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Installing solar panels in your home allows you to do your part for the planet while also reducing your monthly utility bills. However, the cost to purchase panels and have them installed can be a deterrent. Even if you know you’ll save money over the long term, it may be hard to come up with the funds to pay for the project up front.

Fortunately, there are tax incentives as well as financing options that make paying for a solar system a lot more manageable. Solar financing involves using instruments, like loans and leases, to pay for a solar system in installments over time rather than in one lump sum at the time of purchase. Each financing option has different features, advantages, and drawbacks.

Read on to learn more, including how much solar panels cost today, how much they can help you save, plus solar financing options that can help you cover the initial bill.

The Cost of Solar Panels

The cost of solar panels varies by location, the type of solar panels, and the system’s size, but an average-sized residential system currently runs around $29,360. The actual cost of solar panels can run as high as $33,000. However, federal and local tax incentives and rebates can lower the cost by thousands.

There are also different financing options available that allow you to pay for a solar system in installments rather than in one lump sum up front. The monthly amount owed on a solar loan is typically less than an average utility bill.

Recommended: Strategies to Lower Your Energy Bill When Working From Home

Potential Benefits of Solar Panels

While solar panels have the potential to save homeowners money and do a lot of good for the planet, they come with a high price tag. Solar power financing can help make solar energy possible for more people, but not everyone qualifies.

Even if your solar panels don’t eliminate your electric bills, it can lead to significant savings. Generally, the initial expense of the purchase of a solar system can be recouped in an average of six to 10 years. After recouping installation costs, the amount you’ll save over the life of your panels will continue to add up.

Another benefit of solar panels is the potential to increase the resale value of your home. Research has shown that, on average, homes with solar panels sell for nearly 7% more than those without them.

For some people, one of the biggest benefits of installing solar panels, however, is knowing that they’re using renewable energy and helping to reduce greenhouse gasses. This could especially be important for those living in a state where the majority of the energy generated is through non-renewable power sources.

Recommended: How Much Does It Cost to Remodel or Renovate a House?

Potential Drawbacks of Solar Panels

While solar panels have the potential to save homeowners money and do a lot of good for the planet, they come with a high price tag. Solar power financing can help make solar energy possible for more people, but not everyone qualifies.

Another drawback to solar energy is that it is sunlight dependent. If there is a long stretch of overcast weather, or if you live in an area that doesn’t get a lot of sun, you might not be able to generate enough solar energy to take care of your energy needs. However, solar batteries (which store excess energy) can help mitigate this issue.

Solar panels and the wiring they require can also use up a significant amount of space. Depending on how many panels you need for your home, it can be difficult to find adequate space with sufficient sun exposure to install a solar system.

Also keep in mind that uninstalling a solar system and moving it can be difficult and costly. As a result, a solar system is not something you can generally take from house to house. It’s best to consider it as an investment in your home.

Saving Money by Installing Solar Panels

More than 5 million homeowners in America currently have solar panels. One reason is the savings it can offer over time. Once installed on your roof, solar panels typically last for at least 25 years. If your solar system eliminates your electric bill and you normally spend about $150 a month on electricity, that would bring in a potential savings of $65,000 over the life of the system.

Keep in mind, however, that solar panels don’t always eliminate your electricity bill. And, as with any home improvement project, it’s important to consider the upfront costs, how long you plan to live in your home, and if you can find home improvement financing options that work with your budget.

Four Options for Solar Panel Financing

While converting to solar can pay for itself over time, it requires a sizable upfront investment. Here are some options that can help make it easier to foot the bill.

1. Tax Credits and Rebates

A smart solar power financing strategy starts with taking advantage of all available tax credits and rebates. The federal government currently offers a 30% tax credit for solar panels installed through 2032.

Unlike a deduction, a tax credit is an amount of money that you can subtract, dollar for dollar, from the income taxes you owe. So, if you pay $30,000 to install a new solar system, you’ll qualify for a roughly $9,000 tax credit, which equates to $9,000 more in your pocket.

In addition, many states offer rebates that further reduce the cost. To help people learn more about state and local incentive programs, North Carolina State University’s N.C. Clean Energy Technology Center offers a nationwide directory of programs .

