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Upstart Personal Loans Review

Upstart lends to college-educated borrowers who have thin credit files.

Upstart is a good fit for those who:

  • Have average to good credit scores. The minimum required score is 620, but Upstart borrowers have an average score of 692.
  • Are building credit from scratch. Upstart says it lends to borrowers who don’t have credit scores yet by analyzing their academic history. The lender also accepts job-offer letters from those who are starting out in their careers.
  • Have higher-than-average incomes. Though the company has no minimum requirement, the average income of an Upstart borrower was $97,234 as of October 2016 — considerably higher than the U.S. national median of $53,657.
  • Don’t have high debt-to-income ratios. The average Upstart borrower had a ratio of 18%, according to the company.
  • Want a loan to build technical skills. The lender has partnerships with more than a dozen coding boot camps. If a borrower is accepted into any one of them and wants to take a loan to cover tuition, Upstart waives its requirement that the borrower should have a college degree or job offer to qualify for the loan.
Apply Now Detailed Upstart personal loan review

To review Upstart, NerdWallet collected more than 30 data points from the lender, interviewed company executives, completed the online loan application process with sample data, and compared the lender with others that seek the same customer or offer a similar product.

How to apply

Minimum requirements

Lending terms

Fees and penalties

Learn about personal loans

Upstart’s underwriting process changes depending on each person’s credit profile, says Dave Girouard, the company’s CEO and co-founder.

For example, a recent grad with little or no credit history would be assessed mainly on academic performance, but those factors wouldn’t be as important in sizing up a borrower with years of credit experience, he says.

Upstart doesn’t lend money to borrowers directly. Instead, it charges an origination fee to connect borrowers with accredited investors who fund the loans. All borrowers receive a grade based on their profile. The grade is then used to determine the interest rate on the loan.

Applying for an Upstart loan can take a little longer than the process at other online lenders, based on your background. You can check your potential interest rates in minutes without affecting your credit scores. But if you decide to take a loan, you may need to have additional documents handy, such as your college transcript, SAT scores or pay stubs.

If you’re new to credit, Earnest and SoFi also consider your academic background and job history in their loan decisions. But both lenders typically approve borrowers with excellent credit scores and very high incomes. Pave also considers those with thin credit histories and rewards borrowers who take a loan to improve their career or education with a lower interest rate.

How to apply for an Upstart loan
  1. Fill out a preliminary online application with detailed information about your education and employment. Upstart conducts a soft credit check, which won’t affect your credit scores, to show you rates.
  1. If you’re approved, you can select loan terms that are favorable to you.
  1. Next, you have to provide your bank account information to receive the money and upload documents to verify your identity and income.
  1. You’ll receive a hard credit check, which does affect your credit scores, before Upstart sends you the money. It pulls credit information from credit bureau TransUnion. You’ll receive the loan minus an origination fee. You can modify your monthly repayment amount at any time.

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Minimum requirements for an Upstart loan
  • Minimum credit score required: 620.
  • Minimum gross income required: None.
  • Minimum credit history: None.
  • Maximum debt-to-income ratio: None, but generally 18%.

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Upstart’s lending terms
  • Annual percentage rate range: 6.25% to 29.99%.
  • Minimum loan amount: $1,000.
  • Maximum loan amount: $50,000.
  • Loan duration: Three years and five years.
  • Time to receive funds: Next day; three-day waiting period for education loans.

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Upstart’s fees and penalties
  • Origination fee: 1% to 6% of loan amount, depending on borrower’s grade.
  • Prepayment fee: None.
  • Late fees: 5% of payment amount or $15, whichever is greater.
  • Personal-check processing fees: None.
  • Returned payment fee: $15.

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Before you take a personal loan

Consider other debt consolidation options. An unsecured personal loan isn’t your only option to tackle debt. If you have good credit, you might be able to find a 0% credit card promotional offer. Homeowners might be able to get a home equity line of credit. You should also compare other debt consolidation lenders.

Check your credit report and know your financial strengths. Your chances of being approved for a loan and the interest rate you’ll be offered don’t depend just on your credit scores; they also depend on the length of your credit history, your income and other debts. High debt might outweigh a great credit score, for example, or a low score could be bolstered by a high income.

Learn how personal loans work. All lenders require certain personal information to verify your identity and income and check your credit.

Calculate payment scenarios. Run the numbers on different loan amounts and interest rates to see how the payments might affect your monthly budget.

Have a plan for getting out of debt. Personal loans may help you consolidate debt, but in the long run you’ll need to make a budget that both covers expenses and helps you save for emergencies and opportunities.

Amrita Jayakumar is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @ajbombay.

Updated Oct. 17, 2016.

Stop Balancing Your Checkbook

Think about how difficult it was to clean a house 100 years ago, or make a phone call, or travel across the country.

Tasks that were routine then — like, say, beating a rug to clean it — have all but disappeared.

Likewise, technology has obliterated or automated a lot of the money tasks that were once mandatory for people who wanted to be responsible with their finances. If you do any of the following chores, you can and should do them a lot differently now:

Balance your checkbook

Once upon a time, you got a paper statement each month from your bank. You compared the transactions on that statement with what you’d recorded in your check register, adding in any deposits and subtracting any checks or other transactions that hadn’t posted by the time the statement was printed. Then you spent the next hour trying to figure out why the totals didn’t match. (Here’s how to do it right.)

