SoFi

When you want to improve your income potential or change your career to offer your kids more opportunities, you’ll have to manage a myriad of responsibilities — possibly with a full course load to boot. Going back to college can demand a lot from moms physically, mentally, and financially.

The financial impact of going back to school as a mom can seem staggering, so consider scholarships for moms as one way to make an impact.

Keep reading to learn more on scholarships for moms, scholarships for single moms, and scholarships for working moms. We’ll also walk through how to find these scholarships and look into other ways of paying for college.

Who Is Eligible for Scholarships?

Almost anyone can get a scholarship, but you must meet the eligibility requirements set forth by the scholarship guidelines. Some scholarships will require students to be independent students. Independent students are defined by the U.S. Department of Education as those who are:

•   At least 24 years old

•   Married

•   Graduate or professional students

•   Veterans of the U.S. armed forces

•   Active duty members of the armed forces

•   Orphans, those in foster care, or wards of the court

•   People who have legal dependents other than a spouse

•   Emancipated minors

•   Homeless or at risk of becoming homeless

However, non-governmental organizations may have other requirements. Therefore, it’s important to take a look at the qualifications for each individual scholarship.

Recommended: A Guide to Unclaimed Scholarships and Grants

Types of Scholarships for Moms

Nontraditional students interested in receiving financial aid should first submit the Free Application for Federal Student Aid (FAFSA®). Colleges and universities will receive the results of the FAFSA and use that information to inform their aid decisions. The FAFSA is the first step in applying for federal financial aid, including grants, federal student loans, work-study, and other institutional aid. These could help you offset the cost of tuition and other education-related expenses. The FAFSA must be filled out each year the student is enrolled in school.

Other scholarships may require you to apply independent of the FAFSA — that is, the results of the FAFSA may not matter. However, many mom scholarships may require you to prove that you earn a low income. (Low-income thresholds depend on the size of your family and number of children, according to the United States Census Bureau.)

You can tap into many types of scholarships for moms, including single mom scholarships, scholarships for working moms, and other types of scholarships for women going back to college, as outlined below.

Single Mom Scholarships

Yes, organizations offer scholarships for single moms! Take a look:

Soroptimist’s Live Your Dream Award

If you provide the primary financial support for yourself and your dependents, you can qualify for the Soroptimist’s Live Your Dream Award, as long as you show evidence of financial need. You must also enroll or be accepted into a vocational/vocational skills training program or undergraduate degree program and be motivated to achieve your education and career goals.

Applicants must live in one of the following Soroptomist territory countries: Argentina, Bolivia, Brazil, Canada, Chile, Colombia, Ecuador, Guam, Japan, Korea, Mexico, Northern Mariana Islands, Palau, Panama, Paraguay, Peru, Philippines, Taiwan, United States of America, or Venezuela.

Award amount: $1,000 to $10,000
Deadline: Application open from August 1 to November 15

Patsy Takemoto Mink Education Foundation for Low-Income Women and Children Education Support Awards

The Patsy Takemoto Mink Educational Foundation for Low-Income Women and Children
Education Support awards offer college scholarships for single moms to low-income women with children who are pursuing education or training.
​
The criteria for the award state that you must:

•   Be a woman at least 17 years of age.

•   Be a mother with minor children.

•   Pursue your first degree at a post-secondary education level (vocational, associate’s, bachelor’s, master’s, or doctoral degree) — this degree must add to the level of education accomplished (such as a bachelor’s degree after an associate’s degree or an advanced degree after a bachelor’s degree).

•   Pursue a degree or credential at an institution that does not discriminate on the basis of sex/gender, LGBTQ+ status or identity, race or ethnicity, religion, disability, or immigration status.

•   Enrolled in a nonprofit, accredited institution or program in the U.S.

•   Be low-income (earn less than $20,000 total in family income for a family of 2, less than $24,000 for a family of 3, or less than $28,000 for a family of 4).
​
​​Awardees are selected based on financial need, personal circumstances, educational path, vocational and occupational goals, service/activist, and/or civic goals.

