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7 Signs It’s Time for a Mortgage Refinance

Maybe you’ve considered refinancing your mortgage, but haven’t quite decided. Is now the right time? Will rates go lower?

It can be hard to know when to take the plunge.

Whether you purchased a home recently or bought a home years ago, you probably know the average mortgage rates now are high compared to the near-historic lows in early 2021.

But as with any financial rate or data point, it is hard – if not impossible – to time the market or predict the future.

Homeowners often look to refinance when it could benefit them in some way, like with a lower monthly payment. Refinancing is the process of paying off a mortgage with new financing, ideally at a lower rate or with some other, more favorable, set of terms.

Here are seven signs that locking in a new mortgage could be the right move.

Key Points

•   It can make sense to refinance if you can break even quickly, meaning you can reach the point where your savings exceed your costs.

•   If you can reduce your rate by at least 0.50%, that can be a strong indicator to refinance.

•   Switching to a 15-year mortgage can lead to higher monthly payments but lower total interest.

•   You might consider a refinance to secure a fixed-rate mortgage, which protects you against potential interest rate increases.

•   Refinancing from a fixed-rate mortgage to an ARM for lower initial rates could make sense if you’re planning to move before the initial period ends.

7 Signs It May Be Smart to Refinance Your Mortgage

You Can Break Even in Two Years or Less

Refinancing a mortgage costs money — generally 2% to 5% of the principal amount. So if you are refinancing to save money, you’ll likely want to run numbers to be sure the math checks out.

To calculate the break-even point on a mortgage refinance — when savings exceed costs — do this:

1.    Determine your monthly savings by subtracting your projected new monthly mortgage payment from your current monthly payment.

2.   Find your tax rate (e.g., 22%) and subtract it from 1 to get the after-tax percentage of the savings.

3.   Multiply monthly savings by the after-tax percentage. This is your after-tax savings.

4.   Take the total fees and closing costs of the new mortgage loan and divide that number by your monthly after-tax savings. This yields the number of months it will take to recover the costs of refinancing — or the break-even point.

For example, if you’re refinancing a $300,000, 30-year mortgage that has a fixed 7.50% rate to a 6.50% rate, refinancing will reduce your original monthly payment from $2,098 to $1,896 – a monthly savings of $202. Assuming a tax rate of 22%, the after-tax percentage would be 0.78, which results in an after-tax savings of $157.56. If you have $12,000 in refinancing costs, it will take about 76 months to recoup the costs of refinancing ($12,000 / $157.56 = 76.2).

The length of time you intend to own the home can affect whether refinancing is worth the expense. You’ll want to run the calculations to make sure that you can break even on a timeline that works for you. But two years is a general rule of thumb.

The rate and fees usually work in tandem. The lower the rate, the higher the cost. (“Buying down the rate” means paying an extra fee in the form of discount points. One point costs 1% of the mortgage amount and lowers your interest rate by 0.25%.)

If you’re shopping, each mortgage lender you apply with is required to give you a loan estimate within three days of your application, so you can compare terms and annual percentage rates. The APR, which includes the interest rate, points, and lender fees, reflects the true cost of borrowing.

2. You Can Reduce the Rate by at Least 0.50%

You may have heard conflicting ideas about when you should consider refinancing. The reason is that there is no one-size-fits-all answer; individual loan scenarios and goals differ.

One commonly cited rule of thumb is that the home refinance rate should be a minimum of two percentage points lower than an existing mortgage’s rate. What may work for each individual depends on things like loan amount, interest rate, fees, and more.

However, the combination of larger mortgages and lenders offering lower closing cost options has changed that. For a large mortgage, even a change of 0.50% could result in significant savings, especially if the homeowner can avoid or minimize lender fees.

If rates drop low enough, you might even choose to take a higher rate with a no closing cost refi.

Recommended: Guide to Buying, Selling, and Updating Your Home

3. You Can Afford to Refinance to a 15-Year Mortgage

When you refinance a loan, you are getting an entirely new loan with new terms. Depending on your eligibility, it is possible to adjust aspects of your loan beyond the interest rate, such as the loan’s term or the type of loan (fixed vs. adjustable).

If you’re looking to save major money over the duration of your mortgage loan, you may want to consider a shorter term, such as 15 years. Shortening the term of your mortgage from 30 years to 15 years will likely cost you more monthly, but it could save thousands in interest over the life of the loan.

For example, a 30-year $1 million loan at a 7.50% interest rate would carry a monthly payment of approximately $6,992 and a total cost of around $1,517,172 in interest over the life of the loan.

