SoFi

High-interest debt can feel like a heavy weight, keeping you from reaching your financial goals and constantly draining your resources. Even if you consistently make the minimum payments, a significant portion goes towards interest, making it difficult to make any progress on the principal — or original debt.

Fortunately, there are strategies and tools you can use to manage and pay off high-interest debt more efficiently. Below, we walk you through what qualifies as high-interest debt, how it impacts your finances, and practical methods to help you tackle it head-on.

What Is Considered High-Interest Debt?

High-interest debt generally refers to any loan or credit product with an interest rate significantly above average. While there’s no universally accepted definition of “high interest,” generally speaking, any annual percentage rate (APR) in the double-dibits is considered high.

The most common sources of high-interest debt include:

•   Credit card debt: As of May 2025, the average credit card interest rate was 22.25%, but you may see rates as high as 25%.

•   Payday loans: These are short-term, high-cost loans, typically for small amounts (often $500 or less), that are due on your next payday. Fees typically run around $15 per $100, which equates to an APR of almost 400%, according to the Consumer Financial Protection Bureau. This makes payday loans one of the most expensive forms of borrowing.

•   Store credit cards: Store-only credit cards charge an average of 30.24% APR, substantially higher than the average interest rate on general-purpose credit cards.

•   Personal loans for bad credit borrowers: Lenders typically charge higher interest rates — often 30% APR or higher — on personal loans for borrowers with poor credit primarily due to increased risk.

Unlike mortgages or student loans, which tend to have lower, fixed interest rates, high-interest debts can grow quickly if not managed, making them harder to pay off over time.

💡 Quick Tip: There is a lot of debate around credit card interest caps. For consumers carrying high-interest credit card balances, however, one of the shortest paths to debt relief is switching to a lower-interest personal loan. With a SoFi credit card consolidation loan, every payment brings you closer to financial freedom.

How High-Interest Debt Can Dent Finances

High-interest debt doesn’t just make it hard to stay on top of bills, but can have a ripple effect on nearly every aspect of your financial life. Here’s a look at the potential fallout:

•   Increased costs over time: The higher the interest rate, the more you pay in interest over the life of the loan or credit balance. For example, carrying a $5,000 credit card balance at a 22% APR and only making minimum payments could result in paying thousands of dollars in interest on top of what you originally borrowed.

•   Slower progress toward goals: When large chunks of your income go toward interest payments, there’s less money left for savings, investing, or major purchases like a car or a home. High-interest debt can delay financial goals such as building an emergency fund, starting a business, or saving for retirement.

•   Credit impacts: High balances relative to your credit limit can negatively affect your credit utilization ratio, a key factor in credit scoring. Missed or late payments can also damage your credit, which can lead to even higher interest rates in the future.

•   Emotional stress: Living under the constant pressure of unmanageable debt can lead to stress and anxiety. Financial insecurity can also negatively impact your relationships and overall well-being.

How to Pay Off High-Interest Debt

Tackling high-interest debt takes commitment, planning, and sometimes a little help. Here are some effective tools and strategies to consider.

Refinancing

Refinancing involves replacing one loan with another, ideally one that has a lower interest rate. Two popular options for refinancing high-interest debt are:

•   Personal loans: Interest rates on personal loans are generally much lower than credit cards, especially if you have good credit. If you can qualify for a competitive rate on a personal loan for debt consolidation, and use it to pay off your high-interest debt, it could help you save money and potentially pay off your debt faster.

•   Home equity loans or lines of credit (HELOCs): If you own a home, borrowing against your equity can provide access to low-interest funds to pay off high-interest debt. Just keep in mind that these are secured loans, meaning your home is used as collateral. Should you run into trouble repaying your loan or credit line, you could risk losing your home.

To determine if refinancing is worth it, you’ll want to compare loan terms carefully and check for any fees or penalties, which can add to your costs. An online debt consolidation calculator can help you determine exactly how much you could save by refinancing high-interest debt with a lower-interest loan.

💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. One question can save you many dollars.

Balance Transfer

A balance transfer involves taking out a new credit card, ideally one with a 0% introductory APR, and using it to pay off your current credit card balances. This can be an excellent tool for saving on interest, if used wisely. However, there are a few caveats to keep in mind:

•  Balance transfer cards usually charge a 3.0% to 5.0% transfer fee on the transferred amount. So for every $1,000 you transfer, a 4.0% percent balance transfer fee would cost $40.

•  If you don’t pay off the balance within the promotional period (which can be anywhere from 12 to 21 months), the interest rate will jump, potentially undoing your progress.

•  You typically can’t transfer balances between cards from the same bank.

•  You generally need a good credit score to qualify for the best balance transfer offers.

Credit Counseling

Working with a nonprofit credit counseling agency can be a good way to get free or low cost help with managing high-interest debt.

General credit counseling and budgeting advice is often free. For a small fee, a counselor can also set up a debt repayment plan (DMP). If you sign up for a DMP, your counselor will negotiate with your creditors on your behalf to lower interest charges and fees, and come up to a manageable repayment plan. You then make a single monthly payment to the agency and they distribute payments to your creditors.

A DMP typically requires closing your credit accounts and you usually can’t access new credit during the plan.

Recommended: What Is a Credit Card Interest Cap?

Common Debt Repayment Strategies

If you want to tackle your debt on your own, it’s important to take a systematic approach. “Focus on paying off one debt at a time,” advises Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “If you spread your money out over many debt payments, your progress may not be as fast as you want. But by focusing on one goal at a time, you can see success sooner — and that can keep your motivation up.”

Two popular debt payoff strategies — the avalanche and snowball methods — offer different psychological and financial benefits. Here’s how they work:

The Avalanche Method

With the avalanche method, you list your debts in order of interest rate then make extra payments on the debt with the highest rate, while continuing to pay the minimum on the rest. Once that debt is erased, you funnel your extra payments towards the debt with the next-highest interest rate, and so on. This approach helps you save money on interest over time, but it can take longer to see results.

