SoFi

Whether you’re buying a home or getting a college education, taking on debt can allow you to invest in your future. The downside? Whatever you borrow will eventually need to be repaid, and that can add up to a considerable portion of your monthly expenses. Add in credit card bills or an unexpected financial emergency, and getting out of debt could start to feel like an overwhelming task.

Fortunately, it’s possible to break the debt cycle. Here are some steps you can take now to help get your finances in order.

Review Your Credit Card Statements

Credit card debt prevents many people from breaking the debt cycle. Reviewing your credit card statements closely can be a great first step.

Make note of your expenses and see exactly where all of your money is going. Are you spending hundreds of dollars a month on take-out? Are there a few subscriptions you enrolled in but have since stopped using? Be honest with yourself as you assess your spending, and note any areas where you can adjust or cut back.

Set a Budget

After you’ve reviewed your spending, consider making a budget. You can start by tallying your monthly income and monthly expenses. Don’t forget to include savings goals, and be sure to set up new limits for your discretionary spending.

If you’re new to budgeting, there are several different methods to consider. The 50/30/20 budget rule, zero-based budget, and the envelope budget system are three common examples. Whatever method you decide to use is up to you — what really matters is that you find a system that works for you.

Accelerate Your Repayments

If you’re paying off debt, one way to speed up your repayment is paying more than the monthly minimum. Making additional payments on your debt each month could not only help you eliminate your debt more quickly, it could also potentially reduce the money you spend in interest in the long term. Even just $25 a week could have an impact on your repayment.

There are a couple of debt repayment strategies that could help get you back on track. One is the debt snowball method, which prioritizes paying off the smallest debt first while making the monthly minimum payment on all other debts. Once the smallest balance is paid off, you’d focus on the next-smallest debt.

While this method may not reduce the money you spend in interest, the rewarding feeling of seeing your debt dwindle could encourage you to stick with your repayment plan.

Another debt repayment strategy is the debt avalanche, or debt-stacking method. Here, you’d make a list of all your debts by order of interest rate, highest to lowest. While making your minimum monthly payments on all the debts, “attack” the highest interest rate loan with as many extra payments as you can.

Unlike the snowball method, the avalanche method is about streamlining your debt repayment so that you save the most money on interest. It can require more discipline, but keeping track of how much you are saving in interest can be a great motivator.

Establish an Emergency Fund

You can’t predict the future, but you can do your best to prepare for it. Having an emergency fund can help cover unexpected costs and avoid having to use a credit card, which could send you deeper into debt.

Using a windfall, like a bonus at work or your tax refund, is a good way to start an emergency fund. You can put this money in a dedicated savings account or another cash equivalent, if you prefer.

Then each week, aim to save a specified amount of money in your emergency fund. Even saving just $10, $15, or $20 a week can help you be more prepared when a financial emergency strikes. If possible, plan to save somewhere between three and six months’ worth of living expenses.

Recommended: Emergency Fund Calculator

Pay For Things With Cash or Check

While you’re paying down debt, consider storing your credit cards somewhere safe and instead paying for purchases in cash or by check. Doing so can help you keep tabs on how much you’re spending and spot areas where you may be able to cut back.

If you must use a credit card to make a purchase, consider what it might cost you in interest if you aren’t able to pay off your balance at the end of the month. A credit card interest calculator can help you estimate how much interest you will pay on the debt.

Live Within (or Below) Your Means

It can be easy to get swept up in having the best of everything, but living in debt to sustain that lifestyle can ultimately add stress. You can rise above this by living below your means. This means spending less money than you make, which in turn can allow you to focus on preparing for a rainy day, building wealth, and achieving financial freedom.

Determine Needs vs. Wants

Is that new pair of shoes or the latest video game really a must-have?

As you’re trying to break your debt cycle, it’s a smart move to evaluate your wants against your needs. For example, before you make a purchase, carefully think about whether you need it or simply want to have it. If it’s something you can live without, consider holding off until you’re on firmer financial ground.

Breaking out of a debt cycle requires discipline and determination. While skipping out on wardrobe upgrades or the newest tech gadgets now can seem like a huge sacrifice, when you start making headway on paying down what you owe, odds are you’ll feel the reward.

Get a Side Hustle

Another great way to help end the debt cycle: find some extra income by getting a side hustle. You could use money you earn from your new gig to make extra payments on your debts.

Not sure where to look for work? Take a look at your skills and interests and see where you may be able to find an extra job or make some passive income.