At least some of us did.

These days, though, we write far fewer checks, most transactions post pretty quickly and bank errors are rare. We still need to monitor our accounts to spot bogus transactions, keep track of our balances and avoid overdrafts, but the monthly ritual of trying to reconcile a statement to a register is pretty much obsolete. (If you still do write a lot of checks, please switch to more secure payment methods. The information on each check gives the bad guys every bit of information they need to raid your account.)

Rebalance your investments

The right asset allocation — how you divvy up your funds among various classes of stocks, bonds and cash — can help you achieve your investment goals with less risk.

In the olden days, we had to decide how much to put where and then regularly rebalance our portfolios back to those target allocations. If stocks did particularly well, for example, we’d have to sell some of those and buy some bonds to get our allocations back on track. If we failed to rebalance, we’d get our clocks cleaned when inevitable stock downturns cratered our portfolios.

Now we can outsource this burdensome task by buying target-date retirement funds, which have asset allocation and rebalancing services baked in. Or we can invest our money with an automated financial advisor that uses computer algorithms to allocate and rebalance our funds. Betterment, Wealthfront, Charles Schwab Intelligent Portfolios and Vanguard Personal Advisor Services are among the investment managers that use technology to automate investing.

Save paperwork

The IRS accepts electronic documents, and so does nearly everyone else.

You can reduce the paperwork that comes into your home by opting for electronic statements and receipts whenever possible. Services such as FileThis can automatically download electronic statements into your computer, relieving you of this chore each month. Virtually any document you get in paper form can be scanned; paper receipts needed for tax purposes should be, since many receipts fade over time otherwise and become unreadable. Back up your computer regularly to a secure online service or to a disk or drive you can store off site.

The only documents you absolutely need to keep in paper form are those that are a hassle to replace, such as birth, marriage and death certificates.

Visit a bank

Get this: People used to stand in lines to give banks their money. I kid you not.

Bringing your paycheck to the bank was a regular ritual for most workers. Today, direct deposit is the safer, automated way to go, while other checks can be deposited with your bank’s smartphone app. Most other chores that used to be done in person, such as applying for a loan, can be done faster and more easily online.

Create a budget

It’s still important to have a plan for where your future money will go and to compare your expenditures against that plan to avoid overspending.

But you no longer have to start from scratch, sifting through a pile of statements and receipts to craft a budget. Account aggregation and budgeting sites such as Mint can analyze months’ worth of transactions to help you create a spending plan, monitor your progress and warn you when you’re about to overspend in a given category.

Track your mileage

Back in the day you needed to keep a driving log, usually handwritten, to track your mileage if you wanted to be reimbursed or to deduct the expense in your business. You had to include dates and miles driven plus where you went and the business purpose of the trip. It was a lot of work and it was easy to forget trips, which meant leaving money on the table.

Fortunately, most of the hassle has been automated away now with mileage-tracking apps such as MileIQ that record when and where you drove. You swipe right to classify a trip as business or left to deem it personal. The app lets you assign a specific purpose, such as a commute between offices, customer visit, meeting, travel, etc.

Pay for a credit score or report

Knowing what lenders are saying about you is important, since the information in your credit reports is used to set insurance premiums and utility deposits in addition to determining the rates and terms you get on loans. Credit reports are also used by landlords and many employers.

Not that long ago, you typically had to pay for copies of your credit reports and scores. It was a big step forward when the federally authorized website went online more than a decade ago, but you still could access your free credit reports only once a year and you had to pay for scores.

Now you can get both pretty much on demand.

NerdWallet and other personal finance sites offer free credit scores and reports updated monthly or even weekly. The credit reports tend to come from a single credit bureau, and typically the scores are VantageScores, which share a 300-to-850 scale with FICO scores and weigh the information in your credit reports similarly. So while you won’t get a comprehensive view of your credit picture, you’ll get enough information to know generally where you stand with lenders, and you can track your progress as you work to improve and maintain your scores.

Many credit card issuers, including American Express, Bank of America and Barclaycard US, offer free FICO scores to their cardholders, while Discover offers free FICO credit scores to anyone. Capital One offers free VantageScores to anyone.

You may still want to buy your scores from to get a more precise idea of the rates and terms you’re likely to receive on a major loan such as a mortgage or an auto loan, since FICOs are the scores used in most lending decisions. But you don’t need to pay just to keep an eye on your credit.

Liz Weston is a certified financial planner and columnist at NerdWallet, a personal finance website, and author of “Your Credit Score.” Email: Twitter: @lizweston.

This article was written by NerdWallet and was originally published by The Associated Press.

Mortgage Rates Today, Monday, Oct. 17: Slight change from last week; strong market projected in West

Thirty-year and 15-year fixed mortgage rates went up a hair, while 5/1 ARM rates were lower Monday, according to a NerdWallet survey of mortgage rates published by national lenders this morning.

