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Staying on top of student loans and other financial obligations can be challenging. If you’re having trouble making monthly payments, or you’re concerned about how you’ll repay your loans down the road, you might be wondering what happens if you don’t pay your debt.

While you cannot be arrested or put in jail just for failing to pay your student loans, there are repercussions for missing student loan payments, including damage to your credit and wage garnishment.

Here’s a look at the potential legal and financial consequences of not paying debt, as well as tips for tackling student loan debt after you graduate.

Going to Jail for Debt

No matter how much or what type of outstanding debt you have, a debt collector cannot threaten to or have you arrested for that unpaid debt. Doing so is a violation of the Fair Debt Collection Practices Act and would be considered harassment.

A lender can, however, file a lawsuit against you to collect on an outstanding debt. If the court orders you to appear or to provide certain information, but you don’t comply, a judge may issue a warrant for your arrest. A judge can also issue a warrant for your arrest if you don’t comply with a court-ordered installment plan (such as child support).

Bottom line: You never want to ignore a court order, since doing could result in an arrest and, potentially, jail time.


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Can You Go to Jail for Not Paying Student Loans?

No, you can’t be arrested or put in prison for not making payments on student loan debt. The police won’t come after you if you miss a payment. While you can be sued over defaulted student loans, this would be a civil case — not a criminal one. As a result, you don’t have to worry about doing any jail time if you lose.

As mentioned above, however, ignoring an order to appear in court could result in an arrest. And unless you want to deal with a long, messy legal process and added expenses on top of your debt (in the form of attorney and court fees), it’s in your best interest to do whatever you can to avoid defaulting on your student loans.

Statute of Limitations on Debt

In terms of debt collection, the statute of limitations refers to the amount of time that creditors have to sue borrowers for debt that’s past due.

Federal student loans don’t have a statute of limitations. This means that federal loan servicers can pursue collection of defaulted federal student loans indefinitely. Keep in mind that the federal government doesn’t have to sue you to start garnishing wages, tax refunds, and Social Security checks.

For other types of debt, including private student loans, many states have statutes of limitations between three and six years, while some are longer. The timeframe can vary based on the type of debt and the state law named in your credit agreement.

If you’re sued by a debt collector and the debt is too old, you may have a defense to the lawsuit. You may also have a claim against the collector for violating the Fair Debt Collection Practices Act, which prohibits suing or threatening to sue for a debt that is past the statute of limitations.

Recommended: Private Student Loans vs Federal Student Loans

What Are the Consequences of Not Paying Off Student Loan Debt?

The consequences of not paying your student loan debt differ depending on what type of student loans you have.

Federal Student Loans

Typically, with federal student loans, the loan becomes delinquent the first day after a payment is missed. If you don’t make a payment within 90 days, your loan servicer will report the delinquency to the three national credit bureaus.

If you don’t make a payment for 270 days (roughly nine months), the loan will typically go into default. A default can cause long-term damage to your credit score. You may also see your federal tax refund withheld or some of your wages garnished.

Once your federal student loan is in default, you can no longer receive deferment or forbearance or any additional federal student aid. Plus, you’re no longer eligible for an income-driven repayment plan, and your loan servicer can sue you for the money you owe.

Private Student Loans

If you don’t pay private student loans, the consequences will depend on the lender. Generally, however, this is what happens: As soon as you miss a payment, your loan will be considered delinquent. You’ll likely get hit with a late fee and, after 30 days, your lender can report your delinquency to major credit agencies.

After 90 days, your loan will typically go into default. At that point, your loan may be sold to a collections company. Your (and any cosigner’s) credit score will also take a hit. In addition, your lender can sue you for the money you owe. They may also be able to get a court order to garnish your wages. However, they can’t take any money from your tax refunds or Social Security checks.

Tips for Getting Out of Student Loan Debt

You won’t go to jail for not paying back your student loans, but you can still face some significant consequences for missing payments. Here are some ways to stay (or get back) on track.

1. Set up a Budget

It can be hard to manage your finances without a plan. Creating a monthly budget is a helpful way to keep your spending in check and make sure you have enough money for your loan payments. Once you write down everything you’re spending on each month, you may find some easy places to cut back, such as getting rid of streaming services you rarely watch or spending less on takeout and afternoon coffees. Any money you free up can then go towards loan repayment.

2. Increase Cash Flow

Reining in your spending with a budget is a good place to start, but it may not be enough for getting out of debt. Having some extra cash on hand can help manage debt payments and offer some breathing room within your monthly budget.

To boost your income, you might consider taking on more hours at your current job, getting some freelance work, or picking up a side gig (such as food delivery, dog walking, or babysitting). You don’t have to do this forever — just until your student debt is paid off, or at least well under control.

Recommended: Student Loan Debt Guide

3. Create a Debt Reduction Plan

If you have multiple debts, it’s a good idea to take an inventory of everything you owe and then set up a comprehensive debt reduction plan.

A popular system is the avalanche method, which calls for putting any extra cash toward the debt with the highest interest rate while making minimum payments on other balances. When that debt is paid off, you put your extra money towards the debt with the next-highest interest rate, and so on.