Consolidate Debt with a Personal Loan

If you’re juggling multiple high-interest debts, you may want to explore a debt consolidation loan. Typically, this involves using a new personal loan or line of credit to pay off existing debts, consolidating several payments into one.

By consolidating those debts into a single loan — ideally one with a lower interest rate — you can streamline payments and potentially reduce your monthly payments or save on interest.

Recommended: Personal Loan Calculator

The Takeaway

There are strategies that can help you get ahead of your debt and regain control over your finances, which in turn can lower your money stress. Being more mindful about where your money goes, building up savings so you’re prepared for unexpected expenses, and paying for things with cash instead of credit cards are all good steps you can take now. And if you’re trying to pay down multiple high-interest debts, you may want to explore whether a debt consolidation loan is right for you.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

How to get out of the cycle of debt?

There are various ways to get out of the cycle of debt. Smart budgeting, debt consolidation loans, and using techniques like the snowball or avalanche method to pay off what you owe can be among them.

What is the 15/3 payment trick?

The 15/3 payment method is a credit card strategy that involves making two payments each month: a larger one about 15 days before the statement closing date and a smaller one three days before the due date. This can help lower your credit utilization ratio by reducing the balance reported to credit bureaus.

Is $20,000 in debt a lot?

Whether $20,000 in debt is a lot depends on your income and financial situation, but it’s typically considered to be a significant amount, especially if it’s high-interest credit card debt.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q425-014

A negative balance can happen all too easily: You might forget to note a purchase you made with your debit card or an automatic payment you set up. Or maybe you had an emergency pop up that required you to spend more than usual…and more than the money you had in your checking account.

The resulting negative bank balance can have a serious impact, leading to overdraft fees, declined transactions, or worse — account closure. Read on to learn more about negative bank account balances, including ways to avoid the problem, and what to do if you wind up with one.

What Is a Negative Bank Account Balance?

A negative account balance, also known as an overdraft, occurs when you spend more money than you have in your bank account. This happens when a bank allows a transaction to go through even though there are insufficient funds, effectively lending you money to cover the difference, often at the cost of an overdraft fee. The bank may also charge other fees until the balance is restored to zero or positive.

To help you visualize this, here’s an example:

•   Imagine you have $500 in your account, and you write a check for $515, because you thought you had a balance of $600.

•   If the bank pays the $515, you end up with an account balance of minus $15. That’s the difference between how much money you had in the account and how much the bank paid the person that cashed your check. The bank did you a favor by making up the difference.

What Makes a Bank Balance Negative?

Your balance goes negative when you have withdrawn more than you have in your account. This can happen if you make a transaction — such as ATM withdrawal, automatic bill payment, or debit card purchase — in an amount that exceeds the balance in your checking account. This is when overdraft protection kicks in. Instead of rejecting the transaction, the bank will cover the overage, allowing your account to go negative. Typically, you repay a negative balance with the next deposit of funds.

Here’s a closer look at how a negative bank balance can occur.

Miscalculation/Mistakes

Overdrafts can happen easily with miscalculations and mistakes. These are the most basic errors — say, getting the math wrong on how much is in your account, or forgetting about an automatic dedication that hits and takes your balance down lower than you believed it to be.

Multiple Ways to Withdraw From an Account

With all that’s going on in your life, it’s possible you’re not exactly sure what checks you’ve written have been cashed and what incoming checks have cleared. You may unwittingly make a payment or ATM withdrawal thinking you’re good, but discover you’re certainly not. Or perhaps when you’re calculating in your head how much you have, you forget about the money taken out through one of your monthly automatic bill payments.

What Happens if Your Bank Account Remains Negative?

Here are some of the issues a negative bank account can trigger.

Overdraft Fee

If your bank covers a transaction that puts your account in negative territory, it will typically charge a fee. It may charge that fee every time you make a transaction. If you make multiple transactions before you realize you have a negative balance, these can add up to a significant sum.

Account Closure

What happens if you don’t pay an overdrawn account? If you don’t fix your negative balance by depositing money into your account, or if you overdraw your account so often the powers that be at the bank raise their eyebrows, your days as a bank customer may come to a close. They can opt to shutter the account, and it can be difficult to reopen a closed bank account.

Credit Impact and Debt Collection

If the bank closes your account due to an ongoing negative bank account balance, it will likely report the closure to a banking reporting company (like ChexSystems). This negative information will stay on your record for up to five years, which could make it difficult for you to open a new bank account.

Also, a bank that closed your account due to unpaid overdrafts might sell your debt to a collection company, which could negatively impact your credit profile.