The Snowball Method

With the debt snowball method, you list your debt in order of size, ignoring interest rates. You then focus extra payments on the debt with the smallest balance, while making minimum payments on the rest. Once that debt is paid off, you roll its monthly payment to the debt with the next-smallest debt, and so on, creating a “snowball” effect.

This strategy helps you build momentum and motivation as you eliminate entire debts faster, but may cost more in interest compared to the avalanche method.

The Takeaway

High-interest debt may be daunting, but it’s not unbeatable. With the right combination of tools, you can take control of your finances and move toward a debt-free future. Whether you opt for refinancing, a balance transfer, credit counseling, or a DIY payoff approach, the key is to start now, stay committed to your plan, and remember that each payment moves you one step closer to financial freedom.

Credit cards have an average APR of 20%–25%, and your balance can sit for years with almost no principal reduction. Personal loan interest rates average 12%, with a guaranteed payoff date in 2 to 7 years. If you’re carrying a balance of $5,000 or more on a high-interest credit card, consider a SoFi Personal Loan instead. See your rate in minutes.

SoFi’s Personal Loan is cheaper, safer, and more predictable than credit cards.

FAQ

What is an example of high-interest debt?

A common example of high-interest debt is credit card debt. Many credit cards carry annual percentage rates (APRs) topping 20%, especially for those with lower credit scores. Due to compounding interest, balances can keep growing if you only pay the minimum due each month. Payday loans and personal loans for bad credit borrowers are also considered high-interest debt. These loans often feature extremely steep rates that can trap borrowers in a cycle of ongoing payments.

How can I prioritize high-interest debt over other financial goals?

To prioritize high-interest debt, start by creating a budget that allocates extra funds toward these debts while covering essentials. Consider using the avalanche payoff method, which prioritizes paying off debts with the highest interest rates first. While saving and investing are important, aggressively tackling high-interest debt can free up more money in the long run and improve your financial stability.

Does consolidating high-interest debt hurt your credit score?

Debt consolidation can cause a temporary dip in your credit score due to a hard credit inquiry and the opening of a new credit account. However, if managed responsibly, it can have a net positive impact on your credit file over time. By simplifying payments and potentially lowering your interest rate, consolidation can help you build a positive payment history, a key factor in your credit score. The long-term effect on your score largely depends on how well you manage the new loan.

Are personal loans a good option for high-interest credit card debt?

Yes, personal loans can be a smart option for paying off high-interest credit card debt. They typically offer lower fixed interest rates and a set repayment term, making monthly payments more predictable. This can help you save on interest and potentially pay down debt faster. However, it’s important to compare lenders, watch for fees, and avoid racking up new credit card debt after consolidation. Success depends on disciplined repayment and budgeting habits.

How long does it take to pay off high-interest debt with a structured plan?

The time it takes to pay off debt with a structured plan varies based on your total debt, repayment strategy, and how much extra you can pay monthly. Using a formal debt management plan offered by a credit counseling agency, many people become debt-free in two to five years. Larger debts may take longer, especially if you’re only making minimum payments.

---

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.

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 .

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOPL-Q325-017

Read more

While paying off your credit cards can have a positive effect on your credit profile, this isn’t always the case. Depending on the strategy you use to wipe away your debt, you could (inadvertently) do some damage to your scores. This could make it harder to get a mortgage, car loan, or even a rental agreement in the future. Here’s what you need to know to pay down your credit obligations while protecting your credit.

What Not to Do: Ignoring Credit Card Debt

When it comes to credit card debt, the consequences of avoidance and procrastination are steep, both to your financial well-being and to your credit scores. Here’s a look at the potential fallout.

•  Interest charges will pile up: Generally, the longer you avoid paying down your debt, the more interest will accrue. The average interest rate on credit cards as of July 2025 is 20.13%. This means that even if your debt isn’t growing through new purchases, interest alone can make your balance balloon over time.

•  Late fees and credit damage: Credit card issuers usually charge fees if you don’t make the minimum payment by the due date. After 30 days of no payment, your issuer will likely report the missed payment to the credit bureaus, which can do significant damage to your credit profile.

•  Debt collection and legal consequences: Ignoring credit card debt for too long could lead to the debt being sent to a collection agency, a third party that can be aggressive in pursuing repayment. In extreme cases, your creditors might sue you, potentially leading to wage garnishment or seizure of personal assets.

Best Ways to Pay off Debt Without Hurting Credit

When managed carefully, paying off debt can actually have a positive impact on your credit profile. The key is to use tactics that reduce your balances without negatively impacting your payment history, credit utilization, or credit mix.

Consolidate Credit Card Debt

Credit card consolidation involves combining multiple debts into a single loan, such as a debt consolidation loan, ideally with a lower interest rate. This approach can make repayment more manageable and may reduce the total interest you pay. You’ll still need to make consistent monthly payments, but streamlining your bills into one can reduce your chances of missing a due date.

As long as you make on-time payments, your credit profile may benefit from the reduced credit utilization and positive payment history.

💡 Quick Tip: Everyone’s talking about capping credit card interest rates. But it’s easy to swap high-interest debt for a lower-interest personal loan. SoFi credit card consolidation loans are so popular because they’re cheaper, safer, and more transparent.

Balance Transfer

A balance transfer involves moving high-interest credit card debt to a new card with a lower interest rate — ideally one with a 0% introductory annual percentage rate (APR). This strategy can give you a temporary break from interest charges, allowing you to pay off the principal more quickly.

To avoid credit score harm, don’t close old cards after transferring the balance — doing so can reduce your available credit and increase your utilization ratio. It’s also important to pay off the balance before the promotional period ends, or you may face high interest rates (again). Some balance transfer cards offer a 0% APR for as long as 20 months.

Automate Payments

Late or missed payments are among the biggest threats to your credit scores. Automating payments ensures your minimums are paid on time every month, which protects your payment history, a key factor in your credit score.