Another option is the snowball method, which focuses on ticking off debts in order of size, starting with the smallest debt balance, while still taking care of minimum payments on other debt.

4. Apply for an Income-Based Repayment Plan

If you have federal student loans, there are currently three income-driven repayment (IDR) plans you can apply for to make your monthly payments more manageable. These include:

•   Saving on a Valuable Education Plan (SAVE; replacing Revised Pay As You Earn)

•   Pay As You Earn

•   Income-Based Repayment Plan

•   Income-Contingent Repayment Plan

Monthly payments are a percentage of your discretionary income, usually 10% or 20%. What’s more, all plans forgive any remaining balance at the end of the 20- or 25-year repayment period. Note that the current IDR program will sunset for new borrowers starting July 1, 2026, as a result of changes to federal legislation.

Starting July 1, 2026, new federal student loan borrowers will only have access to the new Repayment Assistance Plan (RAP), which requires payment amounts of 1-10% of your annual adjusted gross income and offers forgiveness after 30 years.

5. Find Another Repayment Plan

Besides income-based repayment, current borrowers can explore a variety of other federal repayment plans to help pay off debt. For example, the graduated repayment plan helps recent college grads find their financial footing by setting smaller monthly payments at first before increasing every two years. (Note: Borrowers who take on a new loan after July 1, 2026 will only be eligible for a standard repayment plan or the RAP plan.)

Some private lenders also offer a choice of different repayment options.

6. Look Into Forgiveness Programs

The federal government offers student loan forgiveness to borrowers who meet certain eligibility criteria, such as working in a certain profession, having a permanent disability, or after making payments for a certain amount of time on an income-driven repayment plan. Similar programs are available at the state-level across the country, and generally base eligibility on specific professions or financial hardship. It’s worth contacting your state’s higher education department to see if you might qualify for a repayment assistance program.

The Rural Iowa Primary Care Loan Repayment Program, for instance, provides up to $200,000 toward repaying eligible student loans for doctors who commit to working five years in designated locations.

The NYS Get on Your Feet Loan Forgiveness Program, on the other hand, offers up to 24 months of debt relief to recent graduates in New York who are participating in a federal income-driven repayment plan.

7. Ask About Employer Tuition Reimbursement Programs

Besides health insurance and a 401(k), your employer may provide other benefits, including tuition reimbursement programs, to support and retain their employees.

Often, these programs are focused on annual tuition expenses that employees incur while studying and working concurrently. Still, employers may offer to contribute to student loan payments as well.


💡 Quick Tip: Master’s degree or graduate certificate? Private or federal student loans can smooth the path to either goal.

8. Explore Refinancing Your Student Loans

Student loan refinancing could help you save interest and make your monthly payments easier to manage. Generally, though, refinancing only makes sense if you can qualify for a lower interest rate.

Refinancing involves taking out a new loan with a private lender and using it to pay off your existing federal or private student loans. You can often shop around and “browse rates” without any impact to your credit scores (prequalifying typically involves a soft credit check). Just keep in mind that refinancing federal loans with a private lender means losing access to government protections like income-driven repayment, student loan forgiveness programs, and deferment and forbearance.

Also know that lenders typically require your loans to be in good standing before approving a refinance. That means you generally can’t refinance a student loan in default. You can, however, consider refinancing after recovering from a student loan default.

The Takeaway

Although you won’t go to jail for failing to pay your student loans, there are a number of negative consequences, like late fees, a damaged credit score, wage garnishment, and even being taken to court.

Whatever type of student loan you have, you can help the road to repayment go smoothly by setting up a budget that makes room for monthly loan payments, picking a repayment plan that fits your needs and budget, and investigating forgiveness options.

Finding a student loan with a competitive interest rate and flexible repayment terms can help avoid the stress and repercussions of not paying student loans down the line.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

Do student loans go away after 7 years?

No, student loans won’t disappear after seven years. Negative information about your student loans (such as late payments or defaulting on a loan) will be removed from your credit report after seven years, but that doesn’t remove your responsibility for paying back the loans. You’ll still owe the debt until you pay it back, it’s forgiven, or, in the case of private student loans, the statute of limitations runs out.

How long before student loans are forgiven?

The Public Service Forgiveness Program requires making the equivalent of 120 qualifying monthly payments under an accepted repayment plan (while working full-time for an eligible employer) for student loan forgiveness. With the currently offered federal income-based repayment plans, you need to make payments for 20 to 25 years to have the remaining balance forgiven. State programs may offer more rapid repayment assistance and forgiveness.

Can student loan lenders seize bank accounts?

Yes, but not right away. If you have federal student loans, your wages or bank accounts can be garnished only if you have officially defaulted on your loans (i.e., you haven’t made a payment for at least 270 days). The government does not need a court order or judgment to garnish your wages.

If you default on a private student loan, your creditor must first sue you to obtain a judgment and submit a court order to your employer before your wages can be garnished.

Photo credit: iStock/shadrin_andrey

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

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

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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.

SOISL-Q425-017

More than half of college students graduate with some debt. The average federal student loan debt balance is $39,075, while the total average balance (including private loan debt) may be as high as $42,673, according to the Education Data Initiative.