Differences Between Overdraft and Non-sufficient Funds

An overdraft fee is not the same thing as a non-sufficient funds (NSF) fee. Here’s a look at the difference:

•   An overdraft fee is what a bank or credit union charges you when they have to cover your transaction when you don’t have enough funds available in your account. It’s typically about $27

•   When a financial institution returns a check or electronic transaction without paying it, they may charge a non-sufficient funds fee. It’s usually about $18. The difference is, with a non-sufficient funds fee, the bank is not covering the shortfall; they are essentially rejecting the transaction.

What to Do With a Negative Bank Balance

Fortunately, a negative bank balance is not a problem without solutions. You can take steps to get back on track.

Check Your Recent Activity and Balance

Determine what went wrong and triggered the overdraft. Check your bank’s app (or go online) and also see what charges haven’t been paid or received. Do the math. This will give you an idea of where you stand and how soon you may be back in the positive zone for your balance.

Evaluate Upcoming Automatic Payments

Automating your finances can be a convenient tool, but if you are in overdraft, automatic payments could pop up and derail your efforts. Make sure to account for recurring payments when figuring out how to get your account out of a negative balance.

Deposit Money Into the Account

Once you understand your situation, take action. Deposit enough money to ensure that you won’t overdraw again. Remember to include not only the money you need to bring your balance back into positive territory, but ideally put in enough to give yourself some cushion.

Request a Waived Fee

Your bank or credit union may have a sympathetic ear. Make a request to have your fee waived. They may be feeling generous, particularly if this is your first offense.

Pay the Fees

If you knock on the door of fee forgiveness and you get a no, pay what you owe. If you don’t, you’ll just make your situation worse, meaning the bank could close your account and turn the matter over to debt collection. While the bank may not close your account right away, taking action sooner rather than later is usually best.

Recommended: 10 Tips for Avoiding Overdraft Fees

Tips for Avoiding a Negative Bank Balance

There are ways to steer clear of a negative bank account balance. Try these tips:

•   Set up account alerts to let you know when your account balance reaches a certain number. If you know your account is getting low, you can take steps to avoid going into the negative balance zone.

•   Check your balance regularly. “Waiting until the end of the month to check in on accounts leaves you at risk of excess spending and potentially overdrawing your checking account, “ says Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “Checking in once a week leaves time to self correct and adjust your budget to help balance the numbers.”

•   Consider setting alerts to notify you before automatic deductions are made (many banks offer this option). That way, you can monitor your bank account and its balance to make sure you can cover the debit.

•   Explore what overdraft protection your bank offers. You may be able to link a savings account to your checking which can be tapped to cover overdrafts. It may cost you a fee for that transfer, but it’s likely not as steep as an overdraft fee. Your bank might also allow you to link a credit card (watch out for high interest rates here) to your checking account or to borrow from a line of credit. Know your options. While you don’t want overdrafts to be a regular occurrence, you do want to be protected in case they crop up.

The Takeaway

Having a negative bank balance means you overdrafted your account. This often triggers pricey overdraft fees , and can lead to other financial issues if this situation occurs often or isn’t remedied. It’s wise to keep tabs on your money and use tools that a bank may offer to help you avoid a negative bank account balance or resolve it quickly if it occurs.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Can I still use my debit card if my account is negative?

If your account is negative, you can only use your debit card if you’ve opted into your bank’s overdraft coverage program. Even with this coverage, using your card while your account is negative will likely lead to fees for each transaction.

How are non-sufficient funds different from an overdraft?

The key difference lies in what the bank does. With an overdraft fee, the bank covers your transaction even though you don’t have enough funds, then charges you a fee (typically around $27). With a non-sufficient funds (NSF) fee, the bank rejects the transaction and charges you a fee for doing so (usually around $18).

How do I avoid having a negative bank account?

You can avoid a negative bank account by regularly monitoring your balance, setting up account alerts for low funds or upcoming automatic payments, and exploring overdraft protection options like linking a savings account.

Can you go to jail for a negative bank balance?

Typically, no. A negative bank balance is a civil matter between you and your bank, not a criminal one. However, repeatedly writing bad checks with the intent to defraud, especially in large amounts, could potentially lead to criminal charges in some jurisdictions. This is rare and typically involves more than just a simple overdraft.

How long can you have a negative bank balance?

Each bank has its own policy. While your bank account won’t be closed immediately if you have a negative bank balance, it’s important to resolve the issue as soon as possible.

Photo credit: iStock/kupicoo

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

^Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

SOBNK-Q425-029

A deck can turn your backyard into a dream destination. But the reality is, building one isn’t cheap.

