Posted: 21 Oct 2014 01:00 PM PDT

Chase Slate® is the best card around to help you pay off credit card debt as quickly as possible, then keep your balance hovering at or near zero with an array of helpful budgeting and payment tools.

With Chase Slate®, you'll receive an introductory balance transfer offer with no balance transfer fee for the first 60 days. You'll also get the unbeatable introductory rate of 0% APR on all purchases and said balance transfers for the first 15 months. These introductory offers from Chase Slate are ideal if you've been struggling to pay off your credit card balance because of high interest rates.

I find the Chase Slate® to be truly dedicated to helping you tackle your credit card debt because they don't just absorb your balances and then leave you with a brand-new card that eventually causes more debt. Instead, they offer additional assistance to keep you on track with maintaining a low balance. The Chase Slate® card provides exceptional tools like Blueprint® so you can quickly gain control over your payments, determine where your money is being applied, and gain visibility to your spending habits.

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Chase Slate® Overview

Key Stats and Promotions

Introductory Rate	0% introductory APR for 15 months on balance transfers and purchases
Introductory Balance Transfer Offer	No balance transfer fee for the first 60 days your account is open
Annual Fee	$0

Tips for Using Chase Slate®

Balance Transfers: If you're carrying a large balance, or really any balance that you won't be able to pay off before the next billing cycle, on any of your credit cards with an APR above 0%, take advantage of the 60-day no transfer-fee window.

Everyday purchases: Pay no interest on specific categories by designating your payment plan to Full Pay for your frequent, unavoidable purchases like gas and groceries.

Large purchases: By activating the Split payment method you can select large purchases made on your card, designate when you want those specific items to be to paid off, and your monthly payment will automatically be calibrated to achieve your goal.

Why You Might Like It

You've already spent too much on balances with other cards and are ready to start paying off your debt
You need help structuring how you'll pay off large purchases
You don't want to pay an annual fee on a credit card
You want to set a budget to start gaining back control of your spending
You're a loyal Chase customer

Why You Might Not Like It

You don't have any large credit-card balances and wouldn't be able to take advantage of the balance transfer benefits
You already use a budgeting system that works well and don't want to recreate the wheel
You've already got your payment under control and would rather earn rewards on your spending

Best Way to Use It

Transfer any balances from accounts with above a 0% APR within your first 60 days of opening the Chase Slate card
Set up your personalized Blueprint to stop paying interest on everyday purchases, pay off large purchases more quickly, pay off a balance, or help stay on your targeted budget.

Chase Slate® Details

How it works

Chase Slate® allows you to transfer balances with no fee if done within the first 60 days of opening your account. On top of that, you receive a 0% APR for your first 15 months. Consolidating your credit card debt allows you to stay on top of it more effectively, and consolidating to a single place without interest for over a year gives you the opportunity to finally pay your debt off!

Full Details:

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Chase Slate® Blueprint®

Along with transferring your balances over with no fee and no interest for the first 15 months, you can set up your personalized Blueprint to best fit your needs. Blueprint® is a customizable tool with four plans to help you achieve your financial goals. You can set up one or more plans at a time, including:

Full Pay℠: With Full Pay, you determine which everyday categories of spending you don't want to pay interest on each month. Your account activity will automatically designate these amounts to be paid in full each month even if you're carrying a balance (not recommended) on other items.
Split℠: With Split, you choose any recent large purchase and Blueprint will help you develop a specific plan to pay it off in specified increments within a timeframe that you predetermine.
Finish It℠: With Finish It, you select the amount you want paid down on your lingering balance. You determine the amount of time you need to pay the balance down and Blueprint will set up the payment plan.
Track It℠: With Track It, you set up spending goals throughout various categories and easily track your progress. This is an awesome integrated budgeting tool that will feed your direct spending into your budgeting plans.

Blueprint® Statements

Prior to having visibility to your spending habits, it's hard to make any significant changes. With Blueprint, you can make impactful decisions on your spending and payback plan. You will receive a Blueprint statement with your monthly billing showing the amount that is due for your Blueprint payment in order to accommodate your Blueprint plan. This payment includes your card payment minimum so only one payment is due.

