Summer is almost here, meaning parents have to figure out to do with the kiddos! Yasmin Young talks with Kawanza Humphrey, VP of KeyBank, about budgeting for summer childcare!!

  • Budgeting for Summer Childcare

    Budgeting for Summer Childcare

    • Before you know it, the kids will burst through their school's doors for the last time — ready to start their summer vacation. Take the time to start thinking about your kid's summer childcare now, so you're not caught off guard.
    • But don't fret — with a little help, you can wade through the childcare options and figure out how to budget for the one that best fits your family's needs.
    • Choosing the Right Kind of Care
    • Rather than thinking about what your budget can handle and starting there, let's focus first on what kind of childcare you're looking for.
    • Factors to keep in mind when searching for your perfect childcare solution include the location of the facility, the schedule of care and whether or not it fits your working schedule needs, the reputation of care and the right ratio of caretaker to kids that you're looking for.
    • Different kinds of summer childcare include:
      • Family Help: Oftentimes your best, and first, childcare option can be a loving relative.
      • Babysitting Co-op: Luckily, you're not the only family looking for the right kind of summer childcare. Seek out other families and join babysitting co-ops near you where each family is responsible for providing part of the care and the system runs for free.
      • Nanny Share: A nanny share allows you and a few other moms to create a summer camp-like experience by hiring one nanny across several families.
      • Summer Day/Night Camps: Summer camps can offer deeper learning in your child's particular subject of interest. Use the American Camp Associations' (ACA) camp finder to help with your search.
      • Full-on Help/Daycare: You could look into hiring a full-time nanny through the summer. This would give your child one-on-one attention.
      • Hybrid Approach: Perhaps you want to sign up for two to three weeklong summer camps, but then your parents can pitch in to help with the rest. Or maybe you just need to pay for a nanny during the time in between the camps you've signed up for, and then you and your partner can stagger vacation weeks to get you through the summer.
    • Here's how to budget:
      • Research the Price: First and foremost, you need to know how much money your childcare option will cost, including tax discount on the overall cost. Do you qualify for state-funded help with paying for your childcare?
      • Figure out How Much You'll Need to Save up: Now that you know the remaining total amount of money you'll need to save up for, you need to figure out how much money per month you have to save. Find this by dividing the total amount left that you need to save by the number of months left until payments are due.
    • After going through these steps, perhaps you've found that you are coming up a little short. In this case, you'll want to check out alternative ways to still afford the summer childcare you want and need. Using the tools and resources above, you've got the power to make this year's summer vacation the best ever!

    Additional online resources from KeyBank:

    Budgeting for Summer Childcare

    (This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)

  • Inside Tips for Buying a Home

    Insider Tips for Buying a New Home

    • It’s homebuying season! Buying a new home can be the experience of a lifetime, and nothing compares to the thrill of finding your perfect house. But people often let their emotions lead, and sometimes impulsiveness can make buying a home a little difficult. Here are some tips to help you score your ideal new home.

    • Manage Your Credit Score

    Avoid opening new credit cards or taking out loans for three to six months before you apply for a mortgage. That includes co-signing loans for someone else. All can affect your credit score, and you don't want to raise any red flags when trying to finance your house. Request copies of your credit report to verify that there are no errors and work on paying the full balance or, at least, more than the minimum each month to help improve your credit score.

    • Know the Difference Between Pre-qualified and Pre-approved

    Pre-qualification is often the first official step in buying a new home and can sometimes be a requirement to complete before a real estate agent will agree to work with you. However, the pre-qualification number isn't a formal commitment to lend a certain amount, especially if there's no formal application. It's more of a snapshot of your finances that gives you a better idea of what kind of mortgage is within your reach. Keep in mind that the information in the pre-qualification letter will only include the information that you've shared with your lender; nonetheless, it is an important factor. It's often beneficial to use a calculator to help plan your budget and finances for your pending pre-qualification.

    Preapprovals involve a more complex than pre-qualification and are based on verified information. The lender will run a full credit and financial analysis, including work history, tax returns, debt repayment history, savings, and other assets.

    • Review Your Property Survey and Inspection

    Property surveys reveal important information about exactly how much of the yard you'll own, any improvements or changes that have been made, and potential obstacles you'll face as the owner. For instance, if you plan to build a workshop in your backyard or make other significant additions, you want to be certain where your property ends and what your rights include. Make sure that you know who owns the fencing, whether driveways are shared, and where the flood hazards are.

