Use This Loan Calculator to Figure out Your Payments

Nelson Smith |Aug 1, 2019
This loan calculator will help you figure out what your monthly loan payments will be based on the size of the loan and the interest rate.
Use This Loan Calculator to Figure out Your Payments

Use This Loan Calculator to Figure out Your Payments

Nelson Smith |Aug 1, 2019

What Can You Afford?

Debt is an unfortunate reality for the majority of Americans.

Some people think debt is always bad. They’ll repeat mantras like “there’s no such thing as good debt,” likely remembering their days of struggling with student loan or credit card debt.

But these folks are short-sighted. The important thing to remember is debt is a tool that can be effectively used to your advantage. Borrowing $30,000 to spend on an education that will increase your earning power by $15,000 per year is a fantastic investment, even if it takes years to pay it back. So is buying a sensible car so you can get to work or getting a mortgage to protect yourself from greedy landlords raising rents in a hot housing market.

There are two important things to remember when taking out debt. The first is to always use debt to buy assets, not liabilities. Borrowing to buy a house or finance an education is fine. Using credit cards to finance a vacation or some other consumable isn’t a good idea. Second, make sure you have a good idea of what you’re signing up for. Think about your new potential debt critically before signing up. Can you really afford it? Is it really necessary?

We can help with that second part. We’ve created a loan calculator you’re going to want to consult before signing on the dotted line. Let’s take a closer look at how it works as well as some general tips for getting out of debt as quickly as possible.

The Loan Calculator

This calculator will break down what your loan payment will be, but you’ll need to provide it with the following inputs first:

Loan Amount

This doesn’t need much explanation. This is the amount you’re going to borrow. Make sure you add any loan fees (if applicable) to the face value of your loan.

Interest Rate

Another simple category. This will be prominently displayed on any loan agreement.

It’s fine to input an estimated interest rate if you’ve just begun the process of shopping for a mortgage or car loan. A little online research will reveal what the going rates are for each type of loan.

Loan Period

This is also called the amortization period. It’s how long the loan will take to be paid back. Car loans will typically stretch for anywhere from three to seven years, while mortgages are a 15- to 30-year commitment.

And that’s it. The calculator will take these variables and use them to determine your loan payment. Feel free to play around; you’ll see how extending the loan period will make a loan more affordable. But remember, doing that will increase the total interest cost of the loan.

Next we’ll take a look at different types of loans you might get, and what you’ll need to know before agreeing to the commitment.

Types of Loans

A loan can be arranged on any asset, provided you have a lender and a borrower agree to terms. But ultimately they boil down to two different kinds: installment and revolving loans.

We’ll start with an installment, or fixed, loan. This is your standard loan where a borrower takes a fixed amount and slowly pays it off over a period of time at a fixed payment plan. The banking industry refers to these as installment loans.

A car loan is an installment loan. So are student loans. A mortgage is as well, although the payment could fluctuate if you’ve taken out a variable rate mortgage. Those mortgages aren’t so common nowadays, since they didn’t tend to work out so well for borrowers in 2006-08. Most borrowers prefer the security of a fixed monthly payment.

Typically, a standard installment loan will never stretch out for longer than the life of the underlying asset. This means that a car loan must be paid off relatively quickly, since the lender doesn’t want a borrower to continue paying something off after it has become worthless. An education or a house are both assets that can last decades, so banks allow borrowers to pay them back slowly. These loans also tend to have lower interest rates because they’re backed by secure assets.

Compare that to a payday loan, a short-term loan that only lasts a couple of weeks. Payday loans come with the highest interest rates of all because they’re given to folks with poor credit who have just admitted to having money management problems. You’re looking at interest rates of 25% over just a week or two. It’s best to avoid payday loans at all costs.

Next, let's talk about revolving loans, flexible loans that can fluctuate depending on how much the debtor needs to borrow. The two main types of revolving loans are credit cards and lines of credit.

A revolving loan will give the borrower the flexibility to borrow up to a predetermined limit with interest being charged on just the balance owing. Repayment terms will be more flexible as well, with a borrower being allowed to pay as little as a small monthly minimum or a maximum of the entire balance.