Refinancing to a 15-year mortgage with a 5.50% rate would result in a higher monthly payment, about $8,171, but the shorter maturity would result in total loan interest of around $470,750 -– an interest savings over the life of the loan of about $1,046,422 vs. the 30-year term.

One more perk: Lenders often charge a lower interest rate for a 15-year mortgage than for a 30-year home loan.

4. You’re Interested in Securing a Fixed Rate

Borrowers may take out an adjustable-rate mortgage because they may get a lower rate (at least initially) than on a fixed-rate mortgage for the same property. But just as the name states, the rate will adjust with market fluctuations.

Typically, ARMs for second mortgages such as home equity lines of credit are “pegged” to the prime rate, which generally moves in lockstep with the federal funds rate. First mortgage ARM rates are tied more closely to mortgage-backed securities or the 10-year Treasury note.

Even though ARM loans come with yearly and lifetime interest rate caps, if you believe that interest rates will move higher in the future and you plan to keep your loan for a while, you may want to consider a more stable fixed rate.

Refinancing to a fixed mortgage can protect your loan against rate increases in the future and provide the security of knowing how much you’ll be paying on your mortgage each month, no matter what the markets do.

5. You’re Considering an ARM

You may also be considering a move in the other direction—switching from a fixed-rate mortgage to an adjustable-rate mortgage. This could potentially make sense for someone with a 30-year fixed loan but who plans to leave their home much sooner.

For example, you could get a 7/1 ARM with a potential lower interest rate for the first seven years, after which the rate may change once a year, when up for review, as the market changes. If you plan to move on before higher rate changes, you could potentially save money.

It’s best to know exactly when the rate and payment will adjust, and how high. And it’s important to understand the loan’s margin, index, yearly and lifetime rate caps, and payments. For further details, try using an online mortgage calculator

6. You’re Considering a Strategic Cash-Out Refi

In addition to updating the rate and terms of a mortgage loan, it may be possible to do a cash-out refinance, when you take out a new loan at a higher loan amount by tapping into available equity.

The lender will provide you with cash and in exchange will increase your loan amount, which will likely result in a higher monthly payment.

If you go this route, realize that you’re taking on more debt and using the equity you have built up in your home. Market value changes may result in a loss of home value and equity. Also, a mortgage loan is secured by your home, which means that the lender can seize the property if you are unable to make mortgage payments.

A cash-out refi may make sense if you use it as a tool to pay less interest on your overall debt load. Using the cash from the refinance to pay off debts carrying higher rates, like credit cards, could be a good move.

Depending on loan terms and other factors, a lower rate may allow for overall faster repayment of your other debts.

Recommended: How Does Cash-Out Refinancing Work?

7. Your Financial Situation Has Improved

When putting together an offer for a mortgage, a lender will often take multiple factors into consideration. One of those is prevailing interest rates. Another is your financial situation, including things like your credit history, credit score, income, and debt-to-income ratio.

The better your personal financial situation in the eyes of the lender, the more creditworthy you are – and the better the terms of your loan offer could be.

Therefore, it may be possible to refinance your mortgage loan into better terms if your financial situation has improved since you took out the original loan, especially when paired with relatively low market rates.

The Takeaway

Is it time to refinance? It might be if you could get a lower interest rate or better loan term. For instance, locking in a lower rate now may help you achieve your long-term goals by freeing up cash for other stuff, like retirement or a big vacation.

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


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

FAQ

How do you know if it’s the right time to refinance?

To see if now is a good time for you to refinance, you can calculate your break-even point – when your savings exceed your costs. You can do this by dividing the total closing cost amount by the net monthly savings you’d get from the refinance. This will give you the number of months it will take to pay off the closing costs and let you know where the break-even point is.

What is the timeline for refinancing?

Refinancing typically takes between 30 and 45 days, though it can vary. Being prepared with relevant documents and responsive to requests can expedite the process.

How long after signing a mortgage can you refinance?

The length of time required after you sign a mortgage to when you can refinance can vary based on the type of loan. For conventional loans backed by Fannie Mae or Freddie Mac, you may be able to refinance immediately. However, there may be a “seasoning period” of six months required by your lender before you can refinance with that lender. FHA loans have a waiting period of 210 days to 12 months; VA loans require 210 days or six on-time payments, whichever comes later; and USDA loans can be refinanced after 12 months of on-time payments. Jumbo loan terms are set by the lender.



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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.


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

¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
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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woman on laptop in office

10 Home Office Ideas

Now that remote and hybrid work are standard in many industries, you may find yourself spending a fair amount of time in your home office. Is it up to snuff?

Ideally, you want your home office to both inspire your creativity and allow you to get down to business. Unfortunately, many of us are still working from cramped, messy, and makeshift at-home work spaces.