    When it comes to property inspections, sellers often have their homes pre-inspected in order to mitigate the risk of buyers from walking away from a deal because of an undisclosed or unknown issue, like foundation or outdated electrical. However, even when an inspection has been done by the sellers, buyers should consider hiring their own inspector to get an unbiased report. And, if you're buying new construction, getting an inspection is still important to avoid any surprises.

    Another thing to keep in mind is that with these surveys, it's common to find property encroachments. When this happens, you are aware of the encroachment and willing to assume any risk associated with it. Keep in mind that buying a home from a house flipper would almost definitely require a survey be done.

    • Visit the Home Several Times Before You Buy

    Make a point of visiting the home on several different days at varying times, so long as time allows. When it rains, look for leaks in the basement. If it's chilly, find out if there's a draft coming through the windows and walls. Stopping by in the evening may reveal that a neon sign nearby will make it impossible to sleep or that the noise from a local community center is louder than you can tolerate.

    • Meet Your Prospective Neighbors

    Chat with the folks across the street and get their take on the neighborhood. What do they like about the area? What are their gripes? Even a perfect house can become unlivable if the surrounding environment isn't very friendly.

    • Personalize Your Offer

    Buyers who include personal notes in their offers often motivate sellers to choose their bids over others. When you visit the house, look for clues about who the owners are. Then find ways to connect through shared circumstances or common interests. Perhaps you both have children or grandchildren, graduated from the same alma mater, or share a love of bird watching. Tell them what drew you to the property. Be sincere – people want to know that a buyer will love their house as much as they did, so don't be afraid to open up.

    .

    • Come Prepared With a Counteroffer

    Negotiation is par for the course when buying a new home. First, there's the initial bid and then there's the number that the seller will come back with. From here, you need to decide what your counteroffer will be. Ideally, you'll have an idea of what your counteroffer will be when you make your initial offer. That way, you can respond quickly and efficiently, something that's especially important if you're caught in a bidding war. Planning ahead is also a great way to ensure you stick to your budget.

    Be sure to work with a mortgage loan officer to build a strategy. In a hot market, you'll need to make your best offer and be prepared to keep looking if it's at the top of your budget. However, there's more negotiation in slower markets.

    In addition to the price of your counteroffer, you should also consider splitting closing costs. When you split the closing costs or take them on entirely, you may be using more money out of pocket, but you won't have to adjust your financing, and the seller will receive the price they're looking for.

    • Buy Off-season

    Housing prices are lower during winter than they are in summer, so hold off on buying until then if you can. Listings tend to be more plentiful in the warmer months – patience and diligence are key when house-hunting in winter. But you may get a better price by not competing with everyone else.

    Additional online resources from KeyBank:

    Insider Tips for Buying a New Home 

    Avoid First Time Home Buying Mistakes

    7 House Buying Tips for Saving Money

    (This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)

  • Benefits of Shopping Locally

    Benefits Of Shopping Locally During Small Business Month

    • May is Small Business Month and it offers plenty of reminders about why it pays to shop locally. One of the most persuasive is the economic boost communities get from locally owned independent businesses. Forbes recently looked at why shopping at small businesses is important. Here’s what they found.

    • Create More Local Jobs

    o Local businesses create the majority of economic growth, employing about 77 million Americans and improving stability in communities. When we shop locally, more of our money stays local, so it has a direct positive impact on creating more jobs.

    o Local business owners tend to hire people who represent the demographics of the surrounding community, including historically underserved populations. This contributes particularly to community stability, considering that 40 percent of small businesses are in low-income communities, reports the Association for Enterprise Opportunity.

    • Enhance Diversity

    o Local businesses add to the diversity of products and services available to a community. Whereas chain stores often stock shelves that reflect national demands, a local sporting goods store is more likely to focus on community interests, offering apparel in local school colors.

    o Vibrant local business communities also make neighborhoods more interesting. This tends to attract new residents and encourages growth.

    • Strengthen Local Networks

    o Shopping at small businesses provides access to local expertise about what products and services work best in your geographic area. For example, a local garden shop can tell you which type of tomato grows best in your climate. You can also get more personalized service by establishing a relationship with the owner as well as quicker resolution to customer service issues.

    o Thriving local businesses often hire other small businesses to perform support tasks or provide raw materials and resources. This bolsters networks that can promote further growth, advocating for business-friendly policies, for example, or generating demand for more services, such as co-working spaces and local deliveries.