The Blueprint statement also includes an easy-to-read breakdown of each plan with the following helpful tools:

Fully Pay℠ will show the number of transactions as well as the total spend in each category. It also shows historical spending in the form of a bar chart so you can easily monitor when your peak spending times are throughout the year for purchases within those categories.
Split℠ and Finish It℠ will show you a snapshot of a designated purchase or balance, including the original amount, monthly scheduled payment amount, number of remaining payments, remaining balance, and projected payoff date. It also includes an updated progress bar that displays the percentage of total payment completion.
For Track It℠, you'll have to log in to your account to track your progress against your established budget since it updates based on all purchases rather than on a monthly basis.

Chase Slate® Fraud Protection

Chase also offers an exceptional consumer-protection suite with the use of their credit cards. With the increase of identity theft victims year-over-year in the U.S., this asset is a must.

You'll receive excellent protection, including:

Fraud Protection: Chase's fraud protection constantly monitors your account for suspicious activity.
Fraud Alerts: After registering for Fraud Alerts, you can receive warning of potential fraudulent activity via phone, text, or email.
Zero Liability Protection: You are not held accountable for any unauthorized purchases on your account.
Purchase Protection: When you make a purchase on your Chase Slate card, it is covered against damage or theft up to $500 per claim and $50,000 per account for the next 120 days.

Best Use: Pair With a Cash Back Card

Once you have your spending reigned in and your payment plan established, consider pairing with a cash back rewards card like the Chase Freedom®. Keep in mind that these two items should be your first plan of attack before turning to rewards. You want to be sure that you're not mitigating any rewards benefits because your budget isn't set yet and you're carrying large balances on high-interest accounts.

The Chase Freedom® card offers 5% back on bonus categories that change every quarter and 1% on everything else, with no annual fee. Since both cards are offered by Chase, you can easily monitor spending while signed into a single account online.

Other Choices to Consider

Still not sold on the Chase Slate? It can seem counterintuitive to transfer balances from one card to another, and we would not recommend this as a continued best practice. However, getting your finances under control is an absolute must.

Take a look at our in-depth reviews of the Best Balance Transfer Credit Cards. In addition, you can browse our entire credit card directory below to search for what matters to you.

Best Balance Transfer Credit Card Directory

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The post Chase Slate® Review appeared first on The Simple Dollar.

Keeping Lifestyle Inflation at Bay

Posted: 21 Oct 2014 07:00 AM PDT

One of the biggest challenges that people face when it comes to personal finance success is lifestyle inflation. It’s a subtle thing that people often just take on without even really noticing or thinking about it, but then it turns out to be a vicious enemy of their financial goals.

What Is Lifestyle Inflation?

Lifestyle inflation simply refers to an increase in spending in response to an increase in income. Whenever a person starts bringing home more money and then, because of that increased income, they start spending more by buying a nicer car, buying more gadgets, and so on, they’re undergoing lifestyle inflation.

Let’s say, for example, that you get a raise that causes you to bring home $100 more a month. If the presence of that raise causes you, during your next car purchase, to buy a Lexus instead of a Toyota and take on a car payment that’s $100 more per month than you would have otherwise had, then you’re experiencing lifestyle inflation. You’re locking in a higher level of monthly expenses to enjoy a (theoretically) more luxurious lifestyle.

So, why is that problematic? After all, what’s the point of earning more money if you can’t have better stuff?

For starters, more income usually doesn’t mean more happiness. That is, additional income above a relatively low level (around $40,000 a year in the US, depending on the specific study) doesn’t make you happier over the long run. I discussed this in detail in an earlier post, showing these income levels above which happiness doesn’t increase as suggested by different studies (they tend to range from $40,000 to $75,000 in household income). So, if you’re already making a good salary, more income is not going to translate into more happiness no matter how you use it.

The other major problem is that lifestyle inflation takes away from handling long term personal finance goals like financial independence. If you take a raise and start spending all of it now, that means you’re not preserving any of it to spend later on. You’re not bringing retirement any closer. You’re not moving toward debt freedom. You’re simply not moving toward any financial goals.

My Own Experience with Lifestyle Inflation

In 2002, I started my first “good” job after graduating from college. I went from working twenty hours a week for a bit more than minimum wage to working at a full-time salaried position earning about $40,000 per year. That was a huge jump in income.