2. Solar Panel Leases

A unique option for solar panel financing is a solar lease or power purchase agreement (PPA). With both a lease or a PPA, a company installs the solar system on your roof, and you pay that company for your energy each month, which is typically 10% to 30% lower than your usual electric bill. The company owns the panels and remains responsible for any required maintenance.

Since you don’t own the solar system, however, you can’t take advantage of any tax rebates or other incentives that come with purchasing solar panels outright. Also, solar lease and PPA contracts can extend 20 to 25 years. If you want to move before the contract is up, you would need to find a buyer who wants to take over your contract or could end up paying a hefty cancellation fee.

3. Secured Solar Panel Loans

Since you are adding to and improving your home, you might consider using a home equity loan or home equity line of credit (HELOC) to finance solar panels. This type of financing is secured by the equity you have in your home. Because the debt is secured (which lowers the risk to the lender), you may qualify for a relatively low interest rate. However, if you are unable to repay the loan or credit line, the lender can take your home to recoup its losses. Also, you need to have equity in your home to qualify for a home equity loan or HELOC.

4. Unsecured Solar Panel Loans

An unsecured solar panel loan is an unsecured personal loan that you can use to purchase solar panels. You don’t have to have any equity in your home, or use your home as collateral, to qualify for an unsecured solar panel loan To get approved, the lender considers your income and your credit rating (among other financial factors that vary from lender to lender).

With an unsecured personal loan, you receive a lump sum up front, which you can use for virtually any type of expense, including solar panels. These loans typically have fixed rates so your monthly repayments stay the same over the term of the loan, which is often five to seven years. Because this type of solar panel financing is unsecured, rates can be higher than you might get with a home equity loan or HELOC.

The Tax Benefits of Solar Panels

Installing solar panels can help reduce your federal income tax due in the year the installation is complete. There is a 30% tax credit currently in place for systems installed in 2022-2032. The tax credit expires starting in 2035 unless Congress renews it.

To qualify for the solar panel tax credit, your solar panels must be installed at your primary or secondary U.S. residence between Jan. 1, 2022, and Dec. 31, 2034. You also must own the solar panel system, i.e. you purchased it with cash or solar panel financing but you are neither leasing nor are in a PPA arrangement.

In addition, the system must be new or being used for the first time, and the credit can only be claimed on the original installation of the solar equipment. There is no maximum amount that can be claimed.

The following expenses can be included:

•  Solar PV panels or PV cells (including those used to power an attic fan, but not the fan itself)

•  Contractor costs, including installation, permitting fees, and inspection fees.

•  Balance-of-system equipment, including wiring, inverters, and mounting equipment

•  Energy storage devices that have a capacity rating of 3 kilowatt-hours (kWh) or greater

•  Sale tax on eligible expenses

In addition to the federal tax credit, there are also state-level solar incentives, which vary widely. Generally, getting a state tax break or rebate won’t limit your ability to get solar credits from the IRS.

Your local utility may also offer clear energy incentives, which can help you save money on solar panels. However, this may impact your federal income tax credit.

The Takeaway

There’s no question that solar panels are environmentally friendly. Over time they can also be economically friendly, saving you money on your electricity bill. Doing some research about residential solar panels and general home improvement financing are good steps to take to see if it’s the right choice for your home.

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 does it cost to lease a solar panel system?

According to Home Depot, the average lease costs for solar panels run between $50 to $250 per month. The amount you’ll pay will depend largely on the size and production of the system.

How much can you save using solar panels?

The average homeowner saved around 20% on their utility bill when they switched to solar panels. However, savings depend on a number of factors, including where the home is located, the size of the system, and the roof position.

Is there a tax credit for installing solar panels?

Yes. There is currently a 30% tax credit for systems that were installed between 2022 and 2032. Note that the tax credit is set to expire in 2035, unless it’s renewed by Congress.

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.

SOPL-Q225-019

One of the obvious perks of working from home is the opportunity to cut some expenses, whether that’s from reducing commuting costs, prepping lunch at home, or cutting back on the cost of buying (and cleaning) work clothes.