    • Boost Environmental Sustainability

    o Shopping locally is also good for the environment. Consumers who walk to local town centers reduce their use of cars and buses. Similarly, buying from small businesses that source local products can reduce the environmental impact that national chains impose in their transportation of goods.

    o Local business owners tend to be more civic-minded, whether they’re sponsoring local baseball teams or volunteering with local charities.

    • Increase Real Estate Values

    o Neighborhoods served by successful small businesses see home values increase 50 percent on average. If your neighborhood is full of vibrant local businesses, then the value of your neighborhood will increase as it becomes more desirable.

    o As real estate prices grow, communities can attract new investments to spur continued economic growth. This is especially important in low-income neighborhoods, where small businesses may also have a harder time obtaining loans and resources.

    o An influx of new residents increases local tax revenue, which can be used to invest in infrastructure such as schools, public safety departments, libraries and parks that strengthen communities and drive future growth.

  • Tips and Resources for Small Business Owners

    Small Business Week

    This week is National Small Business Week, a week to highlight the impact of outstanding entrepreneurs, small business owners. Are you looking to start a business? Here are some resources that can help you make your dream come true.

    WEDI

    436 Grant Street

    Buffalo, NY 14213

    (716) 393-4088

    info@wedibuffalo.org

    Westminster Economic Development Initiative - reduces barriers to success and opportunity through economic development, community building, and education.

    Pathstone

    (800) 888-6770

    info@pathstone.org

    PathStone creates opportunities for people to live and work in thriving, diverse communities from which they can create family assets and access robust community services.

    • Development of Affordable Rental and For-Sale Homes

    • Property Management of Affordable Residential Communities

    • Small Business Lending and Technical Assistance to Emerging Entrepreneurs

    EGF

    300 International Drive

    Williamsville, NY 14221

    (716) 626-3423

    info@excelsiorgrowthfund.org

    Excelsior Growth Fund (EGF) offers a variety of business support services to meet the needs of your small business.

    • Advisory Services – EGF’s business and financial experts can support you one-on-one on a variety of topics including financial management, bookkeeping, loan readiness, business growth plans and more. Meet for free with their in-house experts or receive more in depth support from local consultants at a reduced cost.

    • Resource Library – EGF’s business resource library is a one-stop shop for your most frequently asked business growth questions. Their growing collection of articles, resources and more provides insight you won’t want to miss and will prepare you for problems before they occur so you can keep your small business moving forward.

    • Events – Join EGF at a local business education event and hear from their team in-person on your toughest business issues. Their seminar series presents information crucial to small businesses in real time and provides valuable connections to other local business owners and resource providers.

    • Partner Resources – EGF has a growing list of local business resource providers partners for additional opportunities to gain knowledge and access experts who can help.

    Additional online resources from KeyBank:

    Side-Hustle Jobs to Consider When You Work Full Time

    Equipment Buy or Lease Calculator

    (This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)

  • Signs You are Living Beyond Your Means

    Signs you are living beyond your means

    Keeping up with the Joneses? Many of us try, and some of us can. But the truth is, for most of us, it’s bad for our financial wellness. The Joneses are fictitious people who always live better than us. That’s why the real measuring stick of our financial fitness should be ourselves, and the question we should be asking is: can I really afford the lifestyle I’m living? Here are some signs that may suggest you can’t:

    1. Your credit score is below 600. Your score is a reflection of whether you pay your bills on time, the age of your accounts and your outstanding debt compared to total credit. This will influence your purchasing power, as well as your cost to borrow money.
    1. You save less than five percent of your income. You should aim to save 10 to 15 percent of your earnings.
    1. You don’t have an emergency fund. Unexpected and expensive are near inevitabilities in life. You can’t afford to put these emergency costs on your credit card and pay interest on them. It’s a hole that is difficult to dig your way out of.
    1. Your credit card balances are rising. If you carry a month-to-month balance you are spending more than you can afford. You should be able to pay off your credit card balance in full every month.
    1. Your monthly house payments account for more than 28 percent of your income. To calculate what percent you spend, divide your monthly mortgage or rent payment by your monthly income.
    1. You can’t keep up with your bills. You find yourself making late payments or taking cash advances on credit cards to pay bills you once paid with cash.
    1. You live paycheck to paycheck. You need to start putting aside at least five percent into savings. If you can’t, you need to take a closer look at your budget.
    1. You have paid an overdraft fee in the past six months.

