Debt Payoff Archives

Q: Is income-contingent repayment a good idea?

Right now, the federal government has put a hold on federal student loan repayment. However, once the payment pause expires, it might be a good idea for the right situation, particularly if you have a low income or are unemployed. Having trouble making your student loan payments and already “using up” options for unemployment deferment or economic hardship could make income-contingent repayment worth it.

Q: Does income based repayment get forgiven?

Yes! Making payments through an income-driven repayment plan as well as working toward forgiveness through the Public Service Loan Forgiveness (PSLF) program means that after 10 years of qualifying payments, you could get any remaining loan balance forgiven, instead of after 20 or 25 years.

Apr

2025

Student Loans: Refinance vs. Income Driven Repayment

Refinancing Student Loans vs Income Driven Repayment Plans

By Melissa Brock | Debt Payoff, Fresh Out of School, Student Loans, student_loan | Comments Off

If you’re having trouble making your student loan payments or just want to know if you can make a change to your payments, it’s worth looking into the options, such as refinancing student loans or an income-driven repayment plan.

Student loan refinancing is available for both private and federal student loans, while income-driven repayment plans are an option only for federal student loans. Recent changes to income-driven repayment lower monthly payments and curtail interest accrual, making the plans a better deal for borrowers. Here’s what to know about both options as well as the pros and cons of each.

What Is Student Loan Refinancing?

When you refinance a student loan, a private lender pays off your student loans and gives you a new loan with new terms. For example, the interest rate and/or the loan term may change. You can’t refinance loans through the federal government, however. You can only refinance federal student loans (or private student loans) through a private lender.

If you’re a graduate with high-interest Direct Unsubsidized Loans, Graduate PLUS loans, and/or private loans, a refinance can change how quickly you pay off your loans and/or the amount you pay each month.

💡 Quick Tip: Ready to refinance your student loan? With SoFi’s no-fee loans, you could save thousands.

Pros of Student Loan Refinancing

When considering refinancing your student loans, there are several benefits. You can:

• Lower your monthly payments: Lowering your monthly payment means you can save money or spend more in other areas of your life instead of putting that cash toward paying student loans. (Depending on the length of the loan term, however, you may end up paying more in total interest.)

• Get a lower interest rate than your federal student loan interest rates: This can result in paying less interest over the life of the loan (as long as you don’t extend your loan to a longer term). A student loan refinance calculator can show you the interest rate you qualify for.

• Decrease your debt-to-income ratio (DTI): Your DTI compares your debt payments to your income. So if you lower your monthly payments, you could be lowering your DTI ratio — and a lower DTI can help when applying for a mortgage or other type of loan.

• Remove a cosigner. Many borrowers who took out undergraduate loans did so with a parent or other cosigner. Refinancing without a cosigner allows you to regain some financial independence and privacy, provided you have a strong credit history.

Cons of Student Loan Refinancing

That said, refinancing federal loans can have some drawbacks as well. They include:

• No longer being able to take advantage of federal forbearance: When you refinance your student loans through a private lender, you no longer qualify for federal student loan forbearance, such as the Covid-19-related payment holiday. However, it’s worth noting that some private lenders offer their own benefits and protections after you refinance.

• No longer being able to tap into income-driven repayment plans, forgiveness programs, or other federal benefits: Refinancing federal student loans means replacing them with private loans — and forfeiting the protections and programs that come with them.

• Possibly seeing your credit score get dinged: Your lender may do a hard credit history inquiry (or pull), which can affect your credit score.

For a deeper dive into the topic, check out our Student Loan Refinancing Guide.

What Are Income Driven Repayment Plans?

Put simply, income-driven repayment plans are plans that base your monthly payment amount on what you can afford to pay. Under the Standard Repayment Plan, you’ll pay fixed monthly payments of at least $50 per month for up to 10 years. On the other hand, an income-driven repayment plan considers your income and family size and allows you to pay accordingly based on those factors — for longer than 10 years and with smaller loan payments. Income-driven repayment plans are based on a percentage of your discretionary income.

You can only use an income-driven repayment plan for federal student loans. If you qualify, you could take advantage of four types of income-driven repayment plans:

• Saving on a Valuable Education (SAVE) Plan: You typically pay 5% of your discretionary income over the course of 20 years (on loans for undergraduate study) or 10% of your discretionary income for 25 years (on loans for graduate or professional school).

• Income-Based Repayment Plan (IBR Plan): As a new borrower, you typically pay 10% of your discretionary but never more than the 10-year Standard Repayment Plan amount over the course of 20 years. If you’re not a new borrower, you’ll pay 15% of your discretionary income but never more than the 10-year Standard Repayment Plan amount over the course of 25 years.

Two other plans, PAYE and Income-Contingent Repayment, stopped accepting new enrollments as of July 1, 2024.

How do you know which option fits your needs? Your loan servicer can give you a rundown of the program that may fit your circumstances. You must apply for an income-driven repayment plan through a free application from the U.S. Department of Education.

Note: Every income-driven plan payment counts toward the Public Service Loan Forgiveness Program (PSLF). So if you qualify for this program, you may want to choose the plan that offers you the smallest payment.

Pros of Income Driven Repayment Plans

The benefits of income-driven repayment plans include the following:

• Affordable student loan payments: If you can’t make your loan payments under the Standard Repayment Plan, an income-driven repayment plan allows you to make a lower monthly loan payment.

• Potential for forgiveness: Making payments through an income-driven repayment plan and working through loan forgiveness under the PSLF program means you may qualify for forgiveness of your remaining loan balance after you’ve made 10 years of qualifying payments instead of 20 or 25 years.

• Won’t affect your credit score: This may be one question you’re wondering, whether income-based repayment affects your credit score? The answer is: no. Since you’re not changing your total loan balance or opening another credit account, lenders have no reason to check your credit score.

