What Is The Average Cost of Medical School?

The average cost of medical school is $230,296 in total, according to the Education Data Initiative. The yearly cost currently sits at $57,574, and we’re seeing an increase of $1,030 each year.

If you are currently pursuing or already in medical school, the expense is not something to be taken lightly. Almost 70 percent of medical students rely on student loans to help pay for medical school, and the average medical student graduates with just over $250,000 in total student loan debt (this includes debt from their undergraduate degree).

The average physician salary ranges from $194,000 to $250,000, with some specialties making close to $800,000 per year. While these numbers are well above the national average mean wage of $61,900 per year, paying for medical school and paying off medical school student loans is still no easy feat.

How to Pay for Medical School

With the average cost of medical school being well above six figures, finding a way to pay for it is one of the biggest hurdles future medical students face. By being proactive about finding ways to pay for medical school, you may be able to reduce your overall student debt load and save thousands of dollars in interest.

Scholarships

Scholarships aren’t always easy to get at the graduate level, but it’s not impossible. Some schools offer merit-based scholarships to incoming medical students who show exceptional academic capabilities and have a unique life experience. Students can also look into more individualized scholarships geared toward their location, specific area of study, or previous work experience.

Scholarships are offered by colleges and universities, businesses, local organizations, churches, and more. While it may take some time to find scholarships you qualify for and apply for them, the end result could save you thousands in medical school tuition expenses.

Military Service

Some medical professionals choose to obtain their medical degree by participating in a military physician program. The qualifications and commitment for each program vary, and the separate branches of the military, including the Army National Guard and Coast Guard, have different options.

The two options for medical students in the military are the Health Professions Scholarship Program and Uniformed Services University of Health Sciences. Both programs pay for the cost of medical school but require a service commitment once the student graduates.

Federal Financial Aid

The first step in getting federal student loans is to complete the Free Application for Student Aid (FAFSA®). Students can check with the medical school they plan to attend to get filing date requirements and information on institutional financial aid (aid given by the school).

There are three types of federal student aid:

•  Grants: Grants, such as the Pell Grant, do not have to be paid back unless the student withdraws from school and owes a refund. Grants are needs-based and the maximum amount for the 2023-2024 academic school year is $7,395.

•  Work-Study: Federal work-study jobs are needs-based and help students earn money to pay for school through part-time employment. A bonus for medical students is that the work often is tied to community service or may be related to the student’s course of study, so this type of job may be more interesting and manageable than some others.

•  Federal Loans: A student who borrowed money as an undergraduate and demonstrated financial need may have been awarded a Federal Direct Subsidized Loan to help cover school costs. Those loans are not available to students in graduate and professional school programs. However, medical students are eligible for other types of federal loans. They may receive a Direct Unsubsidized Loan, which is not based on financial need, or a Direct PLUS Loan, which, unlike other federal loans, will require a credit check.

Recommended: Comparing Subsidized vs. Unsubsidized Student Loans

Private Student Loans

Private student loans are usually used once federal student loans have been exhausted. Based on federal loan limits and the cost of medical schools, medical students may need additional funding. Certain private student loan lenders, including SoFi, allow borrowing up to 100% of the cost of attendance.

To get a private loan with a competitive interest rate, a borrower generally needs to have a strong credit profile and a low debt-to-income ratio. If a borrower doesn’t meet these qualifications, they may want to consider using a cosigner to qualify for a better rate.

Have a Budget Plan in Place

Finding the right resources to pay for medical school is important, but learning to live within a budget can also keep down the inevitable debt. Students who start with a spending plan as undergraduates may have it easier; they can probably modify what they’ve already been doing to work in medical school. But, it’s never too late to start budgeting.

Recommended: How to Create a Budget in 6 Steps

Once a student determines how much will be coming in from various sources (work, family, loans, scholarships, etc.), the next step is to list what will be going out for tuition and fees, housing, food, transportation, and other costs.

Next, it’s a good idea to see where you can cut back on spending. Is there inexpensive public transportation available? Will there be roommates to split rent and utility bills? Other ideas to reduce expenses include meal planning and cooking at home, canceling subscription services, buying in bulk, and working out at home.

By living on a budget while in school, throughout residency, and for your first few years as an attending physician, you can take out less in loans, pay off your student loans quicker, and set yourself up for financial success down the line.