However, there are other costs that might ratchet up just because you’re home more — and that includes energy costs. The extra time you may be spending on your laptop, keeping the lights on, or even boiling water for a ramen lunch could nudge your energy usage upward — and your monthly electric bill.

If you have those bills set on autopay, you may not have noticed an increase. Or maybe you noticed the expense creep up but didn’t know what you could do to manage it.

Fortunately, with some planning, you can probably minimize your energy bill. Here are some strategies that might help while you’re working from home.

In the Home Office

You may have put some thought into setting up your office in a way that works ergonomically and looks presentable on Zoom. But have you thought about making your workspace energy efficient?

Choosing Power-Saving Equipment

If there’s a choice, consider using a laptop instead of a desktop computer to do your work. According to Energy Saver, the U.S. Department of Energy’s (DOE) consumer resource, it takes much more power to run a desktop and its monitor than it does to run a laptop.

And with the laptop, there’s a battery for backup if the power fluctuates or there’s a brownout due to high electricity demand in your area.

Those who are new to working at home and purchasing their own office equipment may want to check out Energy Star®-certified computers, monitors, and printers, which run more efficiently than standard equipment and use about half as much electricity.

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Unplugging at the End of the Day

Remote workers aren’t the only ones who can benefit from a break at the end of their day. The computers, phone chargers, and other pieces of office equipment they rely on may continue to draw power even when not in use.

For convenience, workers may want to consider attaching these “energy vampires” to a smart power strip, with just one easy-to-reach switch to flip when it’s time to call it quits.

Also: Not to be a Grinch, but come the holiday season, if you like to keep the holiday lights on all day to brighten your work area and deliver a holiday mood, you might rethink that. The cost of holiday lights can add up.

Recommended: Adjusting Your Budget for Working from Home

Letting Computers Take a Nap

Another way to save money on energy is to set a computer to sleep or hibernate if it’s going to sit idle for a while. This differs from using a screen saver, which actually may take extra energy to keep an animated display active on the screen.

When a computer enters sleep mode, the power is cut to any unneeded systems, and the memory receives just enough power to maintain data.

In hibernation mode, the computer saves open documents and running applications to the hard disk instead of to RAM, which means it uses zero power. It takes a little longer to start back up from hibernation, though, so sleep mode may be better for shorter breaks.

Recommended: Do You Qualify for Home-Office Tax Deductions?

Choosing the Right Light

Making the most of natural light in the layout of a home office can cut down on eye strain and energy use, so it can help to create a workspace by a window.

But if a desk lamp will be on for much of the day, using energy-efficient bulbs instead of traditional incandescent bulbs could decrease the amount of energy the light will use by as much as 90%.

Because LED light bulbs produce less heat, they also may help cut costs associated with home cooling. And LEDs and compact fluorescent lamps typically last longer than traditional bulbs.

Elsewhere Around the House

Working from home typically means more time spent using appliances; opening and closing doors; and running the air conditioner, fans, or the heater.

Many power companies offer free home energy assessments with a custom report that shows a home’s past and current power use and offers tips on how to save energy in the future.

For those who prefer to DIY their audit, the Environmental Protection Agency provides the Home Energy Yardstick , which compares a household’s actual energy use (based on a year’s worth of utility bills) to that of similar households.

There are also companies that, for a fee, will come and inspect a home’s energy usage. They will also report on areas where the home and its residents could be more energy efficient (though it may require changing some old behaviors).

Making Chores More Efficient

If the local utility company offers “time of use” pricing plans — charging less for power consumed during off-peak hours — it might be another opportunity to save.

Taking advantage of lower pricing may require breaking some old habits — running the dishwasher in the morning, for example, or doing laundry in the late evening — but the reward might be a lower utility bill as well as a healthier planet.

Running full loads in the clothes washer, dryer, and dishwasher can be another way to save. Tempting as it may be to run a load just to get a favorite pair of jeans clean, you’re much better off waiting till you can fill the washer.

💡 Quick Tip: Want to save more, spend smarter? Let your bank manage the basics. It’s surprisingly easy, and secure, when you open an online bank account.