Revolving loans can be secured against assets. Home owners commonly take out lines of credit that are secured by the equity in their property to pay for home improvements or to just consolidate other bills. These special lines of credit — which are called home equity lines of credit (or HELOCs) — are offered at similar rates to mortgages since they’re secured by the value of the home.

Unsecured lines of credit exist, but most folks access revolving credit through credit cards. An unsecured loan doesn’t have any specific asset a lender can seize if the borrower stops paying. These loans are only secured by the general credit worthiness of the borrower. This works most of the time, since the majority of people don’t default on debts unless they have no other choice.

Credit cards are extremely flexible and offer a low, mandatory monthly payment. Borrowers pay for this privilege through high interest rates on any outstanding balance. Credit card interest will set you back anywhere from 1-3% per month.

Remember, credit cards aren’t secured by anything physical. If you stop paying your credit card, the bank is going to have to do some work to get you to pay. Interest rates charged to credit card borrowers reflect that risk.

Picking a Lender

Many borrowers are so worried they’ll get denied a loan (despite excellent credit) that they take the first offer put in front of them. Many banks count on this when applicants want a mortgage or car loan. A little negotiation can go a long way.

It’s amazing how threatening to walk away from a loan will get a lender to lower their interest rate. Even a reduction of half a percent can mean a lot of money over the life of a loan, especially when we’re talking long-term mortgages.

It also makes a ton of sense to shop a few different lenders before making a big purchase. Leverage each lender against the previous one until you come up with the best rate. A mortgage broker can help with this when buying a house, especially if you don’t have the time nor the ambition to talk to a few different lenders.

Interest rates aren’t everything, however. You’ll also want the flexibility to make extra payments on a loan if you’re serious about slaying debt quickly. Sometimes a bank will give borrowers the lowest rate but will lock them into a contract that won’t give any flexibility.

Paying back a loan early can result in some serious savings. Say you borrow $30,000 over a five-year term at 5% interest. If you take all five years to pay back the loan, you’re looking at interest costs of almost $4,000. But if the same loan is paid back in three years, the total cost of borrowing is just over $2,300.

Who couldn’t use an extra $1,700? That’s how much you can save paying back a loan early.

Don’t forget about other factors when choosing your lender. Some banks offer excellent customer service. Others might offer free banking packages for borrowers. These perks matter, especially for somebody with good credit who is likely receiving similar offers from every lender.

Getting out of Debt

It doesn’t matter if you’re wallowing in debt or have a relatively clean personal balance sheet, it’s still a good idea to get out of debt as quickly as possible. You want to be earning interest, not paying it.

Good debt habits mirror good personal finance habits. To get out of debt quickly you’ll need to free up cash dedicated to other expenses and funnel it toward clearing up loans. This means spending less on everything, especially the big three expenses of housing, transportation and food.

One way to minimize your debt before you even start is to reduce the amount you borrow in the first place. If your bank tells you a $30,000 car loan won’t stretch your budget, opt for a $20,000 loan instead. Do the same thing with your mortgage. You’ll free up hundreds of dollars each month, which can then be thrown at the loan to pay it down all the faster.

Many people have had success using the snowball method to get rid of debt. You tackle the smallest debt first, throwing as much as possible toward it while making minimum payments on your other debts. Once the lowest balance is eliminated, move to the next lowest.

The snowball method gives borrowers psychological victories, which will encourage them to keep going. And it frees up having to make so many minimum payments. But it doesn’t factor in interest rates charged. You’ll want to do the math and maybe alter the snowball method a little before starting.

Improving your credit score is another way you’ll spend less on loans over the long-term and get out of debt faster.

While the exact formula used to determine your credit score is a tightly guarded secret, there are easy moves you can take to improve your score. You’ll want to clear up any accounts that are delinquent. Reducing your current debt-to-available-debt ratio on your credit cards will also help. Applications for new credit will also reduce your score, so keep those to a minimum.

Ultimately, getting a good credit score comes down to paying your bills on time. As long as you keep your creditors happy, it’ll be reflected in your score.

Smart borrowers can also refinance debt to lessen the pressure.