Award amount: $5,000
Deadline: Information about the 2024-25 application will appear in May 2024.

Rosenfeld Injury Lawyers LLC Single Mother Scholarship

Rosenfield Injury Lawyers LLC offers two scholarships to single mothers returning to school, one for a single mother who will attend an undergraduate or community college program and another for a single mother who will attend accredited law school.

To qualify, you must write a 500+-word essay about the advantages of returning to school while raising children and how motherhood has prepared you for the challenges of becoming a student. You must also:

•   Submit a copy of your transcript that displays your grade point average (GPA) — unofficial transcripts are accepted.

•   Authorize Rosenfeld Injury Lawyers LLC to post the material on its website and social media channels.

You may use the scholarship money for education-related expenses, including tuition and registration, textbooks, and other fees and supplies.

Award amount: $1,000
Deadline: TBD for the 2024-25 academic year


💡 Quick Tip: Fund your education with a low-rate, no-fee SoFi private student loan that covers all school-certified costs.

Scholarships for Working Moms

If you’re a working mom, you may want to first consider your current job’s scholarship opportunities. Some companies offer scholarships and/or education reimbursement for their employees.

Company foundations usually create scholarship programs for employees, employees’ children or relatives, or the children of deceased or retired employees. While not necessarily just geared toward working moms, they can still provide a major financial benefit of working and going to school. Visit your company’s human resources for more information about scholarships or other educational assistance you can qualify for. Note that some companies allow employees to take advantage of their education benefits right away, but yours may require you to work at your company for a specified length of time.

Take a look at the scholarship below, geared specifically for working moms.

Job-Applications.com Working Parent College Scholarship Award

Working parents currently in college or another accredited postsecondary educational institution can qualify for the Job-Applications.com scholarship by meeting specific criteria. You must:

•   Be enrolled as a part-time student who is in an accredited U.S. post-secondary educational institution (college, university, or trade school, or a similarly accredited program).

•   Have a current cumulative grade point average of 3.0 or higher at that institution.

•   Have worked an average of at least 12 hours for each of the previous four weeks during the application process.

•   Be a residential parent of at least one minor child.

•   Be a legal U.S. resident.

•   Be at least 18 years of age or older.

You must also submit a 600- to 1,000-word essay about the keys for balancing parenthood, working, and succeeding in college.

Award amount: $1,000
Deadline: TBD for the 2024-25 academic year

Scholarships for Moms Going Back to College

Moms pursuing graduate work may also need help finding grad school scholarships.

Society of Women Engineers Scholarship Program

Those who identify as a female/woman and who study at a community college, bachelor’s or graduate degree program with the intention of preparing for a career in engineering, engineering technology, or computer science may qualify for the Society of Women Engineers Scholarship Program .

To qualify, you must:

•   Plan to study at an undergraduate/community college or plan to get your master’s or Ph.D. at an ABET-accredited program.

•   Major in engineering, technology, or computing.

•   Must attend full time (though exceptions are made for reentry and nontraditional applicants).

•   Not be fully funded for tuition, fees, books, or the equivalent.

Award amount: $1,000 to $10,000
Deadline: TBD for the 2024-25 academic year

Chrysalis Scholarship

The Chrysalis Scholarship , funded by the Association for Women Geoscientists, helps women who experienced an interruption in their education due to raising children or other life circumstances and need financial help to obtain their graduate degrees in a geoscience-related field thesis or dissertation. The scholarship may cover drafting expenses, child care, defense travel, late-stage research and analyses, and more.

To qualify, you must:

•   Be a graduate student who has had an educational interruption due to life circumstances.

•   Approach the completion of your geoscience degree.

•   Plan to contribute to the geosciences and the larger world community.

Application materials include a letter of application in which you describe your background, career goals, and objectives, how you plan to use the scholarship, and the nature and length of the education interruption. You must provide letters of reference from your thesis/dissertation advisor and another scientist of your choice.