Adjusting the Thermostat

One of the easiest ways to be more energy efficient is to set the thermostat up or down a degree or two to keep a home’s heating or air conditioning from running constantly.

The DOE advises consumers to set the thermostat to 78 degrees — or as high as is comfortable — when home in the summer.

In the winter, the DOE advises consumers to set the thermostat to about 68 or 70 degrees when everyone is awake and to turn it down when they’re asleep or not at home.

For the summer, the DOE similarly recommends setting the temperature to as high as is comfortable when they’re home, but letting the house get warmer when they’re away from the house. (Using a smart thermostat that can be operated from a smartphone can make it easier to manage adjustments.)

Getting Creative When Cooking

If eating at home more often is giving the oven a workout (and heating up the house in the summer), consider using the microwave, slow-cooker, or toaster oven to save on electricity and keep things cooler.

So can using the charcoal or gas grill out on the deck, and that might lend a party atmosphere to your regular dinner.

Keeping the Fridge Filled

A well-stocked freezer operates more efficiently than one that’s sitting half-empty, so feel free to load it up (but look for ways to save money on groceries when doing so). And, of course, if you are buying a new fridge, look for an Energy Star one.

Showering Responsibly

According to the DOE, about 18% of the energy consumed in the average home is from heating water. That means long, hot showers, or even standing at the sink shaving with the water running, can drive up energy bills. So can using the hot water setting on the washing machine or rinsing dishes in hot running water.

One option is to turn down the temperature on the water heater. That will help cut your energy bill when you’re working at home without impacting your comfort much at all. Shortening those showers (which can also help you save on water bills) and changing other habits, regardless of whether you are working from your kitchen table or an office, also can help conserve energy and save money. Extra points awarded to those who air-dry their hair or use the same bath towel more than once.

The Takeaway

Whether this is a temporary situation or working from home becomes a regular thing, you may find you’ll have to rethink your budget to accommodate the changes to your lifestyle. While typically your energy bill may go up when you are spending more time at home (and at your laptop and perhaps peeking in the fridge), it’s possible, with a little effort, to manage your power costs.

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

FAQ

Does working from home increase your electricity bill?

Working from home can increase your electricity bill due to the extended use of devices such as computers and monitors, an increase in space heating or cooling, keeping lights on for longer periods, and using appliances more frequently. This increased activity leads to higher energy consumption, especially if energy-efficient practices are not followed.

What runs your electric bill up the most?

While home energy use and costs can vary significantly depending on region, home size, and the energy source, the most significant contributors to a high electric bill are typically heating and cooling systems, followed by water heating, lighting, and the use of other appliances and electronic devices. Running these systems and devices for extended periods, especially during peak hours, can significantly drive up energy costs.

How can I cut down on electricity usage?

To cut down on electricity usage, adjust your thermostat by a degree or two, maximize natural light and switch to energy-efficient bulbs, and use smaller appliances when possible, such as a microwave or toaster oven instead of the oven. In the home office, consider choosing a laptop over a desktop, using the computer’s sleep or hibernate mode, and unplugging devices when not in use.

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Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

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See additional details at https://www.sofi.com/legal/banking-rate-sheet.
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SOBNK-Q225-007

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

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

How Do Personal Loans Work?

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

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

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

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

💡 Quick Tip: Not sure what certain loan terms mean? Check out the Personal Loans Glossary for a simple guide to the basics.

Benefits of Personal Loans for Veterans

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

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

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

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

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

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

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

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

Types of Personal Loans for Veterans

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

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

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

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

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

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

Personal Loan Requirements for Veterans

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

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

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

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

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

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

How to Apply for a Personal Loan as a Veteran

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

Review Your Credit

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

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

Shop Around and Prequalify With Multiple Lenders

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

Pick a Loan Offer and Apply

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

Receive Your Personal Loan

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

The Takeaway

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

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

FAQ

How do veterans apply for personal loans?

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

Are there personal loan options for veterans with bad credit?

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

How do VA loans differ from personal loans for veterans?

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

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

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

Are there government programs for personal loans for veterans?

