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Designed to help you cover life’s financial curveballs, an emergency fund is a stash of cash that can be kept in an array of places. One good option is a savings account that offers you convenient access to your money, a competitive rate on deposits, and minimal fees. This can be a much safer and less risky option than, say, keeping cash in a jar in your closet.

But that’s not the only alternative. Read on to learn more on this topic so you can decide where to put emergency funds.

Where to Keep Emergency Funds

There are a variety of places you can keep an emergency fund, which ideally amounts to at least three to six months’ worth of living expenses. When making a decision, it’s important to consider what works best for your lifestyle. And you’ll also want the security of knowing your money is safe, so it can be best to bank at a financial institution that is insured by the FDIC (Federal Deposit Insurance Corporation) or NCUA (National Credit Union Administration).

With that in mind, here are five possibilities you might consider when looking for the best way to store emergency funds.

1. Traditional Checking or Savings Accounts

You might consider keeping emergency savings in a traditional checking account or savings account at a brick-and-mortar bank. On the pro side, that could make it easier to access your money in an emergency. However, you may not get the best rate for your money. Also, checking accounts often don’t earn you any interest, and their accessibility can make it tempting to dip into the funds for something that isn’t a true emergency.

Traditional banks are not known for offering the highest annual percentage yields, or APYs, on savings accounts either. You’re also more likely to pay a monthly maintenance fee for a traditional savings account than one at an online bank.

Recommended: Emergency Fund Calculator

2. High-Yield Savings

High-yield savings accounts offer above-average rates on balances. For example, you might find a savings account with an APY that’s several times higher (or more) than the national average.

It’s more common to find high-yield savings accounts at online banks vs. traditional banks. That’s because online banks tend to have lower overhead costs so they’re able to pass on savings to their customers. You’re also less likely to pay a monthly fee for a high-yield savings account.

Of course, with an online bank, you won’t have branch banking access to your savings account. You may, however, be able to access your account via an ATM card or debit card, or by transferring funds to a linked account.

3. Bonds

A bond is a type of debt instrument. When you buy a bond, you’re agreeing to let the bond issuer use your money for a set time period. In return, the issuer agrees to pay interest back to you.

Bonds can be attractive since you can earn decent interest rates on savings. However, they’re not great for accessibility since you have to wait for the bond to mature to get your money back.

You could cash out a bond early but that might mean forfeiting some of the interest you could earn. So you may want to consider bonds for money that you’d like to invest, versus money that you might need to tap into for emergencies.

4. Certificate of Deposit (CD) Accounts

A certificate of deposit or CD is a time deposit account. When you put money into a CD, the bank agrees to pay interest on your balance over a set time period. Once the CD matures, you can either withdraw your initial deposit and the interest or roll it all over to a new CD.

CDs can be a reliable way to save, since interest rates are guaranteed. However, your money is locked in for the entire maturity term. If you need to break into a CD early, your bank may charge an early withdrawal penalty. That could cost you some or all of the interest earned.

If you’re interested in using CDs for emergency savings, you might consider a CD ladder. Laddering CDs means opening multiple CDs with different maturity terms. That way, you always have a CD maturity date on the horizon. CD laddering could also help you to capitalize on rising interest rates since you can roll expiring CDs into a new account with a higher APY.

5. Money Market Accounts

Money market accounts combine features of savings accounts with checking accounts. For example, you can earn interest on balances and you might also get a debit card or paper checks that you can use to access your money.

A money market account can offer flexibility since they’re easier to access than bonds or CDs. And you might find money market accounts at online banks that offer rates comparable to what you could get with a high-yield savings account or CD. However, read the fine print: There may be minimum account opening and balance requirements as well as monthly fees to be paid.

If you’re considering a money market account for your emergency fund, consider the fees. An online money market account might be preferable for minimizing what you pay in fees while getting a competitive rate. Remember, the best account for an emergency fund will be the one that suits your specific needs.

Recommended: Smart Ways to Manage Your Money

The Takeaway

Having an emergency fund can help you sleep easier at night if you know that you’re covered should an unexpected expense crop up. If you’re looking for the best emergency fund savings account option, you can start with your current bank then compare it to other banks. Look for a combination of high APY and low (or no) fees to make the most of your money.