A new 400-square-foot wood deck can set you back between $10,000 and $20,000 in 2025, according to HomeGuide, a home improvement website, while Angi put sthe average cost at $8,258. Project costs can vary based on where you live, the materials you use, the size of the deck, and other factors.

Whatever your deck plans entail, you’ll want to make sure you’re financially prepared. Here’s a closer look at the factors that can impact how much you could pay to have a professionally built deck added to your home.

Get an Idea of Labor Costs

No matter what kind of deck you’re building, count on labor taking up a big chunk of the budget. Generally speaking, it’s around 38% to 50% of the overall project costs. (The rest of the budget typically goes toward covering the cost of materials and other smaller expenses.)

One way to get a rough idea of how much you’ll pay for labor is to use the rule of two. This method involves estimating the total cost of the project (labor plus materials) and dividing that amount by two. The result is the estimate of labor costs.

The rule of two also works the other way around. Say you get a quote from a contractor who will be building your deck. To get an idea of the total cost of the project, simply multiply the labor cost you’ve been quoted by two.

While this method can provide a solid starting point as you plan your budget, it doesn’t factor in any unexpected costs that may crop up as your deck is being built.


💡 Quick Tip: With home renovations, surprises are inevitable. Not so with SoFi home improvement loans. There are no fees required, and no surprises.

Consider the Decking Materials

Another important factor to consider is the material you want to use for your deck. More durable decking material will likely cost you more, but could save in the long run with minimal upkeep or less-expensive repairs. Here’s a look at the average cost of common materials, according to Angi:

•   Pressure-treated wood: $2 to $5 per square foot

•   Composite decking: $12 to $22 per square foot

•   Bamboo: $3 to $10 per square foot

•   Cedar: $3 to $7 per square foot

•   Redwood: $5 to $35 per square foot

•   Metal: $15 to $20 per square foot

Of course, price is just one factor. You’ll also want to think about the climate where you live. Do you get a lot of snow in the winter? Is it very humid in the summer? Be sure whatever decking material you choose can stand up to the environment.

Choose a Design That Fits Your Budget

After materials and labor, the actual design of a deck can influence the overall cost of the project. To help keep prices low, you may want to stick with a simple design, traditional, squared-off corners, or even a smaller deck.

One affordable option? A ground-level deck, which sits within 30 inches from the ground. Because it’s so low, this type of deck requires fewer materials and structural reinforcements. And you won’t need to add a railing or stairs, which can be additional savings.

Factor In Additional Costs

While labor, materials, and design are the major players in a construction budget, there are other costs you’ll want to consider.

Permits are one example. Most towns and cities require permits for additional structures like decks. Deck contractors are usually well-versed in this process, and most will include the price of permits in their quotes.

If you’re building the deck yourself — or your contractor won’t pull a permit — you’ll need to handle the red tape yourself. Start by calling your local building department and explaining the project to them. If a permit is required, they can explain how the process works and provide you with the correct application form.

It’s also a smart move to factor in any costs you may incur once the deck is built. For instance, the new addition could increase your home insurance premiums. (Your agent can explain what changes, if any, you’ll need to make to your policy.)

You may also be hit with a higher property tax bill, since the addition of a permanent fixture like a deck typically increases a home’s value. To get an estimate of the change, contact your local building and tax departments.

Comparison Shop

Construction is similar to plumbing or automotive repair in that if you aren’t an expert, it can be hard to gauge the price. Whether you’re hiring a contractor or a carpenter, it can help to ask for bids from a few local professionals to ensure you have the right person for the job — and your budget. Ask potential candidates to provide photos of their projects and names of previous clients you can call.

For a long-term investment like a deck, going with the cheapest option might not be the best strategy. While there are ways to potentially lower the cost of a new deck, be sure you’re not sacrificing quality for price. After all, this is something that you and your family will hopefully be using for years.

Ways to Pay For a New Deck

While a deck brings comfort and enjoyment, the cost of building one can be significant. Here are some common financing options to explore. Including home improvement loans and home equity loans.

Personal Loan

If you need to access funds quickly, don’t want to use your home as collateral, and can afford to make the monthly payments, consider a personal loan.

With this type of loan, you borrow a lump sum from a lender, which you’ll pay back with interest. The money can be used for almost anything, including paying for a new deck. Personal loans are usually unsecured, which means they don’t require collateral. Instead, a lender will consider a borrower’s creditworthiness.

Most lenders offer a personal loan amount of $50,000, though some lenders offer lending up to $100,000. Repayment terms are usually two to seven years, and interest rates are typically fixed.

