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awareness

November 16, 2022 • By Kevin Alvarez

Managing Debt as Interest Rates Rise

Debt can be a challenge to manage, even in the best of times. Now, with the economy in the news nearly every day, how do you effectively manage your debt as the cost of borrowing for things like homes, cars,
and credit cards rises? People are successful when they set a realistic budget for spending. Focusing on non-traditional gifts, the joy of experiences and the resulting memories, can be just as rewarding without damaging your finances, especially as prices on essentials are rising.

Here are five general questions to ask in order to minimize the hit to your wallet in the face of rising interest rates.

What's Your Current Credit Score And History?

Knowing this information helps you understand how rising interest rates will apply to you. Some research shows that only 33 percent of Americans checked their credit score in the past year. Regularly monitoring your credit can alert you to errors, protect you from fraud, and provide you valuable information to strengthen your credit score–which can potentially minimize the rising cost of borrowing.

What Is Your Debt Portfolio?

Another helpful course of action is to make a list of your current debt such as credit cards, car loans, student loans and other debt. Although it’s a simple step, this can make a big difference in visualizing the big picture of your financial situation. Part of seeing the impact of rising interest rates is understanding exactly where you stand.

What Are Your Current Interest Rates?

An effective next step is to regularly review your balances, terms, and interest rates on a monthly basis. By staying on top of this vital information, you can make adjustments and informed decisions about reducing any existing balances more aggressively. As a debt paydown strategy, it often makes sense to start with the highest interest credit cards or loans.

What Is A Realistic Payment Plan?

As you are able, consider paying credit card balances in full by the due date each month. You can avoid interest charges on what you purchase, which means rising interest rates may not have much of an effect on your household finances.

What Is Your Overall Financial Plan?

To stay financially healthy and minimize the impact of rising interest rates, it is key to earn more than you spend, so that you have enough money to build savings for the future. Keeping an eye on your spending is an important step in the effort to create a budget without the cost of high-interest debt. Once you develop a household budget and track income and spending, it becomes clear where the money is going and where you need to adjust your spending to achieve your financial goals. By setting financial goals, preparing a financial plan, sticking to a budget, and setting up an emergency fund for the unexpected, you ensure that your financial well-being does not suffer as interest rates rise.

This information brought to you by GreenPath Financial Wellness.

GreenPath Financial Wellness

September 2, 2022 • By Kevin Alvarez

Life Insurance Awareness Month

September is Life Insurance Awareness Month and if we've learned anything from these past few years, it's that life is unpredictable. At SafeAmerica Credit Union, our hope is to bring awareness and encourage you to learn more about Life Insurance and why it's so important to have.

A Member Benefit for You!

We strive to offer our members the best access to many products and services, such as Life Insurance.  We’ve partnered with TruStage to provide you with easy and affordable access to Auto, Home and Life insurance.

As a member of SafeAmerica Credit Union, Trustage® will work with you to select a policy that's right for your budget, with ongoing support and no hassle.

Trustage Life Insurance® can help give you peace of mind today and provide an income-tax free cash benefit for your family. It can help pay expenses you might leave behind such as funeral costs, mortgage payments or unpaid debts. Trustage helps make it easy to compare insurance and explore options you can afford—so you can make a good decision today for your family.

Types of Life Insurance

Life insurance can be confusing.  Here is a brief summary of the types of insurance you can consider.

Term Life Insurance

Term Life Insurance will cover you for the length of your policy. As long as your premiums are paid, you will be covered. Learn more here.

Whole Life Insurance

With Whole Life Insurance, the rate you initially pay would be locked-in for the entire duration of your policy. Even if health conditions change and your premiums are paid, your coverage will never be cancelled. Learn more about Whole Life Insurance here.

Guaranteed Acceptance Whole Life Insurance

Guaranteed Acceptance Whole Life is a policy which does not turn down people for their health. As long as premiums are made, coverage will never decrease or be cancelled. Learn more about Guaranteed Acceptance Whole Life Insurance here.

Learn More

You can also learn more about Life Insurance by visiting the Trustage website. They offer a variety of quick-read articles to help you make an informed decision.

Read about: Understanding Insurance

Understanding Insurance

Get Started Today

Trustage® can help you get coverage that fits your needs and budget. We designed it to be easy to:

  • Compare life insurance options
  • See instant quotes based on your budget
  • Apply online or over the phone

Don't wait, get an instant online quote today. Or call 1-800-814-2914 and talk to a licensed agent.

Why Trustage®

Since 1935 Trustage has been assisting millions of people by helping protect the financial future of their loved ones with insurance policies designed to be affordable.