Mortgage Rates Today, Monday, Oct. 17 (Change from 10/14) 30-year fixed: 3.72% APR (+0.01) 15-year fixed: 3.09% APR (+0.01) 5/1 ARM: 3.51% APR (-0.10) Forecast sees overall value growth, with Denver leading the way

A new report from Veros Real Estate Solutions, a company specializing in property valuation and risk assessment, predicts that 15 of the top 25 residential markets for home value increases into next September will be in Colorado, Idaho, Washington and Oregon. In a news release from last week, Veros’ vice president of statistical and economic modeling, Eric Fox, said that this concentration is unusual. “In the 13 years that VeroFORECAST has been accurately producing forecasts, we have never seen such strong geographic polarization,” Fox said.

The top five strongest markets are projected to be Denver (+10.8%); Boulder, Colorado (+10.5%); Fort Collins, Colorado (+10.3%); Seattle (+10.2%) and Boise, Idaho (+9.7%).

“In markets with this level of national appreciation, it is most common to see a broad distribution of markets contributing to the rise,” said Fox. “What is remarkable from where we stand today is the possible concentration risk when home price appreciation and market activity become highly clustered in only a few regional areas.”

The top five weakest markets are projected to be Atlantic City, New Jersey (-2.4%); Poughkeepsie, New York (-2.3%); Cumberland, Maryland (-1.7%); Longview, Texas; (-1.5%), and Waterloo, Iowa (-1.3%).

Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

Michael Burge is a staff writer at NerdWallet, a personal finance website. Email:

How to Research Stocks

Researching a stock is a lot like shopping for a car. You can base a decision solely on technical specs, such as torque, mpg and seating capacity. But it’s also important to consider how the ride feels on the road, the manufacturer’s reputation and whether the color of the interior will camouflage dog hair.

Investors have a name for that type of research: fundamental analysis.

Fundamental analysis involves looking at numbers and other measures in a company’s financials as well as assessing the less tangible aspects of a business. This holistic approach can help you decide whether a stock deserves a parking spot in your portfolio.

How to perform quantitative research

Quantitative research begins with financial information that companies are required to file with the U.S. Securities and Exchange Commission:

  • Form 10-K is an annual report including key financial statements that have been independently audited. Here you can review a company’s assets and liabilities via the balance sheet, its sources of income and how it handles its cash via the cash flow statement, and its revenues and expenses via the income statement.
  • Form 10-Q provides a quarterly update on operations and the already mentioned financial results.
  • Annual reports include a company’s 10-K and all quarterly updates. They also provide a business overview and often color commentary about the state of the company for prospective and existing shareholders.

You’ll find highlights from these filings and important financial ratios on your brokerage’s website or on major financial news websites. This information will help you compare a company’s performance against other candidates for your investment dollars.

Don’t get too hung up on specific numbers. But starting with these line items will get you familiar with the measurable inner workings of a company:


This is the amount of money a company brought in during the specified period. It’s the first thing you’ll see on the income statement, which is why it’s often referred to as the “top line.” Sometimes revenue is broken down into “operating revenue” and “nonoperating revenue.” Operating revenue is most telling because it’s generated from the company’s core business. Nonoperating revenue often comes from one-time business activities, such as selling an asset.

Net income

This “bottom line” figure — so called because it’s listed at the end of the income statement — is the total amount of money a company has made after operating expenses, taxes and depreciation are subtracted from revenue. Revenue is the equivalent of your gross salary, and net income is comparable to what’s left over after you’ve paid taxes and living expenses.

Earnings and earnings per share (EPS)

When you divide earnings by the number of shares available to trade, you get earnings per share. This number shows a company’s profitability on a per-share basis, which makes it easier to compare with other companies. When you see earnings per share followed by “(ttm)” that refers to the “trailing twelve months.”

Earnings is far from a perfect financial measurement because it doesn’t tell you how — or how efficiently — the company uses its capital. Some companies take those earnings and reinvest them in the business. Others pay them out to shareholders in the form of dividends. It’s also easy for company management to manipulate the number by using “creative” accounting.

Price-earnings ratio (P/E)

Dividing a company’s current stock price by its earnings per share — usually over the last 12 months — gives you a company’s trailing P/E ratio. Dividing the stock price by forecasted earnings from Wall Street analysts gives you the forward P/E. This measure of a stock’s value tells you how much investors are willing to pay to receive $1 of the company’s current earnings.

Keep in mind that the P/E ratio is derived from the potentially flawed earnings per share calculation, and analyst estimates are notoriously focused on the short term. Therefore it’s not a reliable stand-alone metric.

Return on equity (ROE) and return on assets (ROA)

Return on equity reveals, in percentage terms, how much profit a company generates with each dollar shareholders have invested. The equity is shareholder equity. Return on assets shows what percentage of its profits the company generates with each dollar of its assets. Each is derived from dividing a company’s annual net income by one of those measures. These percentages also tell you something about how efficient the company is at generating profits.

Here again, beware of the gotchas. A company can artificially boost return on equity by buying back shares to reduce the shareholder equity denominator. Similarly, taking on more debt — say, loans to increase inventory or finance property — increases the amount in assets used to calculate return on assets.

