A lot of students miss out on tons of government grants and low-interest loans because they never apply. Always fill out the Free Application for Federal Student Aid, otherwise known as the FAFSA. It’s free to fill out plus you could qualify for some free money.

1-2 million families are qualified for the Pell Grant worth up to $4,000 per year but they miss out because they don’t apply for financial aid. Big mistake. Never turn down free money.

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Wow, I get a loan and they won’t even take my car? Where do I sign up?

If you’re looking to buy a new car and you’re thinking of financing your purchase with a home equity loan, check out Bankrate’s handy calculator before you make a decision. It let’s you plug in the interest rates and durations of your car loan and your home equity loan, then it tells you which loan will save you the most money.

Since a home equity loan is typically a longer duration loan than a car loan, your monthly payments will be lower, but a car loan usually has a lower interest rate. In general, a home equity loan will be cheaper than a standard car loan if you’re making extra monthly payments and if you write off the interest on your taxes. If you don’t plan on doing either of those things, then a regular car loan will end up being cheaper. Check out the calculator to see for yourself.

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Consolidation loans and home equity loans work like this: Take one of these loans out. Pay all of your different credit card debt and other debt down with the loan. Pay one monthly payment with a lower interest than what you were paying before. Good deal, right?

It’s only a good deal if you budget and watch your money from now on. A common practice of people who do loan consolidation is that they don’t change their spending habits. They run up their credit cards like normal. So now they have their new credit card debt AND their consolidation loan debt.

Bottom line: Change your spending and saving lifestyle before you decide to take a home equity loan or a loan consolidation and you won’t end up in a debt spiral.

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What does this have to do with paying high debt first? They jumped high and they’re high-fiving. Yeah it’s a stretch but I got nothing else.

Debt with the higher rate charge the most interest per dollar. The way to get out of debt most efficiently is to pay off the debt with the highest balance first. After that, tackle the next highest debt next and so on.

A lot of people will say to attack the lowest balance first but the numbers side with paying off the highest interest debt first. The reason people pay the lowest balance debt first is because one less bill makes them feel less burdened. You lose less money to interest by paying the highest rate debt first.

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Avoid setting up a bi-weekly mortgage payment plan through your bank. A bi-weekly mortgage payment plan essentially means you make 13 mortgage payments (a half payment every other week for 52 weeks = 26 half payments = 13 whole payments) instead of the 12 mortgage payments you would be making if you paid once a month. The extra payment will go towards the principal, and will allow you to pay off your loan faster. Great, right? Sure, the savings from a bi-weekly payment plan can cut several years off of your mortgage payments, but it often comes at a price - a several hundred dollar enrollment fee, plus additional transaction fees.

If you are paid bi-weekly, you can achieve the same results of a bi-weekly mortgage payment plan (and avoid the fees) by taking half of your mortgage payment out of each check and placing it in a savings account. If you empty out this account every time a mortgage payment is due, you’ll be including the equivalent of an extra half-payment at least two times a year. Be sure to specify that the extra money should go towards the principal.

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A few weeks ago, I did a post that covered some home equity loan basics. In that post, I listed one of the advantages of a home equity loan as “Payments are often tax-deductible.” That’s some really insightful information, huh?

How about some more detailed information, courtesy of Bankrate.com. Basically, interest paid on a home equity loan or home equity line of credit of up to $100,000 is tax-deductible. There are a couple exceptions, however.

“When the combination of all loans secured by a home, including the first mortgage and any other equity loans, are more than the property’s fair market value, the interest on the portion of debt that exceeds the home’s value is not deductible.”

So this stipulation only affects you if you have a loan-to-value (LTV) ratio of over 100%. For example, if your home is worth $100,000, you still owe $80,000 on your mortgage, and you have a home equity loan of $30,000, your LTV ratio will be 110% - ($80,000+$30,000)/$100,000. In that case, only interest paid on the first $20,000 of your home equity loan is tax deductible, since the other $10,000 is the portion of your loans that exceeds your home’s value.

One more exception - if you use your home equity loan for home improvements, you can deduct interest on up to $1 million in mortgage debt. In this case, it’s especially important to keep track of receipts so you can prove that your loan really was used to finance home improvements, and not just used to buy that diamond-encrusted cell phone you’ve always wanted.

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Getting a great rate and the lowest fees on loans and mortgages often requires a FICO credit score of 700+. Walecia (sweet name) posted a tip to help boost your credit score if it’s below 660.

Pay down the cards that are maxed or almost-maxed first. Naturally, lenders are weary when they see credit cards that are maxed or close to being maxed. You get a black mark on your record if you have a balance on your card that’s over 50 percent. For some supplemental reading, check out Flexo’s Raise Your FICO Credit Score.

3 steps to boost your credit score [Bankrate]

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Keep your lines of credit small. Unless it’s for a Bottle Opener Batman Visa Card.

The number of open accounts and lines of credit affects your credit score. There’s no end-all, be-all equation to calculate how much is too few or too many. No calculation will be applicable to all borrowers and all accounts.

A dozen of open accounts and credit lines is looked at differently for a typical working employee compared to an entrepreneur. It’s expected for the self-employed entrepreneur to have more lines of credit than the typical working employee.

Too many open accounts with high balances lowers your credit score (and thus lowers your borrowing power when you need a car loan or a mortgage). Don’t have an absurd number of open accounts and lines of credit and you’ll be golden.

How Many Credit Cards Are Too Many? [American Chronicle]

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Bankrate has a neat calculator that estimates your FICO credit score. You answer 10 questions about your credit history and it spits out a range of what your FICO score would be (give or take 50 points). They ask simple questions such as “What’s the balance on your credit cards?” or “Have you applied for a loan or credit card within the past year?”

I bought my FICO credit report recently and it pegged me with a credit score of 753. Bankrate’s FICO credit score estimator said that my credit score is between 730-780. That’s damn accurate if you ask me. Be honest when you’re answering the questions or the estimation won’t be as accurate.

FICO Score Estimator [via Consumerist via All Financial Matters]

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Contrary to popular belief: Pre-approval letters don’t come with a red-stamped “Approved” on it.

Pre-approval for a mortgage gives you a stronger position when it’s time to negotiate purchase price of a home. A pre-approval letter shows that you’re serious about buying.

The letter tells you the maximum amount of money the lender is willing to give you based on your income and credit report. It’s good to know what your new home’s maximum price can be. You don’t want to shop for houses above the price that you’re pre-approved for unless you have a significant stash of cash saved away.

Don’t mistake a pre-approval letter for a pre-qualification letter. A pre-qualification letter doesn’t contain an in-depth look into your income or credit report. It’s a general estimation. A pre-qualification letter doesn’t hold any water when negotiating a home’s purchase price since it’s less formal than a pre-approval letter.

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