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.

About the author

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.

FAQ

What type of account is the safest for emergency funds?

A bank account at an FDIC-member bank is the safest option for holding your emergency fund. FDIC insurance protects your deposits in the rare event that your bank fails. Accounts that can be FDIC-insured include savings accounts, money market accounts, checking accounts, and CD accounts. NCUA serves a similar function insuring credit union accounts. Both offer $250,000 coverage per depositor, per account ownership category, per insured institution.

Should I open a separate bank account for my emergency fund?

Opening a separate bank account for an emergency fund can be a good idea if you’re worried that you might be tempted to spend savings that are mingled with other funds. Having a separate savings account that’s linked to your checking account can allow for easy transfers. You’ll also continue earning interest until you withdraw the money.

Should emergency funds be kept in cash?

Keeping an emergency fund in cash can be problematic as it increases the risk of the money being lost or stolen. You’re also not earning any interest by keeping emergency funds in savings. What’s more, certain emergency expenses might need to be paid using a check or debit card, which would still require you to deposit your cash into a bank account at some point.

More from the emergency fund series:

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Emergency Fund: What It Is and Why It’s Important

How Much Money Should Be in Your Emergency Fund?

How to Build an Emergency Fund

Emergency Fund Calculator

When to Use Your Emergency Fund

Should You Ever Invest Your Emergency Fund?

>

Photo credit: iStock/dobok

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

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

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

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.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q225-015

If you have a retirement account or a life insurance policy, you’re probably familiar with the process of naming a beneficiary, but did you know that bank accounts can have beneficiaries as well?

The point of designating beneficiaries is to specify who will inherit your assets when you die. When you open a new bank account, you may have the option to add one or more beneficiaries. You can also typically name beneficiaries later, even years after you open the account. You can generally name a beneficiary for a checking account, savings account, certificate of deposit (CD), or money market account.

Naming beneficiaries to bank accounts is something you might consider as part of a broader estate plan. Read on to learn about the benefits of adding a beneficiary to a bank account and how to do it.

What Is a Beneficiary?

A beneficiary is someone who’s entitled to inherit assets from someone else. The types of assets that can allow you to name someone as beneficiary include:

•   Life insurance policies

•   401(k) plans and similar workplace retirement plans

•   Individual Retirement Accounts (IRAs)

•   Trusts

•   Bank accounts

Primary beneficiaries have first claim to assets. Contingent beneficiaries can be named to inherit assets should the primary beneficiary die or not be able to be located.

Beneficiaries can be a person, organization, or entity. For example, you might choose to add a non-profit organization as a beneficiary of a bank account. In that case, you would need to provide details about the organization rather than a person’s information.

Beneficiaries vs Writing a Will

A will is a legal document that allows you to specify how you’d like all the assets included in your estate to be distributed among your heirs after you pass away. You can also use a will to leave funeral or burial instructions or name a legal guardian for your minor children.

A beneficiary designation, on the other hand, assigns a person or party to receive benefits from a specific account or financial product, such as a checking account, savings account, retirement account, or life insurance policy. Beneficiary designations are unique to each asset and are managed by the institution or company that holds that asset.

Beneficiary designations generally supersede the intentions stated in a will. So, if you’ve named your spouse as beneficiary to your 401(k), for example, you wouldn’t be able to leave that asset to someone else in your will.

Should You Add a Beneficiary to Your Bank Account?

Bank accounts, including savings and checking accounts, typically allow you to name a beneficiary, and doing so is generally a good idea.

Naming a beneficiary for a bank account allows that person to inherit those assets once you pass away without having to go through probate. Probate is a legal process in which a deceased person’s estate is divided up among their heirs. Assets can be divided according to the terms of a will. If there isn’t a will, then state inheritance laws can determine what happens to the deceased’s estate.

Probate can be time-consuming and costly. Adding a beneficiary to a bank account allows them to sidestep all of that. Your beneficiary can collect the money in the account without a lengthy wait. They may need to verify their identity and provide a death certificate, but it’s a much simpler process than probate.

You might choose to add a beneficiary if you want to make sure that they’re able to access those assets right away. Your beneficiary designations for a bank account won’t affect your designations for life insurance policies, retirement accounts, or other assets.

