[{"data":1,"prerenderedAt":7215},["Reactive",2],{"/":3},{"data":4,"headers":7187,"perPage":7213,"total":7214},{"stories":5,"cv":7184,"rels":7185,"links":7186},[6,1426,2059,2861,3463,4262,5226,6195],{"name":7,"created_at":8,"published_at":9,"updated_at":10,"id":11,"uuid":12,"content":13,"slug":1416,"full_slug":1417,"sort_by_date":153,"position":1418,"tag_list":1419,"is_startpage":29,"parent_id":1420,"meta_data":153,"group_id":1421,"first_published_at":1422,"release_id":153,"lang":1423,"path":1424,"alternates":1425,"default_full_slug":153,"translated_slugs":153},"What is Personal Finance? Definition, Examples & Tips for Success","2025-04-07T18:30:24.943Z","2025-12-26T13:44:58.928Z","2025-12-26T13:44:59.059Z",651798162,"a8d8a59b-124e-48c9-a12b-d31c8112bb1e",{"seo":14,"_uid":20,"hero":21,"author":31,"category":32,"featured":29,"imageAlt":18,"component":33,"blogContents":34,"canonicalTag":1413,"publishedDate":1414,"_editable":1415},{"_uid":15,"title":16,"plugin":17,"og_image":18,"og_title":18,"description":19,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"77316249-bb90-485a-9a34-facfdf611141","What is Personal Finance? Definition, Examples, Tips for Success | Navient Marketplace","seo_metatags","","Personal finance is a fundamental part of everyone’s lives, and yet it’s a loaded topic for many people. Here’s what you need to know. ","39f3568e-f888-4c3e-816f-3647f7efec59",[22],{"id":18,"_uid":23,"image":24,"intro":25,"classes":18,"_editable":26,"blogTitle":7,"component":27,"imageLink":28,"blendImage":29,"backgroundColor":30},"ee81b4ff-6c03-4123-98ae-73405dea4592","//a.storyblok.com/f/110029/6000x4000/019b862f0a/what-is-personal-finance.png","Personal finance is a fundamental part of everyone’s lives, and yet it’s a loaded topic for many people. Here’s what you need to know.","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798162\"}-->","NriBlogHero","/images/what-is-personal-finance.png",false,"#F6F2F7","natasha-khullar-relph","Finance 101","NriBlogPost",[35],{"_uid":36,"color":37,"richText":38,"_editable":1411,"component":1412},"67b1c1a7-fbb7-4c3c-a267-87dc959687fb","#444444",{"type":39,"content":40},"doc",[41,56,63,70,80,87,95,102,112,119,126,224,231,263,271,292,540,548,555,600,617,721,738,745,829,837,872,893,1014,1035,1151,1159,1166,1197,1214,1231,1248,1265,1273,1280,1297,1342,1373,1381,1402],{"type":42,"content":43},"paragraph",[44],{"text":45,"type":46,"marks":47},"Navient may receive compensation when you click on links associated with this Navient Marketplace. Navient is not being compensated for any application, quotation, or the purchase of any financial products.","text",[48,52],{"type":49,"attrs":50},"styled",{"class":51},"footer-text",{"type":53,"attrs":54},"textStyle",{"color":55},"rgb(0, 0, 0)",{"type":42,"content":57},[58],{"text":59,"type":46,"marks":60},"Personal finance is a fundamental part of everyone’s lives, and yet it’s a loaded topic for many people. Money talk can be intimidating and confusing. Even the definition of “personal finance” can feel a little murky sometimes. But understanding it can be the key to unlocking some of your biggest financial goals — from buying a home to having kids to retiring early. ",[61],{"type":53,"attrs":62},{"color":55},{"type":42,"content":64},[65],{"text":66,"type":46,"marks":67},"So what exactly is personal finance? And how can you leverage it to make sound financial decisions? Here’s what you need to know. ",[68],{"type":53,"attrs":69},{"color":55},{"type":71,"attrs":72,"content":74},"heading",{"level":73},2,[75],{"text":76,"type":46,"marks":77},"Personal finance definition ",[78],{"type":53,"attrs":79},{"color":55},{"type":42,"content":81},[82],{"text":83,"type":46,"marks":84},"Personal finance is personal money management. It refers to an individual’s strategies and habits for earning, spending, saving, and investing. Personal finance also encompasses various aspects of financial decision-making. Budgeting, saving for retirement, debt repayment, and purchasing insurance all fall under the personal finance umbrella. ",[85],{"type":53,"attrs":86},{"color":55},{"type":71,"attrs":88,"content":89},{"level":73},[90],{"text":91,"type":46,"marks":92},"The fundamentals of personal finance",[93],{"type":53,"attrs":94},{"color":55},{"type":42,"content":96},[97],{"text":98,"type":46,"marks":99},"Developing financial literacy, i.e., knowledge and skills about managing money, can help you take control of your cash flow. While financial management is a pretty broad topic, there are a few areas of personal finance that are especially important to understand. Here are the basics. ",[100],{"type":53,"attrs":101},{"color":55},{"type":71,"attrs":103,"content":105},{"level":104},3,[106],{"text":107,"type":46,"marks":108},"Earning an income ",[109],{"type":53,"attrs":110},{"color":111},"rgb(67, 67, 67)",{"type":42,"content":113},[114],{"text":115,"type":46,"marks":116},"Regular income provides financial security. It’s reassuring to know that if an emergency happens, you’ll be able to cover basic financial needs like housing, food, utilities, transportation, and healthcare. Maintaining a strong income is also the most reliable way to grow your net worth and reach your financial goals quickly. That could include saving for retirement, purchasing a home, funding your or your children’s education, or starting a business. ",[117],{"type":53,"attrs":118},{"color":55},{"type":42,"content":120},[121],{"text":122,"type":46,"marks":123},"The primary sources of income for most people include:",[124],{"type":53,"attrs":125},{"color":55},{"type":127,"content":128},"bullet_list",[129,166,209],{"type":130,"content":131},"list_item",[132],{"type":42,"content":133},[134,141,146,161],{"text":135,"type":46,"marks":136},"Employment:",[137,139],{"type":138},"bold",{"type":53,"attrs":140},{"color":55},{"text":142,"type":46,"marks":143},"  Most individuals work for a company or organization and receive a regular paycheck in exchange for their services. Self-employment, freelancing, and gig work are also viable ways to generate income. The ",[144],{"type":53,"attrs":145},{"color":55},{"text":147,"type":46,"marks":148},"Occupational Outlook Handbook",[149,156,159],{"type":150,"attrs":151},"link",{"href":152,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.bls.gov/ooh/",null,"_blank","url",{"type":53,"attrs":157},{"color":158},"rgb(17, 85, 204)",{"type":160},"underline",{"text":162,"type":46,"marks":163}," lists the average income and job outlook for most occupations.",[164],{"type":53,"attrs":165},{"color":55},{"type":130,"content":167},[168],{"type":42,"content":169},[170,176,181,190,195,204],{"text":171,"type":46,"marks":172},"Investments: ",[173,174],{"type":138},{"type":53,"attrs":175},{"color":55},{"text":177,"type":46,"marks":178},"You can also generate income from investments, such as stocks, bonds, or mutual funds. These can provide additional streams of revenue through ",[179],{"type":53,"attrs":180},{"color":55},{"text":182,"type":46,"marks":183},"dividends",[184,187,189],{"type":150,"attrs":185},{"href":186,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.accountingtools.com/articles/what-are-dividends.html",{"type":53,"attrs":188},{"color":158},{"type":160},{"text":191,"type":46,"marks":192},", interest, or ",[193],{"type":53,"attrs":194},{"color":55},{"text":196,"type":46,"marks":197},"capital gains",[198,201,203],{"type":150,"attrs":199},{"href":200,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.irs.gov/taxtopics/tc409#:~:text=You%20have%20a%20capital%20gain,%2C%20aren't%20tax%20deductible.",{"type":53,"attrs":202},{"color":158},{"type":160},{"text":205,"type":46,"marks":206},".",[207],{"type":53,"attrs":208},{"color":55},{"type":130,"content":210},[211],{"type":42,"content":212},[213,219],{"text":214,"type":46,"marks":215},"Passive income:",[216,217],{"type":138},{"type":53,"attrs":218},{"color":55},{"text":220,"type":46,"marks":221}," Passive income refers to earnings derived from sources that require minimal effort or time, such as rental properties, royalties from creative works, or income generated from online businesses. ",[222],{"type":53,"attrs":223},{"color":55},{"type":42,"content":225},[226],{"text":227,"type":46,"marks":228},"To manage your income effectively, it’s also important to understand the difference between disposable and discretionary income. ",[229],{"type":53,"attrs":230},{"color":55},{"type":127,"content":232},[233,248],{"type":130,"content":234},[235],{"type":42,"content":236},[237,243],{"text":238,"type":46,"marks":239},"Disposable income: ",[240,241],{"type":138},{"type":53,"attrs":242},{"color":55},{"text":244,"type":46,"marks":245},"This is what’s left after taxes have been deducted from your paycheck. It’s the money you have available to save, spend, or invest.",[246],{"type":53,"attrs":247},{"color":55},{"type":130,"content":249},[250],{"type":42,"content":251},[252,258],{"text":253,"type":46,"marks":254},"Discretionary income:",[255,256],{"type":138},{"type":53,"attrs":257},{"color":55},{"text":259,"type":46,"marks":260}," This is the money you have after taking care of essential expenses, including housing, food, and transportation. It can be saved or invested, or used for non-essential spending. ",[261],{"type":53,"attrs":262},{"color":55},{"type":71,"attrs":264,"content":265},{"level":104},[266],{"text":267,"type":46,"marks":268},"Budgeting ",[269],{"type":53,"attrs":270},{"color":111},{"type":42,"content":272},[273,278,287],{"text":274,"type":46,"marks":275},"Budgeting is the process of setting aside portions of your income for different spending categories. A good budget acts as a financial blueprint to make sure you’re effectively managing your money and maintaining a steady ",[276],{"type":53,"attrs":277},{"color":55},{"text":279,"type":46,"marks":280},"cash flow",[281,284,286],{"type":150,"attrs":282},{"href":283,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.accountingtools.com/articles/what-is-cash-flow.html",{"type":53,"attrs":285},{"color":158},{"type":160},{"text":288,"type":46,"marks":289},". While there is no one-size-fits-all approach to budgeting, here are some basic steps: ",[290],{"type":53,"attrs":291},{"color":55},{"type":293,"attrs":294,"content":296},"ordered_list",{"order":295},1,[297,325,437,495,510,525],{"type":130,"content":298},[299],{"type":42,"content":300},[301,307,312,321],{"text":302,"type":46,"marks":303},"List your income and expenses: ",[304,305],{"type":138},{"type":53,"attrs":306},{"color":55},{"text":308,"type":46,"marks":309},"First determine your total income from all sources. Then, track your expenses for a month to understand where your money is currently going. You can do this ",[310],{"type":53,"attrs":311},{"color":55},{"text":313,"type":46,"marks":314},"using an Excel spreadsheet",[315,318,320],{"type":150,"attrs":316},{"href":317,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.refinery29.com/en-us/2018/05/196574/how-to-budget-with-an-excel-spreadsheet",{"type":53,"attrs":319},{"color":158},{"type":160},{"text":205,"type":46,"marks":322},[323],{"type":53,"attrs":324},{"color":55},{"type":130,"content":326},[327,340],{"type":42,"content":328},[329,335],{"text":330,"type":46,"marks":331},"Categorize your expenses:",[332,333],{"type":138},{"type":53,"attrs":334},{"color":55},{"text":336,"type":46,"marks":337}," Next, lump your expenses into different spending categories. These might include:",[338],{"type":53,"attrs":339},{"color":55},{"type":127,"content":341},[342,351,360,369,378,387,396,405],{"type":130,"content":343},[344],{"type":42,"content":345},[346],{"text":347,"type":46,"marks":348},"Housing",[349],{"type":53,"attrs":350},{"color":55},{"type":130,"content":352},[353],{"type":42,"content":354},[355],{"text":356,"type":46,"marks":357},"Utilities",[358],{"type":53,"attrs":359},{"color":55},{"type":130,"content":361},[362],{"type":42,"content":363},[364],{"text":365,"type":46,"marks":366},"Groceries",[367],{"type":53,"attrs":368},{"color":55},{"type":130,"content":370},[371],{"type":42,"content":372},[373],{"text":374,"type":46,"marks":375},"Transportation, including car payments and gas",[376],{"type":53,"attrs":377},{"color":55},{"type":130,"content":379},[380],{"type":42,"content":381},[382],{"text":383,"type":46,"marks":384},"Eating out",[385],{"type":53,"attrs":386},{"color":55},{"type":130,"content":388},[389],{"type":42,"content":390},[391],{"text":392,"type":46,"marks":393},"Entertainment and hobbies",[394],{"type":53,"attrs":395},{"color":55},{"type":130,"content":397},[398],{"type":42,"content":399},[400],{"text":401,"type":46,"marks":402},"Debt repayments",[403],{"type":53,"attrs":404},{"color":55},{"type":130,"content":406},[407],{"type":42,"content":408},[409,414,423,428],{"text":410,"type":46,"marks":411},"Savings or contributions to a retirement account, like a ",[412],{"type":53,"attrs":413},{"color":55},{"text":415,"type":46,"marks":416},"401(k)",[417,420,422],{"type":150,"attrs":418},{"href":419,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.irs.gov/retirement-plans/401k-plans",{"type":53,"attrs":421},{"color":158},{"type":160},{"text":424,"type":46,"marks":425}," or ",[426],{"type":53,"attrs":427},{"color":55},{"text":429,"type":46,"marks":430},"IRA",[431,434,436],{"type":150,"attrs":432},{"href":433,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.investor.gov/additional-resources/retirement-toolkit/self-directed-plans-individual-retirement-accounts-iras",{"type":53,"attrs":435},{"color":158},{"type":160},{"type":130,"content":438},[439,466],{"type":42,"content":440},[441,447,452,461],{"text":442,"type":46,"marks":443},"Follow the 50/30/20 rule:",[444,445],{"type":138},{"type":53,"attrs":446},{"color":55},{"text":448,"type":46,"marks":449}," Now it’s time to take a look at your actual spending and determine whether or not it matches your values and goals. One popular budgeting guideline is the ",[450],{"type":53,"attrs":451},{"color":55},{"text":453,"type":46,"marks":454},"50/30/20 rule",[455,458,460],{"type":150,"attrs":456},{"href":457,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.unfcu.org/guides/the-50-30-20-rule/#",{"type":53,"attrs":459},{"color":158},{"type":160},{"text":462,"type":46,"marks":463},". This rule encourages you to spend:",[464],{"type":53,"attrs":465},{"color":55},{"type":127,"content":467},[468,477,486],{"type":130,"content":469},[470],{"type":42,"content":471},[472],{"text":473,"type":46,"marks":474},"50% of your after-tax income on needs (like housing, utilities, groceries, and transportation)",[475],{"type":53,"attrs":476},{"color":55},{"type":130,"content":478},[479],{"type":42,"content":480},[481],{"text":482,"type":46,"marks":483},"30% on wants (like eating out, entertainment, and hobbies)",[484],{"type":53,"attrs":485},{"color":55},{"type":130,"content":487},[488],{"type":42,"content":489},[490],{"text":491,"type":46,"marks":492},"20% on savings, retirement contributions, and debt repayment",[493],{"type":53,"attrs":494},{"color":55},{"type":130,"content":496},[497],{"type":42,"content":498},[499,505],{"text":500,"type":46,"marks":501},"Adjust based on your financial goals:",[502,503],{"type":138},{"type":53,"attrs":504},{"color":55},{"text":506,"type":46,"marks":507}," Your budget should align with your goals and desires. If you have a specific savings target — such as a down payment on a house or a chunk of debt you’d like to pay off — you may want to reconfigure your budget to hit your goal within a reasonable timeframe.",[508],{"type":53,"attrs":509},{"color":55},{"type":130,"content":511},[512],{"type":42,"content":513},[514,520],{"text":515,"type":46,"marks":516},"Pay yourself first: ",[517,518],{"type":138},{"type":53,"attrs":519},{"color":55},{"text":521,"type":46,"marks":522},"It can be tough to prioritize saving over spending. To stay disciplined, set aside a portion of each paycheck for savings or investments before you allocate funds to other categories. Treat savings as a fixed expense and automate regular contributions to your savings accounts.",[523],{"type":53,"attrs":524},{"color":55},{"type":130,"content":526},[527],{"type":42,"content":528},[529,535],{"text":530,"type":46,"marks":531},"Review and adjust regularly: ",[532,533],{"type":138},{"type":53,"attrs":534},{"color":55},{"text":536,"type":46,"marks":537},"Your income, life circumstances, and goals will change over time. Be sure to monitor your budget regularly and adjust as needed. ",[538],{"type":53,"attrs":539},{"color":55},{"type":71,"attrs":541,"content":542},{"level":104},[543],{"text":544,"type":46,"marks":545},"Saving and investing",[546],{"type":53,"attrs":547},{"color":111},{"type":42,"content":549},[550],{"text":551,"type":46,"marks":552},"Here are some popular vehicles for storing extra funds and making that money work for you.",[553],{"type":53,"attrs":554},{"color":55},{"type":127,"content":556},[557],{"type":130,"content":558},[559],{"type":42,"content":560},[561,567,572,581,586,595],{"text":562,"type":46,"marks":563},"Emergency savings: ",[564,565],{"type":138},{"type":53,"attrs":566},{"color":55},{"text":568,"type":46,"marks":569},"Building an ",[570],{"type":53,"attrs":571},{"color":55},{"text":573,"type":46,"marks":574},"emergency fund",[575,578,580],{"type":150,"attrs":576},{"href":577,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.consumerfinance.gov/an-essential-guide-to-building-an-emergency-fund/",{"type":53,"attrs":579},{"color":158},{"type":160},{"text":582,"type":46,"marks":583}," should be a top priority, no matter what stage of life you’re in. Aim to have three to six months’ worth of living expenses socked away in a savings account. This will provide a financial safety net in case of unexpected events like job loss, medical emergencies, or major repairs. ",[584],{"type":53,"attrs":585},{"color":55},{"text":587,"type":46,"marks":588},"High-yield savings accounts",[589,592,594],{"type":150,"attrs":590},{"href":591,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.navient.com/blog/are-high-yield-savings-accounts-worth-it/",{"type":53,"attrs":593},{"color":158},{"type":160},{"text":596,"type":46,"marks":597}," offer competitive interest rates, which can help you earn money from your savings when they’re not in use. ",[598],{"type":53,"attrs":599},{"color":55},{"type":127,"content":601},[602],{"type":130,"content":603},[604],{"type":42,"content":605},[606,612],{"text":607,"type":46,"marks":608},"Checking accounts:",[609,610],{"type":138},{"type":53,"attrs":611},{"color":55},{"text":613,"type":46,"marks":614}," Use this type of account for essential day-to-day transactions, such as paying bills and storing accessible cash. Most checking accounts come with debit cards and ATM access. ",[615],{"type":53,"attrs":616},{"color":55},{"type":127,"content":618},[619,648,692],{"type":130,"content":620},[621],{"type":42,"content":622},[623,629,634,643],{"text":624,"type":46,"marks":625},"Savings accounts: ",[626,627],{"type":138},{"type":53,"attrs":628},{"color":55},{"text":630,"type":46,"marks":631},"This type of bank account allows you to set aside money for short-term financial goals. Unlike high-yield savings accounts, ",[632],{"type":53,"attrs":633},{"color":55},{"text":635,"type":46,"marks":636},"traditional savings accounts",[637,640,642],{"type":150,"attrs":638},{"href":639,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.experian.com/blogs/ask-experian/pros-cons-high-yield-savings-account/",{"type":53,"attrs":641},{"color":158},{"type":160},{"text":644,"type":46,"marks":645}," tend to earn only a nominal amount of interest.",[646],{"type":53,"attrs":647},{"color":55},{"type":130,"content":649},[650,663],{"type":42,"content":651},[652,658],{"text":653,"type":46,"marks":654},"Investment accounts:",[655,656],{"type":138},{"type":53,"attrs":657},{"color":55},{"text":659,"type":46,"marks":660}," For long-term financial planning — such as building wealth or retirement savings — consider opening an investment account. Options include: ",[661],{"type":53,"attrs":662},{"color":55},{"type":127,"content":664},[665,674,683],{"type":130,"content":666},[667],{"type":42,"content":668},[669],{"text":670,"type":46,"marks":671},"Individual brokerage accounts",[672],{"type":53,"attrs":673},{"color":55},{"type":130,"content":675},[676],{"type":42,"content":677},[678],{"text":679,"type":46,"marks":680},"Employer-sponsored retirement plans like 401(k)s,",[681],{"type":53,"attrs":682},{"color":55},{"type":130,"content":684},[685],{"type":42,"content":686},[687],{"text":688,"type":46,"marks":689},"Individual retirement accounts, including traditional and Roth IRAs",[690],{"type":53,"attrs":691},{"color":55},{"type":130,"content":693},[694],{"type":42,"content":695},[696,702,707,716],{"text":697,"type":46,"marks":698},"College savings: ",[699,700],{"type":138},{"type":53,"attrs":701},{"color":55},{"text":703,"type":46,"marks":704},"A ",[705],{"type":53,"attrs":706},{"color":55},{"text":708,"type":46,"marks":709},"529 college savings plan",[710,713,715],{"type":150,"attrs":711},{"href":712,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.sec.gov/about/reports-publications/investor-publications/introduction-529-plans",{"type":53,"attrs":714},{"color":158},{"type":160},{"text":717,"type":46,"marks":718}," offers tax advantages and can be used to cover qualified education expenses, such as tuition, books, and room and board. ",[719],{"type":53,"attrs":720},{"color":55},{"type":127,"content":722},[723],{"type":130,"content":724},[725],{"type":42,"content":726},[727,733],{"text":728,"type":46,"marks":729},"Certificates of Deposit (CDs):",[730,731],{"type":138},{"type":53,"attrs":732},{"color":55},{"text":734,"type":46,"marks":735}," CDs offer savers a fixed interest rate for locking their money into an account for a specific period of time. CDs generally offer higher interest rates than regular savings accounts, but may have penalties for early withdrawal. ",[736],{"type":53,"attrs":737},{"color":55},{"type":42,"content":739},[740],{"text":741,"type":46,"marks":742},"So, how much should you allocate toward each type of account? Here are some general guidelines:",[743],{"type":53,"attrs":744},{"color":55},{"type":127,"content":746},[747,762,777,801],{"type":130,"content":748},[749],{"type":42,"content":750},[751,757],{"text":752,"type":46,"marks":753},"Emergency savings:",[754,755],{"type":138},{"type":53,"attrs":756},{"color":55},{"text":758,"type":46,"marks":759}," Aim to save three to six months’ of living expenses. ",[760],{"type":53,"attrs":761},{"color":55},{"type":130,"content":763},[764],{"type":42,"content":765},[766,772],{"text":767,"type":46,"marks":768},"Investments:",[769,770],{"type":138},{"type":53,"attrs":771},{"color":55},{"text":773,"type":46,"marks":774}," Consider investing 10 to 15% of your income in stocks and bonds, or in opportunities beyond Wall Street, like real estate. A financial advisor can help you decide the best way to invest your money.",[775],{"type":53,"attrs":776},{"color":55},{"type":130,"content":778},[779],{"type":42,"content":780},[781,787,792],{"text":782,"type":46,"marks":783},"College savings:",[784,785],{"type":138},{"type":53,"attrs":786},{"color":55},{"text":788,"type":46,"marks":789}," Determine how much you’ll need to save and start early to take advantage of ",[790],{"type":53,"attrs":791},{"color":55},{"text":793,"type":46,"marks":794},"compounding growth.",[795,798,800],{"type":150,"attrs":796},{"href":797,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.investor.gov/additional-resources/information/youth/teachers-classroom-resources/what-compound-interest",{"type":53,"attrs":799},{"color":158},{"type":160},{"type":130,"content":802},[803],{"type":42,"content":804},[805,811,816,825],{"text":806,"type":46,"marks":807},"Homeownership:",[808,809],{"type":138},{"type":53,"attrs":810},{"color":55},{"text":812,"type":46,"marks":813}," Aim to save at least 20% of a home’s cost as a down payment. Otherwise, you may have to buy ",[814],{"type":53,"attrs":815},{"color":55},{"text":817,"type":46,"marks":818},"Private Mortgage Insurance",[819,822,824],{"type":150,"attrs":820},{"href":821,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.consumerfinance.gov/ask-cfpb/what-is-private-mortgage-insurance-en-122/",{"type":53,"attrs":823},{"color":158},{"type":160},{"text":205,"type":46,"marks":826},[827],{"type":53,"attrs":828},{"color":55},{"type":71,"attrs":830,"content":831},{"level":104},[832],{"text":833,"type":46,"marks":834},"Borrowing",[835],{"type":53,"attrs":836},{"color":111},{"type":42,"content":838},[839,844,853,858,867],{"text":840,"type":46,"marks":841},"Borrowing money can help you reach your financial goals, but you should never take on debt lightly. For one thing, debts will show up on ",[842],{"type":53,"attrs":843},{"color":55},{"text":845,"type":46,"marks":846},"your credit report",[847,850,852],{"type":150,"attrs":848},{"href":849,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.consumerfinance.gov/ask-cfpb/what-is-a-credit-report-en-309/",{"type":53,"attrs":851},{"color":158},{"type":160},{"text":854,"type":46,"marks":855},", the official record of your borrowing history. Too much debt can have a negative impact on your ",[856],{"type":53,"attrs":857},{"color":55},{"text":859,"type":46,"marks":860},"credit score",[861,864,866],{"type":150,"attrs":862},{"href":863,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.experian.com/blogs/ask-experian/what-credit-score-do-i-need-to-buy-a-house/",{"type":53,"attrs":865},{"color":158},{"type":160},{"text":868,"type":46,"marks":869},", which could affect your ability to open other lines of credit in the future. ",[870],{"type":53,"attrs":871},{"color":55},{"type":42,"content":873},[874,879,888],{"text":875,"type":46,"marks":876},"That said, not all debt is ",[877],{"type":53,"attrs":878},{"color":55},{"text":880,"type":46,"marks":881},"bad debt",[882,885,887],{"type":150,"attrs":883},{"href":884,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.equifax.com/personal/education/credit/report/articles/-/learn/understanding-credit-good-debt-vs-bad-debt/",{"type":53,"attrs":886},{"color":158},{"type":160},{"text":889,"type":46,"marks":890},". Here are some common types: ",[891],{"type":53,"attrs":892},{"color":55},{"type":127,"content":894},[895,910,925,940,955,984,999],{"type":130,"content":896},[897],{"type":42,"content":898},[899,905],{"text":900,"type":46,"marks":901},"Mortgage:",[902,903],{"type":138},{"type":53,"attrs":904},{"color":55},{"text":906,"type":46,"marks":907}," A loan used to purchase a home, typically repaid over 15 to 30 years",[908],{"type":53,"attrs":909},{"color":55},{"type":130,"content":911},[912],{"type":42,"content":913},[914,920],{"text":915,"type":46,"marks":916},"Student loans:",[917,918],{"type":138},{"type":53,"attrs":919},{"color":55},{"text":921,"type":46,"marks":922}," Loans that fund education expenses. They can either be federal loans or come from private lenders.",[923],{"type":53,"attrs":924},{"color":55},{"type":130,"content":926},[927],{"type":42,"content":928},[929,935],{"text":930,"type":46,"marks":931},"Credit cards:",[932,933],{"type":138},{"type":53,"attrs":934},{"color":55},{"text":936,"type":46,"marks":937}," A revolving line of credit that allows individuals to make everyday purchases. Credit card debt is typically subject to high interest charges if not paid in full each month.",[938],{"type":53,"attrs":939},{"color":55},{"type":130,"content":941},[942],{"type":42,"content":943},[944,950],{"text":945,"type":46,"marks":946},"Auto loans:",[947,948],{"type":138},{"type":53,"attrs":949},{"color":55},{"text":951,"type":46,"marks":952}," Loans used to purchase a vehicle.",[953],{"type":53,"attrs":954},{"color":55},{"type":130,"content":956},[957],{"type":42,"content":958},[959,965,970,979],{"text":960,"type":46,"marks":961},"Personal loans:",[962,963],{"type":138},{"type":53,"attrs":964},{"color":55},{"text":966,"type":46,"marks":967}," A ",[968],{"type":53,"attrs":969},{"color":55},{"text":971,"type":46,"marks":972},"type of unsecured loan",[973,976,978],{"type":150,"attrs":974},{"href":975,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.navient.com/blog/what-is-a-personal-loan/",{"type":53,"attrs":977},{"color":158},{"type":160},{"text":980,"type":46,"marks":981}," that can be used for various purposes, such as debt consolidation, home improvements, or emergency expenses.",[982],{"type":53,"attrs":983},{"color":55},{"type":130,"content":985},[986],{"type":42,"content":987},[988,994],{"text":989,"type":46,"marks":990},"Home Equity Line of Credit (HELOC): ",[991,992],{"type":138},{"type":53,"attrs":993},{"color":55},{"text":995,"type":46,"marks":996},"A line of credit that allows individuals to borrow against the equity they hold in their homes.",[997],{"type":53,"attrs":998},{"color":55},{"type":130,"content":1000},[1001],{"type":42,"content":1002},[1003,1009],{"text":1004,"type":46,"marks":1005},"Small business loans: ",[1006,1007],{"type":138},{"type":53,"attrs":1008},{"color":55},{"text":1010,"type":46,"marks":1011},"Loans used to start or expand a small business. ",[1012],{"type":53,"attrs":1013},{"color":55},{"type":42,"content":1015},[1016,1021,1030],{"text":1017,"type":46,"marks":1018},"Conversely, paying off your debts can ",[1019],{"type":53,"attrs":1020},{"color":55},{"text":1022,"type":46,"marks":1023},"boost your credit score",[1024,1027,1029],{"type":150,"attrs":1025},{"href":1026,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.equifax.com/personal/education/credit/score/articles/-/learn/how-to-improve-credit-score/",{"type":53,"attrs":1028},{"color":158},{"type":160},{"text":1031,"type":46,"marks":1032},". When repaying debt, consider these general rules:",[1033],{"type":53,"attrs":1034},{"color":55},{"type":293,"attrs":1036,"content":1038},{"order":1037},{"order":295},[1039,1063,1078,1093,1136],{"type":130,"content":1040},[1041],{"type":42,"content":1042},[1043,1049,1058],{"text":1044,"type":46,"marks":1045},"Refinance when possible: ",[1046,1047],{"type":138},{"type":53,"attrs":1048},{"color":55},{"text":1050,"type":46,"marks":1051},"Refinancing your student loans",[1052,1055,1057],{"type":150,"attrs":1053},{"href":1054,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://navirefi.com/blog/how-to-refinance-student-loans/",{"type":53,"attrs":1056},{"color":158},{"type":160},{"text":1059,"type":46,"marks":1060}," or mortgage can potentially save you money by getting you a lower interest rate.",[1061],{"type":53,"attrs":1062},{"color":55},{"type":130,"content":1064},[1065],{"type":42,"content":1066},[1067,1073],{"text":1068,"type":46,"marks":1069},"Manage your credit utilization:",[1070,1071],{"type":138},{"type":53,"attrs":1072},{"color":55},{"text":1074,"type":46,"marks":1075}," Aim to utilize less than 30% of your total credit limit. This can help you maintain a healthy credit score and keep your debt