Financial Beat

By Yvonne Chilik Wollenberg

Student loans: It's a good time to consolidate education debt

The interest rate on student loans has dropped by nearly 2 percentage points to 4.06 percent—the lowest rate ever offered by the federal student loan program. The new rate, which took effect on July 1, applies to Stafford loans that were issued on or after July 1998 and are already being repaid. If you consolidate a federal student loan, you can lock in the rate for the life of the loan. Borrowers with $10,000 in student loan debt and a 10-year repayment plan could save about $1,130 in interest with the new rate. But you'll have to consolidate before June 30, 2003, when the interest rates will be adjusted again.

For students who are still in school, or who have graduated within the past six months, the interest rate dropped to 3.46 percent. The rate for PLUS loans for parents issued after July 1998 decreased from 6.79 percent to 4.86 percent. For information on consolidating student loans, and for the new interest rates on older loans, contact your private lender, or Sallie Mae, a major provider of federal student loans, at www.salliemae.com.

Real Estate: Vacation home market is hot

Prices for second homes rose to a median of $162,000 last year, an increase of more than 25 percent in just two years, says the National Association of Realtors. Although fewer second homes, including vacation and investment property, were sold in 2001 than in 1999, the price jumped sharply from $127,800 in 1999, the last time the trade group surveyed second-home buyers.

So hot is the market that there aren't enough vacation homes available to meet demand, especially in coastal areas, where beach houses can easily cost over $1 million. The states with the highest percentage of vacation homes are Alaska, Arizona, Delaware, Florida, Hawaii, Maine, Montana, New Hampshire, Vermont, and Wisconsin.

Stocks: Investors get real-time access to company information

The SEC has improved its online database to let investors see corporate reports within minutes after they're filed. Previously, corporate documents were available at the SEC's database no sooner than 24 hours after they were filed with the federal agency.

The SEC has also made it easier for investors to search its site for information and to track companies that change names. All public companies are required to file registration statements, quarterly reports, and annual reports through the SEC's database. To view corporate filings, go to the SEC's Web site at www.sec.gov/edgar.shtml .

Travel: Surfing for air fares

Travelocity.com offers the best combination of low airfares and convenient schedules, says a Consumer Reports survey of online travel agencies. While Expedia.com often had the lowest fares in the study, its schedules were frequently convoluted. For example, it offered a round-trip from Atlanta to Miami with stops in Dallas on the way out, and Washington, DC, on the way back. Orbitz came in third for low fares. Three other sites—Cheap Tickets, OneTravel.com, and TravelNow.com—offer deeply discounted tickets, but these are generally not refundable.

The online travel sites usually beat fares offered by local travel agents, but you should check the rates at more than one site. (For one thing, some airlines are not listed on all the sites.) When you find a low airfare, go to the airline's Web site to see whether you can get an even lower price. Check the fine print to make sure your ticket is refundable, and see whether you'll get credit for your frequent flier account.

Banks: How can you tell if an online bank is legitimate?

A sloppy Web site, an extra long Internet address, or offers of unusually high interest on accounts are telltale signs of bogus banking operations set up by e-crooks, says the Federal Deposit Insurance Corp.

If you're interested in opening an account with an online bank, confirm that the FDIC insures it. You can search the agency's online directory of insured institutions at www3.fdic.gov/idasp . Remember to use the institution's legal name, which may be different from the trade name it uses on the Web site. You should find its name, along with other information such as how to reach customer service representatives, at the bank's Web site. For more information on how to bank safely online, go to www.fdic.gov/consumers .

The author is a freelance writer in Teaneck, NJ.

 

Yvonne Wollenberg. Financial Beat. Medical Economics 2002;14:8.