If your home office space could use some sprucing, read on. Here are 10 simple makeover ideas that can transform a drab at-home work area into a well-organized and stimulating work space.

Key Points

•   Refreshing a home office with color and cozy furniture can make it welcoming.

•   A guest bedroom can serve as an ideal home office space.

•   Garage conversions can create a separate, functional workspace.

•   Ergonomic seating is crucial for comfort and support.

•   Setting the scene and being Zoom-ready enhance productivity and professionalism.

1. Refreshing the Home Office

For those lucky enough to have a dedicated home office space, it may be time to give that area a little refresh. Even though corporate office spaces tend to be a little drab, a home office doesn’t have to be.

Painting a home office a cheery color and making the space feel homey with the addition of a couch, a rug, or pictures on the walls will make a home office a welcoming place to spend your working hours.

Of course, a home office needs to be practical, too. Finding an organization system to keep office supplies and files neatly stored will provide some much-needed peace of mind during busy work days.

When setting up a home office, it can be helpful to think about what systems were appealing in the workplace and which were more of a hindrance. Customizing the space to fit personal preferences and needs is one of the perks of working from home.

2. Taking Over the Guest Bedroom

For those who don’t have a separate room to dedicate to a home office, it can be tricky to strike a clear balance between work and play. Working in the bedroom or on the family room couch can make it difficult to mentally separate work time from personal time.

A guest bedroom can be an ideal spot in the home to add a desk. The space is likely unused most days of the year, and you can easily shut the door during the workday when you need privacy. You can also shut the door after a long day of work when you need to feel like you are at home and not at work. Out of sight, out of mind.

A guest bedroom may also be easy to keep tidy, as most members of the household probably don’t spend too much time in that room of the house.

Recommended: 13 Work From Home Jobs With Flexible Hours for Moms

3. Renovating the Garage

If a guest bedroom isn’t an option, a garage may be an ideal space to build a home office. A garage conversion may require renovations, but this space feels very separate from the rest of the home, which can be appealing.

Adding flooring, installing heating and cooling systems, and adding lighting — task and ambient — may go a long way towards making this space both comfortable and functional. A coat of paint in a color that promotes productivity might help, too.

Keep in mind that transforming garage into a home office can be an investment — you can expect to spend around $5,000. To help finance the project, you may want to explore options such as a home improvement loan.

This is essentially an unsecured personal loan that is used for home repairs or upgrades. You receive a lump sum up front which you can use to fix up or refurbish your home office; you then repay the loan over a set term (often five to seven years) with regular monthly payments. Interest rates are typically fixed.

4. Rethinking Your Desk

For homeowners with a big family or apartment renters who are embracing the studio lifestyle, it might be hard to squeeze in another large piece of furniture. A kitchen table or dining room table can serve double duty and provide plenty of space to spread out.

If multiple members of the household are working from home, this large space can even act as a coworking space of sorts. After all, bumping into a loved one in the break room (aka the kitchen) might be a nice surprise during a stressful workday.

The key to making this work is to make this “office” portable. Having a tote bag or storage box to stash any work supplies at the end of the day will be ideal when it’s time to eat dinner. Finding ways to remove those work vibes from a personal space is important for fostering good work-life balance.

Recommended: 32 Inexpensive Ways to Refresh Your Home Room by Room

5. The Right Support

No matter what place in the home you decide to make your workspace, it’s important to have supportive seating. Having the right chair can make all the difference, and in many cases function is much more important than aesthetics.

Having a chair that was specifically designed to provide proper back and neck support during long work days is key.

An ergonomic chair that includes features such as adjustable height, tilt control, lumbar support, and solid padding can all make the workday a bit more comfortable.

6. Setting the Scene

While having the right tools — desk, chair, computer, etc. — is important to building a successful home office, working in the right atmosphere is important, too. Spending the first 10 minutes of the workday setting the scene can be a major game changer.

For those working from home while other members of the household are working or simply existing loudly (hello, adorable but noisy babies), creating an appropriate workplace atmosphere may lead to better focus and productivity.

Start by giving the workspace a little spruce and clear out any unnecessary clutter. Put on some light background music that isn’t distracting (think classical or nature sounds) to block out any unwanted noise. Write a to-do list that prioritizes tasks for the day.

7. Being Zoom Ready

Having a space that is appropriate for video calls is essential for looking professional at home. Zoom, Skype, or Microsoft Teams calls don’t have to take place at a desk if the background isn’t ideal. Present your best self in a quiet spot in the home with good lighting and a clean background.

8. Getting Inspired

In an ideal world, all workspaces would inspire workers, allowing them to feel creative. One of the advantages of working from home is the ability to have more control over the surroundings, making it an inspiring, creative workspace.

