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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.

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Having multiple credit cards brings certain benefits. On average, Americans use three to four credit cards at a time, often to take advantage of various perks and rewards programs. Another reason to own multiple credit cards is they can boost your credit score when managed sensibly.

That said, juggling credit lines can get out of hand, and it’s easy to fall behind with payments and face hefty interest charges. Here’s a guide to managing multiple credit cards, how to know if you have too many, and more.

Steps for Managing Multiple Credit Cards

Here’s how to manage your credit cards wisely and the steps to take to avoid unnecessary interest charges and fees.

Keep Track of Terms

Know what you are signing up for when you apply for a credit card. While a card may offer perks like sign-up bonuses, free vacations, and 0% interest rates initially, it may also charge high fees and exorbitant interest rates later on. Every credit card has different terms and conditions that are often buried in the small print.

Before applying for a new credit card, check the interest rate, or APR. Also look for penalty APRs, purchase APRs, and cash advance APRs. A penalty APR is charged if you don’t comply with the card’s terms and conditions. A purchase APR is the interest rate charged for purchases or carrying the balance over to the next month. A cash advance APR applies if you use your credit card to borrow cash.

A card may also offer an introductory 0% APR, for a limited period. However, once that period is over — or if you miss a payment — the interest rate can skyrocket. Many cards also charge an annual fee for card ownership, a maintenance fee, cash advance fees, foreign transaction fees, returned payment fees, and late payment fees.

If a card offers cash back, find out how much you need to spend to accumulate points or cash back. Check the fine print to find out what types of purchases are qualified and if there are any caps on earning cash and points. Also, read the rules on redeeming rewards, such as when they might expire or be forfeited.

For a sign-up bonus, you might be ineligible if you have owned the same card previously or another family member has the same card.


💡 Quick Tip: Check your credit report at least once a year to ensure there are no errors that can damage your credit score.

Pay on Time and in Full

You will likely incur fees if you miss payments due on your credit card. Also, if you make only the minimum payment on your credit card, you will increase your debt and pay unnecessary interest. But if you pay off your balance in full each month, you are in effect getting a free loan.

If you have multiple credit cards to juggle, it will take dedication to monitor the balances and due dates to avoid late payments, interest charges, and fees. However, managing credit cards responsibly can build your credit history.

It’s also a good idea to check your credit report at least once a year to ensure there are no errors that can damage your credit score.

Set Up Autopay

Once you understand the terms, conditions, and payment due dates of your various credit cards, set up automatic payments to avoid missing a payment. Missing a payment will mean that you are charged interest, and depending on the balance on the card, the interest payments can be steep.

Set Reminders

Managing multiple credit cards may require setting reminders. For example, if you signed up for a card with an initial period of 0%, you should know when that period ends. Also, keep track of when rewards expire, and when you should redeem points or rewards.

Recommended: What Are Cash-Back Rewards and How Do They Work?

Simplify Your Payment Due Dates

You may want to change the payment due dates for your cards to make budgeting easier. For example, if the payments for multiple cards all fall on the same day or week, it can be difficult keeping enough cash on hand.

Consider scheduling due dates close to a payday or soon after a direct deposit. It might take one or two billing cycles for your request to take effect.

Know When to Use Each Card

There’s little point juggling multiple credit cards if you don’t use the right card for the right purpose. That’s why studying each card’s terms and conditions is crucial to optimizing the benefits of your cards. For example, some travel cards come with travel protections that will reimburse you if a trip has to be canceled, and co-branded airline cards may offer free checked bags or upgrades.

Keep a Record of Your Credit Card Features

Organization is the key to managing multiple credit cards. You can use a notebook, spreadsheet, or a personal finance app — whatever it takes for you to be able to access the information you need easily.

Some key data to have at your fingertips are the interest rate, credit limit, issue date, annual fees, and payment due dates, the balance from month to month, and the key facts about the rewards program (minimum spending limits, expiration dates, qualified items).

