Wednesday’s need-to-know money news

Today’s top story: 4 ways to ride the rising interest rates wave. Also in the news: Why you should set your own credit card limits, reasons why credit isn’t as boring as it sounds, and more than 1 million student loan borrowers are in default.

Fed Rate Hike: 4 Ways to Ride Rising Interest Rate Wave
Only the third increase since the 2008 financial crisis.

Set Your Own Credit Card Limits and Improve Your Life
Knowing your limits.

3 Reasons Credit Isn’t as Boring as It Sounds
It’s about more than just cards.

More than 1 million borrowers defaulted on their student loans last year
The amount owed by borrowers has increased 17%.

Q&A: Defaults on a co-signed student loan

Dear readers: A recent column about private student loans prompted financial aid expert Mark Kantrowitz to reach out with some additional advice for people who co-signed student loans for someone who has stopped paying. Although private student loans don’t have the same rehabilitation options as federal student loans, Kantrowitz encourages anyone in this situation to ask the lender, “What are my options?” and “Can you remove the default?”

“I’ve seen lenders not only remove the default from the co-signer’s credit history, but even reduce the interest rate if the co-signer agrees to make the payments by auto-debit,” said Kantrowitz, coauthor of the book “File the FAFSA.”

Someone who agrees to make payments may get a better deal than someone who pays off the loan in a lump sum, Kantrowitz said, because lenders want to be paid interest. But there would be nothing to stop a co-signer who makes payment arrangements to pay off the debt in full after a few months.

“This way he potentially can have the default entirely removed from his credit history, restoring him to his previous credit score,” Kantrowitz said. “It also leaves the account open, so that he can pressure the [borrower] into making payments.”

A game plan for grads struggling with new loan payments

Student-LoansAn improved economy and lower unemployment should reduce the number of recent college graduates who default on the federal student loans they are supposed to start repaying when their six-month grace periods expire – as soon as November for May graduates.

Inevitably, though, some will fall behind even though there is no good reason to do so. Their credit scores will be crippled and they will risk the government garnishing their wages and seizing their tax refunds.

In my latest for Reuters, how new graduates can handle their new loan payments and protect their credit.

At MoneyWatch, the five things you should know about disaster insurance, and the IRS retirement plan contribution limits for 2016.

Tuesday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: What life is like when you default on your student loans. Also in the news: How to get the most from selling your old cell phone, five financial questions everyone needs to know the answers to, and how having no credit score can make life difficult.

3 Grads Reveal What It’s Really Like To Default On Student Loans
It’s not a pretty picture.

Selling Your Old Cellphone? Read This First
How to get the most out of your phone.

Here’s a Financial Literacy Test You Need to Pass
Can you answer these five questions?

5 Ways Having No Credit Score Can Hurt You
Not having a credit score can hurt as much as having a bad one.