How to Pay Off Medical School Debt

It’s no secret that physicians have the potential to earn a higher-than-average salary once they finish their residency and start practicing. Here are the average annual salaries of a variety of medical specialties:

•  Plastic Surgery: $619,000

•  Cardiology: $507,000

•  Radiology: $483,000

•  Anesthesiology: $448,000

•  General Surgery: $412,000

•  Emergency Medicine: $352,000

•  Ob/Gyn: $337,000

•  Family Medicine: $255,000

•  Pediatrics: $251,000

However, these are not earned until both medical school and residency (typically four years) are completed. Luckily, there are medical school loan repayment strategies that can be used without waiting for a big payday.

Loan Forgiveness and Repayment Through Service

There are several student loan forgiveness programs for physicians with student debt. Some are government-sponsored (federal and state), and some are private programs.

Benefits vary, but generally, participants provide service for two to four years (depending on the number of years they receive support) in exchange for repayment of student loans and possibly a stipend for living expenses.

One of the most common programs is the federal Public Service Loan Forgiveness (PSLF) program, which was designed to encourage students to enter full-time public service jobs.

While the program isn’t specifically aimed at medical students, it could help those who choose to forgo the promise of a big salary in exchange for the reward of working for a government or not-for-profit organization.

Eligible borrowers could receive forgiveness of the remaining balance of their federal direct loans after making 120 qualifying payments while employed by certain public service employers.

Another program is the National Health Service Corps (NHSC) Students to Service Loan Repayment Program , which provides loan repayment assistance in return for at least three years of service at an NHSC-approved site in a designated Health Professional Shortage Area. Students who are in their last year of medical or dental school may be eligible.

Federal Repayment Programs

There are several student loan repayment plans for federal student loan borrowers. Some are based on graduated payments that start low and increase over time, and they are designed to ensure the loans will be repaid after a designated period. Others, such as income-based repayment, are based on a percentage of discretionary income and family size.

Federal Loan Consolidation

A Direct Consolidation Loan allows borrowers to combine multiple federal education loans into one loan with a single monthly payment.

Consolidation also can give borrowers access to additional loan repayment plans and forgiveness programs. But there is a downside: The interest rate on the new loan will be a weighted average of prior loan rates (rounded up to the nearest one-eighth of a percentage), not necessarily a new lower rate.

If the monthly payment is lower, it’s probably because the loan term is longer, which means the borrower is paying more interest over time. Also, federal loan consolidation is only for federal loans—the borrower can’t include private student loans. The borrower does, however, keep federal protections and benefits with a Direct Consolidation Loan.

Private Student Loan Refinancing

With student loan refinancing, one or more student loans are combined into one new loan with one new payment, with a new and possibly lower interest rate.

Advantages of a student loan refinance include a possible lower monthly payment, but borrowers should be sure they are prepared to give up federal benefits that are no longer accessible if you refinance, including access to income-driven repayment plans and loan forgiveness. Note: You may pay more interest over the life of the loan if you refinance with an extended term.

Refinancing generally works best for borrowers who have improved their financial situation after graduation with a good job and solid credit profile.

The Takeaway

Medical school is an expensive endeavor, with the average cost being more than $200,000. Many students rely on savings, grants, scholarships, and student loans to pay for their medical education.

When it comes time to pay off those loans, there are many options new graduates can consider. These include federal repayment plans, student loan forgiveness, federal loan consolidation, and student loan refinancing. Those who opt to refinance to a possibly lower rate, though, must be aware that they will lose access to federal protections and benefits.

If you do choose to refinance your student loans, consider SoFi. It takes just two minutes to check your rate and your credit will not be impacted when you prequalify.

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


SoFi Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.


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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.


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 .

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.

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.

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The Navy Loan Repayment Program Explained

The U.S. Navy offers service members a proud and venerable tradition, having patrolled the seas since its inception in 1775.

Almost 250 years later, the Navy still offers its sailors a remarkable life experience, a chance to serve the country, and a host of benefits that make life somewhat easier for military personnel.

One perk that may appeal to Navy members is the Navy Loan Repayment Program, the cornerstone of the service’s student loan relief and forgiveness efforts.

The Navy Loan Repayment Program can pay up to $65,000 toward a service member’s student loans. That makes it well worth a closer look for Navy members looking for help paying down their college loan debt.

Key Points

•   The Navy Loan Repayment Program offers up to $65,000 in student loan relief for eligible service members.