Decorating the space in your favorite colors; adding photos of loved ones, favorite vacations, or hobbies; incorporating a vision board; or keeping a brainstorming journal at the ready are some ways to make the environment one where there is room for creativity and inspiration.

9. Adding a Standing Desk

In your home office, you make the rules. If you don’t want to sit for eight hours a day — who can blame you? — using a standing desk or adding a standing desk converter is a good way to incorporate some movement into the workday.

10. A Room with a View

Last but not least, setting up a home office to take advantage of any pleasant views might bring some peace, calm, and inspiration into the space. Facing a desk towards a window, French doors, or any other space in the home that has a view of the outdoors or even just greenery in another part of the home can help reduce stress.

The Takeaway

While some employers might offer stipends or reimbursements for setting up a home office properly, many employees may have to foot the bill themselves. This expense can be worthwhile, but may not be one that many workers planned for.

For those who need help financing that new home office space or purchasing furniture, there are a few options that may be worth considering, including a home improvement loan.

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


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

FAQ

What to buy for a home office?

The items you place in your home office will depend largely on the type of work you do. But according to Indeed, some common essentials include a workspace or desk; a comfortable, supportive chair; good lighting; a filing cabinet or storage space for paperwork; paper and pens/pencils; and a USB power strip with a surge protector.

Should my desk face a window?

Where you place your desk is a matter of personal preference and logistics. Facing a window can give you a chance to enjoy natural light and a view of the outdoors, which can boost your mood. However, a window can also expose you to glare.

Do companies pay for a home office setup?

Some companies give stipends or reimbursements to help employees cover the cost of setting up a home office. Others may only provide essential equipment, like a laptop or headphones. Ask your manager or human resources department about what benefits your company offers.


About the author

Jacqueline DeMarco

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.



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.



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.

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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How to Write a Check: A Step-by-Step Guide

The basic steps of check-writing sound pretty straightforward: Fill out the date, amount, payee name, and add your signature.

There are, however, right and wrong ways to complete this process. And, despite the current age of online banking, there may still be times when you need to write checks and want to do so correctly. Make an error, and your check may not be cashed, which can lead to hassles and fees.

By learning the simple step-by-step process, you can fill out a check properly when you need to.

Key Points

•   Writing a check involves filling out the date, amount, payee name, and your signature.

•   Errors in check writing can lead to uncashed checks and potential fees.

•   Postdating a check allows it to be deposited at a future date.

•   Writing the dollar amount in words and numbers helps prevent fraud.

•   Signing the check is crucial as an unsigned check is invalid.

1. Date the Check

First things first: Write today’s date on the space provided in the upper right-hand corner of the check. Putting the date on your check will provide evidence of when you wrote the check.

You can also postdate a check and request for the recipient not to deposit the amount until on or after that future date.

filling out date on a check



💡 Quick Tip: Make money easy. Open a bank account online so you can manage bills, deposits, transfers — all from one convenient app.

2. Add the Recipient’s Name

In the line, “Pay to the order of,” write the name of the individual or company you are paying. Be sure to double check the spelling of the person’s name and the official vendor name to avoid any payment mishaps.

You can also make a check out to “cash,” but this poses a security risk. If you or the payee loses the check, anyone who finds it will be able to cash it. You can also write a check to yourself if you need to transfer funds from your checking account to another personal account.

adding recipients name to check

3. Write the Payment Amount in Numbers

Write the dollar and cents amount in the rectangular box, located to the right of the payee line. (Example: $156.99.) It’s essential to write the payment amount clearly for the ATM or bank worker.

filling in payment amount on check

4. Write the Payment Amount in Words

To help prevent error or fraud, write the check amount out in words on the line provided.

How to Write a Check with Cents

To write a check with cents, you’ll express the cents amount as a fraction. For example, $156.99 would read as “One hundred and fifty-six and 99/100.”

How to Write a Check with No Cents

If the dollar amount is whole ($156.00), it should read “one hundred and fifty-six and 00/100.” A banker or ATM will check that your numerical amount matches the spelled-out amount.

Recommended: What Is an Outstanding Check?

writing payment amount on check

5. Sign the Check

One of the biggest mistakes check writers make is forgetting to sign the check. Neglecting to do so makes the check invalid and uncashable. Be sure and write your signature on the bottom right-hand line of the check.

adding signature to a check

6. Add a Memo

Adding a note in the memo line on a check is optional, but it’s a good idea. Doing so will help you remember why you wrote the check in the first place: “July 1st rent” or “Beyoncé tix reimbursement.”