While those numbers may look daunting, keep in mind that you typically don’t need to start repaying your student loans until six months after you graduate. What’s more, lenders (both federal and private) generally offer a number of repayment options that can make managing student loan debt easier.

Here’s a look at nine tips and strategies that can make repaying your student loans as stress-free as possible.

1. Understand Your Total Debt

Before you can determine the best way to manage student loan debt, you’ll want to get a full picture of what you owe. You may graduate with several loans, both federal and private, and the interest rate may be different depending on when you took out the loan.

You can find your federal student loan balances by logging into your account at StudentAid.gov. For private student loan balances, you can contact your loan servicer or check your credit report (you can request a free credit report from AnnualCreditReport.com ).

💡 Quick Tip: With benefits that help lower your monthly payment, there’s a lot to love about SoFi private student loans.

2. Know Your Repayment Terms

In addition to your unpaid balances for each student loan, there are other repayment factors that impact your payoff strategy. This includes each loan’s:

•   Term Your repayment term is the amount of time until you get out of student loan debt, if you follow your original repayment plan.

•   Interest rates This is the cost of financing. While federal student loan rates are the same for every borrower, private student loan rates range based on the lender, the type of interest rate (fixed or variable), and the borrower’s credit score.

•   Grace period Many student loans offer a grace period, which is the length of time that you have after graduation before you need to start paying back your loans. Often the grace period is six months after you graduate or drop below half-time attendance.

Recommended: Average Student Loan Debt

3. Determine if You Qualify for Loan Forgiveness

If you have federal student loans, you could be eligible for certain debt forgiveness programs. These programs can wipe away all or a portion of your student debt after you’ve satisfied certain repayment and eligibility criteria. Some pathways to forgiveness include:

•   Public Service Loan Forgiveness (PSLF) Under PSLF, government and nonprofit workers may be eligible to see the remaining balance of their federal student loan debt forgiven after making 120 qualifying payments. You can use the government’s PSLF help tool to see whether you work for a qualifying employer and generate your PSLF form.

•   Income-driven repayment (IDR) An income-driven repayment plan sets your monthly student loan payment at an amount that is intended to be affordable based on your income. If your federal student loans aren’t fully repaid at the end of the repayment period (which may be 20, 25, or 30 years), any remaining loan balance is forgiven.

•   Teacher Loan Forgiveness Teachers who work full time for five consecutive academic years at a low-income school may be eligible for up to $17,500 in loan forgiveness. To qualify, you must meet the FSA’s requirements as a highly qualified teacher.

4. Select a Repayment Plan That Works for You

Depending on the type of student loan you have, you may be able to choose from a variety of different repayment plans. Loans in the federal system offer access to a set list of repayment options, while private loan repayment plans vary. Choosing a payment plan that works with your budget can make it much easier to deal with student loan debt.

Private Student Loan Repayment Options

When you take out a private student loan, you may be able to choose between several different repayment plans. These may include:

•   Immediate repayment This means you’ll make full monthly payments while you’re still in school.

•   Interest-only repayment Here, you’ll pay only the interest on your loan while you’re still in school.

•   Partial interest repayment With this plan, you’ll make a fixed monthly payment while you’re in school that only covers part of the interest you owe.

•   Full deferment If you go this route, you pay nothing while you’re enrolled in school. However, your loan balance will grow during that time due to accruing interest.

You may also be able to choose your loan repayment term, such as five, 10, or 15 years. Picking a shorter repayment term can help you save on interest (it may also help you qualify for a lower interest rate), but may mean a higher monthly payment.

Once you pick a repayment plan, you generally can’t change it after the fact. However, if you experience a financial hardship, the lender may agree to temporarily lower your payments, waive a payment, or shift to interest-only payments.

Federal Loan Repayment Options

All federal student loans are on the Standard Repayment Plan (which is a 10-year fixed payment repayment plan) by default. Borrowers who take out loans after July 1, 2026, will default to a revised Standard Repayment Plan, which spreads debt into fixed payments over one of four timeframes (ranging from 10 to 25 years), depending on what they owe.

Borrowers with loans taken out before July 1, 2026 can request to enroll in other payment plans, such as:

•   IDR Plan Income-driven repayment (IDR) plans base your monthly payment amount on how much money you make and your family size. Current options include: Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR). Depending on the plan, your payment is reduced to 10% to 20% of your discretionary income. After satisfying a certain number of months of qualifying payments on an IDR plan, you can get the remaining balance of your loan forgiven. (Note: Those who take out new loans after July 1, 2026, will be able to enroll in only a new IDR plan called the “Repayment Assistance Plan,” or RAP.)

•   Graduated Repayment Plan With this option, payments are lower at first and then increase, usually every two years. Payment amounts are designed to ensure your loans are paid off within 10 years (or within 10 to 30 years for Consolidation Loans).

•   Extended Repayment Plan With this plan, your payments can be fixed or graduated and your loan term is stretched to 25 years.

5. Consider Consolidating or Refinancing Your Loans

If you have multiple federal student loans, even if they are with different loan servicers, you may be able to combine them into one loan with a single monthly payment through a Direct Consolidation Loan. This can simplify loan repayment and make it easier to manage student loan debt by giving you a single loan with one monthly bill.