•   Eligibility requires membership in the Navy’s Delayed Entry Program and a minimum score of 50 on the Armed Forces Qualification Test.

•   The program pays 33.3% of the outstanding loan balance annually for three years of service.

•   Only specific federal student loans qualify, including Stafford Loans, Federal PLUS Loans, Consolidation Loans, and Perkins Loans.

•   Applicants must submit necessary documentation, including a Loan Repayment Program Worksheet and a promissory note from the lender.

Who Qualifies for the Navy Program?

The Navy Loan Repayment Program is designed to pay up to $65,000 of federally guaranteed student loans for Navy personnel who qualify. The program is offered to members of the service’s Delayed Entry Program who eventually enlist in the Navy full time.

The Delayed Entry Program, also known as the Delayed Enlistment Program or inactive reserves, is meant to provide an onboarding experience before official enlistment. In the case of the Navy, a future sailor who signs on to delayed entry agrees to report for active duty in the next year. Currently, delayed-entry members can remain on inactive duty for 365 days. At that point, they must enlist for active duty in the Navy to receive student loan aid.

The Delayed Entry Program is only one hurdle Navy members must clear before becoming eligible for the loan repayment program. Service members must also meet the following criteria.

•   They must be “first time” military service members (meaning applicants have never served in the U.S. military before).

•   They must have a high school diploma.

•   They must have achieved a minimum score of 50 on the Armed Forces Qualification Test, which the Navy uses to measure a potential sailor’s IQ and aptitude. A test score of 35 will get an applicant into the Navy, but a higher score of 50 is needed to qualify for the loan repayment program.

•   They must have a student loan that is not in default.

How Navy Student Loan Repayment Works

Through the program, the Navy will pay 33.3% of a service member’s outstanding loan balance or $1,500 — whichever is higher — for each year of naval service, up to three years. If the student loan balance falls below the 33.3% threshold and the borrower is in good standing with the Navy, the Navy will pay the remaining student loan balance in full.

Only specific federal student loans qualify for the loan repayment program. They are as follows:

Stafford Loans, subsidized or unsubsidized. Also known as Direct Stafford Loans, these low-interest loans are made to qualified borrowers for tuition and other college expenses. The funds come directly from the U.S. Department of Education.

Federal PLUS Loans. Otherwise known as Direct PLUS Loans, these loans are offered by the U.S. government to undergraduate and graduate students to cover tuition and college costs. In many cases, Direct PLUS Loans offer funds to college students to cover expenses not covered by other financial aid programs.

Consolidation Loans. Consolidation loans bundle multiple federal loans into a single loan, streamlining the repayment process.

Perkins Loans. Perkins Loans are low-interest loans geared toward college students (both undergraduate and graduate) who demonstrate financial need. Congress stopped making Perkins student loans in 2018, but naval personnel may still have outstanding Perkins loan debt and thus are eligible for help from the Navy Loan Repayment Program.

A future Navy member may apply for the loan repayment program early in the service enrollment process. A Navy applicant is given the option to enroll in the program at the Military Entrance Processing Stations.

MEPS, the stations funded by the U.S. Department of Defense to enroll military service members, handle their applications and assess their physical, mental, and emotional health to see if they’re fit for military service.

For student loan relief purposes, the Navy recruiter on hand (also known as the MEPS classifier) will process all of a Navy recruit’s paperwork, including loan repayment application documents, and submit them for processing.

What Documents Do You Need To Apply?

All documents are available at the MEPS recruiting center or through specific U.S. government websites. You will need all of the following documents to apply:

•   A copy of the Loan Repayment Program Worksheet.

•   A copy of the Navy Enlistment Guarantee. The Navy Loan Repayment Program must be noted as a guarantee on the document.

•   A copy of the Statement of Understanding.

•   A copy of the Future Sailor’s National Student Loan Data System printout (available at the Department of Education’s website. When filing the data system form, the applicant will be assigned a PIN. By and large, it’s the same pin assigned to a financial aid applicant on the Free Application for Federal Student Aid. If the applicant doesn’t have a FAFSA® PIN, one will be assigned).

•   A copy of the Personalized Recruiting for Immediate and Delayed Enlistment.

•   A copy of DD Form 2475, Annual Application for Student Loan Repayment, completed by the student loan lender.

•   A copy of the lender’s promissory note for each Parent PLUS Loan, which clearly designates the student dependent on the note.