Cons of Income Driven Repayment Plans

Now, let’s take a look at the potential downsides to income-driven repayment plans:

• Payment could change later: The Department of Education asks you to recertify your annual income and family size for payment, which is recalculated every 12 months. If your income changes, your payments would also change.

• Balance may increase: Borrowers under the IBR plan receive a three-year interest subsidy from the government. However, after the subsidy expires, borrowers are responsible for paying the interest that accrues on subsidized and unsubsidized loans.

• There are many eligibility factors: Your eligibility could be affected by several things, including when your loans were disbursed, your marital status, year-to-year changing income, and more.

Refinancing vs Income Driven Repayment Plans

Here are the factors related to refinancing and income-driven repayment plans in a side-by-side comparison.

	Refinancing	Income-Driven Repayment Plan
Lowers your monthly payments	Possibly	Possibly
Changes your loan term	Possibly	Yes
Increases your balance	Possibly	Possibly
Is eventually forgiven if you still haven’t paid off your loan after the repayment term	No	Yes
Requires an application	Yes	Yes
Requires yearly repayment calculations	No	Yes

Choosing What Is Right for You

When you’re considering whether to refinance or choose an income-driven repayment plan, it’s important to take into account the interest you’ll be paying over time. It could be that you will pay more interest because you lengthened your loan term. If that’s the case, just make sure you are comfortable with this before making any changes. Many people who refinance their student loans do so because they want to decrease the amount of interest they pay over time — and many want to pay off their loans sooner.

That said, if you’re wondering whether you should refinance your federal student loans, you’ll also want to make sure you are comfortable forfeiting your access to federal student loan benefits and protections.

Refinancing Student Loans With SoFi

Refinancing your student loans with SoFi means getting a competitive interest rate. You can choose between a fixed or variable rate — and you won’t pay origination fees or prepayment penalties.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

Is income-contingent repayment a good idea?

This plan may be a good idea for some borrowers because the repayment terms are based on the lesser of these two: 20% of your discretionary income or a fixed payment over the course of 12 years, adjusted according to your income over the course of 25 years. Any remaining balance will be forgiven if you haven’t repaid your loan in full after 25 years. Because of the longer repayment timeline, the drawback is borrowers may pay more over time. It also won’t provide payments as low as the SAVE Plan.

What are the disadvantages of income based repayment?

The biggest disadvantage of income-based repayment is that you stretch out your loan term from the standard repayment plan of 10 years to longer — up to 25 years. This means that more interest will accrue on your loans and you could end up paying more on your loan before your loan term ends.

Does income based repayment get forgiven?

Yes! Through the Public Service Loan Forgiveness (PSLF) program, student loans can be forgiven after making 10 years of qualifying, consecutive payments. Additionally, borrowers with an income-driven repayment plan may have the remaining balances on their loans forgiven after 20 or 25 years.

About the author

Melissa Brock

Melissa Brock is a higher education and personal finance expert with more than a decade of experience writing online content. She spent 12 years in college admission prior to switching to full-time freelance writing and editing. Read full bio.

Photo credit: iStock/m-imagephotography

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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.

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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Apr

2025

Refinancing Student Loans Without a Cosigner: Is It Possible?

Refinancing Student Loans Without a Cosigner: A Comprehensive Guide

By Melissa Brock | Debt Payoff, Fresh Out of School, Student Loans, student_loan | Comments Off

You may be able to finance student loans without a cosigner as long as you meet specific lender requirements. Refinancing is when a private lender like a bank, credit union, or online lender pays off some or all of your existing student loans and replaces them with a new loan.

A cosigner is an individual with good credit who agrees to repay the loan if you, the primary borrower, cannot. A cosigner may give a student without a strong credit history a better chance of being approved for refinancing and also help them secure a better interest rate on the loan. However, it is possible to refinance loans with no cosigner if you meet certain conditions.

Read on for more information about student loan refinancing without a cosigner and what it involves.

Key Points

• Refinancing student loans without a cosigner requires a good credit score, a solid credit history, and a stable income.

• A lower debt-to-income ratio increases the chances of qualifying for student loan refinancing.

• Refinancing student loans can potentially result in a lower interest rate. It also streamlines student loan payments by consolidating multiple loans into one.

• Refinancing federal student loans turns them into private loans and results in the loss of federal benefits like federal loan forgiveness programs.

• Alternatives to refinancing include income-driven repayment plans and loan forgiveness programs.

Understanding Student Loan Refinancing

With student loan refinancing, a private lender pays off your existing student loans, whether they are private student loans, federal student loans, or a mixture of both. The lender then issues you a new loan with a new interest rate and loan terms.

Ideally, refinancing student loans allows you to get a lower interest rate or more favorable loan terms. The loan interest rate, which is a percentage of your principal amount borrowed, is the amount you pay to your lender in exchange for borrowing money. A lower interest rate can help you save money on your monthly student loan payments.

When you refinance, you may be able to change the repayment terms of the loan. For instance, if you need more time to repay the loan and smaller monthly payments, you may be able to get a longer loan term. However, this means that you will likely pay more in interest overall since you are extending the life of the loan. Alternatively, if you are refinancing student loans to save money, you might be able to get a shorter loan term so that you can repay the loan faster, helping you save on interest payments.

Refinancing can also help you manage your student loan payments by streamlining the process. Instead of having to keep track of multiple loans with different due dates and balances, with refinancing you have just one loan to repay.

You can refinance both federal and private student loans, but be aware that refinancing federal student loans means that you’ll lose access to federal benefits such as federal loan forgiveness and income-driven repayment plans. Clearly, it’s important to consider when to refinance student loans for the best possible outcome.

Recommended: Guide to Student Loan Refinancing

Refinancing Student Loans Without a Cosigner

Refinancing student loans without a cosigner means you’ll have full control over your loan and the responsibility of repaying it will be all yours. No one else will be financially liable for it.