» MORE: Where to get a free crash course in investing

There’s no perfect financial ratio There are endless metrics and ratios investors can use to assess a company’s general financial health and calculate the intrinsic value of its stock. But in all things, context is key. Looking at a company’s revenue or income from a single year tells you nothing about the quality of the business. You have to look at its historical data to spot trends and a general business trajectory. You must also compare key ratios to individual businesses in the same industry and industry averages. Then dive into qualitative research. If quantitative research reveals the black-and-white financials of a company’s story, qualitative research provides the technicolor details that give you a truer picture of its operations and prospects. How to perform qualitative research

Warren Buffett famously said: “Buy into a company because you want to own it, not because you want the stock to go up.” That’s because when you buy stocks, you purchase a personal stake in a business.

Doing qualitative stock research with a business-buyer mindset helps investors focus on the qualities of a company that truly matter in long-term stock investing.

Here are some questions to help you screen your potential business partners:

How does the company make money?

Sometimes it’s obvious, such as a clothing retailer whose main business is selling clothes. Sometimes it’s not, such as a fast-food company that derives most of its revenue from selling franchises or an electronics firm that relies on providing consumer financing for growth. A good rule of thumb that’s served Buffett well: Invest in common-sense companies that you truly understand.

Does this company have a competitive advantage?

Look for something about the business that makes it difficult to imitate, equal or eclipse. This could be its brand, business model, ability to innovate, research capabilities, patent ownership, operational excellence or superior distribution capabilities, to name a few. The harder it is for competitors to breach the company’s moat, the stronger the competitive advantage.

How good is the management team?

A company is only as good as its leaders’ ability to plot a course and steer the enterprise. What is their industry experience? Tenure and career trajectory? How big a personal stake do the corner-office dwellers have in the company they run, and are portions of their salaries tied directly to company performance?

You can find out a lot about management by reading their words in the transcripts of company conference calls and annual reports, and how they respond to questions from the press. Also research the company’s board of directors, the people representing shareholders in the boardroom. Be wary of boards comprised mainly of company insiders. You want to see a healthy number of independent thinkers who can objectively assess management’s actions.

Will this company be around in 20 years?

You want to buy a stake in a business so you can share in its long-term prosperity, right? So, bottom line, what could go wrong? We’re not talking about developments that might affect the company’s stock price in the short-term, but fundamental changes that affect a business’s ability to grow over many years. Identify potential red flags using “what if” scenarios: An important patent expires; the CEO’s successor starts taking the business in a different direction; a viable competitor emerges; new technology usurps the company’s product or service.

» MORE: Tips for investing success

Put it all together

Pick a company you’re interested in, and dig in. Read current and past annual reports and letters to shareholders. Gather the numbers and financial ratios and put them all into context by comparing the company’s performance history to the industry and its peers. Then put on your business-buyer hat and work through the list of qualitative questions.

A combination of quantitative and qualitative research helps you more deeply understand a company’s operations, its place in the industry, its competitors, its long-term potential and, ultimately, if it’s worth making room for in your portfolio for the long road trip ahead.

Dayana Yochim is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @dayanayochim.

The Benefits of Credit Counseling — Even When You Don’t Yet Need It

You may be familiar with credit counseling for bankruptcy or for help with debt management, but consumers in financial distress aren’t the only ones who may benefit from credit counseling.

Nonprofit credit counseling agencies provide free or low-cost financial education services and counseling on a variety of topics. Those looking for financial guidance, especially those who don’t have the resources to work with a financial advisor, may find the help they need through credit counseling.

We asked credit counselors Jeffrey Arevalo and Kim Sands of GreenPath Financial Wellness, a nonprofit credit counseling agency and member of NerdWallet’s Ask an Advisor, how people who don’t yet need credit counseling may still benefit from it.

Why might credit counseling make sense even for people who are not in financial distress?

Arevalo: Part of being financially fit is being proactive. Even if things are stable, life tends to throw us curveballs, and those who have a financial plan will be better equipped to handle those tough times. We have a tendency to be reactive when it comes to our finances, but that mindset can undermine our overall chances of financial success.

Sands: There are many times that seeking the assistance from a credit counselor could be beneficial. For some people it is an upcoming life change like getting married, having a baby or nearing retirement. Others may just want to be able to save a little more, get a better handle on their budget or simply understand their credit report.

How might you use credit counseling to get a handle on your finances if you can’t afford a full-on financial planner?

Arevalo: Credit counselors can help you develop short- and long-term financial goals, which is the basis for a financially healthy life. They can also discuss strategies to help with day-to-day budgeting. They can provide referrals to community, state or federal services or to an appropriate contact for additional help with specific financial issues or questions. A credit counselor can point you to programs and resources — many at a minimal cost — that can help you with your ongoing finances. Unfortunately, the cost of ignoring your financial health can be much greater.

Sands: A free, one-on-one session with a certified credit counselor can help an individual gain a new perspective on their personal budget, credit, savings and more. A credit counselor can share educational tools and materials, develop a detailed financial plan and provide follow-up support.

Are there certain life stages or financial issues for which credit counseling can be particularly helpful?