If you’re already serving in the military or served, Public Service Loan Forgiveness is a great option. The program is for those working for a qualified government organization (municipal, state, or federal) or many nonprofit organizations.

Filling Out the Loan Repayment Form

The key document when applying for the Navy Loan Repayment Program is DD Form 2475, which is broken down into four sections.

Section 1 is completed and approved by the recruiting officer (i.e., the verifying official). The section includes the naval office address and contact information so the lending institution can forward the proper paperwork. If the section is blank, the lender is under no obligation to complete the form. Basically, Section 1 includes the recruiter’s name and signature and the date.

Section 2 includes the applicant’s name, address, telephone number, email address, and Social Security number. This section is completed by the service member/applicant.

Section 3 includes the student loan data (including the borrower’s name, the loan amount, outstanding balance, the original date of the promissory note, the loan holder address, email and phone number, and the loan application number). The section also includes a box noting whether the student loan is in default or not, and asks for the name and address of the financial institution where the loan aid is to be sent.

Section 4 is a grid where more information on the loan can be included to expedite processing. Sections 3 and 4 are filled out by the student loan lending institution.

The Navy mandates that Form 2475 be completed, signed, and transmitted to the lending institution within 60 days of the recruit’s arrival in the Delayed Enlistment Program.

If the recruit/applicant doesn’t know his or her current student loan servicer, the U.S. Department of Education can lend a hand by phone or online.

Important Things to Know

Loan repayment program applicants may want to know several key features and rules governing the Navy student loan program.

Payment dates. Annual loan relief payments are issued to the service member on the original enlistment day during the first, second, and third year of enlistment in the Navy.

Payments are taxable. Any payments made by the Navy to the service member are taxed, as the Internal Revenue Service deems loan relief as taxable income in the year the money is paid out. Expect to have between 25% and 33% of the payment withheld in both federal and state taxes (the amount depends on the state where the applicant resides).

Lenders only. The Navy will not refund any loan amount that is paid out by other parties (aside from the qualified student loan lenders).

If a Navy recruit has any questions about the loan repayment program, the Navy urges him or her to contact the loan repayment manager at Naval Command. The manager is directly responsible for managing the loan program.

Contact the manager at:

Navy Recruiting Command
Attn: LRP
5722 Integrity Drive, Building 784
Millington, TN 38054

Email: [email protected]

Other Ways to Repay Student Loans

Former students who are on the fence about a military commitment or who may be struggling to make student loan payments, have alternatives to military-supported repayment.

One is student loan refinancing with a lender like SoFi®. Someone with a combination of private and federal student loans can refinance both types into one single loan with one monthly payment.

While there are many advantages to refinancing student loans, there are disadvantages, as well. If you are thinking of taking advantage of federal benefits like income-driven repayment or Public Service Loan Forgiveness, refinancing may not be right for you because you’ll lose your eligibility for federal programs.

Borrowers who do not plan on using federal benefits and choose to refinance may qualify for a lower interest rate or lower monthly payments. They’ll have only one payment a month and may be able to either lengthen or shorten the term. Note: You may pay more interest over the life of the loan if you refinance with an extended term.

SoFi offers an easy online application, no fees, and competitive rates. It takes just two minutes to see if you prequalify and checking your rate will not affect your credit score.

Interested in student loan refinancing? Get started with SoFi today.


SoFi Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.


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.

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Understanding Bankruptcy: Is It Ever the Right Option?

Filing for bankruptcy can be a chance to eliminate a great deal of financial stress, put an end to collection calls and letters, and provide an opportunity to remake your financial life. Even so, declaring bankruptcy is not something you should take lightly.

While bankruptcy can, in some cases, reduce or eliminate your debts, it can also have serious consequences, including long-term damage to your credit score. That, in turn, can hamper your ability to obtain new lines or credit, and even make it difficult to get a job or rent an apartment.

As you think about filing for bankruptcy, here are some things to consider.

What Does it Mean to File Bankruptcy?

For individuals, there are two main kinds of bankruptcy:

•   Chapter 7 Also known as “liquidation bankruptcy,” this is bankruptcy in its most basic form. With this type of bankruptcy, your nonexempt possessions, such as homes and cars, are sold to repay existing debts. After this, many (if not all) of your debts are canceled outright in a four- to six-month process.

•   Chapter 13 Also known as a “reorganization bankruptcy,” this is a court-approved plan in which you use your income to make payments on your debts over a three- to five-year period. Some of your debts may also be discharged.