Give Each Card a Purpose

Allocating a purpose for each card will tell you what type of card you might want to get next. For example, you might have a card that offers travel rewards, another card for cash back on groceries, but you might want to also get a card that offers rewards for buying gas. Keep a record of which card serves what purpose.

Carry Only the Cards You Use

Don’t carry all your cards with you all the time. You risk losing them, plus it will make your wallet uncomfortable to carry! There’s no need to carry an airline card that you only use to book flights. Make sure you know which cards charge an inactivity fee, and set up reminders to use the card to avoid such penalties.

Recommended: Find Out Your Credit Score for Free

Use an App to Track Your Card Balances

It’s a good idea to use an app to track your card balances. Apps are particularly useful because they alert you when a payment is due or delinquent. Some apps perform free credit monitoring, help you find a credit card for a specific merchant, and track your loyalty programs.

Signs You Have Too Many Cards

How many cards is too many? That depends on how well you manage them. Here are some indicators that you should consider closing some accounts.

You Can’t Pay the Balance Off Each Month

If you can’t pay off all the balances on your cards each month, you are in danger of falling deeper into debt and having to pay interest. You also risk increasing your credit utilization ratio. When your ratio gets too high, credit card companies may turn you down and credit checks for future employment may be affected..

You’re Missing Payments

If you find it hard to keep track of your credit cards, miss payments, or lose rewards, it’s a sign you might have bitten off more than you can chew. Simplify your financial management by choosing three or four of the most advantageous cards for your lifestyle and cancel the rest.

You’re Earning Too Few Rewards

If you rarely redeem rewards, it might not be worth keeping the card. Not only are you paying a fee for a card that gives you little benefit, but you also have the hassle of keeping track of the card’s features and balance. It might be best to nix these credit cards.

Which Cards Should You Stop Using?

When deciding which credit cards to stop using, list out the benefits of each card. Look at your spending history with that card over the past year and look at what you have gained. If you have spent little and gained little, it’s time to lose the card.

Similarly, if a card charges high annual fees and provides few benefits, don’t keep the card. Also look at the interest rate. If you have a balance on a high-interest card, pay off that debt and close down the card.

When Does It Make Sense to Close a Card?

It makes sense to close a card when you only use it to avoid an inactivity fee, if it provides few benefits, if the fees and interest rate are high, or if you are having trouble paying off the balance each month.


💡 Quick Tip: One way to raise your credit score? Pay your bills on time. Setting up autopay can help you keep your account in good standing.

The Takeaway

Having various cards can be advantageous because you can benefit from rewards and loyalty programs, build your credit history, and take advantage of interest-free credit if you pay off the balance each month. However, each credit card may charge various fees, and managing multiple credit cards can be a headache.

When opening a new credit card, make sure the fees, rewards, limitations, and penalties make sense for you. Also consider if you can manage the card and pay off the balance each month on time. Lastly, review your portfolio of cards regularly in case it makes sense to close down an account.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

How do I manage multiple credit cards?

Managing multiple credit cards comes down to organization. Keep track of all your cards and their various features, including due dates, what you should use them for, the rewards they offer, balances, interest rate, and penalties and fees. There are apps and online tools that help you to manage cards and monitor your credit score.

What is the 15/3 credit card rule?

The 15/3 credit card rule is a strategy to lower your credit utilization ratio. A credit utilization ratio of 30% or below can make you more attractive to lenders. Most people make one credit card payment a month by the due date. With this strategy, a cardholder makes two payments each month. This could reduce your credit utilization ratio if you make the payment before the end of your billing cycle. But keep in mind that even if you regularly pay your credit card balance in full each and every month, you may still be carrying a large balance throughout the month, and your credit score may be affected.

How many credit cards is too many?

How many credit cards you should have depends on your lifestyle and how well you manage them. Feeling overwhelmed and making mistakes like not paying off balances on time are indicators that you cannot keep track of your cards. Other indicators that you may have too many credit cards are that you are not seeing much benefit in the way of rewards but are paying high fees, or you have a significant balance on a card with a high interest rate.

Photo credit: iStock/Sitthiphong

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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.