Some payees may require additional information which you can put on the memo line on the bottom-left corner. The IRS, for example, will ask you to write your Social Security number on your check.

adding a memo to a check

Example of Writing a Check

Now that you’ve read about writing a check, here’s what a properly filled out one looks like:

example of a filled out check

Tips for Filling Out Checks

The steps on how to write a check are pretty clear. But there are additional tips that can help protect your account and ensure a successful transaction.

Use a Pen

Protect your money. Always fill out a check in ink — preferably blue or black ink for easier readability. Using a pencil is a recipe for theft. You don’t want your payee and dollar amounts being erased and rewritten (aka an altered check).

Don’t Sign a Blank Check

Don’t sign your name on the bottom of the check until it is completely filled out. If a check has your signature, but no payee name or dollar amount, you are leaving yourself wide open for any thief with a pen to fill in the blanks.

Keep Your Signature Consistent

Maintaining a consistent signature can help a bank teller or ATM detect signs of identity fraud. You’ll be better able to prove someone other than you signed your check if you have clear signature samples.

Save a Copy of Your Check

Having a copy of your check can act as proof of payment. You can take a picture of it with your cell phone. Some banks will issue checkbooks with carbon copies—a duplicate check attached to the back of a paper one. If you press down hard enough, your writing will transfer onto the duplicate check.

Recommended: Overdraft vs Non-Sufficient Funds Fees: What’s the Difference?

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How to Protect Your Accounts When Writing Paper Checks

After mailing or handing over a check, it’s wise to keep tabs on its path and your bank account. Here are some smart moves that can help keep your records straight.

Record the Payment

Most checkbooks come with a check register — a place to record your check usage and current bank balance. It’s important to dot down:

•   The check number

•   The date you wrote the check

•   The payee information

•   The dollar amount

Doing so will help you balance your checkbook and avoid ending up with a negative balance.

Monitor for Fraud or Lost Checks

Having a record of your checks will help you avoid overdraft fees and keep track of any outstanding checks that payees have yet to cash. When you receive your monthly statement, compare it against your check register to catch any suspicious activity.

This can reveal a check that might have been cashed for a different amount than what you filled it out for. This could indicate a kind of fraud called “check washing,” in which a criminal gets a hold of your check, erases information, and fills it out to themselves.

Or you might spot that a check hasn’t been cashed in a timely manner, indicating that it’s a lost check, worth following up on.

Check Your Available Balance

You don’t want to write a check for more money than you currently have, so keep an eye on your bank balance to avoid bouncing a check. Whether you have a traditional or online checking account, you should be able to easily monitor this on your financial institution’s website or app.

Consider Automated Payments

While checks can still have their time and place in your financial life, online and mobile banking can make it easy to pay bills and otherwise send funds to other accounts. This can be accomplished quickly, easily, and securely by automating your finances.

For example, instead of writing paper checks, you could set up recurring transfers to pay bills online every month or make one-off payments as needed. These actions can be done safely and simply, and they eliminate the need for envelopes and postage stamps, too.

Recommended: ACH vs Checks: Key Differences


Test your understanding of what you just read.


The Takeaway

It’s possible that check payments could eventually become a thing of the past. Until then, it’s important to know how to write a check and avoid making little errors that could result in big headaches.

Most bank accounts come with checks, but that’s not the only feature to consider when shopping for a new account.

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

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

What makes a check invalid?

Banks can refuse to cash a check due to a missing signature, insufficient account funds, invalid or illegible account numbers, or if too much time has passed since the check was dated (typically six months).

Can someone steal your identity with a check?

It is possible for criminals to use the information on your check — your name, your address, your routing number — to steal your identity. They might be able to apply for loans in your name or open bank accounts.

Where is the bank routing number on a check?

The bank routing number is at the bottom of the check, to the left. Just to the right of it is your account number, and then at the far right, the check number.

Who signs the back of a check?

The payee endorses the back of the check in order to make a deposit or cash it.


Photo credit: iStock/payphoto

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SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% 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 members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible 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 an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% 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 Eligible 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 Eligible 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 Eligible 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 Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% 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 1/24/25. There is no minimum balance requirement. Additional information can be found at http://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.

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

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Guide to Personal Loans for Veterans

A personal loan for veterans offers flexible financing that you can use for almost any expense. You can find personal loans at many financial institutions, including banks, credit unions, and online lenders. Some credit unions cater exclusively to veterans, though it’s worth shopping around with multiple lenders to find the best rates and terms.

If you’re looking for financial support as you transition to civilian life, make a big purchase, consolidate high-interest debt, or pursue another goal, read on to learn about the best personal loan options for veterans.

Key Points

•   Personal loans provide veterans with flexible funding for a variety of expenses.