Arevalo: Any stage in life can be a good time for credit counseling. From the person who is just starting to build their credit profile, to someone who is more established and is wondering if they’re on the right track financially, credit counseling can be very beneficial. A good counselor will identify financial strengths or weaknesses and help you develop a plan to harness or address them.

Sands: Most life stages and changes have a financial impact on your budget, whether you are going to college, just graduating, buying your first car or house, starting a family, losing your job, going through divorce or retiring. A credit counselor can be enormously helpful during these times.

For example, if you find out your job is being eliminated, that’s an ideal time to get help from a certified consumer credit counselor. Your counselor can help you develop a plan, including finding expenses you can reduce or eliminate and ensuring that you’re making the best use of your assets. He or she may also create a forecast budget, using estimated figures (like unemployment benefits, help from family, your own assets, etc.) to help you navigate the change. Your counselor can help you determine if you can or should use available credit (like credit cards, home equity, 401(k)s or lines of credit) in the short term. You’ll be able to receive continued follow-up sessions and support as needed.

GreenPath Financial Wellness is a nationwide, nonprofit financial counseling and education organization. 

Tips on ‘Late-Stage’ College Planning

By Brett Tushingham

Learn more about Brett on NerdWallet’s Ask an Advisor

The cost of higher education is growing out of control. Meanwhile, the majority of financial advisors fail to help families navigate the shift from saving for college to figuring out how to pay for it — the critical phase of late-stage planning. This lack of planning causes too many students to graduate with excessive student loan debt.

So how can families with college-bound children best prepare? They should develop a college-planning strategy that addresses five key areas: saving, college selection, financial aid, tax aid and wealth management.


Before late-stage planning, saving for college is paramount. It’s never too late to start, even if your children are entering high school. The best way is with one of two types of 529 accounts:

529 Savings Plans

These are state-sponsored savings vehicles that allow you to grow assets tax-free as long as they’re used for qualified educational expenses. Each state offers different investment options and some provide tax deductions for contributions.

529 Prepaid Plans

Prepaid plans allow you to contribute funds that buy future tuition at current rates. Unlike savings plans in which the chosen investments might lose value, prepaid plans shift the risk to the sponsoring entity. Such plans allow you to buy future tuition at nearly 300 private schools. There are no fees and there is zero market risk.

School selection

Helping your college-bound child choose the right school could be the most important part of your plan. Your goal is to determine where he or she will fit in best, get accepted and graduate on time.

Consider working with an admissions expert, a person who’s familiar with campus life, academics, and admissions and financial aid policies at hundreds of colleges and matches students with the schools that best fit their needs. He or she can help narrow your search.

For a less personalized but more affordable resource, some websites match your child with appropriate schools.

Regardless of your approach, keep in mind the school’s culture and your child’s personality. Take into account the size of the campus, its proximity to home, the relative competitiveness of the student body, class sizes, and social activities, such as fraternities and athletics.

Financial aid

Once you’ve selected the target schools, shift your focus to financial aid:

Types of applications

There are two applications that determine eligibility for need-based financial aid: the Free Application for Federal Student Aid and the CSS Profile. They ask similar questions relating to family finances but can produce dramatically different expected family contributions, or EFCs. Find out which schools use which application to better estimate your out-of-pocket costs.

Asset structuring

Reducing your reportable assets can potentially increase your aid eligibility. Work with an advisor or tax professional to ensure you’re utilizing the appropriate strategies.

Merit aid

Merit aid is based on your child’s unique abilities, be they academic, athletic, musical or civic. It has nothing to with your family’s income or assets and generally comes in the form of scholarships, grants or tuition discounts — which means that it doesn’t have to be paid back.

Some colleges will meet 100% of your child’s need-based aid eligibility with grants and scholarships, while others will use a combination of merit aid, if applicable, and student loans. Use online resources to determine how desirable a candidate your child is to particular schools. If your child stands out, he or she will likely receive more merit-based aid. This is an example of how college selection and affordability go hand in hand — picking the right college can lead to more financial aid that doesn’t have to be paid back.

Tax aid

Tax aid is an often-overlooked aspect of college planning. For example, the American Opportunity Tax Credit can provide up to $10,000 toward the cost of college. If you can’t take the credit yourself, find out if your child qualifies. But your tax planning should go beyond the AOTC.

Consider the tax benefits of shifting appreciated assets, such as stocks, to your child. Your child can potentially sell the assets in his or her name and pay taxes at a lower rate. Make sure that the additional income won’t impact need-based aid eligibility and that it properly navigates the “kiddie tax.”

When executing your college plan, it’s crucial to know in advance how your tax strategies will impact your financial aid. Doing so will ensure that you’re optimizing your tax dollars and financial aid awards.

Wealth management

Even after optimizing financial aid and tax aid, parents and children need to determine the best way to pay their shares of the cost.

You want the best for your children, but using home equity or your retirement assets usually isn’t the best path. A better option would be to help pay your child’s student loans once you have more certainty of achieving your own goals.

Keep in mind that student loans might inhibit your child’s ability to save for his or her own retirement or buy a house after college. Too much emphasis is placed on getting into college and not enough on getting out. He or she needs to understand the impact of making loan payments after college on cash flow.

Map out all your funding options, determine the affordability of each school and decide what sacrifices your family is willing to make to pay your share.

