the revised PPP reflected “the reality that many mid-sized and larger restaurant groups are on the verge of bankruptcy and allow restaurants to qualify for the PPP so long. that they do not employ more than 300 employees at each physical location.

Tom Bené, chief executive officer of the NRA, said the relief plan “will prevent tens of thousands of restaurants from closing in the months to come. A second round of PPP, combined with unique enhancements for the restaurant industry, will provide essential access to capital.

“However, the long-term economic challenges facing independent restaurants, franchises and restaurant chains will not end with the new year, and we will continue to press federal and state leaders for the support that will put us on the road to recovery, ”said Bené.

The NRA viewed the COVID-19 relief plan as a “down payment” on what might be needed to ensure the recovery of the restaurant industry.

The NRA urged Congress to ccreate a restaurant recovery fund for structured relief to help restaurants get the cash flow they need to adjust, rehire and eventually reopen.

“This includes the adoption of the Senate bill on RESTAURANTS,” the NRA said.

The NRA also called for the establishment of a long-term loan program beyond the PPP. so restaurants can rehire, retrain and retain employees by providing up to six months of operating costs and additional support.

Food aid providers also viewed the COVID-19 relief program as a down payment on assistance that may be needed.

The back-up plan increased the monthly SNAP benefit level by 15% based on the Thrifty Food plan from June 2020 through June 2021 and excluded Pandemic Unemployment Compensation (UPC) benefits from being taken. counted in household income for SNAP. The package also extended SNAP eligibility to students who are eligible for a federal or state work study program or who have an expected family contribution of zero.

The program has invested an additional $ 400 million in the Emergency Food Assistance Program (TEFAP) until September 30, 2021. This program is one of the largest sources of food for food banks.

COVID-19 assistance will also provide $ 13 million for the Supplemental Food Staple Food Program through September 30, 2021, and provide urgently needed assistance to help school meals, child care programs. children and adults in need.

Additionally, the relief program requires the U.S. Department of Agriculture to establish a Food Delivery Patterns Working Group for Special Supplementary Nutrition Program for Women, Infants and Children (WIC) participants to that they have access to curbside pickup and other safe shopping methods during a pandemic.

“We are deeply relieved that the bipartite COVID relief deal includes increased benefits under SNAP, as well as additional funding so that our food bank network can continue to meet the increased needs they see every day. “said Kate Leone, head of government. relationship manager at Feeding America. “As our country continues to face a health and economic emergency once in a generation, the bipartite agreement is an important down payment to help deliver the food aid our neighbors need, but other measures will also be needed. In the coming months. . “

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