Award amount: $2,000
Deadline: TBD for the 2024-25 academic year


💡 Quick Tip: Even if you don’t think you qualify for financial aid, you should fill out the FAFSA form. Many schools require it for merit-based scholarships, too.

Applying for Scholarships for Moms

When you’re applying for scholarships, it’s important to get organized. Make a list of due dates on your calendar and estimate how much time it’ll take you to complete each application. Research scholarships early so you don’t miss out on scholarship opportunities.

Read the eligibility guidelines carefully. Contact the organization sponsoring the scholarship if you have specific questions related to eligibility. Some scholarships may not get many applicants, so if you meet almost all the requirements, ask if you can apply anyway. You might be pleasantly surprised to find that the committee or organization will allow you to apply.

Finally, follow all the instructions. Stick to the word limit for the essay and send supporting materials as requested.

Recommended: What a Merit Scholarship Is and How to Get One

Finding Other College Scholarships for Moms

Put your feelers out for every type of scholarship that might apply to you — they don’t even need to be strictly “mom-related.” If you qualify in another way, such as for your interest in zoology or criminology, keep those options open. Look into the following sources for scholarships, as well:

•   Colleges and universities: Colleges and universities offer many different types of scholarships and grants. Make an appointment with an admission counselor and/or the financial aid office to learn more about scholarships you can apply for at each institution you’re interested in attending.

•   Charity organizations: Look into organizations in your community, such as the local Rotary Club. You just might scoop up a few scholarships based on the organizations you know. Ask around!

•   Professional organizations: What do you plan to major in? Check to see if professional organizations of your chosen industry offer scholarships and grants. It’s also possible to get internships and careers from these professional organizations right out of the gate after graduation.

Recommended: How to Pay for College

Other College Financing Methods

You might need other sources of financial aid to close the cost gap after scholarships for college are factored in. Generally, the first step, as mentioned, is filling out the FAFSA. The FAFSA is completely free and offers other financial aid beyond scholarships, including need-based and non-need-based federal financial aid.

Other options for paying for college include:

•   Federal grants: Students who demonstrate financial need may qualify for federal grants. You do not need to pay these back. For example, you could qualify for a Federal Pell Grant or the Teacher Education Assistance for College and Higher Education (TEACH) Grant. Take a look at the eligibility requirements to determine whether you qualify.

•   Federal student loans: You may qualify for federal student loans through the U.S. Department of Education and through the William D. Ford Federal Direct Loan Program. Direct Unsubsidized Loans are non-need-based, while Direct Subsidized Loans are awarded to students who demonstrate financial need.

•   Private student loans: Federal student loans, scholarships, and other funding sources may not fully cover the cost of attendance for students. In that case, students may tap into private student loans. However, private student loans do not have the same benefits or borrower protections as federal student loans (like deferment options or the ability to pursue certain federal loan forgiveness programs). For this reason, private student loans are generally pursued only after all other options have been thoroughly considered.

Recommended: Types of Federal Student Loans

The Takeaway

Scholarships for moms going back to college is one way to help fund your degree. You can find scholarships by asking your college or university about their options, looking into your local community, asking professional organizations in your field, and using an online scholarship search tool. Other options for paying for college include federal student loans, grants, and work-study.

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.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

---

Photo credit: iStock/Portra

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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.

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

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOIS0124018

Read more

The IRS divides income into taxable and nontaxable categories. In general, income is taxable unless there’s a law exempting it.

As you’d expect, all taxable income must be included on your yearly income tax return. But here’s the twist: Nontaxable income may also need to be listed on your return, too.

Because anything tax-related is complicated, we’ll show you some examples of taxable and nontaxable income.

What Is Nontaxable Income?