You can set up automatic payments through your bank or directly with your credit card issuer. You can always make additional manual payments to reduce the balance faster.

Debt Snowball vs. Debt Avalanche Payoff Strategies

One of the best ways to pay off debt without hurting credit is to use a DIY payoff plan. Here are two popular strategies for whittling down multiple debts:

•  Debt avalanche method: Here, you make extra payments on the credit card with the highest interest rate first, while making minimum payments on the others. Once the highest-rate card is paid off, you funnel those extra funds toward the card with the next-highest rate, and so on. This strategy minimizes the amount of interest you’ll pay over time.

•  Debt snowball method: With this approach, you put extra payments toward the card with the smallest balance first, while making minimum payments on the others. When that card is cleared, you focus on paying off the next-smallest balance, and so on. This gives you quick wins and a psychological boost, which can help you stay motivated.

Negotiating and Settling Credit Card Debt

Sometimes, repayment in full isn’t realistic. In those cases, negotiating with your creditor may provide relief while minimizing damage to your credit.

Workout Agreement

With this arrangement, the credit card company may agree to lower your interest rate or temporarily waive interest altogether. They may also be willing to take additional steps to make it easier for you to repay your debt, such as waiving past late fees or lowering your minimum payment.

Because this agreement is informal and not reported as negative to credit bureaus, it can help you pay off debt without hurting your credit, provided you uphold your end of the deal.

Debt Settlement

In a debt settlement, the credit card company agrees to accept less than the full amount you owe, forgive the rest, and close the account. While this might seem appealing, a debt settlement comes with consequences. A settled debt becomes a negative entry on your credit report, where it can stay for seven years. You’ll want to consider debt settlement as a last-resort option, and also be cautious of third party settlement companies that charge high fees or make unrealistic promises.

Hardship Agreement

Some card issuers offer a hardship or forbearance program for borrowers who are experiencing a temporary financial setback, such as a job loss, illness, or injury. Under these programs, the company may agree to lower your interest rate, even temporarily suspend payments. Keep in mind that the issuer might freeze your account while you’re enrolled, which means you won’t be able to use your card. Also, if the plan extends your repayment term, it could increase the total amount of interest you pay.

While a hardship program typically doesn’t impact your credit, it could if the card issuer decides to close your account or lower your available credit.

What Is the Statute of Limitations on Credit Card Debt?

The statute of limitations on debt governs how long a creditor or collection agency can sue you for nonpayment of a debt. The statute of limitations on credit card debt varies from state to state, but is typically between three and six years. Once the statute of limitations has passed, debt collectors can’t win a court order for repayment.

Even if your credit card debt is past the statute of limitations, however, it doesn’t magically disappear. Negative entries — such as late or missed payments, accounts sent to collections, and accounts not paid as agreed — generally stay on your credit report for seven years. These negative marks can lower your credit scores, making it hard to qualify for new credit cards and loans with attractive rates and terms in the future.

Does Credit Card Debt Consolidation Hurt Your Credit?

Debt consolidation can cause a temporary dip in your credit scores, mostly due to the hard inquiry from the loan application and the new account appearing on your report. However, the long-term effects are often positive if you manage the new loan responsibly.

By reducing your credit utilization ratio and maintaining on-time payments, debt consolidation can have a net positive effect on your credit profile over time. The key is to avoid racking up new balances while paying off the consolidated loan.

Recommended: What Is a Credit Card Interest Cap?

How to Consolidate Credit Card Debt Without Hurting Your Credit

The right strategy can help you consolidate debt while protecting or even building your credit.

Consider Debt Consolidation Options

Start by exploring the types of consolidation available — personal loans, balance transfer credit cards, and home equity loans/lines of credit (HELOCs) can all be used to pay off your credit cards and streamline repayment. It’s important to compare interest rates, terms, and fees to find the best fit for your situation.

An online debt consolidation calculator can show you exactly how much interest you could save by paying off your existing credit card (or cards) with a new loan or line of credit.

Get Prequalified

Before applying, see if you can prequalify for a consolidation loan. Prequalification uses a soft credit inquiry and won’t impact your score. It can give you an idea of the interest rate and terms you might receive and help you make an informed choice before formally applying for the loan.

Stop Using Your Credit Cards

Once you consolidate your balances, it’s a good idea to stop or limit use of your consolidated cards. While it’s wise to keep those accounts open (to maintain your credit history and limit), continuing to run up balances on those cards can lead to even more debt, undermining the purpose of consolidation and damaging your credit utilization ratio.

Pay Bills On Time

Payment history is generally the most important factor in your credit scores — it makes up 35% of your overall FICO® credit score. So paying your consolidated loan or transferred balance on time is critical. Even a single late payment can lead to a negative mark on your credit reports and undo some of your progress.

Set up reminders or automate payments to stay on track and build positive credit habits.

Recommended: FICO Score vs Credit Score

The Takeaway

Credit card debt can be a major financial burden, but it doesn’t have to ruin your credit or your financial future. By facing your debt and adopting a planned approach, you can gradually reduce what you owe. Whether you choose to use a paydown strategy (like avalanche or snowball), negotiate with creditors, or explore a consolidation loan, there are various strategies to help you regain control of your finances while protecting — and ultimately building — your credit.

Whether or not you agree that credit card interest rates should be capped, one thing is undeniable: Credit cards are keeping people in debt because the math is stacked against you. If you’re carrying a balance of $5,000 or more on a high-interest credit card, consider a SoFi Personal Loan instead. SoFi offers lower fixed rates and same-day funding for qualified applicants. See your rate in minutes.

SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.

FAQ

Can paying off credit card debt improve my credit score?

Paying off credit card debt can have a positive impact on your credit profile. It lowers your credit utilization ratio (the percentage of available credit you’re currently using), which is a major factor in your credit scores. A lower utilization rate suggests responsible credit management. Making consistent, on-time payments while reducing debt also adds to your positive payment history, which is another key factor in your scores.

