While it is possible to buy a second home without a down payment, the scenarios in which you can do so are quite rare.
Traditional zero-down payment programs may not be available to you because you’re no longer a first-time homebuyer. Lenders are also generally hesitant to offer second home mortgages with low down payments. The down payment requirements for a second home are usually 10% or more.
But you may be in luck: Sometimes you can figure out how to buy a second home with no down payment. Read on to learn:
• What does buying a second home involve?
• What are the usual down payment requirements for a second home?
• How can you buy a second home with no down payment?
Note: SoFi mortgage loans require a down payment.
Key Points
• Purchasing a second home typically requires a down payment, but exceptions exist.
• VA loans, for military and veterans, offer zero-down options for eligible borrowers.
• Seller financing may allow you to forgo a down payment; however, it typically requires a higher amount down.
• Home equity from an existing property may serve as a down payment, through a home equity loan or home equity line of credit (HELOC).
• Strong financial credentials are necessary for lender approval on a second home.
What to Know About Buying a Second Home
Buying a second home comes with a different set of guidelines and rules than purchasing your first home. You’re no longer considered a first-time homebuyer, which disqualifies you from many down payment assistance programs. However, your situation will be treated differently depending on how you want to use the property. Consider the following possibilities:
Moving into the Second Home
If your plan is to keep your first home as a rental property and move into the second home, you may have some options. A mortgage loan may be available in one of two ways.
• USDA loans in approved areas have zero-down payment options. You’re allowed to get a second home with a zero-down USDA loan if you meet certain requirements involving citizenship, income, and other factors. You must live in the property as your principal residence, and you cannot have a USDA loan on your first property. In addition, you must financially qualify for both homes. To count rental income for the first home, USDA requires 24 months of rental income history.
Note: SoFi does not offer USDA loans at this time. However, SoFi does offer FHA, VA, and conventional loan options.
Other qualifiers for this kind of loan include:
• The current home no longer meets your needs for certain reasons (for example, if your family is growing and you live in a two-bedroom home, you’re relocating for a new job, or you’re getting divorced).
• You don’t have another way to obtain the property without the USDA loan.
• You can only keep one other house besides the new second home.
If, say, you’re moving from to a new region for a job opportunity, and USDA loans are available in the area you’re moving to, it’s possible to keep your first home and buy a second if you meet the above conditions.
Worth noting: An obstacle for borrowers can be that lenders need a way to verify rental income. A signed lease and bank statements may not be enough. Your lender may want to see the rental income reported on your taxes for two years.
• VA Loans may also offer zero down payment options. Available to qualifying veterans, service members, and surviving spouses, these government-backed loans can only be used to purchase property that will be a primary residence. So, if you’re moving from one place to another and qualify, you can use a VA loan to purchase the next property with no money down.
Buying the Second Home as a Vacation Home or Rental
Is there a way to buy a second home with no down payment if you plan to use it as a vacation home or rental? Options are few and far between if you’re not planning to use the property as your principal residence. When you’re looking at non-owner-occupied financing, lenders usually want a bigger down payment, not a smaller one.
That said, here are a couple of options that could answer the question of how to buy a second home with no down payment:
• Private loans: If you finance through a relative or other private source, it’s possible to obtain a no-money-down mortgage. Terms are agreed upon by both parties.
• Seller financing: Much like a private loan, the conditions of seller financing (aka owner financing) a loan are whatever the two parties agree on. If the seller is willing to let you buy the property with no money down, you might be able to make this work. However, seller financing usually comes with a bigger down payment, not a smaller one.
Do You Need a Down Payment on a Second Home?
Down payment requirements for a second home are usually higher. Lenders also look for a higher credit score. The loftier down payment requirement and credit score reflect the fact that the lender is taking on elevated risk since borrowers are more likely to default on a second home than a first home. A lender may expect your down payment to be right around the average down payment on a house, which is currently 13%.
Yet, your mortgage lender is also looking for a loan that accommodates your unique situation to help you to buy a second home. Though no down payment options are rare, your lender may have access to financial products that allow for a smaller down payment.
Can You Buy Another Home When You Have a Current Mortgage?
If you financially qualify, buying another house when you have a mortgage is possible. Generally speaking, lenders look for a strong credit history and enough income to cover your debts (including the cost of the new mortgage) to determine if you qualify for an additional mortgage.