The main difference between the two options is that Chapter 7 allows the debtor to eliminate all dischargeable unsecured debt, whereas Chapter 13 allows for payments to be made on those debts.

You may be prevented from filing for Chapter 7 bankruptcy if you earn enough income to repay your debts in a Chapter 13 bankruptcy plan. On the other hand, you may not qualify for Chapter 13 bankruptcy if your debts are too high or your income too low.

If you have substantial equity in your home, you could potentially lose your home if you file for Chapter 7. If you file for Chapter 13, you can keep your home and pay off any mortgage arrears through your repayment plan.

Chapter 13 bankruptcy stays on your credit report for seven years, while Chapter 7 bankruptcy stays on the report for 10 years.

Some debts, like child support obligations, alimony, student loans, and some tax obligations, cannot be wiped out in either type of bankruptcy.

Also keep in mind that bankruptcy won’t relieve you of your obligation to pay your mortgage, though it might make your mortgage payments easier to make by getting rid of other debts.

When To Consider Bankruptcy as a Solution

Life circumstances and financial situations can vary significantly from person to person, so there is no hard and fast rule for when to declare bankruptcy.

However, you may want to start by asking yourself the following questions:

•   Are you unclear on exactly how much you currently owe?

•   Are you only able to make minimum payments on your credit cards?

•   Are you getting calls from debt collectors?

•   Does the idea of solving your financial problems make you feel hopeless, out of control, or scared?

•   Are you using your credit card to pay for necessities?

•   Are you thinking about debt consolidation?

If you answered yes to two or more of these questions, you may want to at the very least give your financial situation more thought and attention.

You may also want to start doing some research (or, if possible, speak with a consumer law attorney) to see if your debt qualifies for bankruptcy, as well as how filing for bankruptcy would affect your life and financial situation.

Alternatives to Bankruptcy

While bankruptcy can sometimes be the best way to get out from under crushing financial burdens, it is not the only way. There are alternatives that can often reduce your debt obligations without some of the negative consequences of bankruptcy. Here are a few you may want to consider.

Credit Counseling

A counselor or counseling service specializing in helping people with debt problems might be able to come up with a solution that has not occurred to you, such as a modified payment plan or debt consolidation.

According to the Federal Trade Commission, you’ll want to look for a nonprofit credit counseling program, such as those offered by universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service. You can also find a nonprofit agency that offers bankruptcy counseling through the National Foundation for Credit Counseling .

Keep in mind that not all not all nonprofit organizations offer free services, so it’s a good idea to do your research before you sign up for any type of credit counseling services.

Negotiating with your Creditors

Creditors would often rather settle a debt with you than have it discharged in bankruptcy. Debt settlement is an agreement between you and your creditors that you will pay a lump sum, possibly far below what you owe, in order to settle the matter.

But it may not be quite as lovely as it sounds. The creditors take a loss, and likely so will your credit score. You’ll also still need to pay taxes on the forgiven amount, because it will be considered revenue (money you’re getting back).

There are debt settlement companies out there to help you negotiate with creditors, but not all are created equal — some of them charge steep fees and can’t guarantee they will get you the settlement that makes the most sense for you.

It’s a good idea to carefully vet any debt settlement company you are considering working with.

Recommended: Credit Card Debt Forgiveness: How Does It Work?

Cutting Back on Expenses

You may want to give some deep thought to the way you live and currently spend your money. Your lifestyle and financial habits may be what inched you toward bankruptcy in the first place. A good way to start is to set up a personal budget, which involves looking at what’s coming in and what’s going out each month, and then looking for places to trim spending.

Even small steps, like making your own lunch, walking instead of burning gas, keeping the heat or air conditioning use to a minimum, and brewing your own coffee could help you free up money that can go toward paying your debt.

While it can be tough to live on a budget at first, with time, you may find yourself becoming more solvent and less burdened.

Debt Consolidation

With debt consolidation, you roll all your debts into one new loan account, preferably with a lower interest rate. This can enable you to pay off your past-due amounts and make one monthly payment going forward.

Having just one payment may make it easier to manage your existing debt, and could possibly save you on interest as well.

Refinancing or Modifying Your Mortgage

If your credit is still good enough, you may be able to refinance your mortgage to a new rate that could get your monthly payment low enough that it saves you from bankruptcy.