Will settling credit card debt hurt my credit?

Settling credit card debt can negatively impact your credit, at least temporarily. When you settle a debt for less than the full amount owed, it may be reported to the credit bureaus as “settled” rather than “paid in full.” This status indicates that you didn’t repay the full debt and the entry can remain on your credit report for up to seven years. However, settling is still better than leaving debts unpaid or going into default.

How long does credit card debt stay on your credit report?

Negative information related to credit card debt — such as late payments, charge-offs, and collection accounts — generally remains on your credit report for seven years. However, positive information — like closed accounts paid as agreed — can stay on your report for up to ten years, helping your credit history. Active accounts in good standing stay on your report as long as the account is open and the lender is reporting it to the credit bureaus.

Is using a personal loan to pay off credit cards a good idea?

Using a personal loan to pay off credit cards can be a smart move if the loan offers a lower interest rate. This strategy, known as debt consolidation, can simplify payments and reduce interest costs. It can also improve your credit utilization ratio (the percentage of available credit you are currently using), which is factored into your credit scores. However, it’s important to have a solid repayment plan and avoid taking on more credit card debt, or the benefits could be short-lived.

What is the best way to pay down high-interest credit card debt?

One of the best ways to pay down high-interest credit card debt is using the avalanche method. This involves making extra payments on the card with the highest interest rate while making minimum payments on others. Once that card is paid off, you funnel the extra payment to the card with the next-highest rate, and so on. This minimizes the total interest paid over time. Another good option is to transfer your balances to a card with 0% introductory APR or a lower-interest personal loan. Whichever method you choose, consistent, above-minimum payments and avoiding new debt are key to getting ahead.

---

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.

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 .

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.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOPL-Q325-007

Read more

An estimated 20% of Americans have $10,000 or more in credit card debt.

Five-figure credit card debt, and the interest that accrues along with it, can feel overwhelming. It’s the kind of debt that keeps people up at night, and prevents them from pursuing their other financial goals.

But, that debt doesn’t have to stick around forever. With a strategy, chipping away at a $10,000 in credit card debt is achievable. Here are some options for how to pay off $10,000 in credit card debt.

Tips for Paying Off $10,000 in Credit Card Debt

Paying down $10,000 in credit card debt takes discipline and time. These tips and tools could help speed up the journey toward debt freedom.

Consider a Side Hustle

If your budget doesn’t have much wiggle room to make extra payments toward credit card debt, you might consider finding ways to generate more income. Starting a side hustle could be a powerful way to pay down a $10,000 credit card debt faster. Whether it’s grabbing a job in the gig economy or taking a catering job on the weekends, you can put those paychecks toward your credit card debt.

Ask for a Raise

If time is limited for a side hustle, think of how you could make more money in your current role. Is it time to ask for a raise, for instance?

Similarly, switching jobs may land you a higher salary. Just make sure that extra income goes toward debt payoff, and not lifestyle creep.

Switch to Cash

When you’re paying down $10,000 in credit card debt, it’s important to avoid accruing a higher balance. Adding more debt can not only feel discouraging, it can extend your payoff timeline.

As you tackle paying down debt, consider avoiding any further spending on credit cards. That can take the form of paying for things in cash, or using a debit card where you can only spend what you actually have. Making a switch to cash means you’re less likely to add to your burden of debt.

Recommended: What Is the Trump Credit Card Interest Cap?

Debt Management Plans

While tips and tricks may help you pay down $10,000 in credit card debt, you may have to consider a larger overall strategy to move you towards payoff. Having a debt management plan in place can take some of the pressure away and could put you on a track toward paying off debt faster.

Two popular methods to accelerate debt repayment include the snowball and avalanche method.

Snowball Method

The snowball method prioritizes paying off small debts first and working your way up. Here’s how:

1.    Make the minimum monthly payments on all debts.

2.    Take inventory of all your debts and order them from lowest outstanding balance to highest.

3.    Put any extra cash toward the smallest balance debt.

4.    Repeat this until the lowest debt is paid off.

5.    Next, move onto the next lowest debt, adding the surplus cash from step 2 to this card’s monthly payments.

6.    Continue to repeat this process, scaling up to the high-balance debts once you pay off the lower ones.

While this method can seem counterintuitive because of the interest that high balances can generate, starting off with small wins has psychological benefits for some. Having those wins early on may motivate you to move forward.

If you tend to be more disciplined and don’t mind playing the long game, you might prefer the debt avalanche method to pay off $10,000 in debt. Here’s how to deploy the avalanche method:

1.    Make minimum payments on all debts.

2.    Compile all your debt, and order it by interest rate from highest to lowest.

3.    Put any extra cash toward the debt with the highest interest rate.

4.    Repeat until the highest-interest debt it paid off.

5.    Move onto the debt with the next-highest interest rate. Put any extra cash toward this balance until it’s paid off.

6.    Continue this process, prioritizing the highest interest debt first, until all balances are settled.

Typically, the debt avalanche saves more money in interest payments in the long run. However, it can take time to see a win with this method, as opposed to debt snowball.

Recommended: Creating a Credit Card Debt Elimination Plan

Credit Card Debt Forgiveness

Credit card debt forgiveness is not as simple as waving a magic wand at your balances and watching them disappear. Forgiveness does not mean the debt’s completely erased, and it comes with its own drawbacks.

Credit card debt forgiveness only becomes an option when a cardholder stops paying their debt and the credit card company sells the outstanding balance to a debt collector. From there, you can negotiate with the debt collector as to how much debt to repay.

Debt collectors typically buy debts for far less than their face value, and thus are willing to recuperate just a portion of the initial amount owed. For example, if you owe $10,000 in credit card debt and it goes to collections, you may be able to negotiate to settle the debt for just $5,000. That payment may be a lump sum or small payments over time.