Steps for Adding a Beneficiary to Your Bank Account

Banks typically don’t require or perhaps even request that you add a beneficiary to an account. It’s a good idea to check with your bank first to find out if you can add a beneficiary to a checking account or savings account. If so, the bank should be able to tell you what you’ll need to do next to do so.

Typically, the process works something like this.

1. Decide Which Accounts Will Have a Beneficiary

The first thing to consider is which accounts to name beneficiaries for. You might have a checking account, savings account, and money market account at the same bank, for instance. Since the accounts are separate, you’d have to decide which ones will have beneficiaries and whether the beneficiary for each one will be the same person.

You’ll need to tell the bank which bank account number or numbers you’re referencing when adding a beneficiary. It’s a good idea to double-check the number to make sure you’re giving the right account information.

2. Choose Your Beneficiaries

Next, you’ll need to decide who will be the beneficiary for your bank accounts. If you’re married, that might be your spouse. If you’re unmarried or widowed, you might choose to name one of your children, another relative, or a close friend.

Keep in mind that you may not be able to name minor children as beneficiaries. If you’d like to ensure that your bank account goes to a minor child, you may need to choose a trusted adult as the beneficiary and ask them to act on behalf of your child and to use the money for their benefit. Alternatively, you could set up a trust or custodial account for your child.

3. Update Your Beneficiary Preferences

The actual process for naming a beneficiary to a checking or savings account will vary by bank. At some banks, it may be as simple as logging in to online banking, navigating to your account settings, and entering your beneficiary’s information. That may include their name, address, date of birth, and Social Security number.

Other banks may require you to submit a beneficiary designation form, either online or in person at a branch. Again, you’d need to provide the beneficiary’s identifying information to add them to your account.

Note that adding a beneficiary designation does not grant that person access to your account during your lifetime. They would only be able to access the money in the account upon your death.

What Is a POD Account?

A payable on death or POD account is a bank account that has a named beneficiary. That beneficiary is entitled to automatically receive the assets from the account when the original account owner passes away. They do not have access to the account during the primary account owner’s lifetime.

Adding a beneficiary to a bank account effectively turns that account into a POD account. Creating a POD account allows your beneficiaries to bypass probate. You can name one or more beneficiaries for a payable on death account. In terms of how to create a POD account, you’d need to tell your bank that you either want to open a new account for that purpose or convert an existing account.

A POD beneficiary designation will override instructions left in a will. When there are multiple beneficiaries to a payable on death account, assets in the account are split between them equally.

How Marriage Impacts POD Accounts

Marriage can add a wrinkle to your will or estate planning efforts if you’re creating a POD account. If you live in a community property state, your spouse would be entitled to half of the assets in the account, excluding ones you owned before the marriage or ones that you inherited. If the account was jointly owned by you and your spouse, a named beneficiary cannot access the funds until your spouse dies.

Keep in mind that if you named your spouse as beneficiary to a bank account and you end up getting divorced, they would still be entitled to receive assets from the account. You’d need to contact your bank to update your POD beneficiary designations to make sure those assets go where you want them to once you pass away.

Alternatives to Adding a Beneficiary to Your Bank Account

Adding one or more beneficiaries isn’t the only option for making sure your loved ones have access to your bank accounts after your passing. You might also consider setting up a joint account with someone else or specifying how you want your bank accounts to be divided in your will. Setting up a joint bank account might be easier, though there are some pros and cons.

Opening a Joint Bank Account

Opening a joint bank account is something you might consider if you’d like the person you’d otherwise choose as a beneficiary to have access to the account while you’re alive. For example:

•   You might choose to set up a joint account with a spouse if you have a high level of financial trust between you.

•   If you’re unmarried, then you might choose to open a joint bank account with your adult child, a parent, or a sibling.

•   You might be asked to open a joint bank account with someone else if you’re assuming responsibility for managing their finances. For instance, an aging parent might want to set up a joint account so you can help them with managing bills.

Can you open a bank account for someone else? Yes, but only in limited situations. Generally, you can open a bank account for someone else if:

•   They’re a minor child.

•   They’ve granted you power of attorney.