If you don’t have enough cash for a down payment on a second home, you may be able to tap your home equity. A home equity loan or a home equity line of credit (HELOC) can help you access money to use for a down payment on a second home.
Though not all lenders will permit this, using home equity may be possible if you want to keep your first home and have no other way of obtaining enough money for a down payment on your second.
It may be advisable to get a home equity loan or HELOC while you are still living in your first house. This allows you to qualify for owner-occupant rates, which are typically much lower than non-owner-occupied rates.
While there aren’t many options for financing a second home with no down payment, you may be in luck. There are some no down payment loans available to qualified buyers, and these loans can help you preserve cash for renovations, improvements, and other expenses. Even if you can’t find a no down payment mortgage for a second home, you will likely have a number of financing options you can tap into that may allow you to snag another property.
SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.
Unlock your home’s value with a home equity line of credit from SoFi, brokered through Spring EQ.
FAQ
What is the minimum down payment for a second home?
For a second home that is not going to be your primary residence, most lenders look for at least a 10% down payment.
How do I buy a second home without 20% down?
With a higher credit score and other financial qualifications, you may be able to find a lender or a program with a required down payment less than 20%.
Can I buy another house if I already have a mortgage?
If you’re a qualified buyer with good debt and income levels with a strong credit history, a lender may be able to approve you for a second mortgage.
Can I use my equity to buy another house?
It may be possible to use home equity to buy another home. Contact a lender to go over your unique situation.
Photo credit: iStock/Nuttawan Jayawan
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945. All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
We’ve all seen them: houses that look forlorn, decrepit, unlived in. Maybe the weeds are tall and the paint is peeling. These are signs of a zombie foreclosure: A homeowner essentially abandons the property, often after receiving a notice of impending foreclosure.
Key Points
• A zombie foreclosure occurs when a homeowner vacates a property before the foreclosure is finalized.
• Homeowners are still responsible for mortgage payments, maintenance, and property taxes after foreclosure notice, but before the foreclosure is complete.
• Abandoning a property can result in financial penalties and credit damage. It can also cause increased crime and health risks in the neighborhood.
• Zombie foreclosures can reduce property values and deter new construction, although it may attract opportunistic investors.
• Buyers of zombie foreclosures face legal, financial, and maintenance challenges, plus many more considerations, but can benefit from low purchase prices.
What Is a Zombie Foreclosure?
A zombie foreclosure typically occurs when a homeowner defaults on their mortgage and believes they must vacate the premises immediately. In other cases, the homeowner may leave for any number of other reasons.
Even if someone defaults on a mortgage, they are not absolved from all responsibilities until the lender completes the foreclosure process. Until then, the homeowner is usually still responsible for the mortgage, maintenance, homeowners association (HOA) fees, and other costs.
At recent count, at least 1.4 million residential properties were sitting vacant across the U.S. More than 212,000 of these homes were in the foreclosure process in the first quarter of 2025. Preforeclosure properties sitting empty, known as zombie homes, totaled nearly 7,100 nationwide. Zombie foreclosure figures decreased significantly in 2024, but they did rise in some states, including Missouri, Michigan, and South Carolina.
Overall, zombie homes represented about 1.3 percent, or approximately 1 in 76 homes, nationwide in 2025’s first quarter – the same as in the fourth quarter of 2024 and increased just slightly from 2024’s first quarter. Numbers of zombie homes are the lowest they’ve been in five years. But although the number of zombie homes remains small, it may begin to go up as foreclosure rates increase.
First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.
A zombie foreclosure can sound scary, but it’s best to be aware of how they happen to avoid the worst consequences. A home often becomes a zombie foreclosure after the homeowner defaults on the mortgage. When this happens, the homeowner typically receives a foreclosure notice from the mortgage lender. They might believe they must leave immediately, abandoning their home as a result.
But while they turn their back on a home they believe has “died,” the home lives on and still has a laundry list of responsibilities. This means mortgage payments, maintenance, HOA fees, property taxes, and more. The current homeowner still holds the title and is still responsible for all these items until the foreclosure process is complete.