There were many, many things that I wanted throughout my college years that I had denied myself because I didn’t have the money. I had built up some real debt during those years as well, with books and clothes and food often purchased with credit as well as some serious student loans during the final two years of college.

So, when that income started rolling in, I bought some things. I bought a new pickup truck. I bought a ton of electronics. I bought a professional wardrobe. I bought pallets of DVDs and books. Sarah and I had a two week honeymoon in the United Kingdom that included several days in an amazing hotel that overlooked Hyde Park.

What I didn’t do is get rid of that college debt. What I didn’t do is save a lot for retirement (I did save some, but not nearly as much as I could have or should have). What I didn’t do is think about anything beyond the next few months.

A few years later, Sarah and I were financially tapped out. It was a four year period of negative financial progress.

Of all of those things that I spent money on during those years, very little of it means anything at all to me today. I don’t really regret the honeymoon, but virtually everything else has no meaning in my life. I regret 99% of my excess expenses during those years because they contributed little value to my life but they certainly cost me a lot of money, time, energy, and stress over the years.

Battling Lifestyle Inflation: Ten Strategies

How do you conquer lifestyle inflation? Here are ten strategies that have actually worked well for me.

Strategy 1: Have Big, Meaningful Long-Term Goals

Where do you want to be in five years? Ten years? Twenty years?

This kind of future thinking can be hard, especially if your life isn’t on a certain path. Many people find themselves on uncertain paths where they don’t know how long their jobs will last or whether they even want to stay in that career path.

Here’s the trick. I’m not talking about where you think your life will be in five, ten, or twenty years. I’m talking about where you want your life to be in five, ten, or twenty years.

Let’s assume a few reasonable things go well over the ensuing years. What would you want your life to be like at that point?

That vision of your future defines a handful of long-term goals for you. All you need to do is compare that optimistic vision of your future with where you’re at now and then think about what you can do to make that transition happen. That’s a big meaningful long-term life goal. You’ve just defined it.

I actually go through this process regularly. I spend several hours on a weekend day roughly every three months thinking through my life goals and what I want to achieve. That way, the big goals never become stale.

Strategy 2: Keep Those Goals Front and Center

The real challenge of big goals is that they sometimes aren’t relevant to what’s going on in our day-to-day lives.

If you’re anything like me, your daily calendar and to-do list is frightening. My to-do list, right now, has somewhere around 70 things on it (I use prioritization, thank goodness). My calendar has scheduled events every single day through the end of the month and well into next month. That’s just reality.

A big long-term goal that’s not directly related to those day-to-day things can seem really abstract and easy to forget. It is vital that when you come up with ways to connect those big goals with your day-to-day life.

I find two elements really make this click.

First, I load my life with visual reminders of those goals. I choose desktop pictures for my computer and phone related to those goals. I hang pictures related to those goals in my office. They’re in my car. They’re on the fridge. They’re everywhere. They keep my big goals in my mind constantly.

Second, I break down those goals into something I can actually do every day to move toward that goal. For example, if my vision of myself in five years shows me looking thin, I would put an exercise session or a very low-cal lunch on my to-do list for the day. Checking off that to-do not only feels like I’m achieving something today, it also has that extra benefit of feeling like I’m progressing toward my big goal. It’s also a reminder of that big goal.

Strategy 3: Save Your Raises

Whenever you see a bump in income, it can feel really good to see that bigger paycheck. When you have that bigger paycheck, though, it can become really tempting to spend that extra money.

How about instead of seeing that extra paycheck, you simply never allow it to cross the threshold of your checking account?

Let’s say you receive a 3% raise. Bump up your retirement savings by that same number – from 3% to 6%, for example. That way, your paycheck will barely change, but you’ll be doubling your retirement savings.

On the other hand, you might just set up an automatic transfer from your checking account to your savings account for the amount of your raise so that it just disappears into savings not long after it appears in your checking.

Your raise, in other words, goes purely toward your long-term goals rather than toward whatever your short-term desires are.

Strategy 4: Recognize That Stuff Rarely Buys Lasting Happiness

The more I evaluate life, the more I see the Pareto principle popping up again and again. For those unfamiliar, the Pareto principle states that, for many events, roughly 80% of the effects come from 20% of the causes. It shows up again and again and again throughout life.