Before opening a joint account, consider the relationship you have with the other person and how much control you’re comfortable allowing them to have. For instance, what if you’d like them to inherit the assets in your bank account but not be able to make withdrawals right now? You may be better off naming them as a beneficiary instead of opening up a joint account with that person.

Recommended: Joint Bank Accounts vs. Separate Bank Accounts in Marriage

The Takeaway

Do checking accounts have beneficiaries? Some of them do or can upon request. Whether you should add a beneficiary to your account will depend on your financial and personal situation.

If you want to ensure that a loved one can easily and quickly claim your checking, savings, or any other type of bank account after you die, it’s a good idea to add them as a beneficiary to the account. This ensures they will be able to claim the funds quickly and with minimal paperwork. If you want that person to be able to access your account while you’re alive, however, setting up a joint account might better suit your needs.

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

What if there is no beneficiary on a bank account?

If there is no beneficiary on a bank account and the account holder dies, the assets in the account will be combined with other assets from the estate during probate. All assets, including bank accounts, would then be distributed according to the terms of a will or, if there is no will, state inheritance laws.

How many beneficiaries can you have on one bank account?

Banks can decide whether to limit the number of beneficiaries you can have on a bank account. When naming multiple beneficiaries, keep in mind that they’ll each be entitled to an equal share of those assets. If you’d rather divide the account up differently, you may want to leave it to your heirs in your will instead.

How does a beneficiary receive their money?

A bank account beneficiary will typically need to verify their identity and the death of the account owner before receiving any money from the account. The bank may cut them an official check for the account balance or transfer the money to their bank account electronically.

About the author

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.

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

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

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

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.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.

SOBNK-Q225-003

There are several reasons why you might be denied a personal loan, ranging from a lower credit score or income than required to incorrect information on your application. No doubt about it, though: Being denied for a denied personal loan can add stress to your life when you expect money to come through.

Follow this guide to understand why personal loans are rejected and how to help improve your approval odds in the future.

Why Was My Personal Loan Rejected?

Here are some common reasons financial institutions reject personal loan applications. Any one of these, or a combination of factors, could lead to a personal loan application being denied.

•   Low income: Lenders may worry about your ability to repay a loan if your income is too low. However, most lenders don’t publish their requirements, nor do they always set specific cutoffs. In other words, it can be hard to know what earnings you need to show to secure a personal loan.

•   Variable income: If you don’t always have a predictable income (as may be the case with entrepreneurs, freelancers, and seasonal workers), a lender might also have concerns about your ability to repay your loan.

•   Unsteady work history: Another reason that lenders may feel you are not a good candidate for a personal loan is if you are in and out of the job market. For instance, a person who has been steadily employed at $60,000 per year could be perceived as more credit-worthy than someone who earned $100,000 for one year, was unemployed for six months, and then employed at $65,000 for nine months.

•   Low credit score: Your credit score can be one of the most important factors on a personal loan application. A poor credit score (below 580) can mean you’ve had difficulty repaying your loans on time (or at all) in the past, so a lender may deny your personal loan application. (Or, if approved, you may wind up with a higher interest rate on your loan than someone with a stellar score.) You can see if a prospective lender shares what credit score you need for a personal loan before applying to save time and energy.

•   High debt-to-income ratio: Your debt-to-income (DTI) ratio is the amount of debt you carry relative to your income. You can determine yours by adding up all your monthly debt payments and dividing that by your monthly income. Multiply that number by 100 to see if it comes in at no more than 43%, which many lenders use as a qualification. The lower your number, the better.

•   Incorrect application information: Your application may include erroneous information, such as accidentally mixing up digits on an account number. This might be an easy fix when you reapply for your personal loan.

•   Not meeting lender requirements: It’s a good idea to ensure you meet all lender requirements before you apply for a personal loan, which at the basic level include having U.S. citizenship or permanent residency, government-issued ID, a Social Security number or individual taxpayer identification number, proof of income, and being at least 18 years of age.

•   Requested too much money: You may have requested more than the maximum amount your lender was willing to lend to you. They take into consideration the amount you can comfortably afford to repay based on your income and DTI.

•   Incomplete application: You may get denied simply because you didn’t complete your paperwork when applying for a personal loan. If so, next time around, consider going over your application extra carefully.