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When you start paying for your own food in college, one of the biggest shocks is just how expensive it can be — especially these days, due to years of high inflation. But what if you could save money in college without settling for boring boxed mac and cheese? While it can be a challenge to keep up the same standard of living as when you were living at home, you don’t have to completely alter your lifestyle. What follows are some essential shopping and dining hacks that will help you eat well during your student years without breaking the bank.

How Much Do College Students Spend on Food?

When you consider how much college students spend on food these days, it’s easy to see why you may be chronically short on cash. The average cost of food per month for a college student is $672, according to the Education Data Initiative. To break that number down further: Students spend, on average, $410 a month eating off-campus and $263 a month on meals cooked at home.

Of course, how much a student spends on food in college will depend on where they go to school (prices are higher in New York City than Florence, Alabama, for example), and how much they eat out versus cook at home. You might spend significantly more than the average, or you may be able to get away with spending a lot less.

💡 Quick Tip: You can fund your education with a competitive-rate, no-fees-required private student loan that covers up to 100% of school-certified costs.

11 Ways to Save Money on Food in College

Despite rising food costs, there are ways to cut your food bill and still eat well. What follows are 11 tips for how to save money on food in college.

1. Plan Out Your Meals

Living on a budget and saving money in college comes down to good planning. Once a week (maybe Sunday morning), sit down and decide what meals you’ll eat during the week. There are a lot of meal-prepping and budget recipe blogs online that can give you ideas. Once you know exactly what you’ll be cooking, you can come up with a detailed grocery list of everything you’ll need. As long as you don’t stray from the list, and you won’t end up exceeding your college student grocery budget.

Of course, things may come up at the last minute, but do your best to work your way through the meal plan.

2. Create a Food Budget

Learning how to budget in college is a critical part of having an independent and successful college experience. Here’s how to come up with a college student grocery budget:

•   Add up your total monthly income. Include any money coming in from a part-time job, parental support, loans, and other financial aid.

•   Subtract your essential living expenses. For example, this might include housing, utilities, internet, transportation (such as gas, train tickets and bus fares), and insurance (such as health, rental and auto).

•   Decide on a maximum college student food budget. Based on your findings, decide how much you can realistically spend on food each week, including groceries and eating out.

•   Track your food spending. To make sure your food spending stays within budget, you might start tracking your food spending with an app on your phone. Some budgeting apps, like YNAB (You Need A Budget) are free for college students; others, like Goodbudget, EveryDollar, and Empower, offer a free basic plan.

3. Set a Limit on Dining Out

Eating out is the biggest monthly food expense for college students without a campus meal plan, running around $102 per week, according to the Education Data Initiative.

Even grabbing coffee on (or off) campus every morning can add up — just one Starbucks tall drip coffee ($3.76) a day costs $1,372 a year. If you brew your own regular filter coffee ($0.50 per cup; $182.50 per year), you can save $1,189.50.

That doesn’t mean you can never go out for meals and treats. You might choose to eat out with friends on Saturday nights, for example, or grab a special coffee drink on Sunday mornings.

Recommended: 10 Money Management Tips for College Students

4. Start Couponing

It may sound old school but using coupons can help you spend significantly less on groceries in college. You might start by signing up for your favorite store’s loyalty program. This will give you access to digital, store-sponsored deals. Then stack up more deals by clipping coupons from the weekly circular in the mail, and saving them for your next grocery run. Before you hit the store, go online: You can often find good coupons at sites like Coupons.com and The Krazy Koupon Lady. It’s also worth checking manufacturer’s websites for offers on items you buy regularly.

5. Buy Generic or Store Brands

Reaching for a popular brand of food generally means spending more money. To grocery shop on a budget, consider going with the item’s generic or store brand counterpart. Consider: At Target, a 20-ounce bottle of Heinz ketchup runs $4.49, while the store brand equivalent is $1.59. While shaving a few dollars off your bill may not seem like much, saving a few extra bucks on 20 items can add up.

Also keep in mind that many generic products are manufactured in the same factories as your favorite name-brand products. Some generic products are, in fact, exactly the same as name-brands but with a lower price tag.