Trustage works with thousands of credit unions across the United States helping families prepare for the future and help secure the financial stability of millions of credit union members.

Learn More

Get an Instant quote

TruStage® is underwritten by CMFG Life Insurance Company, a well-known credit union member insurance provider. For more than 80 years, CMFG Life has earned the trust of members nationwide and is rated “A” (Excellent) by A.M. Best, an independent national organization that rates insurers’ financial strength and performance. “A” is the third-highest of 16 ratings, as of March 2021. Join more than 20 million members who rely on TruStage.

TruStage® Life Insurance is offered by TruStage Insurance Agency, LLC and issued by CMFG Life Insurance Company, P.O. Box 61, Waverly IA 50677-0061. The insurance offered is not a deposit and is not federally insured or guaranteed by your credit union. Products and features may vary by state.

© TruStage Insurance Agency

GEN-2943854.2

June 6, 2022 • By Kevin Alvarez

Living in a Changing Rate Environment: How the Fed’s interest rates effect you

The Federal Reserve Systems (The Feds) job is to strategically change rates to accommodate the economic well-being of the nation. Their job is to keep the nation afloat by raising or lowering the cost of borrowing money.  When the economy starts to grow too fast, which is what’s happening in today’s environment, the Fed may decide to raise rates in hopes that consumers slow down on borrowing.

These higher interest rates make loans more expensive.  This strategy encourages consumers to postpone any projects that involve financing and simultaneously encourages people to save money so they can earn higher interest. While higher interest rates may be bad for borrowers, they are great for anyone with a savings account, as these rates tend to increase as well.

Here we’ll discuss a few ways the Fed’s changing rates directly impact you and your borrowing needs.  But, as with everything, with the bad there also comes the good.  We’ll also show you ways to take advantage of rising deposit rates.

The Borrowing Impact on You:

  1. Mortgages and HELOCs (Home Equity Line of Credit) — While fixed-rate mortgages are not directly impacted by the Fed, they may have some influence on their rates.  If you already have a fixed-rate mortgage, nothing to worry about here – you’re locked in.  However, variable rate mortgages and HELOCs are tied to the Prime rate, meaning those will rise along with the fed funds rate.
  2. Auto Loans — You might find that auto loan rates are on the rise too.  Auto loan rates are dictated by the time of year, the type of vehicle, the borrower’s credit score and more. But the Fed sets the benchmark rate on which auto loan lenders base their rates.
  3. Credit Cards – Most credit cards charge a variable rate, meaning the rate can “vary” based on the Prime rate.  So, when the Fed increases its rate, variable rates tied to Prime also increase.  This can mean significant increases in your minimum payments each month.  Unlike most credit cards, SafeAmerica’s Visa Platinum Rewards credit card has a fixed-rate, so your rate will not adjust.

Now Is The Time To Focus On Saving

There is some positive news in all of these rate changes.  Savers tend to benefit from Fed rate hikes. Financial institutions will typically adjust their APYs (Annual Percentage Yields) in hopes to encourage more money on deposit with them.  A win for you!  Now would be a great time to look around for higher-yielding savings accounts as well as share certificates so you can start to earn more.

We’ve recently increased some of our certificate rates.  To see our rates, click here.

What's SafeAmerica Doing With These Rate Adjustments?

“The recent rate increases from the Federal Reserve are an effort to alleviate the financial pressures brought forth from recent years. While it may seem worrisome, it is a sign of returning to “normal”. You can rest assured knowing that your credit union will begin to accommodate the rate increases in the form of leveraging higher-yield rates for our savings products.”

-Tom Graves, President & CEO of SafeAmerica Credit Union

Our team here at SafeAmerica Credit Union is closely monitoring and following the Feds rate adjustments as they come.  Our number one goal is to continue to provide you with the most competitive rates in our area.  As such, we look closely at our peers to assure we remain competitive, giving you the best rate we can.  We understand these borrowing rate hikes have tremendous impact on you.

If you are ever in need of financial assistance, we encourage you to reach out to our financial wellness program, GreenPath Financial Wellness.  They can help with anything from credit counseling, budgeting, or just financial education.  For more information click here


GreenPath Financial Wellness

Sources: Bankrate.com, Forbes.com

February 24, 2022 • By Kevin Alvarez

America Saves Week – Save By Reducing Debt

One of the greatest contributors to financial stress is debt. If you're having a tough time financially, it can feel isolating, but the truth is 80 percent of Americans have consumer debt. The only way to relieve financial stress is to make a plan and work your way through it. But to make that plan, you'll need to understand the type of debt you have, your best-case scenario to pay down your debt, and how to leverage your knowledge so that you can maintain or increase your credit score. When you reduce your debt, you save in the long run — on late fees, interest, and a higher credit score, which will lower interest rates.