Say you’re struggling with credit card debt, but still have a good credit score. You could apply for a debt consolidation loan at a much lower interest rate, which would immediately decrease your monthly payments. When done right, a debt consolidation loan will save you thousands in interest.

Many credit cards love these types of borrowers, and will offer low-interest balance transfers to entice them to switch card providers. I’d caution people to be careful before accepting one of these offers, however. Once the initial grace period runs out, you’ll be right back to the same high-interest situation with this new card. You’ll want to make sure a serious dent is made to that balance while the rate charged is low.

Ultimately, getting out of debt won’t be easy. It’ll require months — if not years — of sacrifice.

The Bottom Line

Debt gets a bad rap, especially from people who have struggled with it. Some of these naysayers go as far as calling debt “evil” and proclaiming there’s no such thing as good debt.

I disagree. Avoiding debt is a good idea, especially high interest rates offered by credit cards or payday loans. But when used intelligently, debt is a tool that can better your life in so many ways.

There’s nothing wrong with financing big ticket items like a house, car or your education, provided these are done responsibly. Keep your payments low and you’ll be fine.

This calculator will help you use debt better, and the tips provided will allow you to get out of debt quickly, minimizing the total interest.

Our Most Valuable advice

Everything You Need to Know About Filing Your Own Taxes

Katie Macomb | August 1, 2019

It's Not Fun, but It Has to be Done Benjamin Franklin wrote a 1789 letter that states, “But in this world nothing can be said to be certain, except death and taxes.” Even at the United States’ early beginnings, federal taxes were a necessary evil to fund various public projects and administrative costs. Today, federal taxes serve much of the same purpose. While virtually no one likes to prepare and file their taxes, it is a necessity if you want to avoid fines and further hassle. It is no secret that preparing and filing your taxes is notoriously complicated. Many people lament that it should not be so difficult to pay the government. However, some of the complications allow people to save money if they discover specific tax benefits. Knowing how to file your own taxes may be a good option if your tax situation is relatively straightforward, or if you are willing to learn the process. Why Do You Need to File Your Taxes Every Year? The short answer is that federal law requires that most individuals file taxes annually. Income taxes are assessed every year based on your income earned during that period. You then pay a percentage of that income to the government, less any deductions, adjustments, or credits that you qualify to receive. If you do not file (and pay) your taxes, then you may be assessed penalties and interest. The Internal Revenue Service (IRS) can even go as far as garnishing your wages and repossessing your property if you do not file and pay as required. The Benefits of Filing Your Own Taxes If you are one of the 43% of Americans that are doing your own taxes, you are certainly not alone. Roughly 53 million people prepared and filed their own taxes in 2018. There are many benefits to filing your own taxes, including: Saving money: Hiring a tax professional is expensive, and many people can prepare and file their returns on their own, completely free of charge. Control: Some people like knowing the exact information that is included in their return and being able to control the data, and for some, knowing precisely how the numbers work out, is comforting. Gain helpful information: When you prepare your taxes, you can see what items saved you money this year or which issues you should address so you can save money next year. While filing your own taxes is complicated, it can be beneficial under the right circumstances. There are several programs online that walk you through the process to help ensure you are taking advantage of all of your available deductions and credits. The Drawbacks of Filing Your Own Taxes In addition to the benefits, there are also some disadvantages to filing your own taxes. These include: Time and effort: Preparing and filing your taxes takes time and work You have to sift through financial information and deal with concepts that you may not understand well. The process can be frustrating and take