Loans vs Line of Credit

Perhaps you require extra funds for a startup business, to buy a car, or to purchase a home. No matter why you need to borrow money, there are two main options to consider: loans and lines of credit. Here, learn about the differences between these possibilities to determine what is right for your monetary needs.

Line of Credit

Lines of credit function the same way as credit cards. A line provides you with a specified amount of money you can borrow and spend as you wish. It typically includes a variable interest rate and requires paying at least the minimum amount on a monthly basis. For example, if you receive a $10,000 credit limit from a financial institution and spend $5,000 of it in one month, you have $5,000 left. Once you pay back the $5,000 you owe, you can spend it again. The cycle continues as long as you have the credit.

Most personal lines of credit are unsecured like standard credit card accounts. However, it is possible to obtain a secured line using an asset such as a vacation property or sizable recreational vehicle. Secured lines help boost credit ratings, while unsecured lines offer benefits such as low fees and APRs.

If you plan to remodel your home or make other significant improvements, consider applying for a line of credit. Other common uses include emergency situations, such as paying for unforeseen medical expenses, as well as overdraft protection. People with inconsistent or unsteady income can also rely on lines of credit.

Loan

Loans get distributed in lump amounts that must be repaid with interest. They are often amortized, meaning you pay a predetermined amount over a set period. Mortgage, student, and vehicle loans fall under the amortization umbrella, such as paying $200 a month to pay off a student loan. Secured loans require collateral, such as real estate, while unsecured loans do not. And while secured loans come in larger amounts, unsecured loans do not risk asset repossession if you cannot pay them back.

In addition to paying for student, mortgage, and car expenses, you can apply for a loan to consolidate debt or start a business. People often take out loans not only to front new business expenses, but to purchase more inventory and equipment, hire additional staff members, obtain capital, or manage daily operations. 

You can count on Hawaiian Financial Federal Credit Union for all your loan and line of credit needs!  With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial Federal Credit Union is one of the leading financial institutions in the state. We have 14 branches in Oahu and one branch in Maui, and enjoy a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad range of services online, and follow us on Twitter for news and updates. You can also call (808) 832-8700 on Oahu or toll-free at (800) 272-5255 with any questions.

How to Follow Your Loan Payoff Plan

Whether you need extra funding for a project or help paying off bills, large loans can give your budget a much-needed boost. However, when it’s time to pay off your debt, going over the full timeline can feel overwhelming. Follow the steps below to stay on track with your payoff plan.

1. Create a Monthly Budget

To create a monthly budget, factor in your debt payments, necessities like food and utilities, savings, and other regular costs. There should always be some room for infrequent events, like holidays or emergencies, but try not to stray too far from your budget.

2. Record Your Progress

Keep a spreadsheet or notebook to record your debt payments. This may seem tedious when your credit union is keeping tabs on the balance, but this task will mainly be for your benefit. Tracking your progress and seeing the debt gradually get lower will motivate you to stick to your plan.

3. Make Extra Payments

Whenever there is room in your budget, make extra payments. For example, if you receive a bonus at work or a money gift, allocate it toward your debt. Long-term budget increases, such as a raise, will allow you to increase your monthly loan payments. The more you pay early on, the faster your debt will be cleared.

4. Avoid Building More Debt

Introducing more debt will only complicate your payoff plan and keep you in debt for longer. Avoid taking out more loans, limit your credit card use, and use cash when you can. In general, you shouldn’t make any big purchases until your original loan is paid off.

5. Give Yourself a Break

Some people may be capable of funneling every cent they make toward their debts, but you don’t need to push yourself to do this if it will only demotivate you. Constantly preventing yourself from doing what you enjoy may take a toll on your mental health. If you have consistently met payments or paid extra recently, consider treating yourself to a night out or a product you’ve had your eye on. Just remember to stay within your budget.

With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial Federal Credit Union is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services online, follow us on FacebookTwitter, and Instagram for news and updates, or call (808) 832-8700 on Oahu or toll-free at (800) 272-5255 with any questions.

How to Avoid Falling for Coronavirus Scams

Avoid COVID scams

As the coronavirus continues to spread globally, some people are exploiting fears with fraudulent loans, bank transactions, and phishing scams. To ensure your financial information remains secure during this pandemic, utilize the following tips.

  1. Look Out for Phishing Scams

A phishing scam uses fraudulent texts, phone calls, emails, and websites to obtain personal information. These scams typically ask for your name, Social Security number, address, and bank account information, but may also request your login information for familiar sites.

Keep your personal information secure by blocking or reporting any suspicious emails, texts, or calls you receive. Never give out these details to numbers or email addresses you don’t recognize.