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

photo credits:iStock/SDI Productions

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.

SOPL-Q225-005

Veteran employees are a key part of every organization’s talent pool. While many companies have invested in veteran-focused employee resource groups, specialized recruitment teams, or tailored onboarding programs, one area often underutilized is financial well-being support.

While financial health is a vital consideration for all employees, veterans often face distinct challenges and circumstances as they transition from military to civilian life. Many are dealing with everyday financial issues — like budgeting, choosing workplace benefits, and planning for retirement — for the first time. Veterans may also carry significant debt, including student loans and credit card balances, and struggle with balancing short-term needs with long-term financial stability. As a result, financial education and counseling can be a critical and much-appreciated benefit for this segment of your workforce.

Here’s a look at how you can design a meaningful and impactful financial wellness program to attract, engage, and retain veteran talent.

Student Loan Employer Contributions

Despite having access to significant federal veterans’ education benefits, not all veterans leave the service debt-free. Indeed, more than a quarter of veteran undergraduate students have taken out private and federal student loans (with a median amount of $8,000) to complete their education, according to The Pew Charitable Trusts. Their data suggests that the majority of undergraduate student veterans borrow primarily to cover living expenses such as housing and child care. In addition, many veterans accrue student loan debt when they co-sign or take out loans for their children.

Offering student loan repayment benefits is a powerful way to demonstrate support for veterans, as well as all employees who carry student debt. One way to do this on a tax-advantaged basis is through an educational assistance program. Under current law, employers can provide up to $5,250 tax-exempt annually toward a qualified employee’s student loan repayment through 2025 (and possibly beyond, pending legislation).

Thanks to the SECURE 2.0 Act of 2022, another way employers can support workers with student debt is by making matching contributions to retirement plans based on employees’ student loan payments. The purpose of the law is to assist employees who may, because of their student loan debt, decide against making elective contributions by payroll reduction and, as a result, miss out on employer matching contributions.

Emergency Savings Programs

Veteran financial wellness also suffers among those who have less in liquid savings or feel they could not absorb an unexpected financial shock. Research indicates that around 38% of veterans have less than $500 in an emergency savings fund, or no fund at all. These numbers suggest that one way to help relieve financial stress among veteran employees is through an employer-sponsored emergency savings plan.

These plans allow employees to contribute after-tax payroll deductions automatically into a customized savings account. Many employers also make matching contributions, much as they might with a 401(k). Depending on plan design, these funds can be available at any time and for any reason. In addition, most Emergency Savings Accounts (ESAs) are portable, meaning that veterans and other employees can take advantage of the program and retain its benefits even when they have a change in employment.

Help With Credit Card Debt

Another factor that commonly impacts employee financial well-being is high-interest debt, and this may be particularly true for veterans. According to research by the nonprofit group American Consumer Credit Counseling, 41% of veterans have $5,000 or more in credit card debt, compared to only 28% of civilians; 27% have $10,000 or more in credit card debt while only 16% of civilians do; and 10% have $20,000 or more in credit card debt, compared to 7% of civilians.

For any employee carrying a substantial credit card balance, high interest charges and minimum payment structures can create a cycle of debt that’s hard to break free from. Minimum payments often barely cover the interest, which can result in years of payments with little reduction in the outstanding balance.

Here are some ways employers can help support employees having trouble getting ahead of credit card debt:

•   Financial education programs: Consider offering workshops or webinars on budgeting, debt reduction strategies (like the snowball or avalanche method), and credit management. In addition, you might offer access to financial literacy platforms or tools that explain interest rates, minimum payments, and the long-term cost of debt.

•   Financial coaching and credit counseling: You might partner with a local financial counselor or a nonprofit organization to offer employees free or subsidized one-on-one financial coaching and debt counseling.

•   Flexible payroll options: Giving employees access to their earnings before payday in case of an emergency can help workers pay their bills on time, avoid late fees, and reduce their reliance on credit cards for everyday expenses.