a considerable amount of time. Error risk: If you do not completely understand how your taxes work, you run the risk of making a mistake because of misconceptions. If that happens, it could lead to underpayment and audits down the road. Questions: Even if you use a tax preparation software, you may still have questions that will remain unanswered unless you do significant research or reach out to a tax professional. For some people, the risk of having a substantial error that triggers the IRS’s attention is enough to scare them away from preparing their own taxes. Preparing for Filing Your Taxes When you begin work on your taxes, you should have information gathered throughout the year. Some of the most common items that you will need include: Social Security numbers for you, your spouse, and any dependents Information about wages, such as W2s or 1099s Investment income information Documents that represent any other source of income Information regarding adjustments to income, such as student loan interest paid, IRA contributions, and health savings account contributions, just to name a few Information regarding potential credits, including, for example, child care expenses, education expenses, or retirement savings contributions Data about any tax payments that you may have made throughout the year Keeping good records will help make tax preparation easier at the beginning of the year. [youmaylike] The Basics About What You Can Claim When Filing You must pay income taxes on all your income earned throughout the year. However, that income is reduced by a few things. The further you can reduce your taxable income, the less you tax you will pay. There are three general categories of tax reduction methods: Standard or Itemized Deductions Everyone can claim either the standard or itemized deductions. Standard deductions are a set amount that is based on your filing status. Itemized deductions are based on actual expenses that you incurred throughout the year. You can choose to use the higher deduction. The higher the deduction, the less tax you will have to pay on your income because your income decreases on paper. Itemized deductions include things like medical expenses, state and local tax payments, and home mortgage interest deductions. Itemized deductions will only decrease your income by a certain percentage, or up to a specific point. Adjustments Some adjustments to your income may also be available. These include things like paying student loan interest or alimony. Adjustments are more valuable compared to deductions because they decrease your income dollar for dollar. Credits A credit decreases your taxable income as well. Some credits are refundable while others are not. For example, you get a child tax credit simply for having children that qualify for that credit, but that credit will not be paid out to you if you do not have any tax obligations. On the other hand, the Earned Income Credit, which is available for low-income filers, will be refunded to you even if you do not owe any taxes. There are a wide variety of deductions and credits available. Take a look at the federal forms and related schedules to determine whether you might qualify for any of these. How to File Your Own Taxes If You Live Overseas If you earned income in the United States as a U.S. citizen or resident alien, you likely need to pay taxes on that income. This is true even if you live overseas. You can still choose to e-file or mail your tax return to the IRS once you have it prepared, just as if you physically lived in the United States. In some cases, you will be taxed on the income that you earned throughout the world. However, you may be able to deduct a portion or all of the revenue that was not made in the United States in some circumstances. Filing Online The IRS offers an online filing option that is free for individuals that have an adjusted gross income below a specific threshold. Generally, your income must be below $66,000 to qualify for this service. You can also file online by using a commercial tax preparation software. Examples of this type of software include: H&R Block TurboTax TaxCut TaxSlayer There are many programs available that will file your taxes for you, often for a fee. Knowing how to file your own taxes can be a great way to save money, but it can be tricky as well. If you want to file your taxes yourself, be sure to read the form instructions thoroughly and get familiar with various tax saving opportunities before you begin preparing your return.