    If you find yourself in any of the above situations, the healthiest thing you can do for your future is to take an honest look at your income, expenses and spending habits. Question every purchase you make, and be disciplined in those that you do. Then make the necessary changes, because it’s easier to live with your hard decisions now than to deal with the consequences of doing nothing later.

    Additional online resources from KeyBank:

    How to Make a Budget and Build Savings

    Debt Snowball Method: Slay Your Debt Swiftly and Simply 

    Unexpected Expenses Don't Have to Be So Stressful. Here's Why.

    (This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)

  • The Hidden Costs of Moving for a New Job

    Hidden Costs of Relocating for a New Job

    • Relocating for a new position or even a different career path is a reality for many employees. And while the relocation package you're offered might look shiny and appealing, there are hidden costs to relocating that you should be aware of first.

    • Moving Expenses

    o Under the new tax plan, moving expenses for those relocating for a job are no longer tax-deductible (unless you're in the military). This means that you'll be bearing the brunt of any costs not paid up front or reimbursed by your employer. Be sure to ask about moving expenses and which party (you or your employer) is expected to pay for what so that you don't wind up facing an unnecessary reality check on tax day.

    • Health Insurance

    o If you're changing states with your relocation, you might be faced with changing your health plan. That can mean starting over with your deductible, which could be a significant cost for those with high deductible health plans — especially those coupled with health savings accounts (HSAs). Be sure to review your health insurance options and what this will mean for your deductible with your new employer's human resources or benefits department.

    • Selling Your Home

    o You don't want to be stuck paying for two homes. Relocating can mean a hefty living expense tab each month, especially if your existing home doesn't sell within the first 30 days. A slow sale may also inhibit your ability to close on a new home in your new city. Be sure to speak with your employer about how they handle selling your home and helping you secure housing in your new city, along with what happens if your home doesn't sell right away.

    • Benefits

    o A substantial salary jump is one thing, but are you losing valuable benefits by relocating? Be sure to compare the value of the benefits at your current position and the position that requires relocation to ensure that the bigger salary isn't going to be used to make up the difference between what you had and what you've lost.

    • Cost of Living

    o Moving for your career might mean a shift in living expenses. Be sure to do the match before you accept a relocation offer. A cost of living calculator can help you make detailed comparisons, even down to the zip code. You might find a lower salary and lower cost of living puts you way ahead, while a higher salary with a high cost of living leaves you strapped for cash.

    Simply knowing about these five areas that hold potential for hidden relocation expenses is a smart start. Your next step is to ask questions about each, understand how the relocation package offered addresses each one, and make sure that you're aware of the costs of relocating before you make that career jump. A great final tip is to ask to speak with an employee who recently relocated for tips on unexpected expenses or benefits they've encountered in their new city and position. This way, you'll have first-hand knowledge to add to your relocation conversations.

    Additional online resources from KeyBank:

    Hidden Costs of Relocating for a New Job 

    5 Company Benefits to Consider Before Accepting a New Job

    (This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)

  • Tips for Maintaining Good Credit

    Maintaining Good Credit

    The best way to maintain good credit is by demonstrating you are a financially responsible borrower. Here are some things you can do to help manage your credit cards and debt effectively while keeping your credit in good standing:

    1. Seek cards with low interest rates. One advantage of having a good credit score is being eligible for the lowest interest rates available. However, it’s not always easy to find a card with great rates. So look for the card with the lowest rates and best rewards for your lifestyle.

    2. Pay bills on time. Always pay your credit card bills on time. Late payments will have a negative effect on your credit score. If you forget to pay bills on time, consider setting up automatic withdrawal from your checking account. KeyBank’s online and mobile banking tools can also help you schedule timely payments. If you have overdue bills, plan to take care of them immediately.

    3. Make more than the minimum payment. If you only make the minimum payment to your credit card balance, costly interest payments will be added each month. If you can’t pay your credit card balance monthly, the next best solution is to pay more than your minimum monthly payment and stop borrowing.

    4. Avoid cash advances. Never say never, as emergency situations can call for resorting to any measure, but try to avoid cash advances. Interest rates on cash advances are often higher than the rate on purchases, and you can easily dig yourself into a deeper financial hole.

    5. Use credit cards wisely. You should only use your credit card under two conditions. One, you can afford to and will make full payment on all purchases at the end of each month. Two, for emergencies. If neither of these conditions apply, keep your credit card in your wallet.