However, to qualify for student loan refinancing on your own you will need to meet specific requirements. These eligibility requirements include:

Qualifying With Your Own Credit

To get approved for student loan refinancing, you typically need a good credit score and a solid credit history. FICO®, the credit scoring model, considers a good credit score to be between 670 to 739. Different lenders have different credit score requirements — some have a minimum credit score that’s slightly lower than 670 — but a higher score is usually better not only for approval but also to get the best rates and terms.

If your credit score needs some work, there are ways to build your credit over time. First, make all your payments in full and on time. Payments account for 35% of your FICO score, so this is critical. In addition, keep your credit utilization — the amount of debt you owe vs. the available credit you have — as low as you can. This can help show that you’re not overspending. And have a balanced mix of credit, such as credit cards and loans, to demonstrate that you can successfully deal with different types of debt.

In addition to your credit score, lenders will also check your credit history — meaning the age of your credit accounts. Having some older active credit accounts shows that you have a track record of borrowing money and repaying it.

Debt-to-Income Ratio

The lender will also look at your debt-to-income (DTI) ratio. This is a percentage that indicates how much of your money goes toward your monthly debts versus how much money you have coming into your household each month.

You can calculate your DTI by adding up your monthly debts and dividing that figure by your gross monthly income (your income before taxes). Multiply the resulting number by 100 to get a percentage, and that’s your DTI. The lower your DTI is, the less risk you are to lenders because it indicates that you have enough money to pay your debts, including the new loan.

If your DTI is high, above 50%, say, work on paying down the debt you owe before you apply for student loan refinancing. You can also work to boost your income by applying for a promotion or taking on a side hustle.

Employment Status

Generally, lenders look for borrowers who are currently employed and have a steady income, or, in some cases, those who have an offer of employment to start within the next 90 days, in order to approve them for student loan refinance. Check with your lender to learn their specific employment and income criteria.

Recommended: Student Loan Refinancing Calculator

Alternatives to Refinancing

If you can’t qualify for student loan refinancing without a cosigner, there are some other options to explore to help manage your student loan payments.

Income-driven Repayment Plans

With an income-driven repayment (IDR) plan, your monthly student loan payments are based on your income and family size. Your monthly payments are typically a percentage of your discretionary income, which usually means you’ll have lower payments. At the end of the repayment period, which is 20 or 25 years, depending on the IDR plan, your remaining loan balance is forgiven.

Loan Forgiveness Programs

You might qualify for student loan forgiveness through a state-specific or federal program. For instance, borrowers with federal student loans who work in public service may be eligible for the Public Service Loan Forgiveness (PSLF) program. If you work for a qualifying employer such as a not-for-profit organization or the government, PSLF may forgive the remaining balance on your eligible Direct loans after 120 qualifying payments are made under an IDR plan or the standard 10 year repayment plan. There is also a federal Teacher Loan Forgiveness program for student loan borrowers who teach in low-income schools or educational service agencies.

Be sure to check with your state to find out what loan forgiveness programs may be available. Some state programs even offer forgiveness to private student loan holders.

Federal Student Loan Consolidation

A federal Direct Consolidation loan allows you to combine all your federal loans into one new loan, which can lower your monthly payments by lengthening your loan term. The interest rate on the loan will be a weighted average of the combined interest rates of all of your consolidated loans. Consolidation can simplify and streamline your loan payments, and your loans remain federal loans with access to federal benefits and protections. However, a longer loan term means you’ll pay more in interest over the life of the loan.

How SoFi Can Help You Refinance

If you opt to refinance your student loans, you may want to consider refinancing your loans with SoFi. You’ll get competitive fixed or variable interest rates on refinanced student loans, no fees, flexible repayment options, and member benefits such as financial advice.

You can refinance online with SoFi and the process is quick and easy. You can view your rate in just two minutes, and it won’t affect your credit score. Then, you can choose a term and payment that makes sense for you. Just remember that refinancing federal student loans makes them ineligible for federal benefits such as income-driven repayment plans.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQS

Can I refinance my student loan without my cosigner?

If you can qualify for refinancing on your own, you typically won’t need to include the cosigner on the new loan which will have new loan terms. By qualifying on your own, you are essentially demonstrating to the lender that you have what it takes to make your loan payments. To qualify for refinancing without a cosigner, you’ll generally need a strong credit score and solid credit history, a low debt-to-income ratio, and a stable income

Is there any way to get a student loan without a cosigner?

Your ability to get a student loan without a cosigner depends on the type of loan it is and your financial situation. Most federal student loans, including Direct Subsidized and Unsubsidized loans, don’t require you to have good credit or to prove you have income, so you won’t need a cosigner for those loans. However, if you’re taking out a Direct PLUS loan and you have adverse credit, such as a recent loan default, you will likely need a cosigner for the loan.

If you’re interested in private student loans, private lenders generally have strict qualification requirements regarding your credit score and income. As a student without much of a credit history or a steady income, you may need a cosigner to qualify for a private student loan.

How easy is it to refinance student loans?

Refinancing student loans is quite easy today because in most cases you can do virtually all of it online. Here’s how: Research different lenders that offer refinancing and compare their loan terms and interest rates. Get a rate estimate from a few lenders to see what rate you may be eligible for (this process involves a soft credit check that does not affect your credit score), and then choose the lender that makes the most sense for you. You can typically complete the entire loan application online (just be aware that you will need to supply documentation to prove your financial situation).

About the author

Melissa Brock

Photo credit: iStock/paulaphoto

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.

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 .

This article is not intended to be legal advice. Please consult an attorney for advice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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Apr

2025

Payday Loan Consolidation

By Melissa Brock | Debt Payoff, personal_loan | Comments Off

A payday loan is a high-cost, short-term loan that gives you a quick infusion of cash to tide you over until your next paycheck. If you’ve taken out several payday loans, you may wonder about your repayment options. Consolidating them, or taking out a single new loan to pay off the multiple high-interest ones, can be an option. For some people, it can be a path out of the debt cycle.