5 of the Best Investment Apps for Beginners

Stephanie Colestock | August 1, 2019

Make Investing Simple Whether you’re putting away your first $1,000 or have been saving for the future for years, you’re going to want to consider investing your funds at some point. Doing so will allow you to maximize returns and exponentially grow your savings. Unfortunately, the investment process can be pretty intimidating, especially if you are starting out on your own. It’s hard to know how to begin, where to invest, how to balance your portfolio and even what sort of fees you should expect to pay along the way. That’s where the convenience and ease of today’s best investment apps can come into play. What Are Investment Apps? Once upon a time, your only choice for investing was to pick up the phone and call your stock broker to initiate a trade. You were charged for the service, either based on commission or as a flat fee per transaction. While stock brokers are still an option, you can take investing into your own hands these days, without ever needing to talk to another human. And it’s all thanks to investment apps and platforms. Today’s apps offer a range of services and features. With them, users can: Research funds and individual stocks View fees and expenses related to investment choices Invest funds on-the-go, and even automate regular contributions Automatically reinvest earnings on current investments Adjust portfolio for personal risk tolerance View performance projections Choose funds or individual stocks that align with personal beliefs, through portfolios based on socially-responsible missions The best part? Investing through trusted apps is usually cheaper, faster and you’ll have instant access to your portfolio/reports at any time of day. Not only that, but you’ll also be able to set your investment risk tolerance, rebalance your portfolio and even reinvest earnings automatically. Who Are Investment Apps Designed For? Whether you’ve been playing the market for ages or are ready to invest your first $100, the right investment app is worth considering. For those new to the stock market, apps will simplify the process and put the power of investing at your fingertips… literally. From your phone or computer, you can easily see portfolio recommendations based on your own goals, savings plans and even risk tolerances. The right app will tell you up front how much you can expect to spend in fees throughout the year, and can even allow you to automate many of the more confusing aspects, such as picking well-performing stocks or even rebalancing. While investment apps are ideal for beginners, newbies aren’t the only ones who will see the benefits. Even seasoned investors will find the process easy to use, and may even learn that these platforms can maximize returns (and save them money in fees) along the way. Not to mention, many investment apps offer additional insight into specific funds, so you can choose to invest in companies that align with your own passions and beliefs. Now that you know why you should consider using an investment app for your own savings, let’s take a look at some of the best ones available today. Best Investment Apps Great for Beginners: Acorns Fees and Expenses: For investors with less than $1 million invested, fees are between $1-3 per month depending on the account option you choose. Acorns is also free for college students. Beginning Investment Requirement: At least $5 to start Types of Investments Available: ETFs (exchange-traded funds) Portfolio Options: Conservative, Moderately Conservative, Moderate, Moderately Aggressive, Aggressive Automatic Investing?: Yes Automatic Reinvesting?: Yes Automatic Rebalancing?: Yes If you want an easy, hands-off approach to investing that won’t leave your head spinning, Acorns is a great first choice. This app not only simplifies investing for beginners, but allows investors to completely automate the process from start to finish. After connecting the app to your debit card, the app will “round up” each of your daily purchases, putting the savings into an investment holding account. Once you reach the minimum required, Acorns will invest this money on your behalf, based on your account preferences. The app will also reinvest your earnings, as well as rebalance your portfolio when necessary. [youmaylike] Great for Truly Free Investing: Robinhood Fees and Expenses: Robinhood is a free investment platform in every sense of the word, pledging to never charge company fees or commissions to customers. Beginning Investment Requirement: You’ll need $2,000 to get started Types of Investments Available: ETFs, stocks, cryptocurrency and options Portfolio Options: Interest-based options such as Fashion ETF, Tech ETF and Energy ETF, as well as a standard S&P 500 ETF, all with personal risk tolerance settings. You’ll also find “collections,” which are individual stocks grouped according to specific interests — such as companies with female CEOs or that are in the social