•   Fixed-rate loans ensure predictable monthly payments, which can help with budgeting.

•   Competitive interest rates and fast application processes are common benefits.

•   Veterans with lower credit scores can explore secured loans or cosigners.

•   The application process includes a credit check and documentation submission.

How Do Personal Loans Work?

Personal loans for veterans offer funding for almost any purpose, such as a home renovation, life event, or another major purchase. You can also use a personal loan to consolidate high-interest debt. If you can qualify for a decent interest rate, you could save money on your debt and potentially pay it off faster.

With a personal loan, you’ll receive the lump-sum amount upfront and pay it off in monthly installments. Common repayment terms are one, three, five, or seven years, though some lenders offer longer timelines. As for how much you can borrow for a personal loan, the amounts vary but may go anywhere from a few hundred dollars to $100,000.

The interest rates on personal loans are usually fixed, so your loan payments will stay the same from month to month. This fixed interest rate structure also makes it easy to estimate your long-term borrowing costs.

Most personal loans are unsecured, meaning they don’t require any collateral. To qualify, you’ll have to meet a lender’s criteria for credit, income, and debt-to-income ratio. Some lenders require good credit, but others will work with bad- or fair-credit borrowers.

Benefits of Personal Loans for Veterans

A personal loan for veterans can meet a wide range of financial needs. Here are some of the reasons personal loans can be beneficial:

•   Flexible funding: Personal loans can be used for almost any purpose, including covering an emergency expense, funding a home improvement project, or consolidating credit card debt. If debt consolidation is your goal, some lenders will send the funds directly to your creditors to simplify the process.

•   Predictable payments: Because personal loan interest rates tend to be fixed, you’ll make the same payment each month. You can also calculate your long-term loan costs before you borrow.

•   May have competitive rates: Current personal loan rates start around 9.00%. Your rate may be lower than what you’d get on a credit card and almost certainly lower than a payday loan.

•   On-time payments can build credit: If you pay off your personal loan on time, you could see your credit score improve. A stronger credit score could make it easier to qualify for other loans and access better interest rates.

•   Don’t require collateral: Many personal loans are unsecured, which means you don’t have to put up collateral. Missing payments could harm your credit score, but you won’t have to worry about the lender claiming any of your assets.

•   Fast application process: Some lenders can approve your application and disburse funds the same or next day you apply.

Consider the pros and cons of personal loans before you borrow.

Types of Personal Loans for Veterans

As you shop around for financing, you may come across the following types of personal loans:

•   Bank loans: Many banks offer personal loans to veterans and other customers. You can often find competitive rates with banks, but the application process may take longer than it would with an online lender.

•   Online loans: Online lenders can often offer large personal loan amounts, competitive rates, and a fast application process. However, you won’t get the same face-to-face experience that you would with a brick-and-mortar bank or credit union.

•   Credit union loans: If you belong to a credit union (or are open to joining one), you could also explore their personal loan options. Credit unions tend to offer low interest rates and personalized customer service. Some credit unions are exclusively open to military servicemembers and veterans.

•   Peer-to-peer (P2P) loans: P2P loans may also be an option. These are funded by individual investors, rather than a bank, and may have more flexible borrowing requirements than traditional personal loans.

While most personal loans are unsecured, you may also encounter secured options. Secured loans can have less strict borrowing criteria than unsecured ones. You’ll need to pledge an asset as collateral, such as a savings account, vehicle, or fixture in your home. It’s important to understand how personal loans work when they’re secured: If you fall behind on loan payments, the lender can seize your asset as a form of repayment.

Personal Loan Requirements for Veterans

Specific personal loan requirements will vary by lender, but most consider the following when you apply:

•   Credit score: Lenders review your credit score when you apply for a personal loan. A good credit score of 670 or higher may help you get approved and avoid loan origination fees, but some lenders will accept lower scores.

•   Income and employment: Having a stable income and job will prove to the lender that you have the means to pay your loan back on time. Most lenders ask for pay stubs or other proof of employment when you apply.

•   Debt-to-income ratio: Your DTI ratio compares your current monthly debt payments with your income. A DTI below 36% is preferred, but each lender sets its own requirements.

Some banks that offer personal loans designed for veterans will be more flexible when evaluating your application. The Armed Services Bank, for instance, says its personal loans for veterans are ideal if you have little or no credit history.

If you have less-than-stellar credit, you may also have an easier time qualifying for a secured personal loan or a joint personal loan. A joint personal loan requires a cosigner or co-borrower. The lender will consider your joint applicant’s credit along with your own, which could help you get approved or access better interest rates.