Get A Clear View Of Your Finances

You thought we'd say budget first, didn't you? While creating a spending and savings plan (our preferred term over "budget") is essential, the true value in having a plan is clarity. When you know your exact income and expenses, you can better steward the discretionary income left over after your bills are paid. It will become easier for you to decide how much to spend, if you can put more toward debt, what goes into savings, and whether to begin making investments. Your spending and savings plan will also highlight areas that need attention.

For example, is your grocery allocation adequate? Are all of your subscriptions and recurring monthly expenses still necessary, or can any be canceled? Knowing where all of your money is coming from and going to helps you build financial confidence and shows you where you can afford to reduce your debt and begin building wealth.

If you need support with making a spending and savings plan, we've created a straightforward tool that will help!

Work With What You Have

When you're paying down your debt, one conscious decision to adopt is to stop adding to your debt. This step may seem intuitive, but there are circumstances where the urge to just "charge it" may arise.

Many "Buy Now, Pay Later" options are becoming increasingly popular. Though it may feel like it is not, options like Klarna, Afterpay, and Affirm are debt and should be treated as such.

As you work to pay off your credit cards, here's a word of advice: do not close your credit cards!

Closing your credit card accounts may reduce your credit score, as the "age" of your credit factors into your FICO score. By keeping your card open with a $0 balance, you'll have a longer credit history and a larger amount of available credit. The only time you may want to consider canceling a card is if it has pricey annual fees.

Increase Your Income

If you can, consider increasing your income temporarily, allowing you to put more money towards your debt. This will allow you to pay down your debt faster! There are so many options to get a quick cash injection or additional income in today's economy. Some ideas include selling items around your home you no longer use, purging your closet on sites like thredUp, leveraging a talent or skill you have, like tutoring or singing, to offer as a service, or taking advantage of the booming gig economy.

Paying It Off For Good Starts With A Decision

There are many strategies to use when working toward paying off your debt. The most popular strategies include the snowball method or the avalanche method. By deciding which method you want to use beforehand, you will reap the benefits of paying it off faster.

Snowball Method

"Snowballing" your debt is a type of accelerated debt repayment plan. First, list all of your debts from the smallest balance to the largest balance. Next, make the minimum payment on all your debt except the smallest one. With your smallest debt, you will put as much money as you can toward the balance. Once the smallest debt is paid, take the amount you were putting towards that debt and apply it to the next smallest. With this method, interest rates are not the focus.

Avalanche Method

With the "avalanche" method, you will still make the minimum payments on every source of debt, but you apply the remaining funds toward the debt with the highest interest rate. By paying off the debt with the highest interest rate first, you reduce the overall amount of interest you pay.

Making extra payments allows you to pay off your loan(s) more quickly when paying toward installment loans, like your car payment. Just be sure to specify that any additional funds outside of your monthly payment go toward the principal. Before you begin making extra payments to installment loans, check the terms of your loan to determine whether additional fees or prepayment penalties may apply.

Regardless of how you decide to reduce your debt, let America Saves be your savings accountability partner! Take the America Saves Pledge and choose “reduce debt” as your savings goal. We'll support you by sending email and text reminders, resources, and tips to keep you on track towards paying down your debt.

Make the Pledge

By accessing this link, you will be leaving SafeAmerica's website and entering a website hosted by another party.

Although SafeAmerica has approved this as a reliable partner site, please be advised that you will no longer be subject to, or under the protection of, the privacy and security policies of the bank's website. The other party is solely responsible for the content of its website.

We encourage you to read and evaluate the privacy and security policies on the site you are entering, which may be different than those of the bank.

Continue

September 1, 2021 • By Kevin Alvarez

September is Life Insurance Awareness Month!

September serves as Life Insurance Awareness Month. We all want what is best for our families and life insurance provides our loved ones with peace of mind as well as security from any end-of-life and final expenses. Before we begin to learn about what exactly life insurance is and how beneficial it is for our family, let's understand some terminology used in life insurance policies.

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Life Insurance Terms

Administrator: The person (usually the spouse, domestic partner, or close relative) that the court appoints to manage the estate of person who dies with a Will. The administrator is also called the personal representative of the estate.