media sector. Automatic Investing?: No Automatic Reinvesting?: No Automatic Rebalancing?: Yes A great option for beginners and experienced investors alike, Robinhood makes the process both easy and affordable. How affordable? Well, it’s entirely free. By offering a truly free experience, Robinhood saves investors some serious cash over time. Additionally, the platform makes it easy to choose individual stocks or ETFs based on personal interests. If you want to invest in cryptocurrency or options, you can also do so through Robinhood. One of the biggest limitations of the platform, though, is its automation. While you can set up automatic deposits into your account, you will need to manually invest those funds and then reinvest (or withdraw) your dividends. Stash Fees and Expenses: $1 per month fee for those with less than $5,000 invested, or $2 per month for retirement accounts with less than $5,000. For users under 25, fees on retirement accounts are waived. If you have more than $5,000 invested, your fee will be 0.25% annually. Beginning Investment Requirement: You’ll need at least $5 to begin investing (fractional shares are available) Types of Investments Available: ETFs (exchange-traded funds) and fractional stock shares Portfolio Options: Too many to name, ranging from things you Want (portfolios that are conservative to aggressive mixes), things you Believe (such as groups of companies that believe in clean energy, LGBT rights, etc.), and things you Like (tech, retail and social media companies). Automatic Investing?: Yes Automatic Reinvesting?: No Automatic Rebalancing?: No The closest competitor to Acorns, Stash seeks to make investing easy for everyone, regardless of your goals and passions. They have three account options to choose from, allowing you to manage your investment and retirement accounts, or even a child’s education savings through custodial accounts. With Auto-Stash, you can set any number of automatic investment options and transfers. However, Stash will not rebalance your portfolio for you, nor will they reinvest dividends on your behalf. Wealthfront Fees and Expenses: 0.25% annually Beginning Investment Requirement: $500 minimum initial investment Types of Investments Available: ETFs (exchange-traded funds), individual stocks, retirement accounts (401k, IRA), 529 savings plans, trusts Portfolio Options: 11 asset classes to choose from, including natural resources and real estate Automatic Investing?: Yes Automatic Reinvesting?: Yes Automatic Rebalancing?: Yes Wealthfront’s investment platform is designed to be friendly for users of all experience levels. If you’re a seasoned investor, you’ll enjoy all of the options available to you, including the ability to manage your retirement accounts, education savings, and even non-profits or trusts. If you’re a newbie, their free financial expertise center is the perfect place to learn all about investing and your future. TD Ameritrade Fees and Expenses: The managed, automatic portfolio investment option (called Essential Portfolios) is available with a 0.30% advisory fee Beginning Investment Requirement: $5,000 minimum for managed portfolios (no minimum requirement for traditional trading) Types of Investments Available: Stocks, ETFs, options, mutual funds, futures, bonds/CDs, Forex, cryptocurrency Portfolio Options: Essential Portfolios (EP) offer investors a range of options from Conservative to Aggressive, based on your individual passions, preferences and tolerances Automatic Investing?: Yes, with EP Automatic Reinvesting?: Yes Automatic Rebalancing?: Yes A more traditional brokerage app, TD Ameritrade is one of the most recognizable names in the industry. You can easily educate yourself on all things financial, thanks to their free videos and posts. If you want a traditional experience, you can choose your trades and pay per transaction. Prefer a more streamlined, automated approach? Opt for their Essential Portfolios, a hands-off investment option (robo-advisor) that charges a flat monthly fee and requires little-to-no oversight from you. Plus, their app makes the investing process easier than ever with a user-friendly interface, price alerts and no minimum to get started. If you prefer a desktop experience, this is also available to you through TD Ameritrade. Bottom Line Getting started with investing can be intimidating. With all of the terminology and account options out there, it’s easy to want to run and hide. Thanks to some of today’s best investment apps, though, you can not only get started with your first portfolio but also watch your money quickly grow… no matter how much of a beginner you may be! It’s important to choose an app that offers you the portfolio options and features you want most, with fees and deposit minimums that match your financial needs. The five apps above are our favorites for beginners, making that first foray into investing easier than ever before. The hardest part will be choosing the one you love most!