6. Buy in Bulk

Some foods cost significantly less when purchased in larger quantities. And you can take advantage of bulk pricing even if you are shopping for one — just freeze what you don’t need. For example, if you see a two-for-one deal on bread, cheese, or meat, take advantage of the savings and freeze the extra item. You can also cash in on bulk savings for items that last longer, such as cereals, oatmeal, rice, and pasta. This tip for saving money on food can also lead to fewer trips to the store, saving transportation costs (and time).

7. Learn How to Cook Healthy, Budget-Friendly Meals

Buying a box of ramen for a couple of bucks may seem like the cheapest meal for college students, but it could end up costing you in the end. It doesn’t have much nutritional value and likely won’t fill you up, so you may end up eating more. A better strategy: Learn how to cook a few simple, healthy meals that focus on veggies and whole grains and make (costlier) lean meat the “side.”

You can also lower your grocery bill by buying in-season (or frozen) produce, and adding meatless Monday (and maybe one or two other days) to your calendar. Cheaper protein substitutes include beans, tofu, and lentils.

8. Download Apps That Offer Cash Back on Groceries

When you’re searching for ways to save money on food in college, don’t forget about all the rebate apps out there. While these apps don’t give you a discount up front (like a traditional coupon), they offer cash back for buying groceries, which can add up to a significant sum over time. You can typically register with these services for free. Depending on the app, you may need to link a loyalty card or submit receipts to receive a rebate. Some to check out:

•   Ibotta

•   Receipt Hog

•   Checkout 51

•   Fetch Rewards

•   Rakuten

Recommended: What Are Cash-Back Rewards and How Do They Work?

9. Consider Buying a College Meal Plan

Generally, students will save money by declining the meal plan and making most of their meals at home. However, that’s not the case for everyone. Off-campus dining can add up quickly. So if you tend to eat out a lot and don’t enjoy cooking, a campus meal plan could potentially be a better deal. You might opt for the lowest plan (such as seven meals per week) and then use your swipe for the most expensive meal of the day.

Another dining hall hack that can help you save on food: Bring a plastic container with you and pack up your leftovers and unused napkins that you already took (you paid for it and it will only end up in the garage.)


💡 Quick Tip: Need a private student loan to cover your school bills? Because approval for a private student loan is based on creditworthiness, a cosigner may help a student get loan approval and a more competitive rate.

10. Find Free Food

While it’s not something you can rely on every day, you’d be surprised at how much free food is available on campus. School groups, clubs, and organizations will often offer free food to students as a way to draw a larger crowd to their public events. Browse community boards, event flyers, and your school’s newspaper or website to learn about special events offering free food. This is one of the easiest ways to save money on food in college.

Recommended: How to Get Involved on Campus in College

11. Maximize Your Leftovers

It’s not always easy, or cost-effective, to cook for one, so you may want to cook more than you need. This means leftovers, which can help you save money on meals later in the week. While it may sound boring, you can get creative with leftovers. Making chicken one night? Shred the leftovers, add some salsa and toss it on a tortilla for lunch the next day. Or mix it up with a little mayo for chicken salad. Leftover veggies, rice, quinoa, beans, meat, and/or seeds can all come together for a tasty Buddha bowl.

Just keep in mind that leftovers can typically be kept for three to four days in the refrigerator, according to the Mayo Clinic. After that, the risk of food poisoning goes up. If you don’t think you’ll finish leftovers within four days, freeze them right away.

The Takeaway

Food is expensive but that doesn’t mean you can’t eat well on a student budget. The key is to plan ahead; get comfortable with a few low-cost, healthy (and easy) recipes; maximize leftovers; and minimize eating out.

Also keep in mind that student loans, both federal or private, can be used to cover not just the cost of tuition and fees but also living expenses, and that includes groceries and food. If an expense is essential to your educational success — meaning it supports your basic daily needs or attendance at school — it’s likely a permissible use of student loan funds.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

Is it cheaper to buy your own food in college?