You might not be able to control the cost of education, but you can sure plan for it. Start as early as possible, explore all of your options and coordinate with outside professionals as needed. If your current financial advisor isn’t providing coordinated guidance, find someone who can.

College will be one of your greatest investments. The sooner you put a plan together, the better.

Brett Tushingham is a financial advisor and the founder of Tushingham Wealth Strategies in Wilmington, North Carolina.

NerdWallet’s Best Credit Card Tips for October 2016

As the month in which we celebrate Halloween, October kicks off the end-of-year spending season. The National Retail Federation predicts that Halloween spending will total $8.4 billion this year — the highest amount since the federation began its annual surveys in 2005. That’s a lot of candy and costumes. Before you start shopping, take a moment to browse our top credit card tips for October 2016.

Activate your bonus rewards categories

If you have a credit card with rotating bonus categories, the arrival of October means it’s time to activate your rewards for the final quarter of 2016. Issuers tend to tailor the categories for maximum seasonal impact, and they expect you’ll be doing a lot of gift shopping from now until the new year. Here are the Q4 categories for popular cards:

  • Chase Freedom®: 5% cash back at department stores, wholesale clubs, and drugstores.
  • Citi® Dividend Platinum Select® Visa® Card : 5% cash back at Best Buy and department stores.
  • Discover it® - Cashback Match™: 5% cash back at, department stores, Sam’s Club.
  • U.S. Bank Cash+™ Visa Signature® Card: 5% cash back in two categories that you choose, including cell phones, bookstores, department stores, electronics stores and more.

The amount of spending eligible for 5% cash back is capped at $2,000 per quarter for the U.S. Bank card, $1,500 for the other cards.

Look into airline and travel card sign-up bonuses

NerdWallet’s 2016 Travel Credit Card Study found that credit card issuers tend to offer their best limited-time offers for travel and airline cards beginning in October and peaking in November. These sign-up bonuses commonly offer something like 50,000 miles or points if you spend, say, $3,000 within the first three months you have the card.

If you have your eye on a Citi credit card, NerdWallet’s study found that Citi’s best limited-time offers have been offered in October.

Another good reason to apply now for a new card with a great sign-up bonus is that you’re more likely to meet the threshold to earn the bonus. If you put all your holiday spending — gifts, decorations, food and drink — on the new card, it may be fairly easy to hit that number in the allotted time.

Get your credit score

Last month, we encouraged you to pull your credit report. Now that you’ve taken care of that, why not get your credit score? NerdWallet offers free TransUnion credit scores, which are updated weekly. (Sign up for your free credit score here.) Meanwhile, most major credit card issuers now give their cardholders free access to FICO scores.

There are many good reasons to keep tabs on your credit score. First, you can see the effects of your credit behavior, which can help you develop good money management habits that will lead to a higher score.

Another benefit of knowing your score is that you’ll be more likely to apply for the right credit card. If you’ve got an average credit score, there’s no point in applying for a credit card that requires excellent credit, which will only result in a rejection (and a further hit to your score). Nobody likes to be rejected for anything, whether it’s a date, a team, a college or a credit card. NerdWallet offers free credit scores so that you have a better chance of being approved.

Ellen Cannon is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @ellencannon.

Mortgage Rates Today, Friday, Oct. 14: Steady to Lower

Thirty-year fixed mortgage rates were unchanged, while 15-year fixed and 5/1 ARM rates were lower Friday, according to a NerdWallet survey of mortgage rates published by national lenders this morning.

Rates on 30-year mortgages have held firm for three days, but 15-year fixed loans took a solid turn lower today. Adjustable rate loans have also taken a break over the past couple of days from their steady climb.

Mortgage Rates Today, Friday, Oct. 14 (Change from 10/13) 30-year fixed: 3.71% APR (NC) 15-year fixed: 3.08% APR (-0.03) 5/1 ARM: 3.61% APR (-0.01) Homeownership rates still sinking, but millennials may launch turnaround

The national homeownership rate has declined for more than a decade, but a demographic powerhouse may be the catalyst to reverse that course — Gen Y. In an analysis released this week, Sean Becketti, chief economist for Freddie Mac, said the forecasts for homeownership rates to sink below 60% may be too pessimistic.

It’s likely that millennials will soon marry, start families and buy homes at a faster pace than previous generations, Becketti said. And as America becomes a “majority minority” country, income and education gaps may narrow or be eliminated, feeding additional housing growth, he added.

“And as these types of potential homebuyers comprise a larger and larger share of the population, it will become increasingly expensive to overlook them. Profit-oriented financial institutions will be motivated to find better ways to serve them,” Becketti concluded.

Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

Hal Bundrick is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @halmbundrick.

Bike Rage Explained: Why Drivers and Cyclists Don’t Get Along

Bicycle commuting has enjoyed a huge popularity surge in recent years. Since 2005, bike-commuting rates have jumped 46% nationally, on average, with exponentially larger increases in many big cities, according to the League of American Bicyclists.

But with cars and bikes increasingly competing for the same road space, those on both sides of the lane can turn a bit surly. The tension between drivers and cyclists sometimes escalates into frightening bouts of rage and even intentional damage and injuries.