Beneficiary: The beneficiary of a life insurance policy is the person, organization or trust that you define as receiving the life insurance payout. If you take out a $10,000 policy and name your child the sole beneficiary, when you die, they get $10,000. You can also assign multiple beneficiaries to your policy and define just how much of the policy they’ll receive. For example: John takes out a $25,000 life insurance policy. He names his wife and his two sons as the beneficiaries of his policy, but he specifies that his wife will receive 50% of the payout and each of his sons will receive 25% of the payout. John dies, and his wife gets $12,500, while each son gets $6,250.

Cash Value: For most whole life insurance policies, when you pay your premiums some of that money goes into an investment account. The money in this account is the cash value of that. If you cancel a policy, you can receive the cash value of the policy as payment instead of the face value.

Death Benefit: A death benefit is the money paid upon the death of the insured. It’s usually a payout of the full coverage amount defined in the policy (a $10,000 policy pays a $10,000 death benefit).

Decedent: The person who has passed.

Estate:  All liabilities as well as assets like your home become your "Estate". You would have to take inventory of all things you own and decide how your heirs and creditors would receive assets.

Executor: A person named in a Will and appointed by the court to carry out the dead person's wishes. The executer is also called the personal representative of the estate.

Face Value: The face value of the policy is simply the coverage amount the policy is worth. So, the face value of a $10,000 policy is $10,000. This is usually the same amount as the death benefit.

Living Trust:  A trust set up during the life of a person to distribute money or property to another person or organization.

Personal Representative: The administrator or executor that the court appoints to manage the estate.

Probate: The court process for distributing a dead person's assets, paying debts owed and settling the financial affairs of people when they pass.

Successor: Anyone who has the legal right to receive property of a person who dies, either under the Will or the Probate Code.

Trust: An agreement where property is given to someone to be held for the benefit of another person.

Will: A legal document with Instructions about what will happen to their property after death.

"Do I really need life insurance?"

"If you were to die, would your family struggle to pay for

your funeral, mortgage or daily living expenses?"

 Chart Icon

What End of Life Expenses to Expect

A study done by Experian in 2016 determined 73% of Americans are going to die in debt. Unless a family member cosigned with the person who passed, debt is typically not inherited by any of the surviving family members and is paid off by the estate.

What may come out of pocket for the living family members (with no insurance policies in place) may be the following:

  • Funeral Expenses - The California average is about $11,777.  
  • Nursing Home Care/Hospice Care - This can easily reach $1,000 for 24 hour care, BUT Medicaid may be able to cover 100%. 
  • Medical Bills - Depending on medical conditions and treatment, this cost only adds stress to an already difficult time.

"How much life insurance do I really need?"

"The amount of insurance depends on the standard

of living you wish to assure your dependents."

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The Two Basic Types of Life Insurance:

  • What is Term Life Insurance?
  • What is Whole Life Insurance?
What is Term Life Insurance?
  • Available terms can range from 10 to 30 years 
  • Beneficiaries receive larger death payouts than whole life insurance policies
  • Benefits transfer to beneficiaries tax-free
  • Can easily be converted to Whole Life Insurance
  • Lower payments based on how young you are
  • May be a challenge to renew your policy upon expiration
  • No ability to cash out for end of life expenses
  • Protects your family from a loss of income
  • Temporary policy with an expiration date 
  • Typically costs less than Whole Life Insurance
What is Whole Life Insurance?
  • Burial costs and other final expenses are covered
  • Builds cash value, which could be used while you are alive
  • Coverage will continue as long as payments are made
  • Death Benefits transfer to beneficiaries tax-free
  • Death benefit amount can never decrease
  • The cost (Premiums) do not increase as long as payments are made
  • Smaller death payout
  • Typically higher in cost than Term Life Insurance

"I'm pretty healthy, I'll wait until I am older to get Life Insurance."

"You pay less if you get insurance when you are younger and besides

you'll be covered should any unexpected health issues arise."

 Money Icon

Think of Life Insurance as a Form of Investment

Just as some invest into the stock market and/or the real estate market, whole life policies build cash value through a portion of the money used for premiums through interest. Over time, this sum slowly grows to the point where you can borrow from it tax-free. Keep in mind, you will have to pay interest on this loan and any remaining balance will be deducted from the death benefit your loved ones are set to receive.

If the above-mentioned funds become big enough, you may have the option to trade the policy for an annuity. This would provide you with monthly payments for the rest of your life or when the funds are exhausted. While this may sound like a great idea, you would have to keep in mind, there is a chance your insurance policy will not pay out the death benefit to your loved ones.