The idea that stuff doesn’t buy lasting happiness is a great example of the Pareto principle. Think about it: 80% of the pleasure you get from your possessions comes from 20% of your possessions. Most of your possessions provide very little pleasure in your life.

Think about all of the stuff jammed in your closet that you never look at. Think about the stuff on your bookshelves that you never deal with. What about the stuff in your cupboard that you never use?

When I think back on the vacations I took in my life, most of them were pretty forgettable. There were high spots during them, of course, but most of those high spots could have occurred on a camping vacation within a few hundred miles of home.

Again and again, I find that spending money does not buy lasting happiness most of the time. I find lasting happiness from personal relationships and from building my own skills and from activities using a pretty small proportion of my possessions. Buying new stuff or investing a ton of money into new experiences rarely adds up to being “worth it.”

Strategy 5: Be Mindful of the Costs When Evaluating What Others Have

Jealousy is a dangerous thing. It can create material desires out of nowhere, making you really want things that wouldn’t have crossed your mind otherwise. You see what other people have… and you really want it, too.

The problem is that when we see what other people have, we don’t immediately balance it out with what it cost those people.

Here’s an example: a wonderful couple I know is currently honeymooning in the tropics. Their honeymoon sounds amazing. I’d love to do that with Sarah and – I admit – I’m just a touch jealous of their trip. It just sounds incredible.

However, when I sit down and start pricing out a trip like that, I begin to see the reality. They are spending many thousands of dollars on the trip. That’s a hefty expense. Their trip may be wonderful, but it’s going to have a lasting negative impact on their finances going forward.

That doesn’t make the trip bad, per se, but it does make it seem like much more of a balance of factors rather than just an awesome good thing.

Whenever you feel a pang of jealousy for something that someone else has or is experiencing, think for a moment about what that possession or experience is costing them and how it’s denying them other opportunities and freedoms. This cuts through my jealousy and desire like a hot knife through butter.

Strategy 6: Maintain a Family Budget

A family budget is a simple plan that describes how all of your family income is spent. Some is spent on this category, some is spent on this other category, some is used for food, some is used for gas, and so on. (I use You Need a Budget to manage my own family’s budget.)

A budget is useful because it requires that you keep track of and figure out where every single dollar coming into your life goes. If you track your expenses and keep them separated into the budget categories, you can see how things are really going.

A budget is particularly useful when your income level changes because now you have the ability to expand the budgetary areas of your choosing. Will you crank up the “debt repayment” category? If you do, then you’ll be making bigger debt payments each month, which means that debt will vanish faster than ever. Maybe it will go into “Roth IRA” or some other category.

Regardless, a budget gives you a framework to make sensible decisions about that extra money. You don’t just rely on intuition and desire when you have a budget.

Strategy 7: Budget for Personal Expenses

Watching your new, higher income disappear into budget categories that don’t spell out any pleasures in your life can be kind of disheartening. All of us like to have a little bit of pocket money, after all, and when a raise comes through, that lack of pocket money can feel particularly disheartening.

My solution for this problem is to simply have a line in the budget for “pocket money.” I budget a certain amount each month for both Sarah and myself to be able to spend without consequence, knowing that our budget is well taken care of.

If you get a raise and really want to reward yourself, raise that “personal expenses” line on your budget by $10 or so. In other words, you’re allowing yourself a bit of nonspecific lifestyle inflation, but you’re also planning so that most of the money is going toward your bigger goals.

For me, simply having that “personal expenses” line is enough. I have enough to spend each month. I don’t need to spend more than that, so it’s quite easy to apply a raise to other expenses.

Strategy 8: Choose Substance Over Style

Many of the elements of “lifestyle inflation” that people buy into are examples of style over substance. Expensive clothes. An expensive car. An expensive home.

Most of the time, that additional expense doesn’t really add anything to the function of those items. It doesn’t buy warmer clothes – it just buys flashier clothes. It doesn’t buy a house that does any better at keeping you warm or keeping you dry. The car you already have gets you from point A to point B; the extra expense is mostly just flashiness.

When it comes to your major expenses, focus on substance instead of style. What do you need your home to do for you? What do you need your car to do for you? What does this more expensive option really add to that? Is that difference worth the expense?