It’s generally cheaper to buy groceries and cook at home than to sign up for the college meal plan. However, that’s not necessarily true for every student. Off-campus dining can add up quickly. So if you tend to eat out a lot and don’t like to cook, a campus meal plan could potentially cost less than buying your own food.

How much should a college student spend on groceries a month?

It depends on your budget and the cost of food in your area. On average, college students spend $673 on food per month. That includes eating off-campus ($410) and meals cooked at home ($263).

What percent of college students eat out?

Studies suggest that 42% of college students eat out multiple times a week. College students spend, on average, $102 a week eating off-campus, according to the Education Data Initiative.

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Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

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SOISL-Q425-018

When you’re in school, it can seem like all your money is going toward tuition and books. Still, it’s essential to learn how to budget as a college student.

You may not have a full-time job yet, or even know your major, but managing your money early on could help you save for spring break, uncover monthly savings, and avoid taking out additional student loans.

Here’s how to get started.

4 Steps to Create a Budget in College

Step 1: Calculate Your Income

When it comes to budgeting in college, a good first step is figuring out how much money you actually have to spend. To do this, add up your income. This may include student loans, scholarships, a part-time job, or contributions from your family.

It’s a smart idea to revisit your income regularly, such as at the start of each term. That way, if you’ve switched jobs, had a change in your financial aid package, or received a windfall from your parents, you can adjust the budget accordingly.


💡 Quick Tip: SoFi offers low fixed- or variable-interest rates. So you can get a private student loan that fits your budget.

Step 2: List Your Expenses

If you’re new to learning how to budget as a college student, there’s a little homework involved in figuring out your spending habits. If you’re game for this task, take an evening to list all of your college-related expenses and their cost each month. Then categorize each expense as either “necessary” or “fun.”

Necessary expenses are essentials, like rent, utilities, books, tuition, food, and gas. Fun expenses are related to entertainment — think dining out, bar tabs, tickets to athletic games, travel, or clothes.

You may also want to consider making room in the budget to build your savings. Double-check if any of your student loans have interest that needs to be paid immediately. Even if interest payments are deferred, it’s smart to start paying down student loan debt now. After all, every little bit helps.

Step 3: Choose a Budgeting Method

There’s no one-size-fit-all approach to budgeting for college students, and it may take some trial and error before you find the type that works for you. Here are some popular budgeting methods you may want to explore:

50/30/20 Budget

In the 50/30/20 budget, you allocate 50% of your after-tax dollars to “needs,” 30% to “wants,” and the remaining 20% to savings.

Recommended: See how your money is categorized using the 50/30/20 Monthly Budget Calculator.

The 70% Rule

The 70% rule is similar to the 50/30/20 budget. Here, you allocate 70% of your after-tax income to living expenses, 20% to paying down debt or — if you have no debt — to savings, and 10% to whatever you wish.

Zero-Sum Budget

The goal of a zero-sum budget is to assign a purpose to all of your monthly after-tax income. Start by assigning dollars to each of your required bills, like rent, groceries, or student loan payments. Then figure out how much is left over for discretionary spending and saving, and assign where exactly that money is going.

Pay Yourself First

The premise of “pay yourself first” is simple: Assign money for savings or other financial goals, and spend the remaining money however you wish.

Envelope Budget

With the envelope budgeting method, you take out a set amount of cash every month to spend in each budget category, such as “groceries” or “transportation.” The money is stored separately in different envelopes, which you draw from when needed. (You can also adapt this budgeting method to use your debit card — just be sure to keep track of your spending.)

Line-Item Budget

A line-item budget can help you keep track of monthly expenditures. Using a spreadsheet or a pencil and paper, simply list your income for the month (or school term, if you’d prefer). Then, list each expense you have during the month. This allows you to see your income and cash that’s flowing out. If you’d like to see how your current spending stacks up, you can include a list of past expenses.

Shared Cost Splitting

If you have a roommate or are living with a partner, you split shared monthly bills right down the middle (or whatever percentage you both agree on). Each person pays their part.