Complicating the picture, lenders sometimes decide not to complete the foreclosure process. There can be many reasons for this, but the most common is that the lender determines that foreclosing on the home isn’t worth it. Foreclosed homes often need significant repairs, and there might be a large amount of back taxes to pay.
While zombie foreclosures only make up a small percentage of all foreclosures, they do happen. Just because someone receives a foreclosure notice doesn’t mean the home is no longer their responsibility. That’s why it’s wise to follow up with the mortgage lender and await official communication before leaving for good.
Consequences of a Zombie Foreclosure
A zombie foreclosure is not a good thing for anyone involved. There can be a range of issues for the owner and the home’s neighbors.
Impact on Homeowners
As mentioned earlier, you are still responsible for your home if you receive a foreclosure notice. If you abandon the property before the foreclosure process is complete, you might face some serious consequences:
• Penalties and fees: If the foreclosure process drags on, it could result in the accrual of interest, penalties, and fees. These can increase the financial burden you were already experiencing.
• Damage to your credit: A zombie foreclosure can seriously damage your credit because it may result in a home mortgage loan default. This can make it very difficult to obtain loans in the future, including new mortgages, auto loans, and personal loans.
• Legal consequences: Not making your payments could result in a variety of lawsuits. For instance, the city might sue you over unpaid property taxes. Or the homeowners association might sue you to collect its fees.
As you can see, the consequences of a zombie foreclosure can be significant. Therefore, seeking legal advice to understand your rights and responsibilities in these situations is best. In addition, you should ensure all paperwork is complete before you leave the property for the last time.
Impact on Neighbors
The homeowner who abandons a property may not be the only one who suffers. There may also be consequences for neighbors:
• Increase in crime: Squatting, vandalism, and theft are just a few of the types of crimes that might occur after a zombie foreclosure.
• Public health issues: Foreclosed homes are often neglected, leading to overgrown yards. This can attract mosquitoes and other pests that can spread diseases.
• Costs for the local government: Someone must take care of a neglected home, and that job often falls to the local government. This can then lead to higher taxes for people in the area.
Impact on the Housing Market
The broader housing market can also be impaired due to zombie foreclosures. However, some opportunistic investors may also take advantage of the situation. Here are some of the potential impacts on the local housing market:
• Decrease in property values: A zombie foreclosure can cause a home to become an eyesore and a hazard to the local community. This can make the neighborhood less desirable as a whole, leading to a decrease in property values across the board.
• Decrease in new construction: New builders may be hesitant to pursue projects where there are zombie foreclosures. They might believe they can’t compete with the low prices of foreclosed homes.
• Opportunities for investors: While zombie foreclosures’ impacts are mostly negative, they can also lead to opportunity. Investors can purchase these homes at bargain-bin prices, renovate them, and either sell or rent them.
While they can create opportunities for investors, most zombie foreclosures’ impacts on the housing market are negative. As a whole, local communities generally suffer the consequences as a result. One way for owners to reduce the risk of a zombie foreclosure is to ensure a home is affordable for them from the outset.
Considerations If Purchasing a Zombie Foreclosure
While zombie foreclosures may have a discounted price tag, there is much to consider before moving forward. First, there can be legal complexities that complicate the process. For instance, the home may be in pre-foreclosure, the foreclosure may not have been properly completed, or there may be liens on the property. You must understand these complexities when purchasing a zombie foreclosure. Working with a real estate attorney with experience in this area is best.
You should also consider the condition of the property. Those that have been abandoned can have a range of issues, such as structural damage, mold, or vandalism. Some of these issues are more costly to fix than others. Thus, the home will need a thorough inspection to understand what repairs it may need.
Another important consideration is financing. Some lenders might be hesitant to finance homes in poor condition. You might need to explore alternative financing options, such as a renovation loan. Or you might even have to pay cash. Either way, more flexibility may be necessary when dealing with zombie foreclosures.
The Takeaway
Zombie foreclosures typically occur when a homeowner vacates the premises after receiving a foreclosure notice but before the foreclosure process is complete. Zombie foreclosures can hurt both homeowners and the local community. Therefore, homeowners may want to avoid this situation by remaining in their homes until they receive a notice to vacate and trying to stay current on mortgage payments, property taxes, and HOA fees.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
What are zombie mortgages?