Whether you have federal, private, or both types of loans, you might consider refinancing your student loans with one private student loan, ideally with a lower interest rate and/or better repayment terms. This can simplify repayment and could also help you save money. Just keep in mind that if you opt for a longer long term, you can end up paying more in total interest. Also be aware that if you refinance federal loans to private, you may lose some benefits, such as student loan forgiveness and income-driven repayment.

Recommended: What Happens if You Just Stop Paying Your Student Loans

6. Ask Your Employer About Student Loan Assistance

Many employers are now offering student loan repayment assistance or tuition reimbursement as a way to recruit and retain top employees.

In addition, some employers will pair student loan repayment with contributions to a traditional 401(k) plan. With this relatively new benefit, an employer matches a worker’s student loan payments as if they were payments to a qualified retirement plan, even if they don’t contribute to the company’s retirement plan.

The upshot: It can be worth asking your employer if they have any repayment assistance — or are planning to offer it in the future.

Recommended: Jobs that Pay for Your College Degree

7. Explore Payoff Strategies

Whatever type of student loan repayment plan you have, there are steps you can take on your own to help manage your student loan debt, and even speed up repayment. Here are two effective strategies to consider:

•   Making extra payments toward principal If you have any extra cash to spare after you make your minimum monthly loan payment(s), consider putting it directly toward lowering your principal balance. Doing this can help you reduce the amount of debt you owe, pay off your loans faster, and save you money on interest over time. Just be sure to tell your lender in writing that your extra payment should go toward the principal and not toward future payments.

•   Avalanche repayment method This can be useful if you have multiple student loans. With this approach, you make minimum student loan payments on all your loans and then direct any extra money toward the loan with the highest interest rate. Once that loan is paid off, you funnel your extra funds to the loan with the next-highest rate until that debt is paid off, and so on until all your student debts are gone. This payoff method can speed up loan repayment and also save you money.

8. Take Advantage of Lender-Specific Benefits

Some student loan lenders offer certain benefits to their borrowers. For example, federal loan servicers, as well as many private lenders, offer a discount on the interest rate if you agree to set up your payments to be automatically withdrawn from your checking account each month.

In addition, some private lenders offer specific borrower perks, such as a one-time cash reward if you get above a certain GPA or the ability to earn reward points that you can then use to lower your monthly payments. It’s a good idea to learn about — and take advantage of — any repayment benefits your lender offers. This can make it easier to handle your student loan debt after you graduate.


💡 Quick Tip: Need a private student loan to cover your school bills? Because approval for a private student loan is based on creditworthiness, a cosigner may help a student get loan approval and a more competitive rate.

9. Budget Your Finances Accordingly

No matter the amount or type of student debt you have, a key way to manage repayment is to set up a basic budget. While that may sound complicated, it’s actually a relatively simple process.

The first step is to figure out how much money you have coming in each month (like your income after taxes and any help you may receive from your parents). Next, make a list of all your fixed monthly expenses, such as rent, utilities, phone/cable bill, food, and minimum payments due on loans, including your student loans.

You then subtract your fixed costs from your total income. Whatever is left is your disposable income — the money you have to spend on things like eating out, movies, other entertainment, and clothing.

Going through this exercise can help ensure you have enough funds to make your loan payments each month and avoid getting hit with late fees or, worse, defaulting on your student loans.

The Takeaway

There’s no one right way to handle student loan debt. Federal student loan borrowers have access to different student loan repayment strategies that can make paying off your debt more manageable. Private lenders typically also offer several different repayment options and sometimes even forbearance or deferment for borrowers who run into financial difficulty making payments.

No matter what type of student debt you have, you can utilize smart repayment strategies (such as making extra payments towards principal or using the avalanche repayment method) to pay off your loans faster and save money on interest.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

How do you pay off $70K in student loans?

There are many ways to pay off $70,000 in student loans, depending on the type of loans you have and repayment goals.

If you have federal student loans, you might sign up for an income-driven repayment (IDR) plan, which bases your payments on your income. In addition, you could have any remaining balance forgiven after 20 to 30 years, depending on the plan.

For any type of student loan (federal or private), you might consider refinancing. This involves taking out a new private student loan and using it to pay off your existing student loans. Depending on your credit, you might get a lower interest rate, which could save you money on interest. You might also be able to shorten your loan term, and pay off your loans faster. Just keep in mind that refinancing federal student loans with a private lender means losing federal benefits like income-based repayment and forgiveness options.

What is the best student loan repayment method?

The best repayment method for you depends on the type of student loans you have, your repayment goals, and your current financial situation.

If you’re looking to repay unsubsidized federal or private student loans as quickly as possible, you might consider paying interest while you’re in school and then, after you graduate, making extra payments toward the principal whenever you can. Another way to potentially pay off your loans faster is to refinance. This may allow you to lower your interest rate and/or shorten your repayment term. Just keep in mind that refinancing federal student loans with a private lender means losing federal benefits like income-based repayment and forgiveness options.

What age group holds the most student loan debt?

Borrowers between age 50 and 61 hold the most student debt, with an average student loan balance of $46,790, according to the Education Data Initiative.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

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

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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.

