Speaker 1: It's time for the b a q a A b
Speaker 1: a q a A the b a q A with
Speaker 1: tiff and a the b a q a A. Hey, Hey,
Speaker 1: it's me Tiffany and no Mandy unfortunately, but that's okay
Speaker 1: because I'm in the stew with you. This is Brian Ambishing,
Speaker 1: Question and answer. You have questions, I have some answers.
Speaker 1: Although I am not your attorney, your doctor, your lawyer. Okay,
Speaker 1: you are going to reach out to the people that
Speaker 1: you pay for serious advice and you're gonna take what
Speaker 1: I take what I tell you with the smallest, smallest,
Speaker 1: smallest of greendom. So thought of salt aka goes to
Speaker 1: your grandma, not me and Mandy. Okay, Okay. So if
Speaker 1: you have questions that you'd like answered about career, about business,
Speaker 1: about money, about child life these days, you can go
Speaker 1: on over to Branhambishing podcast dot and click contact us,
Speaker 1: slide into the DMS on Ig Brown and Vision podcast,
Speaker 1: the BA podcast on Twitter, and Briannivision podcast at gmail
Speaker 1: dot com. Okay, so let's get to the questions. Well,
Speaker 1: first question of today comes from Courtney via ig. Courtney says, hello, ladies,
Speaker 1: I love this podcast. And Tiffany, I've been a part
Speaker 1: of your literature academy for about two years. Yeah, and
Speaker 1: I love it. We love that. It's taught me so much.
Speaker 1: So I have a question. My now fiance told me
Speaker 1: that back in twenty twenty he ended up getting a
Speaker 1: personal loan to pay off credit cards, and without reading
Speaker 1: the fine print, found out later that the lender took
Speaker 1: over his car loan for collateral. So now he's paying
Speaker 1: off his car through them instead of Capital One, and
Speaker 1: it's paying three hundred dollars more on this car month
Speaker 1: now than before. Damn. He called the lender to see
Speaker 1: if he can get a lower payment since he hasn't
Speaker 1: missed a payment or has been late since he got
Speaker 1: the loan, but they said he couldn't do that. Of course,
Speaker 1: not child, They want all that money. So we're wondering
Speaker 1: if you guys have any advice on the best way
Speaker 1: to handle a personal loan and if possible to refinance
Speaker 1: a personal loan, If so, is it a good idea
Speaker 1: to do? So? Okay, thank you. So what I'm getting Courtney,
Speaker 1: is that fiance wanted to pay a credit card debt,
Speaker 1: which is great. He got a loan to pay it off. Okay,
Speaker 1: somehow in the fine print the lender said, I'm gonna
Speaker 1: take off over your car loan. That way, if you
Speaker 1: don't pay me, will take your car and you're gonna
Speaker 1: pay off the car loan and the three hundred dollars
Speaker 1: a month I'm assuming is part fee, part to pay
Speaker 1: down that credit card debt. You didn't say how much
Speaker 1: your credit card debt was, and he's wanted to lower
Speaker 1: his payment. Okay, so you didn't share what the interest
Speaker 1: rate was. There's a lot missing here, So let's just
Speaker 1: I'm just gonna make some generalizations. In general. If you
Speaker 1: are wanting to get out of a specific loan with
Speaker 1: a specific lender because you want better terms, here are
Speaker 1: some of your options. You can do what you said,
Speaker 1: which is see if you can renegotiate with them in
Speaker 1: the terms. That's one, which they've said no. Two, you
Speaker 1: can try to refinance, you know, with you know that
Speaker 1: lender or a different lender. So that's two. That's certainly
Speaker 1: something that you can do. And then three, you can
Speaker 1: also look for another lender. What I would do is
Speaker 1: I would head down to my local credit union. A
Speaker 1: sister of mine not she is doing that now. Doing this. Now,
Speaker 1: she's looking to purchase a car, and dealer financing has
Speaker 1: gotten better than it used to. But still, you know,
Speaker 1: you're typically gonna pay you know, a higher interest rate,
Speaker 1: not always because dealer financing is much better these days,
Speaker 1: and some of these big banks don't even do car financing.
Speaker 1: They make you go through the dealer. But so I
Speaker 1: told her because a friend of mine is a teacher
Speaker 1: where I live, and there's a credit union that a
Speaker 1: lot of teachers in Newark like to use because they
Speaker 1: have better interest rates. So she went to the credit union.