Zombie mortgages are outstanding home loans that borrowers have stopped making payments on, often because they thought the debt was forgiven or settled long ago. In some cases, these can be second mortgages that a borrower may not even be aware of. It is not always legal for lenders to try to collect on these debts.
What is the foreclosure rate in the United States?
The foreclosure rate is 1.3% in the United States, according to the fourth-quarter 2024 Vacant Property and Zombie Foreclosure Report from ATTOM Data Solutions. While an increasing number of homeowners have faced foreclosure since the nationwide foreclosure moratorium was lifted, foreclosure rates are historically low.
What city has the most foreclosures?
Among 171 U.S. metropolitan statistical areas with 100,000 or more residential properties in 2025’s first quarter, those with at least 100 properties in danger of possible foreclosure and the top rates of zombie foreclosure include Peoria, IL (15.5 percent of properties in foreclosure were vacant); Wichita, KS (12.5 percent); and Kansas City, MO (10.9 percent).
Photo credit: iStock/Derek Broussard
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi 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.
*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.
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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.
Mental health and financial health typically go hand in hand. For years, studies have shown a link between stress over finances and an increase in mental health problems, including depression, anxiety, and substance abuse. And on the flip side of the coin, people with mental illnesses are more likely to have financial problems.
Recent research also supports this important connection. In SoFi at Work’s The Future of Workplace Financial Well-Being 2024 survey (which included 750 HR leaders and 750 full-time employees), 86% of workers said they feel increasingly stressed about their finances, up more than 10% from our 2022 report. They also reported that this stress has negatively impacted their sleep (48%), mental health (47%), physical health (36%), and motivation to pursue professional goals (37%).
Financial stress and mental health problems can lead to increased absenteeism and low productivity among your workers. As a result, it may make sense to help employees combat financial issues and mental health problems at the same time. Indeed, over the last few years, many employers have been exploring ways that financial well-being benefits and mental health benefits could work together to build the support and solutions employees need to weather financial and mental stress. Here are some lessons from those efforts that might benefit your organization.
Key Points
• The majority of workers today are worried about their finances and feel unprepared for the future.
• Financial stress impacts mental health, which can affect work performance and productivity.
• Financial wellness benefits — like budgeting tools, debt counseling, and employee savings plans — can help workers feel more financially secure.
• Personalized benefits that are relevant to employees’ situations can be especially beneficial.
• Helping employees balance short-term needs with long-term security can also help boost financial and mental health.
Recognize How Financial Well-Being Programs Can Support Mental Health in the Workplace
Financial planning, budgeting tools, debt counseling, and financial education services have become increasingly popular employer offerings in recent years. These tools can help employees become financially stable so that they can move on to long-term savings and goals. In addition, gaining control over day-to-day financial challenges can help reduce the stress and anxiety associated with financial instability.
Now may be a particularly good time to emphasize the connection between financial and mental health wellness to your workforce. According to SoFi’s survey data, just over half of HR leaders recognize the impact financial stress has on employees’ mental health and two out of five said it impacts employees’ productivity and focus — an increase of 10% or more since SoFi’s last survey. What’s more, 74% of employees said these benefits impact their desire to stay with their employer.
Offer a Choice of Flexible Financial-Contribution Programs
Personalized benefits that are relevant to individuals’ situations can be especially helpful in reducing the financial stress employees are feeling right now. Depending on an employee’s personal situation, payroll deduction emergency savings accounts, student loan repayment programs, and/or debt management tools may be effective ways to help workers handle the financial stressors that may be contributing to depression, anxiety, and other mental illness.
This is a good time to take inventory and see what solutions might be missing from your financial well-being benefits. Questions to consider include:
• Have you set up an automated emergency savings program for employees?
• And if you have, are you sure your employees know it exists and how to participate?
• Are your education and financial planning efforts aimed at all employees, not just those focused on long-term savings?
Help Employees Keep an Eye on Long-Range Goals, Too
Today’s high cost of living combined with immediate financial concerns like repaying student loans and credit card debt means that many employees are simply not saving enough for the future. In fact, SoFi’s financial wellness survey found that 45% of workers are stressed about not having enough money saved for retirement.