manageable.",[1076],{"type":53,"attrs":1077},{"color":55},{"type":130,"content":1079},[1080],{"type":42,"content":1081},[1082,1088],{"text":1083,"type":46,"marks":1084},"Make regular payments: ",[1085,1086],{"type":138},{"type":53,"attrs":1087},{"color":55},{"text":1089,"type":46,"marks":1090},"Even if you’re focused on paying down one type of debt, continue to make on-time minimum payments on all your debts in the meantime.",[1091],{"type":53,"attrs":1092},{"color":55},{"type":130,"content":1094},[1095],{"type":42,"content":1096},[1097,1103,1108,1117,1122,1131],{"text":1098,"type":46,"marks":1099},"Debt repayment strategies: ",[1100,1101],{"type":138},{"type":53,"attrs":1102},{"color":55},{"text":1104,"type":46,"marks":1105},"There are different approaches to debt repayment, such as ",[1106],{"type":53,"attrs":1107},{"color":55},{"text":1109,"type":46,"marks":1110},"the Snowball Method",[1111,1114,1116],{"type":150,"attrs":1112},{"href":1113,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.ramseysolutions.com/debt/how-the-debt-snowball-method-works",{"type":53,"attrs":1115},{"color":158},{"type":160},{"text":1118,"type":46,"marks":1119}," (paying off smaller debts first) or ",[1120],{"type":53,"attrs":1121},{"color":55},{"text":1123,"type":46,"marks":1124},"the Avalanche method",[1125,1128,1130],{"type":150,"attrs":1126},{"href":1127,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.ramseysolutions.com/debt/debt-snowball-vs-debt-avalanche",{"type":53,"attrs":1129},{"color":158},{"type":160},{"text":1132,"type":46,"marks":1133}," (paying off debts with the highest interest rates first). Choose the strategy that most appeals to you.",[1134],{"type":53,"attrs":1135},{"color":55},{"type":130,"content":1137},[1138],{"type":42,"content":1139},[1140,1146],{"text":1141,"type":46,"marks":1142},"Stay motivated: ",[1143,1144],{"type":138},{"type":53,"attrs":1145},{"color":55},{"text":1147,"type":46,"marks":1148},"Debt repayment can be tedious. Keep yourself engaged by finding an accountability buddy, listening to financial education podcasts, and keeping your financial goals in mind. ",[1149],{"type":53,"attrs":1150},{"color":55},{"type":71,"attrs":1152,"content":1153},{"level":104},[1154],{"text":1155,"type":46,"marks":1156},"Insurance coverage",[1157],{"type":53,"attrs":1158},{"color":111},{"type":42,"content":1160},[1161],{"text":1162,"type":46,"marks":1163},"Insuring yourself against financial emergencies is an important component of smart money management. Some common types of insurance include: ",[1164],{"type":53,"attrs":1165},{"color":55},{"type":127,"content":1167},[1168],{"type":130,"content":1169},[1170],{"type":42,"content":1171},[1172,1178,1183,1192],{"text":1173,"type":46,"marks":1174},"Life insurance:",[1175,1176],{"type":138},{"type":53,"attrs":1177},{"color":55},{"text":1179,"type":46,"marks":1180}," Life insurance provides financial protection for your dependents in the event of your death. There are primarily two types of life insurance. ",[1181],{"type":53,"attrs":1182},{"color":55},{"text":1184,"type":46,"marks":1185},"Term life insurance",[1186,1189,1191],{"type":150,"attrs":1187},{"href":1188,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.navient.com/blog/is-term-life-insurance-worth-it/",{"type":53,"attrs":1190},{"color":158},{"type":160},{"text":1193,"type":46,"marks":1194}," provides coverage for a specific term, such as 10, 20, or 30 years. Whole life insurance provides coverage for your entire life. A financial planner or estate planning lawyer can help you choose the right type for you.",[1195],{"type":53,"attrs":1196},{"color":55},{"type":127,"content":1198},[1199],{"type":130,"content":1200},[1201],{"type":42,"content":1202},[1203,1209],{"text":1204,"type":46,"marks":1205},"Auto insurance:",[1206,1207],{"type":138},{"type":53,"attrs":1208},{"color":55},{"text":1210,"type":46,"marks":1211}," Auto or car insurance provides coverage for property damage, bodily injury, and other liabilities related to vehicles. ",[1212],{"type":53,"attrs":1213},{"color":55},{"type":127,"content":1215},[1216],{"type":130,"content":1217},[1218],{"type":42,"content":1219},[1220,1226],{"text":1221,"type":46,"marks":1222},"Home insurance: ",[1223,1224],{"type":138},{"type":53,"attrs":1225},{"color":55},{"text":1227,"type":46,"marks":1228},"This protects your home and belongings against damages or losses caused by fire, theft, or natural disasters. ",[1229],{"type":53,"attrs":1230},{"color":55},{"type":127,"content":1232},[1233],{"type":130,"content":1234},[1235],{"type":42,"content":1236},[1237,1243],{"text":1238,"type":46,"marks":1239},"Disability insurance:",[1240,1241],{"type":138},{"type":53,"attrs":1242},{"color":55},{"text":1244,"type":46,"marks":1245}," Disability insurance replaces your income if you are unable to work due to a disability or illness. ",[1246],{"type":53,"attrs":1247},{"color":55},{"type":127,"content":1249},[1250],{"type":130,"content":1251},[1252],{"type":42,"content":1253},[1254,1260],{"text":1255,"type":46,"marks":1256},"Long-Term Care Insurance:",[1257,1258],{"type":138},{"type":53,"attrs":1259},{"color":55},{"text":1261,"type":46,"marks":1262}," This covers the cost of services like nursing homes, assisted living facilities, or professional caregivers. These aren’t usually covered by health insurance. ",[1263],{"type":53,"attrs":1264},{"color":55},{"type":71,"attrs":1266,"content":1267},{"level":104},[1268],{"text":1269,"type":46,"marks":1270},"Taxes",[1271],{"type":53,"attrs":1272},{"color":111},{"type":42,"content":1274},[1275],{"text":1276,"type":46,"marks":1277},"Staying informed about tax laws and regulations can help you minimize your tax burden. Here are some key points to understand:",[1278],{"type":53,"attrs":1279},{"color":55},{"type":127,"content":1281},[1282],{"type":130,"content":1283},[1284],{"type":42,"content":1285},[1286,1292],{"text":1287,"type":46,"marks":1288},"Income tax: ",[1289,1290],{"type":138},{"type":53,"attrs":1291},{"color":55},{"text":1293,"type":46,"marks":1294},"This is typically the largest portion of an individual’s tax burden. It’s often calculated based on a percentage of your taxable income. ",[1295],{"type":53,"attrs":1296},{"color":55},{"type":127,"content":1298},[1299],{"type":130,"content":1300},[1301],{"type":42,"content":1302},[1303,1309,1314,1323,1328,1337],{"text":1304,"type":46,"marks":1305},"Tax deductions and credits: ",[1306,1307],{"type":138},{"type":53,"attrs":1308},{"color":55},{"text":1310,"type":46,"marks":1311},"Deductions are items you can subtract from your taxable income. These may include charitable contributions and certain business expenses. Tax credits, on the other hand, are items you can subtract directly from your tax bill. These can save you even more money. Examples include the ",[1312],{"type":53,"attrs":1313},{"color":55},{"text":1315,"type":46,"marks":1316},"Child Tax Credit",[1317,1320,1322],{"type":150,"attrs":1318},{"href":1319,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.irs.gov/credits-deductions/individuals/child-tax-credit",{"type":53,"attrs":1321},{"color":158},{"type":160},{"text":1324,"type":46,"marks":1325}," and ",[1326],{"type":53,"attrs":1327},{"color":55},{"text":1329,"type":46,"marks":1330},"energy-efficient home credits",[1331,1334,1336],{"type":150,"attrs":1332},{"href":1333,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit#:~:text=The%20maximum%20credit%20you%20can,biomass%20stoves%20or%20biomass%20boilers",{"type":53,"attrs":1335},{"color":158},{"type":160},{"text":1338,"type":46,"marks":1339},". ",[1340],{"type":53,"attrs":1341},{"color":55},{"type":127,"content":1343},[1344],{"type":130,"content":1345},[1346],{"type":42,"content":1347},[1348,1354,1359,1368],{"text":1349,"type":46,"marks":1350},"Tax-advantaged accounts: ",[1351,1352],{"type":138},{"type":53,"attrs":1353},{"color":55},{"text":1355,"type":46,"marks":1356},"Retirement accounts, ",[1357],{"type":53,"attrs":1358},{"color":55},{"text":1360,"type":46,"marks":1361},"Health Savings Accounts",[1362,1365,1367],{"type":150,"attrs":1363},{"href":1364,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.cms.gov/outreach-and-education/health-savings-account.pdf",{"type":53,"attrs":1366},{"color":158},{"type":160},{"text":1369,"type":46,"marks":1370}," (HSAs), and education savings accounts let you make contributions that may be tax deductible or allowed to grow tax-free. ",[1371],{"type":53,"attrs":1372},{"color":55},{"type":71,"attrs":1374,"content":1375},{"level":73},[1376],{"text":1377,"type":46,"marks":1378},"Compare personal finance products on Navient Marketplace",[1379],{"type":53,"attrs":1380},{"color":55},{"type":42,"content":1382},[1383,1388,1397],{"text":1384,"type":46,"marks":1385},"Looking for ways to improve your personal finance? Navient Marketplace offers customized quotes from the best providers across the web. If you’re looking for a credit card, student loan, home/auto insurance, a personal loan, or even a savings account, Navient can find you the product that best suits your situation. Check out ",[1386],{"type":53,"attrs":1387},{"color":55},{"text":1389,"type":46,"marks":1390},"Navient Marketplace",[1391,1394,1396],{"type":150,"attrs":1392},{"href":1393,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.navient.com",{"type":53,"attrs":1395},{"color":158},{"type":160},{"text":1398,"type":46,"marks":1399}," today to get your personalized rates.",[1400],{"type":53,"attrs":1401},{"color":55},{"type":42,"content":1403},[1404],{"text":1405,"type":46,"marks":1406},"Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.",[1407,1409],{"type":49,"attrs":1408},{"class":51},{"type":53,"attrs":1410},{"color":55},"\u003C!--#storyblok#{\"name\": \"BlogText\", \"space\": \"157494\", \"uid\": \"67b1c1a7-fbb7-4c3c-a267-87dc959687fb\", \"id\": \"651798162\"}-->","BlogText","https://www.marketplace.navient.com/blog/what-is-personal-finance/","Updated: September 20, 2023","\u003C!--#storyblok#{\"name\": \"NriBlogPost\", \"space\": \"157494\", \"uid\": \"39f3568e-f888-4c3e-816f-3647f7efec59\", \"id\": \"651798162\"}-->","what-is-personal-finance","navient_marketplace/blog/what-is-personal-finance",-500,[],651751493,"3d6998ef-3e89-4cc5-a0cd-37ed7d70f71d","2023-09-26T16:16:47.915Z","default","blog/what-is-personal-finance/",[],{"name":1427,"created_at":1428,"published_at":1429,"updated_at":1430,"id":1431,"uuid":1432,"content":1433,"slug":2052,"full_slug":2053,"sort_by_date":153,"position":1418,"tag_list":2054,"is_startpage":29,"parent_id":1420,"meta_data":153,"group_id":2055,"first_published_at":2056,"release_id":153,"lang":1423,"path":2057,"alternates":2058,"default_full_slug":153,"translated_slugs":153},"What Happens if I Default on a Loan?","2025-04-07T18:30:21.356Z","2025-12-26T13:44:59.448Z","2025-12-26T13:44:59.477Z",651798159,"be1f223d-4435-4db6-9e3e-6c704c0ad5b6",{"seo":1434,"_uid":20,"hero":1437,"author":1442,"category":32,"featured":29,"imageAlt":18,"component":33,"blogContents":1443,"canonicalTag":2050,"publishedDate":1414,"_editable":2051},{"_uid":15,"title":1435,"plugin":17,"og_image":18,"og_title":18,"description":1436,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"What Happens if I Default on a Loan? | Navient Marketplace","Defaulting on a loan can have serious consequences. Learn how to avoid defaulting and what steps to take if it happens.",[1438],{"id":18,"_uid":23,"image":1439,"intro":1436,"classes":18,"_editable":1440,"blogTitle":1427,"component":27,"imageLink":1441,"blendImage":29,"backgroundColor":30},"//a.storyblok.com/f/110029/5184x3456/fefcc7e4b3/what-happens-if-i-default-on-a-loan.png","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798159\"}-->","/images/what-happens-if-i-default-on-a-loan.png","grace-guido",[1444],{"_uid":36,"color":37,"richText":1445,"_editable":2049,"component":1412},{"type":39,"content":1446},[1447,1455,1462,1469,1477,1493,1500,1507,1514,1535,1543,1550,1558,1565,1585,1593,1600,1608,1629,1637,1667,1688,1696,1703,1711,1718,1805,1813,1820,1949,1957,1964,1992,2000,2015,2025,2040],{"type":42,"content":1448},[1449],{"text":45,"type":46,"marks":1450},[1451,1453],{"type":49,"attrs":1452},{"class":51},{"type":53,"attrs":1454},{"color":55},{"type":42,"content":1456},[1457],{"text":1458,"type":46,"marks":1459},"When you take out a loan, you intend to be able to pay it back. However, sometimes unexpected financial situations can make it challenging to make your payments. ",[1460],{"type":53,"attrs":1461},{"color":55},{"type":42,"content":1463},[1464],{"text":1465,"type":46,"marks":1466},"Defaulting on a loan happens when you miss your monthly payments for a specific amount of time. Once your loan is in default, you can experience consequences, including damage to your credit score, collection efforts, legal actions, and possibly losing assets secured by the loan. ",[1467],{"type":53,"attrs":1468},{"color":55},{"type":71,"attrs":1470,"content":1471},{"level":73},[1472],{"text":1473,"type":46,"marks":1474},"What Happens When I Start Missing Payments?",[1475],{"type":53,"attrs":1476},{"color":55},{"type":42,"content":1478},[1479,1488],{"text":1480,"type":46,"marks":1481},"Delinquency",[1482,1485,1487],{"type":150,"attrs":1483},{"href":1484,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.studentloanborrowerassistance.org/what-is-the-difference-between-default-and-delinquency/",{"type":53,"attrs":1486},{"color":158},{"type":160},{"text":1489,"type":46,"marks":1490}," is the first step towards defaulting on your loan. If you miss a single loan payment or make a late payment, you will be delinquent on your loan. ",[1491],{"type":53,"attrs":1492},{"color":55},{"type":42,"content":1494},[1495],{"text":1496,"type":46,"marks":1497},"At this stage, your loan payment is past due. Lenders typically have a grace period that allows late payments without severe consequences. However, you may experience late fees. ",[1498],{"type":53,"attrs":1499},{"color":55},{"type":42,"content":1501},[1502],{"text":1503,"type":46,"marks":1504},"Delinquency can lead to default, but it’s important to note that it is a temporary and reversible situation. You can recover from delinquency by making your missed payment(s) and getting back on track with your loan obligation. ",[1505],{"type":53,"attrs":1506},{"color":55},{"type":42,"content":1508},[1509],{"text":1510,"type":46,"marks":1511},"If you become delinquent on your loan or struggle to make payments, immediately contact your lender. Communicating and taking proactive steps can help stop delinquency from escalating into default. ",[1512],{"type":53,"attrs":1513},{"color":55},{"type":42,"content":1515},[1516,1521,1530],{"text":1517,"type":46,"marks":1518},"When you miss consecutive payments for a specific period of time as specified in your loan agreement, you ",[1519],{"type":53,"attrs":1520},{"color":55},{"text":1522,"type":46,"marks":1523},"default on your loans",[1524,1527,1529],{"type":150,"attrs":1525},{"href":1526,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://studentaid.gov/manage-loans/default",{"type":53,"attrs":1528},{"color":158},{"type":160},{"text":1531,"type":46,"marks":1532},". Default is the next step after delinquency and represents a more severe failure to make payments and pay back your loan. It can result in negative consequences, including legal action. ",[1533],{"type":53,"attrs":1534},{"color":55},{"type":71,"attrs":1536,"content":1537},{"level":73},[1538],{"text":1539,"type":46,"marks":1540},"What Does it Mean to Default on a Loan?",[1541],{"type":53,"attrs":1542},{"color":55},{"type":42,"content":1544},[1545],{"text":1546,"type":46,"marks":1547},"Defaulting on your loan will have different consequences and courses of action based on the type of loan. Different loan types have different time periods for default. Remember that the exact time period will differ depending on your lender and loan agreement.",[1548],{"type":53,"attrs":1549},{"color":55},{"type":71,"attrs":1551,"content":1552},{"level":104},[1553],{"text":1554,"type":46,"marks":1555},"Credit Cards ",[1556],{"type":53,"attrs":1557},{"color":111},{"type":42,"content":1559},[1560],{"text":1561,"type":46,"marks":1562},"Credit cards will usually default after several months of delinquency. Exact timelines for default may vary, so check with your lender. Expected consequences include increased interest rates and penalty fees. ",[1563],{"type":53,"attrs":1564},{"color":55},{"type":42,"content":1566},[1567,1572,1581],{"text":1568,"type":46,"marks":1569},"If your credit card defaults, you could experience aggressive collection efforts from your lender or a debt collection agency. Your lender could also pursue legal action to recover the outstanding debt and possibly secure ",[1570],{"type":53,"attrs":1571},{"color":55},{"text":1573,"type":46,"marks":1574},"wage garnishment",[1575,1578,1580],{"type":150,"attrs":1576},{"href":1577,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.dol.gov/agencies/whd/fact-sheets/30-cppa",{"type":53,"attrs":1579},{"color":158},{"type":160},{"text":1338,"type":46,"marks":1582},[1583],{"type":53,"attrs":1584},{"color":55},{"type":71,"attrs":1586,"content":1587},{"level":104},[1588],{"text":1589,"type":46,"marks":1590},"Personal Loans",[1591],{"type":53,"attrs":1592},{"color":111},{"type":42,"content":1594},[1595],{"text":1596,"type":46,"marks":1597},"Personal loans will default at different times depending on your lender and loan agreement. Typically, it will be after several weeks or months, but check with your lender for the exact timeline.  Depending on the loan type, personal loans could result in wage garnishment or seizure of your collateral asset if you have a secured loan. ",[1598],{"type":53,"attrs":1599},{"color":55},{"type":71,"attrs":1601,"content":1602},{"level":104},[1603],{"text":1604,"type":46,"marks":1605},"Mortgage",[1606],{"type":53,"attrs":1607},{"color":111},{"type":42,"content":1609},[1610,1615,1624],{"text":1611,"type":46,"marks":1612},"The time period for defaulting on a mortgage will ",[1613],{"type":53,"attrs":1614},{"color":55},{"text":1616,"type":46,"marks":1617},"vary by the lender and state",[1618,1621,1623],{"type":150,"attrs":1619},{"href":1620,"uuid":153,"anchor":153,"target":154,"linktype":155},"http://www.foreclosurelaw.org/",{"type":53,"attrs":1622},{"color":158},{"type":160},{"text":1625,"type":46,"marks":1626},". For many borrowers, defaulting on a mortgage will lead to foreclosure. If you struggle to make your mortgage payments, consider refinancing your mortgage. ",[1627],{"type":53,"attrs":1628},{"color":55},{"type":71,"attrs":1630,"content":1631},{"level":104},[1632],{"text":1633,"type":46,"marks":1634},"Student Loans",[1635],{"type":53,"attrs":1636},{"color":111},{"type":42,"content":1638},[1639,1648,1653,1662],{"text":1640,"type":46,"marks":1641},"Student loans",[1642,1645,1647],{"type":150,"attrs":1643},{"href":1644,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://navirefi.com/",{"type":53,"attrs":1646},{"color":158},{"type":160},{"text":1649,"type":46,"marks":1650}," will typically default after ",[1651],{"type":53,"attrs":1652},{"color":55},{"text":1654,"type":46,"marks":1655},"270 days",[1656,1658,1659,1661],{"type":150,"attrs":1657},{"href":1526,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":138},{"type":53,"attrs":1660},{"color":158},{"type":160},{"text":1663,"type":46,"marks":1664},". This type of loan has a long delinquency period, allowing you more time to sort out your financial situation. ",[1665],{"type":53,"attrs":1666},{"color":55},{"type":42,"content":1668},[1669,1674,1683],{"text":1670,"type":46,"marks":1671},"The first consequence of student loan default can be ",[1672],{"type":53,"attrs":1673},{"color":55},{"text":1675,"type":46,"marks":1676},"acceleration",[1677,1680,1682],{"type":150,"attrs":1678},{"href":1679,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://studentaid.gov/help-center/answers/article/what-is-acceleration",{"type":53,"attrs":1681},{"color":158},{"type":160},{"text":1684,"type":46,"marks":1685},", meaning your outstanding balance is due immediately. The federal government can also withhold federal benefits and tax refunds until you repay your debt. Defaulting on student loans can also result in wage garnishment. ",[1686],{"type":53,"attrs":1687},{"color":55},{"type":71,"attrs":1689,"content":1690},{"level":104},[1691],{"text":1692,"type":46,"marks":1693},"Auto Loans",[1694],{"type":53,"attrs":1695},{"color":111},{"type":42,"content":1697},[1698],{"text":1699,"type":46,"marks":1700},"Auto loans will typically default after several weeks or months. For an exact timeline, check with your lender. If you default on your auto loan, your lender may repossess your vehicle. If your car is repossessed, you may still owe your lender due to your vehicle depreciating. ",[1701],{"type":53,"attrs":1702},{"color":55},{"type":71,"attrs":1704,"content":1705},{"level":104},[1706],{"text":1707,"type":46,"marks":1708},"Consequences",[1709],{"type":53,"attrs":1710},{"color":111},{"type":42,"content":1712},[1713],{"text":1714,"type":46,"marks":1715},"Regardless of the type of loan you are defaulting on, certain consequences may apply in every situation: ",[1716],{"type":53,"attrs":1717},{"color":55},{"type":127,"content":1719},[1720,1735,1750,1775,1790],{"type":130,"content":1721},[1722],{"type":42,"content":1723},[1724,1730],{"text":1725,"type":46,"marks":1726},"Damage to your credit score:",[1727,1728],{"type":138},{"type":53,"attrs":1729},{"color":55},{"text":1731,"type":46,"marks":1732}," default will be reported to the credit bureaus, causing your credit score to fall. A low credit score may make qualifying for future credit and favorable terms difficult. ",[1733],{"type":53,"attrs":1734},{"color":55},{"type":130,"content":1736},[1737],{"type":42,"content":1738},[1739,1745],{"text":1740,"type":46,"marks":1741},"Increased interest rates and fees: ",[1742,1743],{"type":138},{"type":53,"attrs":1744},{"color":55},{"text":1746,"type":46,"marks":1747},"late fees will add to your debt balance, and you could experience increased interest rates when you default. Increased rates and added fees will make it even harder to pay off. ",[1748],{"type":53,"attrs":1749},{"color":55},{"type":130,"content":1751},[1752],{"type":42,"content":1753},[1754,1760,1770],{"text":1755,"type":46,"marks":1756},"A default will stay on your credit report for ",[1757,1758],{"type":138},{"type":53,"attrs":1759},{"color":55},{"text":1761,"type":46,"marks":1762},"seven years",[1763,1766,1767,1769],{"type":150,"attrs":1764},{"href":1765,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.consumerfinance.gov/ask-cfpb/how-long-does-negative-information-remain-on-my-credit-report-en-323/",{"type":138},{"type":53,"attrs":1768},{"color":158},{"type":160},{"text":1771,"type":46,"marks":1772},": your credit score can improve over time, but the default will stay on your report for seven years.",[1773],{"type":53,"attrs":1774},{"color":55},{"type":130,"content":1776},[1777],{"type":42,"content":1778},[1779,1785],{"text":1780,"type":46,"marks":1781},"You may have to work with a collection agency: ",[1782,1783],{"type":138},{"type":53,"attrs":1784},{"color":55},{"text":1786,"type":46,"marks":1787},"lenders may involve collection agencies to recover the outstanding debt. They may frequently contact you until you pay off your debt. ",[1788],{"type":53,"attrs":1789},{"color":55},{"type":130,"content":1791},[1792],{"type":42,"content":1793},[1794,1800],{"text":1795,"type":46,"marks":1796},"Potential legal action: ",[1797,1798],{"type":138},{"type":53,"attrs":1799},{"color":55},{"text":1801,"type":46,"marks":1802},"legal action can result in wage garnishment or seizure of your collateral asset, depending on loan type. ",[1803],{"type":53,"attrs":1804},{"color":55},{"type":71,"attrs":1806,"content":1807},{"level":73},[1808],{"text":1809,"type":46,"marks":1810},"How to Avoid Going Into Default",[1811],{"type":53,"attrs":1812},{"color":55},{"type":42,"content":1814},[1815],{"text":1816,"type":46,"marks":1817},"If your loan is not already in default, you can take steps to avoid it. Since default has some significant consequences, try your best to prevent it. Here are some options that may work for you based on your financial situation and loan type: ",[1818],{"type":53,"attrs":1819},{"color":55},{"type":293,"attrs":1821,"content":1822},{"order":295},[1823,1839,1883,1934],{"type":130,"content":1824},[1825,1838],{"type":42,"content":1826},[1827,1833],{"text":1828,"type":46,"marks":1829},"Deferment or Forbearance: ",[1830,1831],{"type":138},{"type":53,"attrs":1832},{"color":55},{"text":1834,"type":46,"marks":1835},"One option to avoid default is seeking deferment or forbearance. Both are ways to provide temporary relief from your payments and require specific eligibility criteria and approval from your lender. Contact your lender to learn if this may be an option for you. ",[1836],{"type":53,"attrs":1837},{"color":55},{"type":42},{"type":130,"content":1840},[1841,1882],{"type":42,"content":1842},[1843,1849,1854,1863,1868,1877],{"text":1844,"type":46,"marks":1845},"Repayment Plans (For Federal Student Loans): ",[1846,1847],{"type":138},{"type":53,"attrs":1848},{"color":55},{"text":1850,"type":46,"marks":1851},"Changing your ",[1852],{"type":53,"attrs":1853},{"color":55},{"text":1855,"type":46,"marks":1856},"payment plan",[1857,1860,1862],{"type":150,"attrs":1858},{"href":1859,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://studentaid.gov/manage-loans/repayment/plans",{"type":53,"attrs":1861},{"color":158},{"type":160},{"text":1864,"type":46,"marks":1865}," may be a viable option for federal student loans to make your payments more manageable. ",[1866],{"type":53,"attrs":1867},{"color":55},{"text":1869,"type":46,"marks":1870},"Income-driven repayment plans",[1871,1874,1876],{"type":150,"attrs":1872},{"href":1873,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://studentaid.gov/manage-loans/repayment/plans/income-driven",{"type":53,"attrs":1875},{"color":158},{"type":160},{"text":1878,"type":46,"marks":1879}," base your monthly payments on your income and family size. An income-driven repayment plan may be a good option if your current payments are not affordable for your income. ",[1880],{"type":53,"attrs":1881},{"color":55},{"type":42},{"type":130,"content":1884},[1885,1933],{"type":42,"content":1886},[1887,1893,1898,1906,1914,1919,1928],{"text":1888,"type":46,"marks":1889},"Refinance or Consolidate (For Student Loans): ",[1890,1891],{"type":138},{"type":53,"attrs":1892},{"color":55},{"text":1894,"type":46,"marks":1895},"For private student loans, ",[1896],{"type":53,"attrs":1897},{"color":55},{"text":1899,"type":46,"marks":1900},"refinancing",[1901,1903,1905],{"type":150,"attrs":1902},{"href":1644,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":1904},{"color":158},{"type":160},{"text":1907,"type":46,"marks":1908},"1",[1909,1912],{"type":49,"attrs":1910},{"class":1911},"superscript",{"type":53,"attrs":1913},{"color":55},{"text":1915,"type":46,"marks":1916}," can lower your monthly payments. For federal student loans, consider ",[1917],{"type":53,"attrs":1918},{"color":55},{"text":1920,"type":46,"marks":1921},"consolidating",[1922,1925,1927],{"type":150,"attrs":1923},{"href":1924,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://studentaid.gov/manage-loans/consolidation",{"type":53,"attrs":1926},{"color":158},{"type":160},{"text":1929,"type":46,"marks":1930},". Although this may result in paying more in interest over the life of your loan, it may help make your monthly payments more manageable. ",[1931],{"type":53,"attrs":1932},{"color":55},{"type":42},{"type":130,"content":1935},[1936],{"type":42,"content":1937},[1938,1944],{"text":1939,"type":46,"marks":1940},"Contact Your Lender: ",[1941,1942],{"type":138},{"type":53,"attrs":1943},{"color":55},{"text":1945,"type":46,"marks":1946},"Options to avoid default will vary depending on your lender and loan type. If you struggle to make payments, do not hesitate to contact your lender. Explain your financial situation and work with your lender to come up with a solution. ",[1947],{"type":53,"attrs":1948},{"color":55},{"type":71,"attrs":1950,"content":1951},{"level":73},[1952],{"text":1953,"type":46,"marks":1954},"What To Do if You’re in Default",[1955],{"type":53,"attrs":1956},{"color":55},{"type":42,"content":1958},[1959],{"text":1960,"type":46,"marks":1961},"If you’re in default, contact your lender as soon as possible. Do not avoid communications from your lender or collection agencies. ",[1962],{"type":53,"attrs":1963},{"color":55},{"type":42,"content":1965},[1966,1971,1980,1987],{"text":1967,"type":46,"marks":1968},"There are options out there if you’re struggling to make payments. ",[1969],{"type":53,"attrs":1970},{"color":55},{"text":1972,"type":46,"marks":1973},"Apply for a debt consolidation loan",[1974,1977,1979],{"type":150,"attrs":1975},{"href":1976,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.navient.com/",{"type":53,"attrs":1978},{"color":158},{"type":160},{"text":1981,"type":46,"marks":1982},"2",[1983,1985],{"type":49,"attrs":1984},{"class":1911},{"type":53,"attrs":1986},{"color":55},{"text":1988,"type":46,"marks":1989}," or balance transfer credit card today. ",[1990],{"type":53,"attrs":1991},{"color":55},{"type":42,"content":1993},[1994],{"text":1405,"type":46,"marks":1995},[1996,1998],{"type":49,"attrs":1997},{"class":51},{"type":53,"attrs":1999},{"color":55},{"type":42,"content":2001},[2002,2008],{"text":1907,"type":46,"marks":2003},[2004,2006],{"type":49,"attrs":2005},{"class":1911},{"type":53,"attrs":2007},{"color":55},{"text":2009,"type":46,"marks":2010}," You may lose benefits associated with your underlying federal and/or private loans if you refinance such as federal Income-driven Repayment Plans, Economic Hardship Deferment, Public Service Loan Forgiveness, or other deferment and forbearance options. If you file for bankruptcy, you may still be required to pay back this loan.",[2011,2013],{"type":49,"attrs":2012},{"class":51},{"type":53,"attrs":2014},{"color":55},{"type":42,"content":2016},[2017],{"text":2018,"type":46,"marks":2019},"Choosing to refinance to a longer term may lower your monthly payment, but increase the amount of interest you may pay. Choosing to refinance to a shorter term may increase your monthly payment, but lower the amount of interest you may pay. Review your loan documentation for total cost of your refinanced loan.",[2020,2022],{"type":49,"attrs":2021},{"class":51},{"type":53,"attrs":2023},{"color":2024},"rgb(75, 75, 75)",{"type":42,"content":2026},[2027,2033],{"text":1981,"type":46,"marks":2028},[2029,2031],{"type":49,"attrs":2030},{"class":1911},{"type":53,"attrs":2032},{"color":2024},{"text":2034,"type":46,"marks":2035}," Navient customers are invited to consider personal loan offers through our partner MoneyLion. Navient has not shared your information with MoneyLion and is not involved in the personal loan application process in any manner. All information is submitted directly to MoneyLion and any personal loan offers are made directly by participants in MoneyLion’s lending platform. Engine by MoneyLion is the industry-leading embedded financial marketplace and independent subsidiary of MoneyLion Inc. (“MoneyLion”) (NYSE:ML). Checking your rate will not affect your credit score. Eligibility is not guaranteed and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. ",[2036,2038],{"type":49,"attrs":2037},{"class":51},{"type":53,"attrs":2039},{"color":2024},{"type":42,"content":2041},[2042],{"text":2043,"type":46,"marks":2044},"Loan proceeds may not be used for postsecondary educational expenses, including refinancing federal or private student loans.",[2045,2047],{"type":49,"attrs":2046},{"class":51},{"type":53,"attrs":2048},{"color":2024},"\u003C!