•   Loan purpose didn’t match lender criteria: Lenders often impose restrictions on how you use your loan. If you intend to use a personal loan as a student loan, for example, the lender may have restrictions against that and deny your loan application.

By the way, it’s worth noting that even if you were preapproved for a personal loan, you might still ultimately be denied. Here’s why: The preapproval process may not give your lender the full information they need to definitively approve the loan.

Recommended: Personal Loan Guide for Beginners

What to Do After You’ve Been Rejected for a Loan

If your personal loan application has been rejected, the lender must share what’s known as an adverse action notice, which reveals which information was used to make this decision. This can point you in the right direction about what may have triggered the denial and help guide you toward getting a personal loan in the future.

You might also check with your lender directly to find out why. If the rejection was due to an error on your application, you could potentially apply again and correct that mistake. (Check with your lender about any waiting period before reapplying.)

Can You Improve Your Loan Approval Chances?

If you were rejected for a personal loan, here are some ways you can improve the odds of being approved in the future.

Finding a Cosigner

Your lender may suggest you reapply within a short period of time with a cosigner. This would be someone with good credit who agrees to take ownership of the loan if you can’t repay it in full yourself. Keep in mind just what a big commitment this is for a cosigner: They must agree to be responsible for the debt if you default.

Checking Your Credit Report

Your credit report is a statement that contains information about your credit activity and reflects how well you’ve handled debt in the past. However, your credit report may contain erroneous information about your identity, account errors, debt duplication, and more.

You can get a free annual copy of your credit report from each of the three credit bureaus at AnnualCreditReport.com, by calling 877-322-8228, or via mail at Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. If you do find any mistakes, you can dispute them and potentially build your credit score.

Building Your Credit

If your credit score wasn’t high enough to qualify for a personal loan, you may want to check your lender’s requirements and reapply when you have a better credit score. There are several ways to build your credit:

•   Be meticulous about paying your bills on time.

•   Don’t apply for too many loans or credit lines in a short period of time.

•   Keep your DTI at no more than 43%, preferably lower.

•   Maintain credit accounts in good standing; length of credit history counts toward building your score.

•   Aim for a good credit mix. Having installment loans, say, as well as credit cards can help build your score.

Recommended: What Credit Score Do You Need for a Personal Loan?

When to Reapply for a Personal Loan

How soon you can reapply for a personal loan may vary depending on your lender and the reason why you were rejected. Some lenders may allow you to quickly reapply if you bring a cosigner on board, as noted above. Others may require you to wait up to 90 days before you apply again for a personal loan. Also, you may need to wait a period of time to, say, build your credit score to bring it in line with what a lender requires. That could take months.

Your lender can likely give you some suggestions about whether it makes sense to reapply quickly or wait a while.

Alternatives to Personal Loans

If you can’t get approved for a personal loan, here are some other funding sources to consider.

•   Credit cards: Credit cards are a definite alternative to personal loans, but if you don’t pay off your monthly balance, the interest rates are higher for these than personal loans. That could lead to you having significant credit card debt. Credit cards also work differently than personal loans; what you owe is based on the amount of credit you use and the interest charged, versus how a lump-sum personal loan is paid back.

•   Home equity loan: A home equity loan differs from a personal loan because you use your home equity (the difference between the home’s value and what’s owed on the mortgage) to secure the loan. This is critical to note: If you stop making payments, the lender can seize your home. In terms of how it works, you’ll receive the money in one lump sum and pay back principal plus interest monthly over the term of the loan.

•   Home equity line of credit (HELOC): A HELOC, just like a home equity loan, is secured by your home. However, it works like a credit card, allowing you to draw on your loan as much as you want through a withdrawal period. After that period, a HELOC enters the repayment phase.

•   Cash-out refinance: A cash-out refinance is a type of mortgage refinance that allows you to borrow more than you currently owe. You can take that difference in cash. Again, as with a home equity loan or HELOC, your property will serve as collateral. If you can’t make the payments, you could lose your home.

•   Peer-to-peer loan: These loans, which bypass traditional lenders, are also called “crowdfunding loans” or “social lending loans.” They differ from loans from financial institutions because multiple investors fund them. Peer-to-peer loans may offer an alternative to individuals who can’t get loans from traditional lenders. Some peer-to-peer lenders include Prosper and Upstart.