Despite the demand for short-term saving solutions, you may also want to help employees balance short- and long-term goals. Even for younger employees, you don’t want to take the focus completely off retirement and college savings benefits. And for employees who are closer to retirement, building savings is important, too. Helping everyone in your workforce, regardless of where they are, maintain a balance between short-term and long-range goals can be an important step to developing their overall financial well-being and lowering their stress.
The Takeaway
Human resource leaders, mental health professionals, and economists all agree that financial stress can have far-reaching consequences for your workforce, including increased mental and physical health issues and reduced engagement and productivity.
Given what we know about the connections between mental health and financial well-being, combining your mental health and financial well-being benefits to create customized packages accessible and meaningful to all employees can help ensure your workforce is ready for the challenges ahead.
SoFi at Work can help. We provide the benefits platforms and education resources that can enhance financial wellness throughout your workforce.
Products available from SoFi on the Dashboard may vary depending on your employer preferences.
Advisory tools and services are offered through SoFi Wealth LLC, an SEC-registered investment adviser. 234 1st Street San Francisco, CA 94105.
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.
A medical fellowship after residency can provide the training you need for a successful career in your preferred specialty. But it also probably means you’ll make far less for a period of one to three years.
Do you get paid during a fellowship? Yes, you do. Primary care medical fellows earn an average salary of $75,943 per year. While that’s above the national annual median salary of $59,228, it doesn’t compare to the salary of a full-time family medicine physician of $273,000.
You may need to set and stick to a budget during your fellowship training period. Read on for some strategies that can help.
Key Points
• A medical fellowship typically offers a salary of around $75,943, which is lower than that of fully licensed physicians, necessitating careful budgeting.
• Budgeting effectively involves categorizing expenses into fixed and variable types, ensuring that monthly expenses do not exceed income.
• Housing is often the largest monthly expense; finding affordable housing or considering shared living arrangements can significantly reduce costs.
• Utilizing income-based repayment plans, deferment, or forbearance options can help manage student loan payments while in a medical fellowship.
• Seeking passive income opportunities, using credit card points, and practicing smart grocery shopping can further alleviate financial pressures during fellowship years.
The Difference Between Residency and Fellowship
Residency usually takes place right after medical school and is designed to give doctors the experience needed to serve patients. A fellowship follows residency and is designed to train fellows in a narrower specialty.
While some fellows may earn more than residents (residents earn an average of $67,400 per year), their salary is still significantly lower than that for most working physicians. Usually, medical fellows have to pay for the majority of their living expenses, including housing and at least some meals.
Additionally, most fellows face a high student loan burden as well, with 73% of medical school graduates having some form of education debt. The average student loan debt of medical school graduates, including undergraduate loans, is $264,519.
With a relatively low salary and a high debt burden, being smart with money during fellowship years can be a big part of creating a strong financial foundation.
Fellows may feel like they have too much on their plate to devote time to thinking about personal finance. But just a few savvy budgeting strategies can help fellows spend wisely and potentially avoid getting deeper into debt.
10 Budgeting Tips for Living on Your Fellowship Doctor Salary
1. Finding a Budget that Works for You
The first step to smart budgeting is actually making a budget. Start by creating a list of monthly expenses in two categories: fixed expenses (those that stay roughly the same every month, such as rent, utilities, and insurance) and variable expenses (those that fluctuate, such as eating out and entertainment).
Next, note how much money is earned each month from fellowship or any other income sources. Use take-home pay after taxes and deductions.
Ideally, expenses should be less than income. If they’re not, work out where costs can be trimmed. With a reasonable budget in place, the next step can be to track spending each month.
2. Living Within Your Means
Expenses should not exceed the money you bring in. During a medical fellowship, you might be tempted to extend yourself financially with the expectation that your salary will soon increase dramatically. But going into debt isn’t a savvy way to start off your career.
Credit cards generally have the highest interest rates, so even a small balance can balloon into substantial debt down the line. Failing to make payments or using too much available credit could impact an individual’s credit score, which could make a difference when looking for a mortgage or car loan.
3. Choosing Housing Carefully
For most people, housing is the single largest monthly expense. That’s why it’s worth putting in the effort to find an affordable option that meets your needs. In a particularly expensive market, it may be worth getting roommates. Another factor to consider — the closer you are to your workplace, the more that can potentially be saved in commuting costs.