How to Apply for a Personal Loan as a Veteran

To apply for a personal loan as a veteran, you’ll need to take these general steps:

Review Your Credit

Start by checking your credit so you can evaluate your chances of approval. You can check your FICO® Score at MyFICO.com or use another credit score monitoring service. You can also review a free copy of your credit report once a week from AnnualCreditReport.com.

If time allows, you could take steps to improve your credit score, such as making on-time payments on your loans and reducing the amount of credit you’re using.

Shop Around and Prequalify With Multiple Lenders

Your next step is to research lenders and prequalify for personal loans. Prequalification only takes a minute or two and won’t affect your credit. You could review offers from several banks, credit unions and online lenders to find a loan with the best interest rate and terms. A personal loan calculator can help you estimate your borrowing costs.

Pick a Loan Offer and Apply

Once you’ve found your best loan offer, you can fill out a full application and upload documentation. After you apply, the lender will likely run a hard credit inquiry to check your credit report.

Receive Your Personal Loan

If the lender approves your application, you’ll finalize your loan agreement and get your funds. You’ll start paying back the loan on your chosen repayment schedule.

The Takeaway

Personal loans can be a valuable financial tool for veterans, whether you’re covering an unexpected expense, consolidating debt or managing another life event. As you explore your options, look for a personal loan with competitive rates, few (or no) fees and a repayment term that works for your budget.

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


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

FAQ

How do veterans apply for personal loans?

Veterans can apply for personal loans with any bank, credit union, or online lender that offers them. Checking offers through pre-qualification, if available, is a great way to view rates without dinging your credit score. Once you’re ready to apply, you’ll fill out a loan application and provide required documentation, such as pay stubs and identification.

Are there personal loan options for veterans with bad credit?

Some banks, such as the Armed Forces Bank, offer special personal loan options for veterans with bad credit. You can also find online lenders that accept bad credit. Note that having bad credit could mean you end up with higher interest rates and origination fees.

How do VA loans differ from personal loans for veterans?

VA loans are a type of mortgage guaranteed by the Department of Veterans Affairs. They offer competitive rates and don’t typically require a down payment, but they must be used to buy a home. Personal loans, on the other hand, are typically used to cover a big expense or consolidate credit card debt.

Do veterans receive special interest rates or terms on personal loans?

Some financial institutions offer special interest rates and terms on personal loans for veterans. Most lenders, however, will base your rates and terms on your financial profile, particularly your credit and income.

Are there government programs for personal loans for veterans?

There are no government programs for personal loans for disabled veterans or non-disabled veterans. However, service members on active duty are protected by the Military Lending Act (MLA) and the Service members Civil Relief Act (SCRA). The MLA caps personal loan interest rates at 36.00%, while the SCRA limits the rates on any preservice loans to 6.00%.


photo credits:iStock/SDI Productions

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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 .

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


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.

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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How Does an HR Team Implement a Student Loan Matching or Direct Repayment Benefit?

HR pros know that helping employees with debt, particularly student loan debt, is a key ingredient to building financial wellness in the workforce. With nearly 43 million Americans carrying a total of 1.7 trillion in federal student debt, it’s the rare employer that doesn’t have a significant number of employees with substantial student loans.

Not surprisingly, many HR leaders are looking at how they may be able to help. The number of employers offering student loan benefits more than tripled in the past five years, from 4% in 2019 to 14% in 2024, according to data from the International Foundation of Employee Benefit Plans.

Despite the need and desire, implementing these benefits can be challenging. Recent legislative and executive actions concerning student loan repayment and forgiveness have been confusing. Employers are naturally wondering what role they should play in student debt repayment and what benefits can best help.

Here, we’ll look at two important student debt repayment benefits, how they work, and how they can best be implemented to attract and retain talented workers and enhance overall financial wellness among your employees.

Key Points

•   Under current law, employers can help employees with student loan repayment in two different ways.

•   Employers can offer up to $5,250 annually per employee for student loan repayment on a tax-exempt basis through 2025.

•   Companies can also match employees’ qualified student loan payments with contributions to their retirement accounts.

•   Eligibility criteria for repayment benefits include qualified loans for higher education expenses and potential tenure requirements.

•   To receive a match, employees need to certify annually that they have made qualified student loan payments.

•   Benefits for employees and employers include financial wellness, talent retention, and enhanced recruitment.

Student Loan Repayment Benefits

Though tax-advantaged educational assistance programs have been available for many years, employers now have the option to contribute $5,250 annually per employee toward student loan payments (not just tuition reimbursement) on a tax-exempt basis. That means employees won’t pay income tax on contributions made by their employers toward educational assistance programs, yet the employer also gets a payroll tax exclusion on these funds.

Employers can make the payments directly to their employees’ student loan servicers or lenders, or they can provide them to the employees themselves, who can then put them toward their student debt.