A few recent examples:

  • May 2016: A Florida cyclist, reacting to being cut off, reportedly followed the offending driver home and threatened him with a knife, ultimately stabbing his spare tire and slamming the man’s hand in a door jamb.
  • June 2016: A San Francisco cyclist was sentenced to probation for blocking a woman’s station wagon during a citywide cycling gathering and smashing her window with his bike lock after, he claims, she’d hit him.
  • August 2016: An Alabama motorist was charged with reckless endangerment and criminal mischief after running over a man’s bike with his car after the two had been arguing about right-of-way laws.

What often begins as a humdrum commute to work or a relaxing weekend excursion — for either cyclists or drivers — can become mired in both legal and financial issues.

Drivers struggle to identify with cyclists

A fundamental problem in driver-cyclist dust-ups is that many motorists don’t use bicycles, says Steve Taylor, communications manager for the League of American Bicyclists.

When drivers get annoyed with other drivers, he says, most understand that it’s an isolated incident; as drivers themselves, they realize it’s not proof that every motorist is a nuisance. But that rational thinking goes out the window when a bike rider ticks them off.

“If drivers come across one cyclist who’s a jerk, they assume all cyclists are jerks,” Taylor says.

Many drivers believe they take precedence on the road, and that cyclists are invaders, says Leon James, an author and University of Hawaii professor specializing in road rage psychology.

While driver’s education programs teach motorists the rules of the road, they fail to offer guidance about the emotional aspects of driving, he believes. Drivers aren’t taught that intolerance toward cyclists is a form of hostility, and may wind up thinking they’re higher than bikers in the commuting pecking order.

This may explain why, to certain drivers, seeing a cyclist run a stop sign or delay traffic becomes more than merely annoying — it’s a slap in the face. Or worse, a lit fuse.

Cyclists caught in a vulnerable state

If motorists’ rage is driven in part by their perceived superiority on the road, cyclists’ anger may stem from the opposite: intense vulnerability.

The type of vehicle people use can influence their mindset in traffic, James says. Cyclists are reminded how defenseless they are every time they get on the bike. Given their precarious position, they may react defiantly when they perceive drivers as behaving in a threatening manner, such as following too closely or not leaving a cushion when passing.

“We don’t have bumpers or barriers around us,” Taylor says. “Being assertive when you know you have the right of way is crucial.”

Of course, being assertive is a far cry from taking a bike lock to a driver’s window like a battle-ax.

Cyclists can be led down the road to aggression by the misguided notion that they’re standing up to motorists in the name of all cyclists. “Anger plus self-righteousness is the classic recipe for road rage,” James says.

He urges bike riders never to seek revenge in the name of cyclist justice. If riders find themselves in disagreements with drivers, they can do more for themselves and their brethren, James says, by maintaining positivity and not being directly provocative.

How insurance can help

A car insurance policy is the go-to financial safety net when things go wrong on the road. Here’s how insurance can (and can’t) be used in road rage situations that have arisen between drivers and bicyclists.

Bicyclist batters car with object

The cyclist: No insurance will pay out for intentional damage you do to someone else.

The driver: Suing the cyclist is an option. Or you can turn to comprehensive car insurance, if you have it, which covers vandalism.

Car and bicycle collide; driver is at fault (accident not intentional)

The cyclist: Whether you have injuries or bike damage, you can make a claim against the driver’s liability insurance.

The driver: Assuming the cyclist makes a claim against your policy, your liability insurance pays for the cyclist’s injury treatment and vehicle repairs, up to your limit. If your car is damaged from the accident, you can make a claim on collision coverage, if you have it.


The cyclist: Bicycle insurance, if you have it, may help pay for repairs to your bike and your injury treatment, as well as your liability costs if you damage the driver’s vehicle. If you don’t have bicycle coverage, your homeowners or renters insurance may cover personal liability costs. If you have car insurance with personal injury protection (often called PIP), that may help pay for injuries, or you can turn to your health insurance for your medical costs.

The driver: You can make a claim for your vehicle damage through the rider’s bicycle, home or renters insurance. Failing any of these options, you may need to take legal action.

Cyclist slashes driver’s tire

The driver: The slashed tire is considered vandalism, but it’s probably not worth making a claim on your comprehensive insurance, if you have it. Your deductible would apply to the claim, so you’d probably net little or no money.

car door is intentionally shut on your HAND

Whether you’re the cyclist or the driver, suing is an option, or you can make a claim on your health insurance for medical treatment.

» MORE: What cyclists need to know about insurance

Looking to shifts in attitude, changes in road design

Driving tends to be sorted into two main styles: aggressive driving and defensive driving. James advocates for a third option: supportive driving.

Many commuters treat traffic like a race or a competition, wanting to be first in the lane, first through the intersection, first to the destination. But, James says, we could achieve safer and faster travel by thinking of traffic as a coordinated activity in which we rely on one another.

Emphasizing intervehicle etiquette in driver’s education programs, as well as creating more education programs for adults that focus on sharing the roads, may be the keys to sparking this attitude change.