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Balance Short-Term Needs and Long-Term Financial Goals

Veterans often need to juggle short-term needs (like finding housing, covering moving expenses, or supporting a family) with long-term goals like retirement. Balancing these competing demands can be especially difficult if they’re dealing with debt and learning how to manage money without military infrastructure.

Employers can support retirement readiness by offering clear, veteran-specific guidance on retirement planning, including how to roll over Thrift Savings Plans, how to integrate VA disability benefits into long-term financial planning, and how to catch up on retirement savings. Employer 401(k) match incentives and targeted education on retirement investment strategies can also be especially impactful.

The Takeaway

It’s essential to analyze your workforce — and the talent you’re looking to hire — to understand what programs will best serve your veteran employees’ needs. But implementing a few hallmark veteran-ready financial well-being programs can help you improve the overall financial wellness of your workforce and attract and retain top talent.

SoFi at Work offers a benefits platform, education resources, and financial counseling that can help you increase employee productivity, loyalty, and overall well-being.

Photo credit: iStock/SDI Productions

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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.

SOAW-Q225-012

After several years of interest hikes by the Federal Reserve, student loan refinancing rates aren’t what they used to be. While borrowers could lock in rock-bottom rates around 2.00% a few years ago, today’s rates start closer to 5.00%.

The good news is that rates around 5.00% may be lower than what you currently have, leading to lower monthly payments and long-term savings.

If you’re considering whether to refinance student loans, here’s a closer look at the current student loan refinance landscape so you can make sense of where interest rates stand today.

Understanding Today’s Student Loan Refinance Market

The interest rates in today’s student loan refinance market are higher than they were a few years ago. Around the start of the pandemic, you could find ultra-low refinancing rates around 2.00%. Now, rates start around 4.50% or 5.00% for well-qualified borrowers.

Although starting rates have more than doubled in the past few years, they could still be lower than your current student loan rates. For example, federal Direct Subsidized and Unsubsidized loans for undergraduates currently carry a fixed rate of 6.53%, while Direct PLUS loans for parents and graduate students are at 9.08%.

If your current rates are high, you may find savings through refinancing student loans even in a high interest environment. Just be aware that refinancing federal loans makes them ineligible for federal benefits such as income-driven repayment plans and federal deferment.

What Drives Student Loan Refinance Rates

Student loan refinancing rates are largely influenced by the federal funds rate, which is set by the Federal Reserve. The Fed hiked this rate multiple times over the past few years in an effort to curb inflation. Lenders adjusted their refinance rates in response, which made it more expensive to borrow money.

The good news is that rates have started to come down. The Federal Reserve dropped the federal funds rate a few times starting in September 2024, resulting in a rate decrease of a full percentage point. Currently, rates seem to be holding steady, though that could change in the coming year.

The interest rate you get when you refinance also depends on your financial profile. Lenders offer the lowest rates to borrowers with the strongest finances, which typically means a high credit score, stable income, and low debt-to-income (DTI) ratio.

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How to Know If Refinancing Still Makes Sense in a High Rate Climate

Refinancing student loans in a high-interest environment could still make sense if it would save you money. Although today’s rates are higher than they used to be, they may still be lower than your current rates. Even a decrease of one percentage point could lead to savings on your student debt.

Many lenders let you check your rates without impacting your credit score through prequalification. If you can find a better rate than you have now, refinancing may be worthwhile. Use a student loan refinancing calculator to crunch the numbers on your potential savings.

You may also refinance student loans to adjust your repayment timeline. You can typically choose terms between five and 15 or 20 years. A longer term could make your monthly payments more manageable — however, you may pay more interest over the life of the loan with an extended term. A shorter term could save you money and get you out of debt faster, though your monthly payments would likely be higher.

If you have federal student loans, you might also consider consolidating them and choosing a new repayment plan. Learn more about student loan consolidation vs. refinancing to decide which option might be the right choice for you.

Strategies to Navigate a High Rate Environment

A high-rate environment isn’t ideal, but there are strategies you can use to minimize interest costs and make informed decisions about your student loan debt.

Consider Waiting for Rates to Drop but With a Plan

If today’s rates are too high, you could wait for them to come down. While you wait, you could use this time to strengthen your financial profile. Take steps to strengthen your credit, pay down your debts, and build a stable income history. That way, you’ll be a stronger candidate for student loan refinancing when rates drop.