Recommended: How to Save Money in College

Step 4: Set Up a System to Track Your Budget

There are at least three good ways to help you budget in college:

•   Whiteboards

•   Budget-tracking apps

•   Spreadsheets

All three methods work similarly. You’ll record your income and expenses for the month. At the end of the month, you’ll look back at how much you brought in and how much you spent so you can make adjustments for the next month.

A whiteboard works particularly well if you have roommates and split your bills. It helps keep everyone accountable and serves as a good reminder to pay your bills on time. In the whiteboard scenario, you can record what you spent for the day, and update your totals every day. It’s best to put the whiteboard in a spot where you can see it, such as by your desk or on the fridge.

A budget-tracking app on your phone lets you take your budget on the go. Budget apps can link to your bank and credit card accounts, so every time you make a transaction, the app automatically records it.

You can set up your budget by adding new categories, and maybe allow notifications so you get a warning when you’re close to going over on your burrito budget.

You can also learn how to budget in college by making a simple spreadsheet. Build a virtual spreadsheet with Google Sheets or Excel, using a new tab for each month in the year so you can separate monthly expenses.

This method is more manual than an app, requiring you to look at your bank or credit card statements and manually record each transaction in your budget.

Tips for Sticking to Your College Budget

Managing your money as a college student doesn’t have to be overly complicated. Here are some ways you can live within your means:

•   Build a financial cushion into your budget.

•   Start an emergency fund.

•   Overestimate your expenses — and underestimate your income.

•   Take advantage of free events in your area.

•   Save on food by cooking your own meals.

•   Set financial goals each month or school term to help you stay focused and motivated.

💡 Quick Tip: Need a private student loan to cover your school bills? Because approval for a private student loan is based on creditworthiness, a cosigner may help a student get loan approval and a lower rate.

The Takeaway

If you’re in school and are new to taking financial ownership, you might not know how to track income and expenditures — or want to. But learning how to budget money in college could help you afford to eat more than ramen, lessen debt, and maybe even spot ways to save money.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

How do I set up a basic budget?

To create a basic college student budget, start by listing all your monthly sources of income, including financial aid, earnings from a part-time job, and family contributions. Next, write down all your monthly necessary expenses, such as rent, transportation, and groceries. Subtract your fixed expenses from the monthly spending allotment. Whatever is left over can be used to cover non-essential expenses, like dining out, travel, and buying clothes.

What is a 50/30/20 budget for college students?

With the 50/30/20 budget, you assign 50% of your after-tax dollars to fixed expenses, such as rent, food, utilities, insurance, and car and student loan payments. Next, allocate 30% of your money to variable expenses, like travel, dining out, and entertainment. Finally, set aside the remaining 20% to savings.

What tools can college students use to manage their budget?

There is no shortage of options when it comes to tools to manage a budget. A budgeting app, spreadsheet, or even a pen and paper can all do the trick. Your bank may also offer budgeting tools.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SORL-Q425-012

Almost everyone needs to finance car repairs sooner or later. It might be a breakdown on the highway, a fender bender at the supermarket parking lot, or perhaps (ugh) someone steals your catalytic converter.

Whatever the case, car repair bills can be significant and arrive without warning, stretching your budget to the max. If you’re in this situation, consider these strategies to pay for urgent repairs and get back on the road again.

Strategies to Pay for Car Repairs

If you get hit with a large car repair bill or are thinking ahead and know a big-ticket item is coming up, consider the following ways to pay for the work that needs to be done.

1. Dip Into Your Emergency Fund

You may have heard it said that you should keep an emergency fund easily accessible for precisely this situation — an unexpected expense. But should you really use your emergency fund to pay for car repairs?

Dipping into your emergency fund might be a solution if you don’t have other cash available to pay for repairs. And, for many people, having a vehicle up and running is vital to their work and personal lives. In this way, it is a valid reason to tap your emergency fund.

What’s more, using your emergency savings instead of reaching for your credit card could save money on interest and other applicable costs.

Of course, if you dip into your emergency fund, you may need to spend time building it back up so you’re prepared for any other emergencies.


💡 Quick Tip: Some lenders can release funds as quickly as the same day your loan is approved. SoFi personal loans offer same-day funding for qualified borrowers.