Taylor also believes certain changes in road design could help foster a more considerate mindset. Traffic lights with separate signals for drivers and cyclists, he says, could help stagger traffic flow and open up space in intersections, which Taylor cites as particularly troublesome spots for cyclists.

“Protected” bike lanes, which are separated from the main roadway by a low concrete divider, posts or even parked cars, are another potential solution. Protected bike lanes exist in 34 states, and they reduce injuries per bike trip by 28%, according to the cycling advocacy group People for Bikes.

If protected bike lanes aren’t an option, Taylor suggests a counterintuitive fix: narrowing the driving space slightly, such as by designing centered bike lanes that run along the street side of turn lanes rather than the curb side. Taylor argues that traffic is safer when cyclists are more conspicuous, as motorists are forced to take accountability for helping keep them safe and are less easily lulled into dangerous behaviors like speeding or turning without looking.

Driving and riding supportively is also in your financial interest, no matter your vehicle of choice. Cyclists aren’t required to have insurance, and those who don’t will have to pay for others’ injuries or damage, as well as possibly their own, if they cause a crash. Again, cyclists who also have car insurance can usually get riding-related injuries covered if they have personal injury protection.

If drivers are at fault, their liability insurance will pay for a cyclist’s damage and injuries — as long the crash isn’t intentional — but drivers may face higher car insurance rates at renewal time as a result.

Alex Glenn is a staff writer at NerdWallet, a personal finance website. Email:

Ask Brianna: How Do I Afford Having Kids?

“Ask Brianna” is a Q&A column for 20-somethings or anyone else starting out. I’m here to help you manage your money, find a job and pay off student loans — all the real-world stuff no one taught us how to do in college. Send your questions about postgrad life to

This week’s question: 

“I’m in my 20s, and my partner and I are thinking about becoming parents, but the potential expenses seem overwhelming. How can I afford to have kids?”

The U.S. Department of Agriculture’s handy, terrifying Cost of Raising a Child Calculator told me that the average two-parent household in the U.S. earning less than $61,530 a year spends $11,850 to raise a child in his or her first year. Such a big number might make you think that having a baby is impossible financially.

But don’t get discouraged. I’d guess that very few parents went to the trouble of saving every penny they’d need before the baby arrived, especially since 37% of U.S. pregnancies were unplanned in 2006-10, according to the Centers for Disease Control and Prevention.

“Ideally everyone’s loaded by the time they have their kids, but that’s hardly ever the case,” says Rachel Podnos, a certified financial planner at Wealth Care LLC in Washington, D.C.

If you’re able to spend several months planning for your baby’s arrival, you can make small changes now that will prepare you to budget more strictly when he or she arrives. Here’s how to wrangle your finances before you become a parent.

Master your cash flow

If you haven’t monitored your expenses and how they stack up to your income, commit to getting a handle on that now, says Douglas Boneparth, a New York-based certified financial planner specializing in millennials. Your monthly budget will soon include a lot more ongoing costs, such as diapers, formula and child care, plus one-time costs such as furniture, a stroller and a car seat.

Use a budgeting app to track how much you spend, or keep a close eye on your bank or credit card statement each week, so you can plan how you’ll divert money to those new expenses. The good/bad news is that you probably won’t go out as often as a new parent, making saving on entertainment a little easier, Boneparth says. You’ll likely have family members clamoring to buy cute baby gear, so take them up on it with a gift registry.

Research the average cost of big-ticket expenses such as child care in your area so you know what to expect, Podnos says. The Economic Policy Institute found that child care for a 4-year-old isn’t cheap anywhere, but the cost varies a lot by location: It costs $344 a month in rural areas of South Carolina and $1,472 a month in Washington, D.C. Find your local average cost using the institute’s Family Budget Calculator.

Put emergency savings into overdrive

You always need a rainy-day fund, but the amount you save should increase now that you’ll have a baby to feed and house if you or your partner loses a job. If you’ve gotten by with just $500 or $1,000 saved for emergencies, boost it to at least three months’ worth of expenses. Now’s the time to make saving a priority, even if you don’t get to that massive $11,850.

You’ll need to save more money if you or your partner won’t have any income during family leave. The Family Medical Leave Act allows employees of private companies with 50 or more workers to take up to 12 weeks of unpaid leave for the birth or adoption of a child, meaning you can keep your job but won’t get a paycheck. Some states provide a more generous benefit: California, New Jersey and Rhode Island offer paid family leave, as will New York starting Jan. 1, 2018, according to the National Conference of State Legislatures. Ask your employer about your company’s leave options, too.

Plan for the future

As new parents, you and your partner must do some tedious but important financial prep to make sure your child will be taken care of if you’re no longer around. You likely need life insurance, which will help cover your child’s expenses and replace your income if you die. Create a will with the help of an attorney. It should identify your child’s legal guardian if you and your partner die while he or she is a minor, Podnos says. Consider starting to save for college in a 529 plan, too, which is a state-sponsored, tax-free investment plan to help pay for education expenses.

This is serious stuff. But along with saving and budgeting, it’s crucial to get it done early so you can spend precious time enjoying your little one.

Brianna McGurran is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @briannamcscribe.

This article was written by NerdWallet and was originally published by The Associated Press.

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