--#storyblok#{\"name\": \"BlogText\", \"space\": \"157494\", \"uid\": \"67b1c1a7-fbb7-4c3c-a267-87dc959687fb\", \"id\": \"651798159\"}-->","https://www.marketplace.navient.com/blog/what-happens-if-i-default-on-a-loan/","\u003C!--#storyblok#{\"name\": \"NriBlogPost\", \"space\": \"157494\", \"uid\": \"39f3568e-f888-4c3e-816f-3647f7efec59\", \"id\": \"651798159\"}-->","what-happens-if-i-default-on-a-loan","navient_marketplace/blog/what-happens-if-i-default-on-a-loan",[],"12cbfbb6-ff53-41b2-a115-28376f0c7d55","2023-09-26T16:17:34.857Z","blog/what-happens-if-i-default-on-a-loan",[],{"name":2060,"created_at":2061,"published_at":2062,"updated_at":2063,"id":2064,"uuid":2065,"content":2066,"slug":2854,"full_slug":2855,"sort_by_date":153,"position":1418,"tag_list":2856,"is_startpage":29,"parent_id":1420,"meta_data":153,"group_id":2857,"first_published_at":2858,"release_id":153,"lang":1423,"path":2859,"alternates":2860,"default_full_slug":153,"translated_slugs":153},"Which debt should I pay off first?","2025-04-07T18:30:19.642Z","2026-04-01T16:45:08.862Z","2026-04-01T16:45:08.886Z",651798158,"a89244e6-c8ca-49cd-ad15-5b25234ef178",{"seo":2067,"_uid":20,"hero":2070,"author":1442,"category":32,"featured":29,"imageAlt":18,"component":33,"blogContents":2076,"canonicalTag":2852,"publishedDate":1414,"_editable":2853},{"_uid":15,"title":2068,"plugin":17,"og_image":18,"og_title":18,"description":2069,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"Which debt should I pay off first? | Navient Marketplace","Pay off higher-interest debt first to save the most money over time. But if that sounds like too big of a challenge, try these other methods.",[2071],{"id":18,"_uid":23,"image":2072,"intro":2069,"classes":18,"_editable":2073,"blogTitle":2074,"component":27,"imageLink":2075,"blendImage":29,"backgroundColor":30},"//a.storyblok.com/f/110029/1280x853/6fb22bafe2/which-debt-should-i-pay-off-first.png","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798158\"}-->","Which Debt Should I Pay Off First?","/images/which-debt-should-i-pay-off-first.png",[2077],{"_uid":36,"color":37,"richText":2078,"_editable":2851,"component":1412},{"type":39,"content":2079},[2080,2089,2099,2122,2142,2151,2173,2181,2190,2212,2220,2229,2238,2247,2256,2273,2303,2311,2319,2327,2336,2345,2354,2363,2384,2392,2400,2543,2551,2560,2569,2578,2587,2609,2617,2625,2787,2796,2817,2826,2842],{"type":42,"attrs":2081,"content":2082},{"textAlign":153},[2083],{"text":45,"type":46,"marks":2084},[2085,2087],{"type":53,"attrs":2086},{"color":55},{"type":49,"attrs":2088},{"class":51},{"type":42,"attrs":2090,"content":2091},{"textAlign":153},[2092],{"text":2093,"type":46,"marks":2094},"Navient is not a debt consulting company. This is for personal finance education only. If you have questions about how to pay off your debt, please consult with a professional debt management company. ",[2095,2097],{"type":53,"attrs":2096},{"color":55},{"type":49,"attrs":2098},{"class":51},{"type":42,"attrs":2100,"content":2101},{"textAlign":153},[2102,2107,2116],{"text":2103,"type":46,"marks":2104},"If you have multiple sources of debt, it can take time to figure out which debt you should pay off first. Remember that you are not alone in your debt management efforts. In 2022, ",[2105],{"type":53,"attrs":2106},{"color":55},{"text":2108,"type":46,"marks":2109},"the average debt for Americans was $95,067",[2110,2113,2115],{"type":150,"attrs":2111},{"href":2112,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.experian.com/blogs/ask-experian/research/consumer-debt-study/",{"type":53,"attrs":2114},{"color":158},{"type":160},{"text":2117,"type":46,"marks":2118}," across all debt types. ",[2119],{"type":53,"attrs":2120},{"color":2121},"rgb(51, 51, 51)",{"type":42,"attrs":2123,"content":2124},{"textAlign":153},[2125,2130,2137],{"text":2126,"type":46,"marks":2127},"Whether you have debt from a mortgage, student loans, credit cards, or other debt types, there are methods to paying off your debt that can make it easier. The best plan for you is the one you can stick with. However, the first step for ",[2128],{"type":53,"attrs":2129},{"color":55},{"text":2131,"type":46,"marks":2132},"everyone",[2133,2135],{"type":53,"attrs":2134},{"color":55},{"type":2136},"italic",{"text":2138,"type":46,"marks":2139}," is paying off any tax debt or delinquent accounts before trying out these strategies. ",[2140],{"type":53,"attrs":2141},{"color":55},{"type":71,"attrs":2143,"content":2144},{"level":73,"textAlign":153},[2145],{"text":2146,"type":46,"marks":2147},"Pay Off Tax Debt First",[2148,2150],{"type":53,"attrs":2149},{"color":55},{"type":138},{"type":42,"attrs":2152,"content":2153},{"textAlign":153},[2154,2159,2168],{"text":2155,"type":46,"marks":2156},"If you owe any tax debt, you need to pay this debt off first. Tax debt is the result of not paying the tax balance of your federal income taxes by the due date, typically April 15. Going too long without paying could result in ",[2157],{"type":53,"attrs":2158},{"color":55},{"text":2160,"type":46,"marks":2161},"high interest, penalties, and fees",[2162,2165,2167],{"type":150,"attrs":2163},{"href":2164,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.irs.gov/newsroom/if-youve-filed-but-havent-paid#:~:text=The%20failure%2Dto%2Dpay%20penalty,the%20total%20amount%20you%20owe.",{"type":53,"attrs":2166},{"color":158},{"type":160},{"text":2169,"type":46,"marks":2170},". Leaving this debt unpaid will be extremely difficult to get out from under. ",[2171],{"type":53,"attrs":2172},{"color":55},{"type":42,"attrs":2174,"content":2175},{"textAlign":153},[2176],{"text":2177,"type":46,"marks":2178},"Once you pay off your tax debt, you can start paying off your remaining debt. ",[2179],{"type":53,"attrs":2180},{"color":55},{"type":71,"attrs":2182,"content":2183},{"level":73,"textAlign":153},[2184],{"text":2185,"type":46,"marks":2186},"Pay Delinquent Accounts First",[2187,2189],{"type":53,"attrs":2188},{"color":55},{"type":138},{"type":42,"attrs":2191,"content":2192},{"textAlign":153},[2193,2198,2207],{"text":2194,"type":46,"marks":2195},"Another essential step before paying off your remaining debt is to take care of any ",[2196],{"type":53,"attrs":2197},{"color":55},{"text":2199,"type":46,"marks":2200},"delinquent accounts",[2201,2204,2206],{"type":150,"attrs":2202},{"href":2203,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.investopedia.com/terms/d/delinquent.asp#:~:text=In%20finance%2C%20it%20commonly%20refers,generally%20considered%20to%20be%20delinquent.",{"type":53,"attrs":2205},{"color":158},{"type":160},{"text":2208,"type":46,"marks":2209},". Delinquent accounts are payments or debts that are past due. Having delinquent accounts can have consequences, including late fees and damage to your credit score. It can also make it difficult to secure future credit, such as a mortgage or auto loan. ",[2210],{"type":53,"attrs":2211},{"color":55},{"type":42,"attrs":2213,"content":2214},{"textAlign":153},[2215],{"text":2216,"type":46,"marks":2217},"Once you’ve handled any delinquent accounts, it’s time to start paying off any remaining debt. ",[2218],{"type":53,"attrs":2219},{"color":55},{"type":71,"attrs":2221,"content":2222},{"level":73,"textAlign":153},[2223],{"text":2224,"type":46,"marks":2225},"Pay Off Highest-Interest Debt First (Avalanche Method)",[2226,2228],{"type":53,"attrs":2227},{"color":55},{"type":138},{"type":42,"attrs":2230,"content":2231},{"textAlign":153},[2232],{"text":2233,"type":46,"marks":2234},"Best for: individuals who can stay motivated",[2235,2237],{"type":53,"attrs":2236},{"color":55},{"type":2136},{"type":42,"attrs":2239,"content":2240},{"textAlign":153},[2241],{"text":2242,"type":46,"marks":2243},"Pros: save money on interest ",[2244,2246],{"type":53,"attrs":2245},{"color":55},{"type":2136},{"type":42,"attrs":2248,"content":2249},{"textAlign":153},[2250],{"text":2251,"type":46,"marks":2252},"Cons: can take a while to feel like you are making progress",[2253,2255],{"type":53,"attrs":2254},{"color":55},{"type":2136},{"type":42,"attrs":2257,"content":2258},{"textAlign":153},[2259,2268],{"text":2260,"type":46,"marks":2261},"The debt avalanche method",[2262,2265,2267],{"type":150,"attrs":2263},{"href":2264,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.consumerfinance.gov/about-us/blog/how-reduce-your-debt/",{"type":53,"attrs":2266},{"color":158},{"type":160},{"text":2269,"type":46,"marks":2270}," is the most commonly recommended option for paying off debt. Using this method, you’ll save the most on interest by paying off debts with high-interest rates. ",[2271],{"type":53,"attrs":2272},{"color":55},{"type":42,"attrs":2274,"content":2275},{"textAlign":153},[2276,2281,2287,2297],{"text":2277,"type":46,"marks":2278},"This method focuses on paying off the debt with the highest interest rate first. To follow the avalanche method, make your minimum monthly payments on all accounts, but dedicate any extra money to the highest-interest debt. ",[2279],{"type":53,"attrs":2280},{"color":55},{"text":2282,"type":46,"marks":2283},"As a general tip, when you have additional funds to pay ahead, ",[2284,2286],{"type":53,"attrs":2285},{"color":55},{"type":138},{"text":2288,"type":46,"marks":2289},"pay toward the principal",[2290,2293,2295,2296],{"type":150,"attrs":2291},{"href":2292,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-paying-interest-and-paying-off-my-principal-in-an-auto-loan-en-845/",{"type":53,"attrs":2294},{"color":158},{"type":138},{"type":160},{"text":2298,"type":46,"marks":2299}," instead of the loan balance. ",[2300,2302],{"type":53,"attrs":2301},{"color":55},{"type":138},{"type":42,"attrs":2304,"content":2305},{"textAlign":153},[2306],{"text":2307,"type":46,"marks":2308},"Once you pay off your highest-interest debt, prioritize paying off the debt with the next highest-interest rate. Continue this process until you are debt free. Like an avalanche, this method starts slowly and then gains momentum. You’ll have more funds for the remaining debts as you pay off the highest-interest debts. Saving money on interest will help you make larger payments on your remaining debt and reduce the total interest you will pay. ",[2309],{"type":53,"attrs":2310},{"color":55},{"type":42,"attrs":2312,"content":2313},{"textAlign":153},[2314],{"text":2315,"type":46,"marks":2316},"The avalanche method may be suitable if you can stick to making regular payments for years or even decades. It may also work for you if your highest-interest debts are of a relatively low balance. Low balances will make it easier for you to gain momentum using this method. ",[2317],{"type":53,"attrs":2318},{"color":55},{"type":42,"attrs":2320,"content":2321},{"textAlign":153},[2322],{"text":2323,"type":46,"marks":2324},"While there are benefits to this method, it can be demotivating to get started since the highest-interest debt will also be the most challenging to pay off. It may not work for you if your highest-interest debt also has a high balance. ",[2325],{"type":53,"attrs":2326},{"color":55},{"type":71,"attrs":2328,"content":2329},{"level":73,"textAlign":153},[2330],{"text":2331,"type":46,"marks":2332},"Pay Off Smallest Balance Debt First (Snowball Method)",[2333,2335],{"type":53,"attrs":2334},{"color":55},{"type":138},{"type":42,"attrs":2337,"content":2338},{"textAlign":153},[2339],{"text":2340,"type":46,"marks":2341},"Best for: individuals who want to see progress quickly",[2342,2344],{"type":53,"attrs":2343},{"color":55},{"type":2136},{"type":42,"attrs":2346,"content":2347},{"textAlign":153},[2348],{"text":2349,"type":46,"marks":2350},"Pros: easy to make progress",[2351,2353],{"type":53,"attrs":2352},{"color":55},{"type":2136},{"type":42,"attrs":2355,"content":2356},{"textAlign":153},[2357],{"text":2358,"type":46,"marks":2359},"Cons: will likely cost more than the avalanche method overall",[2360,2362],{"type":53,"attrs":2361},{"color":55},{"type":2136},{"type":42,"attrs":2364,"content":2365},{"textAlign":153},[2366,2371,2379],{"text":2367,"type":46,"marks":2368},"Another method to pay off your debt is ",[2369],{"type":53,"attrs":2370},{"color":55},{"text":2372,"type":46,"marks":2373},"the snowball method",[2374,2376,2378],{"type":150,"attrs":2375},{"href":2264,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":2377},{"color":158},{"type":160},{"text":2380,"type":46,"marks":2381},". This method pays off your lowest balances first, regardless of interest rates. ",[2382],{"type":53,"attrs":2383},{"color":55},{"type":42,"attrs":2385,"content":2386},{"textAlign":153},[2387],{"text":2388,"type":46,"marks":2389},"This method may be excellent for you if you need help staying motivated or want to feel like you are making progress on your debt quickly. You will likely be able to pay off your first debt in a matter of months or a year. The snowball method keeps your momentum, motivating you to pay down your remaining debt balances. ",[2390],{"type":53,"attrs":2391},{"color":55},{"type":42,"attrs":2393,"content":2394},{"textAlign":153},[2395],{"text":2396,"type":46,"marks":2397},"Follow the snowball method with these easy steps: ",[2398],{"type":53,"attrs":2399},{"color":55},{"type":293,"attrs":2401,"content":2403},{"order":2402},{"order":295},[2404,2452,2468,2484,2511,2527],{"type":130,"content":2405},[2406,2420],{"type":42,"attrs":2407,"content":2408},{"textAlign":153},[2409,2415],{"text":2410,"type":46,"marks":2411},"Make a list of all your debt balances",[2412,2414],{"type":53,"attrs":2413},{"color":55},{"type":138},{"text":2416,"type":46,"marks":2417}," to identify the smallest. For example, let’s consider the following debts: ",[2418],{"type":53,"attrs":2419},{"color":55},{"type":127,"content":2421},[2422,2432,2442],{"type":130,"content":2423},[2424],{"type":42,"attrs":2425,"content":2426},{"textAlign":153},[2427],{"text":2428,"type":46,"marks":2429},"Credit Card A: $1,000 balance",[2430],{"type":53,"attrs":2431},{"color":55},{"type":130,"content":2433},[2434],{"type":42,"attrs":2435,"content":2436},{"textAlign":153},[2437],{"text":2438,"type":46,"marks":2439},"Credit Card B: $7,500 balance",[2440],{"type":53,"attrs":2441},{"color":55},{"type":130,"content":2443},[2444],{"type":42,"attrs":2445,"content":2446},{"textAlign":153},[2447],{"text":2448,"type":46,"marks":2449},"Personal Loan: $15,000 balance",[2450],{"type":53,"attrs":2451},{"color":55},{"type":130,"content":2453},[2454],{"type":42,"attrs":2455,"content":2456},{"textAlign":153},[2457,2463],{"text":2458,"type":46,"marks":2459},"Pay the minimum payments on all debts except for your smallest balance.",[2460,2462],{"type":53,"attrs":2461},{"color":55},{"type":138},{"text":2464,"type":46,"marks":2465}," For this example, you would make the minimum payments on Credit Card B and your Personal Loan. ",[2466],{"type":53,"attrs":2467},{"color":55},{"type":130,"content":2469},[2470],{"type":42,"attrs":2471,"content":2472},{"textAlign":153},[2473,2479],{"text":2474,"type":46,"marks":2475},"Put any extra money toward your smallest debt balance. ",[2476,2478],{"type":53,"attrs":2477},{"color":55},{"type":138},{"text":2480,"type":46,"marks":2481},"In this example, any extra money would go towards paying off Credit Card A. ",[2482],{"type":53,"attrs":2483},{"color":55},{"type":130,"content":2485},[2486],{"type":42,"attrs":2487,"content":2488},{"textAlign":153},[2489,2495,2500,2506],{"text":2490,"type":46,"marks":2491},"Snowball effect: ",[2492,2494],{"type":53,"attrs":2493},{"color":55},{"type":138},{"text":2496,"type":46,"marks":2497},"once you pay off your smallest balance, move on to the next smallest.",[2498],{"type":53,"attrs":2499},{"color":55},{"text":2501,"type":46,"marks":2502}," ",[2503,2505],{"type":53,"attrs":2504},{"color":55},{"type":138},{"text":2507,"type":46,"marks":2508},"Using the example, once you pay off Credit Card A, make extra payments toward Credit Card B. ",[2509],{"type":53,"attrs":2510},{"color":55},{"type":130,"content":2512},[2513],{"type":42,"attrs":2514,"content":2515},{"textAlign":153},[2516,2522],{"text":2517,"type":46,"marks":2518},"Repeat as necessary. ",[2519,2521],{"type":53,"attrs":2520},{"color":55},{"type":138},{"text":2523,"type":46,"marks":2524},"Continue making extra payments on your next smallest balance until you are debt-free. ",[2525],{"type":53,"attrs":2526},{"color":55},{"type":130,"content":2528},[2529],{"type":42,"attrs":2530,"content":2531},{"textAlign":153},[2532,2538],{"text":2533,"type":46,"marks":2534},"Debt-free: ",[2535,2537],{"type":53,"attrs":2536},{"color":55},{"type":138},{"text":2539,"type":46,"marks":2540},"celebrate reaching your financial goals! ",[2541],{"type":53,"attrs":2542},{"color":55},{"type":42,"attrs":2544,"content":2545},{"textAlign":153},[2546],{"text":2547,"type":46,"marks":2548},"Compared to the avalanche method, this method will cost more overall and take longer. You will also accrue more interest. However, it may be worth it, as paying off your debt will feel more achievable. ",[2549],{"type":53,"attrs":2550},{"color":55},{"type":71,"attrs":2552,"content":2553},{"level":73,"textAlign":153},[2554],{"text":2555,"type":46,"marks":2556},"Consolidate Your Debt",[2557,2559],{"type":53,"attrs":2558},{"color":55},{"type":138},{"type":42,"attrs":2561,"content":2562},{"textAlign":153},[2563],{"text":2564,"type":46,"marks":2565},"Best for: individuals who have multiple high-interest debts",[2566,2568],{"type":53,"attrs":2567},{"color":55},{"type":2136},{"type":42,"attrs":2570,"content":2571},{"textAlign":153},[2572],{"text":2573,"type":46,"marks":2574},"Pros: simplifies payment",[2575,2577],{"type":53,"attrs":2576},{"color":55},{"type":2136},{"type":42,"attrs":2579,"content":2580},{"textAlign":153},[2581],{"text":2582,"type":46,"marks":2583},"Cons: may extend your repayment period; may accumulate more debt ",[2584,2586],{"type":53,"attrs":2585},{"color":55},{"type":2136},{"type":42,"attrs":2588,"content":2589},{"textAlign":153},[2590,2595,2604],{"text":2591,"type":46,"marks":2592},"Consider ",[2593],{"type":53,"attrs":2594},{"color":55},{"text":2596,"type":46,"marks":2597},"consolidating your debt ",[2598,2601,2603],{"type":150,"attrs":2599},{"href":2600,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://offers.moneylion.com/channelTrackingOfferRedirect/ba675b58-5d95-47ac-b285-7ddd8df4eaf3/f8b6569c-b09c-41c4-818f-6ac8ffa83f8e",{"type":53,"attrs":2602},{"color":158},{"type":160},{"text":2605,"type":46,"marks":2606},"to simplify your payments and potentially lower your interest rates. However, you should only consolidate if you are sure you can continue making payments. ",[2607],{"type":53,"attrs":2608},{"color":55},{"type":42,"attrs":2610,"content":2611},{"textAlign":153},[2612],{"text":2613,"type":46,"marks":2614},"Taking a break from payments can be tempting once your balance is transferred, but you should continue making payments. Delaying will only keep you in debt longer. ",[2615],{"type":53,"attrs":2616},{"color":55},{"type":42,"attrs":2618,"content":2619},{"textAlign":153},[2620],{"text":2621,"type":46,"marks":2622},"Here are some options to consolidate your debt: ",[2623],{"type":53,"attrs":2624},{"color":55},{"type":293,"attrs":2626,"content":2627},{"order":295},[2628,2702,2753],{"type":130,"content":2629},[2630,2673],{"type":42,"attrs":2631,"content":2632},{"textAlign":153},[2633,2639,2644,2654,2659,2668],{"text":2634,"type":46,"marks":2635},"Debt consolidation loan: ",[2636,2638],{"type":53,"attrs":2637},{"color":111},{"type":138},{"text":2640,"type":46,"marks":2641},"One option to consolidate your debt is a ",[2642],{"type":53,"attrs":2643},{"color":55},{"text":2645,"type":46,"marks":2646},"personal loan",[2647,2651,2653],{"type":150,"attrs":2648},{"href":2649,"uuid":153,"anchor":153,"target":2650,"linktype":155},"https://www.earnest.com/personal-loans?utm_medium=organic&utm_source=navient_marketplace&utm_campaign=PL_rc_pro_genpop_20260331 ","_self",{"type":53,"attrs":2652},{"color":158},{"type":160},{"text":2655,"type":46,"marks":2656},". You can use the personal loan to pay off your debts and then make monthly loan payments instead of several different payments. ",[2657],{"type":53,"attrs":2658},{"color":55},{"text":2660,"type":46,"marks":2661},"Consolidating your debt with a personal loan",[2662,2665,2667],{"type":150,"attrs":2663},{"href":2664,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.navient.com/blog/personal-loan-to-pay-off-credit-card/",{"type":53,"attrs":2666},{"color":158},{"type":160},{"text":2669,"type":46,"marks":2670}," can potentially lower your interest rate, especially if you have high-interest debt. Lowering the interest rate on your debt will reduce your overall payments and the amount of interest paid. Paying off your debts with a personal loan may have other benefits, such as boosting your credit score. Managing a single debt may demonstrate financial responsibility to credit bureaus, possibly improving your creditworthiness. While there are benefits to debt consolidation with a personal loan, consider the drawbacks as well. Lenders may not approve a personal loan if your credit score is low. You also may not receive interest rates lower than your current interest rates. There are also costs associated with personal loans, such as origination fees. Consider all fees to understand the total cost of your personal loan.  ",[2671],{"type":53,"attrs":2672},{"color":55},{"type":42,"attrs":2674,"content":2675},{"textAlign":153},[2676,2684,2694],{"text":2677,"type":46,"marks":2678},"Apply for a personal loan",[2679,2681,2683],{"type":150,"attrs":2680},{"href":2649,"uuid":153,"anchor":153,"target":2650,"linktype":155},{"type":53,"attrs":2682},{"color":158},{"type":160},{"text":1907,"type":46,"marks":2685},[2686,2688,2690,2692,2693],{"type":150,"attrs":2687},{"href":2649,"uuid":153,"anchor":153,"target":2650,"linktype":155},{"type":53,"attrs":2689},{"color":158},{"type":49,"attrs":2691},{"class":1911},{"type":1911},{"type":160},{"text":2695,"type":46,"marks":2696}," >>",[2697,2699,2701],{"type":150,"attrs":2698},{"href":2649,"uuid":153,"anchor":153,"target":2650,"linktype":155},{"type":53,"attrs":2700},{"color":158},{"type":160},{"type":130,"content":2703},[2704,2751],{"type":42,"attrs":2705,"content":2706},{"textAlign":153},[2707,2713,2718,2723,2732,2737,2746],{"text":2708,"type":46,"marks":2709},"Balance transfer credit card:",[2710,2712],{"type":53,"attrs":2711},{"color":111},{"type":138},{"text":2714,"type":46,"marks":2715}," ",[2716],{"type":53,"attrs":2717},{"color":111},{"text":2719,"type":46,"marks":2720},"Another option is to consolidate your debt with a ",[2721],{"type":53,"attrs":2722},{"color":55},{"text":2724,"type":46,"marks":2725},"balance transfer credit card",[2726,2729,2731],{"type":150,"attrs":2727},{"href":2728,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.consumerfinance.gov/consumer-tools/credit-cards/answers/key-terms/#balance-transfer",{"type":53,"attrs":2730},{"color":158},{"type":160},{"text":2733,"type":46,"marks":2734},". This option is only for existing credit card debt, not other debt types like a mortgage or student loans. A benefit to consolidating your credit card debt with a balance transfer card is that many offer 0% APR for the first 12 months. Introductory offers typically allow you to make payments without paying interest for your first year. Balance transfer cards will also simplify your payments if you have multiple credit card debts. However, consider any ",[2735],{"type":53,"attrs":2736},{"color":55},{"text":2738,"type":46,"marks":2739},"balance transfer fees",[2740,2743,2745],{"type":150,"attrs":2741},{"href":2742,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.consumerfinance.gov/ask-cfpb/what-is-a-balance-transfer-fee-can-a-balance-transfer-fee-be-charged-on-a-zero-percent-interest-rate-offer-en-53/",{"type":53,"attrs":2744},{"color":158},{"type":160},{"text":2747,"type":46,"marks":2748}," before getting a balance transfer card. Usually, the fee will be a percentage of the amount transferred. Additional costs can impact the cost-effectiveness of consolidating your credit card debt, so factor this into your decision. It may be challenging to qualify for a balance transfer card with a low credit score or a history of late payments. Consolidating your credit card debt with a balance transfer card may be a good option if you can take advantage of the introductory offer and have a good credit score. ",[2749],{"type":53,"attrs":2750},{"color":55},{"type":42,"attrs":2752},{"textAlign":153},{"type":130,"content":2754},[2755],{"type":42,"attrs":2756,"content":2757},{"textAlign":153},[2758,2764,2768,2773,2782],{"text":2759,"type":46,"marks":2760},"Take out a HELOC:",[2761,2763],{"type":53,"attrs":2762},{"color":111},{"type":138},{"text":2714,"type":46,"marks":2765},[2766],{"type":53,"attrs":2767},{"color":111},{"text":2769,"type":46,"marks":2770},"Another option is to take out a ",[2771],{"type":53,"attrs":2772},{"color":55},{"text":2774,"type":46,"marks":2775},"home equity line of credit",[2776,2779,2781],{"type":150,"attrs":2777},{"href":2778,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://consumer.ftc.gov/articles/home-equity-loans-and-home-equity-lines-credit",{"type":53,"attrs":2780},{"color":158},{"type":160},{"text":2783,"type":46,"marks":2784},". This option may work for you if you’re a homeowner with equity. Typically, a certain amount of equity is required to qualify for a HELOC, usually around 20%. A HELOC allows you to borrow money against the equity in your home. With A HELOC, you can draw money multiple times up to the maximum HELOC amount. The benefits of consolidating your debt with a HELOC include lower interest rates, simplified payments, and flexibility. Home equity lines of credit can have lower interest rates than credit cards and other unsecured types of debt. They are also flexible and allow you to draw funds as needed. However, the biggest drawback is the risk to your homeownership. A HELOC is secured by your home, meaning you risk foreclosure if you miss payments. Consider your ability to make payments and the potential risk before taking out a HELOC. ",[2785],{"type":53,"attrs":2786},{"color":55},{"type":71,"attrs":2788,"content":2789},{"level":73,"textAlign":153},[2790],{"text":2791,"type":46,"marks":2792},"The Best Way to Pay Off Your Debt is to Pick a Plan You’ll Stick With",[2793,2795],{"type":53,"attrs":2794},{"color":55},{"type":138},{"type":42,"attrs":2797,"content":2798},{"textAlign":153},[2799,2804,2812],{"text":2800,"type":46,"marks":2801},"Remember that the best method to pay off your debt is the one you can commit to. Don’t feel like you have to use a particular approach if you don’t believe it will be sustainable for you in the long run. If you want to consolidate your debt, ",[2802],{"type":53,"attrs":2803},{"color":55},{"text":2805,"type":46,"marks":2806},"Navient Marketplace has customized financial solutions",[2807,2809,2811],{"type":150,"attrs":2808},{"href":1976,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":2810},{"color":158},{"type":160},{"text":2813,"type":46,"marks":2814}," that can help you become debt-free. ",[2815],{"type":53,"attrs":2816},{"color":55},{"type":42,"attrs":2818,"content":2819},{"textAlign":153},[2820],{"text":1405,"type":46,"marks":2821},[2822,2824],{"type":53,"attrs":2823},{"color":55},{"type":49,"attrs":2825},{"class":51},{"type":42,"attrs":2827,"content":2828},{"textAlign":153},[2829,2835],{"text":1907,"type":46,"marks":2830},[2831,2833],{"type":53,"attrs":2832},{"color":55},{"type":49,"attrs":2834},{"class":1911},{"text":2836,"type":46,"marks":2837},"Navient customers are invited to consider personal loan offers through our partner Fiona. Navient has not shared your information with Fiona and is not involved in the personal loan application process in any manner. All information is submitted directly to Fiona and any personal loan offers are made directly by participants in Fiona’s lending platform, powered by Even Financial. Even Financial, Inc. is the industry-leading embedded financial marketplace and independent subsidiary of MoneyLion Inc. (“MoneyLion”) (NYSE:ML). Checking your rate will not affect your credit score. Eligibility is not guaranteed and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. ",[2838,2840],{"type":53,"attrs":2839},{"color":55},{"type":49,"attrs":2841},{"class":51},{"type":42,"attrs":2843,"content":2844},{"textAlign":153},[2845],{"text":2043,"type":46,"marks":2846},[2847,2849],{"type":53,"attrs":2848},{"color":55},{"type":49,"attrs":2850},{"class":51},"\u003C!--#storyblok#{\"name\": \"BlogText\", \"space\": \"157494\", \"uid\": \"67b1c1a7-fbb7-4c3c-a267-87dc959687fb\", \"id\": \"651798158\"}-->","https://www.marketplace.navient.com/blog/which-debt-should-i-pay-off-first/","\u003C!