SOISL-Q425-027

Uninsured motorist coverage shields you from having to pay for injuries and property damage in accidents that weren’t your fault and were caused by an uninsured driver.

According to the Insurance Research Council, 15.4% of motorists on the road are uninsured. Purchasing uninsured motorist coverage reduces the likelihood that you’ll have to pay out of pocket if you’re involved in an accident caused by one of these irresponsible drivers.

It’s generally a good idea to add uninsured motorist coverage to your auto insurance policy, as it’s fairly inexpensive, usually only costing an extra $5 – $10 a month, per vehicle, for policyholders with clean driving histories. Below, we give you the scoop on the different kinds of uninsured motorist coverage and what these policies entail.

Breaking Down Uninsured Motorist Coverage Variations

There are two main kinds of uninsured motorist coverage. Similar to your standard auto insurance policy’s collision and bodily injury coverage, this kind of policy breaks down into uninsured motorist bodily injury coverage and uninsured motorist property damage coverage.

•   Uninsured motorist bodily injury coverage: Covers your party’s medical expenses and related costs in accidents caused by uninsured drivers.

•   Uninsured motorist property damage coverage: Covers your repair bills and related costs in accidents caused by uninsured drivers.

Bodily injury and property damage coverage for uninsured motorists are sometimes packaged and sold together when you purchase uninsured motorist insurance. However, this isn’t the case with all policies; check with your insurance provider to know for sure. Now, let’s take a closer look at each of these kinds of coverage.

Uninsured Motorist Bodily Injury Coverage (UMBI)

Uninsured motorist bodily injury coverage (UMBI) pays for the cost of medical bills, lost wages, pain and suffering, and funeral costs (though we hope that is never needed) in the event an uninsured driver causes an accident in which you’re the victim.

In some instances, this policy may pay out if you, as a pedestrian or bicyclist, are involved in an accident caused by an uninsured driver. Check with your car insurance provider to confirm whether this might be covered.

UMBI typically does not have a deductible to meet; you would get full reimbursement of the costs.

Uninsured Motorist Property Damage Coverage (UMPD)

Uninsured motorist property damage coverage (UMPD) pays for the cost of repair bills for either your vehicle or property in the event either is involved in an accident caused by an uninsured driver.

Unlike bodily injury coverage, UMPD often requires the payment of a deductible when used. This is usually set by state law and typically is between $100 and $1,000.

Recommended: How Does Car Insurance Work?

Uninsured vs Underinsured Motorist Coverage

Here’s another kind of coverage you should know about: underinsured motorist coverage, which helps cover your costs if you’re involved in an accident where the party at fault has insufficient insurance coverage to pay for your medical costs.

Underinsured motorist coverage differs from uninsured motorist coverage in that it’s designed to cover any shortfalls in your costs due to the underinsured motorist’s inadequate insurance policy. By contrast, uninsured motorist coverage covers your bills due to the uninsured driver’s failure to purchase insurance.

Similar to uninsured motorist coverage, underinsured motorist coverage also comes in bodily injury and property damage variants. Both bodily injury and property damage coverage is usually packaged and sold together, though insurance policies may vary.

Underinsured motorist coverage is sold separately from uninsured motorist coverage, and states can have different coverage requirements for each. Check with your insurance provider to verify whether you need to purchase these separately.

Uninsured Motorist Coverage Limits

Your auto insurance quote will typically break down your uninsured motorist coverage limits into two numbers: a smaller dollar figure followed by a larger dollar figure, separated by a slash. For example, $100,000/$300,000.

This can also be expressed as follows:

•   $100,000 per person

•   $300,000 per accident

These two numbers represent the per person and per accident coverage limits of your uninsured motorist insurance. The per person limit is the maximum your insurance company will pay for any single individual injured in a covered accident. Conversely, the per accident limit is the maximum your insurance company will pay for a covered accident, regardless of how many injured people are in your party.

How Uninsured Motorist Coverage Limits Work

If you’re thinking, “But what exactly does that mean?” we hear you. Let’s spell out how this coverage would work using the $100,000/$300,000 example above. If you have a family of five that’s riding in a car that gets hit by an uninsured driver, the maximum amount your insurance company will pay for their cumulative medical bills is $300,000, despite each individual’s coverage limit being $100,000.

If you’re ever involved in an accident caused by an uninsured driver where your costs exceed your coverage limits, in most cases, your health insurance policy will usually kick in to cover the balance. Consult your insurance providers for the specifics on your policies.

Recommended: How Much Auto Insurance Do I Really Need?

How Much Uninsured Motorist Coverage Do I Need?

The answer depends on whether your state requires uninsured motorist coverage. If it does, you must buy at least the state’s minimum (for more details, see below). Typically, this amount will match your liability coverage amounts. If your state does not require this kind of coverage, consider variables like the healthcare costs in your state and how much your vehicle is worth. Generally, uninsured motorist coverage is fairly affordable and is a worthy investment for some peace of mind.

According to the Insurance Research Council, more than one in seven drivers on the road are uninsured. This figure is even higher in states like Mississippi, where over 28% of drivers on the road are estimated to be uninsured.