Recommended: Personal Loan Calculator

Fixed-Rate Home Equity Loan

If you’ve built up equity in your home and have a one-time cash need, you may want to look into a fixed-rate home equity loan.

This loan type, which uses your home as collateral, is fairly straightforward: You receive a lump-sum payment from the lender, which you’ll repay over a period of time with a set interest rate. The term of these loans typically spans five to 15 years, and the amount you borrow must be repaid in full if you sell your home. If you’re unable to make the payments, you could risk losing your house.

Note that the closing costs may be similar to the cost of closing on a home mortgage. As you’re comparison shopping, be sure to ask about the lender’s closing costs so you can prepare your budget accordingly.

Home Equity Line of Credit (HELOC)

If your deck addition turns into an ongoing project, and you want some flexibility to pay as you go, then a home equity line of credit (HELOC) may be a good fit.

A HELOC is revolving debt, meaning that as you pay down the loan balance, you can borrow it again during the draw period. That’s when you can use, or draw, funds against the line of credit, typically 10 years. After that, you can no longer draw funds. (Another important time period to keep in mind? The repayment period, which is the amount of time you have to repay the loan in full.)

Note that unlike a fixed-rate home improvement loan, a HELOC’s interest rate is variable. This means it changes to reflect the current interest rate, which could cause your monthly loan payment amounts to vary.

No-Interest Credit Cards

With a no-interest, or 0% APR, credit card, you won’t be charged any interest on your purchases for a set period of time. Some cards also extend the temporary 0% APR to balance transfers.

A no-interest credit card comes with low borrowing costs, which could make it an attractive way to finance a new deck. But qualifying for one of these cards can be difficult. And when the promotional period ends, a potentially high APR will start accruing on the remaining balance.

The Takeaway

Adding a deck onto your home can be a great way to enjoy your backyard and add to the value of your home. When budgeting for the cost to build a deck, you’ll want to factor in labor, materials, design, and extra expenses like permits, insurance premiums, and property taxes. Enlisting the help of a reputable, licensed contractor or carpenter can help ensure you get the deck you want, at a price you can afford.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

How much should I budget for a deck?

A deck can cost anywhere from $2 to more than $75 per square foot, depending on size, material, complexity, and labor. The national average for a professionally constructed deck is about $7,320 or about $30 to $60 per square foot.

How much would a 20 x 20 foot deck cost to build?

A 20×20 deck (400 square feet) costs approximately $16,000 to $24,000 for professional installation. The price can vary significantly based on materials and labor.

Can you build a deck for $5,000?

It may be possible to build a deck for $5,000. If it’s a small deck, you use inexpensive materials, and/or you do some of the work yourself, you may be able to construct a deck for that price. The average deck currently costs slightly more than $8,000.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q425-010

Wedding bands are a symbol of a couple’s eternal love and commitment, but they’re also an added expense in the wedding budget. According to the wedding site The Knot, wedding bands can cost around $600 to $1,200 each. One way to potentially score a deal on your rings is by shopping during strategic times of the year.

Sales often occur in the weeks between Thanksgiving and Christmas. And you may find a bargain during September and October, when jewelers need to clear out old stock before the holidays.

But February, the month devoted to lovers, can also be a good time to shop for wedding bands. Here’s why.

Reasons to Buy Your Wedding Bands in February

There are a few reasons why you may want to shop for wedding rings during the shortest month of the year.

It’s a Popular Time for Proposals

Many people pop the question between Christmas Eve and New Year’s Day, and Valentine’s Day continues to be one of the most popular holidays for couples to get engaged.

Jewelers know this, and they often prepare for the influx of business by rolling out promotions on engagement rings and wedding bands. Consider hitting the stores between New Year’s Day and Valentine’s Day, before the crowds show up. And if you can, shop during an off-peak time of day when the store is quieter. You may find it easier to try to negotiate a better price for your bands.


💡 Quick Tip: Need help covering the cost of a wedding, honeymoon, or new baby? A SoFi personal loan can help you fund major life events — without the high interest rates of credit cards.

Bridal Fairs Are Kicking Into Gear

Many bridal expos are held in February and March, offering couples a chance to see the latest wedding band styles without the sales pressure. Vendors are there to give tips as well as a good pitch, and some may offer limited-time, expo-related discounts.

Gather up information and coupons at the bridal fair, then give yourselves a day or two to regroup and possibly go make a purchase.

The Timing Works for a Summer Wedding

Jewelers typically recommend shopping for wedding bands at least three to four months before your wedding date — longer if you have your heart set on a one-of-a-kind design. That will give you time to look and look again, get the rings sized, and have any engraving or other customizing done.