It’s important to understand how this process can work and its pros and cons.

Key Points

• Payday loan consolidation replaces multiple high-interest payday loans (often 391% APR or higher) with a single personal loan at a much lower rate (typically 8%–36% APR).

• Consolidation provides predictable monthly payments, fewer fees, and potential credit score improvement through on-time repayment.

• Options include debt consolidation loans, credit counseling services, and debt management plans, each offering different levels of support and cost.

• Borrowers must meet basic requirements such as proof of income, valid ID, and an active bank account; origination fees usually range from 1%–10%.

• Avoiding future payday loan debt requires budgeting, building an emergency fund, and considering alternatives like credit union PALs, personal loans, paycheck advances, or side hustles.

Understanding Payday Loan Consolidation

Before you learn about payday loan consolidation, a brief note about these loans: They are typically used by people in urban areas who earn less than $40,000 per year. They can offer cash when needed for individuals who are falling behind on rent, utilities, or car payments.

Next, take a closer look at payday loans and how debt consolidation works.

Definition and How It Works

Payday loan consolidation means combining multiple existing payday loans under one new personal loan. In short, payday loan debt consolidation bands your loans together and allows you to repay them, typically at a lower interest rate and/or with a longer repayment period, usually one to seven years. In short, they can be a great alternative to repaying individual payday loans. While payday loans are usually very short-term, if you do the math, their annual percentage rate (APR) can be a shocking 391% or higher.

To get a payday loan consolidation loan, you can take the following steps:

1. Add up your payday loan balance, including fees.

2. Compare debt consolidation interest rates and loan terms, as well as personal loan requirements.

3. Apply for the loan that best suits your needs. Banks, credit unions, and online lenders may offer personal loans, which are typically unsecured loans, meaning you don’t need to provide collateral.

4. Once you are approved for a personal loan, you receive a lump sum payment to pay off your payday lenders. Or your lender may pay off your payday loans directly.

5. Make monthly payments on the personal loan until you pay it off completely. Setting up automatic payments so you don’t miss a payment can be a smart move.

Recommended: Payday Loan Requirements

Benefits of Consolidating Payday Loans

Here are the benefits of consolidating online payday loans and other forms of fast cash lending.

• New interest rate: Consolidating your payday loans means you can get a new, lower interest rate, well below than the triple-digit APRs that payday loans typically carry.

• Convenience: When you consolidate to a personal loan, you receive a regular monthly payment, which helps with a more predictable repayment schedule. You no longer need to juggle or worry about multiple payments.

• Lower fees: You may get charged an origination fee (between 1% and 10% of the loan amount) with a personal loan, but these charges are typically much less than the cost of carrying payday loans.

• Credit building: You might be able to build your credit score as you make regular, on-time monthly payments on your new personal loan. This can benefit you in the long run because it could give you opportunities to qualify for other loans at more favorable rates in the future.

Options for Payday Loan Consolidation

There are several options for payday loan consolidation, including debt consolidation loans, credit counseling services, and debt management plans.

Debt Consolidation Loans

You might want to consider a debt consolidation loan through a bank, a credit union, or an online lender. A debt consolidation loan is a type of loan that allows you to pool many of your loan payments into a single loan payment, making it easier for you to keep track of your payments. You might also find that these financial institutions offer significantly lower interest rates than payday loans. This can result in lower monthly costs, which can be very helpful for those who are living paycheck to paycheck.

Check for the interest rate on your new loan and the length of time you’ll repay your debt consolidation loan to ensure you get a comprehensive understanding of how much you’ll pay.

Credit Counseling Services

Credit counseling services are nonprofit organizations that help you manage your debts. They may offer educational materials and advice after reviewing your situation in a consultation, educate you about money management, help you develop a budget, and understand your credit report and scores.

Debt Management Plans

Credit counseling agencies and certified financial planners (CFPs) can help you develop a debt management plan. They will walk through your financial situation and discuss several options, including how to handle unsecured debts like credit cards and personal loans. Agencies may take management of your debts and contact creditors to find out if they can:

• Lower interest rates

• Lower monthly payments

• Stop late fees

They will let all your creditors know that they have taken over your accounts, which means your payments go to the agency instead of to your creditors.

A CFP can help you budget and explore options for restructuring and consolidating your debt.

Of course, you’ll pay fees for these professional services, so check with the agency or CFP how much you’ll pay. Be cautious about this decision, and check the reputation of an agency or financial professional carefully.

Qualifying for Payday Loan Consolidation

You can qualify for payday loan consolidation by meeting credit and income verification requirements and by understanding the fees and interest rates, repayment terms, and schedules.

Credit Requirements and Income Verification

Here are the usual requirements: You must be 18 or older and have a valid ID, such as a driver’s license or passport, to get a consolidation loan. You must also prove your income through a pay stub or other document and that you have an active bank or credit union account.

Fees and Interest Rates

Payday debt consolidation loans also come with fees and interest. As of August 2024, interest rates range from about 8.00% to 36.00%, depending on your creditworthiness, with an average of 12.36%. Origination fees are typically 1% to 10% of the loan amount.

Repayment Terms and Schedules

Along with a lower interest rate, you can also expect a longer repayment period with a payday consolidation loan compared to a standard payday loan. The term typically ranges from one to seven years with monthly payments.

Develop a Debt Repayment Strategy

Once you receive the money for the payday loan consolidation, you can pay off each payday lender (or the lender of your consolidation loan may do so for you). Then focus on paying off your personal loan. It’s vital to keep up on your personal loan payments, because missed payments can negatively affect your credit score.

Consider setting up automatic payments to avoid making missed payments, which also results in late fees. You might even get a discount (possibly between 0.25% and 0.50%) to set up automatic payments.