Another option available with Whole Life Insurance is being able to surrender (sometimes known as "selling") your policy to the insurance company. By doing so, you void your insurance coverage and while you will get a sum of money, it would not be as much as the amount the insurance company would have paid out when you pass. While thinking of life insurance as an investment, understand this should not replace your savings or 401k.

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How To Pick the Right Policy

Which policy best aligns for your own goals and/or family's goals? When it comes down to figuring out which policy is best, most will initially pay for term life insurance until their career reaches an established point in-which more of their earned money is used towards converting their term policy to whole life.

SafeAmerica Credit Union has partnered with Trustage® Life Insurance to help credit union members like you protect the people who matter most in their lives. Any amount of coverage can make a difference.

TruStage® Life Insurance can help give you peace of mind today and provide an income-tax free cash benefit for your family. It can help pay expenses you might leave behind like funeral costs, mortgage payments or unpaid debts. TruStage helps make it easy to compare insurance and explore options you can afford—so you can make a good decision today for your family:

  • Compare life insurance options
  • See instant quotes based on your budget
  • Apply online or over the phone
Get an Instant Quote
Understanding Insurance

TruStage® Life Insurance is offered by TruStage Insurance Agency, LLC and issued by CMFG Life Insurance Company, PO Box 61, Waverly IA 50677‑0061. The insurance offered is not a deposit and is not federally insured or guaranteed by your credit union.

© 2020 TruStage Insurance Agency

DTCG-2947101.1


Sources:

https://www.courts.ca.gov

https://www.debt.org

https://educationdata.org

https://www.forbes.com

http://www.insurance.ca.gov

https://www.investopedia.com

https://www.investopedia.com

https://www.trustage.com

https://yahoo.com

August 20, 2021 • By Kevin Alvarez

A Guide to Understanding Financial Terms

When reading about credit cards, mortgages, or other financial products, you may encounter financial terminology and acronyms that you aren’t familiar with. Please note, these descriptions are a guide only and are not legal definitions.

A


 

Adjustable-Rate Mortgage

An adjustable-rate mortgage (ARM) is a mortgage that offers the borrower a fixed interest rate for a set amount of time. After that time expires, the interest rate on the remaining balance varies though out the life of the loan. Depending on the terms of the mortgage, the interest rate resets each month or year. This type of mortgage is also called a variable rate mortgage.

Annual Percentage Rate

The Annual Percentage Rate (APR) is the yearly cost of borrowing money. APR includes the interest and fees charged over a one-year period. Many types of debt include an APR such as credit cards, auto loans, mortgages and personal loans. The APR helps borrowers choose credit card offers, mortgages, loans, etc.

B


 

Balance

When referring to debt, a balance is the amount of money remaining to be repaid on a loan, credit card or mortgage. When the term "balance" refers to a checking or savings bank account, the balance is the amount of money present in the account.

Balance Transfer

A balance transfer refers to moving a balance from one account to another account, which is often an account at another financial institution. It most commonly describes transferring outstanding debt owed on a credit card to an account held at another credit card company.

Balloon Payment

A balloon payment is the money owed on a loan when the loan term expires (usually after 5-7 years). When the term is over, the borrower must pay a balloon payment for the total amount remaining on the loan, or the borrower can choose to refinance the loan for new terms and rates. Balloon loans sometimes allow the borrower to transfer the remaining amount automatically into a long-term mortgage.

Bankruptcy

When an individual or a company has debt that cannot be repaid, declaring bankruptcy gives the individual or company legal protection from the debts. Bankruptcy is a legal process that can offer relief from some or all debts, depending on the type of bankruptcy.

Budget

A budget is written plan that tracks monthly expenses and income. It is used to help manage finances, keep current with expenses and save money.

C


 

Card Holder

A card holder is the person who is issued a credit card, along with any authorized users. The primary card holder is responsible for credit card payments. Credit card holders are protected by the federal lending laws which protect consumer rights.

Cash Advance

A cash advance is a loan issued from a creditor. The most common cash advances are issued by a credit card or through a loan taken in advance of a paycheck. These types of cash advance loans charge special interest rates and fees on the amount of the advance.

Cash Advance Fee

A cash advance fee is a charge made by the bank or financial institution that the borrower owes after taking a cash advance loan. This fee could be either a one-time, flat fee that is owed at the time of the transaction or a fee charged as an annual percentage of the amount of the cash advance. Did you know SafeAmerica waves cash advance fees on our Visa Credit Cards? Click here to learn more.