As you consider these options, it’s important to shop around and compare interest rates and repayment terms before you make a decision.

Recommended: Personal Loan Requirements to Get Approved

The Takeaway

If you’re denied for personal loans, it could be due to low or variable income, your credit score, or other factors. It’s important to consider your options, whether reapplying or finding an alternate source of funding, so you can find the best fit for your finances.

Shopping for a personal loan? See what SoFi offers.

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

Why do I keep getting denied for a small loan?

The reasons for a personal loan denial can vary. Low income, a poor credit score, and other factors may be to blame. Often, however, you can gain insight about why your application was not approved and then work to secure funding in the future. If you are applying often for various forms of credit, that could be one reason why lenders are wary.

How can I get a loan when I can’t get approved?

If you’ve been turned down for a personal loan, you might be able to bring on a cosigner and get approved. Or you could consider waiting and applying for a personal loan with a stronger application package. You can also seek a different form of funding, such as a home equity loan or a peer-to-peer loan.

How hard is it to get a $30,000 personal loan?

You may qualify for a $30,000 personal loan if you meet the requirements, which often include having a credit score of at least 580 to qualify and above 700 for more favorable terms.

About the author

Melissa Brock

Melissa Brock is a higher education and personal finance expert with more than a decade of experience writing online content. She spent 12 years in college admission prior to switching to full-time freelance writing and editing. Read full bio.

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

SOPL-Q324-009

The monthly cost of a $150K mortgage will vary depending on the type of loan, the interest rate, and the length of the loan. Mortgage loan terms are typically either 15 years or 30 years. The monthly payments for a 15-year loan are significantly higher than those for a 30-year loan; however, the lifetime cost of a shorter loan term is usually lower because, overall, you will pay less interest.

There are also additional costs to consider, such as private mortgage insurance (PMI) charged on some loans, condo or HOA fees, and any hazard insurance that may be required because of the location of the home. Here’s a look at how much a $150,000 mortgage might cost per month for a 15-year and 30-year loan term.

Total Cost of a $150K Mortgage

A $150,000 30-year mortgage with a 6.00% interest rate costs around $900 a month. The same loan over 15 years costs around $1,266 a month. However, these are just estimates; the exact costs will depend on your loan’s term and other “hidden” costs.

The monthly payment includes the principal and interest, but if you’re a a first-time buyer, you may not realize that escrow, taxes, and insurance might be additional line items. There are also upfront costs, or closing costs, that are paid when the purchase is initially finalized.

Upfront Costs

Upfront costs are the costs you pay once your offer on a home has been accepted. They are typically called closing costs, and some of them might be covered by your down payment.

Earnest Money

Also known as a good faith deposit, this is the money you put down to show the seller you are serious about buying their property. The amount will differ based on the price of the home.

Down Payment

Your down payment will likely be the biggest upfront cost you will have. The amount will vary depending on your lender, but typically it will be between 3% and 20% of the cost of the house. The more you can afford as a down payment, the lower your total loan will be, and the less you will have to pay each month in principal and interest. The following are the typical minimum down payments for the various types of home loans:

•   Conventional loan with mortgage insurance: 3%

•   Conventional loan without mortgage insurance: 20%

•   Federal Housing Administration loan: 3.5%

•   Veteran Affairs loan: 0%

•   U.S. Department of Agriculture loan: 0%

Closing Costs

The lender that makes your mortgage loan will charge administration fees, including the origination fee, underwriting fees, and application fees. You can also expect to pay taxes associated with transferring the title on the property, and you may need to pay for the cost of the home’s appraisal at the closing as well.

Bear in mind that your mortgage lender may want to see that you have enough money in your bank account to pay for at least two months of mortgage payments after paying closing costs and the down payment. This amount is called “reserves.” It’s not something that you will have to pay, but it is an amount you may need to show will be available to you after you have paid other expenses.

Long-Term Costs

The biggest long-term cost of buying a home is usually the monthly mortgage payment, which includes a portion of the principal (the amount you borrowed) plus the interest. Here are some other costs you can expect:

Property Taxes

The seller or their real estate agent should be able to give you a sense of what the annual property taxes will be on your new home, although taxes may change annually.