Create a Budget and Cutting Expenses

Creating a budget can help ensure you won’t need another payday loan. Use a budget app or try a method like the 50/30/20 budget rule to keep track of your expenses and to determine where you can cut back, whether it’s eating out, purchasing shoes or clothes, a gym membership you never use, or other items you don’t really need.

Doing this can help you make your payday loan consolidation payments and meet all your other debt obligations. Staying on top of your finances in this way can be a path to paying off debt quickly.

Prioritizing Debt Payments

Consider prioritizing debt repayment for your personal loan for consolidation and also on other loans that you owe. Taking care of all types of debt you owe can set you up for financial success. Tackling all types of debts can help you succeed over time, so keep track of what you owe on the following:

• Mortgage

• Student loans

• Auto loan

• Home equity loan

• Credit-builder loan

Recommended: Debt Payoff Guide

Build an Emergency Fund

Many experts recommend building an emergency fund that contains three to six months’ worth of basic expenses, to help protect against incurring future debts. An emergency fund can cover unexpected expenses or financial emergencies, such as a big car repair bill or a job loss situation. You might put the money for an emergency fund into a high-yield savings account to earn a competitive interest rate.

If you have an emergency in the future, you can dip into your emergency savings instead of taking out a payday loan.

Avoid Payday Loan Debt in the Future

Payday loans are risky, and if you need money, they should be your last resort. So, what are your alternatives? Here are some options.

Understand the Risks of Payday Loans

Payday loans may seem innocuous because you can get a quick infusion of cash without a credit check as long as you repay the loan balance on your next payday. Payday loans are small loans (usually $500 or less) that you must repay within 10 to 14 days of receiving the money. No biggie, right?

It’s true that you’ll get funds in your bank account quickly — usually within one business day. But the risks of payday loans occur when the lender assesses fees. Payday lenders don’t charge traditional interest rates — they usually charge a flat fee, between $10 and $30 for every $100 borrowed.

For example, a $500 loan could incur $150 in fees after the 10- to 14-day period. Some have interest rates of a whopping 600%.

Explore Alternative Financing Options

To avoid those kinds of interest rates, alternatives to payday loans include:

• Personal loans: Standard personal loans can offer funds at a significantly lower interest rate, if you qualify. Bad-credit personal loans can be obtained by those who have a low credit score, and these loans do not require collateral. Unfortunately, these come with higher interest rates, but they’re not as high as payday loans.

• Payday alternative loans: Payday alternative loans come from credit unions as an alternative to payday loans. Payday alternative loans (PALs) are divided into PALs I and PALs II. Credit unions offer $200 and $1,000 PALs I with a maximum 28.00% APR, with one- to six-month repayment terms. Credit unions offer PALs up to $2,000 and a maximum 28.00% APR, with one- to 12-month repayment terms.

• Home equity line of credit (HELOC): A HELOC is a type of loan where you borrow against your home’s equity. Your home serves as collateral, which means the bank could seize your home if you don’t repay your loan. You can think of a HELOC as similar to a credit card. After your lender approves the amount you can borrow, you have a certain amount of time to withdraw up to the limit within the draw period. When the draw period ends (say, after 10 years), you’ll enter a repayment period, such as 10 or 20 years. HELOCs typically have much lower interest rates than payday loans.

• Friend and family loans: Consider asking family and friends for a loan, but remember that not repaying a loan to family or friends can have lasting effects on your relationship.

• Credit card cash advance: Cash advances are short-term loans that allow you to access money from the financial institution that backs your credit card. You can borrow money against your line of credit, though it’s important to check the fees and APR. A credit card cash advance is usually an expensive option.

• Employer paycheck advances: Your employer may offer paycheck or payroll advances up to a limit, typically $1,000. You pay the loan back to your employer through future earned wages. Learn more about the repayment terms and details about the payment advance before you go that route.

• Peer-to-peer loans: Peer-to-peer loans take a crowdfunding approach to borrowing money. Money comes from individual private investors instead of institutions, typically in the form of unsecured personal loans, but note that due to the nature of these loans, the government doesn’t provide insurance for them.

• Second job or side hustle: A side hustle or second job can bring in more cash, if you have the time and resources to devote to it. This income stream could help you avoid taking out a payday loan.

Improving Financial Literacy

One of the best ways to improve your understanding and management of your money is to learn as much as you can about it. Developing financial literacy can help you make informed decisions about how to save money for emergencies, avoid debt, spend and budget wisely, and more. This, in turn, can help you sidestep payday loans.

The Takeaway

If you’ve taken out payday loans, you may wonder if consolidating payday loans makes sense. Taking out a single personal loan can help you replace multiple high-interest loans with a single, lower-interest one. This can allow you to reduce the amount of interest you’ll pay over time and take better control of your finances. Other types of loans may also be available to help you avoid payday loans. Educate yourself about all of your options so you can choose the best path forward.

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.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

FAQ

Can I consolidate payday loans with bad credit?

You may be able to get a payday consolidation loan with bad credit, but the interest rate may be higher than what you’d find with a higher credit score. Check with lenders to see whether you qualify for payday loan consolidation and at what interest rate.

What happens if I miss payments on a consolidated loan?

When you opt for a payday loan consolidation, your responsibility is to repay your loans. If you miss payments on a loan consolidation, you will likely incur late fees and could face a negative impact on your credit score. Keep making on-time, regular payments so your credit score doesn’t take a dip.

How long does payday loan consolidation take?

You can typically receive a personal loan fairly quickly, and the repayment term is usually between one and seven years.

About the author

Melissa Brock

Photo credit: iStock/tsingha25

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 .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOPL-Q324-007

Apr

2025

How to Pay off $100K in Student Loans

By Melissa Brock | Debt Payoff, Student Loans, student_loan | Comments Off

When you’re facing $100,000 in student loan debt, you may wonder if you’ll ever be able to pay it all off. To make it even more daunting, you’re probably facing tens of thousands of dollars in interest charges.