You might think that nontaxable income is money that you can plausibly leave off your tax return. However, that’s not the case. Nontaxable income won’t be taxed even if you include it on your tax return. On the flip side, leaving income off your tax return won’t shield you from taxes. It just means you’ll be liable for those taxes, plus late fees and penalties, when the IRS figures it out — and they usually do. For questions about your specific income tax liabilities, consult an accountant or tax advisor.

Nontaxable Income Examples

The IRS provides a chart on nontaxable income limits — or how much you need to earn before you’re required to file an income tax return. For example, a single person age 65 or over can earn up to $15,700 without needing to file a federal tax return. A head of household under age 65, meanwhile, can earn up to $20,800 without needing to file.

There are many other types of income besides what appears on a W-2 or 1099. Here are examples of income that’s nontaxable, even if you might think otherwise.

•   Inheritances and bequests. Money and other assets you inherit are typically exempt from federal income tax. That’s because any taxes are levied before the estate is settled, and the threshold for estate taxes is high: $13.61 million in 2024.

•   Cash gifts. In 2024, gifts up to $18,000 are excluded from taxes. Above that, the gift giver typically pays the tax.

•   Rebates. This refers to cash you receive back from a retailer, manufacturer, or dealer.

•   Life insurance payouts. If cashed in after someone dies.

•   Scholarships. If used to pay school tuition and fees. However, when the funds are used to pay for room and board or personal expenses, they may be taxable.

•   Alimony for divorces finalized after 2018, and child support payments.

•   Welfare payments

💡 Quick Tip: Online tools make tracking your spending a breeze: You can easily set up budgets, then get instant updates on your progress, spot upcoming bills, analyze your spending habits, and more.

How Taxable Income Works

All taxable forms of income must be listed on your IRS return and will count toward whatever tax bracket you’re in.

Taxable income can include funds that aren’t yet in your bank account, such as when a check arrives but you don’t cash it during the tax year. The IRS offers examples of this to provide clarity. For instance, if your mail carrier tries to deliver a check to you on the final day of the tax year but you “are not at home to receive it,” that counts as income for the current year. If the check was mailed but couldn’t reach you during the tax year, that money goes toward next year.

Types of Taxable Income

Taxable income comes in three forms: money, property, and services. Money includes wages, salaries, self-employment income, and commissions; royalties, strike pay; rental income; and alimony if the divorce was finalized before 2019. Stock market gains are another example of taxable income.

Fringe benefits are typically taxable. This category could include a company vehicle, holiday gifts from your employer in cash or gift certificate form, an off-site gym membership, or childcare services.

Nontaxable vs Taxable Income

Putting money away for retirement often involves depositing funds into a tax-sheltered account to benefit from the IRA or 401(k) tax deduction. With these accounts, there’s a tax impact when you make your contributions or withdraw your money but not at other times. These retirement accounts come with annual contribution limits, though, so you may decide to invest in taxable accounts when those limits are reached.

When opening a taxable brokerage account, the goal is tax-efficient investing instead of the tax-deferred investing that happens with an IRA or 401(k). This can include investing into long-term stocks or municipal and treasury bonds.

Recommended: What Is a Taxable Account?

Examples of Income That Is Both Taxable and Nontaxable

If your employer pays for your tuition, it can be nontaxable. But if it goes over a certain amount, it can become taxable. The same is true with employer-paid group life insurance. You may also want to take a close look at the category of “unearned income.”

Unearned income is passively earned income that you make without working. This can include retirement distributions, Social Security benefits, interest from bank accounts, stock dividends, and so forth. It also includes debt cancellation or forgiveness, which can be taxable or nontaxable, depending whether it was canceled or forgiven for less than the amount due.

How to Reduce Your Tax Liability

Reducing taxable income makes good sense. Some strategies to consider include:

•   Choosing the right filing status

•   Maxing out your retirement contributions

•   Deducting qualified health care expenses

•   Opening a 529 savings plan if your children may attend private school or college

Another strategy is to reduce or avoid capital gains tax. You can do that a few ways:

•   Donating appreciated shares of stock. This applies when you have held the stock for more than a year.