  1. Keep Your Money Safe 

Banks are federally insured, so if a leak does happen, your money will still be secure within a financial institution. Additionally, most banks have high levels of protection, making it difficult for online scammers to breach their security. This protection isn’t readily available if you choose to store funds elsewhere, leaving you susceptible to scams.

  1. Avoid Loans From Untrusted Lenders

With unemployment rates at their highest, many families are turning to loans to help stay afloat. But never provide personal information to an institution or individual you’re not familiar with. And if the loan conditions sound too good to be true, they likely are. Only trust your bank or a verified lender when pursuing loans.

  1. Keep Technology Updated

Cellphones, tablets, and computers all have security measures included in their software. However, to keep these programs running properly, you must keep your system updated. Look for new software updates on all your devices, and install them promptly to address any vulnerabilities in your system.

 

With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial Federal Credit Union is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services online, follow us on FacebookTwitter, and Instagram for news and updates, or call (808) 832-8700 on Oahu or toll-free at (800) 272-5255 with any questions.

 

How to Cut Costs During the Pandemic

The coronavirus pandemic has spurred a financial crisis on an unprecedented scale, and unemployment rates continue to rise. As millions of Americans are dealing with economic uncertainty, now is the time to consider your emergency plan. If your savings are running low or you didn’t have much to begin with, there are a few ways you can cut costs to reserve your funds for the necessities. Here are a few budgeting tips to help sustain you through the pandemic.

1. Cancel Subscriptions & Memberships

When money is tight and you’re tapping into your emergency plan funds, the first cuts you should make are subscriptions and memberships. Many families have streaming service accounts that are frequently forgotten, or monthly box subscriptions with items they don’t always use. Consider canceling one or two services to reduce monthly spending.

2. Shop Around for Better Policies

Now is the best time to see if you can get a better deal from different insurance providers. Shop around, get as many quotes as you can, and read policies closely to understand what you’re paying for. Many auto insurers are also offering discounts on premiums since fewer people are driving, so see if your provider can offer you a cheaper policy.

3. Avoid Stockpiling Groceries

Public uncertainty about the pandemic has resulted in many shoppers panic-buying at the grocery store. Instead of overspending on a month’s worth of food in one trip, buy enough for one or two weeks at a time. This way you can save money in your emergency plan fund and weekly budget for other essentials.

4. Call Utility Companies

If you’re worried about falling behind on any of your bills, utility companies might be understanding. Call your water, electric and gas, telephone, and internet service providers to see if they’ll cut you a break. Some are offering payment extensions and waiving late-payment fees, and others are temporarily agreeing not to disconnect customers.

5. Look for Lower-Priced Foods

While many savvy shoppers normally rely on coupons and sales to budget their groceries, there aren’t many deals going on right now. Health risks have caused many companies to reduce food production, sometimes leading to an increase in prices at the store. If you’re looking for bargains, your choices are currently limited, so instead aim to buy lower-priced foods. For example, you can purchase store-brand items rather than name-brand and chicken instead of beef.

If you’re having trouble budgeting during the coronavirus crisis, you need a dependable credit union to help you design a realistic emergency plan. With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial Federal Credit Union is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services online, follow us on FacebookTwitter, and Instagram for news and updates, or call (808) 832-8700 on Oahu or toll-free at (800) 272-5255 with any questions.

Bad Habits That Can Lead to Identity Theft and Good Habits to Protect Yourself

 

Woman using smartphone with icon graphic cyber security network of connected devices and personal data informationIdentity theft is always on the rise, as cybercriminals constantly look for new ways to gain your personal information and commit fraud. Identity theft can cause long-term damage to your credit and take thousands of dollars out of your pocket. Sometimes, having your data stolen is unavoidable, but in some cases, your bad habits can increase your risk of being a victim.  Turn these bad habits into good ones and protect yourself instead!

Bad Habit: Using the Same Password

It may not seem like a big deal if hackers get into your Pinterest account, but imagine what could happen if you used the same password for your bank, email, or cloud storage?

Good Habit:  Create unique passwords for each of your online accounts.  Using unique passwords for every website can keep your most sensitive data out of a cybercriminal’s hands and prevent identity theft.

 

Bad Habit: Not Checking Your Accounts

You’re not doing yourself any favors if you don’t check your accounts regularly.  Someone could be committing fraud with your card information and you wouldn’t even know it!

Good Habit:  Utilize your online banking services.  The great thing about online banking is that it’s now easier than ever to access an updated list of your transactions in real time. With online banking, you can monitor your purchase history carefully, and notify your financial institution as soon as you notice a suspicious transaction.