Fortunately, there are a number of strategies to make your payments manageable and more affordable. Learn how to pay off 100K in student loans and find the repayment option that’s best for you.

Understanding Your $100,000 Student Loan Debt

According to the Education Data Initiative, 8% of borrowers owe more than $100,000 in student loan debt. As the interest continues to build on the loan, you’ll owe even more than $100,000 over time. That’s what makes living with student loan debt so challenging.

For example, if you have a $100,000 loan balance with a 7% interest rate and a 10-year repayment term, you’ll owe $39,330 in interest payments over the life of the loan. So your $100,000 loan becomes $139,330, with monthly payments of $1,161.

The longer you take to pay off your $100,000 in student loans, the more you’ll pay. But of course, your payments also need to fit into your budget each month, along with your rent, utilities, and other necessities.

Breaking Down Federal and Private Loans

There are key differences between federal and private student loans that can affect how you repay what you owe. Federal student loans come from the Department of Education, while private student loans are offered by private institutions like banks, credit unions, and online lenders.

Federal student loans have fixed interest rates, flexible repayment options, and federal protections and programs such as income-driven repayment plans and loan forgiveness.

Private student loans are often used to help fill the gap that federal loans, scholarships, and other financial aid doesn’t cover. These loans may have fixed or variable interest rates, and they often require a cosigner. Private student loans don’t offer the same flexible repayment options or federal programs that federal student loans do.

Check to see what kinds of loans you have. You may have federal student loans only or a combination of federal and private student loans. Knowing exactly what your loans are will help you determine the best way to tackle your debt.

Recommended: Student Loan Debt Guide

Calculating Interest and Total Repayment Costs

Once you’ve identified the kinds of student loans you have, calculate how much your total repayment cost, including interest, will be based on the loan term of your current repayment plan. With federal student loans, unless you pick another plan, you will automatically be placed on the 10-year Standard Plan.

You can check with your student loan service provider to get your total student loan costs. You can also use a student loan calculator or calculate it yourself.

To determine how much the monthly simple interest on your loan will be, you first need to calculate the daily interest on the loan. To do this, divide the loan’s interest rate by 365 and multiply that number by the principal amount. Then multiply the resulting number by the number of days in your billing cycle.

On a $100,000 loan with an interest rate of 6.00% and a repayment term of 10 years, your monthly payment would be $1,110.21, and $276.88 of that would be interest.

That adds up to $33,224.60 in interest over the life of the loan, giving you a total loan repayment cost of $133,224.60.

Creating a Budget and Repayment Plan

To start paying off $100,000 in student loans, it helps to create a budget. You might consider using a popular budgeting technique such as the 50/30/20 rule, which allocates 50% of your income toward needs (housing, utilities, bills), 30% toward wants (nonessential items like dining out and entertainment), and 20% toward savings and investments. You may decide to forgo a big chunk of the wants and direct that extra money into paying off your student loans.

Once you’ve set up a budget, evaluate your loan repayment options. The Standard Plan with its 10-year repayment term might not be the best choice for you, especially if the monthly payments are too steep. Instead, you may want to consider income-driven repayment (IDR) plans. These plans are designed for borrowers who have a high debt relative to their income.

With income-driven repayment, your monthly payment amount is based on your income and family size. Your loan term will be approximately twice as long as on the Standard Plan. However, the longer loan term means you will pay more interest over time.

Exploring Loan Consolidation and Refinancing

Student loan consolidation and refinancing are two other possible options to help manage student loan debt.

Consolidating Federal Student Loans

When you have multiple federal student loans, you can consolidate them into a new federal Direct Consolidation Loan. With this loan, you can choose more flexible loan terms, like a longer time to repay the loan. You’ll also simplify your payments. Instead of making several different loan payments, with consolidation you make just one payment.

Refinancing with Private Lenders

When you refinance your student loans, you replace your current loans with a new loan from a private lender. Ideally, you might be able to qualify for better rates and terms.

It’s possible to refinance private student loans, federal student loans, or a combination of both types. However, if you refinance your federal student loans into private loans, you’ll lose access to the federal programs and protections those loans offer, such as deferment, forbearance, forgiveness, and income-driven repayment plans.

Recommended: Private Student Loans Guide

Weighing the Pros and Cons

There are benefits and drawbacks to refinancing and consolidating your student loans. Here are the pros and cons of each option.

Pros of federal student loan consolidation:

• Simplified payments.You’ll have a single monthly loan payment, rather than multiple payments.

• Lower monthly payment. You might be able to get a lower monthly payment, but that means you’ll make more payments over a longer term.

• Longer loan term. Consolidation gives you the flexibility to choose a lengthier loan term.

Cons of federal student loan consolidation:

• Consolidation may result in more payments and interest over time if you extend your loan term.

• With consolidation you might lose certain benefits such as interest rate discounts, principal rebates, and loan cancellation benefits.

• A longer loan term could mean you’ll be making payments for years longer than your original term.

• Consolidating your loans might cause you to lose credit for payments made toward income-driven repayment plan forgiveness.

Refinancing student loans also has advantages and disadvantages.

Pros of student loan refinancing:

• You may get a lower interest rate. If you qualify for a lower interest rate, you could save money. A student loan refinancing calculator can help you determine what you might save.

• You might qualify for better terms. You may be able to extend the length of your loan, which could lower your monthly payment.

• Simplified payments. With refinancing, you only have one payment each month, rather than multiple loan payments.

Cons of student loan refinancing:

• You’ll lose federal protections and programs. When you refinance your student loans with a private lender, you lose all federal benefits and protections, including deferment and forbearance.

• No access to income-driven repayment plans. IDR plans are another thing you give up with refinancing.

Utilizing Repayment Assistance Programs

Loan repayment assistance programs (LRAPs) are another resource that could help you manage your student debt. States, employers, and other organizations may offer these programs that can help you repay your student loans.