For couples getting married in the summer — peak wedding season — this will mean starting the ring buying process in February.

How to Shop for Wedding Bands

No matter what time of year you shop for a wedding ring, it’s a good idea to do a little prep work before you hit the stores. Here are some things to consider doing ahead of time.

Set a Budget

You want bands you’ll love forever, but not at a price that will put you in debt for the rest of your lives. At the start, let your jeweler know what your budget is, and they can work with you to find rings within that range.

Consider a Wedding Set

If you haven’t settled on an engagement ring yet, you may want to look into purchasing a wedding set. This set includes your engagement ring and a matching wedding band. Buying both at the same time could save you money.

Shop Around

As with most major purchases, you’ll want to shop around for wedding bands. Visit different jewelers, including online shops, and don’t be afraid to ask questions about the pros and cons of different metals, gemstones, and designs.

Once you find the bands you want, try negotiating for a better price. You may be able to increase your chances of getting a deal by offering to pay all cash.

How to Pay For Your Wedding Bands

A wedding ring is usually cheaper than an engagement ring, but it can still take a significant bite out of your budget.

According to The Knot, the typical men’s wedding band costs around $600, while the average woman’s band runs closer to $1,200. Prices can vary widely based on a number of factors, including the metal type, overall design, and gemstones.

Here, a few common ways to finance wedding rings.

No-Interest Credit Cards

Larger jewelry stores usually offer some sort of in-store financing, including no-interest credit cards. You can also apply for one directly with a lender.

This option lets you buy the bands you want today, which is a major benefit. And it could make good financial sense if you’re able to pay off the balance before the promotional period ends. However, if you can’t, you’ll have to pay interest on whatever you owe. And that interest rate probably will be higher than other credit card or loan offers available to you.

Buy Now, Pay Later

Think of buy now, pay later (or BNPL) as a kind of installment payment plan. It allows you to purchase your wedding bands today and then spread out payments over a set number of weeks or months, often for zero or low interest. Klarna, Afterpay, and Affirm are all common examples of BNPL providers.

Usually, no minimum credit score is required for approval. Rather, providers will consider the amount available on the debit or credit card you’re using in the transaction, your history with that lender, and key details about the item you’re buying.

Also, a soft credit check is typically conducted to approve or reject your request, but it does not impact your credit score.

As with a no-interest credit card, if you pay off the BNPL plan as planned, you may not incur interest or fees. But if funds aren’t paid on time, or a longer-term plan is chosen, you could be hit with a high interest rate and/or late fees.

Personal Loan

You can get a personal loan from a bank, credit union, or online lender. Many, but not all, personal loans are unsecured, which means you won’t need to put up any collateral, such as a house or car. Instead, lenders will consider your creditworthiness.

Most personal loans are paid back within three to five years, and the interest rate tends to be higher if there is no collateral. The better your credit score is, the lower the interest rate and monthly payment will be. However, the lower the payment, the longer it might take you to pay off the loan.

Generally speaking, once you’re approved for a wedding loan, you can receive funds within days. In some cases, you may be able to get the money within a day or two. This quick influx of cash can come in handy if you’re planning to haggle for a better price on the band.

Recommended: Personal Loan Calculator

The Takeaway

Wedding bands currently cost on average between $600 and $1,200, but you may get a better deal by shopping in February and other sale seasons. Be sure to shop around, and when you find the ring you want, don’t be afraid to try haggling. In terms of financing your purchase, options include savings, no-interest credit cards, and personal loans.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

What is the best time of year to buy a wedding ring?

It can be wise to buy a wedding ring six to eight months before the ceremony to allow time for sizing, engraving, and other types of customization. That said, there may be sales at certain times of year to help make wedding rings more affordable. February, since it includes Valentine’s Day, can be a good month to shop for wedding bands.

What is the three-month rule for wedding rings?

The three-month rule says that an engagement ring should cost the equivalent of three months’ worth of salary. This concept was developed as a marketing tactic almost a hundred years ago.

How much should you spend on an engagement ring?

How much you spend on an engagement ring (or if you buy one at all) is a very personal decision. A long-standing guideline is to pay around three months’ worth of salary, but that was developed as part of a marketing program, so it’s really up to each couple to decide what amount they feel comfortable with.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q425-011

A signature loan is a type of loan that lenders can make without requiring any collateral. They’ll typically approve the loan based upon a person’s financials and credit scores — plus their signature on loan papers. This is also called an unsecured personal loan, a signature personal loan, good faith loan, or character loan.