If you’re not able to refinance at a lower rate, you may be able to qualify for a mortgage modification. A mortgage loan modification is a change in your loan terms that could reduce your monthly payment.

If your lender allows it, it could involve extending the number of years you have to repay the loan, reducing your interest rate, and/or forbearing (or reducing) your principal balance.

You’ll want to keep in mind, however, that if you receive a loan modification and you still can’t make the payments, you could be at risk of losing your home

The Takeaway

If you have large debts that you can’t repay, are behind in your mortgage payments and in danger of foreclosure, and/or are being harassed by bill collectors, declaring bankruptcy might be a good solution.

Bankruptcy can help you get out from under crushing debt. The process involves either liquidating (or selling off) your assets to pay your debts or adhering to a court-ordered repayment plan.

However, bankruptcy comes with consequences. The information stays on your credit report for seven to 10 years. It can also make it difficult to get credit, buy a home, or sometimes get a job.

Before considering bankruptcy, you may want to first explore other debt management options.

If you’re looking for a better way to manage your spending and saving, SoFi can help. With a SoFi Checking and Savings account, you can easily see your weekly spending on your dashboard in the app. This can help you stay on top of your spending, and make sure you are staying on track with your budget. With SoFi, you’ll also earn a competitive annual percentage yield (APY) and won’t pay any account fees.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.


SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.


SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.


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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Paying Off $10,000 in Credit Card Debt

Paying Off $10,000 in Credit Card Debt

An estimated 14 million Americans have at least $10,000 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. Nearly half of all Americans who switched roles last year saw an increase in 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.

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.

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.

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 buy debts for pennies on the dollar, 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.

Recommended: Types of Personal Loans

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.

If a personal loan sounds like the right fit for you, consider SoFi personal loans. SoFi has a simple online application and offers easy-to-use tools. You can view your rate in just 60 seconds, and get your loan funds as soon as the day your loan is approved.

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


Photo credit: iStock/ArtistGNDphotography

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.

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


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Paying off $50,000 in Credit Card Debt

Paying off $50,000 in Credit Card Debt

Not all debt is bad. In fact, taking out loans and using credit cards responsibly is how most people build credit to access low-interest loans in the future. However, a problem arises if budgeting is poorly managed or finances become tight.

In either case, it’s easy to slide further and further into debt with no clear path to financial freedom. Before you know it, you may end up with $50,000 in credit card debt, which can feel insurmountable. But instead of throwing up your hands, here are some tips for how to pay off $50,000 in credit card debt and get your finances back on track.

Tips for Paying Off $50,000 in Credit Card Debt

Unsure of how to pay down $50,000 in credit card debt? Here are some paths forward you may consider, depending on your financial situation and preferences.

1. Pay More Than the Minimum

If you only pay the minimum balance on your card each month, it will take you much longer to pay off the debt. That’s because you will continue to pay a high interest rate. If you can pay off more than the minimum and start chipping away at the principal loan amount, you’ll pay less in interest over time, and the debt will disappear faster.

2. Focus on High-Interest Debt First

High-interest debt is the most expensive, so you’ll save money if you can get rid of it sooner. Check your credit cards to see which one has the highest annual percentage rate (APR), and then pay that one off first. Then, use the amount you save once that card is paid off to work on paying down the card with the next-highest APR.

3. Pay Off the Card With the Lowest Balance First

A different approach to paying down credit card debt is to initially focus on the card with the lowest balance. This is known as the snowball method, and it can help you stay motivated to pay down debt when you see each card’s balance getting paid off one by one.

4. Review Your Expenses

You might be able to free up cash to put toward paying off your credit card debt by taking a close look at how you spend your money and perhaps creating a budget that’s a bit stricter.

A good place to start when looking for areas to cut back are monthly subscriptions that you’re not using or don’t need, such as streaming services or audiobooks. You might also consider whether you can change your lifestyle. Look for ways to reduce your expenses — perhaps you can eat out less, buy cheaper groceries, or downsize your home.

5. Use Extra Cash to Pay Down Your Debt

If you’re lucky enough to receive a bonus at work or an unexpected windfall, use it to pay down your debt rather than adding it to your spending pool. Also think about whether you could take on some gig work, which would allow you to increase your income temporarily while you focus on paying down some of your debt.

Debt Management Program

Another option you might explore to get a handle on $50,000 of credit card debt is a debt management program (DMP). Credit counseling agencies offer DMPs to help people better manage their finances through education and counseling.