Speaker 1: They had three stipulations. You had to live in Newark,
Speaker 1: or work in Newark, or worship in Newark. So she
Speaker 1: was able to prove that she lived in Newark. She
Speaker 1: was able to open up a credit union account that
Speaker 1: day and apply for the loan for the car. So
Speaker 1: right now, I think interest rates if you're borrowing money
Speaker 1: for a car are like in the seven percent range,
Speaker 1: you know, maybe high sixes. They're offering five percent in
Speaker 1: that range, so not even I think like four percent,
Speaker 1: four point something, something tremendous. So she is going to
Speaker 1: purchase her car at the dealership, but use the financing
Speaker 1: at the credit union. So what I would do is
Speaker 1: to tell your fiance to one reach out to credit
Speaker 1: unions in his area and see if you know what,
Speaker 1: I don't know how much he owes he if he'd
Speaker 1: be able to get potentially get his car loan and
Speaker 1: his credit cards like paid off via the credit union
Speaker 1: and he holds the credit union instead. Now here's the thing,
Speaker 1: I do not know the terms of this new lender.
Speaker 1: If you're able to pre pay, because some lenders won't
Speaker 1: let you. So you're gonna want to call and say
Speaker 1: or look at the fine print to see can I
Speaker 1: pay this loan off before the period of time. So
Speaker 1: sometimes lenders will be like, okay, you have like five
Speaker 1: six years on this car note, but you can't prepay,
Speaker 1: meaning whether you pay in five years or five months,
Speaker 1: you pay in the full amount either way, you know,
Speaker 1: So you want to make sure that he's able to prepay,
Speaker 1: meaning paid and paying it off before the allotted period
Speaker 1: of time and there's not a penalty to do so.
Speaker 1: And if that so, then I would start. If his
Speaker 1: credit score is right, you know, ideally would be able
Speaker 1: to go to a credit union and see if the
Speaker 1: credit union can assume these two loans or this total loan,
Speaker 1: you know, credit cards mixed with car note, and then
Speaker 1: he can now pay the credit union at a lower
Speaker 1: interust rate and therefore lowering his monthly payment. Okay, so
Speaker 1: those are some of your options. Does that make sense? Courtney?
Speaker 1: You know, here's the thing. You know that fine print
Speaker 1: be fine printing, and I know sometimes it can feel
Speaker 1: overwhelming when it comes to like borrowing money. So some
Speaker 1: questions just in general, so whether this is Courtney or
Speaker 1: Courtney's fiance saying when you borrow money, questions that you
Speaker 1: always want to ask is like one, you know, like
Speaker 1: how much am I actually borrowing? You know? Two? Obviously,
Speaker 1: who do I owe? Sometimes you're borrowing money, you're like
Speaker 1: so for example, if you're getting credit financing from a
Speaker 1: car dealership, it's like, well, who do I actually who
Speaker 1: am I going to end up owing? Right? So that's two. Three?
Speaker 1: What is my interest rate? And is it fixed or
Speaker 1: is it variable? So that means meaning like, okay, am
Speaker 1: I going to pay five percent for the length of
Speaker 1: the loan or five percent for the first two years
Speaker 1: and then ten percent after that? So what is my
Speaker 1: interest rate? Is it fixed or is it variable? So
Speaker 1: is it the same or does it go up and
Speaker 1: down based upon the market or otherwise? Right? What was that? Four? Right? So?
Speaker 1: Five or four? I don't remember.
Speaker 2: I'm on.
Speaker 1: How long is the term three months, three years, five years?
Speaker 1: Or how long do I have before I pay it back?
Speaker 1: You know? Six? Five? I can't remember what I'm on.
Speaker 1: Is there a prepayment penalty? Yes? Some people. The reason
Speaker 1: why they don't want you to pay off sooner is
Speaker 1: they want they don't want to miss out on the
Speaker 1: interest they're gonna earn on you continuing to pay, you know,
Speaker 1: so like that's a huge one, Like, you know, is
Speaker 1: there a pre payment penalty? So let's just say you're
Speaker 1: gonna buy a car and it's twenty thousand dollars because
Speaker 1: you get a previously owned car, you put down ten
Speaker 1: you have a ten thousand dollars loan, and then you say,
Speaker 1: I don't, I don't know. You hit the you hit
Speaker 1: the numbers for fifty thousand. You're like, let me pay
Speaker 1: off this car a week later. Are you going to
Speaker 1: be punished for that? Are you even allowed to do that?