Do some research to find out if there are any LRAPs you might qualify for — for instance, some are offered to college grads that work in public service fields — and check with your employer to find out if they offer such a program.

Strategies for Accelerating Loan Repayment

There are several different strategies for repaying your student loans faster, which could help you save money over the long term. Here are some options to consider.

• Start paying off your loans sooner. If possible, make student loan payments while you’re still in school or during the six-month grace period after graduation. If you can’t afford to make full payments, pay off enough to cover the interest each month and keep it from accruing.

• Sign up for automatic payments. Making your loan payments automatic will ensure that they’re made on time, and prevent any late penalty charges. Plus, you may get an interest rate deduction for enrolling in an automatic payment program.

• Pay a little extra each month. Paying more than the minimum on your loan can help you pay off the loan faster. It can also reduce the amount of interest you’ll pay.

• Put any extra money toward your loans. Use a windfall, a tax refund, or birthday money from family members to help pay off your student loan.

• Consider student loan refinancing. With refinancing you may be able to qualify for a lower interest rate or a shorter loan term.

The Takeaway

A student loan debt of $100,000 might seem daunting, but there are ways to repay your loans that might also save you money or allow you to pay off your loans faster. Options include income-driven repayment plans, putting additional money toward your loan payments each month, loan consolidation, or student loan refinancing. Weigh the pros and cons of the different options to decide which one is best for you.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

How long will it take to pay off 100K in student loans?

The length of time it will take to pay off $100K in student loans depends on a variety of factors, including the repayment plan you choose and whether or not you regularly make extra payments toward your student loans each month. For instance, if you’re on the Standard Repayment plan for federal student loans and you don’t make additional payments on your loans, it will typically take you 10 years to pay off your loans. If you opt for an income-driven repayment plan, your loan repayment term will generally be 20 years or longer.

Can I settle student loan debt for less than I owe?

It’s difficult to settle student loan debt for less than you owe. However, if you find yourself in very dire circumstances and your loans are in default, you may be able to get a student loan settlement. That means you pay off your student loans for less than you owe typically in one lump sum, depending on the settlement terms. Your lender must be willing to work with you in order to qualify for a student loan settlement. Check with your loan servicer for more information.

What happens if I can’t make my student loan payments?

If you can’t make your student loan payments, reach out to your lender or loan servicer right away to let them know you’re struggling. They will explain the options you have, which might include income-driven repayment plans, forbearance, or deferment. It’s important to reach out to the lender or loan servicer immediately because if you miss payments, they may report the missed payments to the credit reporting agencies, which can hurt your credit.

About the author

Melissa Brock

Photo credit: iStock/damircudic

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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

SOSLR-Q324-005

Apr

2025

How to Refinance a Home Mortgage

By Janet Siroto | Debt Payoff, Home Ownership, mortgage | No Comments

Mortgage rates have been generally on the rise for the last few years, from an average of less than 5.00% for a 30-year fixed-rate loan during most of April 2022 to 6.64% in early April 2025. But despite it being more expensive to borrow money for a home, refinancing is still an attractive option for many homeowners. It allows you to replace your current mortgage with a new, potentially more advantageous one.

Perhaps you decided that you’d like to change your loan term, or you received a windfall you’d like to put toward lowering your mortgage ASAP. Another possibility is that you’ve built up equity and would like to tap it in a cash-out refinance.

Whatever your situation may be, here’s what you need to know about refinancing a home mortgage loan, from whether it’s right for you to what steps are involved to how much it will cost.

Key Points

• Common reasons for refinancing a mortgage include lowering your monthly payments, paying off the loan faster, accessing equity, and removing mortgage insurance.

• Closing costs for refinancing typically range from 2% to 5% of the loan’s principal.

• Your credit score influences the interest rate you’re offered, which has a big impact on the overall loan cost.

• The refinancing process includes setting goals, checking credit, researching home value, comparing rates, preparing documents, and monitoring lender progress.

• Comparing offers from multiple lenders is essential to find the best interest rate and terms, potentially saving money.

What Is Mortgage Refinancing?

Mortgage refinancing occurs when you replace one home loan with a new one. You might do so for such reasons as:

• To get a different loan term (say, 15 years instead of 30, or vice versa)

• To get a better interest rate

• To tap your home equity

• To make a switch between a fixed- and adjustable-rate loan

• To get rid of mortgage insurance on an FHA loan.

You need to go through the loan application process, underwriting, and closing again and pay the related costs. The new loan will pay off the old one. Then, going forward, you pay the new lender every month instead of your previous one.

Mortgage Refinancing Costs

Refinancing will generally cost from 2% to 5% of your loan’s principal value in closing costs. That’s a significant range, so it can be wise to shop around to make sure you’re getting the best deal.

Since you’re essentially applying for a new loan, you will likely need a chunk of cash at the ready if you choose to refinance. For this reason, it’s important to consider those refinancing costs compared to the potential savings. A good rule of thumb is to be certain you can recoup the cost of the refinance in two to three years — which means you shouldn’t have immediate plans to move.

There are helpful online calculators for determining approximate costs for a mortgage refinance. Of course, this will only be an estimate, and each lender will be different. As you do your research, lenders can provide final closing cost information alongside a quote for your new mortgage rate.

When you refinance, you also have to consider closing costs. Some lenders may not have origination fees, but instead charge the borrower a higher interest rate.

If you have a history of managing credit well and a strong financial position, there are some mortgage refinancing lenders that will probably reward you by offering a better rate than they would charge those with lesser credentials.

Recommended: Home Affordability Calculator

How Long Does a Mortgage Refinance Take?

The process can take anywhere from 30 to 45 days or longer to complete. Factors that impact timing include the complexity of the loan, your ability to submit materials in a timely fashion, and the efficiency of the lender and/or broker.

If you want the process to move quickly, you may want to look for mortgage lenders who offer more streamlined service and a better customer experience. This may mean working with an online lender versus, say, a brick-and-mortar bank.