When you stick with substance over style, you always have what you need. When you choose style over substance, you often find yourself without that stable foundation.

Strategy 9: Build Friendships With People That Have Similar (or Lesser) Budgets and Philosophies

When you hang out with people, what do they talk about? What are they proud of?

Do they talk about the new stuff they covet? The hot new restaurant they visited? The expensive new thing they now own?

Or do they talk about their life goals? Do they talk about events and activities that don’t require purchases? Do they talk about philosophy and ideas? Do they talk about staying within their budget and their financial choices that gear toward savings?

One group of friends is going to push you toward lifestyle inflation. The other will naturally push you away from it.

I’ve had circles of friends of both types. When I hung out with the first circle, we were in the worst throes of lifestyle inflation. Today, our circle of friends is much like the second example and our lifestyle has deflated, if anything.

Having trouble cultivating more down-to-earth friends? Look for activities in the community that might attract such people in a social way. Check out book clubs that are hosted by your library or spend time at volunteer activities in your community.

Strategy 10: “Test Drive” Lifestyle Upgrades (and See If They Bring Lasting Joy)

Even after all of these steps, you might be convinced that certain lifestyle upgrades are still the right thing for you. If that’s the case, try taking baby steps instead of giant leaps.

One method of doing this is to look at all of the things that you might be buying or replacing over the next year or so. Across all of those purchases, think about the one or two features that you wouldn’t ordinarily buy that might really matter to you. For example, you might decide that of all of the things you can upgrade in your life, a bigger data plan might provide the biggest impact. Then, just upgrade that one thing and hold back on the others.

This borrows from the Pareto principle mentioned earlier. 20% of the upgrades you pay for will bring you 80% of the value. So, spend some time trying to figure out what that 20% is.

Another method – one that works well if you’re already budgeting – is to “pretend” you have a fatter bill for a while. For example, imagine you’re thinking about moving to a bigger apartment or even renting a house. Your current rent is $500 a month, but the place you’re eyeing is in the $900 a month range. Spend a few months trying out what it’s like to have a $900 a month rent by paying your $500 a month in rent and then putting the other $400 into a savings account and not touching it. If you can get by just fine with that higher rent, make the move. (Plus, you’ll have a thousand or two in savings at that point.)

A third tactic for trying out lifestyle upgrades is to simply comparison shop. Sometimes, by comparison shopping, you can find an opportunity for a lifestyle upgrade but find that it doesn’t cost any more than you already have. For example, a friend of mine recently switched cellular providers, which enabled him to get a better smart phone and a larger data plan for the same price he was already paying.

Final Thoughts

Lifestyle inflation is a sure way to prevent yourself from reaching your financial goals, whatever they may be. If you have big dreams for the future, yet you take your raises and you spend all of that money on short-term pleasures, what you’ll find is that those short term pleasures will almost entirely fade away but you won’t have that long-term goal either.

Being aware of lifestyle inflation is just the first step. Take actions to keep lifestyle inflation from damaging the big dreams you have for the future. You’ll be glad you did.

The post Keeping Lifestyle Inflation at Bay appeared first on The Simple Dollar.

Student Loans 101: Vocabulary

Posted: 21 Oct 2014 05:00 AM PDT

Money and college can be confusing. Whether you're just starting out on your college journey or dealing with student loans from years ago, here is a glossary of helpful terms you may need to know:

Accredited: If your college and program is accredited, it means that it has met specific requirements by the U.S. Department of Education. You'll have to attend an accredited school to get federal loans or use any federal aid.

Administrative Wage Garnishment: If your federal student loans go into default, the federal government has the ability to take up to 15% of your disposable income directly from your employer.

APR/Annual Percentage Rate: This percentage is the interest rate you will pay on your loan.

Auto-Debit: This allows your lender to automatically deduct a payment from your checking account every month. Some lenders offer a small reduction in your interest rate if you sign up for this. This can also ensure you avoid late fees.

Award Letter: You'll receive this letter from your intended college. It will tell you the type of financial aid you qualify for along with the amount. You'll also see your Expected Family Contribution and your school's Cost of Attendance.