5 of the Best Auto Insurance Companies

Eric Bank | August 1, 2019

Protect Against Collisions and More If you drive a car in the United States, liability insurance must cover it. This type of policy pays for medical and property damage resulting from a vehicular accident. You can also purchase comprehensive and collision insurance to cover other costs. These additional coverages help protect the value of your car should it be damaged. If you are calculating how much it will cost to buy a car, you need to take into consideration the cost of insurance as well. In this article, we’ll review the basics of car insurance and the best auto insurance companies in America, including costs, pros and cons. This is a brief introduction to automobile coverage. Liability Coverage When an accident occurs, liability insurance covers you, household members and authorized drivers for the costs associated with property damage and bodily injury. It covers the cost to repair or replace property damage that you caused. You are also covered if you cause the bodily harm or death of someone else while you are driving the car. This includes medical expenses, loss of income and specified legal defense costs. Collision Insurance If you are involved in a collision, this type of insurance will help pay for repairing or replacing your vehicle. If the collision is your fault, the coverage may extend to other damaged vehicles involved in the accident. States do not mandate that you buy collision insurance, but your lender or car dealer will if you finance or lease the car. Policies offer a range of deductibles, which is how much you’ll have to pay for repairs before the insurance kicks in. Larger deductibles lower the policy premiums but expose you to more out-of-pocket expenses if a collision occurs. Comprehensive Insurance Comprehensive insurance covers damage to your car that occurs for reasons other than a collision, including theft, fire, vandalism, weather and natural disasters. This coverage is often required if you finance your automobile. You can add riders to this insurance to provide coverage of additional costs, including auto towing, glass repair, daily rental while your car is in the shop and emergency roadside service. As with collision insurance, you can set the deductible on your comprehensive insurance policy to cut your premium costs. Gap Insurance If your car is severely damaged in an accident or other incident, you might find that your comprehensive and collision damage won’t provide enough coverage to pay off the amount you owe on the vehicle. Many policies pay only the fair market value of a totaled car, which might be only 80% of the amount you owe. You can buy additional insurance to plug this gap and ensure you can pay off the car loan in full if the vehicle is destroyed or stolen. Normally, car leases require you to buy gap insurance. If you pay cash or pay off your loan, you can save money by avoiding or dropping gap insurance when no longer needed. Top Five Auto Insurers These five insurers all offer full coverage policies and many additional services. Amica Amica is a superstar among car insurers, winning accolades from Consumer Reports and J.D. Powers. It’s known for handling the claims process smoothly. Average annual cost for full coverage: $1,360. Pros You can have your car repaired at any body shop, without restrictions. Offers a premium package which, for additional cost, provides full glass coverage, rental coverage, good driving rewards and identity fraud monitoring. Superior financial stability rating from A.M. Best. Cons Missing some discounts, such as military, low-mileage and prepay discounts. Must speak on phone to get a quote. Sparse website when it comes to customer education. [youmaylike] State Farm State Farm is the country’s largest multi-line insurance company. It excels in customer service and regularly garners high marks from customers. Average annual cost for full coverage: $1,337. Pros Superior financial stability rating from A.M. Best. Excellent online quote tool, getting customers a quote in as little as five minutes. Easy claim handling and top service from its more than 18,000 agents and its easy-to-use mobile app. Cons Doesn’t offer coverage for new car replacement or uninsured motorists. Missing prepayment and automatic payment discounts. The Hartford While only 11th in size, the Hartford is big when it comes to policy options. It offers rates based on your actual driving as well as full-replacement of new cars when destroyed shortly after purchase. Average annual cost for full coverage: N/A. Pros Solid benefits, including superior roadside assistance and towing programs. High marks from customers for their purchase experiences. One of the few insurers with mechanical breakdown coverage for out-of-warranty repairs. Cons Mediocre service interaction according to J.D. Power surveys. Sparse online learning materials. Geico Geico is the second-largest U.S. car insurer. It is a favorite among tech-savvy geeks who appreciate the insurer’s mobile app and excellent online service. Average annual cost for full coverage: $1,627. Pros Geico offers plenty of ways to save, such as multi-vehicle, driving history and vehicle safety equipment discounts. Special savings for active and retired military members and federal employees. Full-featured mobile app for getting quotes, buying insurance, managing your policy, submitting claims, summoning roadside assistance and making payments. Cons Human help may be in short supply, as just about everything is handled online. No gap insurance offered. USAA No insurer matches USAA for service to military members. Unfortunately, it's only available to active service members, their families and retired veterans. Average annual cost for full coverage: $896. Pros Superior financial stability rating from A.M. Best. Top-ranked purchase experience score from J.D. Power. Cons Missing gap coverage. Doesn’t offer interior vehicle coverage or new car replacement coverage. Limited availability. The Right One for You Competition in the insurance industry helps drive down prices and prompts insurers to offer money-saving features. For example, your carrier might reward you for a safe driving record and for having a long-term relationship with the insurer. The right insurer for you is one that is highly rated for service, offers the exact coverage you want and does so at an unbeatable price. You should always gather multiple quotes before selecting an insurer, and make sure you get credit for all applicable discounts.