•   Selling stocks at a loss to offset capital gains, which can reduce your taxable income.

•   Investing in property via a Qualified Opportunity Fund. You can temporarily defer paying taxes on your gains.

Each of these strategies can be complex, and professional help is recommended.


💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

The Takeaway

The IRS divides income into taxable and nontaxable categories. With the second, the income may or may not need to be listed on your federal tax return, even though taxes aren’t owed. Some common forms of nontaxable income include inheritances, cash gifts of $18,000 or less, scholarships that cover school tuition and fees, alimony, child support, and welfare payments.

Taxable income can be “earned” on the job, as with wages, salaries, and commissions. Unearned income is the term for passive revenue, such as stock gains in taxable accounts, interest on savings, and benefits you receive from your employer. To prepare for tax time, it can help to have a quality money tracker app that gives you high visibility into what you’ve spent.

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

See exactly how your money comes and goes at a glance.

FAQ

What is an example of nontaxable income?

Nontaxable income examples include child support payments and, as of 2019, alimony. Other examples include inheritances (which may be taxed in other ways) and cash gifts from friends or family. Contributions to an IRA may be partially or fully tax deductible, depending on your income and filing status. The funds would be taxed only when you make a withdrawal.

What are some examples of income that is taxable?

Money earned through a salary, wages, and self-employment income are some of the most common types of taxable income. Other types include royalties, commissions, rental income, and strike pay.

What are four items that are taxable income?

Wages, salaries, self-employment income, and commissions are four commonly applicable forms of taxable income.

---

Photo credit: iStock/andresr

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

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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.

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.

SORL0124018

Read more

Saving up enough money for a down payment on your first home is a major life goal. But sometimes it feels like the goalpost is always moving. How much do you need to save for a down payment, exactly? Friends say they put down 10%. Your parents talk about a 20% benchmark. And some programs allow borrowers to put down just 3%.

Bottom line: There are traditional numbers that many people stand by, but these days, the old guidelines don’t always apply. And that’s a good thing, given that at the end of 2023, the median home listing price in the U.S. was $384,683, according to Zillow. Twenty percent of that —almost $70,000 — is a substantial chunk of change for most people.

This article will demystify how different down payment amounts can impact your mortgage choices and help you better identify the home mortgage loan that bests fit your financial scenario to put you on the road to owning your own home.

Why Does a 20% Down Payment Seem like the Magic Number?

If you’re thinking about buying your first home, you’ve likely heard that a 20% down payment has traditionally been the standard. Generally speaking, putting down this much on your new home helps lenders view you as a less risky borrower, which may ultimately help you get a better deal on your loan terms.

In addition, having this significant chunk of equity in the home allows for value fluctuations and the borrower is less likely to find themselves underwater or upside down on their mortgage in a declining market.

Plus, with a 20% down payment, you won’t have to buy private mortgage insurance (PMI). PMI protects the lender in case of loan default but it can cost anywhere from 0.140% to 2.33% of your total loan amount annually depending upon many factors. (Don’t confuse PMI with MIP, which is the Mortgage Insurance Premium required by the Federal Housing Administration on its FHA loans.)

And then there’s the most obvious perk of a 20% down payment: Putting more money down up front means that you’ll owe less, which normally equates to lower monthly mortgage payments and less interest charged over the life of the loan.

But let’s face it: Even if you’re making a decent — heck, a pretty awesome — salary, saving up 20% of the total cost of a home can be difficult, especially if you’re paying rent, juggling student loans, and trying to reach other long-term goals, including saving for retirement. That’s likely why many buyers put down less than 20%. In the 2023 National Association of Realtors® Profile of Home Buyers and Sellers report, first-time homebuyers financed an average of 92% of their home’s cost and repeat buyers financed 81% of the purchase price.