Here’s what to consider when offering student loan repayment benefits.

Recommended: What Employers Need to Know About Student Loans in 2025

How Much Will You Offer?

The maximum allowed annually on a tax-exempt basis is $5,250 per employee but employers do not have to provide that much. Many organizations start with a $50 to $100 a month payment. Even this seemingly small amount can help employees save thousands of dollars in interest over the life of the loan if directed toward the principal.

The amount you’ll contribute likely depends on the overall costs you are willing to dedicate to this benefit. An employee survey or other demographic data can help you determine how many of your workers carry student debt and would likely qualify for this benefit, which can help you understand the cost. In addition, you may want to look at future hiring trends for the next several years to estimate the number of new employees likely to join the program.

Will You Tie Benefits to Tenure?

Some employers require a time commitment — such as three to five years at the company — in exchange for the student loan payments. Others may simply delay the benefit for new employees for six months or a year.

In determining the qualification surrounding your program, you’ll need to weigh the immediate need for student loan relief among your workers and your need for higher retention and recruiting rates.

Is Your Paperwork in Place?

A program document outlining the design of the student loan contribution plan that complies with IRS regulations is necessary to implement this benefit.

You’ll also need to make sure this benefit works with any other existing qualified education assistance programs you may offer, such as tuition reimbursement.

The $5,250 tax-exempt limit applies to all tuition programs. So, if an employee receives reimbursement for a certification class, for example, and is eligible for student loan forgiveness payment for their undergraduate degree, the total of the two benefits per year for that employee cannot exceed $5,250. Anything above that amount will be considered taxable wages.

Matching Contributions for Student Loan Repayment

The Secure Act 2.0, signed into law late in 2022, is designed to encourage more American workers to save for retirement. The act also formally authorizes matching contributions for student loan repayment, allowing companies to match employees’ qualified student loan payments with contributions to their retirement accounts, including 401(k)s, 403(b)s, SIMPLE IRAs, and government 457(b) plans.

Many HR leaders see the benefit as a win-win for employees. It allows them to pay down student debt while still participating in retirement savings, hopefully starting at an early age. The provision also benefits employers looking to offer a creative benefit to retain and recruit workers, as it removes many of the preexisting legal barriers and administrative complexities that discouraged some companies from adopting a student loan repayment feature.

Here’s what to know about the matching contributions for student loan payments program.

The Rules Are (Mostly) the Same for All Matches

A student loan matching benefit must abide by all the rules of a traditional match. This means that the eligibility criteria, matching contribution rate, and vesting schedule you apply to matching contributions on student loan payments must be the same as those you apply to elective deferrals.

There is, however, one small difference: You are allowed to deposit the matching contributions to the employee’s 401(k) plan account less frequently than regular matching contributions, as long as you contribute at least annually.

Only Qualified Student Loan Payments are Eligible

Student loans must be qualified for repayments to be matched. That generally means any loans borrowed solely to pay for higher education expenses for the employee, their spouse, or a dependent. This includes refinanced student loans but not loans from a relative or retirement plan.

Loans eligible for repayment must have been used to pay for qualified education expenses including tuition, fees, books, supplies, equipment, and room and board for students enrolled at least half-time.

To receive a match, employees simply need to certify annually that they have made qualified student loan payments and the amount of these payments. Plan sponsors are allowed to rely on an employee’s certification and do not need to conduct an independent evaluation as to whether the payments meet all of the requirements to be qualified student loan payments.

The Takeaway

Benefits that can help ease the burden of student debt are important tools employers can utilize to recruit and retain talent and promote financial wellness among employees. This is especially important now that borrowers are facing new repayment policies and potential program changes by the Trump administration. Student loan repayment and matching contributions are two benefits employers may want to consider in this current environment.

SoFi at Work can help. We’re experts in the student lending space. With SoFi at work you have access to platforms and information that will help build the benefits you need to create a successful and loyal workforce.

FAQ

Are student loan payment benefits tax-exempt?

Yes, with some qualifications. The CARES Act allows employers to provide up to $5,250 annually per employee for student loan repayment on a tax-exempt basis through 2025.

Can employers offer student loan payment matches in retirement accounts?

Yes, a provision in Secure 2.0 (legislation signed into law in 2022) allows companies, starting in 2024, to match a worker’s student loan payment in the form of a contribution to their workplace retirement plan.

What are the advantages of student debt repayment benefits?

Student loan repayment benefits can help attract and retain talented workers. They can also increase productivity among your employees by reducing the stress created by burdensome student debt and boosting overall financial wellness.


Photo credit: iStock/insta_photos

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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.


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.

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