    6. Keep accounts open. Surprisingly, closing a credit card can actually hurt your credit score because your credit score measures available credit versus credit balance. So the more credit you have available that you don’t use the better your score will be. So feel free to shred unused credit cards, just don’t cancel the account.

    Remember, credit isn’t a bad thing. It allows us to make important purchases, such as cars and homes, we otherwise couldn’t afford. It can also help individuals launch and grow businesses. The key is to maintain a healthy relationship with it so it’s there when you need it.

    Additional online resources from KeyBank:

    Tips to Improve Your Credit Score

    Building Credit Toughness: What Kind of Borrower Are You?

    How to Break Bad Spending Habits

    (This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)

  • How to go on Vacation without Breaking the Bank

    Making the Most of Your Vacation Budget

    • No one plans to start off their vacation with a limited budget, but sometimes you can't resist that first opportunity to splurge. If you've spent too much on a five-star meal or the perfect gift for someone back home, you can still find ways to reduce your spending and get back on track.

    • Seek out Local Deals

    o If you've gone over your vacation budget earlier than anticipated, your best bet is to find lower cost activities. Looking up top free or low-cost activities in the city you're touring can help you find walking trails, museums with discount passes, or possibly a free entry national park. Travel sites like TripAdvisor provide plenty of information about things to do in popular cities, along with ratings and reviews provided by other tourists.

    o If you're willing to stay flexible, try to sightsee at non-peak times of the day and take advantage of twilight admissions. To visit as many attractions as possible and still stay within budget, look for combo packages like those available at CityPASS which include admission to larger cities' most popular tourist stops at reduced rates.

    • Look for Frugal Dining Options

    o Cutting back on your restaurant budget is another savings option while on vacation. Rather than dining at five-star restaurants, look into local favorites or those offering special deals during vacation season. Seek out recommendations, whether at your hotel, with your tour guide, or from restaurant rating websites. If your hotel offers free breakfast, take them up on it. For daytime snacks, make a grocery store run and plan ahead rather than picking up more expensive items when you're hungry throughout the day. Be on the lookout for lunch and dinner specials when you're out touring.

    • Stay Low-Key

    o Rather than continuing to spend money on expensive excursions, it's better to take a step back and ask yourself why you're on vacation. Did you want to simply relax and get away? If so, find a free beach to soak up the sun and sand. If you wanted to explore a new city, look for a walking tour or other free local venues to visit. Is the weather not cooperating? Consider a fun rainy day activity like going to the movies.

    • Vacations can be completed on a budget, even when they start with a minor amount of overspending. Free or low-cost activities are often available everywhere you go — if you know how to find them. When you return home, don't forget to quickly evaluate your overall vacation spending and start saving for your next big trip.

    Additional online resources from KeyBank:

    How to Start Saving for a Vacation

    Making the Most of Your Vacation Budget 

    Vacation Home vs. Hotel: What to Book for Holiday Travel

    (This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)

  • How to Avoid the High Cost of Divorce

    How to Avoid the High Cost of Divorce

    • Whether you've been married for many years or just a few, the decision to divorce is never easy. Not only is there emotional pain, but a divorce can be strenuous on your finances as well. If you and your soon-to-be-ex-spouse agree to the divorce and want an amicable dissolution, there are ways to sidestep the courtroom and lower the financial and emotional cost of divorce.

    • Avoid Litigation

    o In litigated or contested divorces, where details are hashed out in court for a judge to decide, the average divorce can cost between $15,000 and $30,000. In a collaborative divorce, the couple signs a participation agreement stating they will not go to court. Instead, they will work with a team of attorneys for each spouse to resolve their issues. A collaborative divorce could cut your costs anywhere from 20 percent to 40 percent, according to Money Crashers.

    o If you know you'll have difficulty agreeing on a division of property, child custody, etc., consider hiring an independent, third-party mediator who will work with both of you to come to a divorce settlement agreement. You can expect to pay between $3,000 and $7,000 for a mediated divorce. Arbitration is another option to avoid the cost of going to court. A third-party arbitrator makes binding decisions about issues in your divorce that you and your spouse must adhere to. Expect to pay between $3,000 and $4,000 per day for arbitration.