You might also start researching lenders and checking your rates through loan prequalification. Preparing now will help you hit the ground running when interest rates start to fall.

Locking in a Fixed Rate Now to Avoid Further Hikes

Interest rates can be unpredictable, and there’s always a chance they could climb again. If you have a variable rate on your student loans, it could go up over time, making your loans more expensive and the monthly payments unpredictable. Locking in a fixed rate now could protect you from this economic uncertainty.

Plus, you could always refinance again if rates drop. Many leading refinancing providers don’t charge fees to refinance student loans, so refinancing multiple times might be a smart move for some borrowers.

Exploring Shorter Loan Terms or Smaller Loan Amounts

Opting for a shorter loan term may also help you save on interest, though your monthly payments will typically be higher. Some lenders offer better student loan refinancing rates on shorter repayment terms.

Plus, a short term will help get you out of debt faster, limiting your overall interest charges. If you owe multiple student loans, you could consider refinancing only the high-rate loans that would benefit from refinancing now.

Benefits of Refinancing Despite Higher Rates

Refinancing student loans even when interest rates are high can have several potential benefits:

•   Save money: Refinancing student loans can save you money if you can get a better rate than you have now or pay off your debt faster.

•   Adjust repayment terms: A new repayment schedule could help you accelerate student loan repayment or cut your monthly payments if they’ve become unaffordable.

•   Combine multiple loans into one: If you have several student loans, you can combine them into one new loan, thereby simplifying repayment.

•   Transfer a parent loan to the student: Parent borrowers may want their child to refinance a student loan the parent took out in their own name to assume responsibility for the debt.

Risks of Refinancing During a Period of High Interest Rates

At the same time, refinancing student loans when interest is high has risks:

•   Lose federal protections: If you refinance federal loans, you’ll lose access to federal benefits, such as income-driven repayment plans, forbearance, and deferment.

•   Become ineligible for loan forgiveness: Refinancing federal loans means you’ll forfeit eligibility for federal forgiveness programs like Public Service Loan Forgiveness and Teacher Loan Forgiveness.

•   Have trouble getting approved: Lenders typically look for a strong credit score, stable income, and low DTI ratio. If your financial situation is shaky, you could end up with a high interest rate or have your refinancing application denied.

The Takeaway

A high-interest environment isn’t ideal, but it is still possible to reduce your current student loan rates through refinancing. If you’re considering whether now is a good time to refinance student loans, start by checking your rates through prequalification. Lenders like SoFi let you review offers with no commitment or impact on your credit score.

If you can get a good rate, you may want to consider refinancing. If not, focus on building your credit and financial profile so you’ll be a stronger candidate if rates drop in the future.

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.

FAQ

What is considered a high interest rate for student loan refinancing?

A high interest rate for student loan refinancing is one that’s higher than your current rates, as it could increase your costs of borrowing. Federal student loans currently carry rates between 6.53% and 9.08%, and private student loans start at about 5.00%, so a high refinancing rate would be one that’s even higher.

Should I refinance my student loans now or wait?

Whether to refinance student loans now depends on your situation. Refinancing now could make sense if you can qualify for a lower interest rate. You might also benefit from switching from a variable rate to a fixed rate through refinancing so your monthly payments and long-term loan costs are predictable. However, you might be better off waiting if you can’t qualify for a lower interest rate.

Can I refinance again if interest rates drop later?

Yes, you can refinance student loans again if interest rates drop in the future, as long as you meet a lender’s refinance loan approval requirements. Lenders look at your credit, income, debt-to-income ratio, and other factors when considering your application for student loan refinancing.

How do I know if I’m getting a good refinance rate right now?

You’re getting a good refinance rate if the rate is lower than your current rate and would save you money on your student loans. You can also check your rate against the lender’s current rate offerings to see if it falls on the low end of the range. Finally, you can shop around with different lenders to see if you might get a better rate with a new refinance loan from a new lender.

photo credit: iStock/gorodenkoff

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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