Speaker 1: You want to make sure you're able to prepay or
Speaker 1: pay off early. And then two, what happens if you're
Speaker 1: in late, like do you lose your five percent interest?
Speaker 1: You want to ask of this like a question seven,
Speaker 1: I guess do you lose your interest rate? Did your
Speaker 1: interest rate go up?
Speaker 3: You know?
Speaker 1: What happens? You know? How quickly do they report you
Speaker 1: to the credit bureaus? So if I'm late, what happens
Speaker 1: you know? And do they have some sort of help
Speaker 1: if you're struggling financially? So those are some of the
Speaker 1: questions that you always want to ask before you borrow
Speaker 1: any money. Yeah, because that five pen free five Britain.
Speaker 1: But you know, if you ask those questions, it doesn't
Speaker 1: mean that you're never going to make your mistakes and mishaps,
Speaker 1: but it will allow you to be a more educated borrower,
Speaker 1: you know. And so to me, my favorite place to
Speaker 1: borrow the credit union. I believe that you should have
Speaker 1: three financial institutions in your life. I believe you should
Speaker 1: have your regular brick and mortar bank. So that's the
Speaker 1: big bank, so that you be seeing on the corners, right,
Speaker 1: those big old you know, the banks we all know
Speaker 1: if I say their name, but they don't pay me,
Speaker 1: so I ain't saying no nets Okay, So that's one
Speaker 1: big bank and the reason Why you have a big
Speaker 1: bank is for convenience. If you are in California, you
Speaker 1: can use that same bank that's on the corner. You
Speaker 1: come to New Jersey, the bank is probably there. You
Speaker 1: go to Alasta, the bank is probably there. So big
Speaker 1: bank for convenience. This is where I like to keep
Speaker 1: my checking right, my everyday money. Second financial institution that
Speaker 1: I like to have is an online only financial institution.
Speaker 1: Why because that's why I like to keep my savings
Speaker 1: because they typically have high yield savings accounts because they
Speaker 1: don't have the same overhead costs as these big banks
Speaker 1: that are on every corner. They're online, and so they
Speaker 1: get to pass on the savings to you in the
Speaker 1: form of paying out higher interest. I'll give you an example.
Speaker 1: Your big bank on the corner. If you put your
Speaker 1: money in savings there, you're probably gonna make point zero
Speaker 1: zero zero zer one percent child by right now at
Speaker 1: a high dealed savings account at an online only bank,
Speaker 1: you're looking at four four and a half percent currently
Speaker 1: as I'm taking this, that's what it's looking like, you know,
Speaker 1: give or take. So you're four times the amount that
Speaker 1: you're going to earn on your money at an online
Speaker 1: only bank. So that's the second type of institution. Third
Speaker 1: type of institution that I like is a credit union.
Speaker 1: This is where I like to borrow from, so brick
Speaker 1: and mortar convenience, checking online only bank savings account for
Speaker 1: high yield savings, and then credit union to borrow from.
Speaker 1: Because credit unions typically many credit unions are nonprofit or
Speaker 1: definitely their community based credit unions, and their role for
Speaker 1: us if they're nonprofit is not to make a profit
Speaker 1: and to offer as many resources and tools financially to
Speaker 1: community as they can so you can get a better
Speaker 1: deal on the money that you're borrowing. Because my sister
Speaker 1: is instead of spending like seven percent or like six
Speaker 1: percent on like you know, on her interest for the
Speaker 1: car loan, she's gonna pay like four percent. That's tremendous
Speaker 1: of how much money she's gonna save. And so I
Speaker 1: like to have those three. And of course, like a
Speaker 1: broker's account is probably the fourth if I'm thinking about
Speaker 1: it like for investing, but we're thinking about day to
Speaker 1: day money, those are the three into so just consider
Speaker 1: that that. Like, I like to have them in place,
Speaker 1: even if I'm not using your credit union right now.