Borrower: This is the person who is legally responsible for the student loans. You may have loans where you are the borrower, and loans where a parent is the borrower.

Cancellation: In very rare circumstances, you may hear of a student loan being cancelled. If your college was closed before you could complete your course of study, you may be eligible to have your loans cancelled. Cancellation may also occur if a borrower has a serious disability or dies.

Capitalization: This is when all of the unpaid interest is added right to your principal balance of your loan. This occurs when you start repaying your loans or when any deferment or grace period ends.

Cost of Attendance (COA): This is the estimated amount that you will pay (or paid) for attending your specific college. This amount includes tuition, books, supplies, and room and board.

Consolidation: Once you're ready to repay your loans, you can have them consolidated, which means combining all of your loans into one loan. A benefit to this is making it easier to keep track of your debt, since now you only have one loan instead of several. Plus, you may be able to get a lower interest rate. However, on the flip side, consolidating loans can also mean losing certain benefits, such as loan forgiveness.

Debt-to-Income Ratio: Your debt-to-income ratio is what it sounds like: It’s the amount of debt you have compared to your income. This is a standard item lenders will look at to determine whether you'll be eligible for a loan. If you have a lot of student loan debt, you may not be eligible for other types of loans and credit, including credit cards, a car loan, or a mortgage loan, for example. This is also looked at when determining what type of student loan repayment plan you'll be eligible for.

Default: Your student loan is considered in default if you fail to make a payment for 270 days. A loan going into default is bad news. Besides harming your credit, you can also lose eligibility for federal student aid, lose the ability for deferment, forbearance, or other repayment plans, and you may even have your federal and state taxes withheld through a tax offset.

Deferment: A deferment is a set period of time during which repayment of your student loans is delayed. There are many different types of deferment, including in-school, unemployment, economic hardship, or active duty military service. You will often need to apply for deferment through your lender by completing an application and providing proof and/or documentation of your eligibility.

Delinquency: The first day you miss your scheduled student loan payment, it is considered a delinquent loan. Your loan will be considered delinquent until you bring your loan current. After 90 days of a loan being delinquent, your lender reports it to the major credit bureaus.

Dependency Status: Your dependency status determines whether if you are considered a dependent student or an independent student. This will impact what information you are required to share on your Free Application for Federal Student Aid (FAFSA) and what types of financial aid you might be eligible for.

Dependent: As a dependent, it is assumed you have support from your parents, and therefore you are required to include your parents’ information on the FAFSA.

Direct Consolidation Loan: This would allow you to combine multiple federal loans into one single loan. This could make it easier to deal with your loan; however, it could also result in the loss of certain loan benefits.

Direct Loan: This is a federal loan that borrowers (including students and parents) can get directly from the U.S. Department of Education. These loans include Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans.

Disbursement: This is the payment of your funds by your school.

Discharge: If a loan is discharged, it means you (as the borrower) are released from the obligation to repay your loan.

Discretionary Income: For the Income-Based Repayment plan or the Pay As You Earn repayment plan, your discretionary income is the difference between your current income and 150 percent of the poverty guideline in the state you live in for a family of your size. For the Income-Contingent Repayment plan, it is the difference between your income and 100 percent of the poverty guidelines.

Disposable Income: This is the amount that remains from your pay after any deductions.

Economic Hardship Deferment: If you are currently working full-time (at least 30 hours per week) but still have trouble making your payments, you may qualify for this deferment.

Enrollment Status: This is how you are currently attending your college. It can include full-time, part-time, half-time, or less than half-time. If your enrollment status drops to less than half-time, your student loans are eligible to kick in. Enrollment status can also include withdrawn or graduated.

Estimated Family Contribution: If you are a dependent, you are required to submit your parent's financial information on your FAFSA. Once you do, you will receive your estimated family contribution, a dollar amount that your family is expected to contribute and, therefore, will affect your eligibility for financial aid.

Exit Counseling: When you are graduating or attending school less than half-time, you'll need to take exit counseling. It is an information session that will explain to you how repayment of your student loans will work and your responsibilities.

FAFSA: FAFSA is the Free Application for Federal Student Aid. Fill this out before each academic year to see what federal aid you qualify for, including grants, federal loans, or a work-study program.

Federal Loan: A federal loan is one that comes directly from the U.S. Department of Education, as opposed to a private lender.