--#storyblok#{\"name\": \"NriBlogPost\", \"space\": \"157494\", \"uid\": \"39f3568e-f888-4c3e-816f-3647f7efec59\", \"id\": \"651798158\"}-->","which-debt-should-i-pay-off-first","navient_marketplace/blog/which-debt-should-i-pay-off-first",[],"1a81a2d0-664d-4cbb-8826-0829c0be4314","2023-09-26T16:17:56.227Z","blog/which-debt-should-i-pay-off-first/",[],{"name":2862,"created_at":2863,"published_at":2864,"updated_at":2865,"id":2866,"uuid":2867,"content":2868,"slug":3456,"full_slug":3457,"sort_by_date":153,"position":1418,"tag_list":3458,"is_startpage":29,"parent_id":1420,"meta_data":153,"group_id":3459,"first_published_at":3460,"release_id":153,"lang":1423,"path":3461,"alternates":3462,"default_full_slug":153,"translated_slugs":153},"How to Budget When You’re Broke","2025-04-07T18:30:18.017Z","2025-12-26T13:44:59.861Z","2025-12-26T13:44:59.926Z",651798157,"16b94920-acf2-431d-ab1b-facc6bbdf1ec",{"seo":2869,"_uid":20,"hero":2872,"author":1442,"category":32,"featured":29,"imageAlt":18,"component":33,"blogContents":2877,"canonicalTag":3454,"publishedDate":1414,"_editable":3455},{"_uid":15,"title":2870,"plugin":17,"og_image":18,"og_title":18,"description":2871,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"How to Budget When You’re Broke | Navient Marketplace","It’s always smart to have a budget, especially when you’re tight on money. Read our guide to take your budgeting skills to the next level.",[2873],{"id":18,"_uid":23,"image":2874,"intro":2871,"classes":18,"_editable":2875,"blogTitle":2862,"component":27,"imageLink":2876,"blendImage":29,"backgroundColor":30},"//a.storyblok.com/f/110029/4471x3357/5586b5fc94/how-to-budget-when-youre-broke.png","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798157\"}-->","/images/how-to-budget-when-youre-broke.png",[2878],{"_uid":36,"color":37,"richText":2879,"_editable":3453,"component":1412},{"type":39,"content":2880},[2881,2889,2910,2919,2926,2935,2942,2963,2970,2991,3000,3021,3029,3037,3045,3053,3060,3109,3125,3133,3141,3149,3157,3177,3184,3191,3198,3206,3214,3222,3230,3245,3252,3259,3267,3275,3283,3291,3306,3313,3320,3329,3336,3343,3364,3373,3380,3387,3396,3403,3410,3419,3426,3445],{"type":42,"content":2882},[2883],{"text":45,"type":46,"marks":2884},[2885,2887],{"type":49,"attrs":2886},{"class":51},{"type":53,"attrs":2888},{"color":55},{"type":42,"content":2890},[2891,2896,2905],{"text":2892,"type":46,"marks":2893},"One of the best ways to take control of your finances is to ",[2894],{"type":53,"attrs":2895},{"color":55},{"text":2897,"type":46,"marks":2898},"make and stick to a personal budget",[2899,2902,2904],{"type":150,"attrs":2900},{"href":2901,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://consumer.gov/managing-your-money/making-budget#what-it-is",{"type":53,"attrs":2903},{"color":158},{"type":160},{"text":2906,"type":46,"marks":2907},". A budget is a monthly plan for your spending that takes into account your needs and wants. It can help you set spending limits, stay or become debt-free, and save for your future. ",[2908],{"type":53,"attrs":2909},{"color":55},{"type":71,"attrs":2911,"content":2912},{"level":73},[2913],{"text":2914,"type":46,"marks":2915},"Key Tips for Budgeting",[2916,2917],{"type":138},{"type":53,"attrs":2918},{"color":55},{"type":42,"content":2920},[2921],{"text":2922,"type":46,"marks":2923},"Budgeting doesn’t have to be overly complicated. Here are some key budgeting tips to help you while creating and following your monthly budget: ",[2924],{"type":53,"attrs":2925},{"color":55},{"type":71,"attrs":2927,"content":2928},{"level":73},[2929],{"text":2930,"type":46,"marks":2931},"Understand your monthly income and spending habits",[2932,2933],{"type":138},{"type":53,"attrs":2934},{"color":55},{"type":42,"content":2936},[2937],{"text":2938,"type":46,"marks":2939},"Before planning your budget, calculate your monthly income and expenses. Your monthly income is your net pay or ‘take-home pay.’ It is what you earn after your taxes are taken out. This includes earnings from your job and any other side hustles. ",[2940],{"type":53,"attrs":2941},{"color":55},{"type":42,"content":2943},[2944,2949,2958],{"text":2945,"type":46,"marks":2946},"To help calculate an accurate monthly income, use an ",[2947],{"type":53,"attrs":2948},{"color":55},{"text":2950,"type":46,"marks":2951},"income and benefits tracker",[2952,2955,2957],{"type":150,"attrs":2953},{"href":2954,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/cfpb_your-money-your-goals_income_benefits_tool_2018-11_ADA.pdf",{"type":53,"attrs":2956},{"color":158},{"type":160},{"text":2959,"type":46,"marks":2960},". If your income fluctuates month to month, you can take the average of what you make in a year and divide by 12. ",[2961],{"type":53,"attrs":2962},{"color":55},{"type":42,"content":2964},[2965],{"text":2966,"type":46,"marks":2967},"Once you have calculated your monthly income, take a look at your monthly expenses. Your monthly expenses are everything you spend money on in a month.",[2968],{"type":53,"attrs":2969},{"color":55},{"type":42,"content":2971},[2972,2977,2986],{"text":2973,"type":46,"marks":2974},"To calculate your monthly expenses, take a look at your bank statements to see what you have spent your money on. Alternatively, you could track your spending daily and keep your receipts to add it all up at the end of the month. Use a ",[2975],{"type":53,"attrs":2976},{"color":55},{"text":2978,"type":46,"marks":2979},"spending tracker",[2980,2983,2985],{"type":150,"attrs":2981},{"href":2982,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/cfpb_well-being_spending-tracker.pdf",{"type":53,"attrs":2984},{"color":158},{"type":160},{"text":2987,"type":46,"marks":2988}," to make adding up your expenses easier. ",[2989],{"type":53,"attrs":2990},{"color":55},{"type":71,"attrs":2992,"content":2993},{"level":73},[2994],{"text":2995,"type":46,"marks":2996},"Choose a budgeting method",[2997,2998],{"type":138},{"type":53,"attrs":2999},{"color":55},{"type":42,"content":3001},[3002,3007,3016],{"text":3003,"type":46,"marks":3004},"Once you know your monthly income and spending habits, you can ",[3005],{"type":53,"attrs":3006},{"color":55},{"text":3008,"type":46,"marks":3009},"start making your budget",[3010,3013,3015],{"type":150,"attrs":3011},{"href":3012,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.consumerfinance.gov/about-us/blog/budgeting-how-to-create-a-budget-and-stick-with-it/",{"type":53,"attrs":3014},{"color":158},{"type":160},{"text":3017,"type":46,"marks":3018},". There are many different methods of budgeting to choose from. The right budgeting method for you will depend on your goals and current financial situation. Here are some common budgeting methods: ",[3019],{"type":53,"attrs":3020},{"color":55},{"type":71,"attrs":3022,"content":3023},{"level":104},[3024],{"text":3025,"type":46,"marks":3026},"50/30/20 Budgeting",[3027],{"type":53,"attrs":3028},{"color":111},{"type":42,"content":3030},[3031],{"text":3032,"type":46,"marks":3033},"Best for: budgeting beginners ",[3034,3035],{"type":2136},{"type":53,"attrs":3036},{"color":55},{"type":42,"content":3038},[3039],{"text":3040,"type":46,"marks":3041},"Pros: easy to implement; can be adjusted as needed",[3042,3043],{"type":2136},{"type":53,"attrs":3044},{"color":55},{"type":42,"content":3046},[3047],{"text":3048,"type":46,"marks":3049},"Cons: may not work for those with more debt or large savings goals ",[3050,3051],{"type":2136},{"type":53,"attrs":3052},{"color":55},{"type":42,"content":3054},[3055],{"text":3056,"type":46,"marks":3057},"This method breaks down your spending into three categories:",[3058],{"type":53,"attrs":3059},{"color":55},{"type":293,"attrs":3061,"content":3063},{"order":3062},{"order":295},[3064,3079,3094],{"type":130,"content":3065},[3066],{"type":42,"content":3067},[3068,3074],{"text":3069,"type":46,"marks":3070},"Needs (50%): ",[3071,3072],{"type":138},{"type":53,"attrs":3073},{"color":55},{"text":3075,"type":46,"marks":3076},"Necessary expenses such as your rent, utilities, car payment, and medical bills.",[3077],{"type":53,"attrs":3078},{"color":55},{"type":130,"content":3080},[3081],{"type":42,"content":3082},[3083,3089],{"text":3084,"type":46,"marks":3085},"Wants (30%): ",[3086,3087],{"type":138},{"type":53,"attrs":3088},{"color":55},{"text":3090,"type":46,"marks":3091},"Discretionary spending including dining out and entertainment. ",[3092],{"type":53,"attrs":3093},{"color":55},{"type":130,"content":3095},[3096],{"type":42,"content":3097},[3098,3104],{"text":3099,"type":46,"marks":3100},"Savings and Debt payments (20%): ",[3101,3102],{"type":138},{"type":53,"attrs":3103},{"color":55},{"text":3105,"type":46,"marks":3106},"Money put towards paying off debt such as your student loans or saving for future goals. ",[3107],{"type":53,"attrs":3108},{"color":55},{"type":42,"content":3110},[3111,3120],{"text":3112,"type":46,"marks":3113},"The 50/30/20",[3114,3117,3119],{"type":150,"attrs":3115},{"href":3116,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://srfs.upenn.edu/financial-wellness/browse-topics/budgeting/popular-budgeting-strategies",{"type":53,"attrs":3118},{"color":158},{"type":160},{"text":3121,"type":46,"marks":3122}," budgeting method is easy for budgeting beginners. If you are looking for a simple budgeting method to implement, this may work for you! However, this method may not work for individuals with higher debt obligations and those that are looking to save more.  ",[3123],{"type":53,"attrs":3124},{"color":55},{"type":71,"attrs":3126,"content":3127},{"level":104},[3128],{"text":3129,"type":46,"marks":3130},"Zero-Based Budgeting",[3131],{"type":53,"attrs":3132},{"color":111},{"type":42,"content":3134},[3135],{"text":3136,"type":46,"marks":3137},"Best for: taking full control of your spending",[3138,3139],{"type":2136},{"type":53,"attrs":3140},{"color":55},{"type":42,"content":3142},[3143],{"text":3144,"type":46,"marks":3145},"Pros: accounts for every single dollar of your income",[3146,3147],{"type":2136},{"type":53,"attrs":3148},{"color":55},{"type":42,"content":3150},[3151],{"text":3152,"type":46,"marks":3153},"Cons: intensive and requires precise planning – to the dollar",[3154,3155],{"type":2136},{"type":53,"attrs":3156},{"color":55},{"type":42,"content":3158},[3159,3164,3172],{"text":3160,"type":46,"marks":3161},"With ",[3162],{"type":53,"attrs":3163},{"color":55},{"text":3165,"type":46,"marks":3166},"zero-based budgeting",[3167,3169,3171],{"type":150,"attrs":3168},{"href":3116,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":3170},{"color":158},{"type":160},{"text":3173,"type":46,"marks":3174},", every dollar of your income is put to use. With this budgeting method, your income minus your expenses should equal zero. Zero-based budgeting would be best for individuals with a consistent monthly income.",[3175],{"type":53,"attrs":3176},{"color":55},{"type":42,"content":3178},[3179],{"text":3180,"type":46,"marks":3181},"Zero-based budgeting is not the same as living paycheck to paycheck. It means that every dollar of your income is spent thoughtfully and put towards your financial needs, like savings, entertainment, or paying off debt. ",[3182],{"type":53,"attrs":3183},{"color":55},{"type":42,"content":3185},[3186],{"text":3187,"type":46,"marks":3188},"To create this type of budget, dedicate a certain amount of your income to every expense you will have that month (rent, utilities, dining out, entertainment, debt payments, savings etc.) until you have planned for every dollar of your income. It requires precise planning and a great understanding of your monthly income and expenditures. ",[3189],{"type":53,"attrs":3190},{"color":55},{"type":42,"content":3192},[3193],{"text":3194,"type":46,"marks":3195},"This method is more intensive as it requires you to track every single dollar. This may work for those who understand their spending habits and want full control of their spending. It may not be best for those who cannot predict exact expenses for the month or who are new to budgeting. ",[3196],{"type":53,"attrs":3197},{"color":55},{"type":71,"attrs":3199,"content":3200},{"level":104},[3201],{"text":3202,"type":46,"marks":3203},"Envelope Budgeting ",[3204],{"type":53,"attrs":3205},{"color":111},{"type":42,"content":3207},[3208],{"text":3209,"type":46,"marks":3210},"Best for: precise planning and individuals who like to pay with cash",[3211,3212],{"type":2136},{"type":53,"attrs":3213},{"color":55},{"type":42,"content":3215},[3216],{"text":3217,"type":46,"marks":3218},"Pros: tangible reminder of your budget",[3219,3220],{"type":2136},{"type":53,"attrs":3221},{"color":55},{"type":42,"content":3223},[3224],{"text":3225,"type":46,"marks":3226},"Cons: requires handling large amounts of cash",[3227,3228],{"type":2136},{"type":53,"attrs":3229},{"color":55},{"type":42,"content":3231},[3232,3240],{"text":3233,"type":46,"marks":3234},"Envelope budgeting",[3235,3237,3239],{"type":150,"attrs":3236},{"href":3116,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":3238},{"color":158},{"type":160},{"text":3241,"type":46,"marks":3242}," is similar to zero-based budgeting, but done entirely with cash. Once you decide how much of your income will go to each spending category, get envelopes for each. Label the envelopes for the appropriate category (groceries, utilities, gas, etc.). ",[3243],{"type":53,"attrs":3244},{"color":55},{"type":42,"content":3246},[3247],{"text":3248,"type":46,"marks":3249},"Once you have used all of the money in the envelope for that category, you cannot spend any more in that category until the next month. In case of emergency, you can take money from another envelope. However, if it becomes a habit, that is a sign you are not budgeting effectively. ",[3250],{"type":53,"attrs":3251},{"color":55},{"type":42,"content":3253},[3254],{"text":3255,"type":46,"marks":3256},"This method may work for those that like to have a tangible reminder of their budget. It can also be effective at preventing overspending in each category. Envelope budgeting may not be right for you if you do not feel comfortable holding onto cash or prefer digital transactions. ",[3257],{"type":53,"attrs":3258},{"color":55},{"type":71,"attrs":3260,"content":3261},{"level":104},[3262],{"text":3263,"type":46,"marks":3264},"Pay-Yourself-First Budgeting",[3265],{"type":53,"attrs":3266},{"color":111},{"type":42,"content":3268},[3269],{"text":3270,"type":46,"marks":3271},"Best for: paying off your debts and contributing to your savings",[3272,3273],{"type":2136},{"type":53,"attrs":3274},{"color":55},{"type":42,"content":3276},[3277],{"text":3278,"type":46,"marks":3279},"Pros: leaves room to spend your discretionary money however you like",[3280,3281],{"type":2136},{"type":53,"attrs":3282},{"color":55},{"type":42,"content":3284},[3285],{"text":3286,"type":46,"marks":3287},"Cons: does not consider how you could save money on a day-to-day basis",[3288,3289],{"type":2136},{"type":53,"attrs":3290},{"color":55},{"type":42,"content":3292},[3293,3301],{"text":3294,"type":46,"marks":3295},"Pay-yourself-first budgeting",[3296,3298,3300],{"type":150,"attrs":3297},{"href":3116,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":3299},{"color":158},{"type":160},{"text":3302,"type":46,"marks":3303}," is simple yet effective, and focuses mostly on debt repayment and savings. ",[3304],{"type":53,"attrs":3305},{"color":55},{"type":42,"content":3307},[3308],{"text":3309,"type":46,"marks":3310},"Simply budget for how much you would like to save or put towards your debt. After you have saved the allotted amount, you can spend your money however you like. Of course, it is still important to prioritize necessary expenses. ",[3311],{"type":53,"attrs":3312},{"color":55},{"type":42,"content":3314},[3315],{"text":3316,"type":46,"marks":3317},"Pay-yourself-first budgeting may work for those that don’t like to budget every single expense, but still want to work towards saving. With this method, you are working towards your goals without having to worry about your discretionary spending. However, if you are looking to be more effective with your money in every category of spending, this may not be for you. ",[3318],{"type":53,"attrs":3319},{"color":55},{"type":71,"attrs":3321,"content":3322},{"level":73},[3323],{"text":3324,"type":46,"marks":3325},"Track your spending and progress",[3326,3327],{"type":138},{"type":53,"attrs":3328},{"color":55},{"type":42,"content":3330},[3331],{"text":3332,"type":46,"marks":3333},"Once you have chosen a budgeting method and implemented your budget, it is essential to keep track of your progress. Without holding yourself accountable to the budget you just worked so hard to create, you can get off track and miss your financial goals. ",[3334],{"type":53,"attrs":3335},{"color":55},{"type":42,"content":3337},[3338],{"text":3339,"type":46,"marks":3340},"Come up with ways to track your spending and progress. Take the time to review your bank account statements or receipts at the end of each week. Note when you are reaching an expense limit in your discretionary spending and see where you can cut back. ",[3341],{"type":53,"attrs":3342},{"color":55},{"type":42,"content":3344},[3345,3350,3359],{"text":3346,"type":46,"marks":3347},"If you like to keep up to date with your progress digitally, consider ",[3348],{"type":53,"attrs":3349},{"color":55},{"text":3351,"type":46,"marks":3352},"downloading a budgeting app",[3353,3356,3358],{"type":150,"attrs":3354},{"href":3355,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://mint.intuit.com/how-mint-works",{"type":53,"attrs":3357},{"color":158},{"type":160},{"text":3360,"type":46,"marks":3361},". Using a budgeting app or keeping a detailed spreadsheet may motivate you to stick to your budget and remind you of your goals. If you’d rather keep things on pen and paper, start a spending journal. ",[3362],{"type":53,"attrs":3363},{"color":55},{"type":71,"attrs":3365,"content":3366},{"level":73},[3367],{"text":3368,"type":46,"marks":3369},"Set goals and work towards them",[3370,3371],{"type":138},{"type":53,"attrs":3372},{"color":55},{"type":42,"content":3374},[3375],{"text":3376,"type":46,"marks":3377},"When you are budgeting, it can be easy to lose sight of why you are doing it. Following through with your plans can be overwhelming. The best way to stick with it is to set goals to help you remember why you are budgeting.  ",[3378],{"type":53,"attrs":3379},{"color":55},{"type":42,"content":3381},[3382],{"text":3383,"type":46,"marks":3384},"Whether you are trying to put away more money each month to pay off your student loans, or build up an emergency fund, your goals can motivate you. Remember that a strict budget doesn’t have to be forever and your budget will pay off and help achieve your goals. ",[3385],{"type":53,"attrs":3386},{"color":55},{"type":71,"attrs":3388,"content":3389},{"level":73},[3390],{"text":3391,"type":46,"marks":3392},"Update your budget when necessary",[3393,3394],{"type":138},{"type":53,"attrs":3395},{"color":55},{"type":42,"content":3397},[3398],{"text":3399,"type":46,"marks":3400},"As your financial situation changes, your budget should change as well. If you eventually achieve a higher monthly income, your budget should change to account for that. Similarly, if you encounter large unexpected expenses, you should adjust your budget to account for that as well. ",[3401],{"type":53,"attrs":3402},{"color":55},{"type":42,"content":3404},[3405],{"text":3406,"type":46,"marks":3407},"When you meet your savings goals or pay off your debt, you can adjust your budget to not include those expenses. This will leave extra money for spending on what you enjoy while retaining financial stability. After all, it’s time to enjoy the rewards of sticking with your budget! ",[3408],{"type":53,"attrs":3409},{"color":55},{"type":71,"attrs":3411,"content":3412},{"level":73},[3413],{"text":3414,"type":46,"marks":3415},"Why Should You Have a Budget?",[3416,3417],{"type":138},{"type":53,"attrs":3418},{"color":55},{"type":42,"content":3420},[3421],{"text":3422,"type":46,"marks":3423},"Budgeting will help you be more thoughtful with how you spend your money. It can also keep you from acquiring more debt by spending more than you have. Whether it’s your first time budgeting or you are budgeting pro, putting a budget together can help you achieve your financial goals. ",[3424],{"type":53,"attrs":3425},{"color":55},{"type":42,"content":3427},[3428,3433,3440],{"text":3429,"type":46,"marks":3430},"Looking to improve even more of your financial wellness? Visit ",[3431],{"type":53,"attrs":3432},{"color":55},{"text":1389,"type":46,"marks":3434},[3435,3437,3439],{"type":150,"attrs":3436},{"href":1976,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":3438},{"color":158},{"type":160},{"text":3441,"type":46,"marks":3442}," for personalized banking and finance products. ",[3443],{"type":53,"attrs":3444},{"color":55},{"type":42,"content":3446},[3447],{"text":1405,"type":46,"marks":3448},[3449,3451],{"type":49,"attrs":3450},{"class":51},{"type":53,"attrs":3452},{"color":55},"\u003C!--#storyblok#{\"name\": \"BlogText\", \"space\": \"157494\", \"uid\": \"67b1c1a7-fbb7-4c3c-a267-87dc959687fb\", \"id\": \"651798157\"}-->","https://www.marketplace.navient.com/blog/how-to-budget-when-youre-broke/","\u003C!--#storyblok#{\"name\": \"NriBlogPost\", \"space\": \"157494\", \"uid\": \"39f3568e-f888-4c3e-816f-3647f7efec59\", \"id\": \"651798157\"}-->","how-to-budget-when-youre-broke","navient_marketplace/blog/how-to-budget-when-youre-broke",[],"382dbe21-a040-412a-8c21-561d1fe4c915","2023-09-26T16:18:38.954Z","blog/how-to-budget-when-youre-broke",[],{"name":3464,"created_at":3465,"published_at":3466,"updated_at":3467,"id":3468,"uuid":3469,"content":3470,"slug":4255,"full_slug":4256,"sort_by_date":153,"position":1418,"tag_list":4257,"is_startpage":29,"parent_id":1420,"meta_data":153,"group_id":4258,"first_published_at":4259,"release_id":153,"lang":1423,"path":4260,"alternates":4261,"default_full_slug":153,"translated_slugs":153},"What is Buy Now, Pay Later?","2025-04-07T18:30:07.668Z","2025-12-26T13:45:01.530Z","2025-12-26T13:45:01.570Z",651798150,"eab77288-c488-4f12-933d-e7418a976d9d",{"seo":3471,"_uid":20,"hero":3474,"author":31,"category":32,"featured":29,"imageAlt":18,"component":33,"blogContents":3479,"canonicalTag":4252,"publishedDate":4253,"_editable":4254},{"_uid":15,"title":3472,"plugin":17,"og_image":18,"og_title":18,"description":3473,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"What is Buy Now, Pay Later? | Navient Marketplace","Buy Now, Pay Later allows you to defer payment over a certain time period. Here’s how to make an informed financial choice the next time you shop.",[3475],{"id":18,"_uid":23,"image":3476,"intro":3473,"classes":18,"_editable":3477,"blogTitle":3464,"component":27,"imageLink":3478,"blendImage":29,"backgroundColor":30},"//a.storyblok.com/f/110029/1280x853/8e94adc89b/what-is-buy-now-pay-later.png","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798150\"}-->","/images/what-is-buy-now-pay-later.png",[3480],{"_uid":36,"color":37,"richText":3481,"_editable":4251,"component":1412},{"type":39,"content":3482},[3483,3491,3512,3520,3527,3534,3541,3549,3556,3563,3570,3577,3585,3592,3600,3609,3616,3624,3631,3639,3646,3654,3662,3669,3677,3684,3692,3699,3707,3734,3742,3763,3771,3778,3786,3807,3814,3821,3828,3836,3843,3905,3913,3920,3937,3954,3971,3988,4005,4022,4039,4047,4054,4062,4109,4117,4139,4147,4167,4175,4182,4207,4215,4224,4233,4242],{"type":42,"content":3484},[3485],{"text":3486,"type":46,"marks":3487},"Given the rising cost of living, you may have begun to find some necessary purchases out of reach. To help alleviate that burden, Buy Now, Pay Later (BNPL) has emerged as a popular alternative to traditional payment methods. ",[3488],{"type":53,"attrs":3489},{"color":3490},"#000000",{"type":42,"content":3492},[3493,3498,3507],{"text":3494,"type":46,"marks":3495},"In fact, as as many as ",[3496],{"type":53,"attrs":3497},{"color":3490},{"text":3499,"type":46,"marks":3500},"42% of American consumers",[3501,3504,3506],{"type":150,"attrs":3502},{"href":3503,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.consumerfinance.gov/about-us/blog/should-you-buy-now-and-pay-later/",{"type":53,"attrs":3505},{"color":3490},{"type":160},{"text":3508,"type":46,"marks":3509}," say they’ve used BNPL at least once. While BNPL offers flexibility and convenience, it’s important to understand the mechanisms, benefits, and potential drawbacks to this payment method. Here’s how to make an informed financial choice the next time you shop.",[3510],{"type":53,"attrs":3511},{"color":3490},{"type":71,"attrs":3513,"content":3514},{"level":73},[3515],{"text":3516,"type":46,"marks":3517},"What is Buy Now, Pay Later (BNPL)?",[3518],{"type":53,"attrs":3519},{"color":3490},{"type":42,"content":3521},[3522],{"text":3523,"type":46,"marks":3524},"Buy Now, Pay Later (BNPL) is a payment method that allows consumers to defer payment over a certain time period. With BNPL, you can acquire a product or service immediately, then pay for it in a series of installments spread over several weeks or months. ",[3525],{"type":53,"attrs":3526},{"color":3490},{"type":42,"content":3528},[3529],{"text":3530,"type":46,"marks":3531},"Often, these installments can be made interest-free. This approach offers flexibility and convenience in managing your finances while giving you immediate access to the things you need. ",[3532],{"type":53,"attrs":3533},{"color":3490},{"type":42,"content":3535},[3536],{"text":3537,"type":46,"marks":3538},"Many retailers now offer BNPL options during checkout. Before you click that button, though, make sure you understand the terms, fees, and payment schedules, as these can change from vendor to vendor.",[3539],{"type":53,"attrs":3540},{"color":3490},{"type":71,"attrs":3542,"content":3543},{"level":73},[3544],{"text":3545,"type":46,"marks":3546},"How does Buy Now, Pay Later work?",[3547],{"type":53,"attrs":3548},{"color":3490},{"type":42,"content":3550},[3551],{"text":3552,"type":46,"marks":3553},"The Buy Now, Pay Later (BNPL) process is fairly simple. Instead of paying the total cost upfront at checkout, you’ll enter your information into the retailer’s BNPL platform. ",[3554],{"type":53,"attrs":3555},{"color":3490},{"type":42,"content":3557},[3558],{"text":3559,"type":46,"marks":3560},"Then, the platform will split your total payment into equal weekly, bi-weekly, or monthly payments, depending on the provider. You’ll pay the first installment when you make the purchase and the remaining installments over a predetermined time period. Some BNPL services may also offer extended plans for larger purchases. ",[3561],{"type":53,"attrs":3562},{"color":3490},{"type":42,"content":3564},[3565],{"text":3566,"type":46,"marks":3567},"To use BNPL, you’ll typically need to sign up with a BNPL provider or partner at the point of sale. You may also need to create an account linked to your payment details. Approval is often quick and doesn’t require extensive credit checks, making it accessible to a wide range of shoppers. ",[3568],{"type":53,"attrs":3569},{"color":3490},{"type":42,"content":3571},[3572],{"text":3573,"type":46,"marks":3574},"Few BNPL platforms charge interest. However, if you miss a payment, you could incur late fees and take a hit to your credit score. Whenever you choose to use BNPL, staying on top of your payments is absolutely critical.",[3575],{"type":53,"attrs":3576},{"color":3490},{"type":71,"attrs":3578,"content":3579},{"level":73},[3580],{"text":3581,"type":46,"marks":3582},"The pros and cons of Buy Now, Pay Later ",[3583],{"type":53,"attrs":3584},{"color":3490},{"type":42,"content":3586},[3587],{"text":3588,"type":46,"marks":3589},"BNPL has recently gained traction as a convenient payment option, but it’s not without its drawbacks. Here are the key pros and cons of Buy Now, Pay Later. ",[3590],{"type":53,"attrs":3591},{"color":3490},{"type":71,"attrs":3593,"content":3594},{"level":104},[3595],{"text":3596,"type":46,"marks":3597},"Pros of BNPL",[3598],{"type":53,"attrs":3599},{"color":3490},{"type":71,"attrs":3601,"content":3603},{"level":3602},4,[3604],{"text":3605,"type":46,"marks":3606},"Convenient and Flexible",[3607],{"type":53,"attrs":3608},{"color":3490},{"type":42,"content":3610},[3611],{"text":3612,"type":46,"marks":3613},"The biggest advantage of BNPL is its convenience and flexibility. Customers can purchase products they want without worrying about upfront payment or high interest rates. With the option to pay in installments over time, Buy Now, Pay Later plans can make pricey purchases more manageable for people on a tight budget.",[3614],{"type":53,"attrs":3615},{"color":3490},{"type":71,"attrs":3617,"content":3618},{"level":3602},[3619],{"text":3620,"type":46,"marks":3621},"No Interest or Hidden Fees",[3622],{"type":53,"attrs":3623},{"color":3490},{"type":42,"content":3625},[3626],{"text":3627,"type":46,"marks":3628},"Another benefit of Buy Now, Pay Later loans is that they often come with 0% interest rates or hidden fees (though this varies based on provider). This makes it easier for shoppers to budget their expenses, knowing the exact amount they’ll pay without any extra charges.",[3629],{"type":53,"attrs":3630},{"color":3490},{"type":71,"attrs":3632,"content":3633},{"level":3602},[3634],{"text":3635,"type":46,"marks":3636},"Boosts sales for merchants ",[3637],{"type":53,"attrs":3638},{"color":3490},{"type":42,"content":3640},[3641],{"text":3642,"type":46,"marks":3643},"BNPL can also benefit merchants and businesses. Offering this payment option enables merchants to potentially boost sales and increase their customer base. Customers who may not have been able to make an upfront payment can now pay for the product in manageable installments.",[3644],{"type":53,"attrs":3645},{"color":3490},{"type":71,"attrs":3647,"content":3648},{"level":104},[3649],{"text":3650,"type":46,"marks":3651},"Cons of BNPL",[3652],{"type":53,"attrs":3653},{"color":3490},{"type":71,"attrs":3655,"content":3656},{"level":3602},[3657],{"text":3658,"type":46,"marks":3659},"Risk of overspending",[3660],{"type":53,"attrs":3661},{"color":3490},{"type":42,"content":3663},[3664],{"text":3665,"type":46,"marks":3666},"One of the biggest issues with BNPL is the risk of overspending. When you’re not paying for your purchases upfront, there’s a possibility of losing track of expenses and exceeding your budget. This could add stress and difficulty to your financial situation. ",[3667],{"type":53,"attrs":3668},{"color":3490},{"type":71,"attrs":3670,"content":3671},{"level":3602},[3672],{"text":3673,"type":46,"marks":3674},"Potential for debt",[3675],{"type":53,"attrs":3676},{"color":3490},{"type":42,"content":3678},[3679],{"text":3680,"type":46,"marks":3681},"The convenience of BNPL can be misleading and may lead to an accumulation of debt if you’re not careful. Failure to pay required installment payments on time could lead to late fees and penalties, and ultimately hurt your credit score.",[3682],{"type":53,"attrs":3683},{"color":3490},{"type":71,"attrs":3685,"content":3686},{"level":3602},[3687],{"text":3688,"type":46,"marks":3689},"Approval criteria varies",[3690],{"type":53,"attrs":3691},{"color":3490},{"type":42,"content":3693},[3694],{"text":3695,"type":46,"marks":3696},"Though you may be eligible even if you have bad credit, the BNPL provider could perform a soft credit check and choose not to allow you this payment option if you don’t meet their criteria. This is entirely dependent on the provider, so you may qualify in some cases but not in others. ",[3697],{"type":53,"attrs":3698},{"color":3490},{"type":71,"attrs":3700,"content":3701},{"level":3602},[3702],{"text":3703,"type":46,"marks":3704},"Some BNPL companies charge high interest rates and fees",[3705],{"type":53,"attrs":3706},{"color":3490},{"type":42,"content":3708},[3709,3714,3721,3729],{"text":3710,"type":46,"marks":3711},"The popular “pay-in-four” model, which splits your purchase into four equal