While credit card debt forgiveness means paying less than the total owed, it has a fair share of drawbacks. Neglecting credit card debt can wreak havoc on a person’s credit score, and you’ll still need to pay some portion of the debt.

Additional Options for Paying Off Debt

Credit card debt forgiveness isn’t the only route toward paying off $10,000 in credit card debt. Depending on your situation, one of the following solutions may work.

Balance Transfers

Some credit card companies allow cardholders to make credit card balance transfers. That means you transfer the outstanding balance from one credit card to another, often with an introductory low interest rate or no interest.

Balance transfers do come with fees, but depending on how much you owe and how much you could save on interest, it could be worth it in the long run. However, keep in mind the interest rate the balance transfer offers may be for a limited time. You’ll want to pay off the remaining balance before the rate rises, or you could owe more than you did before the transfer.

Personal Loans

There are a number of common uses for personal loans, including paying off credit card debt. Often, a personal loan will have a lower interest rate than credit cards, which could help you pay down your debt faster and save on interest. If you’re struggling to figure out how to pay off $10,000 in credit card debt, consolidating multiple balances into a single loan also may streamline the process.

Your credit score can impact if you get approved for a personal loan, as well as what interest rate you receive. If you have a less than stellar credit score, you may not get approved.

Using a personal loan calculator can help you determine if this strategy will net you savings and, if so, how much.

💡 Quick Tip: Credit card interest rates average 20%-25%, versus 12% for a personal loan. And with loan repayment terms of 2 to 7 years, you’ll pay down your debt faster. With a SoFi personal loan for credit card debt, who needs credit card rate caps?

The Takeaway

Paying down $10,000 in debt might not be easy, but with the right strategies, it is possible. This could mean adopting an aggressive payoff method or looking for additional options to pay down the debt, like personal loans.

Credit cards have an average APR of 20%–25%, and your balance can sit for years with almost no principal reduction. Personal loan interest rates average 12%, with a guaranteed payoff date in 2 to 7 years. If you’re carrying a balance of $5,000 or more on a high-interest credit card, consider a SoFi Personal Loan instead. See your rate in minutes.

SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.

FAQ

How do I get out of credit card debt with high interest?

You have options when it comes to paying off credit card debt. One to consider is the avalanche method, which involves paying off the card with the highest interest rate first while making minimum payments on other cards. Then, move on to the debt with the next-highest interest rate, and continue the process until you have no more balances.

Should I seek credit card forgiveness?

Credit card forgiveness isn’t common. That said, you may be able to negotiate with your creditor to reduce the amount you owe, which can help relieve some of your debt burden.

How long will it take to pay off $10k in credit card debt?

The length of time it will take you to pay off $10,000 in credit card debt depends largely on the amount of your monthly payment and your card’s APR. Consider this example: If you have an APR of 21.95%, and make monthly payments of $500, it will take you 26 months to pay off the debt. If you can swing a larger monthly payment of $1,000, it would take you 12 months.

---

Photo credit: iStock/ArtistGNDphotography

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.

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.

SOPL-Q225-008

Read more

Revolving credit is a flexible type of borrowing that allows you to access money as you need it (up to predetermined limit), repay some or all of the balance, and then borrow again. Unlike a one-time loan, revolving credit becomes available again — or “revolves” — as you pay it back. This makes it a convenient option for covering ongoing expenses or handling emergencies.

Common examples of revolving credit include credit cards, personal lines of credit, and home equity lines of credit (HELOCs). Understanding how revolving credit works, how it compares to other types of debt, and how to use it responsibly can help you avoid high-interest debt traps and maintain a healthy credit profile.

How Revolving Credit Works

When you open a revolving credit account, your lender sets a credit limit, which is the maximum amount you can borrow at any given time. You can use all or part of this limit, and you only pay interest on the amount you borrow, not the entire limit.

As you make payments, your available credit increases. For example, if your credit limit is $5,000 and you spend $1,000, you’ll have $4,000 in available credit. If you pay back the $1,000, your available credit goes back up to $5,000.

Revolving credit accounts usually require a minimum monthly payment to keep the account in good standing. If you carry a balance from one statement period to the next, you’ll pay interest on your balance. Annual percentage rates (APRs) vary but can be steep for credit cards.

💡 Quick Tip: There is a lot of debate around credit card interest caps. For consumers carrying high-interest credit card balances, however, one of the shortest paths to debt relief is switching to a lower-interest personal loan. With a SoFi credit card consolidation loan, every payment brings you closer to financial freedom.

Revolving Debt vs. Installment Debt

Revolving debt is different from installment debt (or non-revolving credit) in a few key ways:

•   Structure: Installment loans (like mortgages, personal loans, or auto loans) give you a lump sum upfront, which you repay in fixed monthly installments over a set term. Revolving credit allows you to continuously borrow and repay within your credit limit.

•   Repayment: Installment loans have fixed payment schedules and, in some cases, there may be a prepayment penalty. Revolving accounts offer variable payments depending on your balance.

•   Interest rates: Revolving credit often has higher interest rates than installment loans, especially unsecured revolving accounts like credit cards.

•   Usage flexibility: Revolving credit is generally more flexible than installment debt, since it lets you borrow as needed without reapplying for a loan. Also, some installment loans are only approved for a specific purpose, such as a car loan or mortgage.

Both types of debt can be useful tools. Which one is a better fit will depend on your borrowing needs. Revolving credit can be a good option for short-term or variable expenses, while installment debt is generally better for large, fixed purchases.

Recommended: Revolving Credit vs Line of Credit

Secured vs. Unsecured Debt

Revolving credit can be either secured or unsecured:

•   Secured revolving credit: With this type of credit, you must pledge an asset as collateral to guarantee repayment. If you fail to make payments according to the loan agreement, the lender has the right to seize and sell the collateral to recover their losses. Examples of secured revolving credit include a HELOC (backed by your home) and a secured credit card (backed by a savings account). Secured revolving accounts often have lower interest rates due to reduced risk to the lender.