Federal Family Education Loan Program: Also known as FFEL, this expired program allowed private lenders to give loans to borrowers that were guaranteed by the government. But now, all federal loans come directly from the Department of Education.

Forgiveness: Depending on the type of your loan, you may qualify for a portion to be forgiven. This means that those loans get "erased", and you no longer owe that portion of the loan.

Forbearance: Depending on the type of loan you have and your lender, you can qualify for a forbearance if you are having trouble making your payments. A forbearance allows you to stop making payments for 12 months while interest will continue to accrue.

Grace Period: Most lenders offer a grace period, a certain amount of time after you graduate or stop attending college full-time, when you do not yet have to make payments on your student loans. But as mentioned in 15 Ways to Deal With Student Loan Debt, try to avoid the tempting option of simply ignoring your debt during this period.

Graduate PLUS Loan: This is a federal loan that is used to cover the costs of graduate school.

Grant: A grant is essentially free money that is used to apply towards your education that does not need to be paid back. A grant is similar to a scholarship, but grants are often need-based, while scholarships are often based on merit, athletic ability, or affiliations. You can find grants by filing out the FAFSA, talking with your financial aid office, and researching other grant resources online.

Gross Annual Income: Your gross annual income is the income you earned in one year before taxes. Gross Annual Income (GAI) will be used when filling out the FAFSA, applying for loans, and to determine your repayment plan once you are paying back your student loans.

In-School Deferment: This type of deferment is used when you are currently enrolled in a college, generally for more than half-time. If you are in school, you can defer, or temporarily stop making payments, for the time you are enrolled.

In-State: Generally, each college offers an in-state tuition rate and an out-of-state tuition rate. If you choose to attend a college in the state you legally reside, you will pay in-state tuition, which is generally lower than out-of-state.

Income Based Repayment: This is one of the student loan repayment plans designed to lower your monthly payments, based upon your current income. This specific plan, also known as IBR, caps your payment at 15 percent of your discretionary income.

Independent Student: If you are considered an independent student, you are thought to be receiving no assistance from your family.

Interest Rate: You must pay interest to your lender in exchange for borrowing the money. The dollar amount of interest owed is calculated using a percentage of the debt — for example, 6.25% — your interest rate. A fixed interest rate will not go up or down during the term of the loan, whereas variable interest rates can shift depending on financial markets.

Lender: The lender is the organization that gave you a loan. A lender could be the U.S. Department of Education (for federal loans), a bank, credit union, your school, or another lending institution, such as Sallie Mae.

Out-of-State: Generally, each college offers an in-state tuition rate and an out-of-state tuition rate. If you choose to attend a college in a state where you don’t legally reside, you will pay out-of-state tuition, which is generally higher than in-state.

Outstanding Principal: This is the total sum of the money borrowed on the specific loan, including any capitalized interest.

Pay As You Earn: This is one of the income-driven repayment plans for student loans designed to make your monthly payments lower, based upon your current income. The Pay As You Earn plan caps your payments at 10 percent of your discretionary income.

Perkins Loan: This is a federal loan with low interest, where your school is the lender. Funds will depend on what your financial need is and what is available from your college.

PLUS Loan: There are Graduate PLUS loans and Parent PLUS loans. These PLUS loans are either for graduate students to help fund their education or for parents of undergraduates to help them pay for their tuition.

Principal: This is the outstanding balance of your loan, without any future interest and fees.

Private Loan: This type of loan is given by a private company instead of the federal government. You may receive or have received a private loan from a bank, credit union, your school, state agency, or common loan providers such as Sallie Mae.

Promissory Note: This is what you will sign to agree to the terms of your student loan payback.

Subsidized: The federal government will pay interest that accrues during your grace period, unless it occurred between July 2012 and July 2014.

Unemployment Deferment: If you are actively seeking employment and you're unable to pay your student loan minimum payments, you can apply for an unemployment deferment. This will temporarily postpone your payments.

Unsubsidized: Unlike subsidized loans, you are responsible for your interest on loans during all periods.

Work-Study: This is a type of federal aid. This particular program provides part-time jobs for undergraduates and graduate students with financial need. Your college needs to participate in this program to be eligible.

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