There may be some very valid reasons why it would be beneficial for you to put down less than 20% on your dream house. Again, it will depend on your exact financial circumstances and long term goals, but it could be worth considering the following:


💡 Quick Tip: SoFi’s Lock and Look ⁺ feature allows you to lock in a low mortgage financing rate for 90 days while you search for the perfect place to call home.

Preserving Your Nest Egg

Putting 20% down on a home might force you to rely heavily on funds you’ve worked hard to save, and liquidating these funds, even for an investment like a home, may not always be in your best interest.

Allocating a big chunk of change to a house before you’ve covered your other important life expenses — such as an emergency fund equal to at least three months of expenses — may not be the most prudent option for you in the long run. (You’ll also want to make sure you keep in reserve funds for closing costs and any moving expenses and furnishing expenses associated with purchasing a home.)

And then there’s retirement savings: You may be able to borrow money to pay for school, to buy a new car, and to buy a home, but you definitely can’t borrow money to pay for your retirement. So you may want to consider alternatives before you dip too deeply into your retirement savings.

While you can withdraw qualified funds up to $10,000 from a traditional or Roth IRA without penalty to buy your first home, there are still taxes to consider. With a traditional IRA, you have to pay taxes on the amount you withdraw, but with a Roth IRA, no taxes will be due if you’ve had the account for at least five years. Taking the $10,000 could help you in the long run, especially if you expect income boosts as you make strides in your career.

If you are considering putting other financial goals on hold in order to buy your home, it might make sense to take a step back and look at your overall financial profile. This could help you see what makes the most sense for your circumstances. Our in-depth first-time homebuyer guide extensively covers such topics.

Protecting Your Other Big Financial Goals

By putting less money down on your home, you’ll likely be able to make more headway on other short-term financial goals, such as paying off student loans and credit cards, as well as your long-term goals, such as saving up for retirement.

You may also be able to invest more, which could help you grow your hard-earned cash. If you have other important financial goals that need achieving, you may want to consider waiting until you’ve reached them before buying a home, or you could choose to put less money down so that you don’t have to abandon your other financial objectives.

Exploring Your Down Payment Options

If you’re considering putting down less than 20%, it is a good idea to try plugging different down payment amounts into a home affordability calculator to see how they affect your monthly payments. Also take a look at your monthly income vs. your ongoing monthly expenses — which could include car payments, insurance premiums, credit card bills, and any other debts.

Mortgage lenders, whether banks or mortgage brokers, are required to figure out a borrower’s ability to repay the loan before making it. So you can also get prequalified for a home loan in order to see what type of interest rate and borrowing power a lender might feel you qualify for based on your income, expenses, and estimated down payment.


💡 Quick Tip: Don’t have a lot of cash on hand for a down payment? The minimum down payment for an FHA mortgage loan is as low as 3.5%.1

The Right Down Payment Percentage is Personal

Everyone’s financial picture looks different, so if you find yourself in a situation where you can’t afford to put down a full 20% but still want to purchase a home, there are numerous options. If you’ve done your homework and gotten prequalified, you know how your down payment might affect your loan terms. You can also look into whether or not you are eligible for a VA loan, backed by the U.S. Department of Veterans Affairs, which allows for 100% financing? Or perhaps you qualify as a first-time homebuyer, which may allow for as little as 3% down? (You might be surprised to learn that if you haven’t owned a primary residence in the last three years, you are considered a first-time homebuyer.)

An FHA loan could also be an option. Borrowers with FICO® credit scores of 580 or more may qualify for a down payment of 3.5%. You will have to pay the FHA mortgage insurance premium (MIP), mentioned above, but it could be worth it, especially if putting down a smaller down payment allows you to get in the housing market instead of paying high rent, or own in a place where home prices seem to be on an upward trajectory.

The Takeaway

When searching for the perfect home, you’ll want to shop around in order to find your best fit — there’s no one size fits all. The same is true of your down payment percentage. But rest assured, although a 20% down payment might be tradition, it’s hardly a loan requirement, and there are many home loans that will allow you to put down less than 20% — and many financial circumstances in which a lower down payment amount is the right choice.