•   Unsecured revolving credit: An unsecured debt is not backed by collateral. If you fail to repay the debt, the lender cannot automatically seize a specific asset (like your house or car) to recover their losses. Instead, they rely on your promise to pay. Most credit cards and personal lines of credit are unsecured. Because lenders take on more risk, interest rates on unsecured debts tend to be higher than they are on secured debts.

Types of Revolving Credit

Here’s a look at some of the most popular types of revolving credit.

Credit Cards

You can use a credit card to make purchases, pay bills, or withdraw cash up to your credit limit. If you pay your balance in full each month, you can generally avoid interest charges. If you carry a balance, on the other hand, interest will accrue, often at rates above 20% APR. Credit cards may also offer rewards, cash back, or other perks, making them a potentially valuable financial tool when managed well.

Personal Lines of Credit

A personal line of credit is similar to a credit card but with a few key differences. For one, they typically have a draw period and a repayment period. During the draw period (often two to five years), you can access your credit line and use the funds for virtually any purpose. When you make payments during this period, you free up funds to borrow again. At the end of the draw period, you’ll begin the repayment period. During this period, you no longer have access to the line of credit and must pay off the balance in full.

Home Equity Lines of Credit (HELOCs)

A HELOC is a revolving line of credit secured by your home’s equity, and your home is used as collateral for the credit line. During your draw period (often 10 years), you can borrow up to your credit limit as needed. As you repay your balance, the funds are available to borrow again. After the draw period, you enter the repayment period (usually 20 years).

HELOCs typically have lower interest rates than unsecured revolving credit because they’re backed by collateral. They are often used for home improvements, emergency expenses, or consolidating higher-interest debt. However, because your home is at risk if you default, they require careful consideration.

How Revolving Debt Can Affect Your Credit Score

Revolving credit can have both positive and negative impacts on your credit profile. Here’s a breakdown of the key factors involved in calculating your credit score and how revolving credit can impact each of them:

•   Credit utilization ratio: Your credit utilization ratio measures how much of your available credit you’re using on your credit cards and other lines of credit and is expressed as a percentage. A high utilization (above 30%) can negatively influence your credit file, while keeping it low can have a positive influence.

•   Payment history: Making regular, on-time payments on a revolving credit account adds positive information to your payment history. Late or missed payments, on the hand, can do significant credit damage.

•   Length of credit history: Lenders often view a longer history of responsible credit management as a positive indicator of your creditworthiness. Keeping revolving accounts open and in good standing over many years can have a favorable impact on your credit profile.

•   Credit mix: Your credit mix describes the different types of credit accounts you have. A healthy mix of revolving and installment accounts can positively influence your credit.

Bottom line: If you max out your credit limits or fall behind on your payments, revolving credit can adversely impact your credit. However, if you consistently pay on time and keep your credit utilization ratio low, a revolving credit account can benefit your credit file over time.

Tips for Managing Revolving Debt

If you’re struggling to manage credit card (or other revolving credit) balances, these strategies can help you get ahead of your debt and potentially save money on interest.

Budget Strategies

Making some shifts in your budget can help you pay down your balances systematically. Two strategies to consider:

•   The debt avalanche: This method focuses on paying off the debt with the highest interest rate first, while making minimum payments on the rest. Once the highest-rate debt is cleared, you target the next-highest, and so on. This minimizes total interest paid and can save you money over time.

•   The debt snowball: Here, you target the debt with the smallest balance first, regardless of interest rate. After paying off the smallest debt, you apply its payment amount to the next smallest, and so on. This approach provides quick wins, which can boost motivation and momentum.

Debt Consolidation

If you have multiple high-interest debts, consider consolidating them into a single loan, such as a personal loan, with a lower interest rate. This can simplify repayment and potentially reduce interest costs. An online debt consolidation calculator can help you determine how much you could potentially save by taking out a personal loan and using it to pay down your current balances.

💡 Quick Tip: Some personal loan lenders can release your funds as quickly as the same day your loan is approved.

Balance Transfer

A balance transfer involves moving your revolving debt from one credit card to another card that has a lower or 0% introductory APR. This can save money on interest, but be mindful of transfer fees and the length of the promotional period.

Credit Counseling

Working with a nonprofit credit counseling agency can be a good way to get free or low cost help with managing revolving debt. A certified counselor can help create a debt management plan, negotiate lower interest rates, and provide education on responsible credit use. This can be a good option if you’re struggling but want to avoid more damaging solutions like bankruptcy or settlement.

Debt Settlement

If you’re struggling with high-interest revolving debt and have exhausted other solutions, you might consider debt settlement. This involves negotiating with creditors, typically through a third-part debt settlement company, to accept less than the full amount owed. While this can reduce your total debt, it typically hurts your credit and should only be considered as a last resort before bankruptcy.

The Takeaway

Revolving credit offers flexibility and convenience, which can make it a handy tool for managing expenses and building credit. However, its easy access and potentially high interest rates mean it can also become a financial burden if mismanaged.

By understanding the differences between revolving and installment debt, knowing the types of revolving credit available, and following sound debt management practices, you can make revolving credit work for — and not against — your financial health.

Credit cards have an average APR of 20%–25%, and your balance can sit for years with almost no principal reduction. Personal loan interest rates average 12%, with a guaranteed payoff date in 2 to 7 years. If you’re carrying a balance of $5,000 or more on a high-interest credit card, consider a SoFi Personal Loan instead. See your rate in minutes.

SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.

FAQ

Are revolving credit and revolving debt the same thing?

Revolving credit and revolving debt generally refer to the same thing — a type of debt where you can draw funds as needed, repay the money, and then borrow it again. This differs from installment debt, where you borrow a fixed sum of money and agree to pay it back over a set period through regular, fixed payments. Revolving credit or debt comes with credit limits and typically has variable interest rates. With this type of credit, you only pay interest on what you borrow, not the entire credit line.