Collateral

Collateral is an asset that a lender accepts as a security for a loan. If a borrower defaults on their loan payments, the lender has the right to seize the collateral and sell it to recoup any losses.

Collections

Collections occur when a creditor, or a business, like a utility company, sells past-due debt to an agency to recover the amount owed. The delinquent debt could be past due credit card debts, utility charges, medical bills, cell phone bills or other payments that are over 6 months past due. Collection agencies attempt to recover past due debts by contacting the borrower via phone and mail.

Conventional Mortgage or Loan

A conventional mortgage or conventional loan is available through a private lender or two government-sponsored enterprises-Fannie Mae or Freddie Mac. Conventional loans are considered risky because they are not guaranteed by the government. These mortgages can have strict requirements and higher interest rates and fees.

Credit

Credit refers to the money that is borrowed that the borrower will need to repay.

Credit Card Charge-Offs

Occurs when a borrower does not pay the full minimum payment on a debt for several months. At that time, the creditor writes it off as bad debt. Note that a credit card charge-off does not absolve a borrower of responsibility for the debt. Interest is still owed on the balance. even after a credit card charge-off, the lender could turn over the account to a collections agency.

Credit History

A person's credit history develops as they borrow, repay and manage their loan payments, expenses and other transactions. Future loans depend on a solid credit history, because lenders check this information.

Credit Report

A credit report is a statement that has information about a person's credit history, including loan paying history and the status of credit accounts. Lenders use credit reports to help them decide if they will loan money and what interest rates they will charge.

Credit Score

A credit score is a number based on a formula using the information in a person's credit report. The result is an accurate forecast of how likely that person is to pay bills or repay loans. Lenders use credit scores to determine what interest rate they will offer on credit cards, mortgages, car loans and other loans.

Creditor

A creditor is a person or institution that extends credit by lending a borrower money. The borrower agrees to repay the funds under the agreed upon terms.

D


 

Debt

Debt is money owed to a lender, such as debt from credit cards, student loans, or a mortgage.

Debt Consolidation

Debt Consolidation means that a person's debts, whether credit card bills or loan payments, are rolled into a new loan with one monthly payment, A debt consolidation loan does not erase debt. Borrowers might pay more by consolidating debt into another type of loan.

Debt Management plan

A debt management plan is when an organization works with creditors to reduce a borrower's monthly payment and interest rates. People working through a debt management typically take 3-to-5 years to pay off debt.

Debt Counseling

Borrowers receive debt counseling (also called credit counseling) when a trained credit counselor reviews their personal finances, debt and credit history to help manage financial challenges.

Debt Settlement

Debt Settlement is a process of negotiating with creditors to accept a percentage of the full amount of debt that is charged off or severely delinquent. For-profit debt settlement companies operate to deliver profits to their organization. As part of the for-profit business model, debt settlement employees are often paid on a commission basis, based on the fees they collect from consumers.

Default

A default on a loan occurs when a loan payment is not made by the borrower according to the payment terms of an agreement.

Deferment

A loan deferment is when a lender agrees that a borrower can pause making monthly payments for a set amount of time. Loans that are deferred are not forgiven. The borrower still owes the money and must repay the debt. Deferments are often available with student loans to provide the borrower with a set amount of time before making any payments.

Delinquent

When a borrower is late or overdue on making a payment, such as on payments to credit cards, a mortgage, an automobile loan or other debt, it is called delinquent. People who are delinquent, or late, with making payments may be charged a late fee.

F


 

Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act is a set of laws that protect consumer rights during the debt collection process.

Fannie Mae

Fannie Mae, the informal name of the Federal National Mortgage Association, is a U.S. Government-sponsored enterprised that buys mortgages from lenders, bundles them intp investments and sells them on the secondary mortgage market. typically, Fannie Mae purchases home mortgages loans from commercial banks or big banks.

Finance Charge

A finance charge is the cost of borrowing money. The cost to a borrower includes interest and other fees. Lenders typically set finance charges as a percentage of the amount borrowed. Some lenders might set a flat fee finance charge.

Fixed Rate

A fixed rate is an interest rate that stays the same for the life of the loan, or for a portion of the loan term, depending on the loan agreement.

Forbearance

Forbearance is a process when a lender agrees to a lower payment or no payment for a temporary period of time. Forbearance is not loan forgiveness. After that time expires, the borrower may face higher payments, accrued interest or an extended loan term.

Foreclosure

Foreclosure is a legal proceeding that happens when a borrower does not make payments on a secured debt. The lender may start legal foreclosure proceedings to seize the property associated with the debt. As an example, default on a mortgage could result in foreclosure and auction of the property.