4. Delaying the Purchase of a New Car
For those living in an urban area, think about whether public transit or carpooling may be options for getting to work. If a vehicle is nonnegotiable, consider a used car rather than a new one. Cars lose much of their value when they’re driven off the lot for the first time, so it may be worth seeking out used cars that are in great shape at a great price.
5. Saving on Food
As a variable expense, food is an area with plenty of opportunities to save. If you have any meals provided for you as part of your fellowship, take advantage of the free food. Eating out can be tempting with a busy schedule, but it may be wiser to limit how often you go to restaurants and how much you spend there.
Since you won’t always have time to cook, preparing meals in batches to eat throughout the week could help you resist the temptation of going out.
To save money on food when you grocery shop, purchase what’s on sale, learn what produce is in season, and consider purchasing generic brands. Look for nonperishable items in bulk at discount stores. If you’re feeling extra thrifty, using coupons could save you some change, too.
6. Traveling with Rewards Points
During your fellowship, you’ll probably want to go on vacation and take a well-deserved break. But your trip doesn’t have to break the bank. Fellows with a decent enough credit score may qualify for credit cards that offer significant point bonuses, which can be redeemed for travel costs like flights, hotels, or rental cars. Some cards may require cardholders to spend a certain amount upfront to qualify for a bonus, so double check you’re not taking on unnecessary expenses or carrying a balance if you don’t need to.
7. Taking Advantage of Income-Based Repayment Plans, Deferment, or Forbearance
Those with eligible federal loans who cannot afford to make payments may be able to pause their payments through deferment or forbearance options if they meet certain qualifications.
Income-driven repayment (IDR) plans allow borrowers to tie their monthly payment to what they make over 20 to 25 years. After that, the balance is forgiven on one of the IDR plans, the Income-Based Repayment (IBR) Plan. Eligibility for these programs largely depends on the types of student loans that the borrower holds and when they were borrowed.
Those who are in a qualified graduate fellowship may be able to request a student loan deferment while in a medical fellowship. If successful, they likely won’t have to make payments during the fellowship. In some cases, borrowers may not be required to pay accrued interest, for example, if they hold subsidized federal student loans.
Borrowers who don’t qualify for deferment but are still struggling financially may be able to apply for forbearance, but would likely be responsible for paying the interest that accrues.
Fellows who are interested in pursuing a career in public health may also consider the Public Service Loan Forgiveness program. In that program, borrowers who work for a qualifying government or non-profit organization may be able to get their loans forgiven after 10 years of qualifying payments.
8. Trying to Save
Living on a fellow’s salary may not leave much room for saving, but if at all possible, setting small savings goals could be helpful.
For example, if you don’t already have an emergency fund, you could try to put away some money every month until you have about three to six months of living expenses saved.
Once you have a cushion for emergencies, consider contributing to a retirement account, such as a traditional or Roth IRA. The power of compound returns means investing early can translate into gains over time. The longer money is invested, the more time it potentially has to grow and withstand any volatility.
9. Considering Passive Income
As a fellow, you probably don’t have extra time to take on a side hustle. If you’re looking for ways to potentially boost your pay, consider looking into low-effort sources of passive income, which can allow you to earn money without investing much time or energy.
Examples include renting out a room or your car. It may require some effort up front, but if you can increase your cash flow without working too much, it could be worth it.
10. Refinancing Your Student Loans
Dealing with student loans can be challenging when you’re living on a medical fellowship salary.
When you refinance your loans with a private lender, you get a new loan, ideally with a lower interest rate and/or more favorable term.
Depending on your situation, student loan refinancing can lower your monthly payment. Note: You may pay more interest over the life of the loan if you refinance with an extended term.
Keep in mind that when refinancing with a private lender, you do give up the federal benefits that come with most federal student loans, such as deferment, forbearance, income-based repayment programs, and student loan forgiveness. If you plan on using those programs at any point in time, it is not recommended to refinance your federal student loans.
The Takeaway
Fellowships can be an excellent opportunity to hone in on your medical specialty of choice, but the relatively low salary may require some creative budgeting in order to keep expenses in line with income.
Some ideas to consider include creating a passive income stream, shopping smarter at the grocery store, establishing a realistic budget, and finding an affordable living situation.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
FAQ
Is a medical fellowship worth it?