Based on those figures, residents of higher-risk states may be well served by purchasing uninsured motorist coverage. Conversely, it might not be as high of a priority for residents of lower-risk states, like Maine and Utah, where 5.7% and 6.2% of drivers respectively are estimated to be uninsured.

Now, let’s circle back to the states that do require this kind of policy. The table below lists the regulations regarding the minimum required uninsured and underinsured motorist coverage for each state.

Recommended: What Does Liability Auto Insurance Typically Cover?

Uninsured/Underinsured Motorist Coverage Requirements by State

Let’s take a look at the guidelines in every state, so you can see how much coverage may be required where you live. In each category, the amount shown is per person/per accident. When there is not a figure in an area of the chart, that means the insurance isn’t required.

^*New Hampshire does not require drivers to purchase auto insurance, but drivers who do choose to purchase auto insurance must have at least the minimum uninsured/underinsured motorist coverage amounts listed. ** In January 2026, New Jersey’s minimum limits for uninsured/underinsured motorist coverage will increase to $35,000/$70,0000.

Recommended: 5 Steps to Switching Your Car Insurance

How Much Does Uninsured Motorist Coverage Cost?

Depending on how much uninsured motorist coverage you choose to purchase and your personal driving habits, your costs could be as little as $5 to $10 per month. This figure also tends to vary widely based on the overall percentage of uninsured motorists in your area, according to national insurance data.

Insurance premiums vary widely across drivers, states, and even insurance providers, so make sure you check around for a personalized quote.


💡 Quick Tip: Saving money on your fixed costs isn’t always easy. One exception is auto insurance. Shopping around for a better deal really can pay off.

The Takeaway

The prospect of being in an accident caused by an uninsured driver is a real concern, given the number of these motorists on the road. Adding uninsured motorist coverage to your auto insurance policy may be a good idea. In some states, it may even be required by law. For a relatively low cost, you can protect yourself from the possibility of being left with bills because another driver didn’t have enough insurance. The right package of car insurance policies is one way to protect yourself from unexpected circumstances.

When you’re ready to shop for auto insurance, SoFi can help. Our online auto insurance comparison tool lets you see quotes from a network of top insurance providers within minutes, saving you time and hassle.

Photo credit: iStock/RyanJLane

Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.

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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Having multiple credit cards brings certain benefits. On average, Americans use three to four credit cards at a time, often to take advantage of various perks and rewards programs. Another reason to own multiple credit cards is they can boost your credit score when managed sensibly.

That said, juggling credit lines can get out of hand, and it’s easy to fall behind with payments and face hefty interest charges. Here’s a guide to managing multiple credit cards, how to know if you have too many, and more.

Steps for Managing Multiple Credit Cards

Here’s how to manage your credit cards wisely and the steps to take to avoid unnecessary interest charges and fees.

Keep Track of Terms

Know what you are signing up for when you apply for a credit card. While a card may offer perks like sign-up bonuses, free vacations, and 0% interest rates initially, it may also charge high fees and exorbitant interest rates later on. Every credit card has different terms and conditions that are often buried in the small print.

Before applying for a new credit card, check the interest rate, or APR. Also look for penalty APRs, purchase APRs, and cash advance APRs. A penalty APR is charged if you don’t comply with the card’s terms and conditions. A purchase APR is the interest rate charged for purchases or carrying the balance over to the next month. A cash advance APR applies if you use your credit card to borrow cash.

A card may also offer an introductory 0% APR, for a limited period. However, once that period is over — or if you miss a payment — the interest rate can skyrocket. Many cards also charge an annual fee for card ownership, a maintenance fee, cash advance fees, foreign transaction fees, returned payment fees, and late payment fees.

If a card offers cash back, find out how much you need to spend to accumulate points or cash back. Check the fine print to find out what types of purchases are qualified and if there are any caps on earning cash and points. Also, read the rules on redeeming rewards, such as when they might expire or be forfeited.

For a sign-up bonus, you might be ineligible if you have owned the same card previously or another family member has the same card.


💡 Quick Tip: Check your credit report at least once a year to ensure there are no errors that can damage your credit score.

Pay on Time and in Full

You will likely incur fees if you miss payments due on your credit card. Also, if you make only the minimum payment on your credit card, you will increase your debt and pay unnecessary interest. But if you pay off your balance in full each month, you are in effect getting a free loan.

If you have multiple credit cards to juggle, it will take dedication to monitor the balances and due dates to avoid late payments, interest charges, and fees. However, managing credit cards responsibly can build your credit history.

It’s also a good idea to check your credit report at least once a year to ensure there are no errors that can damage your credit score.

Set Up Autopay

Once you understand the terms, conditions, and payment due dates of your various credit cards, set up automatic payments to avoid missing a payment. Missing a payment will mean that you are charged interest, and depending on the balance on the card, the interest payments can be steep.

Set Reminders

Managing multiple credit cards may require setting reminders. For example, if you signed up for a card with an initial period of 0%, you should know when that period ends. Also, keep track of when rewards expire, and when you should redeem points or rewards.

Recommended: What Are Cash-Back Rewards and How Do They Work?

Simplify Your Payment Due Dates

You may want to change the payment due dates for your cards to make budgeting easier. For example, if the payments for multiple cards all fall on the same day or week, it can be difficult keeping enough cash on hand.