Freddie Mac

Freddie Mac, the informal name of the Federal Home Loan Mortgage Corporation, is a U.S. government-sponsored enterprise that buys mortgages, combines them with other forms of loans, and sells the debt on the secondary mortgage market. Typically, Freddie Mac purchases home mortgage loans form smaller banks and lenders.

G


 

Grace Period

A grace period is a set period of time in which borrowers do not have to pay finance charges or interest if they pay balances in full. Revolving credit card lending provides a borrower with a grace period.

I


Interest

Interest refers to the cost of borrowing funds, paid to the lender by the borrower. Interest also means the profit that accrues to those who deposit funds in a savings account or investment.

Interest Rate

An interest rate is the fee lenders charge a borrower, calculated as a percentage of the loan amount. The percentage charged when borrowing money is known as the interest rate.

L


 

Loan

A loan is sum of money that is advanced to a borrower. The borrower agrees to specified terms such as finance charges, interest and repayment date. Some examples include auto and recreational vehicles loans, home loans, home equity loans, personal loans as well as student loans.

Loan Forgiveness

Loan forgiveness means a borrower is no longer obligated to make loan payments. With student debt loan forgiveness, the borrower must meet criteria such as actively serving in the military, performing volunteer work, teach or practice medicine in certain types of communities, or must meet other criteria specified by the forgiveness program.

Loss Mitigation

Loss mitigation is the process when mortgage servicers work with borrowers to avoid foreclosure.

Loan Modification

Loan modification is when a lender makes a permanent change to loan terms. The modifications could inlcude changing the interest rate, type of mortgage or extending the time to pay the mortgage balance.

M


 

Minimum Payment

The minimum payment is a payment made on a loan or credit card that is specified by the lenders as the smallest payment amount due. Borrowers can pay more than the minimum payment.

Mortgage

A mortgage is the loan a borrower takes in from a lender to purchase real estate.

P


 

Past Due

Past due is when a payment has not been made by its due date. Borrowers who are past due will usually face penalties and are subject to late fees.

Private Mortgage Insurance

Private mortgage insurance is a type of mortgage insurance that might be required for borrowers to pay for with a conventional loan. Private mortgage insurance protects the lender in the event a borrower stops making payments on the loan.

R


 

Reinstatement

Reinstatement refers to a lump sum payment that makes an account current when the borrower pays everything that is owed. This payment would include any missed payments and fees.

Refinance

Refinancing applies to all types of loans, this simply means you are replacing any existing debt and terms with a new set of debt and terms, most often with a lower interest rate than the original loan rate.

Repayment Plan

A repayment plan is a written agreement for borrowers who are past due on loan payments. This option allows the borrower to pay the late amount as a smaller addition to the regular monthly payment, spread out over several months.

Revolving Credit

Revolving credit is when a creditor increases the credit limit to an agreed level as a borrower pays off a debt, such as a credit card. Revolving credit may take the form of credit cards or lines of credit with other lenders.

S


Secured Debt

A secured debt is a loan that allows the lender to seize the asset or collateral used to acquire the debt to repay the funds advanced to the borrower in the event of default. Examples of secured debt are mortgages and auto loans.

Short Sale

A short sale is when a homeowner in financial distress sells property for less than the amount due on the mortgage.

U


Unsecured Debt/Unsecured Loan

Unsecured debt or an unsecured loan is a loan that is not backed by an asset or collateral. It is riskier than secured debt. The interest rate for unsecured debt is normally higher than secured debt.

V


Variable Rate Mortgages

A variable rate mortgage is a mortgage in which the initial interest rate is fixed for a period of time. After that period expires, the interest rate on the outstanding balances varies throughout the life of the loan. Depending on the terms of the mortgage, the interest rate resets each month or year. This type of mortgage is also referred to as an adjustable-rate mortgage (ARM).



As a valued member, we provide you with access to certified experts through our partners GreenPath Financial Wellness who will empower you to eliminate financial stress, get out of debt, increase savings, and achieve your financial goals.

Learn more about starting your journey to financial freedom by clicking on the button below.

GreenPath Financial Wellness

 

Sources:

https://www.greenpath.com/

https://www.debt.org/

https://www.investopedia.com/

https://www.consumerfinance.gov/practitioner-resources/youth-financial-education/

August 11, 2021 • By Kevin Alvarez

National Financial Awareness Day – August 14th

August 14th marks National Financial Awareness Day. This day serves as the perfect opportunity to go over your finances and see what habits could be addressed to provide financial freedom.