These agencies are non-profit organizations that assign counselors to individuals who need help. The counselors provide advice and guidance, and negotiate with the client’s creditors to develop reduced payment plans. Creditors are eager to get paid back, so they’re usually amenable to lowering interest rates and waiving fees for clients who work with a DMP and show they’re serious about repaying their debt.

If you choose to work with a DMP, you’ll usually make a single monthly payment, which then gets distributed to your creditors. The DMP will lower the amount of interest you’re paying overall and remove late fees, which means more of your money goes toward paying down your principal. This translates to your debt getting paid off quicker.

There’s usually a fee for a credit counselor’s services, and you will be required to close all of the accounts under the DMP so that you don’t continue to rack up debt. Still, a DMP can help relieve financial stress since you’re taking concrete steps to improve your financial situation.

Credit Card Debt Forgiveness

Credit card forgiveness occurs when a creditor forgives you of debt. While this might sound like a surefire path to financial freedom, this is rare for credit card companies, and it usually comes at a cost. Instead, what credit card companies might do is agree to negotiate a settlement whereby you pay a portion of the amount you owe with penalties. If you’re three or more months behind and unable to catch up with payments, it’s possible to negotiate a settlement with a credit card provider.

That being said, a creditor is more likely to offer forgiveness right before selling your debt to a collector because they’ll have to sell the debt for less than the full amount you owe and lose money. Negotiating a settlement with you instead may minimize their losses. It’s even easier to pursue debt forgiveness from a debt collector because collectors can profit even if you only pay some of the amount you owe.

Note that forgiven debt is considered income by the IRS, so you will owe taxes on the forgiven amount.

Additional Options for Paying Off Debt

Other options for paying off $50,000 in credit card debt include taking out a debt consolidation loan, which is a common type of personal loan, or turning to a home equity loan or a balance transfer credit card.

Home Equity Loan

If you have equity in your home, a home equity loan might offer a lower interest rate than your credit card and provide cash to pay off some of that higher-interest debt.

However, you will have to factor closing costs into the equation. Also know that you’re putting your home at risk if you can’t stay on top of monthly payments.

Personal Loan

Among the many common uses for personal loans is debt management and consolidation. If approved, you can use the funds you receive from a personal loan to pay off your credit cards. This will consolidate your debt, leaving you with just one payment to worry about each month.

Ideally, you’ll be able to secure a lower interest rate as well, which can offer savings. A personal loan calculator can help you determine if lowering your interest rate and monthly payments with a personal loan could help you save on total interest.

Recommended: Get Your Personal Loan Approved

Balance Transfer

With a balance transfer, you move your existing credit card debts to another card, ideally one that offers a lower interest rate. Some balance transfer credit cards even offer a temporary introductory APR that’s as low as 0%, though you’ll generally need solid credit to qualify for the most competitive offers.

Just note that a balance transfer fee will apply, so you’ll need to factor that into your overall costs. Also make sure that you’ll be able to pay off your balance in full before the introductory APR ends — otherwise, the interest rate could rise dramatically.

The Takeaway

Figuring out how to pay off $50,000 in credit card debt can seem overwhelming. Luckily, there are a number of options at your disposal. You might try a debt payoff method like the debt snowball or the debt avalanche, or you might look for ways to cut back or bring in extra money to put toward debt payments. Seeking help through a DMP is another option if you’re struggling to get your financial life back in order.

Another possibility is consolidating your debt by taking out a personal loan. Loan amounts range from $5,000 to $100,000, and it’s possible to get funds the same day you sign – or you could have SoFi pay off your credit card directly.

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

FAQ

Should I sign up for a debt management program?

Consider signing up for a debt management program if you feel overwhelmed by your debt. A credit counselor can consolidate your debts into one payment and simplify the debt repayment process, as well as offer general advice and guidance.

Should I seek credit card forgiveness?

Credit card forgiveness is rare to receive. However, you might 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 $50k in credit card debt?

How long it will take you to pay off $50,000 in credit card debt depends on the APR and the amount of your monthly payment. For example, assuming you’re not continuing to add to your debt, if you have an APR of 19.07% and make monthly payments of $2,000, it will take you 33 months to pay off your debt. If you were only paying $1,000 a month at that APR, it would take you 101 months.


Photo credit: iStock/milan2099

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.

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


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