Read on to learn more about signature loans, how they compare to other types of personal loans, and their pros and cons.

What Are Signature Loans?

Signature loans are unsecured personal loans. Unlike secured personal loans, a signature loan doesn’t require you to pledge collateral — an asset of value like a house or a bank account — that the lender can seize should you fail to repay the loan. Signature loans are approved based solely on the creditworthiness of the applicant.

Because the loan is unsecured, signature loans often come with higher interest rates than secured loans like car loans and mortgages. However, the interest rates for these personal loans are typically lower than credit cards.

You can use a signature loan for virtually any purpose, such as consolidating high-interest debts, a major purchase, or a medical emergency.

How Do Signature Loans Work?

A signature loan works in the same way as an unsecured personal loan. These loans are offered by many banks, credit unions, and online lenders. When you apply for a signature loan, the lender will consider a number of factors, such as your credit history, income, and credit score, to determine whether you qualify for the loan and what the rate and terms will be.

If you’re approved for a signature loan, the lender will issue you a lump sum of cash, which you will then repay (plus interest) in monthly installments over a set term, often 24 to 60 months.

A Quick Look at Secured Loans

A secured loan requires you to pledge collateral to secure the debt. For a car loan, it’s typically the vehicle that is being purchased with the loan proceeds. For a mortgage loan, it’s typically the house being financed or refinanced. If the borrower defaults on a secured loan, the lender seizes the collateral to recoup their losses.

Some personal loans are secured, while others are unsecured. Secured personal loans could have a savings account put up as collateral, as just one example. This strategy could be risky for the borrower, though, because it may tie up money meant to be used for living expenses or set aside for emergency circumstances.

A Quick Look at Unsecured Loans

A lender does not require any collateral on a signature personal loan, which is an unsecured personal loan. So should you default on the loan, you won’t lose an asset of value (though your credit will likely take a hit). However, an unsecured loan may be harder to qualify for and have a higher interest rate than a secured loan, due to the increased risk to the lender.

Common Reasons to Get a Personal Loan

Personal loans are versatile, with the borrower typically able to use the funds for any personal, family, or household purposes. Some common personal loan uses are:

•   Credit card debt consolidation Interest rates on credit cards can be high — the average annual percentage rate (APR) is currently over 22%. So you might use a lower-interest personal loan to combine credit card balances into one loan.

•   Home improvement projects Depending upon the size of the remodeling project, costs can range from hundreds of dollars to thousands — even tens of thousands. A personal loan can give the borrower the opportunity to conveniently pay for home repairs and upgrades.

•   Medical bills Unexpected medical expenses can quickly add up, putting a real dent in someone’s budget. Paying for them with a personal loan can often make more sense than using a high-interest credit card for that purpose.

•   Weddings From engagement rings to ceremonies and receptions, weddings can get expensive — and that doesn’t even include the honeymoon. Couples may decide to look into signature personal loans for weddings as a way to cover their expenses.

•   Moving expenses From moving supplies to renting a truck or hiring movers, the dollars can rack up, with a personal loan being one way to pay for the expenses.

Pros and Cons of Signature Loans

If you need loan funds fast, you don’t have collateral to pledge, or don’t want to tie up assets as collateral, a signature loan might be the right choice for you. Here are some of the pros and cons of signature loans:

Pros of Signature Loans

•   Funds disbursement is typically quick

•   There is no collateral requirement

•   Generally a wide range of loan amounts available

Cons of Signature Loans

•   Lenders may see unsecured signature loans as riskier than collateralized personal loans, so interest rates may be higher than secured loans.

•   Some lenders’ minimum loan amounts may be higher than some people need.

•   Short-term signature loans can be payday loans, which typically have extremely high interest rates and fees.

Signature Loans vs Personal Loans

A signature loan is a type of personal loan, specifically an unsecured personal loan. Each is approved based on the applicant’s creditworthiness, without collateral being a consideration. A secured personal loan, however, is not the same thing as a signature loan, since collateral is required to back up this type of loan.

As with other types of personal loans, online signature loan lenders are widely available, making it easy to compare lenders. Once approved for a signature loan, funds may be disbursed quickly, sometimes in just a few days. There are few restrictions on the use of the signature loan funds.

Signature Loans vs Revolving Credit

Signature loans are typically installment loans, with a lump sum loan amount repaid in equal installments over a set amount of time. Revolving credit, like a credit card or line of credit, works differently.

With revolving credit, you have access to a credit limit. You can then borrow money when you want to (up to your limit), pay it back over time, and borrow again as needed. You only pay interest on the amount you actually borrow, not the full credit limit.