Whether a medical fellowship is worth it depends on an individual’s situation and goals. Medical fellowships provide advanced learning and training as well as practical work experience in very specific specialties. Medical fellows tend to be highly respected, and a fellowship can be a solid foundation for a successful career.
However, medical fellowship programs are extremely competitive to get into, fellowships require a significant time commitment, and the salary is substantially lower than the salary of a full-time physician.
Does a medical fellowship pay more than a residency?
A medical fellowship generally does pay more than a medical residency. The average salary for a primary care medical fellow is $75,943 per year, while the average salary for a medical resident is $67,400 per year.
How long is a medical fellowship?
A medical fellowship is typically one to three years, but the exact length of time depends on the area of specialization. For example, family practice physicians generally have a three-year fellowship, while general surgeons have a five-year fellowship.
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It’s human nature to wonder how you compare to everyone else. And that goes for money, too. For instance, are you spending more or less on housing? Food? Transportation?
In total, the average single person spends about $4,641 per month, according to the most recent (2023) Consumer Expenditure Survey from the U.S. Bureau of Labor Statistics (BLS). The numbers may be slightly higher for 2024. According to 4th quarter 2024 U.S. Bureau of Economic Analysis, the average monthly spending for a single person was $4,948 per month, when seasonally adjusted.
Of course, monthly expenses will vary depending on where and how you live. Still, knowing where you stand can help you budget better and see how your spending stacks up against other people’s outflow of cash.
Here, you’ll get a sense of how much an average person might spend per month so you can consider how your own budget looks.
Key Points
• The average monthly expenses for one person can vary, but the average single person spends about $4,641 per month.
• Housing tends to consume the highest portion of monthly income, with the average cost for one person coming in at about $1,684 per month.
• The average single person spends around $756 per month on transportation.
• Individuals spend an average of $367 per month on health care, though they may spend much more if they’re not covered by an employer-plan.
• Food expenses can run around $572 per month for a single person.
Average Monthly Expenses in 2025
Housing
Housing tends to consume the highest portion of monthly income. Using BLS statistics, the average spending on housing is $1,684 per month for one person. Typically, single people devote more of their monthly income to housing (around 36%) than those living as a married couple or family (around 31%).
Costs can also vary significantly depending on whether you live alone (more costly) or have one or more roommates (less costly). That’s important to consider when estimating expenses and making a monthly budget.
Where you live can also have a major impact on your monthly housing costs. A single person living in a studio will generally spend more on housing in New York City than they would in a more affordable metro area. According to RentHop, the average price for a studio (one-room) rental in New York City was $3,550 in April 2025, compared to $2,450 in Oklahoma City, Oklahoma.
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Transportation
Transportation costs can vary depending on your mode of transport (i.e., car vs. bus vs train), as well as what region of the country you live in.
But one thing that holds true for many of us: Transportation often accounts for the second-largest budget item, after housing.
The average single person shells out around $756 per month on transportation, including car or public transportation, gas, insurance and other related expenses, according to BLS statistics. Of course, you can take steps to lower those costs as needed, like learning how to save money on gas.
Health Care
Health care expenses can vary depending on each individual’s circumstances, and can also rise and fall from one month to the next. For example, there may be some months where unexpected medical costs crop up (such as emergency care), and other months where you only need to cover insurance premiums.
What you’ll have to spend on health care will also depend on where you live and what type of insurance coverage you choose. According to the BLS survey, individuals spend an average of $367 each month on health care. That number could be higher, however, for those who aren’t covered by an employer plan.
According to the Economic Policy Institute, an individual living in Columbus, Ohio spends about $470 per month on health care, including insurance premiums and out-of-pocket costs, assuming they purchase the lowest cost bronze plan on the Affordable Care Act health insurance exchange. That number rises to $696 per month for a single person living in New York City.
Everyone’s gotta eat, and the average single person spends about $572 on food per month, including food eaten at home as well as away from home, according to BLS data. However, the monthly cost for food for one person can vary widely depending on age, income, location, and eating habits.
While some monthly costs, like rent, are fixed, food is an area where consumers can often find savings if they need to reduce monthly spending (such as getting serious about meal planning and choosing lower cost brands at the supermarket).
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Cell Phone
The average monthly cost of a cell phone plan is $141 per month, according to J.D. Power’s 2024 U.S. Wireless Retail Experience Study.