    • Do Your Homework

    o Divorce proceedings are regulated by state laws. DivorceSupport.com offers links to each state's requirements including residency rules, grounds for divorce, the division of property, child custody, support and visitation, and spousal support or alimony.

    o Even in an amicable divorce, divorce attorneys provide expert insight on situations you may overlook, and work to ensure your financial future remains secure. The American Academy of Matrimonial Lawyers has tips on selecting a divorce lawyer which includes questions you should ask and a free online client handbook on divorce.

    o To save on legal costs, hire a lawyer who charges a flat fee for your divorce case. That way you won't have to watch the clock and billable hours every time you call or meet to discuss your case. If your lawyer charges hourly, ask for frequent updates on the costs you have incurred.

    • Do-it-Yourself

    o Legal fees are the biggest cost in any divorce. Like other legal documents, you can also file your own divorce papers. You don't technically need a lawyer. DIY works only in uncontested, no-fault agreements — meaning both parties agree on all matters including the decision to divorce, property division, child custody, etc. You can download the necessary forms from your state or county court websites for free.

    o If you're not sure which forms to download, you can go the online divorce route. Online divorce programs, ranging from $49 to $949, ask a series of questions to walk you through all of the paperwork applicable to your divorce. You'll enter your information online and then print and sign the forms. Some programs even provide professional assistance from divorce attorneys, financial advisors, and co-parenting experts at an additional cost. Compare Legal Forms reviewed the best online divorce forms. Regardless of which online program you choose, you'll still need to file your divorce papers with your local court and pay filing fees — $150 to $300 on average.

    • Arriving at the divorce table with mutual respect and agreement helps start the next chapter of your life on a secure emotional and financial footing.

    Additional online resources from KeyBank:

    How to Avoid the High Cost of Divorce 

    Legally Separated: How to Prepare Financially

    (This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)

  • Are You Paying too much for Your Student Loans

    Refinance Student Loans: What You Need to Know

    • You're paying off your student loans — but are you paying more than you have to? If you're paying the same interest rate (or higher) than when you took out the loan, refinancing could help you save money on interest payments.

    • When you refinance student loans, you're generally taking out a loan with a different interest rate and payment terms from your previous loans. The creditor of this loan pays off your previous loan, and you proceed to make payments to the new creditor until your debt is paid off.

    • Why Refinance?

    o The main reason to refinance is to get a better interest rate. With a lower rate, you can use the money you would have paid in interest to pay off your principal more quickly. Or, depending on the loan terms, you might take the same length of time to pay off the loan but pay a smaller amount each month, freeing up some room in your budget.

    o Likewise, if you currently have a variable APR and you're worried about your rate going up in the future, refinancing to a fixed-rate loan would prevent eventual rate increases. This can make it easier to plan your budget and to predict when you'll finish paying off the loan.

    • Is Refinancing Right for You?

    o To start with, it may not be a viable option for you if your credit score isn't high enough to qualify for a better rate. Or, if you have federal student loans, refinancing to a private lender would mean that you no longer qualify for the federal income-based repayment program — or for other federal loan forbearance or forgiveness programs. So people who expect that they'll need help from one of those programs would be better off keeping their federal loans.

    o However, refinancing can be a great option for anyone who is on track to pay off their federal loans and aren't likely to qualify for federal loan forgiveness. Those who have private loans often benefit from lower rates or other favorable terms when they refinance student loans. If you took out loans while in school, you may not have established a solid credit history and there's a good chance that you're paying higher rates than you could be with your current credit history. Refinancing allows you to take advantage of your improved credit score and higher income to get a new loan that's less expensive.

    o Refinancing your student loans doesn't have to be an all-or-nothing deal. Even if some of your loans aren't good candidates, you may have other loans that could be refinanced for better rates. Don't rule it out until you've considered each loan by itself.

    • When to Refinance

    o The better your credit score, the better the rate you'll qualify for. Therefore, if you're currently working to raise your credit score, you may want to wait until your score goes up before you refinance.

    o If your score already qualifies you for a lower rate, it might be the perfect time to refinance so you can save on interest. This is especially true if you're thinking about a fixed-rate loan and you expect rates to rise; in that case, you should refinance before rates go up. It's not easy to predict economic trends, so it's a good idea to talk to a financial adviser about how rates are likely to change and when you should refinance.

    o Before taking out a new loan, consider the terms including the APR, monthly payment, whether the rate is fixed or not and whether it offers protection in case of unemployment. Once you look at all of the variables, you may find that refinancing reduces the amount you owe in interest and allows you to pay off those loans sooner.

    Additional online resources from KeyBank:

    How to Repay Student Loans the Smart Way

    Refinance Student Loans: What You Need to Know

    Smart Ways to Save Money After Paying off Student Loans

    (This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)