payments,",[3712],{"type":53,"attrs":3713},{"color":3490},{"text":2501,"type":46,"marks":3715},[3716,3719],{"type":150,"attrs":3717},{"href":3718,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://npr.org/2022/06/12/1104460692/who-actually-pays-with-buy-now-pay-later-companies-like-klarna-and-affirm",{"type":53,"attrs":3720},{"color":3490},{"text":3722,"type":46,"marks":3723},"doesn't usually charge interest or late fees",[3724,3726,3728],{"type":150,"attrs":3725},{"href":3718,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":3727},{"color":3490},{"type":160},{"text":3730,"type":46,"marks":3731},". This is not always true of long-term BNPL plans. So it’s important to make sure you’re clear on your provider’s terms and conditions so you’re not stuck with a nasty surprise bill later. ",[3732],{"type":53,"attrs":3733},{"color":3490},{"type":71,"attrs":3735,"content":3736},{"level":3602},[3737],{"text":3738,"type":46,"marks":3739},"Lack of consumer protections ",[3740],{"type":53,"attrs":3741},{"color":3490},{"type":42,"content":3743},[3744,3749,3758],{"text":3745,"type":46,"marks":3746},"BNPL lenders often fall under different regulatory frameworks than credit card or loan providers. As a result, consumers may be less protected with some BNPL providers than others. A recent Consumer Financial Protection Bureau ",[3747],{"type":53,"attrs":3748},{"color":3490},{"text":3750,"type":46,"marks":3751},"study on BNPL",[3752,3755,3757],{"type":150,"attrs":3753},{"href":3754,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.consumerfinance.gov/about-us/newsroom/cfpb-study-details-the-rapid-growth-of-buy-now-pay-later-lending/",{"type":53,"attrs":3756},{"color":3490},{"type":160},{"text":3759,"type":46,"marks":3760}," also warns that BNPL users may have limited recourse in case of disputes or fraud.",[3761],{"type":53,"attrs":3762},{"color":3490},{"type":71,"attrs":3764,"content":3765},{"level":3602},[3766],{"text":3767,"type":46,"marks":3768},"Complicated returns ",[3769],{"type":53,"attrs":3770},{"color":3490},{"type":42,"content":3772},[3773],{"text":3774,"type":46,"marks":3775},"If you’ve made partial payments for an item through BNPL and wish to return it, the process isn’t always straightforward. Some merchants or BNPL services may issue refunds directly to your original payment method, whether that’s your bank account or credit card. Others might credit the refunded amount back to your BNPL account, potentially adjusting the subsequent installment payments or reducing the remaining balance owed. ",[3776],{"type":53,"attrs":3777},{"color":3490},{"type":71,"attrs":3779,"content":3780},{"level":73},[3781],{"text":3782,"type":46,"marks":3783},"Does Buy Now, Pay Later affect your credit score?",[3784],{"type":53,"attrs":3785},{"color":3490},{"type":42,"content":3787},[3788,3793,3802],{"text":3789,"type":46,"marks":3790},"BNPL services typically don’t conduct ",[3791],{"type":53,"attrs":3792},{"color":3490},{"text":3794,"type":46,"marks":3795},"hard credit checks",[3796,3799,3801],{"type":150,"attrs":3797},{"href":3798,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.consumerfinance.gov/ask-cfpb/whats-a-credit-inquiry-en-1317/",{"type":53,"attrs":3800},{"color":3490},{"type":160},{"text":3803,"type":46,"marks":3804}," when you sign up or make purchases. Instead, they often rely on soft credit checks, which don’t affect your credit. ",[3805],{"type":53,"attrs":3806},{"color":3490},{"type":42,"content":3808},[3809],{"text":3810,"type":46,"marks":3811},"However, some BPNL providers may choose to perform hard credit inquiries in specific cases, like granting higher credit limits or when switching you to a different payment plan. These hard inquiries could temporarily drop your credit score. ",[3812],{"type":53,"attrs":3813},{"color":3490},{"type":42,"content":3815},[3816],{"text":3817,"type":46,"marks":3818},"In addition, most BNPL services will report late payments or defaults to credit bureaus. This negative reporting will show up on your credit report and could negatively affect your score. Conversely, timely payments might positively impact your credit score if the BNPL provider reports to credit bureaus. ",[3819],{"type":53,"attrs":3820},{"color":3490},{"type":42,"content":3822},[3823],{"text":3824,"type":46,"marks":3825},"Be sure to review the terms and conditions of the BNPL service you use to understand if and how they report payment behavior to credit bureaus. This can help you gauge how BNPL usage might affect your credit score. ",[3826],{"type":53,"attrs":3827},{"color":3490},{"type":71,"attrs":3829,"content":3830},{"level":73},[3831],{"text":3832,"type":46,"marks":3833},"Should you use Buy Now, Pay Later?",[3834],{"type":53,"attrs":3835},{"color":3490},{"type":42,"content":3837},[3838],{"text":3839,"type":46,"marks":3840},"To use BNPL responsibly, you’ll need a firm understanding of your current financial situation and a clear repayment strategy. Here are some things to consider.",[3841],{"type":53,"attrs":3842},{"color":3490},{"type":127,"content":3844},[3845,3860,3875,3890],{"type":130,"content":3846},[3847],{"type":42,"content":3848},[3849,3855],{"text":3850,"type":46,"marks":3851},"Nonessential purchases: ",[3852,3853],{"type":138},{"type":53,"attrs":3854},{"color":3490},{"text":3856,"type":46,"marks":3857},"BNPL generally isn’t recommended for nonessential purchases. It’s usually wiser to budget carefully, save your money, and purchase the product when you can afford to pay for it upfront. ",[3858],{"type":53,"attrs":3859},{"color":3490},{"type":130,"content":3861},[3862],{"type":42,"content":3863},[3864,3870],{"text":3865,"type":46,"marks":3866},"Essential purchases:",[3867,3868],{"type":138},{"type":53,"attrs":3869},{"color":3490},{"text":3871,"type":46,"marks":3872}," BNPL can be helpful for essential purchases, like groceries, as long as you’re confident in your ability to make timely payments. With low interest rates, they can be a low-risk alternative to credit cards.",[3873],{"type":53,"attrs":3874},{"color":3490},{"type":130,"content":3876},[3877],{"type":42,"content":3878},[3879,3885],{"text":3880,"type":46,"marks":3881},"Interest and fees: ",[3882,3883],{"type":138},{"type":53,"attrs":3884},{"color":3490},{"text":3886,"type":46,"marks":3887},"BNPL services don’t often charge interest if payments are made on time. But delayed payments could leave you with fees or interest charges, impacting your overall expenses.",[3888],{"type":53,"attrs":3889},{"color":3490},{"type":130,"content":3891},[3892],{"type":42,"content":3893},[3894,3900],{"text":3895,"type":46,"marks":3896},"Credit score: ",[3897,3898],{"type":138},{"type":53,"attrs":3899},{"color":3490},{"text":3901,"type":46,"marks":3902},"BNPL can affect your credit score if you miss payments or default. If you’re concerned about credit impacts, consider alternative payment strategies. ",[3903],{"type":53,"attrs":3904},{"color":3490},{"type":71,"attrs":3906,"content":3907},{"level":73},[3908],{"text":3909,"type":46,"marks":3910},"Buy Now, Pay Later Apps",[3911],{"type":53,"attrs":3912},{"color":3490},{"type":42,"content":3914},[3915],{"text":3916,"type":46,"marks":3917},"Several apps offer Buy Now, Pay Later services, allowing users to make purchases and split payments into manageable installments. Some of the popular BNPL apps include:",[3918],{"type":53,"attrs":3919},{"color":3490},{"type":127,"content":3921},[3922],{"type":130,"content":3923},[3924],{"type":42,"content":3925},[3926,3932],{"text":3927,"type":46,"marks":3928},"Afterpay:",[3929,3930],{"type":138},{"type":53,"attrs":3931},{"color":3490},{"text":3933,"type":46,"marks":3934}," Afterpay partners with stores like Old Navy and Gap, and provides shoppers with interest-free pay-in-four plans. It also offers six- and 12-month plans with an APR range of 0% to 35.99%. Afterpay charges no fees if payments are on time, but may charge up to $8 for payments made at least 10 days late.",[3935],{"type":53,"attrs":3936},{"color":3490},{"type":127,"content":3938},[3939],{"type":130,"content":3940},[3941],{"type":42,"content":3942},[3943,3949],{"text":3944,"type":46,"marks":3945},"Affirm:",[3946,3947],{"type":138},{"type":53,"attrs":3948},{"color":3490},{"text":3950,"type":46,"marks":3951}," This app can be used for online purchases from retailers like Amazon and Walmart. Affirm offers flexible payment plans with transparent interest rates and terms. It also offers a zero-interest pay-in-four plan. Monthly plans (of up to 60 months) can charge 0% to 36% APR. However, there are no late fees. ",[3952],{"type":53,"attrs":3953},{"color":3490},{"type":127,"content":3955},[3956],{"type":130,"content":3957},[3958],{"type":42,"content":3959},[3960,3966],{"text":3961,"type":46,"marks":3962},"Apple Pay Later: ",[3963,3964],{"type":138},{"type":53,"attrs":3965},{"color":3490},{"text":3967,"type":46,"marks":3968},"Pay Later can be used for purchases up to $1,000 online or in-app with zero interest or fees for the pay-in-four plan. You can connect this platform to a debit card and manage it via the Apple Wallet app.",[3969],{"type":53,"attrs":3970},{"color":3490},{"type":127,"content":3972},[3973],{"type":130,"content":3974},[3975],{"type":42,"content":3976},[3977,3983],{"text":3978,"type":46,"marks":3979},"Klarna: ",[3980,3981],{"type":138},{"type":53,"attrs":3982},{"color":3490},{"text":3984,"type":46,"marks":3985},"Available at both Sephora and Macy’s, Klarna provides a convenient interest-free pay-in-four plan. However, late payments beyond 10 days may result in a fee of up to $7. APR can range from 0% to 29.99%. ",[3986],{"type":53,"attrs":3987},{"color":3490},{"type":127,"content":3989},[3990],{"type":130,"content":3991},[3992],{"type":42,"content":3993},[3994,4000],{"text":3995,"type":46,"marks":3996},"Paypal: ",[3997,3998],{"type":138},{"type":53,"attrs":3999},{"color":3490},{"text":4001,"type":46,"marks":4002},"The pay-in-four option is interest-free, while the six, 12, and 24-month plans carry an APR ranging from 9.99% to 29.99%. There are no late fees applied. ",[4003],{"type":53,"attrs":4004},{"color":3490},{"type":127,"content":4006},[4007],{"type":130,"content":4008},[4009],{"type":42,"content":4010},[4011,4017],{"text":4012,"type":46,"marks":4013},"Sezzle: ",[4014,4015],{"type":138},{"type":53,"attrs":4016},{"color":3490},{"text":4018,"type":46,"marks":4019},"This app is compatible with multiple retailers, including Target. Their pay-in-four plan comes with zero interest and doesn’t entail late fees. However, failing to make a payment deactivates the account after 48 hours, necessitating a $10 reactivation fee. ",[4020],{"type":53,"attrs":4021},{"color":3490},{"type":127,"content":4023},[4024],{"type":130,"content":4025},[4026],{"type":42,"content":4027},[4028,4034],{"text":4029,"type":46,"marks":4030},"Zip: ",[4031,4032],{"type":138},{"type":53,"attrs":4033},{"color":3490},{"text":4035,"type":46,"marks":4036},"This app is accepted wherever Visa is. Zip charges a per-installment fee (typically $1) for pay-in-four plans. It also charges state-dependent late fees ($5, $7, or $10) for missed payments. ",[4037],{"type":53,"attrs":4038},{"color":3490},{"type":71,"attrs":4040,"content":4041},{"level":73},[4042],{"text":4043,"type":46,"marks":4044},"Alternatives to BNPL",[4045],{"type":53,"attrs":4046},{"color":3490},{"type":42,"content":4048},[4049],{"text":4050,"type":46,"marks":4051},"If you’re struggling to make a purchase, BNPL is not your only financing option. Each of the following alternatives offer distinct advantages based on your financial needs.",[4052],{"type":53,"attrs":4053},{"color":3490},{"type":71,"attrs":4055,"content":4056},{"level":104},[4057],{"text":4058,"type":46,"marks":4059},"Credit cards",[4060],{"type":53,"attrs":4061},{"color":3490},{"type":42,"content":4063},[4064,4072,4079,4084,4093,4098,4105],{"text":4058,"type":46,"marks":4065},[4066,4069,4071],{"type":150,"attrs":4067},{"href":4068,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.navient.com/blog/how-to-choose-a-credit-card/",{"type":53,"attrs":4070},{"color":3490},{"type":160},{"text":1907,"type":46,"marks":4073},[4074,4076,4077],{"type":49,"attrs":4075},{"class":1911},{"type":1911},{"type":53,"attrs":4078},{"color":3490},{"text":4080,"type":46,"marks":4081}," can be beneficial for everyday purchases, emergencies, or larger expenses due to their widespread acceptance and convenience. They might be preferable over BNPL when you need a more extended repayment period, want to ",[4082],{"type":53,"attrs":4083},{"color":3490},{"text":4085,"type":46,"marks":4086},"build credit history",[4087,4090,4092],{"type":150,"attrs":4088},{"href":4089,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.navient.com/blog/how-many-credit-cards-should-i-have/",{"type":53,"attrs":4091},{"color":3490},{"type":160},{"text":4094,"type":46,"marks":4095},", or enjoy perks like cashback, rewards, or travel benefits",[4096],{"type":53,"attrs":4097},{"color":3490},{"text":1981,"type":46,"marks":4099},[4100,4102,4103],{"type":49,"attrs":4101},{"class":1911},{"type":1911},{"type":53,"attrs":4104},{"color":3490},{"text":1338,"type":46,"marks":4106},[4107],{"type":53,"attrs":4108},{"color":3490},{"type":71,"attrs":4110,"content":4111},{"level":104},[4112],{"text":4113,"type":46,"marks":4114},"Personal loans",[4115],{"type":53,"attrs":4116},{"color":3490},{"type":42,"content":4118},[4119,4126,4134],{"text":4113,"type":46,"marks":4120},[4121,4123,4125],{"type":150,"attrs":4122},{"href":975,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":4124},{"color":3490},{"type":160},{"text":4127,"type":46,"marks":4128},"3",[4129,4131,4132],{"type":49,"attrs":4130},{"class":1911},{"type":1911},{"type":53,"attrs":4133},{"color":3490},{"text":4135,"type":46,"marks":4136}," are ideal for significant expenses like home renovations, medical bills, or debt consolidation. Personal loans are a type of installment loan. They can provide you with a substantial, fixed amount of money and a structured, long-term repayment plan. ",[4137],{"type":53,"attrs":4138},{"color":3490},{"type":71,"attrs":4140,"content":4141},{"level":104},[4142],{"text":4143,"type":46,"marks":4144},"Secured loans",[4145],{"type":53,"attrs":4146},{"color":3490},{"type":42,"content":4148},[4149,4153,4162],{"text":703,"type":46,"marks":4150},[4151],{"type":53,"attrs":4152},{"color":3490},{"text":4154,"type":46,"marks":4155},"secured loan",[4156,4159,4161],{"type":150,"attrs":4157},{"href":4158,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.navient.com/blog/secured-vs-unsecured-loans/",{"type":53,"attrs":4160},{"color":3490},{"type":160},{"text":4163,"type":46,"marks":4164}," is a type of personal loan that’s backed by collateral like property or assets. Secured loans are useful for larger purchases, such as real estate or major investments. They might be preferred when you require a substantial amount of funding for a specific purpose and are willing to provide collateral to secure the loan. ",[4165],{"type":53,"attrs":4166},{"color":3490},{"type":71,"attrs":4168,"content":4169},{"level":73},[4170],{"text":4171,"type":46,"marks":4172},"Compare loans on Navient Marketplace",[4173],{"type":53,"attrs":4174},{"color":3490},{"type":42,"content":4176},[4177],{"text":4178,"type":46,"marks":4179},"BNPL can be a good option to explore for short-term purchases that you can easily pay off in four to six installments. However, if you’re looking for a more substantial sum to make a big purchase, a personal loan might be the way to go. ",[4180],{"type":53,"attrs":4181},{"color":3490},{"type":42,"content":4183},[4184,4189,4195,4203],{"text":4185,"type":46,"marks":4186},"On Navienet Marketplace, you can use our free personal loan search tool to get swift access to cash at lower interest rates than credit cards or open lines of credit. Explore your options and find personalized loan rates by",[4187],{"type":53,"attrs":4188},{"color":3490},{"text":2501,"type":46,"marks":4190},[4191,4193],{"type":150,"attrs":4192},{"href":1976,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":4194},{"color":3490},{"text":4196,"type":46,"marks":4197},"visiting our marketplace",[4198,4200,4202],{"type":150,"attrs":4199},{"href":1976,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":4201},{"color":3490},{"type":160},{"text":205,"type":46,"marks":4204},[4205],{"type":53,"attrs":4206},{"color":3490},{"type":42,"content":4208},[4209],{"text":1405,"type":46,"marks":4210},[4211,4213],{"type":49,"attrs":4212},{"class":51},{"type":53,"attrs":4214},{"color":3490},{"type":42,"content":4216},[4217],{"text":4218,"type":46,"marks":4219},"1 Navient may receive compensation when you click on links associated with this Navient Marketplace. Navient is not being compensated for any application, quotation, or the purchase of any financial products.",[4220,4222],{"type":49,"attrs":4221},{"class":51},{"type":53,"attrs":4223},{"color":3490},{"type":42,"content":4225},[4226],{"text":4227,"type":46,"marks":4228},"2 Navient has partnered with CardRatings for our credit card products. Navient and CardRatings may receive a commission from card issuers. Opinions. reviews, analyses & recommendations are Navient's alone, and have not been reviewed, endorsed or approved by any of these entities. ",[4229,4231],{"type":49,"attrs":4230},{"class":51},{"type":53,"attrs":4232},{"color":3490},{"type":42,"content":4234},[4235],{"text":4236,"type":46,"marks":4237},"3 Navient customers are invited to consider personal loan offers through our partner MoneyLion. Navient has not shared your information with MoneyLion and is not involved in the personal loan application process in any manner.  All information is submitted directly to MoneyLion and any personal loan offers are made directly by participants in MoneyLion’s lending platform.  Engine by MoneyLion is the industry-leading embedded financial marketplace and independent subsidiary of MoneyLion Inc. (“MoneyLion”) (NYSE:ML). Checking your rate will not affect your credit score. Eligibility is not guaranteed and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions.",[4238,4240],{"type":49,"attrs":4239},{"class":51},{"type":53,"attrs":4241},{"color":3490},{"type":42,"content":4243},[4244],{"text":4245,"type":46,"marks":4246},"Loan proceeds may not be used for postsecondary educational expenses, including refinancing federal or private student loans.",[4247,4249],{"type":49,"attrs":4248},{"class":51},{"type":53,"attrs":4250},{"color":3490},"\u003C!--#storyblok#{\"name\": \"BlogText\", \"space\": \"157494\", \"uid\": \"67b1c1a7-fbb7-4c3c-a267-87dc959687fb\", \"id\": \"651798150\"}-->","https://www.marketplace.navient.com/blog/what-is-buy-now-pay-later/","January 4, 2024","\u003C!--#storyblok#{\"name\": \"NriBlogPost\", \"space\": \"157494\", \"uid\": \"39f3568e-f888-4c3e-816f-3647f7efec59\", \"id\": \"651798150\"}-->","what-is-buy-now-pay-later","navient_marketplace/blog/what-is-buy-now-pay-later",[],"6267a2b9-e935-4885-aedc-86fd254532a1","2024-01-04T08:57:00.000Z","/blog/what-is-buy-now-pay-later/",[],{"name":4263,"created_at":4264,"published_at":4265,"updated_at":4266,"id":4267,"uuid":4268,"content":4269,"slug":5220,"full_slug":5221,"sort_by_date":153,"position":1418,"tag_list":5222,"is_startpage":29,"parent_id":1420,"meta_data":153,"group_id":5223,"first_published_at":5224,"release_id":153,"lang":1423,"path":153,"alternates":5225,"default_full_slug":153,"translated_slugs":153},"8 Ways to Improve Credit Score ASAP","2025-04-07T18:30:02.322Z","2025-12-26T13:45:02.306Z","2025-12-26T13:45:02.389Z",651798145,"240d24c4-4990-4696-9f34-c3abcdf06f2e",{"seo":4270,"_uid":20,"hero":4273,"author":31,"category":32,"featured":29,"imageAlt":18,"component":33,"blogContents":4278,"canonicalTag":5217,"publishedDate":5218,"_editable":5219},{"_uid":15,"title":4271,"plugin":17,"og_image":18,"og_title":18,"description":4272,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"8 Ways to Improve Credit Score ASAP | Navient Marketplace","A low credit score can mean low odds of loan approval or higher interest rates. Here are 8 tested strategies to improve your credit score fast.",[4274],{"id":18,"_uid":23,"image":4275,"intro":4272,"classes":18,"_editable":4276,"blogTitle":4263,"component":27,"imageLink":4277,"blendImage":29,"backgroundColor":30},"//a.storyblok.com/f/110029/1600x1066/08633c1d9f/how-to-improve-credit-score.png","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798145\"}-->","/images/how-to-improve-credit-score.webp",[4279],{"_uid":36,"color":37,"richText":4280,"_editable":5216,"component":1412},{"type":39,"content":4281},[4282,4290,4297,4305,4325,4332,4339,4347,4354,4361,4368,4375,4382,4390,4397,4404,4411,4419,4440,4447,4455,4462,4469,4549,4556,4564,4585,4605,4612,4619,4627,4634,4647,4660,4673,4680,4688,4695,4716,4723,4731,4738,4746,4753,4800,4808,4815,4832,4863,4880,4897,4928,4936,4943,5106,5114,5121,5170,5178,5193,5201],{"type":42,"content":4283},[4284],{"text":45,"type":46,"marks":4285},[4286,4288],{"type":49,"attrs":4287},{"class":51},{"type":53,"attrs":4289},{"color":3490},{"type":42,"content":4291},[4292],{"text":4293,"type":46,"marks":4294},"Maintaining a good credit score is central to achieving financial well-being. A higher credit score not only makes it easier to get approved loans and credit cards, but also leads to lower interest rates and favorable terms. If you’re trying to figure out how to improve your credit score quickly, here are some proven strategies to consider. ",[4295],{"type":53,"attrs":4296},{"color":3490},{"type":71,"attrs":4298,"content":4299},{"level":73},[4300],{"text":4301,"type":46,"marks":4302},"Review and dispute errors in your credit report",[4303],{"type":53,"attrs":4304},{"color":3490},{"type":42,"content":4306},[4307,4312,4321],{"text":4308,"type":46,"marks":4309},"Start by pulling a copy of your credit report from all three major credit bureaus (Equifax, Experian, and TransUnion). You can also obtain a free credit report and credit score from ",[4310],{"type":53,"attrs":4311},{"color":3490},{"text":4313,"type":46,"marks":4314},"AnnualCreditReport.com",[4315,4318,4320],{"type":150,"attrs":4316},{"href":4317,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.annualcreditreport.com/index.action",{"type":53,"attrs":4319},{"color":3490},{"type":160},{"text":1338,"type":46,"marks":4322},[4323],{"type":53,"attrs":4324},{"color":3490},{"type":42,"content":4326},[4327],{"text":4328,"type":46,"marks":4329},"Carefully review your own credit report for any inaccuracies like incorrect personal information, fraudulent credit card accounts, identity theft, or late payments that were incorrectly reported. ",[4330],{"type":53,"attrs":4331},{"color":3490},{"type":42,"content":4333},[4334],{"text":4335,"type":46,"marks":4336},"Dispute these errors by contacting credit bureaus through a written letter or an online dispute form. Their timely removal can result in a significant and speedy improvement in your credit score.",[4337],{"type":53,"attrs":4338},{"color":3490},{"type":71,"attrs":4340,"content":4341},{"level":73},[4342],{"text":4343,"type":46,"marks":4344},"Pay your bills on time ",[4345],{"type":53,"attrs":4346},{"color":3490},{"type":42,"content":4348},[4349],{"text":4350,"type":46,"marks":4351},"One of the biggest factors impacting your credit score is your payment history, which is why it’s crucial to always make payments on time and in full. ",[4352],{"type":53,"attrs":4353},{"color":3490},{"type":42,"content":4355},[4356],{"text":4357,"type":46,"marks":4358},"To lenders and credit bureaus, when you miss a payment or submit it late, you’re showing a lack of responsibility in managing credit obligations. This can signal financial instability and lead to a decrease in your credit score.",[4359],{"type":53,"attrs":4360},{"color":3490},{"type":42,"content":4362},[4363],{"text":4364,"type":46,"marks":4365},"Late payments don’t typically appear on your credit report until they are 30 days past due or delinquent –– but once they’re reported, they can remain on your credit report for up to seven years. ",[4366],{"type":53,"attrs":4367},{"color":3490},{"type":42,"content":4369},[4370],{"text":4371,"type":46,"marks":4372},"The severity of the impact that late payments have on your credit score depends on several factors, including the timeliness and frequency of late payments. Multiple late payments and a pattern of delinquency can result in a more significant negative impact on your credit score.",[4373],{"type":53,"attrs":4374},{"color":3490},{"type":42,"content":4376},[4377],{"text":4378,"type":46,"marks":4379},"To minimize the negative impact of late payments on your credit score, it’s important to make timely payments and avoid missing due dates. Setting up automatic payments or reminders can help ensure that you stay on track with your monthly payments.",[4380],{"type":53,"attrs":4381},{"color":3490},{"type":71,"attrs":4383,"content":4384},{"level":73},[4385],{"text":4386,"type":46,"marks":4387},"Reduce credit utilization ratio",[4388],{"type":53,"attrs":4389},{"color":3490},{"type":42,"content":4391},[4392],{"text":4393,"type":46,"marks":4394},"Another major contributor to your credit score ranges, credit utilization ratio (CUR) refers to the percentage of your available credit that you’re currently using. For example, if you’re using $2,000 every month of your available $10,000 credit limit, your credit utilization ratio is 20%. ",[4395],{"type":53,"attrs":4396},{"color":3490},{"type":42,"content":4398},[4399],{"text":4400,"type":46,"marks":4401},"High credit utilization can negatively impact your credit score. Aim to keep your credit utilization below 30% of your total credit limit. Any higher, and this could demonstrate to credit bureaus that you’re spending above your means. Ideally, lenders are looking for you to use your line of credit without leaning on it too much. ",[4402],{"type":53,"attrs":4403},{"color":3490},{"type":42,"content":4405},[4406],{"text":4407,"type":46,"marks":4408},"If your current credit utilization ratio is higher, consider paying down your debts aggressively and using your debit card for your monthly purchases. Lowering it will demonstrate responsible credit management and positively impact your credit score.",[4409],{"type":53,"attrs":4410},{"color":3490},{"type":71,"attrs":4412,"content":4413},{"level":73},[4414],{"text":4415,"type":46,"marks":4416},"Request a credit limit increase",[4417],{"type":53,"attrs":4418},{"color":3490},{"type":42,"content":4420},[4421,4426,4435],{"text":4422,"type":46,"marks":4423},"When you request a credit limit increase, you’re essentially asking your credit card issuer to raise the maximum amount you can borrow on your card. This increased credit limit provides a larger buffer between your outstanding balances and your total available credit. The result is a lower ",[4424],{"type":53,"attrs":4425},{"color":3490},{"text":4427,"type":46,"marks":4428},"credit utilization ratio",[4429,4432,4434],{"type":150,"attrs":4430},{"href":4431,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://corporatefinanceinstitute.com/resources/commercial-lending/credit-utilization-ratio/",{"type":53,"attrs":4433},{"color":3490},{"type":160},{"text":4436,"type":46,"marks":4437},".  ",[4438],{"type":53,"attrs":4439},{"color":3490},{"type":42,"content":4441},[4442],{"text":4443,"type":46,"marks":4444},"You’re more likely to be considered for a credit limit increase if you’ve consistently demonstrated responsible credit behavior, such as making timely payments. To apply for a credit limit increase, you may need to provide your current income, employment status, and other relevant financial details. ",[4445],{"type":53,"attrs":4446},{"color":3490},{"type":71,"attrs":4448,"content":4449},{"level":73},[4450],{"text":4451,"type":46,"marks":4452},"Diversify your credit mix",[4453],{"type":53,"attrs":4454},{"color":3490},{"type":42,"content":4456},[4457],{"text":4458,"type":46,"marks":4459},"Credit mix refers to the variety of credit types that an individual has access to, such as credit card debt, mortgages, installment loans, and student loans. A diverse credit mix is important because it provides a more comprehensive view of an individual’s ability to manage different types of credit. Lenders and credit scoring models view a well-rounded credit mix as a sign of responsible credit behavior. ",[4460],{"type":53,"attrs":4461},{"color":3490},{"type":42,"content":4463},[4464],{"text":4465,"type":46,"marks":4466},"To diversify your credit mix, consider these options: ",[4467],{"type":53,"attrs":4468},{"color":3490},{"type":127,"content":4470},[4471,4499,4526],{"type":130,"content":4472},[4473],{"type":42,"content":4474},[4475,4481,4486,4494],{"text":4476,"type":46,"marks":4477},"Credit builder loans:",[4478,4479],{"type":138},{"type":53,"attrs":4480},{"color":3490},{"text":4482,"type":46,"marks":4483}," These loans are designed to help individuals establish a credit profile for the first time. They can also help with credit repair. To get a ",[4484],{"type":53,"attrs":4485},{"color":3490},{"text":4487,"type":46,"marks":4488},"credit builder loan",[4489,4492],{"type":150,"attrs":4490},{"href":4491,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.moneylion.com/network/navient/credit-builders/explore/",{"type":53,"attrs":4493},{"color":3490},{"text":4495,"type":46,"marks":4496},", you’ll first make a deposit, which the lender will keep in a secure bank account. As you repay the loan, the lender will report your positive payment history to the credit bureaus, contributing to your credit history and overall mix. Then, at the end of the term, you will receive the loan balance.",[4497],{"type":53,"attrs":4498},{"color":3490},{"type":130,"content":4500},[4501],{"type":42,"content":4502},[4503,4508,4513,4521],{"text":960,"type":46,"marks":4504},[4505,4506],{"type":138},{"type":53,"attrs":4507},{"color":3490},{"text":4509,"type":46,"marks":4510}," This type of installment loan is popular for debt consolidation, paying for home improvements, or covering unexpected expenses. Including a ",[4511],{"type":53,"attrs":4512},{"color":3490},{"text":2645,"type":46,"marks":4514},[4515,4518,4520],{"type":150,"attrs":4516},{"href":4517,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.navient.com/blog/how-to-get-a-personal-loan-with-bad-credit/",{"type":53,"attrs":4519},{"color":3490},{"type":160},{"text":4522,"type":46,"marks":4523}," in your credit mix demonstrates your ability to manage and repay unsecured installment debt. ",[4524],{"type":53,"attrs":4525},{"color":3490},{"type":130,"content":4527},[4528],{"type":42,"content":4529},[4530,4536,4544],{"text":4531,"type":46,"marks":4532},"Secured credit cards: ",[4533,4534],{"type":138},{"type":53,"attrs":4535},{"color":3490},{"text":4537,"type":46,"marks":4538},"Secured credit cards",[4539,4541,4543],{"type":150,"attrs":4540},{"href":4158,"uuid":153,"anchor":153,"target":153,"linktype":155},{"type":53,"attrs":4542},{"color":3490},{"type":160},{"text":4545,"type":46,"marks":4546}," require a security deposit. Your credit limit is typically capped at the amount of your deposit. Responsibly using a secured credit card and making on-time payments can help you establish a positive credit history. Unlike loans, secured credit cards are a type of revolving credit, adding diversity to your credit mix. ",[4547],{"type":53,"attrs":4548},{"color":3490},{"type":42,"content":4550},[4551],{"text":4552,"type":46,"marks":4553},"While diversifying your credit mix is beneficial, it’s essential to do so responsibly. Opening multiple credit accounts within a short timeframe — or using the extra accounts as a justification to take on more debt — can have negative impacts on your credit score. ",[4554],{"type":53,"attrs":4555},{"color":3490},{"type":71,"attrs":4557,"content":4558},{"level":73},[4559],{"text":4560,"type":46,"marks":4561},"Be cautious about opening new accounts",[4562],{"type":53,"attrs":4563},{"color":3490},{"type":42,"content":4565},[4566,4571,4580],{"text":4567,"type":46,"marks":4568},"When you apply for new credit, the lender typically pulls your credit file, conducting what’s called a “",[4569],{"type":53,"attrs":4570},{"color":3490},{"text":4572,"type":46,"marks":4573},"hard inquiry",[4574,4577,4579],{"type":150,"attrs":4575},{"href":4576,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://time.com/personal-finance/article/what-is-a-hard-inquiry/",{"type":53,"attrs":4578},{"color":3490},{"type":160},{"text":4581,"type":46,"marks":4582},"”. Each hard inquiry can lead to a slight decrease in your credit score. ",[4583],{"type":53,"attrs":4584},{"color":3490},{"type":42,"content":4586},[4587,4592,4600],{"text":4588,"type":46,"marks":4589},"While the impact is usually small, multiple inquiries can add up, potentially resulting in a more significant decrease. This is particularly relevant when you’re actively seeking new credit, such as ",[4590],{"type":53,"attrs":4591},{"color":3490},{"text":4593,"type":46,"marks":4594},"applying for credit cards",[4595,4597,4599],{"type":150,"attrs":4596},{"href":4068,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":4598},{"color":3490},{"type":160},{"text":4601,"type":46,"marks":4602},", loans, or mortgages. ",[4603],{"type":53,"attrs":4604},{"color":3490},{"type":42,"content":4606},[4607],{"text":4608,"type":46,"marks":4609},"Lenders and credit score models, including VantageScore and FICO Score, interpret a flurry of new credit applications as a sign of risky financial behavior. Opening multiple new lines of credit in a short timeframe may suggest financial instability or the potential for taking on more debt than you can manage. ",[4610],{"type":53,"attrs":4611},{"color":3490},{"type":42,"content":4613},[4614],{"text":4615,"type":46,"marks":4616},"Hard inquiries typically stay on your credit report for about two years. However, their influence on your score is most significant in the first few months. ",[4617],{"type":53,"attrs":4618},{"color":3490},{"type":71,"attrs":4620,"content":4621},{"level":73},[4622],{"text":4623,"type":46,"marks":4624},"Become an authorized user",[4625],{"type":53,"attrs":4626},{"color":3490},{"type":42,"content":4628},[4629],{"text":4630,"type":46,"marks":4631},"If you have a trusted family member or friend with a long-standing, positive credit history, ask them to include you as an authorized user on their credit card. Becoming an authorized user means you can use the credit card as if it were your own, and also piggyback off the account holder’s credit history. Here are some ways it can improve your credit score: ",[4632],{"type":53,"attrs":4633},{"color":3490},{"type":42,"content":4635},[4636,4642],{"text":4637,"type":46,"marks":4638},"1. Building positive payment history",[4639,4640],{"type":138},{"type":53,"attrs":4641},{"color":3490},{"text":4643,"type":46,"marks":4644},": If the primary cardholder has a history of making timely payments and maintaining a low credit utilization ratio, that positive payment history can be reflected on your credit report. This can help boost your credit score and demonstrate your creditworthiness.",[4645],{"type":53,"attrs":4646},{"color":3490},{"type":42,"content":4648},[4649,4655],{"text":4650,"type":46,"marks":4651},"2. Establishing credit history:",[4652,4653],{"type":138},{"type":53,"attrs":4654},{"color":3490},{"text":4656,"type":46,"marks":4657}," If you're new to credit or have a limited credit history, being added as an authorized user can help you establish a credit history. The primary cardholder's credit account, with its positive payment history, can provide a foundation for your credit profile.",[4658],{"type":53,"attrs":4659},{"color":3490},{"type":42,"content":4661},[4662,4668],{"text":4663,"type":46,"marks":4664},"3. Increasing your available credit:",[4665,4666],{"type":138},{"type":53,"attrs":4667},{"color":3490},{"text":4669,"type":46,"marks":4670}," Being an authorized user can also increase your available credit. The credit limit on the primary cardholder's account will be factored into your credit utilization ratio depending on the credit model. A lower credit utilization ratio, which is the amount of credit you're using compared to your total available credit, is generally better for your credit score. ",[4671],{"type":53,"attrs":4672},{"color":3490},{"type":42,"content":4674},[4675],{"text":4676,"type":46,"marks":4677},"It's important to note that the impact of being an authorized user on your credit score can vary. It depends on factors such as the credit card company's policies, how long you've been an authorized user, and the overall health of the primary cardholder's credit account. Additionally, not all credit scoring models may consider authorized user accounts in the same way, so the impact on your credit score may vary across different scoring models. ",[4678],{"type":53,"attrs":4679},{"color":3490},{"type":71,"attrs":4681,"content":4682},{"level":73},[4683],{"text":4684,"type":46,"marks":4685},"Address debt in collections",[4686],{"type":53,"attrs":4687},{"color":3490},{"type":42,"content":4689},[4690],{"text":4691,"type":46,"marks":4692},"When a debt goes to collections, it means the original creditor has given up on collecting the payment and has enlisted the services of a third-party debt collector to do so for them. Addressing any debt you have in collections is a proactive step toward improving your credit score and financial standing. ",[4693],{"type":53,"attrs":4694},{"color":3490},{"type":42,"content":4696},[4697,4702,4711],{"text":4698,"type":46,"marks":4699},"First, obtain detailed information about any debts that are currently in collections. Contact the debt collector to ",[4700],{"type":53,"attrs":4701},{"color":3490},{"text":4703,"type":46,"marks":4704},"negotiate a settlement",[4705,4708,4710],{"type":150,"attrs":4706},{"href":4707,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.consumerfinance.gov/ask-cfpb/how-do-i-negotiate-a-settlement-with-a-debt-collector-en-1447/",{"type":53,"attrs":4709},{"color":3490},{"type":160},{"text":4712,"type":46,"marks":4713},". Many collectors are willing to agree to a reduced payment amount if it means they can get at least some of their investment back. Document any agreements in writing before making payments. ",[4714],{"type":53,"attrs":4715},{"color":3490},{"type":42,"content":4717},[4718],{"text":4719,"type":46,"marks":4720},"After settling the debt, check your credit report to make sure the account is either removed or marked as paid. Keeping an eye on your report is essential to confirm that the negative information is accurately reflected. ",[4721],{"type":53,"attrs":4722},{"color":3490},{"type":71,"attrs":4724,"content":4725},{"level":73},[4726],{"text":4727,"type":46,"marks":4728},"Frequently Asked Questions",[4729],{"type":53,"attrs":4730},{"color":3490},{"type":42,"content":4732},[4733],{"text":4734,"type":46,"marks":4735},"Building credit can be a tricky process. Here are some answers to commonly asked questions about it. ",[4736],{"type":53,"attrs":4737},{"color":3490},{"type":71,"attrs":4739,"content":4740},{"level":104},[4741],{"text":4742,"type":46,"marks":4743},"How quickly can you improve your credit score?",[4744],{"type":53,"attrs":4745},{"color":3490},{"type":42,"content":4747},[4748],{"text":4749,"type":46,"marks":4750},"While there’s no instant credit-score fix, you can make significant improvements to your score by working diligently over time. ",[4751],{"type":53,"attrs":4752},{"color":3490},{"type":127,"content":4754},[4755,4770,4785],{"type":130,"content":4756},[4757],{"type":42,"content":4758},[4759,4765],{"text":4760,"type":46,"marks":4761},"Short-term improvements:",[4762,4763],{"type":138},{"type":53,"attrs":4764},{"color":3490},{"text":4766,"type":46,"marks":4767}," Some tasks can improve your score in just a few weeks to a few months. These include disputing errors on your credit report, negotiating with collections companies, and paying off small balances to reduce your overall debt-to-income ratio. ",[4768],{"type":53,"attrs":4769},{"color":3490},{"type":130,"content":4771},[4772],{"type":42,"content":4773},[4774,4780],{"text":4775,"type":46,"marks":4776},"Mid-term improvements:",[4777,4778],{"type":138},{"type":53,"attrs":4779},{"color":3490},{"text":4781,"type":46,"marks":4782}," You can improve your score over the course of several months by more seriously reducing credit card balances and maintaining consistent on-time payments, which will result in an improved payment history.",[4783],{"type":53,"attrs":4784},{"color":3490},{"type":130,"content":4786},[4787],{"type":42,"content":4788},[4789,4795],{"text":4790,"type":46,"marks":4791},"Long-term improvements: ",[4792,4793],{"type":138},{"type":53,"attrs":4794},{"color":3490},{"text":4796,"type":46,"marks":4797},"To improve your score within a year to several years, pay off your bigger debts, wait for negative information to age off your credit score, and allow the length of your credit history to grow. ",[4798],{"type":53,"attrs":4799},{"color":3490},{"type":71,"attrs":4801,"content":4802},{"level":104},[4803],{"text":4804,"type":46,"marks":4805},"How is credit score calculated?",[4806],{"type":53,"attrs":4807},{"color":3490},{"type":42,"content":4809},[4810],{"text":4811,"type":46,"marks":4812},"Credit scores are calculated using complex algorithms designed to analyze an individual’s credit history. While the exact formulas used by credit scoring models are proprietary, here’s what we know about the key elements. As an example, here’s how FICO’s credit score calculations work:",[4813],{"type":53,"attrs":4814},{"color":3490},{"type":127,"content":4816},[4817],{"type":130,"content":4818},[4819],{"type":42,"content":4820},[4821,4827],{"text":4822,"type":46,"marks":4823},"Payment history (35%): ",[4824,4825],{"type":138},{"type":53,"attrs":4826},{"color":3490},{"text":4828,"type":46,"marks":4829},"The most significant factor is your payment history. This is a measure of how consistently you’ve paid your bills on time. Late payments, missed payments, defaults, bankruptcies, and other negative payment behaviors can significantly impact your score.",[4830],{"type":53,"attrs":4831},{"color":3490},{"type":127,"content":4833},[4834],{"type":130,"content":4835},[4836],{"type":42,"content":4837},[4838,4844,4849,4858],{"text":4839,"type":46,"marks":4840},"Credit utilization (30%): ",[4841,4842],{"type":138},{"type":53,"attrs":4843},{"color":3490},{"text":4845,"type":46,"marks":4846},"Your credit utilization rate measures the ratio of your credit card balances to your maximum credit limits. Lenders see lower utilization rates as positive, which is why you should try to ",[4847],{"type":53,"attrs":4848},{"color":3490},{"text":4850,"type":46,"marks":4851},"keep this ratio below 30%",[4852,4855,4857],{"type":150,"attrs":4853},{"href":4854,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://time.com/personal-finance/article/credit-utilization-ratio/",{"type":53,"attrs":4856},{"color":3490},{"type":160},{"text":4859,"type":46,"marks":4860}," when you can.",[4861],{"type":53,"attrs":4862},{"color":3490},{"type":127,"content":4864},[4865],{"type":130,"content":4866},[4867],{"type":42,"content":4868},[4869,4875],{"text":4870,"type":46,"marks":4871},"Length of credit history (15%): ",[4872,4873],{"type":138},{"type":53,"attrs":4874},{"color":3490},{"text":4876,"type":46,"marks":4877},"This is a measure of how long your credit accounts have been active. It considers both the average age of your accounts and the age of your oldest account. The longer your credit history, the stronger this portion of your score. ",[4878],{"type":53,"attrs":4879},{"color":3490},{"type":127,"content":4881},[4882],{"type":130,"content":4883},[4884],{"type":42,"content":4885},[4886,4892],{"text":4887,"type":46,"marks":4888},"Credit mix (10%): ",[4889,4890],{"type":138},{"type":53,"attrs":4891},{"color":3490},{"text":4893,"type":46,"marks":4894},"Credit scoring models assess the variety of credit accounts you have, including credit cards, installment loans, mortgages, and other types of credit. ",[4895],{"type":53,"attrs":4896},{"color":3490},{"type":127,"content":4898},[4899],{"type":130,"content":4900},[4901],{"type":42,"content":4902},[4903,4909,4914,4923],{"text":4904,"type":46,"marks":4905},"New credit (10%): ",[4906,4907],{"type":138},{"type":53,"attrs":4908},{"color":3490},{"text":4910,"type":46,"marks":4911},"Credit inquiries and newly opened credit accounts fall under this category. Opening multiple accounts in a short period can negatively affect your credit score. However, certain types of inquiries, like those related to ",[4912],{"type":53,"attrs":4913},{"color":3490},{"text":4915,"type":46,"marks":4916},"rate shopping",[4917,4920,4922],{"type":150,"attrs":4918},{"href":4919,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.badcredit.org/how-to/how-rate-shopping-affects-your-credit-scores/",{"type":53,"attrs":4921},{"color":3490},{"type":160},{"text":4924,"type":46,"marks":4925}," for a mortgage or auto loan, are treated differently. ",[4926],{"type":53,"attrs":4927},{"color":3490},{"type":71,"attrs":4929,"content":4930},{"level":104},[4931],{"text":4932,"type":46,"marks":4933},"How can I build credit if I have bad or no credit?",[4934],{"type":53,"attrs":4935},{"color":3490},{"type":42,"content":4937},[4938],{"text":4939,"type":46,"marks":4940},"Building credit when you have bad credit or no credit history can be challenging, but it’s possible with these strategic steps. ",[4941],{"type":53,"attrs":4942},{"color":3490},{"type":127,"content":4944},[4945,4960,4975,4990,5013,5028,5043,5072],{"type":130,"content":4946},[4947],{"type":42,"content":4948},[4949,4955],{"text":4950,"type":46,"marks":4951},"Get a secured credit card: ",[4952,4953],{"type":138},{"type":53,"attrs":4954},{"color":3490},{"text":4956,"type":46,"marks":4957},"These require a cash deposit. Responsible use establishes a positive credit history.",[4958],{"type":53,"attrs":4959},{"color":3490},{"type":130,"content":4961},[4962],{"type":42,"content":4963},[4964,4970],{"text":4965,"type":46,"marks":4966},"Become an authorized user: ",[4967,4968],{"type":138},{"type":53,"attrs":4969},{"color":3490},{"text":4971,"type":46,"marks":4972},"Ask someone with good credit if you can be an authorized user on their credit card account. Their positive history may reflect on your credit report. ",[4973],{"type":53,"attrs":4974},{"color":3490},{"type":130,"content":4976},[4977],{"type":42,"content":4978},[4979,4985],{"text":4980,"type":46,"marks":4981},"Apply for a retail store credit card: ",[4982,4983],{"type":138},{"type":53,"attrs":4984},{"color":3490},{"text":4986,"type":46,"marks":4987},"Obtain a new credit card with lenient approval terms. Make small purchases and pay the balance in full each month. ",[4988],{"type":53,"attrs":4989},{"color":3490},{"type":130,"content":4991},[4992],{"type":42,"content":4993},[4994,5002,5008],{"text":4995,"type":46,"marks":4996},"Take out a credit builder loan",[4997,4999,5000],{"type":150,"attrs":4998},{"href":4491,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":138},{"type":53,"attrs":5001},{"color":3490},{"text":5003,"type":46,"marks":5004},": ",[5005,5006],{"type":138},{"type":53,"attrs":5007},{"color":3490},{"text":5009,"type":46,"marks":5010},"These secured loans require an initial deposit, but lenders start reporting your responsible repayment behavior to credit bureaus right away. ",[5011],{"type":53,"attrs":5012},{"color":3490},{"type":130,"content":5014},[5015],{"type":42,"content":5016},[5017,5023],{"text":5018,"type":46,"marks":5019},"Sign up for rent reporting services: ",[5020,5021],{"type":138},{"type":53,"attrs":5022},{"color":3490},{"text":5024,"type":46,"marks":5025},"Some services report rent payments to credit bureaus, helping you build credit. ",[5026],{"type":53,"attrs":5027},{"color":3490},{"type":130,"content":5029},[5030],{"type":42,"content":5031},[5032,5038],{"text":5033,"type":46,"marks":5034},"Get a student credit card:",[5035,5036],{"type":138},{"type":53,"attrs":5037},{"color":3490},{"text":5039,"type":46,"marks":5040}," These are one of the best credit card options for students, as they come with student-specific perks and manageable credit limits.",[5041],{"type":53,"attrs":5042},{"color":3490},{"type":130,"content":5044},[5045],{"type":42,"content":5046},[5047,5053,5058,5067],{"text":5048,"type":46,"marks":5049},"Use a credit-boosting service: ",[5050,5051],{"type":138},{"type":53,"attrs":5052},{"color":3490},{"text":5054,"type":46,"marks":5055},"Services like ",[5056],{"type":53,"attrs":5057},{"color":3490},{"text":5059,"type":46,"marks":5060},"Experian Boost",[5061,5064,5066],{"type":150,"attrs":5062},{"href":5063,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.experian.com/consumer-products/score-boost.html?pc=sem_exp_google&cc=sem_exp_google_ad_1651407997_65972645920_379826966571_kwd-585063777506_e___k_Cj0KCQiAtaOtBhCwARIsAN_x-3JxBdllvyaXTtM6vhzDyr_SSZYf5X0qHzA6elCWxliFGNZ6eCd8ctYaAkAhEALw_wcB_k_&ref=brand&awsearchcpc=1&gad_source=1&gclid=Cj0KCQiAtaOtBhCwARIsAN_x-3JxBdllvyaXTtM6vhzDyr_SSZYf5X0qHzA6elCWxliFGNZ6eCd8ctYaAkAhEALw_wcB",{"type":53,"attrs":5065},{"color":3490},{"type":160},{"text":5068,"type":46,"marks":5069}," will broaden the scope of payments credit bureaus consider when calculating your score. These could include regular bills or subscription services as well as credit card and loan payments.",[5070],{"type":53,"attrs":5071},{"color":3490},{"type":130,"content":5073},[5074],{"type":42,"content":5075},[5076,5082,5087,5096,5101],{"text":5077,"type":46,"marks":5078},"Sign up for credit monitoring:",[5079,5080],{"type":138},{"type":53,"attrs":5081},{"color":3490},{"text":5083,"type":46,"marks":5084}," Borrowers can sign up for ",[5085],{"type":53,"attrs":5086},{"color":3490},{"text":5088,"type":46,"marks":5089},"credit monitoring services",[5090,5093,5095],{"type":150,"attrs":5091},{"href":5092,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.consumerfinance.gov/ask-cfpb/what-is-a-credit-monitoring-service-en-1365/",{"type":53,"attrs":5094},{"color":3490},{"type":160},{"text":5097,"type":46,"marks":5098},", which send out alerts whenever credit accounts are updated. This can help you keep better track of your credit over time.",[5099],{"type":53,"attrs":5100},{"color":3490},{"text":2714,"type":46,"marks":5102},[5103,5104],{"type":138},{"type":53,"attrs":5105},{"color":3490},{"type":71,"attrs":5107,"content":5108},{"level":73},[5109],{"text":5110,"type":46,"marks":5111},"Get financial products customized to your needs",[5112],{"type":53,"attrs":5113},{"color":3490},{"type":42,"content":5115},[5116],{"text":5117,"type":46,"marks":5118},"An excellent credit score can help you get approved for new lines of credit, qualify for better interest rates, and get closer to your personal finance goals. Some of the best ways to improve your score include lowering your credit utilization ratio or adding to your credit mix. ",[5119],{"type":53,"attrs":5120},{"color":3490},{"type":42,"content":5122},[5123,5128,5135,5140,5147,5152,5158,5166],{"text":5124,"type":46,"marks":5125},"If you’re looking to take out a new loan or apply for a new credit card with a higher credit limit, consider shopping through Navient Marketplace. With Navient Marketplace, you can compare lenders",[5126],{"type":53,"attrs":5127},{"color":3490},{"text":1907,"type":46,"marks":5129},[5130,5132,5133],{"type":49,"attrs":5131},{"class":1911},{"type":1911},{"type":53,"attrs":5134},{"color":3490},{"text":5136,"type":46,"marks":5137}," and credit card issuers",[5138],{"type":53,"attrs":5139},{"color":3490},{"text":1981,"type":46,"marks":5141},[5142,5144,5145],{"type":49,"attrs":5143},{"class":1911},{"type":1911},{"type":53,"attrs":5146},{"color":3490},{"text":5148,"type":46,"marks":5149}," for free all in one place. Just enter a few details about yourself and",[5150],{"type":53,"attrs":5151},{"color":3490},{"text":2501,"type":46,"marks":5153},[5154,5156],{"type":150,"attrs":5155},{"href":1976,"uuid":153,"anchor":153,"target":153,"linktype":155},{"type":53,"attrs":5157},{"color":3490},{"text":5159,"type":46,"marks":5160},"get personalized results from lenders in seconds.",[5161,5163,5165],{"type":150,"attrs":5162},{"href":1976,"uuid":153,"anchor":153,"target":153,"linktype":155},{"type":53,"attrs":5164},{"color":3490},{"type":160},{"text":205,"type":46,"marks":5167},[5168],{"type":53,"attrs":5169},{"color":3490},{"type":42,"content":5171},[5172],{"text":1405,"type":46,"marks":5173},[5174,5176],{"type":49,"attrs":5175},{"class":51},{"type":53,"attrs":5177},{"color":3490},{"type":42,"content":5179},[5180,5186],{"text":1907,"type":46,"marks":5181},[5182,5184],{"type":49,"attrs":5183},{"class":1911},{"type":53,"attrs":5185},{"color":3490},{"text":5187,"type":46,"marks":5188}," Navient customers are invited to consider personal loan offers through our partner MoneyLion. Navient has not shared your information with MoneyLion and is not involved in the personal loan application process in any manner.  All information is submitted directly to MoneyLion and any personal loan offers are made directly by participants in MoneyLion’s lending platform.  Engine by MoneyLion is the industry-leading embedded financial marketplace and independent subsidiary of MoneyLion Inc. (“MoneyLion”) (NYSE:ML). Checking your rate will not affect your credit score. Eligibility is not guaranteed and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions.",[5189,5191],{"type":49,"attrs":5190},{"class":51},{"type":53,"attrs":5192},{"color":3490},{"type":42,"content":5194},[5195],{"text":4245,"type":46,"marks":5196},[5197,5199],{"type":49,"attrs":5198},{"class":51},{"type":53,"attrs":5200},{"color":3490},{"type":42,"content":5202},[5203,5209],{"text":1981,"type":46,"marks":5204},[5205,5207],{"type":49,"attrs":5206},{"class":1911},{"type":53,"attrs":5208},{"color":3490},{"text":5210,"type":46,"marks":5211}," Navient has partnered with CardRatings for our credit card products. Navient and CardRatings may receive a commission from card issuers. Opinions. reviews, analyses & recommendations are Navient's alone, and have not been reviewed, endorsed or approved by any of these entities. ",[5212,5214],{"type":49,"attrs":5213},{"class":51},{"type":53,"attrs":5215},{"color":3490},"\u003C!--#storyblok#{\"name\": \"BlogText\", \"space\": \"157494\", \"uid\": \"67b1c1a7-fbb7-4c3c-a267-87dc959687fb\", \"id\": \"651798145\"}-->","https://www.marketplace.navient.com/blog/how-to-improve-credit-score/","January 25, 2024","\u003C!--#storyblok#{\"name\": \"NriBlogPost\", \"space\": \"157494\", \"uid\": \"39f3568e-f888-4c3e-816f-3647f7efec59\", \"id\": \"651798145\"}-->","how-to-improve-credit-score","navient_marketplace/blog/how-to-improve-credit-score",[],"a6f3c215-4f67-4646-92ec-c00c09579ae6","2024-01-25T08:57:00.000Z",[],{"name":5227,"created_at":5228,"published_at":5229,"updated_at":5230,"id":5231,"uuid":5232,"content":5233,"slug":6189,"full_slug":6190,"sort_by_date":153,"position":1418,"tag_list":6191,"is_startpage":29,"parent_id":1420,"meta_data":153,"group_id":6192,"first_published_at":5224,"release_id":153,"lang":1423,"path":6193,"alternates":6194,"default_full_slug":153,"translated_slugs":153},"9 Ways to Lower Debt-to-Income Ratio Fast","2025-04-07T18:30:00.642Z","2025-12-26T13:45:02.436Z","2025-12-26T13:45:02.470Z",651798144,"7380346d-c2f9-4ac6-89a3-c5300bf585a8",{"seo":5234,"_uid":20,"hero":5237,"author":31,"category":32,"featured":29,"imageAlt":18,"component":33,"blogContents":5243,"canonicalTag":6187,"publishedDate":5218,"_editable":6188},{"_uid":15,"title":5235,"plugin":17,"og_image":18,"og_title":18,"description":5236,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"9 Ways to Lower Debt-to-Income Ratio Fast | Navient Marketplace","Debt-to-income ratio (DTI) affects everything from credit score to loan approval. Here’s how to improve yours to get the best rates possible.",[5238],{"id":18,"_uid":23,"image":5239,"intro":5236,"classes":18,"_editable":5240,"blogTitle":5241,"component":27,"imageLink":5242,"blendImage":29,"backgroundColor":30},"//a.storyblok.com/f/110029/1600x1066/423b00f45a/how-to-lower-debt-to-income-ratio.png","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798144\"}-->","9 Ways to Lower Your Debt-to-Income Ratio Fast","/images/how-to-lower-debt-to-income-ratio.webp",[5244],{"_uid":36,"color":37,"richText":5245,"_editable":6186,"component":1412},{"type":39,"content":5246},[5247,5255,5262,5269,5276,5284,5291,5299,5306,5314,5321,5328,5347,5355,5362,5394,5414,5422,5429,5437,5444,5452,5493,5500,5529,5536,5592,5599,5646,5653,5660,5686,5716,5742,5750,5771,5778,5795,5812,5819,5836,5853,5860,5867,5875,5882,5903,5910,5918,5925,5932,5940,5959,5977,5984,5991,5999,6006,6013,6021,6028,6035,6043,6050,6070,6077,6084,6091,6126,6134,6148,6163,6178],{"type":42,"content":5248},[5249],{"text":45,"type":46,"marks":5250},[5251,5253],{"type":49,"attrs":5252},{"class":51},{"type":53,"attrs":5254},{"color":3490},{"type":42,"content":5256},[5257],{"text":5258,"type":46,"marks":5259},"Your debt-to-income ratio is an important measure of your financial health — and one that can determine whether or not you qualify for new credit cards or loans. It tells lenders whether you can handle debt responsibly. ",[5260],{"type":53,"attrs":5261},{"color":3490},{"type":42,"content":5263},[5264],{"text":5265,"type":46,"marks":5266},"It’s also an important component of your credit score. The lower your debt-to-income (DTI) ratio, the better your score. So, if you’re looking to refinance or apply for additional loans, you’ll need to check your DTI ratio first. ",[5267],{"type":53,"attrs":5268},{"color":3490},{"type":42,"content":5270},[5271],{"text":5272,"type":46,"marks":5273},"Here’s what you need to know about debt-to-income ratio – what it is, where to find it, and how to lower it fast. ",[5274],{"type":53,"attrs":5275},{"color":3490},{"type":71,"attrs":5277,"content":5278},{"level":73},[5279],{"text":5280,"type":46,"marks":5281},"What is debt-to-income ratio (DTI)?",[5282],{"type":53,"attrs":5283},{"color":3490},{"type":42,"content":5285},[5286],{"text":5287,"type":46,"marks":5288},"Your debt-to-income ratio is a financial metric that measures the percentage of your monthly income that goes towards paying debts. It’s calculated by dividing your total monthly debt payments by your gross monthly income and then multiplying the result by 100. For example, if your monthly income is $5,000 and your monthly debt payments amount to $1500, your debt-to-income ratio is 30% (1,500/5,000). ",[5289],{"type":53,"attrs":5290},{"color":3490},{"type":71,"attrs":5292,"content":5293},{"level":73},[5294],{"text":5295,"type":46,"marks":5296},"Why is DTI important?",[5297],{"type":53,"attrs":5298},{"color":3490},{"type":42,"content":5300},[5301],{"text":5302,"type":46,"marks":5303},"Debt-to-income ratio is important because it gives lenders an idea of your ability to manage debt and make monthly payments on time. A high debt-to-income ratio indicates that a significant portion of your income is already allocated towards debt obligations. This can limit your financial flexibility, affect your ability to qualify for new loans or credit, and impact your overall financial stability.",[5304],{"type":53,"attrs":5305},{"color":3490},{"type":71,"attrs":5307,"content":5308},{"level":73},[5309],{"text":5310,"type":46,"marks":5311},"What’s a good debt-to-income ratio?",[5312],{"type":53,"attrs":5313},{"color":3490},{"type":42,"content":5315},[5316],{"text":5317,"type":46,"marks":5318},"A high DTI suggests that you may be strapped for cash. If you’re using a high proportion of your income to pay off creditors, you won’t look like a good candidate for new credit. ",[5319],{"type":53,"attrs":5320},{"color":3490},{"type":42,"content":5322},[5323],{"text":5324,"type":46,"marks":5325},"In contrast, a low DTI makes you appear more creditworthy to lenders. That’s because a lower DTI ratio suggests that you have more disposable income available after meeting your debt obligations. It means you likely have the funds required to take on new lines of credit. ",[5326],{"type":53,"attrs":5327},{"color":3490},{"type":42,"content":5329},[5330,5335,5342],{"text":5331,"type":46,"marks":5332},"Achieving a lower DTI can also positively impact your ",[5333],{"type":53,"attrs":5334},{"color":3490},{"text":4427,"type":46,"marks":5336},[5337,5339,5341],{"type":150,"attrs":5338},{"href":4431,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":5340},{"color":3490},{"type":160},{"text":5343,"type":46,"marks":5344},", another important financial metric. That’s because paying off debts will reduce the proportion of debt you have compared to your total available credit. A good debt-to-income ratio is typically considered to be below 36%.",[5345],{"type":53,"attrs":5346},{"color":3490},{"type":71,"attrs":5348,"content":5349},{"level":104},[5350],{"text":5351,"type":46,"marks":5352},"Front-end versus back-end DTI",[5353],{"type":53,"attrs":5354},{"color":3490},{"type":42,"content":5356},[5357],{"text":5358,"type":46,"marks":5359},"Front-end DTI and back-end DTI ratios are two components used to assess your financial health and borrowing capacity. ",[5360],{"type":53,"attrs":5361},{"color":3490},{"type":127,"content":5363},[5364,5379],{"type":130,"content":5365},[5366],{"type":42,"content":5367},[5368,5374],{"text":5369,"type":46,"marks":5370},"The front-end ratio",[5371,5372],{"type":138},{"type":53,"attrs":5373},{"color":3490},{"text":5375,"type":46,"marks":5376}," (also known as the housing ratio) focuses specifically on housing-related expenses. It includes the percentage of your income allocated to rent or monthly mortgage payments, property taxes, homeowners insurance, and, if applicable, homeowners association (HOA) fees.",[5377],{"type":53,"attrs":5378},{"color":3490},{"type":130,"content":5380},[5381],{"type":42,"content":5382},[5383,5389],{"text":5384,"type":46,"marks":5385},"Back-end