Speaker 1: I like to just be a member of one. The
Speaker 1: good thing about many credit unions is that you could
Speaker 1: join the same day and ask for a loan the
Speaker 1: same day. But ideally, you know, having those three under
Speaker 1: your belt are going to help you navigate. Well, we're
Speaker 1: gonna take it for guy. Hopefully that was helpful. If
Speaker 1: you have questions, like I said, sobbing to the DMS
Speaker 1: on IG Brian Abision podcast, email us at Brianna Vision
Speaker 1: Podcasts at gmail dot com, go to a Brownambition podcast
Speaker 1: dot com and click contact and the BA podcast on Twitter.
Speaker 1: But we'll be back and black and ready to answer
Speaker 1: more questions. Hey, hey, hey, BA fam, here's a Brown
Speaker 1: Ambition throwback.
Speaker 2: Here's my question. What would be the best way to
Speaker 2: tackle debt? If my husband and I have forty thousand
Speaker 2: dollars worth of debt from credit cards, student loans, and
Speaker 2: personal loans? Should we consolidate our debt or try using
Speaker 2: a method like the snowball method for more information. We're
Speaker 2: both students, we have full time jobs and a mortgage,
Speaker 2: but we're struggling to save money while trying to pay
Speaker 2: off debt. Interesting questions. So just to recap forty dollars
Speaker 2: in total, that consists of credit cards, student loans, and
Speaker 2: personal loans. Interesting miss, and they're wondering how to tackle it.
Speaker 2: And that's collectively, that's collectively together.
Speaker 1: Yep, I'm not gonna lie. That's not that bad.
Speaker 3: I'm not saying that.
Speaker 2: We could say that, like what I was thinking, like,
Speaker 2: y'all can do this. You got this, Yes, you got this.
Speaker 2: Wet's take each of those three types. We don't know
Speaker 2: how much is credit cards, how much is student loans,
Speaker 2: or we don't know what the interest rates are, so
Speaker 2: it's a little bit difficult to give specific advice. But
Speaker 2: where where would you say start.
Speaker 3: To Well, I would I personally like the snowball methods.
Speaker 3: I'm a little biased. And the snowball method is just
Speaker 3: kind of when you line up your debt from low
Speaker 3: with highest as far as balances are concerned, and then
Speaker 3: you start to tackle the debt with the lowest balance first.
Speaker 3: So basically the other two debts get their minimum and
Speaker 3: the debt with the lowest balance gets its minimum plus
Speaker 3: whatever extra money you could pull from your from your budget.
Speaker 3: So you should have a budget and say, hey, budget,
Speaker 3: this is how much my life costs. How much is
Speaker 3: left over after I pay my expenses. Oh, there's two
Speaker 3: hundred dollars left over, and then you can might decide
Speaker 3: one hundred dollars is gonna go to saving, because you
Speaker 3: should be saving and paying down debts simultaneously. So maybe
Speaker 3: one hundred dollars goes to savings and another hundred goes
Speaker 3: to my debt paid down plan. So now you have
Speaker 3: your debt paid down plan money. And if you're gonna
Speaker 3: do the snowball method, it would look like this, Hey,
Speaker 3: lowest balance debt, You're gonna get your minimum plus this
Speaker 3: one hundred dollars, and now I'm gonna pay it, pay pay, pay,
Speaker 3: pay and pay pay it. And then when that's paid off,
Speaker 3: I'm gonna roll over the lowest debt's minimum plus that
Speaker 3: one hundred dollars to the second lowest debt. So the
Speaker 3: second low s det is going to get effectively three
Speaker 3: payments in one. It's minimum the first lowest debts minimum
Speaker 3: plus that hundred dollars, and then you're gonna pay pay
Speaker 3: pay paid off, and then you're gonna roll it off
Speaker 3: to the third lowest debt. And so that's the way
Speaker 3: the snowball method works. Or you can use the avalanche method.
Speaker 3: Which is when you pay off the debt with the
Speaker 3: highest interest rate off first. And so the avalance method
Speaker 3: makes the most sense as far as mathematically, because you're
Speaker 3: basically paying off the debt that has that's costing you
Speaker 3: the most amount of money because the interest rate is
Speaker 3: the highest, And the snowball method makes the most sense
Speaker 3: emotionally because if you pay off the debt with the
Speaker 3: lowest balance first, you kind of get a faster return
Speaker 3: emotional return on your investment because it might take you
Speaker 3: ten years to pay off the debt with the highest
Speaker 3: interest rate, and so you might not feel as.