Does revolving debt hurt your credit score?

Revolving debt can affect your credit in positive and negative ways, depending how it’s managed. If you carry large balances or max out cards, it will increase your credit utilization rate (how much available credit you’re using) and suggest higher credit risk to lenders. Missing payments or paying late can also negatively impact your credit file. However, if you keep credit utilization low and make on-time payments consistently, having revolving debt can strengthen your credit profile over time.

How can I reduce my revolving debt quickly?

To reduce revolving debt quickly, focus on paying more than the minimum each month and target high-interest balances first (the avalanche method) to save on interest. You can also try the snowball method — paying off smaller debts first — for quicker wins. Another option is to consolidate balances with a lower-interest personal loan or a balance transfer card with a 0% annual percentage rate (APR). This can reduce costs and help speed repayment.

What is a good credit utilization ratio for revolving accounts?

A good credit utilization ratio is generally below 30%, meaning you’re using less than 30% of your total available credit. For example, if your combined credit limit is $10,000, you’ll want to try to keep balances under $3,000. Credit scoring models often reward lower usage because it signals responsible credit management and less risk of default.

Can you have too much revolving credit?

Yes, it’s possible to have too much revolving credit. While a high credit limit offers a potential safety net and might positively impact your credit file (by lowering your credit utilization ratio), it also comes with some potential downsides. One is that having access to multiple open credit lines can tempt overspending. Another is that lenders may view high credit limits as a potential risk, since you could potentially utilize all that credit. This could make it harder to qualify for loans and credit with favorable terms in the future.

---

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.

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 .

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOPL-Q325-013

Read more

Consumer debt refers to any money you borrow for personal, family, or household purposes. It includes credit card debt, student loans, auto loans, mortgages, personal loans, and payday loans.

White “debt” can have negative connotations, having consumer debt isn’t necessarily a bad thing. Borrowing money allows you to achieve your goals, such as buying a house or going to college. However, consumer debt can become a burden if you borrow too much or for the wrong reasons.

Unfortunately, many Americans are currently saddled with high levels of debt. Total consumer debt hit a new record in the first quarter of 2025, ringing in at $18.203 trillion according to the New York Fed’s quarterly Household Debt and Credit Survey (HHDC). The average total consumer household debt, according to Experian, was $105,056 in 2024, a 13% uptick from 2020.

Here, take a closer look at the different types of consumer debt, including how each can help — or hurt — your finances, plus how to pay off high levels of consumer debt.

What Is Consumer Debt?

Consumer debt, as its name implies, is debt held by consumers, meaning private individuals as opposed to governments or businesses. It includes debts you may already have or might seek in the future — credit cards, student loans, auto loans, personal loans, and mortgages. It doesn’t include business loans or lines of credit or business credit cards.

Consumer debt products are offered by banks, credit unions, online lenders, and the federal government. They generally fall into two major categories: revolving debt and non-revolving debt.

With revolving debt, you repay your debt monthly (credit cards are a prime example). With non-revolving debt, you receive a loan in one lump sum and then repay it in fixed payments over a defined term. Non-revolving credit typically includes auto loans, student loans, mortgages, and personal loans.

Consumer debt can also be broken down into secured vs unsecured debt. Secured debt is debt backed by an asset (such as a home or car) used as collateral. If the loan isn’t paid back, the lender has the option to seize the asset. Unsecured debt, on the other hand, does not require collateral. The lender simply relies on the borrower’s ability to repay the loan.

Recommended: What Is a Credit Card Interest Cap?

The Different Types of Consumer Debt

Consumer debts vary widely in terms of how they work, their terms, and their impact on your financial well-being. Here a closer look at some of the most common types of consumer debt.

Mortgage Debt

Mortgage debt is the most common (as well as the largest) type of debt in the U.S. This type of consumer loan is used to purchase a home and the home is used as collateral.

Mortgages are installment loans, which means you pay them back in a set number of payments (installments) over the term of the loan, typically 15 or 30 years. Mortgage interest rates are usually lower than other types of consumer loans, and the interest may be tax deductible if you itemize your taxes.

If you make your payments on time, a mortgage can have a positive impact on your credit profile, since it shows you are a responsible borrower. If you stop making payments on a mortgage, however, it can negatively impact your credit. Plus, the lender can begin the foreclosure process, which typically includes seizing the property and selling it to recoup its losses.

Student Loan Debt

Student loans are unsecured installment debt used to pay for education expenses, such as tuition and room and board. They are offered by federal or private lenders and issued in one lump-sum payment. The borrower is then responsible for making repayments in regular amounts, typically after they graduate or are no longer in school.

Student loans are often one of the first debts consumers take on and can be an important way to build a positive credit history, provided you make on-time payments. Interest rates vary by lender. If you get a student loan from the U.S. Department of Education, the interest rate is set by the federal government and will remain fixed over the life of the loan.

Depending on your income, interest paid on student loans may be tax-deductible up to certain limits.

Auto Loan Debt

Auto loans are secured installment loans used to purchase a vehicle. These loans can have varying terms and interest rates, and the vehicle serves as collateral for the loan. You can get an auto loan through a bank or through a lender connected with a car dealership.

Unlike a house, a car depreciates in value over time. As a result, you, ideally, only want to take out financing for a vehicle if you can get a low interest rate. Some car companies offer low- or no-interest financing deals for individuals with good credit.

You get the proceeds of an auto loan in one lump sum then repay that amount, plus any interest, in a set number of payments (typically made monthly) over an agreed-upon period of time, often three to six years. If you stop making payments, the lender can repossess your car and sell it to get back its money.

Like other types of consumer loans, making on-time payments on your auto loan can help you build a positive credit history.

Personal Loans

Personal loans are consumer loans that individuals can use for a wide variety of purposes, such as debt consolidation, home improvements, or emergency expenses. You can get a personal loan with an online lender, bank, or credit union. They typically have fixed interest rates and set repayment terms, often one to seven years.