 

Bad Habit: Keeping Your Social Media Accounts Public

The personal questions most websites use to confirm your identity may seem secure, but that information can easily be found online. Your social media accounts are a treasure trove of information scammers, criminals, and thieves can use to determine your high school mascot, your pets’ names, and where you come from.

Good Habit:  To protect your identity and prevent fraud, keep all of your social media accounts private, and be careful who you allow access.

With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial Federal Credit Union is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services online, follow us on FacebookTwitter, and Instagram for news and updates, or call (808) 832-8700 on Oahu or toll-free at (800) 272-5255 with any questions.

 

3 Ways to Maximize Your Retirement Savings 

boost retirement savingsIf you’re struggling to save enough for retirement—or to determine what your savings goals should be in the first place—turn to Hawaiian Financial Federal Credit Union. We are a full-service credit union that can assist with all aspects of retirement planning to help you build a more secure future. Here are just some of the ways our knowledgeable team will help you devise a savings strategy.

 

  1. Account for Inflation 

There are a number of formulas that can determine how much money you need for a comfortable retirement, but they don’t always account for inflation. While the precise figure varies from year to year, most financial institutions use a target inflation rate of 2%. Because of this rate, every dollar you save in 2020 will have considerably less purchasing power in 2040. To ensure you put away enough, talk to a financial advisor about your current assets and liabilities, career trajectory, and long-term goals. They’ll weigh this information against the target inflation rate to calculate approximately how much you’ll need.

  1. Open an IRA

Opening an individual retirement account (IRA) is a sound investment that will pay off when you finally leave the workforce. If you opt for a traditional IRA, you can deduct contributions during the tax year that you make them. If you opt for a Roth IRA, on the other hand, you can withdraw funds upon reaching age 59½ without being taxed on your earnings. In 2020, accountholders can contribute up to $6,000 (or $7,000 if they’re over 50) to their IRAs.

  1. Attend a Financial Planning Workshop

At Hawaiian Financial Federal Credit Union, we are committed to protecting our members’ financial security and helping them grow their retirement savings. Join us on March 11 and March 28 at the INPAC Wealth Solutions headquarters, 1001 Bishop St, Ste 2300, for a free retirement workshop led by INPAC Wealth Solutions’ very own principal wealth advisor, Troy Wada. Troy will explain the various expenses you should account for during retirement, as well as the market cycles and inflation rates that could influence them. He will also share strategies for maximizing your savings by devising ambitious but attainable goals. If you are interested in attending either date, please RSVP with Carey at (808) 784-4006 or e-mail carey@greamplanlive.com.  We hope to see you there!

With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial Federal Credit Union is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services online, follow us on FacebookTwitter, and Instagram for news and updates, or call (808) 832-8700 on Oahu or toll-free at (800) 272-5255 with any questions.

 

3 Ways Your Tax Refund Can Build or Improve a Line of Credit

Loving couple paying bills online at homeYou’re expecting a significant tax refund this year. It may be tempting to splurge it all. But if you’ve been thinking about buying a first home or financing a car, those extra funds can help improve your chances of getting a line of credit. Here are several savvy tips for using your refund to make it happen.

 

  1. Pay Down Balance

A line of credit is issued to an individual by a credit union or other lender that allows borrowing up to a designated amount. Because the line of credit must eventually be paid back, you can use your tax refund to pay down the balance. If you’re trying to secure a new line of credit, paying down existing credit card debt and other financial obligations may help boost your credit score. This can improve your chances of being approved for the line of credit.

  1. Apply For a Secured Card

Another way to up your chances of receiving or maintaining a line of credit is through responsible credit card management. A secured card is another way you can use your tax refund. You can use the funds to put a deposit on the card. When you make consistent payments each month, you’re establishing a good debt management record, which can increase your credit score over time. When you apply for a line of credit, lenders will take this into consideration during the approval decision process.

  1. Pay Off Existing Line

If you currently have a line of credit, your tax refund may be enough to pay down the entire balance. Credit unions and other lenders will typically be more inclined to approve you for another line in the future if you’ve demonstrated responsible financial behavior with a prior line of credit. Depending on your situation, you may even qualify for a higher amount should you need the funds for a home renovation or other financial priority.

 

 

With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial Federal Credit Union is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services online, follow us on Facebook, Twitter, and Instagram for news and updates, or call (808) 832-8700 on Oahu or toll-free at (800) 272-5255 with any questions.

Lower Your Home Mortgage Rate With These 3 Tips

lowermortgage.jpgHomeownership is a dream of many people. However, this dream comes with the cold, hard reality of a monthly mortgage payment, including interest. Keeping mortgage rates manageable is a key factor in remaining financially stable after buying a new home. Here is how you can do just that.