Speaker 1: Good about it.
Speaker 3: So I like the snowball method, although obviously that this
Speaker 3: method is amazing if you can stick with it. So yeah,
Speaker 3: I think that I think that that's what I would do.
Speaker 3: I would line it up like that, Honestly, I would.
Speaker 2: Look at the I feel like I have a feeling
Speaker 2: out of all three of those types of debt that
Speaker 2: you have, the credit cards probably have the highest interest rates.
Speaker 2: So I'm a fan, I mean, And that's kind of
Speaker 2: looking at things with the avalanche method in mind versus
Speaker 2: a snowball. But if you wanted a quick you know,
Speaker 2: especially if you're kind of struggling. And let's say he's
Speaker 2: got some credit cards, You've got some credit cards, and
Speaker 2: you want a simple way to just keep track of
Speaker 2: everything in one place. You could look into consolidating those
Speaker 2: credit cards with a personal loan, for example, from a
Speaker 2: credit union, if it means that you could secure a
Speaker 2: lower interest rate than what you're currently paying on those
Speaker 2: credit cards. Because we know how difficult it can be
Speaker 2: to pay down credit card debt when it's got you know,
Speaker 2: what is the average APR in credit cards, and thing
Speaker 2: like seventeen percent that's with like perfect credit today. So yeah,
Speaker 2: I could look at I know this crazy, you could
Speaker 2: look at consolidating those credit cards just so you have
Speaker 2: one fixed monthly payment, which is what you get with
Speaker 2: a personal loan, and then you can both tackle that
Speaker 2: payment together. And of course, when you're applying for a
Speaker 2: personal loan, they're going to take into account how much
Speaker 2: you can afford to pay, so your monthly payment shouldn't
Speaker 2: be more, shouldn't end up being more than what you
Speaker 2: guys can comfortably afford with your student loans. If you're
Speaker 2: both still still in school, then maybe they aren't quite
Speaker 2: due yet, so they're not an immediate concern, but you
Speaker 2: definitely want to. I would focus on getting rid of
Speaker 2: that other types of debt, the credit card, the personal
Speaker 2: loans before you guys graduate, so that when you graduate
Speaker 2: you can just throw everything you got at those student loans.
Speaker 2: If the student loans are an issue, now you know,
Speaker 2: if they're federal, there's things you can do income based
Speaker 2: repayment for bears, deferment while you focus on your higher
Speaker 2: interest debt like credit cards or personal loans to buy
Speaker 2: yourself some time. But eventually you got to tackle them
Speaker 2: right and even if you defer them, interest is going
Speaker 2: to still be accruing. So you want to aggressively as
Speaker 2: fast as you can get rid of the other debt
Speaker 2: and then hop on those student loans. If they're private,
Speaker 2: you can look into well, if you've got them, you know,
Speaker 2: pretty high interest rate in your student loans and you
Speaker 2: think you're interested in looking at refinancing, that's also an option.
Speaker 2: If you guys have strong credit scores. There's lots of
Speaker 2: companies out there that will refinance your student loan debt today,
Speaker 2: which will help you secure a lower interest rate and
Speaker 2: maybe reduce your payments and help you pay it off faster.
Speaker 2: But just keep in mind, if you have federal student
Speaker 2: loans and you're refinancing them, you're essentially turning them into
Speaker 2: a private loan, which means those flexible options I mentioned earlier,
Speaker 2: like income based repayment or forbearance are probably no longer
Speaker 2: available to you. So it has to be worth that
Speaker 2: trade off for you to refinance them and turn them
Speaker 2: into private loans.
Speaker 3: Yeah, and to me, it rarely is worth it, so
Speaker 3: you know. So, I mean there's companies like so Far
Speaker 3: that I that are great companies for refinancing for private loans,
Speaker 3: but I always tell people, if you can keep them federal,
Speaker 3: it typically is worth it, just because if you ever
Speaker 3: fall on hard times, private loans don't care, but loans,
Speaker 3: but federal loans, there are things in place that you
Speaker 3: know that you can use to protect yourself if you
Speaker 3: fall on hard times, And it's much easier to the
Speaker 3: fall on a private loan, like a veteran alone is
Speaker 3: harder to default.
Speaker 1: And so yeah, So I mean, except for like maybe
Speaker 1: rare instances,