The concept of financial education/awareness can be traced back to Benjamin Franklin’s 1737’s Poor Richard’s Almanack. There, Mr. Franklin wrote a column called “Hints For Those That Would Be Rich.”

It was with this article, he coined the phrase and ended his column with “A penny saved is twopence clear.” This piece of advice has somehow been lost through time and has had many people believing Franklin said “A penny saved is a penny earned.” While equally sound advice, some may argue it’s the modern interpretation of what Franklin had originally said.

Read Benjamin Franklin's Article below.

Hints For Those That Would Be Rich

Hints to those that would be rich 1
Hints to those that would be rich 2
Hints to those that would be rich 3

Benjamin Franklin’s “Hints For Those That Would Be Rich” was the closest, formal piece of financial education the American people had at the time. It wasn’t until 1849 where James William Gilbart published his article, “Ten Minutes’ Advice about Keeping a Banker.” Through this, Gilbart shared in detail, the many advantages of having a bank account along with a personal banker.

Elements of Banking 1

We’ve come a long way in a short amount of time and with the ease of access regarding information, we can learn timeless financial concepts, habits and tips rather instantly.

Hints For Those Who Are SafeAmerica Members

Just like Mr. Benjamin Franklin wrote his column about financial education back in 1737, SafeAmerica Credit Union too has hints for those that would be rich.

Budgeting For Short And Long Term Goals

Setting a budget and developing a spending plan is a great way to relieve uncertainty and stress while also helping to figure out how to meet both your short-term and long-term financial goals. Use this worksheet to calculate your monthly expenses and income to get an idea of what you have to work with, what your commitments are, and what you have remaining to devote to your goals.

Budgeting your finances allows you to become better prepared for those unwanted and unexpected expenses when they arise (i.e. car maintenance, home repairs, and medical costs). It also allows you to have a “true” budget when it comes to where you are spending.

Understanding Your Credit And How To Build It

From getting approved for a loan to lower interest rates, there are many benefits to improving your credit. Use this tip sheet to learn about the factors that affect your credit score and how you can improve your score (and overall financial health!) Reviewing your credit cards’ limits, interest rates and history put you into a position to space out purchases which would have less of an impact on your overall savings/checking accounts. You may find after your review, you could open a new line of credit to assist with expanding your Credit Utilization, thus improving your credit score. However, you won’t know until your make time to review your credit situation.

Building and maintaining your credit history are both an important part of everyone’s financial journey and having a reliable credit history shows lenders you are capable of making payments and on time. When first starting your credit journey there are a few options one can take to build their credit in a safe and controlled manner with one example being a youth credit card. Establishing and understanding good credit habits especially at an early age allow youth to grow into lives with responsible financial decision making.

Setting Financial Goals

Do you remember the last time you ironed out the details for your next financial goal(s)? Whether it’s for a new car, vacation, home or even education. Understanding how much money needs to be saved allows for a clear path towards reaching your goals all while staying within your budget.

Utilizing Online Banking to Be Aware of your Finances

Online Banking allows you to monitor all your transactions in a safe and timely manner. Your account activity is almost instantly displayed for your review, whether you made a payment, used your debit card, transferred funds or even paid a bill. So many things can be done with online banking, your own monitoring and peace of mind is definitely one of them.

What You Can Do Now

Education.  Financial awareness does not have to be a difficult or daunting task for anyone, especially with the many resources readily available for members to take advantage of.  Through our partnership with GreenPath Financial Wellness, we provide our members financial education, free financial counseling, credit report reviews, student loan counseling, and much more!  We invite you to utilize this free service made available to you as a SafeAmerica Credit Union member.

GreenPath Financial Wellness

Start young.  Being aware of money management, no matter how simple, at an early age can only set you up for success in the future.  You can start the process of teaching your little ones healthy financial habits, as well as becoming even more financially aware yourself, by looking into youth savings programs.  SafeAmerica Credit Union offers a robust youth program that can help them on the path to financial success.

Youth Program

August 10, 2021 • By Kevin Alvarez

Increasing Your Financial Awareness: Recorded Webinar

Learning about personal finances can feel overwhelming or out of reach. This webinar recording provides discussion and tips for more easily manage our finances.

What You'll Learn

  • Ways to take control of your finances
  • Money mistakes you can learn from
  • Practical steps to increase your financial awareness

As a member, we provide you with access to certified experts who will empower you to eliminate financial stress, get out of debt, increase savings, and achieve your financial goals.

Click below to learn more on how GreenPath Financial Wellness can play an important role towards your financial freedom.

GreenPath
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