Our Most Valuable advice

How to Apply for a Business Credit Card

Myles Leva | August 1, 2019

Paying for Business Expenses Applying for a business credit card is something a small business should seriously consider for itself. Business credit cards can provide a range of benefits to a business. They allow a company to build up credit for better borrowing conditions down the road. They’re also quite easy to apply for. In this article we’ll go over how to apply for a business credit card and other important points to note. What Is a Business Credit Card? A business credit card is a credit card that is intended for business expenses. These cards are not meant for any individual’s personal use, but they are available to businesses of all sizes. What Is a Business Credit Card Used For? Business credit cards are meant for business expenses, and as such, they come with several perks that you wouldn’t get with a normal credit card. Business credit cards typically have far higher credit limits than normal cards, but they are also harder to qualify for. As a business phenomenon, business credit cards vary their offers greatly, and certain cards are meant for certain businesses. They are also highly customizable when it comes to individual payment terms. Businesses don't always have consistent incomes like individuals do, and business credit cards handle this problem. These cards are used to gain access to a long line of credit, to control employee spending on business expenses and more. One of their other common uses is to make accounting easier, as putting all business expenses on one separate account definitely makes reporting to the Internal Revenue Service easier. In the end, there are many uses for a business credit card. Why Would I Need a Business Credit Card? You might not need one, but if you run a business, you’ll be leaving money on the table by not at least looking into them. Business credit cards can solve many of the problems business owners face. [seealso] [youmaylike] If you need employees to make purchases for the business, a business credit card is the safest option. These cards can be given to authorized users, a status you can easily give to any of your employees. From here, these cards make it easy to monitor employee spending and spot any discrepancies. You can attach customized user privileges to each card to limit spending and place limits on where the card can be used. As mentioned, if you feel like your credit is too limited, business credit cards are a sure way around low credit. According to the American Bankers Association, the average monthly payment on a business credit card is twice as high as the average payment on a normal one. If you’ve found yourself annoyed with the Internal Revenue Service over the complicated reporting processes for business owners, you’re not alone. This is where a business credit card can solve another problem. Simply handing over your business credit card statements to your accountant will make them love you. It will also provide them with the information they need to predict future spending. Another great use for a business credit card is lifting your liability for debts. Liability for credit card debt is determined by the liability offered by the card. If you’re using a personal credit card for business expenses, you are liable for all debts. On the other hand, if you use a business credit card with commercial liability, your business is liable for any debts, which changes the game. Keep in mind that some cards offer joint liability, which leaves both you and your business liable for any debts. Make sure you know what you’re getting into before signing any paperwork. Lastly, just as personal credit cards offer rewards programs, so do business cards. The main difference here is that business credit card rewards are tailored to your business needs. How to Apply for a Business Credit Card Before you apply for a business credit card, you should make sure you’re eligible. For the most part, you only require the following to be able to apply for one: A legal name for your business. A business structure to apply with, such as a Limited Liability Corporation. An explanation of the nature of your business. You’ll typically be given a list of industry types to choose from. A tax ID number issued by the Internal Revenue Service Your roll in the business you’re representing Various business/financial information including: Annual revenue Number of employees Length of time in business Estimated monthly expenses If you have this information ready, you can apply for a business credit card. At this point, it would be wise to shop around and find the best option for your business. Your decision in the business credit card you choose will have larger ramifications than your choice in a personal credit card. Applying for a business credit card is much the same as applying for a personal one. There are a few differences, but the main thing to remember is that business credit cards are taken more seriously than normal ones, so you’ll have to face a higher bar of entry. This doesn’t mean getting a business credit card is hard, but it does mean you need to arrive more well-prepared than you normally would. To make things easier, you can prepare for certain obstacles in advance. You may need to sign a personal guarantee that you will pay off any debts. Also keep in mind that if you’re the one applying for a business credit card, and your business doesn’t already have one, they will conduct a personal credit check. It may be best to try to optimize your personal credit if you plan on applying for a business credit card in the future. Some Options at a Glance Here are some of the most popular options for small business credit cards: Chase Inc Business Preferred This is a great option for a few reasons. With the Business Preferred card from Chase Inc, you get 80,000 ultimate reward points when you spend $5,000 with the card in the first three months. The card also provides generic, but highly-useful benefits for business owners. Business Platinum Card from American Express The Business Platinum is ideal for businesses that spend a lot on flights and travel. This card offers numerous rewards on flight and hotel expenses and makes sure you get something serious back if you use it for these expenses. Chase Inc Business Unlimited The Chase Inc Business Unlimited offers unlimited 1.5% cash back. While we’ve said enough already, they also offer several other perks that are overshadowed by their first one.

.