HOA, Condo, or Co-op Fees

Some homes are part of a condominium association, a co-op, or a Homeowners Association (HOA). Homeowners pay a monthly fee and receive benefits, such as grounds maintenance, use of a community center, or snow removal. These fees can range anywhere from $100 to $1,000 a month or more, depending on the association and location.

Home Upkeep

Home repair costs are highly variable but as a general rule you can expect to pay out around 1% of the home’s value each year for routine maintenance.

Insurance

You will of course need to insure your new home and its contents. You might also need to purchase hazard insurance if your area is at high risk for floods, earthquakes, wildfires, severe storms, or other natural disasters. The cost of hazard insurance can be between 0.25% to 0.33% of the home’s value for a year-long policy.

If you paid a smaller down payment, your mortgage lender may also require you to pay monthly private mortgage insurance (PMI) because you are considered a higher risk.

Recommended: Home Loan Help Center

Estimated Monthly Payments on a $150K Mortgage

The table below shows the estimated monthly payments for a $150,000 mortgage loan for both a 15-year and a 30-year loan with interest rates varying from 4% to 8%.

How Much Interest Is Accrued on a $150K Mortgage?

The amount of interest you pay on a $150,000 mortgage will depend on the length of the loan and the interest rate. For a 15-year loan with a 6.00% interest rate, the interest would amount to around $77,841 over the life of the loan. For a 30-year loan with a 6.00% interest rate, the interest would amount to $173,755, which is more than double.

$150K Mortgage Amortization Breakdown

An amortization schedule for a mortgage loan tells you when your last payment will be. It also shows you how much of your monthly payment goes toward paying off the principal and how much goes toward paying off the interest. Most of your payment will be used to pay off the interest early on in the loan term.

Below is the mortgage amortization breakdown for a $150,000 mortgage with a 6.00% interest rate for a 30-year loan.

SoFi offers a mortgage calculator that shows the amortization of a property of any value and for any down payment or interest rate.

What Is Required to Get a $150K Mortgage?

Getting any mortgage usually requires both an adequate income and a large enough down payment. This home affordability calculator shows you how much of a mortgage you can afford based on your gross annual income, your monthly spending, your down payment, and the interest rate.

The Takeaway

The payments on a $150,000 mortgage will depend on the term of the loan and the interest rate. As a general rule, the shorter the term of the loan, the less interest you will pay over its lifespan.

In addition to your $150,000 mortgage payment, you can also expect to pay upfront closing costs and additional costs over the years that you are a homeowner. SoFi’s home loan help center has information and calculators that can help you decide what size of a mortgage you can afford considering the upfront and hidden costs. There are special considerations — and special mortgage assistance programs — if you are a first-time buyer.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

What will monthly payments be for a $150K mortgage?

Your monthly payment for a $150,000 mortgage will depend on the interest rate and the term of the loan. The payment for a $150,000 30-year mortgage with a 6.00% interest rate is approximately $900. The same loan over 15 years costs $1,266 each month.

How much do I need to earn to afford a $150K mortgage loan?

Assuming you go with a 30-year mortgage at an interest rate of 6.00%, you would need to earn about $50,000 a year in order to cover your mortgage plus insurance and property taxes. (As a general rule, lenders recommend these costs not exceed 28% of your gross earnings.)

How much down payment is required for a $150K mortgage loan?

The down payment you are expected to pay on a home depends on the lender. The more you pay upfront, the lower your loan amount and the lower your payments will be. Conventional wisdom says your down payment should be 20%. Some lenders will accept a down payment as low as 3%, but you may have to purchase private mortgage insurance.

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

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SOHL-Q225-004

As your child enters the “getting into college” phase of their lives, there’s a lot to talk about, from whether it’s better to take the SAT or ACT to how many schools they should apply to. At the same time, it’s important to discuss how your family is going to pay for college and, if debt will be part of the equation, how student loans work.

For one reason, the topic is pretty complicated. For another, even if you plan to help repay any student loans, most qualified education loans are taken out in the student’s name, which means they are personally on the hook for repayment. Maybe your student-athlete or scholar is counting on a full ride. While confidence is a wonderful thing, full rides are exceedingly rare.

Here are six student loan concepts you can discuss with your aspiring college student.