Consider scheduling due dates close to a payday or soon after a direct deposit. It might take one or two billing cycles for your request to take effect.

Know When to Use Each Card

There’s little point juggling multiple credit cards if you don’t use the right card for the right purpose. That’s why studying each card’s terms and conditions is crucial to optimizing the benefits of your cards. For example, some travel cards come with travel protections that will reimburse you if a trip has to be canceled, and co-branded airline cards may offer free checked bags or upgrades.

Keep a Record of Your Credit Card Features

Organization is the key to managing multiple credit cards. You can use a notebook, spreadsheet, or a personal finance app — whatever it takes for you to be able to access the information you need easily.

Some key data to have at your fingertips are the interest rate, credit limit, issue date, annual fees, and payment due dates, the balance from month to month, and the key facts about the rewards program (minimum spending limits, expiration dates, qualified items).

Give Each Card a Purpose

Allocating a purpose for each card will tell you what type of card you might want to get next. For example, you might have a card that offers travel rewards, another card for cash back on groceries, but you might want to also get a card that offers rewards for buying gas. Keep a record of which card serves what purpose.

Carry Only the Cards You Use

Don’t carry all your cards with you all the time. You risk losing them, plus it will make your wallet uncomfortable to carry! There’s no need to carry an airline card that you only use to book flights. Make sure you know which cards charge an inactivity fee, and set up reminders to use the card to avoid such penalties.

Recommended: Find Out Your Credit Score for Free

Use an App to Track Your Card Balances

It’s a good idea to use an app to track your card balances. Apps are particularly useful because they alert you when a payment is due or delinquent. Some apps perform free credit monitoring, help you find a credit card for a specific merchant, and track your loyalty programs.

Signs You Have Too Many Cards

How many cards is too many? That depends on how well you manage them. Here are some indicators that you should consider closing some accounts.

You Can’t Pay the Balance Off Each Month

If you can’t pay off all the balances on your cards each month, you are in danger of falling deeper into debt and having to pay interest. You also risk increasing your credit utilization ratio. When your ratio gets too high, credit card companies may turn you down and credit checks for future employment may be affected..

You’re Missing Payments

If you find it hard to keep track of your credit cards, miss payments, or lose rewards, it’s a sign you might have bitten off more than you can chew. Simplify your financial management by choosing three or four of the most advantageous cards for your lifestyle and cancel the rest.

You’re Earning Too Few Rewards

If you rarely redeem rewards, it might not be worth keeping the card. Not only are you paying a fee for a card that gives you little benefit, but you also have the hassle of keeping track of the card’s features and balance. It might be best to nix these credit cards.

Which Cards Should You Stop Using?

When deciding which credit cards to stop using, list out the benefits of each card. Look at your spending history with that card over the past year and look at what you have gained. If you have spent little and gained little, it’s time to lose the card.

Similarly, if a card charges high annual fees and provides few benefits, don’t keep the card. Also look at the interest rate. If you have a balance on a high-interest card, pay off that debt and close down the card.

When Does It Make Sense to Close a Card?

It makes sense to close a card when you only use it to avoid an inactivity fee, if it provides few benefits, if the fees and interest rate are high, or if you are having trouble paying off the balance each month.


💡 Quick Tip: One way to raise your credit score? Pay your bills on time. Setting up autopay can help you keep your account in good standing.

The Takeaway

Having various cards can be advantageous because you can benefit from rewards and loyalty programs, build your credit history, and take advantage of interest-free credit if you pay off the balance each month. However, each credit card may charge various fees, and managing multiple credit cards can be a headache.

When opening a new credit card, make sure the fees, rewards, limitations, and penalties make sense for you. Also consider if you can manage the card and pay off the balance each month on time. Lastly, review your portfolio of cards regularly in case it makes sense to close down an account.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

How do I manage multiple credit cards?

Managing multiple credit cards comes down to organization. Keep track of all your cards and their various features, including due dates, what you should use them for, the rewards they offer, balances, interest rate, and penalties and fees. There are apps and online tools that help you to manage cards and monitor your credit score.

What is the 15/3 credit card rule?

The 15/3 credit card rule is a strategy to lower your credit utilization ratio. A credit utilization ratio of 30% or below can make you more attractive to lenders. Most people make one credit card payment a month by the due date. With this strategy, a cardholder makes two payments each month. This could reduce your credit utilization ratio if you make the payment before the end of your billing cycle. But keep in mind that even if you regularly pay your credit card balance in full each and every month, you may still be carrying a large balance throughout the month, and your credit score may be affected.

How many credit cards is too many?

How many credit cards you should have depends on your lifestyle and how well you manage them. Feeling overwhelmed and making mistakes like not paying off balances on time are indicators that you cannot keep track of your cards. Other indicators that you may have too many credit cards are that you are not seeing much benefit in the way of rewards but are paying high fees, or you have a significant balance on a card with a high interest rate.

Photo credit: iStock/Sitthiphong

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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The average credit card debt for Millennials, who are primarily in their 30s, is almost $7,000 as of 2025, according to Experian®. That, however, only tells part of the story about what America owes on their plastic.