What Are Signature Loans Commonly Used For?

There are few restrictions on the use of signature loan funds. One common use of a signature loan is to consolidate other, high-interest debt with the goal of either getting a lower interest rate or having a fixed payment end date.

Signature loan funds are also commonly used to pay for wedding expenses, medical expenses, or home renovation or repairs.

Advantages and Disadvantages of Signature Loans Online

Signature personal loans are widely available online and can be good choices for people who don’t mind not having a physical bank branch to drive to for transactions.

Advantages of signature loans online include:

•   Competitive rates Online lenders can often offer competitive rates because they don’t have the expenses involved in maintaining physical branches.

•   Convenience It can often be quick and easy to apply online (no driving, no appointments needed), and online lenders often offer streamlined processes which may result in quicker approval times.

•   Different criteria Some online lenders might focus more significantly on a borrower’s cash flow and employment history, perhaps allowing for a bit more wiggle room on credit scores than a traditional bank would be willing to give.

•   Additional benefits Online lenders may also offer more perks to their customers than a traditional bank offers.

There are, however, disadvantages to working with an online lender vs. a bank you have an established relationship with. Some to consider:

•   No history As an established customer of a traditional bank, you may qualify for a reduced interest rate, depending on your creditworthiness.

•   Potential scams Not all online “lenders” are legit so you’ll want to be wary of unsolicited offers, and only enter financial information on official, secure websites. It’s also a good idea to research the lender’s reputation before giving them your personal information.

•   No face-to-face interaction Unlike working with a brick-and-mortar financial institution, you likely won’t have the chance to meet with an online lender in person. If this is something you value and desire in a lender, the online loan option may not be for you.

•   Potential spam If you contact a number of online lenders directly to compare rates, you can end up on their email contact list, even if you don’t choose to work with them.

💡 Quick Tip: Just as there are no free lunches, there are no guaranteed loans. So beware lenders who advertise them. If they are legitimate, they need to know your creditworthiness before offering you a loan.

Application and Approval Processes

Similar to an unsecured personal loan, a signature loan’s application and approval process is generally simple and straightforward.

Things to Look Out for When Getting a Signature Loan

It’s a good idea to review your credit report before shopping around for a loan. A free annual credit report can be requested from each of the three major credit reporting agencies. If there are errors or inaccuracies on your credit report, you can try to correct them before any lenders start the loan qualification process.

Credit reports don’t include a person’s credit score . However, you may be able to access that information through your bank, credit card issuer, or a reliable website at no charge.

When you’re satisfied that your credit report is accurate, you may want to compare lenders and consider getting prequalified. Many lenders will do a soft credit check at that point, which will not affect your credit score. You’ll be able to compare interest rates and terms from multiple lenders to find the one that works best for your unique financial situation.

Getting prequalified can give you a good sense of how much might be available to borrow, what the interest rate would likely be, and how that translates into a monthly payment.

Before applying, it’s important to know how much you need to borrow. You generally want to choose an amount that would cover the expenses at hand while trying to avoid borrowing more than necessary. Interest will be charged on the amount borrowed, not only the amount used.

When comparing prequalification quotes from different lenders, it’s a good idea to find out if there are any hidden fees, such as origination fees, late fees, or prepayment fees.

Typical Signature Loan Requirements

Each lender has unique application and approval requirements but may commonly ask for the applicant’s name, proof of address, photo ID, and proof of employment and income. After the application has been submitted, a lender will conduct a hard credit check to review the applicant’s credit report.

Besides checking credit scores, lenders like to see steady employment and enough income to meet expenses, including this new loan. Sometimes, having a cosigner or co-borrower might improve the chances of loan approval or help to secure a more favorable interest rate.

The Takeaway

A signature loan is an unsecured personal loan. It typically offers quick funding for a variety of uses, such as medical bills, wedding expenses, home improvement projects, or credit card debt consolidation. Though these loans typically have higher interest rates than secured loans like home equity loans, they can be a useful way to finance a variety of needs.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

Are signature loans easy to get?

You typically need a good credit score to get a signature loan, since lenders want to be confident that you will repay the money.

Signature loans are unsecured, meaning you don’t have to pledge an asset of value (like a home or bank account) that the lender can seize should you fail to repay the loan. This raises risk for the lender. As a result, signature loans can sometimes be harder to get than secured loans like car loans.

Do you need a down payment for a signature loan?

No down payment is necessary for a signature loan.

What is the maximum that can be borrowed with a signature loan?

Lending limits will vary by lender, but you can often get as much as $100,000 in funding with a signature loan.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q425-048