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.

SoFi Mortgages: simple, smart, and so affordable.

---

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 for more information.

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

⁺Lock and Look program: Terms and conditions apply. Applies to conventional purchase loans only. Rate will lock for 91 calendar days at the time of preapproval. An executed purchase contract is required within 60 days of your initial rate lock. If current market pricing improves by 0.25 percentage points or more from the original locked rate, you may request your loan officer to review your loan application to determine if you qualify for a one-time float down. SoFi reserves the right to change or terminate this offer at any time with or without notice to you.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOHL0124026

Read more

Applying for a student loan consolidation can take approximately 30 minutes for borrowers who have their financial information on hand, according to the Federal Student Aid website. Repayment of the consolidated loan usually begins within 60 days after the loan is disbursed.

When you need to simplify your monthly student loan payments, you don’t want to waste a minute. Let’s cover the definition of consolidation, examine how long it takes to consolidate student loans, and go over the steps in the student loan consolidation process. We’ll also discuss whether it’s possible to speed up how long student loan consolidation takes.

What Is Student Loan Consolidation and How Does It Work?

“Consolidation” is just a fancy word for combining, and that’s a great first step to understand how student loan consolidation works. If you have multiple federal loans, you can combine them into a single loan using a Direct Consolidation Loan. After a free application process, consolidation gives you a single monthly payment instead of multiple bills.

A Direct Consolidation Loan may lower your monthly payment by giving you a longer repayment period (up to 30 years) or access to income-driven repayment plans — but not by lowering your interest rate. The rate you receive will be a weighted average of your prior loan rates, rounded up to the nearest ⅛ of a percent.

You can consolidate most federal student loans, including the following:

•   Direct Subsidized Loans

•   Direct Unsubsidized Loans

•   Direct PLUS Loans

•   Parent Loans for Undergraduate Students

Check the Federal Student Aid website for a complete list of qualified loans.

How do you consolidate your student loans?

•   Gather your loan records, account statements, and bills so you have everything in front of you to complete the Direct Consolidation Loan Application and Promissory Note.

•   Fill out borrower information, such as your name, address, and Social Security number, as well as the names of two adult references.

•   Next, you’ll enter the loans you want to consolidate (including requested information and codes) as well as the loans you don’t want to consolidate.

•   You’ll also walk through how you want to repay your loans and review the borrower understandings, certifications, and authorizations. Finally, sign the note, which promises that you’ll repay your loans.

How Long Does Student Loan Consolidation Take?

The federal Direct Consolidation Loan application process takes approximately six weeks from the day it is submitted. Consolidating private student loans — called refinancing – typically takes less time. Read on for details.

Federal Loans

Federal student loans come from the federal government through the U.S. Department of Education. Terms and conditions are set by law, including the interest rate.

To consolidate federal student loans, you first must fill out the Federal Direct Consolidation Loan Application and Promissory Note, which should take about 30 minutes to complete. From there, the process of consolidation takes approximately six weeks. Borrowers can check the status of their application at StudentAid.gov.

Until the consolidation process is complete, you must continue to make payments on your current loans. Once the servicer determines your loans are eligible for consolidation, you may begin paying your new loan instead.

Private Loans

Private student loans, unlike federal student loans, originate from a private lender — a bank, online lender, or credit union. You cannot change private student loans into federal student loans through the federal loan consolidation process. You also cannot consolidate private and federal student loans together.

However, you can refinance private loans. Refinancing means switching to a private lender to get a better rate or term. You can refinance a single loan or combine a number of loans to give you one new loan.

Refinancing federal student loans means that all of your loans become private loans. As a result, you lose access to federal student loan benefits like interest rate discounts and loan cancellation benefits. (You can learn more about the pros and cons in our student loan refinancing guide.)