Credit card debt in America is a significant issue, with combined balances topping $1.21 trillion in the second quarter of 2025, per the Federal Reserve Bank of New York. You probably are aware that credit card debt is high-interest debt and can be hard to pay off.

If you are wondering how your balance compares to those of other people your age, to see how you stack up, read on for a decade-by-decade review of what Americans owe.

Credit Card Debt for Millennials

Welcome to your 30s, which can be a time that many people are establishing their adult lives. What does that mean? Possibly home ownership (or outfitting your rental home), having a family and paying for the kids’ expenses, traveling, dinners out with friends, and maybe new clothes because, congrats, you snagged a new job.

Some of these changes will impact your overall debt by age, but consider just your debt related to using your plastic. Your evolving lifestyle can cost you.

The average credit card debt for Millennials (those born between 1981 and 1996) is currently $6,961, significantly more than the $3,493 owed by Gen Z, those who were born between 1997 and 2012. You should consider not only how this figure can impact your overall financial life, but also how it can affect your credit rating. You’ll want to take note of your credit utilization ratio, or how much of your credit limit your balance represents, as you work to keep your profile in good shape. Financial experts suggest this number stay at or below 30%.

Credit Card Debt for Gen X

Gen X, or those Americans born between 1965 and 1980, have on average, $9,600 in credit card debt, which is the highest for the age groups reviewed here. Many Generation X-ers have bought houses, cars, and started families. They are increasingly consuming and, as life gets busier, growing financial demands can encourage the growth of credit card debt.

As consumers are more and more stabilized in their lifestyle and careers, they tend to grow more comfortable spending money they can’t immediately repay. Additionally, at this age, people may be focused on financing children’s education, which can make paying off their credit card balances a lesser priority.

What’s more, saving for retirement is likely to be a primary focus at this age. For those trying to fatten up their nest egg, paying off credit card debt may move to the back burner.

Credit Card Debt for Baby Boomers

This age group owes an average of $6,795 in credit card debt, a bit less than Millennials. Many people in this age range are over the crest of their expenses as a parent or as a homeowner.

However, as time passes, medical expenses can grow, and those can be put on their credit card and grow their debt.

Recommended: Tips for Using a Credit Card Responsibly

Ways to Pay Off Your Credit Card Debt

As you plan to pay off your credit cards, it’s important not to underestimate the challenges of your mid-to-late 30s. With growing responsibilities and increasingly complicated finances, it can be easy to fall into debt.

It’s important to organize your budget in a way that allows you to make monthly payments to reduce and eventually eliminate debt while still accumulating savings.

Also, knowing when credit card payments are due and paying them promptly is an important facet of maintaining your financial wellness.

•   One strategy that may be worth trying is the debt snowball method, where you prioritize repayment on your debts from the debt with the smallest amount to the debt with the largest amount, regardless of their interest rates. (While still making minimum payments on all other debts, of course.)

When you pay off the debt with the smallest amount, focus the money you were spending on those payments into the debt with the next lowest balance. This method builds in small rewards, helping to give you momentum to continue making payments. This method is all about giving yourself a mental boost in order to pay off your debt faster.

The idea is that the feeling of knocking out a debt balance — however small — will propel you toward paying down the next smallest balance. The con, however, is that you could end up paying more interest with the snowball method, because you’re tackling your smallest loan balance as opposed to your highest interest debt.

•   The other popular payoff method, the debt avalanche method, encourages the borrower to pay off the loan with their highest interest rate first. While you don’t get that psychological boost that comes with knocking out small debts quickly, paying off your highest interest loans first is the more cost-effective solution of the two.

•   Another option to consider is to apply for a personal loan. Personal loans are loans that can be used for almost any purpose, whether that’s home improvement, covering unexpected medical expenses, or paying off credit card debt.

Personal loans can be a way to get ahead of debt, since interest rates are typically competitive, especially when compared to high-interest credit cards. A personal loan allows you to consolidate debt — simplifying multiple monthly payments with different credit card companies into one monthly payment.

•   Another strategy to pay off credit card debt is, of course, to cut down on expenses and tighten your budget. When it comes to paying off debt, organization is key.

Pick one of the different budgeting methods that suits you best. Make sure you are tracking both your income and your expenses. Take a look at your monthly purchases and try categorizing them into different areas. With some strategic planning, small changes can add up to make a big difference.

The Takeaway

Credit card debt is a serious financial issue for many Americans, and Millennials, who are primarily in their 30s, tend to carry the highest amount of this kind of debt. Ways to deal with this kind of debt include budgeting wisely, trying debt payoff methods, and debt consolidation loans. If you decide that a debt consolidation personal loan is your best option, shop around, and see what kinds of offers you qualify for from different lenders.

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.

FAQ

How much credit card debt do most people in their 30s carry?

According to data from Experian, Millennials, who are primarily in their 30s, carry almost $7,000 in credit card debt per person.

Which generation has the most credit card debt per person?

Members of Gen X, with an average of $9,600 in credit card debt per person, has the highest level of credit card debt.

What are ways to get out of credit card debt?

Options to pay off credit card debt include trying different budgeting methods and apps to curtail spending; utilizing such techniques as the snowball or avalanche approaches to paying down debt, and taking out a personal loan for debt consolidation.

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