DTI ",[5386,5387],{"type":138},{"type":53,"attrs":5388},{"color":3490},{"text":5390,"type":46,"marks":5391},"(also known as total DTI), on the other hand, considers all monthly debt obligations, including housing-related expenses like mortgage loans and rent payments. Car loans or auto loans, credit card balances, student loans, and any other outstanding debts are considered part of back-end DTI ",[5392],{"type":53,"attrs":5393},{"color":3490},{"type":42,"content":5395},[5396,5401,5410],{"text":5397,"type":46,"marks":5398},"Lenders often use both front-end and back-end ratios when evaluating borrowers’ credit history. Many mortgage lenders look for a back-end DTI that’s 28% or lower for conventional home loans and 43% or lower for ",[5399],{"type":53,"attrs":5400},{"color":3490},{"text":5402,"type":46,"marks":5403},"FHA loans",[5404,5407,5409],{"type":150,"attrs":5405},{"href":5406,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.hud.gov/buying/loans",{"type":53,"attrs":5408},{"color":3490},{"type":160},{"text":205,"type":46,"marks":5411},[5412],{"type":53,"attrs":5413},{"color":3490},{"type":71,"attrs":5415,"content":5416},{"level":73},[5417],{"text":5418,"type":46,"marks":5419},"How to lower your debt-to-income ratio",[5420],{"type":53,"attrs":5421},{"color":3490},{"type":42,"content":5423},[5424],{"text":5425,"type":46,"marks":5426},"Here are some practical approaches to reduce your DTI ratio and improve your credit score.",[5427],{"type":53,"attrs":5428},{"color":3490},{"type":71,"attrs":5430,"content":5431},{"level":104},[5432],{"text":5433,"type":46,"marks":5434},"1. Evaluate your debt",[5435],{"type":53,"attrs":5436},{"color":3490},{"type":42,"content":5438},[5439],{"text":5440,"type":46,"marks":5441},"First, take a closer look at the total amount of debt you have. Then, for each debt, write down the interest rate, minimum payment, type of loan, and how much you still owe. This way, you have a solid baseline to start from. ",[5442],{"type":53,"attrs":5443},{"color":3490},{"type":71,"attrs":5445,"content":5446},{"level":104},[5447],{"text":5448,"type":46,"marks":5449},"2. Try a budgeting model",[5450],{"type":53,"attrs":5451},{"color":3490},{"type":42,"content":5453},[5454,5459,5468,5473,5482,5488],{"text":5455,"type":46,"marks":5456},"The goal of ",[5457],{"type":53,"attrs":5458},{"color":3490},{"text":5460,"type":46,"marks":5461},"budgeting",[5462,5465,5467],{"type":150,"attrs":5463},{"href":5464,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.navient.com/blog/how-to-budget-when-youre-broke/",{"type":53,"attrs":5466},{"color":3490},{"type":160},{"text":5469,"type":46,"marks":5470}," is not to restrict, but to empower. It’s about directing your money consciously toward your ",[5471],{"type":53,"attrs":5472},{"color":3490},{"text":5474,"type":46,"marks":5475},"personal finance",[5476,5479,5481],{"type":150,"attrs":5477},{"href":5478,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.navient.com/blog/what-is-personal-finance/",{"type":53,"attrs":5480},{"color":3490},{"type":160},{"text":1907,"type":46,"marks":5483},[5484,5486],{"type":49,"attrs":5485},{"class":1911},{"type":53,"attrs":5487},{"color":3490},{"text":5489,"type":46,"marks":5490}," goals, whether that’s tackling debt, building savings, or putting together the down payment for a house. ",[5491],{"type":53,"attrs":5492},{"color":3490},{"type":42,"content":5494},[5495],{"text":5496,"type":46,"marks":5497},"Start by writing down your regular sources of income, like… ",[5498],{"type":53,"attrs":5499},{"color":3490},{"type":127,"content":5501},[5502,5511,5520],{"type":130,"content":5503},[5504],{"type":42,"content":5505},[5506],{"text":5507,"type":46,"marks":5508},"salary",[5509],{"type":53,"attrs":5510},{"color":3490},{"type":130,"content":5512},[5513],{"type":42,"content":5514},[5515],{"text":5516,"type":46,"marks":5517},"passive income",[5518],{"type":53,"attrs":5519},{"color":3490},{"type":130,"content":5521},[5522],{"type":42,"content":5523},[5524],{"text":5525,"type":46,"marks":5526},"side hustles",[5527],{"type":53,"attrs":5528},{"color":3490},{"type":42,"content":5530},[5531],{"text":5532,"type":46,"marks":5533},"Then, list your fixed monthly expenses, like… ",[5534],{"type":53,"attrs":5535},{"color":3490},{"type":127,"content":5537},[5538,5547,5556,5565,5574,5583],{"type":130,"content":5539},[5540],{"type":42,"content":5541},[5542],{"text":5543,"type":46,"marks":5544},"rent or mortgage payment",[5545],{"type":53,"attrs":5546},{"color":3490},{"type":130,"content":5548},[5549],{"type":42,"content":5550},[5551],{"text":5552,"type":46,"marks":5553},"utilities",[5554],{"type":53,"attrs":5555},{"color":3490},{"type":130,"content":5557},[5558],{"type":42,"content":5559},[5560],{"text":5561,"type":46,"marks":5562},"groceries",[5563],{"type":53,"attrs":5564},{"color":3490},{"type":130,"content":5566},[5567],{"type":42,"content":5568},[5569],{"text":5570,"type":46,"marks":5571},"alimony",[5572],{"type":53,"attrs":5573},{"color":3490},{"type":130,"content":5575},[5576],{"type":42,"content":5577},[5578],{"text":5579,"type":46,"marks":5580},"child support",[5581],{"type":53,"attrs":5582},{"color":3490},{"type":130,"content":5584},[5585],{"type":42,"content":5586},[5587],{"text":5588,"type":46,"marks":5589},"transportation expenses ",[5590],{"type":53,"attrs":5591},{"color":3490},{"type":42,"content":5593},[5594],{"text":5595,"type":46,"marks":5596},"Finally, add in variable expenses like… ",[5597],{"type":53,"attrs":5598},{"color":3490},{"type":127,"content":5600},[5601,5610,5619,5628,5637],{"type":130,"content":5602},[5603],{"type":42,"content":5604},[5605],{"text":5606,"type":46,"marks":5607},"dining out",[5608],{"type":53,"attrs":5609},{"color":3490},{"type":130,"content":5611},[5612],{"type":42,"content":5613},[5614],{"text":5615,"type":46,"marks":5616},"rideshares  ",[5617],{"type":53,"attrs":5618},{"color":3490},{"type":130,"content":5620},[5621],{"type":42,"content":5622},[5623],{"text":5624,"type":46,"marks":5625},"streaming platforms ",[5626],{"type":53,"attrs":5627},{"color":3490},{"type":130,"content":5629},[5630],{"type":42,"content":5631},[5632],{"text":5633,"type":46,"marks":5634},"subscription box services  ",[5635],{"type":53,"attrs":5636},{"color":3490},{"type":130,"content":5638},[5639],{"type":42,"content":5640},[5641],{"text":5642,"type":46,"marks":5643},"paid apps",[5644],{"type":53,"attrs":5645},{"color":3490},{"type":42,"content":5647},[5648],{"text":5649,"type":46,"marks":5650},"Next, turn a spotlight on where your money is going. Are there areas where you can trim expenses? Maybe it’s finding a cheaper phone plan, brewing your coffee at home, or cutting subscriptions. These steps can free up cash, which you can redirect toward debt repayment. ",[5651],{"type":53,"attrs":5652},{"color":3490},{"type":42,"content":5654},[5655],{"text":5656,"type":46,"marks":5657},"Remember there is no one-size-fits-all approach to budgeting, so it’s worth exploring different models to see what works for you. Some popular budgeting methods include:",[5658],{"type":53,"attrs":5659},{"color":3490},{"type":127,"content":5661},[5662],{"type":130,"content":5663},[5664],{"type":42,"content":5665},[5666,5672,5681],{"text":5667,"type":46,"marks":5668},"50/30/20: ",[5669,5670],{"type":138},{"type":53,"attrs":5671},{"color":3490},{"text":5673,"type":46,"marks":5674},"This model",[5675,5678,5680],{"type":150,"attrs":5676},{"href":5677,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.khanacademy.org/college-careers-more/financial-literacy/xa6995ea67a8e9fdd:budgeting-and-saving/xa6995ea67a8e9fdd:budgeting/v/budgeting-and-the-503020-rule",{"type":53,"attrs":5679},{"color":3490},{"type":160},{"text":5682,"type":46,"marks":5683}," suggests allocating 50% of your income to needs, 30% to wants, and 20% to savings and debt repayment. ",[5684],{"type":53,"attrs":5685},{"color":3490},{"type":127,"content":5687},[5688],{"type":130,"content":5689},[5690],{"type":42,"content":5691},[5692,5698,5702,5711],{"text":5693,"type":46,"marks":5694},"Zero-based budgeting:",[5695,5696],{"type":138},{"type":53,"attrs":5697},{"color":3490},{"text":2501,"type":46,"marks":5699},[5700],{"type":53,"attrs":5701},{"color":3490},{"text":5703,"type":46,"marks":5704},"Zero-based budgeting",[5705,5708,5710],{"type":150,"attrs":5706},{"href":5707,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.ramseysolutions.com/budgeting/how-to-make-a-zero-based-budget",{"type":53,"attrs":5709},{"color":3490},{"type":160},{"text":5712,"type":46,"marks":5713}," assigns every dollar a specific purpose. Allocate your income to various categories, ensuring that your budget balances to zero. ",[5714],{"type":53,"attrs":5715},{"color":3490},{"type":127,"content":5717},[5718],{"type":130,"content":5719},[5720],{"type":42,"content":5721},[5722,5728,5737],{"text":5723,"type":46,"marks":5724},"The envelope system: ",[5725,5726],{"type":138},{"type":53,"attrs":5727},{"color":3490},{"text":5729,"type":46,"marks":5730},"This system",[5731,5734,5736],{"type":150,"attrs":5732},{"href":5733,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.debt.org/advice/dave-ramseys-envelope-system-explained/",{"type":53,"attrs":5735},{"color":3490},{"type":160},{"text":5738,"type":46,"marks":5739}," involves designating spending categories and using physical envelopes to manage cash flow. This approach can be effective for those who prefer a tangible way to track their spending. ",[5740],{"type":53,"attrs":5741},{"color":3490},{"type":71,"attrs":5743,"content":5744},{"level":104},[5745],{"text":5746,"type":46,"marks":5747},"3. Prioritize debt payments",[5748],{"type":53,"attrs":5749},{"color":3490},{"type":42,"content":5751},[5752,5757,5766],{"text":5753,"type":46,"marks":5754},"If you want to lower your debt-to-income ratio, the most obvious way to start is by ",[5755],{"type":53,"attrs":5756},{"color":3490},{"text":5758,"type":46,"marks":5759},"paying off your debt",[5760,5763,5765],{"type":150,"attrs":5761},{"href":5762,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.navient.com/blog/how-to-pay-off-credit-card-debt-fast/",{"type":53,"attrs":5764},{"color":3490},{"type":160},{"text":5767,"type":46,"marks":5768},". Now that you’ve looked over your budget and found ways to cut expenses, consider which debt to allocate that extra income to. ",[5769],{"type":53,"attrs":5770},{"color":3490},{"type":42,"content":5772},[5773],{"text":5774,"type":46,"marks":5775},"Two popular debt repayment strategies are the snowball method and the avalanche method. Both methods focus on making minimum payments on all your debts except for one, which you put all your extra income toward to pay off as quickly as possible. ",[5776],{"type":53,"attrs":5777},{"color":3490},{"type":127,"content":5779},[5780],{"type":130,"content":5781},[5782],{"type":42,"content":5783},[5784,5790],{"text":5785,"type":46,"marks":5786},"With the snowball method,",[5787,5788],{"type":138},{"type":53,"attrs":5789},{"color":3490},{"text":5791,"type":46,"marks":5792}," you pay off the smallest debt first and move up the ladder to the next smallest, then the next, and the next, until all your debt is gone. The snowball method does not take into account interest rate –– just the balance of each debt. ",[5793],{"type":53,"attrs":5794},{"color":3490},{"type":127,"content":5796},[5797],{"type":130,"content":5798},[5799],{"type":42,"content":5800},[5801,5807],{"text":5802,"type":46,"marks":5803},"With the debt avalanche method",[5804,5805],{"type":138},{"type":53,"attrs":5806},{"color":3490},{"text":5808,"type":46,"marks":5809},", you focus on paying off the debt with the highest interest rate first. Once that’s paid off, you move to the next highest interest rate, then the next, and the next, until all your debts are paid off. The debt avalanche method focuses only on interest rate, not balance. ",[5810],{"type":53,"attrs":5811},{"color":3490},{"type":42,"content":5813},[5814],{"text":5815,"type":46,"marks":5816},"The method you choose is very much dependent the type of person you are: ",[5817],{"type":53,"attrs":5818},{"color":3490},{"type":127,"content":5820},[5821],{"type":130,"content":5822},[5823],{"type":42,"content":5824},[5825,5831],{"text":5826,"type":46,"marks":5827},"The avalanche method",[5828,5829],{"type":138},{"type":53,"attrs":5830},{"color":3490},{"text":5832,"type":46,"marks":5833}," is ideal for self-motivated people who want to save the most money possible, since this method will result in paying off the highest-interest debt which will cost more in the long run. ",[5834],{"type":53,"attrs":5835},{"color":3490},{"type":127,"content":5837},[5838],{"type":130,"content":5839},[5840],{"type":42,"content":5841},[5842,5848],{"text":5843,"type":46,"marks":5844},"The debt snowball method",[5845,5846],{"type":138},{"type":53,"attrs":5847},{"color":3490},{"text":5849,"type":46,"marks":5850}," is valuable for people who prefer the psychological benefit of quick wins. If you’re able to pay off a small credit card debt, for example, it can give you the motivation you need to move on to say, a car loan or a personal loan payment, and continue until all your debts are paid off. ",[5851],{"type":53,"attrs":5852},{"color":3490},{"type":42,"content":5854},[5855],{"text":5856,"type":46,"marks":5857},"The debt avalanche method will save you the most money, but it can also be very difficult to stick with (if your loan with the largest interest rate has a large balance, it could be years before you pay off your first debt). ",[5858],{"type":53,"attrs":5859},{"color":3490},{"type":42,"content":5861},[5862],{"text":5863,"type":46,"marks":5864},"The debt snowball method, on the other hand, won’t save you as much money on interest in the long run, but it’s much easier to stick to because of its emphasis on psychological quick wins. ",[5865],{"type":53,"attrs":5866},{"color":3490},{"type":71,"attrs":5868,"content":5869},{"level":104},[5870],{"text":5871,"type":46,"marks":5872},"4. Boost your income",[5873],{"type":53,"attrs":5874},{"color":3490},{"type":42,"content":5876},[5877],{"text":5878,"type":46,"marks":5879},"It’s great to request a promotion or secure a new job. However, that’s not always possible. Consider taking on a side gig, renting out equipment you already own, or selling crafts on Etsy. ",[5880],{"type":53,"attrs":5881},{"color":3490},{"type":42,"content":5883},[5884,5889,5898],{"text":5885,"type":46,"marks":5886},"Remember that the income considered for DTI is typically ",[5887],{"type":53,"attrs":5888},{"color":3490},{"text":5890,"type":46,"marks":5891},"gross income, not net income",[5892,5895,5897],{"type":150,"attrs":5893},{"href":5894,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.experian.com/blogs/ask-experian/gross-vs-net-income/",{"type":53,"attrs":5896},{"color":3490},{"type":160},{"text":5899,"type":46,"marks":5900},". Making withdrawals from investment accounts may provide a temporary income boost — and in turn, a possible credit score boost. ",[5901],{"type":53,"attrs":5902},{"color":3490},{"type":42,"content":5904},[5905],{"text":5906,"type":46,"marks":5907},"Additionally, taking fewer deductions on your taxes might increase your gross income, positively influencing your DTI ratio. However, these can be tricky decisions to make. Ensure they align with your overall financial well-being and goals before moving forward. ",[5908],{"type":53,"attrs":5909},{"color":3490},{"type":71,"attrs":5911,"content":5912},{"level":104},[5913],{"text":5914,"type":46,"marks":5915},"5.Negotiate with creditors",[5916],{"type":53,"attrs":5917},{"color":3490},{"type":42,"content":5919},[5920],{"text":5921,"type":46,"marks":5922},"Many creditors are willing to negotiate interest rates or lower payments if you’re struggling to pay your debts. This approach is particularly effective for medical bills, as healthcare providers often recognize how challenging unexpected medical expenses can be.",[5923],{"type":53,"attrs":5924},{"color":3490},{"type":42,"content":5926},[5927],{"text":5928,"type":46,"marks":5929},"If you’re facing financial hardship, call your creditor and be transparent about your situation. Sharing your specific circumstances may lead to more personalized solutions. ",[5930],{"type":53,"attrs":5931},{"color":3490},{"type":71,"attrs":5933,"content":5934},{"level":104},[5935],{"text":5936,"type":46,"marks":5937},"6. Consider refinancing ",[5938],{"type":53,"attrs":5939},{"color":3490},{"type":42,"content":5941},[5942,5947,5954],{"text":5943,"type":46,"marks":5944},"If you have multiple high-interest debts, consider refinancing",[5945],{"type":53,"attrs":5946},{"color":3490},{"text":1907,"type":46,"marks":5948},[5949,5951,5952],{"type":49,"attrs":5950},{"class":1911},{"type":1911},{"type":53,"attrs":5953},{"color":3490},{"text":5955,"type":46,"marks":5956},". With refinancing, a lender pays off your loans and issues you a single new loan in their place. ",[5957],{"type":53,"attrs":5958},{"color":3490},{"type":42,"content":5960},[5961,5966,5973],{"text":5962,"type":46,"marks":5963},"This new loan will have a new interest rate, new terms, etc, and if you’re in a better financial situation than you were when you took out your original loans, you may be eligible for a lower interest rate, which could lower your monthly payment and/or save you a significant amount in interest over the life of the loan",[5964],{"type":53,"attrs":5965},{"color":3490},{"text":1981,"type":46,"marks":5967},[5968,5970,5971],{"type":49,"attrs":5969},{"class":1911},{"type":1911},{"type":53,"attrs":5972},{"color":3490},{"text":1338,"type":46,"marks":5974},[5975],{"type":53,"attrs":5976},{"color":3490},{"type":42,"content":5978},[5979],{"text":5980,"type":46,"marks":5981},"When you refinance, you’ll also have the option to negotiate new terms, like a longer repayment term, which can lower your monthly payment and in turn your DTI.",[5982],{"type":53,"attrs":5983},{"color":3490},{"type":42,"content":5985},[5986],{"text":5987,"type":46,"marks":5988},"Keep in mind, if you extend your repayment term, you will most likely spend more in interest over the life of the loan. However, this may be worth it to you if it lowers your DTI to a range that improves your eligibility for the line of credit you’re seeking. ",[5989],{"type":53,"attrs":5990},{"color":3490},{"type":71,"attrs":5992,"content":5993},{"level":104},[5994],{"text":5995,"type":46,"marks":5996},"7. Avoid taking on new debt",[5997],{"type":53,"attrs":5998},{"color":3490},{"type":42,"content":6000},[6001],{"text":6002,"type":46,"marks":6003},"Successfully paying off current debt can sometimes create a false sense of financial freedom. It’s important to view this achievement as a milestone in your journey rather than an invitation to revert to old spending habits. Maintaining discipline is key. ",[6004],{"type":53,"attrs":6005},{"color":3490},{"type":42,"content":6007},[6008],{"text":6009,"type":46,"marks":6010},"Recognize potential triggers or temptations that might lead you to incur new debt. Whether it’s the allure of a sale, peer pressure, or the desire for instant gratification, understanding these factors empowers you to make mindful decisions and resist unnecessary spending. ",[6011],{"type":53,"attrs":6012},{"color":3490},{"type":71,"attrs":6014,"content":6015},{"level":104},[6016],{"text":6017,"type":46,"marks":6018},"8. Build an emergency fund",[6019],{"type":53,"attrs":6020},{"color":3490},{"type":42,"content":6022},[6023],{"text":6024,"type":46,"marks":6025},"An emergency fund provides a financial safety net. It’s a cushion against unexpected expenses that might otherwise push you toward relying on credit cards or loans. An emergency fund can help you weather unforeseen challenges without accumulating additional debt. ",[6026],{"type":53,"attrs":6027},{"color":3490},{"type":42,"content":6029},[6030],{"text":6031,"type":46,"marks":6032},"Financial experts often recommend saving three to six months’ worth of living expenses as your emergency fund. This can provide a solid foundation to cover essential costs in case of job loss, medical emergencies, or other unexpected events. Adjustments may be necessary based on factors such as income stability, the nature of your expenses, and personal risk tolerance. ",[6033],{"type":53,"attrs":6034},{"color":3490},{"type":71,"attrs":6036,"content":6037},{"level":104},[6038],{"text":6039,"type":46,"marks":6040},"9. Use windfalls wisely",[6041],{"type":53,"attrs":6042},{"color":3490},{"type":42,"content":6044},[6045],{"text":6046,"type":46,"marks":6047},"Windfalls refer to unexpected or sudden financial gains that come your way. These can include bonuses, tax refunds, family inheritance, work-related incentives, or even lottery winnings. ",[6048],{"type":53,"attrs":6049},{"color":3490},{"type":42,"content":6051},[6052,6057,6066],{"text":6053,"type":46,"marks":6054},"When you receive a windfall, resist the temptation to splurge on non-essential items. Instead, use the cash to reduce existing debts. This could involve paying down your mortgage, making additional credit card payments, or settling outstanding ",[6055],{"type":53,"attrs":6056},{"color":3490},{"text":6058,"type":46,"marks":6059},"personal loans",[6060,6063,6065],{"type":150,"attrs":6061},{"href":6062,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.navient.com/blog/pros-and-cons-of-personal-loans/",{"type":53,"attrs":6064},{"color":3490},{"type":160},{"text":1338,"type":46,"marks":6067},[6068],{"type":53,"attrs":6069},{"color":3490},{"type":71,"attrs":6071,"content":6072},{"level":73},[6073],{"text":5110,"type":46,"marks":6074},[6075],{"type":53,"attrs":6076},{"color":3490},{"type":42,"content":6078},[6079],{"text":6080,"type":46,"marks":6081},"A higher DTI is a sign of financial instability. A lower DTI ratio, on the other hand, generally signals a healthy credit report. Low DTI is critical for qualifying for new credit cards and loans. ",[6082],{"type":53,"attrs":6083},{"color":3490},{"type":42,"content":6085},[6086],{"text":6087,"type":46,"marks":6088},"Fortunately, different lenders assess DTI differently. If you’re looking to refinance, take out a new personal loan, or secure a balance transfer or debt consolidation loan, be sure to compare lender requirements before you apply. ",[6089],{"type":53,"attrs":6090},{"color":3490},{"type":42,"content":6092},[6093,6098,6103,6108,6114,6122],{"text":6094,"type":46,"marks":6095},"One of the best ways to do that is through an online marketplace like Navient Marketplace. Navient Marketplace lets you compare dozens of lenders",[6096],{"type":53,"attrs":6097},{"color":3490},{"text":4127,"type":46,"marks":6099},[6100,6101],{"type":1911},{"type":53,"attrs":6102},{"color":3490},{"text":6104,"type":46,"marks":6105}," for free, all in one place. Just enter a few details about yourself and",[6106],{"type":53,"attrs":6107},{"color":3490},{"text":2501,"type":46,"marks":6109},[6110,6112],{"type":150,"attrs":6111},{"href":1976,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":6113},{"color":3490},{"text":6115,"type":46,"marks":6116},"get personalized results in seconds",[6117,6119,6121],{"type":150,"attrs":6118},{"href":1976,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":6120},{"color":3490},{"type":160},{"text":1338,"type":46,"marks":6123},[6124],{"type":53,"attrs":6125},{"color":3490},{"type":42,"content":6127},[6128],{"text":1405,"type":46,"marks":6129},[6130,6132],{"type":49,"attrs":6131},{"class":51},{"type":53,"attrs":6133},{"color":3490},{"type":42,"content":6135},[6136,6142],{"text":1907,"type":46,"marks":6137},[6138,6140],{"type":49,"attrs":6139},{"class":1911},{"type":53,"attrs":6141},{"color":3490},{"text":2009,"type":46,"marks":6143},[6144,6146],{"type":49,"attrs":6145},{"class":51},{"type":53,"attrs":6147},{"color":3490},{"type":42,"content":6149},[6150,6156],{"text":1981,"type":46,"marks":6151},[6152,6154],{"type":49,"attrs":6153},{"class":1911},{"type":53,"attrs":6155},{"color":3490},{"text":6157,"type":46,"marks":6158}," Choosing to refinance to a longer term may lower your monthly payment, but increase the amount of interest you may pay. Choosing to refinance to a shorter term may increase your monthly payment, but lower the amount of interest you may pay. Review your loan documentation for the total cost of your refinanced loan.",[6159,6161],{"type":49,"attrs":6160},{"class":51},{"type":53,"attrs":6162},{"color":3490},{"type":42,"content":6164},[6165,6171],{"text":4127,"type":46,"marks":6166},[6167,6169],{"type":49,"attrs":6168},{"class":1911},{"type":53,"attrs":6170},{"color":3490},{"text":6172,"type":46,"marks":6173}," Navient customers are invited to consider personal loan offers through our partner MoneyLion. Navient has not shared your information with MoneyLion and is not involved in the personal loan application process in any manner.  All information is submitted directly to MoneyLion and any personal loan offers are made directly by participants in MoneyLion’s lending platform. Engine by MoneyLion is the industry-leading embedded financial marketplace and independent subsidiary of MoneyLion Inc. (“MoneyLion”) (NYSE:ML). Checking your rate will not affect your credit score. Eligibility is not guaranteed and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions.",[6174,6176],{"type":49,"attrs":6175},{"class":51},{"type":53,"attrs":6177},{"color":3490},{"type":42,"content":6179},[6180],{"text":4245,"type":46,"marks":6181},[6182,6184],{"type":49,"attrs":6183},{"class":51},{"type":53,"attrs":6185},{"color":3490},"\u003C!--#storyblok#{\"name\": \"BlogText\", \"space\": \"157494\", \"uid\": \"67b1c1a7-fbb7-4c3c-a267-87dc959687fb\", \"id\": \"651798144\"}-->","https://www.marketplace.navient.com/blog/how-to-lower-debt-to-income-ratio/","\u003C!--#storyblok#{\"name\": \"NriBlogPost\", \"space\": \"157494\", \"uid\": \"39f3568e-f888-4c3e-816f-3647f7efec59\", \"id\": \"651798144\"}-->","how-to-lower-debt-to-income-ratio","navient_marketplace/blog/how-to-lower-debt-to-income-ratio",[],"9ba191e6-11dd-4835-9fc7-929bbadcdef3","/how-to-lower-debt-to-income-ratio",[],{"name":6196,"created_at":6197,"published_at":6198,"updated_at":6199,"id":6200,"uuid":6201,"content":6202,"slug":7178,"full_slug":7179,"sort_by_date":153,"position":1418,"tag_list":7180,"is_startpage":29,"parent_id":1420,"meta_data":153,"group_id":7181,"first_published_at":7182,"release_id":153,"lang":1423,"path":153,"alternates":7183,"default_full_slug":153,"translated_slugs":153},"The 9 Best Ways to Use Your Tax Refund","2025-04-07T18:29:56.839Z","2025-12-26T13:45:11.167Z","2025-12-26T13:45:11.199Z",651798142,"6a0b0a6f-a3e0-4c49-9a76-528ab36e8bf2",{"seo":6203,"_uid":20,"hero":6206,"author":31,"category":32,"featured":29,"imageAlt":18,"component":33,"blogContents":6211,"canonicalTag":7175,"publishedDate":7176,"_editable":7177},{"_uid":15,"title":6204,"plugin":17,"og_image":18,"og_title":18,"description":6205,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"The 9 Best Ways to Use Your Tax Refund | Navient Marketplace","Want to make the most of your tax refund this year? Here are 9 great ways (including ones that can make you money) to put it to use.",[6207],{"id":18,"_uid":23,"image":6208,"intro":6205,"classes":18,"_editable":6209,"blogTitle":6196,"component":27,"imageLink":6210,"blendImage":29,"backgroundColor":30},"//a.storyblok.com/f/110029/5568x3712/a61f8a40cc/best-way-to-use-tax-refund.png","\u003C!