How to Refinance a Home Mortgage Loan

When you refinance a home mortgage, you are essentially repeating the same process as when you originally bought your property. This time, however, instead of the loan going to the homeowner you are buying a house from, funds will first go to the financial institution that holds your current mortgage. Once that loan is paid off, your newly refinanced loan kicks in. You start making payments to the new lender.

Because you are replacing one mortgage with another, you can expect the steps to be similar to those you took when you got your original loan, from shopping around for the best loan for your situation to providing the necessary documentation to closing.

Steps in the Mortgage Refinancing Process

Here’s a closer look at the process:

1. Determine your goal. The first (and arguably most important) step is to decide what you want to get out of your mortgage loan refinance. There are several mortgage refinance types, but “rate and term” and “cash-out” are the two most common.

Just as the name implies, a “rate and term” refinance updates the interest rate, the term (or duration) of the loan, or both. You can also switch between an adjustable- vs. a fixed-rate loan.

It is important to understand that not every refinance will save you money on interest. For example, if you extend the loan term from 15 to 30 years, you may lower your monthly payment, but you could end up paying more money in interest over the course of your loan.

Once you decide on your goal, your primary focus will be determining whether the fees are worth what you’ll gain.

With a cash-out refinance, you are using increased equity in your home to take out additional money on your mortgage.

This is usually done to fund common home repairs or pay off other, higher-interest debt. While this kind of loan can be an excellent tool if you use it wisely, as with all loans, it’s rarely advisable to take out more than you absolutely need.

2. Check your credit score and credit history for errors. Your credit score is an important factor in determining the rate you’re offered. Make sure you take time to clear up anything that’s been reported erroneously on your credit report. You might also want to remedy, say, an unpaid bill that was forwarded to a collection agency. These are factors that can lower your score.

3. Research your home’s approximate value. Check comparable sale prices — not just listing prices — in your neighborhood to get an idea of what your house is worth. If the value of your home has gone up significantly and improves your loan-to-value ratio (LTV), this will be helpful in securing the best refinancing rate.

4. Compare refinance rates online. It’s wise to shop around and see what at least a few lenders offer. Don’t forget to ask about all costs involved. Most financial institutions should be able to give you an estimate, but the accuracy can depend on how well you know your credit score and LTV ratio.

5. Get your paperwork together. The process will move faster if you have your pay stubs, bank statements, tax filings, and other pertinent financial information ready to go.

6. Have cash on hand. Refinancing brings charges, and at closing, such items as overdue property taxes might need to be paid, too. Make sure you can cover these costs.

7. Track the lender’s progress. Once the process is underway, keep an eye on how well things are moving ahead. What typically happens: The lender will likely send an appraiser for a home inspection. After the loan documentation and appraisal are submitted, loan officers determine the interest rate and create the loan closing documents. The closing is then scheduled with the refinancing company, mortgage broker, and your attorney.

Reasons to Refinance

As mentioned above, there are several typical reasons to refinance:

• Reducing your monthly payment

• Paying off your loan sooner

• Changing the loan terms or type (fixed- vs. adjustable-rate)

• Tapping your home equity

• Eliminating mortgage insurance on an FHA loan.

Benefits of Refinancing

By refinancing your home loan, your monthly mortgage payments might be reduced. This in turn could free up money in your budget to go toward other goals, like paying down credit card debt or pumping up your emergency fund.

Alternatively, you might pay off your loan sooner, which could save you a considerable amount in interest over the life of the loan.

Refinancing your mortgage might also allow you to tap equity in your home. This could be useful if, say, you need those funds for educational or other expenses coming your way.

Also, some people who switch from an adjustable- to a fixed-rate loan may feel more secure with a set, unwavering payment schedule.

Recommended: First-Time Homebuyer Programs

Tips to Refinance a Mortgage

Beyond the tips mentioned above, you may also benefit from keeping these points in mind:

• Think carefully about no-closing-cost loans. Yes, not paying closing costs can sound appealing, but there’s a good chance you will wind up with a higher interest rate and pay more over the life of the loan.

• Make your appraisal a success. It can be distressing to have an appraisal come in low and throw a wrench into the works as you try to refinance. If there’s a glaring issue (rotting porch posts, for instance), it might be wise to fix it before the appraiser visits.

• Prioritize requests for paperwork and documentation when your file is moving through underwriting. Not doing so can cause the process to drag on for longer than anyone might want.

The Takeaway

Depending on your financial situation and goals, refinancing your home loan can be a smart move. You may be able to lower your monthly payments, or you might shorten your loan term, thereby saving a considerable amount in interest. Another reason to refinance: To tap the equity you have built up in your home and use that cash elsewhere. The process is very similar to the one you followed when shopping for, applying for, and closing on your current mortgage. It will involve doing your research, providing documentation, and paying closing costs.

SoFi can help you save money when you refinance your mortgage. Plus, we make sure the process is as stress-free and transparent as possible. SoFi offers competitive fixed rates on a traditional mortgage refinance or cash-out refinance.

A new mortgage refinance could be a game changer for your finances.

FAQ

What is the average refinance fee?

Typically, you can expect to pay between 2% to 5% of the loan’s principal in closing costs when refinancing a mortgage.

Is it expensive to refinance?

The cost of refinancing will typically vary with the amount of the loan you are seeking. If closing costs are, say, 3.5% of the loan principal, that will be $3,500 on a $100,000 loan and $35,000 on a $1,000,000 loan. It can also be helpful to compare these closing costs to the benefits of refinancing. For instance, you might free up more money every month to pay down pricey credit card debt, or you might shorten your loan term and pay less interest over the life of the loan when refinancing.

Why is it so expensive to refinance a mortgage?

When you refinance a loan, you are replacing your current loan with a new one. Closing costs are assessed to cover the expenses involved, including appraisal fees and other charges.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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.

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 .

SOHL-Q225-021