2. Use Your Insurance

Is your car repair related to an accident? If so, your car insurance may help. It’s designed to protect you financially by covering some of the repair costs for vehicle damage and the medical bills related to any injuries.

The type of coverage and circumstances can vary.

•   For example, comprehensive insurance may help with some costs even if the accident didn’t involve another car or if the damage was caused by an unexpected event, like a tree falling on your hood.

•   Collision insurance doesn’t typically cover damage caused by normal wear and tear. This means that your coverage may not include things like theft, vandalism, or weather damage.

•   There is one type of insurance — what’s known as mechanical breakdown insurance (MBI) — that covers some types of repairs. Therefore, if you have damage caused by routine use of the vehicle and you have an MBI policy, you may want to check to see if the repair is covered.

Before going this route, consider whether using your insurance will actually be cheaper than paying out of pocket. Making an insurance claim could cause your insurance rates to rise.

It’s wise to understand how your car insurance works. The specific instances that your insurance will cover should be laid out in your insurance policy. The amount of your policy deductible as well as the repair and type of coverage will likely be some factors you review with your insurance carrier.

3. Try to Negotiate

Whether you have to replace multiple tires after driving over road debris or you have to install new brakes due to normal wear and tear, you may be looking at a hefty repair bill.

The good news is that car dealerships aren’t the only places where you can haggle over your car. Local car repair shops might be willing to cut you a deal to win your business.

•   Consider asking the repair shop for a written quote explaining precisely what is wrong with your vehicle, how the mechanic plans to fix it, and what the cost will be.

•   Once you have this written estimate in hand, you may want to get a second opinion. Sometimes auto mechanics will offer you a discount on a quote from another shop to get your business.

•   You could also ask the mechanic to limit their quote to only the essential repairs to ensure that they don’t try to upsell you on prematurely replacing all your tires when the problem you need addressed is your power steering.

4. Put It on a Credit Card

It can be important to protect yourself against excessive credit card debt, but if you need to shell out hundreds, or even thousands of dollars for a quick car repair, you may find yourself reaching for that plastic lifeline.

You may feel as if you don’t have options, but proceed with caution. Using a credit card may come at a high price. Credit cards can carry high-interest rates that, if not paid off in a timely manner, can drive up the original cost of the car repair. If you can’t pay off your credit card debt right away, you may end up spending much more for your repairs by the time you make your final payment.

5. Consider a Personal Loan

Another option for paying for car repairs when you have no cash on hand may be taking out a personal loan. Personal loans are sometimes overlooked as a way to come up with cash fast, but in the right circumstances, a personal loan can come in handy.

A personal loan can often offer lower interest rates vs. options such as using your credit card. This could help you save money when facing unexpected car repairs.

•   A personal loan is typically an unsecured installment loan, which means that you borrow a set amount and pay it back in equal monthly installments over a fixed period. “Unsecured” means that the loan is not tied to any physical piece of property through a lien, but instead offered to borrowers based on factors like creditworthiness.

•   Another benefit of using a personal loan to pay for car repairs is the relatively quick application process. While you’ll need to meet certain qualifications set by your chosen lender in order to secure financing on a personal loan, some lenders disburse loan funds within a few days.

Depending on your situation, a personal loan might be the right option when it comes to helping you get back behind the wheel and onto the road.

Recommended: Personal Loan Calculator

The Takeaway

If you need to pay for car repairs, you have a few options to consider, from tapping your insurance (if appropriate) to using your emergency fund to taking out a personal loan. If the latter seems like the right move for you, shop around to find the offer that’s the right fit 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

What are ways to pay for car repairs?

To pay for car repairs, you might dip into your emergency fund, tap your insurance (if applicable), try to negotiate, use a credit card, or take out a personal loan.

How does a personal loan work?

A personal loan offers a lump sum of cash that is then paid off over time, in installments, with interest.

Can you put car repairs on a credit card?

Yes, you can often put car repairs on a credit card. However, credit cards typically carry high interest rates, so you may want to consider other options, such as using emergency funds or taking out a personal loan.