Refinancing with a private student loan lender typically takes less time — sometimes just a few business days. However, this timeline can be longer if additional documentation is needed or if you have a coapplicant. In these cases, the timeline can vary depending on the lender and the time it takes the borrower to gather and submit the documents.

Recommended: Consolidating vs. Refinancing Student Loans

Is There Any Way to Accelerate the Student Loan Consolidation Process?

Unfortunately, you cannot accelerate the federal student loan consolidation process.

You may want to consider skipping the consolidation process altogether and refinance your student loans with a private lender, which will likely take less time. You can take a look at a student loan refinancing rate calculator to make sure it will financially work to your advantage.

Pros and Cons of Consolidating Student Loans

Why might you want to consolidate federal loans into a single federal Direct Consolidation Loan? Or why might you want to steer clear of consolidation altogether? Review the pros and cons below to get a better understanding of whether consolidating student loans is right for you.

Pros	Cons
Simplify your loan payments. You’ll have just one loan payment instead of several payments for multiple loan types.	Losing benefits. If you choose to consolidate your loans using a refinance, you will lose out on federal benefits, like income-driven repayment and forgiveness.
Lower your monthly payment. You could lower your monthly payment. It’s possible to extend your payment term to 30 years, which allows you to take more time to repay.	Paying more interest. You will pay more interest over the life of the loan if you refinance with an extended term.
Change loan servicers. You can switch loan servicers, the entity that handles the day-to-day details of your loan, which can help you out if you’re unhappy with your current servicer.	Losing credit for prior payments. If you’ve been working toward an income-driven repayment plan or PSLF, you’ll lose credit for any payments made toward them.
Switch to a fixed-rate loan. You can switch any variable interest rates to a fixed-rate, which can offer you more stability in your monthly payments.	Paying capitalized interest. Outstanding interest on loans you consolidate becomes part of your principal balance on the new loan, which means interest will then accrue on a higher principal balance.

Alternatives to Student Loan Consolidation

If you think it might take too long to consolidate your student loans or you just want a more options, you may have these alternatives available to you:

•   Deferment: If you can claim medical or financial hardship, or you’re back in school or between jobs, you may be able to pause your student loan payments through deferment.

•   Forbearance: Forbearance means that you won’t have to make a payment or that you’ll be allowed to make a smaller payment on your federal student loans.

•   Income-driven repayment plans: Income-driven repayment plans allow you to make payments based on your family size and income.

•   Modification: A student loan modification changes the terms and conditions of an existing student loan. Unlike consolidation, a modification means you keep the same loan but adjust it.

You might also consider keeping your plan and improving your financial situation in order to comfortably be able to make your payments. This will avoid the potential downsides of consolidation, like paying more in interest due to a longer loan term.

The Takeaway

If you’re tired of making multiple federal student loan payments, consolidation might be the answer. In general, the process takes about six weeks after submitting the application.

You may also consider student loan refinancing to help you manage your monthly payments. SoFi makes it easy to see what rates you may be eligible for. Plus, with SoFi, you can skip paying origination fees, application fees, and prepayment penalties.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

Does it take longer to consolidate federal or private student loans?

It typically takes six weeks to consolidate federal student loans — longer than refinancing — but you retain your federal benefits. If you’re uncertain whether you want to consolidate your federal student loans or refinance with a private student loan lender, consider shopping around before you make a final decision.

When can consolidating student loans make sense?

Consolidating can make sense if you want to reduce multiple student loans into one monthly loan payment. Additionally, if you want to lower your monthly payments, switch loan servicers, or change to a fixed-rate loan, consolidation might be worth exploring.

Why would you consolidate rather than refinance student loans?

When you’re weighing the pros and cons of consolidating vs. refinancing, it’s important to determine your goals. If simplification is your major goal, you may want to consolidate. Additionally, if you have federal student loans and don’t want to lose protections, it might be wise to forgo refinancing and instead opt for student loan consolidation.

---

Photo credit: iStock/TanyaJoy

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.

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.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

SOSL09230685

Read more