The good news? If your budget is particularly tight, you could spend as little as $25 a month for basic service and a monthly cap on data.
Utility Bills
After you’ve saved up and carefully budgeted to buy a home, you probably don’t want to be surprised by a higher-than-expected utility bill. The average monthly electricity bill in the U.S. is $137 per month, while the average monthly bill for natural gas runs around $69, according to Move.org.
Your monthly utilities may also include water, which runs $47 per month on average. Other monthly utility costs you may need to cover (and their average monthly costs) include: sewer ($65), trash ($62.50), and internet ($77). Americans also cough up an average of $59 monthly for streaming services.
Clothing
The average single adult spends about $123 on clothing per month, according to BLS data. If your budget is tight, this is one category where you can often pare back spending, whether by shopping your closet, hitting the sales racks, or bringing older clothes that need repairs or fit adjustments to the tailor. A clothing swap with friends can be another option.
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Gym Memberships
The average gym membership runs anywhere from $10 to $100 per month, depending on location and amenities. If you can find one on the lower end of that range, it could be a good deal if you use it regularly.
If, however, you aren’t really using that membership or it’s too pricey for your budget, you could try going outside and hitting the pavement, joining an exercise meetup group, watching YouTube videos, and/or picking up some dumbbells and exercise bands to workout at home.
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Getting Your Monthly Expenses in Check
Knowing the average cost of living can be helpful when you’re trying to determine how much of your budget you may need to allocate to different spending categories. (If you’re thinking, “What budget?” it’s likely a wise move to get busy creating a budget.)
These average monthly expenses shared above, though, are just that — averages.
To fine-tune your budget, and make sure your spending is in line with both your income and your goals, it’s a good idea to track your own spending (which means every cash/debit card/credit card payment and every bill you pay) for a month or two.
There are a few options for tracking spending. One easy method is to make all purchases for the month on one debit card or credit card, then, at the end of the month, take note of all the purchases made.
Another option is to use an app (your bank may provide a good one) that can help you log and track your spending. At the end of the month, you can then see everything you spent, as well as allocate each expense into key categories, such as housing, transportation, food, health care, etc.
You can then see how your spending compares to national averages, as well as where you might want to tweak things. For instance, if you don’t have enough at the end of the month to put any money away into your retirement fund, you might want to pare back non-essential spending (such as restaurants, clothing, gym memberships).
The same holds true if you haven’t been able to put money towards an emergency fund, which is an important safety net if you were to endure an emergency such as a job loss.
Whether you’re creating a new budget or refreshing an old one, you’ve probably noticed how important (and tricky) it is to get your monthly expenses right.
Knowing the average amount people spend to live can help you figure out how your spending stacks up and, if you’re just starting out, help to ensure you’re budgeting enough for each category.
To stay on top of your money, you may want to track your daily spending for a month (or more), and then set up certain spending limits to keep your purchases in line with your income, as well as your savings goals.
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FAQ
How much should a single person spend a month?
There’s no one-size-fits-all answer, as spending varies based on location, lifestyle, and income. However, a general guideline is to allocate your income as follows: 50% on necessities (rent, utilities, groceries), 30% on discretionary spending (entertainment, dining out), and 20% on savings and debt repayment beyond the minimum. Adjust these percentages based on your specific needs and financial goals.
What is the average living expenses for a single person in the US?
The average living expenses for a single person in the U.S. can vary widely depending on location. According to the most recent data from the U.S. Bureau of Labor Statistics (2023), the average single person spends around $4,641 per month. This includes housing, food, transportation, health care, and other essentials.
Living in urban areas or coastal cities tends to be more expensive, while costs are lower in rural or Midwest regions. Personal choices, such as eating out frequently or owning a car, can also significantly affect monthly living expenses.
What is a good monthly personal budget?
A good monthly personal budget should prioritize essential expenses like housing, food, and utilities, while also allowing for saving and discretionary spending. A popular method is the 50/30/20 rule: 50% of your income goes to necessities, 30% to wants, and 20% to savings and debt repayment. This balanced approach helps ensure you can cover your expenses while also progressing toward long-term goals. You may need to adjust the percentages based on your specific financial situation and priorities.
About the author
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.
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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.
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