  1. Increase Your Down Payment

The standard down payment for a home is usually 20% of the total cost, but in some cases, you may be able to provide much less than that. However, there are very good arguments for providing as large a down payment as you can manage. The bigger down payment, the less interest you’ll need to pay. Monthly payments will also be smaller when down payments are more substantial.

  1. Decrease the Loan Term

Many home loans come with a 30-year term. While this provides ample time for you to pay off your loan, it can also greatly increase costs. If possible, consider a shorter term, such as 10 or 15 years. Not only will you have your home paid off much quicker, you’ll also end up paying a lot less.

  1. Improve Your Credit Score

While there is no quick-fix to a fair or poor credit score, if you’re planning to buy a home sometime in the future you should take steps to improve your rating now. Your score is based on a number of factors, including the balance on your credit cards. Keep this figure to no more than 30% of the total credit limit, while also making sure you pay your bills on time each month.

 

With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial FCU is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services, follow us on Facebook, Twitter, and Instagram for news and updates, or call (808) 832-3700 on Oahu or toll-free at (800) 272-5255 with any questions.

5 Ways to Budget After the Holidays

post-holidayThe holidays are a period of gift-buying, travel expenses, and time off work, so it’s easy to spend more than you earn. The best New Year’s resolution you can make is to straighten out your finances. Here are a few tips to help you stick to your budget and replenish your credit union account.

1. Take Inventory of Where You Are Financially

Once the holidays are over, it’s time to review your credit card statements. Make sure you can at least make the minimum monthly payments. If the totals are quite high, consider putting the cards in a drawer until you pay the balances down.

2. Curb Excess Spending

Restrict spending when it comes to items that you don’t need right away. A good spending formula to use is the 50/30/20 rule, which allocates 50% of your monthly income to essentials, 30% to debt repayment, and 20% to wants. Once the debt is paid, put that money into savings.

3. Record Your Expenses

Record your everyday expenses so you know where to further cut back on spending. After a few months, review your notes for small indulgences, like coffee and dining out, that add up over time. Once you’re aware of them, ask yourself the next time whether you want to treat yourself or stick to your financial goals.

4. Set Up Automated Payments

Automating your payments through online banking ensures you set aside enough money for your credit card balance, plus you’ll never have another late fee. Paying off your balance consistently will also build your credit score. Just make sure you have enough money in the debited account every month.

5. Return & Reap Rewards

If you received a gift you likely won’t use, return it if possible. Also, redeem cashback deals or reward points on the credit cards you used leading up to the holidays, and use any gift cards. Whether you put these small bonuses toward your daily needs, debt balances, or credit union savings account, you’ll have extra cash on hand.

With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial FCU is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services, follow us on Facebook, Twitter, and Instagram for news and updates, or call (808) 832-3700 on Oahu or toll-free at (800) 272-5255 with any questions.

 

 

How to Save for Your Child’s College Education

college education

Just about every parent wants to send their child to college, but higher education is incredibly expensive. In fact, the average cost for one year of school is over $26,000 — up 34% from a decade ago. Luckily, there are many programs provided by local credit unions and state governments that can help you save for your child’s education and avoid taking out a line of credit. Here are three of the top options available.

1. Traditional Savings Account

Savings accounts allow you to steadily grow your money with a guaranteed interest rate. Additionally, the risk of utilizing such a service is low as long as you choose an insured credit union. Since the annual percentage yield (APY) of savings accounts are usually lower than riskier investment options, parents typically create a portfolio consisting of multiple account styles to obtain both security and potential growth.

2. IRA

An individual retirement account (IRA) is a type of investment account with long-term savings in mind. Even though earnings aren’t guaranteed as they are with a traditional savings account, the potential growth is typically higher. Such accounts also allow you to withdraw money completely tax-free for an approved expense.

While traditional IRAs are designed solely for retirement, a Roth IRA can also be utilized for buying your first home and higher education expenses. Alternatively, a Coverdell IRA caters to college expenses specifically, including tuition, books, and fees. There are contribution limitations for both styles, and credit unions require minimum balance requirements to avoid fees.

3. 529 Plan

Just about every state offers their own state-sponsored 529 plan, which allows you to invest post-taxed income in stocks and bonds. With Hawaii’s HI529 program, the minimum initial investment is only $15, and each account is allowed to grow to $305,000 before contributions are capped, which may help your family avoid taking out student loans down the road. Unfortunately, the program doesn’t qualify for any state tax deductions, and you’ll face minimum yearly fees. However, parents have the option to invest in any state’s 529 plan regardless of where they live or the child plans to attend school.

With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial FCU is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services, follow us on Facebook, Twitter, and Instagram for news and updates, or call (808) 832-3700 on Oahu or toll-free at (800) 272-5255 with any questions.