1. Here’s What We Think We Can Contribute

It might be uncomfortable to talk frankly about your family finances, but they almost always determine the amount and types of financial aid your child may qualify for.

It can be important for parents to discuss what they’re able to contribute in order to help their young adults wrap their heads around the numbers, too. How much debt they may need to take on to pay for college could impact where they choose to apply to school, since tuition costs vary widely.


💡 Quick Tip: When shopping for a private student loan lender, look for benefits that help lower your monthly payment.

2. Let’s Forge Ahead With the FAFSA

The first step to hunt for financial aid is to complete the Free Application for Federal Student Aid (FAFSA). While this form has a reputation for being long and complex, a new streamlined FAFSA is being released for the 2024-25 academic year. The new form is scheduled to become available by Dec. 31, 2023 — a delay from the typical Oct. 1 release date.

Based on financial need, a college’s cost of attendance, and FAFSA information, schools put together a financial aid package that may be composed of scholarships and grants, federal student loans, and/or work-study.

Awards based on merit (scholarships) or need (grants) are considered “free money” for college. When they don’t cover the full cost of college, that’s where student loans can come in.

If your income is high, should you bother with the FAFSA? Sure, because there’s no income cutoff for federal student aid. And even if your student is not eligible for federal aid, most colleges and states use FAFSA information to award non-federal aid.

3. Interest Rates: Fixed or Variable

Your soon-to-be college student may not know that there are two types of interest rates for student loans: fixed and variable.

Fixed interest rates stay the same for the life of the loan. Variable rates go up or down based on market fluctuations.

You can explain that all federal student loans have fixed interest rates, which are set each year by the federal government, and that private student loan interest rates may be variable or fixed.

4. Federal vs Private Student Loans

Around now your young person is restless. But press on.

Anyone taking out student loans should learn that there are two main types: federal and private. All federal student loans are funded by the federal government. Private student loans are funded by banks, credit unions, and online lenders.

If your child is going to borrow money for college, it’s generally advised to start with federal student loans. Since federal student loans are issued by the government, they have benefits, including low fixed interest rates, forbearance and deferment eligibility, and income-based repayment options.

Private student loans have terms and conditions set by private lenders, and don’t offer the generous repayment options or loan forgiveness programs of federal loans, but some private lenders do offer specific deferment options.

Private student loans can be used to fill gaps in need, up to the cost of attendance, which includes tuition, books and supplies, room and board, transportation, and personal expenses. A student applicant often will need a cosigner.

5. Another Wrinkle: Subsidized vs Unsubsidized

Financial need will determine whether your undergraduate is eligible for federal Direct Subsidized Loans. Your child’s school determines the amount you can borrow, which can’t exceed your need.

The government pays the interest on Direct Subsidized Loans while your child is in college, during the grace period (the first six months after graduation or when dropping below half-time enrollment), and in deferment (postponing repayment).

With federal Direct Unsubsidized Loans, interest begins accruing when the funds are disbursed and continues during grace periods, and the borrower is responsible for paying it. Direct Unsubsidized Loans are available to both undergraduate and graduate students, and there is no requirement of financial need.

Borrowers are not required to pay the interest while in school, during grace periods, or during deferment (although they can choose to), but any accrued interest will be added to the principal balance when repayment begins.

There are annual and aggregate limits for subsidized and unsubsidized loans. Most dependent freshmen, for example, can borrow no more than $5,500, and no more than $3,500 of this amount may be in subsidized loans.


💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.

6. Soothing Words: Scholarships and Grants

It’s important to not overlook the non-loan elements of the financial aid package. They can (hooray) reduce the amount your student needs to borrow.

Scholarships and grants are essentially free money, since you are not required to pay the money back. While some schools automatically consider your student for scholarships based on merit or other qualifications, many scholarships and grants require applications.

You may want to assign a research project to your college-bound young adult to look into all of the scholarship options they may qualify for. There are numerous scholarship finders available online. They may also want to talk to their guidance counselor and the financial aid office of their chosen school to learn about opportunities.

The Takeaway

Debt isn’t the most thrilling parent-child topic, but college students who will need to borrow should know the ins and outs of student loans: interest rates, federal vs. private, subsidized vs. unsubsidized, and repayment options.

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.

About the author

Julia Califano

Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.

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

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).

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

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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