--#storyblok#{\"name\": \"NriBlogHero\", \"space\": \"157494\", \"uid\": \"ee81b4ff-6c03-4123-98ae-73405dea4592\", \"id\": \"651798142\"}-->","/images/best-way-to-use-tax-refund.webp",[6212],{"_uid":36,"color":37,"richText":6213,"_editable":7174,"component":1412},{"type":39,"content":6214},[6215,6223,6230,6238,6259,6266,6286,6319,6340,6359,6367,6374,6381,6388,6471,6479,6513,6534,6541,6549,6556,6563,6580,6597,6614,6631,6648,6665,6673,6701,6708,6725,6742,6759,6776,6793,6810,6827,6844,6861,6878,6895,6902,6910,6917,6924,6932,6953,6970,6987,7004,7021,7038,7055,7063,7070,7077,7084,7092,7099,7107,7114,7139,7148,7157,7166],{"type":42,"content":6216},[6217],{"text":45,"type":46,"marks":6218},[6219,6221],{"type":49,"attrs":6220},{"class":51},{"type":53,"attrs":6222},{"color":55},{"type":42,"content":6224},[6225],{"text":6226,"type":46,"marks":6227},"If you’ve found yourself with a little extra cash courtesy of a tax refund, congratulations on the financial boost! Now, before you turn your living room into a gaming hub or book the next flight to Mexico, let’s talk about some smart and satisfying ways to put that refund to good use. From treating yourself to a guilt-free splurge to making those dollars work for you, we’ve got the lowdown on the nine best ways to ride the tax refund wave. ",[6228],{"type":53,"attrs":6229},{"color":55},{"type":71,"attrs":6231,"content":6232},{"level":73},[6233],{"text":6234,"type":46,"marks":6235},"1. Pay down debt  ",[6236],{"type":53,"attrs":6237},{"color":55},{"type":42,"content":6239},[6240,6245,6254],{"text":6241,"type":46,"marks":6242},"Last year, the IRS disbursed over $345 billion in tax refunds, and the ",[6243],{"type":53,"attrs":6244},{"color":55},{"text":6246,"type":46,"marks":6247},"average refund was $2,753",[6248,6251,6253],{"type":150,"attrs":6249},{"href":6250,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://time.com/personal-finance/article/average-tax-refund/",{"type":53,"attrs":6252},{"color":158},{"type":160},{"text":6255,"type":46,"marks":6256},". That’s not a small amount! ",[6257],{"type":53,"attrs":6258},{"color":55},{"type":42,"content":6260},[6261],{"text":6262,"type":46,"marks":6263},"When it comes to using this windfall wisely, one of the most effective strategies is to pay down existing debt. This financial move not only provides immediate relief but also sets the stage for a more secure financial future. ",[6264],{"type":53,"attrs":6265},{"color":55},{"type":42,"content":6267},[6268,6273,6281],{"text":6269,"type":46,"marks":6270},"Begin by taking stock of all your outstanding debts, including credit cards, loans, and any other liabilities. Next, categorize these debts based on interest rates, outstanding balances, and repayment terms. When it comes to ",[6271],{"type":53,"attrs":6272},{"color":55},{"text":6274,"type":46,"marks":6275},"paying off debt",[6276,6278,6280],{"type":150,"attrs":6277},{"href":5762,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":6279},{"color":158},{"type":160},{"text":6282,"type":46,"marks":6283},", you have two repayment strategies to choose from: ",[6284],{"type":53,"attrs":6285},{"color":55},{"type":293,"attrs":6287,"content":6288},{"order":295},[6289,6304],{"type":130,"content":6290},[6291],{"type":42,"content":6292},[6293,6299],{"text":6294,"type":46,"marks":6295},"The Avalanche Method: ",[6296,6297],{"type":138},{"type":53,"attrs":6298},{"color":55},{"text":6300,"type":46,"marks":6301},"The Avalanche Method focuses on paying off debts with the highest interest rates, such as credit card debt, first. It involves making minimum payments on all debts while allocating extra funds to the debt with the highest interest rate. Once the highest-interest debt is fully paid, the strategy continues with the next highest-interest debt. This approach minimizes the total interest paid over time. ",[6302],{"type":53,"attrs":6303},{"color":55},{"type":130,"content":6305},[6306],{"type":42,"content":6307},[6308,6314],{"text":6309,"type":46,"marks":6310},"The Snowball Method: ",[6311,6312],{"type":138},{"type":53,"attrs":6313},{"color":55},{"text":6315,"type":46,"marks":6316},"The Snowball Method, on the other hand, prioritizes paying off the smallest debts first. It involves making minimum payments on all the debts while directing any extra funds to the smallest debt. Once the smallest debt is paid off, the freed-up funds are then applied to the next smallest debt, creating a snowball effect. This method is more focused on the psychological boost of quick wins by eliminating smaller debts early in the process. ",[6317],{"type":53,"attrs":6318},{"color":55},{"type":42,"content":6320},[6321,6326,6335],{"text":6322,"type":46,"marks":6323},"You can use your federal income tax refund to make significant ",[6324],{"type":53,"attrs":6325},{"color":55},{"text":6327,"type":46,"marks":6328},"lump sum payments toward targeted debts",[6329,6332,6334],{"type":150,"attrs":6330},{"href":6331,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.navient.com/blog/which-debt-should-i-pay-off-first/",{"type":53,"attrs":6333},{"color":158},{"type":160},{"text":6336,"type":46,"marks":6337},". By doing so, you’re reducing your interest expenses over the life of the loan. ",[6338],{"type":53,"attrs":6339},{"color":55},{"type":42,"content":6341},[6342,6347,6354],{"text":6343,"type":46,"marks":6344},"This results in increased monthly cash flow, providing you with the flexibility to allocate resources towards savings, investments, or other ",[6345],{"type":53,"attrs":6346},{"color":55},{"text":5474,"type":46,"marks":6348},[6349,6351,6353],{"type":150,"attrs":6350},{"href":5478,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":6352},{"color":158},{"type":160},{"text":6355,"type":46,"marks":6356}," goals. ",[6357],{"type":53,"attrs":6358},{"color":55},{"type":71,"attrs":6360,"content":6361},{"level":73},[6362],{"text":6363,"type":46,"marks":6364},"2. Build or boost an emergency fund",[6365],{"type":53,"attrs":6366},{"color":55},{"type":42,"content":6368},[6369],{"text":6370,"type":46,"marks":6371},"In most tax preparation software, you can opt for a direct deposit of your tax refund. All you’ll need is the account number and routing number. ",[6372],{"type":53,"attrs":6373},{"color":55},{"type":42,"content":6375},[6376],{"text":6377,"type":46,"marks":6378},"Then, you can transfer this money to an account of your choice. Building or beefing up your emergency savings is a smart money move, and using your federal tax refund can set you on the right path for handling unexpected financial bumps. ",[6379],{"type":53,"attrs":6380},{"color":55},{"type":42,"content":6382},[6383],{"text":6384,"type":46,"marks":6385},"Consider your emergency fund as a financial safeguard against surprises like medical bills, car troubles, or unexpected job changes. It’s your cushion, saving you from turning to high-interest credit cards in emergencies. Here’s a closer look at how to make the most of your refund check for your emergency fund:",[6386],{"type":53,"attrs":6387},{"color":55},{"type":293,"attrs":6389,"content":6390},{"order":295},[6391,6406,6441,6456],{"type":130,"content":6392},[6393],{"type":42,"content":6394},[6395,6401],{"text":6396,"type":46,"marks":6397},"Figure out your fund size: ",[6398,6399],{"type":138},{"type":53,"attrs":6400},{"color":55},{"text":6402,"type":46,"marks":6403},"Calculate your monthly living costs, considering job stability, health, and family needs. Experts often suggest aiming for three to six months’ worth of expenses.",[6404],{"type":53,"attrs":6405},{"color":55},{"type":130,"content":6407},[6408],{"type":42,"content":6409},[6410,6416,6421,6429,6436],{"text":6411,"type":46,"marks":6412},"Start or beef up your fund:",[6413,6414],{"type":138},{"type":53,"attrs":6415},{"color":55},{"text":6417,"type":46,"marks":6418}," If you don’t have an emergency fund, use a chunk of your tax refund to kickstart one. Open a dedicated ",[6419],{"type":53,"attrs":6420},{"color":55},{"text":6422,"type":46,"marks":6423},"high-yield savings account",[6424,6426,6428],{"type":150,"attrs":6425},{"href":591,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":6427},{"color":158},{"type":160},{"text":1907,"type":46,"marks":6430},[6431,6433,6434],{"type":49,"attrs":6432},{"class":1911},{"type":1911},{"type":53,"attrs":6435},{"color":18},{"text":6437,"type":46,"marks":6438}," just for emergencies. If you already have one, use your tax refund to fill in any gaps from unexpected expenses.",[6439],{"type":53,"attrs":6440},{"color":55},{"type":130,"content":6442},[6443],{"type":42,"content":6444},[6445,6451],{"text":6446,"type":46,"marks":6447},"Prioritize accessibility:",[6448,6449],{"type":138},{"type":53,"attrs":6450},{"color":55},{"text":6452,"type":46,"marks":6453}," Pick a savings account or tool that allows quick access to your money. While interest rates matter, focus on how easily you can get to your funds when needed. Some savings account may accrue more interest, but will they allow you immediate access to funds when an emergency strikes?",[6454],{"type":53,"attrs":6455},{"color":55},{"type":130,"content":6457},[6458],{"type":42,"content":6459},[6460,6466],{"text":6461,"type":46,"marks":6462},"Automate contributions:",[6463,6464],{"type":138},{"type":53,"attrs":6465},{"color":55},{"text":6467,"type":46,"marks":6468}," Make saving a habit by setting up automatic transfers or direct deposits from your checking account to your emergency fund bank account, so you’re not tempted to make withdrawals. Consistent contributions help build a reliable safety net. ",[6469],{"type":53,"attrs":6470},{"color":55},{"type":71,"attrs":6472,"content":6473},{"level":73},[6474],{"text":6475,"type":46,"marks":6476},"3. Save for retirement ",[6477],{"type":53,"attrs":6478},{"color":55},{"type":42,"content":6480},[6481,6486,6494,6499,6508],{"text":6482,"type":46,"marks":6483},"By steering your refund toward retirement savings, you’re making a smart investment in your financial future, paving the way for a comfy and fulfilling retirement. Make the most of tax-advantaged retirement accounts like ",[6484],{"type":53,"attrs":6485},{"color":55},{"text":6487,"type":46,"marks":6488},"401(k)s",[6489,6491,6493],{"type":150,"attrs":6490},{"href":419,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":6492},{"color":158},{"type":160},{"text":6495,"type":46,"marks":6496},", ",[6497],{"type":53,"attrs":6498},{"color":55},{"text":6500,"type":46,"marks":6501},"IRAs, or Roth IRAs",[6502,6505,6507],{"type":150,"attrs":6503},{"href":6504,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.irs.gov/retirement-plans/individual-retirement-arrangements-iras",{"type":53,"attrs":6506},{"color":158},{"type":160},{"text":6509,"type":46,"marks":6510},". Depending on the account, your contributions can be tax deductible or grow tax-free. ",[6511],{"type":53,"attrs":6512},{"color":55},{"type":42,"content":6514},[6515,6520,6529],{"text":6516,"type":46,"marks":6517},"If you’re 50 or older, leverage ",[6518],{"type":53,"attrs":6519},{"color":55},{"text":6521,"type":46,"marks":6522},"catch-up contributions",[6523,6526,6528],{"type":150,"attrs":6524},{"href":6525,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-catch-up-contributions",{"type":53,"attrs":6527},{"color":158},{"type":160},{"text":6530,"type":46,"marks":6531}," allowed by retirement accounts. This lets you put in extra money beyond the usual limits, helping you catch up on building your retirement savings. Additionally, use retirement calculators to estimate your ideal savings amount. This can help guide you on how to allocate your tax refund for the most impact. ",[6532],{"type":53,"attrs":6533},{"color":55},{"type":42,"content":6535},[6536],{"text":6537,"type":46,"marks":6538},"Finally, consider getting advice from a financial expert or tax preparer to tailor your retirement savings plan to your unique situation. Expert guidance can optimize your investment strategy and address specific savings goals or concerns. ",[6539],{"type":53,"attrs":6540},{"color":55},{"type":71,"attrs":6542,"content":6543},{"level":73},[6544],{"text":6545,"type":46,"marks":6546},"4. Invest in education or professional development",[6547],{"type":53,"attrs":6548},{"color":55},{"type":42,"content":6550},[6551],{"text":6552,"type":46,"marks":6553},"By investing your tax refund in education or professional development, you not only level up your knowledge and skills, but also set the stage for better career opportunities, earning potential, and overall job satisfaction. ",[6554],{"type":53,"attrs":6555},{"color":55},{"type":42,"content":6557},[6558],{"text":6559,"type":46,"marks":6560},"This strategic investment in yourself can pave the way for a more fulfilling and successful professional journey. Plus, some of these may be deductible expenses when you file your federal tax return next year, especially if you’re self-employed. Some ways to do this include: ",[6561],{"type":53,"attrs":6562},{"color":55},{"type":127,"content":6564},[6565],{"type":130,"content":6566},[6567],{"type":42,"content":6568},[6569,6575],{"text":6570,"type":46,"marks":6571},"Take courses or workshops: ",[6572,6573],{"type":138},{"type":53,"attrs":6574},{"color":55},{"text":6576,"type":46,"marks":6577},"Enroll in courses, workshops, or seminars using your tax refund. Online platforms offer tons of options for conveniently boosting your knowledge and skills. ",[6578],{"type":53,"attrs":6579},{"color":55},{"type":127,"content":6581},[6582],{"type":130,"content":6583},[6584],{"type":42,"content":6585},[6586,6592],{"text":6587,"type":46,"marks":6588},"Get certified: ",[6589,6590],{"type":138},{"type":53,"attrs":6591},{"color":55},{"text":6593,"type":46,"marks":6594},"Consider investing in recognized certification programs. They not only boost your professional credibility but also open doors to exciting opportunities. ",[6595],{"type":53,"attrs":6596},{"color":55},{"type":127,"content":6598},[6599],{"type":130,"content":6600},[6601],{"type":42,"content":6602},[6603,6609],{"text":6604,"type":46,"marks":6605},"Brush up on language or soft skills: ",[6606,6607],{"type":138},{"type":53,"attrs":6608},{"color":55},{"text":6610,"type":46,"marks":6611},"Improve your language skills or work on soft skills like communication, leadership, and time management. These are versatile skills that amp up your effectiveness in various professional settings. ",[6612],{"type":53,"attrs":6613},{"color":55},{"type":127,"content":6615},[6616],{"type":130,"content":6617},[6618],{"type":42,"content":6619},[6620,6626],{"text":6621,"type":46,"marks":6622},"Tech and digital skills: ",[6623,6624],{"type":138},{"type":53,"attrs":6625},{"color":55},{"text":6627,"type":46,"marks":6628},"Stay in the loop with technological advancements by taking courses that build up your digital skills. This is especially crucial in today’s tech-driven work environments. ",[6629],{"type":53,"attrs":6630},{"color":55},{"type":127,"content":6632},[6633],{"type":130,"content":6634},[6635],{"type":42,"content":6636},[6637,6643],{"text":6638,"type":46,"marks":6639},"Go to networking events: ",[6640,6641],{"type":138},{"type":53,"attrs":6642},{"color":55},{"text":6644,"type":46,"marks":6645},"Use part of your tax refund to attend conferences, workshops, or networking events. These not only provide insights, but also help you make connections and stay updated on industry trends. ",[6646],{"type":53,"attrs":6647},{"color":55},{"type":127,"content":6649},[6650],{"type":130,"content":6651},[6652],{"type":42,"content":6653},[6654,6660],{"text":6655,"type":46,"marks":6656},"Build a personal library: ",[6657,6658],{"type":138},{"type":53,"attrs":6659},{"color":55},{"text":6661,"type":46,"marks":6662},"Invest in books, journals, or online subscriptions that align with your professional interests. A carefully curated collection can be a handy reference and a source of continuous learning. ",[6663],{"type":53,"attrs":6664},{"color":55},{"type":71,"attrs":6666,"content":6667},{"level":73},[6668],{"text":6669,"type":46,"marks":6670},"5. Make home improvements",[6671],{"type":53,"attrs":6672},{"color":55},{"type":42,"content":6674},[6675,6680,6689,6696],{"text":6676,"type":46,"marks":6677},"By strategically using your tax refund ",[6678],{"type":53,"attrs":6679},{"color":55},{"text":6681,"type":46,"marks":6682},"for home improvements",[6683,6686,6688],{"type":150,"attrs":6684},{"href":6685,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://marketplace.navient.com/blog/home-equity-loan-vs-line-of-credit/",{"type":53,"attrs":6687},{"color":158},{"type":160},{"text":1981,"type":46,"marks":6690},[6691,6693,6694],{"type":49,"attrs":6692},{"class":1911},{"type":1911},{"type":53,"attrs":6695},{"color":18},{"text":6697,"type":46,"marks":6698},", you can not only create a more comfortable and aesthetically pleasing living environment, but also make a sound investment in the long-term value of your property. ",[6699],{"type":53,"attrs":6700},{"color":55},{"type":42,"content":6702},[6703],{"text":6704,"type":46,"marks":6705},"Conduct a thorough assessment of your home to identify areas that require maintenance, repair or upgrades, prioritizing projects based on urgency and long-term benefits. These could include:",[6706],{"type":53,"attrs":6707},{"color":55},{"type":127,"content":6709},[6710],{"type":130,"content":6711},[6712],{"type":42,"content":6713},[6714,6720],{"text":6715,"type":46,"marks":6716},"Energy efficiency upgrades: ",[6717,6718],{"type":138},{"type":53,"attrs":6719},{"color":55},{"text":6721,"type":46,"marks":6722},"Think about energy-efficient upgrades like programmable thermostats or new windows. Not only do they cut down on bills, but they also make your home more eco-friendly. ",[6723],{"type":53,"attrs":6724},{"color":55},{"type":127,"content":6726},[6727],{"type":130,"content":6728},[6729],{"type":42,"content":6730},[6731,6737],{"text":6732,"type":46,"marks":6733},"Kitchen renovations: ",[6734,6735],{"type":138},{"type":53,"attrs":6736},{"color":55},{"text":6738,"type":46,"marks":6739},"Give your kitchen some love by upgrading appliances or changing up the layout. A kitchen facelift isn’t just practical; it adds a touch of style. ",[6740],{"type":53,"attrs":6741},{"color":55},{"type":127,"content":6743},[6744],{"type":130,"content":6745},[6746],{"type":42,"content":6747},[6748,6754],{"text":6749,"type":46,"marks":6750},"Bathroom remodeling: ",[6751,6752],{"type":138},{"type":53,"attrs":6753},{"color":55},{"text":6755,"type":46,"marks":6756},"Amp up your bathrooms with new fixtures or a refreshed look. A modern bathroom adds value and makes daily life a bit more luxurious. ",[6757],{"type":53,"attrs":6758},{"color":55},{"type":127,"content":6760},[6761],{"type":130,"content":6762},[6763],{"type":42,"content":6764},[6765,6771],{"text":6766,"type":46,"marks":6767},"Landscaping and outdoor spaces:",[6768,6769],{"type":138},{"type":53,"attrs":6770},{"color":55},{"text":6772,"type":46,"marks":6773}," Spruce up your outdoor spaces with landscaping or patio upgrades. Maybe throw in a barbecue area for some extra fun. It’s all about boosting curb appeal and creating family spaces. ",[6774],{"type":53,"attrs":6775},{"color":55},{"type":127,"content":6777},[6778],{"type":130,"content":6779},[6780],{"type":42,"content":6781},[6782,6788],{"text":6783,"type":46,"marks":6784},"Painting and refreshing: ",[6785,6786],{"type":138},{"type":53,"attrs":6787},{"color":55},{"text":6789,"type":46,"marks":6790},"A fresh coat of paint can work wonders inside and out. Budget for all paint, trim updates, or a facelift for the exterior. It’s an easy and affordable way to give your home a new look. ",[6791],{"type":53,"attrs":6792},{"color":55},{"type":127,"content":6794},[6795],{"type":130,"content":6796},[6797],{"type":42,"content":6798},[6799,6805],{"text":6800,"type":46,"marks":6801},"Roof repairs or replacement: ",[6802,6803],{"type":138},{"type":53,"attrs":6804},{"color":55},{"text":6806,"type":46,"marks":6807},"Take care of your roof with repairs or a replacement. Fixing leaks and shingles not only extends your home’s life but also prevents potential water damage. ",[6808],{"type":53,"attrs":6809},{"color":55},{"type":127,"content":6811},[6812],{"type":130,"content":6813},[6814],{"type":42,"content":6815},[6816,6822],{"text":6817,"type":46,"marks":6818},"Smart home upgrades:",[6819,6820],{"type":138},{"type":53,"attrs":6821},{"color":55},{"text":6823,"type":46,"marks":6824}," Dive into smart home tech for added security and convenience. Smart thermostats, security systems, or automated lighting can instantly make your home more comfortable. ",[6825],{"type":53,"attrs":6826},{"color":55},{"type":127,"content":6828},[6829],{"type":130,"content":6830},[6831],{"type":42,"content":6832},[6833,6839],{"text":6834,"type":46,"marks":6835},"Flooring upgrades: ",[6836,6837],{"type":138},{"type":53,"attrs":6838},{"color":55},{"text":6840,"type":46,"marks":6841},"Swap out worn-out flooring with something fresh. Whether it’s hardwood, laminate, or tile, new floors can transform your home’s look and feel. ",[6842],{"type":53,"attrs":6843},{"color":55},{"type":127,"content":6845},[6846],{"type":130,"content":6847},[6848],{"type":42,"content":6849},[6850,6856],{"text":6851,"type":46,"marks":6852},"Basement or attic conversions: ",[6853,6854],{"type":138},{"type":53,"attrs":6855},{"color":55},{"text":6857,"type":46,"marks":6858},"Make the most of under-used areas like the basement or attic. Convert them into a home office, guest room, or a cool entertainment spot. ",[6859],{"type":53,"attrs":6860},{"color":55},{"type":127,"content":6862},[6863],{"type":130,"content":6864},[6865],{"type":42,"content":6866},[6867,6873],{"text":6868,"type":46,"marks":6869},"Upgrading home systems: ",[6870,6871],{"type":138},{"type":53,"attrs":6872},{"color":55},{"text":6874,"type":46,"marks":6875},"Upgrade essential home systems like HVAC, plumbing, or electrical to keep your spaces working like it should. ",[6876],{"type":53,"attrs":6877},{"color":55},{"type":127,"content":6879},[6880],{"type":130,"content":6881},[6882],{"type":42,"content":6883},[6884,6890],{"text":6885,"type":46,"marks":6886},"DIY projects: ",[6887,6888],{"type":138},{"type":53,"attrs":6889},{"color":55},{"text":6891,"type":46,"marks":6892},"Feeling crafty? Try some DIY projects that match your skills and interests. Custom shelving, furniture refinishing, or unique decor can add a personal touch to your home. ",[6893],{"type":53,"attrs":6894},{"color":55},{"type":42,"content":6896},[6897],{"text":6898,"type":46,"marks":6899},"For more complex projects or renovations, consider consulting with professionals such as contractors or interior designers. Their expertise can ensure that the investment yields optimal results and adds lasting value to your home. ",[6900],{"type":53,"attrs":6901},{"color":55},{"type":71,"attrs":6903,"content":6904},{"level":73},[6905],{"text":6906,"type":46,"marks":6907},"6. Save for future goals",[6908],{"type":53,"attrs":6909},{"color":55},{"type":42,"content":6911},[6912],{"text":6913,"type":46,"marks":6914},"If you decide to use your tax refund to save for future goals, make sure to differentiate between short-term and long-term objectives. Categorizing financial goals by time horizon allows for a tailored savings strategy. ",[6915],{"type":53,"attrs":6916},{"color":55},{"type":42,"content":6918},[6919],{"text":6920,"type":46,"marks":6921},"Short-term goals, like a vacation or home renovation, may require liquid savings, while long-term goals, such as retirement or a home purchase, may involve strategic investments for growth. This strategic approach fosters discipline, motivation, and long-term financial security, facilitating the alignment of your financial resources with your unique aspirations. ",[6922],{"type":53,"attrs":6923},{"color":55},{"type":71,"attrs":6925,"content":6926},{"level":73},[6927],{"text":6928,"type":46,"marks":6929},"7. Contribute to a college fund",[6930],{"type":53,"attrs":6931},{"color":55},{"type":42,"content":6933},[6934,6939,6948],{"text":6935,"type":46,"marks":6936},"Putting your tax refund into a college savings fund for your children is a wise step toward early savings. Consistent contributions can accumulate into a substantial fund, offering financial support for their higher education and potentially reducing their reliance on student loans. College funds, specifically ",[6937],{"type":53,"attrs":6938},{"color":55},{"text":6940,"type":46,"marks":6941},"529 plans",[6942,6945,6947],{"type":150,"attrs":6943},{"href":6944,"uuid":153,"anchor":153,"target":154,"linktype":155},"https://www.savingforcollege.com/intro-to-529s/what-is-a-529-plan",{"type":53,"attrs":6946},{"color":158},{"type":160},{"text":6949,"type":46,"marks":6950},", provide flexibility in covering various eligible expenses, including tuition, books, room and board. The specific advantages of a 529 plan include:",[6951],{"type":53,"attrs":6952},{"color":55},{"type":127,"content":6954},[6955],{"type":130,"content":6956},[6957],{"type":42,"content":6958},[6959,6965],{"text":6960,"type":46,"marks":6961},"Tax-free growth: ",[6962,6963],{"type":138},{"type":53,"attrs":6964},{"color":55},{"text":6966,"type":46,"marks":6967},"Gains within the account grow tax free, offering a powerful financial benefit over time. ",[6968],{"type":53,"attrs":6969},{"color":55},{"type":127,"content":6971},[6972],{"type":130,"content":6973},[6974],{"type":42,"content":6975},[6976,6982],{"text":6977,"type":46,"marks":6978},"Tax deductions for contributions: ",[6979,6980],{"type":138},{"type":53,"attrs":6981},{"color":55},{"text":6983,"type":46,"marks":6984},"While federal deductions are not applicable, some states provide tax deductions or credits for contributions to in-state 529 plans.",[6985],{"type":53,"attrs":6986},{"color":55},{"type":127,"content":6988},[6989],{"type":130,"content":6990},[6991],{"type":42,"content":6992},[6993,6999],{"text":6994,"type":46,"marks":6995},"High contribution limits: ",[6996,6997],{"type":138},{"type":53,"attrs":6998},{"color":55},{"text":7000,"type":46,"marks":7001},"529 plans allow substantial contributions, making them advantageous for families aiming to fully fund their children’s education. ",[7002],{"type":53,"attrs":7003},{"color":55},{"type":127,"content":7005},[7006],{"type":130,"content":7007},[7008],{"type":42,"content":7009},[7010,7016],{"text":7011,"type":46,"marks":7012},"Flexibility in beneficiary designation: ",[7013,7014],{"type":138},{"type":53,"attrs":7015},{"color":55},{"text":7017,"type":46,"marks":7018},"If educational plans change, you can switch the beneficiary to another family member without penalties. ",[7019],{"type":53,"attrs":7020},{"color":55},{"type":127,"content":7022},[7023],{"type":130,"content":7024},[7025],{"type":42,"content":7026},[7027,7033],{"text":7028,"type":46,"marks":7029},"No income restrictions: ",[7030,7031],{"type":138},{"type":53,"attrs":7032},{"color":55},{"text":7034,"type":46,"marks":7035},"Accessible to families across various taxable income levels, as there are no income restrictions. ",[7036],{"type":53,"attrs":7037},{"color":55},{"type":127,"content":7039},[7040],{"type":130,"content":7041},[7042],{"type":42,"content":7043},[7044,7050],{"text":7045,"type":46,"marks":7046},"Ease of management: ",[7047,7048],{"type":138},{"type":53,"attrs":7049},{"color":55},{"text":7051,"type":46,"marks":7052},"529 plans are relatively straightforward to manage, with professional fund managers handling investment decisions. ",[7053],{"type":53,"attrs":7054},{"color":55},{"type":71,"attrs":7056,"content":7057},{"level":73},[7058],{"text":7059,"type":46,"marks":7060},"8. Donate to charitable causes",[7061],{"type":53,"attrs":7062},{"color":55},{"type":42,"content":7064},[7065],{"text":7066,"type":46,"marks":7067},"Donating a part of your tax refund to charity is a meaningful way to use your financial resources positively. Identify causes aligned with your value – whether in education, healthcare, or environmental conservation –  and ensure they are legitimate nonprofits with tax-exempt status. ",[7068],{"type":53,"attrs":7069},{"color":55},{"type":42,"content":7071},[7072],{"text":7073,"type":46,"marks":7074},"Next, strategically approach giving by allocating a portion of your tax refund for one-time donations, exploring monthly giving programs, checking for employer matching gift programs, or contributing to a donor-advised fund for flexibility. ",[7075],{"type":53,"attrs":7076},{"color":55},{"type":42,"content":7078},[7079],{"text":7080,"type":46,"marks":7081},"The IRS states that charitable donations can lead to federal tax deductions for American taxpayers if you follow specific guidelines. Deductions are generally based on the fair market value of the donation, subject to adjusted gross income limits. Non-cash items and some volunteer expenses may also qualify. For high-value items, a qualified appraisal may be necessary. ",[7082],{"type":53,"attrs":7083},{"color":55},{"type":71,"attrs":7085,"content":7086},{"level":73},[7087],{"text":7088,"type":46,"marks":7089},"9. Treat yourself, but mindfully",[7090],{"type":53,"attrs":7091},{"color":55},{"type":42,"content":7093},[7094],{"text":7095,"type":46,"marks":7096},"Finally, celebrate your hard work by setting aside a small portion of your tax refund for personal enjoyment. Choose a reward that aligns with your interests or passions. Keep it in check, though, with clear spending limits, ensuring you prioritize essential expenses and savings. By avoiding impulse buys and investing in experiences that contribute to personal growth, you create a harmonious balance between responsible financial choices and self care. ",[7097],{"type":53,"attrs":7098},{"color":55},{"type":71,"attrs":7100,"content":7101},{"level":73},[7102],{"text":7103,"type":46,"marks":7104},"Get financial products customized to your needs ",[7105],{"type":53,"attrs":7106},{"color":55},{"type":42,"content":7108},[7109],{"text":7110,"type":46,"marks":7111},"Using your tax refund wisely is crucial for optimizing your financial well-being, as strategic allocation towards debt reduction, savings, investments, and essential expenditures contributes to long-term financial stability and personal fulfillment.",[7112],{"type":53,"attrs":7113},{"color":55},{"type":42,"content":7115},[7116,7121,7127,7135],{"text":7117,"type":46,"marks":7118},"If you’re looking to refinance your debt or pay it off faster, Navient lets you compare lenders for free all in one place. Just enter a few details about yourself and",[7119],{"type":53,"attrs":7120},{"color":55},{"text":2501,"type":46,"marks":7122},[7123,7125],{"type":150,"attrs":7124},{"href":1976,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":7126},{"color":55},{"text":7128,"type":46,"marks":7129},"get personalized results within seconds",[7130,7132,7134],{"type":150,"attrs":7131},{"href":1976,"uuid":153,"anchor":153,"target":154,"linktype":155},{"type":53,"attrs":7133},{"color":158},{"type":160},{"text":205,"type":46,"marks":7136},[7137],{"type":53,"attrs":7138},{"color":55},{"type":42,"content":7140},[7141],{"text":1405,"type":46,"marks":7142},[7143,7145],{"type":49,"attrs":7144},{"class":51},{"type":53,"attrs":7146},{"color":7147},"rgb(68, 68, 68)",{"type":42,"content":7149},[7150],{"text":7151,"type":46,"marks":7152},"1 Navient customers are invited to consider savings offers through our partner MoneyLion. Navient has not shared your information with MoneyLion.  Savings offers are made by participants in MoneyLion’s savings platform, powered by Even Financial.  Even Financial, Inc. is the technology platform powering financial services online.",[7153,7155],{"type":49,"attrs":7154},{"class":51},{"type":53,"attrs":7156},{"color":7147},{"type":42,"content":7158},[7159],{"text":7160,"type":46,"marks":7161},"2 Navient customers are invited to consider personal loan offers through our partner MoneyLion. Navient has not shared your information with MoneyLion and is not involved in the personal loan application process in any manner.  All information is submitted directly to MoneyLion and any personal loan offers are made directly by participants in MoneyLion’s lending platform.  Engine by MoneyLion is the industry-leading embedded financial marketplace and independent subsidiary of MoneyLion Inc. (“MoneyLion”) (NYSE:ML). Checking your rate will not affect your credit score. Eligibility is not guaranteed and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions.",[7162,7164],{"type":49,"attrs":7163},{"class":51},{"type":53,"attrs":7165},{"color":7147},{"type":42,"content":7167},[7168],{"text":4245,"type":46,"marks":7169},[7170,7172],{"type":49,"attrs":7171},{"class":51},{"type":53,"attrs":7173},{"color":7147},"\u003C!--#storyblok#{\"name\": \"BlogText\", \"space\": \"157494\", \"uid\": \"67b1c1a7-fbb7-4c3c-a267-87dc959687fb\", \"id\": \"651798142\"}-->","https://www.marketplace.navient.com/blog/best-way-to-use-tax-refund/","March 8, 2024","\u003C!--#storyblok#{\"name\": \"NriBlogPost\", \"space\": \"157494\", \"uid\": \"39f3568e-f888-4c3e-816f-3647f7efec59\", \"id\": \"651798142\"}-->","best-way-to-use-tax-refund","navient_marketplace/blog/best-way-to-use-tax-refund",[],"cfa5efbb-7fbe-4e8d-986e-71f0cfb3013b","2024-03-08T08:57:00.000Z",[],1775068324,[],[],{"cache-control":7188,"connection":7189,"content-encoding":7190,"content-type":7191,"date":7192,"etag":7193,"per-page":7194,"referrer-policy":7195,"sb-be-version":7196,"server":7197,"total":7198,"transfer-encoding":7199,"vary":7200,"via":7201,"x-amz-cf-id":7202,"x-amz-cf-pop":7203,"x-cache":7204,"x-content-type-options":7205,"x-frame-options":7206,"x-permitted-cross-domain-policies":7207,"x-ratelimit":7208,"x-ratelimit-policy":7209,"x-request-id":7210,"x-runtime":7211,"x-xss-protection":7212},"max-age=0, private, must-revalidate","keep-alive","gzip","application/json; charset=utf-8","Wed, 01 Apr 2026 18:53:58 GMT","W/\"630d4c2a60635512aa0533d058e03ec1\"","9","strict-origin-when-cross-origin","5.706.0","nginx/1.29.1","8","chunked","Origin,Accept-Encoding","1.1 b972ddb21199e78c50db3b97a65aa6ec.cloudfront.net (CloudFront)","SsxS9YJoZbtzhrDyWVd-RQg98CLMusPCimpYhA6AbYPrY8K9CFtP6A==","SFO53-P10","RefreshHit from cloudfront","nosniff","SAMEORIGIN","none","\"space-concurrent-requests\";r=29","\"space-concurrent-requests\";q=30","8c36a422-07af-4f09-8cfe-920649fea12f","0.139725","0",9,8,1775069637058]