Personal loans are typically unsecured, meaning you don’t need to provide any collateral. Instead, lenders look at factors like credit score, debt-to-income ratio, and cash flow when assessing a borrower’s application.

Once approved for a personal loan, you receive a lump sum (which can be anywhere from $1,000 to $50,000, $100,000, or more) and start paying it back, plus interest, in fixed monthly payments over the loan’s term. On-time loan payments can help build your credit, but missed payments can damage it.

Recommended: Typical Personal Loan Requirements Needed for Approval

Credit Card Debt

Credit card debt arises from using credit cards to make purchases or cover expenses. This type of debt is revolving, meaning you don’t have to pay it off at the end of the loan term (usually the end of the month). If you carry a balance from month to month, you pay interest on the outstanding amount.

Credit card debt is an unsecured loan, since it isn’t tied to a physical asset the lender can repossess to cover the debt if you don’t pay your bills. Interest rates vary depending on the card, your credit scores, and your history with the lender, but currently average around 24%.

To remain in good standing, you’re required to make a minimum payment on your balance each month. However, only paying the minimum allows interest to accrue, which can make the debt increasingly harder to pay off. As a result, credit card debt is often the most problematic type of debt for consumers.

A long history of making on-time payments can have a positive impact on your credit profile, while missing and late payments (and using a large amount of your available credit line) can have a negative impact on your credit.

💡 Quick Tip: Everyone’s talking about capping credit card interest rates. But it’s easy to swap high-interest debt for a lower-interest personal loan. SoFi credit card consolidation loans are so popular because they’re cheaper, safer, and more transparent.

Payday Loans

Payday loans are a type of short-term credit offered to consumers looking to get access to cash fast. Generally, these loans are for relatively small amounts of money ($500 or less) and must be repaid in a single payment on your next payday, hence the name. Payday loans are typically available through storefront payday lenders or online.

Although these fast-cash offers can be tempting, the high cost associated with them make them a last resort. A typical two-week payday loan will charge $15 for every $100 you borrow, which is the equivalent of a whopping 400% annual percentage rate (APR).

Generally, payday loans are not reported to the three major consumer credit bureaus, so they are unlikely to impact your credit scores.

Pros and Cons of Consumer Debt

There are both benefits and drawbacks to consumer debt. Here’s a look at how they stack up.

Pros of Consumer Debt

•   Access to immediate funds Consumer debt allows individuals to make large purchases (like a home or car) or cover expenses (like a college education) when they do not have the necessary cash on hand.

•   Building credit history Responsible borrowing and timely repayments can help establish and build an individual’s credit history and credit score.

•   Emergency financial support Consumer debt, such as a personal loan, can provide a safety net in unexpected situations when someone needs funds immediately.

Cons of Consumer Debt

•   High interest rates Many forms of consumer debt, such as credit card debt or payday loans, carry high interest rates, making them costly in the long run.

•   Risk of overborrowing Without careful financial planning, consumer debt can lead to excessive borrowing, making it difficult to manage monthly payments and potentially causing financial stress.

•   Negative impact on financial goals Excessive consumer debt can hinder individuals from achieving long-term financial goals, such as saving for retirement or buying a home.

Getting Out of Consumer Debt

To get out from under unhealthy levels of consumer debt, consider the following steps:

•   Assess your debts You might start by making a list of all your debts, noting balances, interest rates, and minimum monthly payments. This will allow you to see where you stand and make a plan for debt repayment.

•   Create a budget Next, you’ll want to assess your average monthly income and expenses to determine how much you can allocate towards debt repayment each month. At the same time, you may want to look for ways to cut back on nonessential spending; any funds you free up can go towards extra payments.

•   Prioritize repayment If you have multiple high-interest debts, you may want to focus on paying off the highest-interest debt first, while making minimum payments on other debts. Or, you might focus on repaying the debt with the smallest balance, making minimum payments on all your debts. Once that is paid off, you move on the next-highest balance.

•   Explore debt consolidation options Consider consolidating multiple debts into a single loan to simplify repayment and, ideally, save money. One way to do this is through a debt consolidation loan, a personal loan that may come with lower interest rates than your existing debts.

•   Negotiate with creditors Another option is to reach out to your creditors to see if you can negotiate lower interest rates, extended payment terms, or possible debt settlement options.

•   Seek professional help if needed If you are struggling with debt, you may want to consult a nonprofit credit counseling service. Credit counselors help you go over your debts to devise a plan for repayment, and they can also help you with budgeting and other personal finance basics.

The Takeaway

Consumer debt is debt you take on for personal, rather than business, reasons. But all consumer debt is not created equal. Some debts, such as mortgages or student loans, can be characterized as “good” debts, since they can benefit your long-term financial health. Other debts, like high-interest credit card debt or payday loans, on the other hand, can be considered “bad debts,” since they can put your financial health at risk.

Credit cards have an average APR of 20%–25%, and your balance can sit for years with almost no principal reduction. Personal loan interest rates average 12%, with a guaranteed payoff date in 2 to 7 years. If you’re carrying a balance of $5,000 or more on a high-interest credit card, consider a SoFi Personal Loan instead. See your rate in minutes.

SoFi’s Personal Loan is cheaper, safer, and more predictable than credit cards.

FAQ

What is considered consumer debt?

Consumer debt is debt taken on for personal consumption vs. business or investment needs. It can include such things as credit card debt, student loans, mortgages, car loans, and personal loans.

Is a credit card a consumer loan?

No, a credit card is a revolving line of credit. A loan typically involves receiving a lump sum of cash and paying it back over time.

Is a credit card considered debt?

Yes, a credit card is a kind of debt. With a credit card, you are borrowing money from the card issuer to make a purchase. You then pay back the amount of the purchase, possibly plus interest and fees.

---

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.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

SoFi Private Student Loans
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.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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.

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.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOPL-Q225-093

Read more