Guide to Credit Card Cell Phone Protection

Guide to Credit Card Cell Phone Protection

Owning a cell phone can get expensive, especially if you have to replace or fix a stolen or damaged one. Luckily, you may have cell phone protection from your credit card.

By taking advantage of credit cards with cell phone protection, you could save on a separate cell phone insurance plan. But before signing up for a new credit card or foregoing insurance, it’s best to understand exactly what is and isn’t covered under credit card phone insurance.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

What Is Credit Card Cell Phone Protection?

Credit card cell phone protection is a type of insurance protection, where your credit card issuer pays for you to replace a stolen cell phone or make repairs to a damaged one. In most cases, you’ll need to pay for your cell phone bill with that card in order to get the protection.

Depending on the terms and conditions listed on your credit card, you’ll be protected from certain types of damage, and up to a certain coverage amount.

How Does Credit Card Cell Phone Protection Work?

When you pay for your cell phone bill with a credit card that offers cell phone protection, you can file a claim if you experienced a type of covered loss.

Keep in mind that the coverage provided by your cell phone may not be primary. This means you may need to exhaust your other options, such as by filing a claim with your home, car, or separate cell phone insurance first. It’s best to check the terms of your credit card phone insurance to see when you’re able to file a claim.

If you are able to file a claim with the credit card issuer, you may need to pay a deductible per claim (in many cases it’s around $25 or $50) before insurance kicks in. Plus, you may have limitations as to how many claims you can make per year, as well as the amount you’ll be covered for. The specifics will ultimately depend on how your credit card works.

Who Does Credit Card Cell Phone Protection Cover?

In most cases, your credit card issuer will provide protection for cell phones that you pay your monthly service bills for. As in, any phone numbers listed on the monthly bill that you pay for using an eligible credit card will most likely be covered. That means if you have more than one phone on your plan, the credit card protection will extend to all of them.

However, some credit card companies may limit the number of cell phones that are covered. It bears repeating that it’s important to check the coverage limitations listed in the terms and conditions for your credit card.

What Does Credit Card Cell Phone Protection Cover?

Typically, credit card cell phone protection will pay to replace an eligible phone that’s stolen or to make repairs to an eligible phone that’s damaged. What’s typically covered includes damage to your phone that makes it non-functional or not operate optimally. Different credit card companies will have various definitions for covered damages, which can range from cracked screens to hardware failures.

What Isn’t Covered by Credit Card Cell Phone Protection?

Remember, cell phone protection only provides coverage for the actual phone. Here’s what usually is not covered by your eligible credit card:

•   Accessories like a phone case or screen protector

•   Cell phones for purchased for resale, or commercial or professional use

•   Cell phones that are lost or that disappeared under mysterious circumstances (i.e. there wasn’t evidence of any wrongdoing)

•   Phones stolen from a common carrier (like the U.S. Postal Service or another delivery service) or your baggage

•   Phones from pay-as-you-go plans

•   Cosmetic damage

•   Damage or theft from fraud, illegal activities, normal wear and tear, certain natural disasters, and intentional acts

•   Taxes or fees such as delivery charges

•   Losses that are covered under your cell phone manufacturer warranty

•   Replacement of a phone that wasn’t purchased from a cell phone retail store with the ability to activate phone with your cell phone service provider

Recommended: What is a Charge Card

Factors to Consider Before Getting a Cell Phone Insurance Policy With Your Issuer

Trying to decide whether to take advantage of cell phone insurance through a credit card? Here are some considerations to make before deciding.

The Deductible

Though the deductible may not cost you a lot, it’s important to check exactly how much you’ll have to pay out of pocket before your insurance will cover the rest. It’s also smart to check how much it will cost for the repair beforehand, especially if you believe the cost could be close to the amount of your deductible.

The Number of Claims You Can File

Some credit card issuers limit the amount of claims you can make. For instance, you may only be able to make two separate claims a year up to the coverage limit.

You’ll also want to check to see whether the allowable coverage amount would be enough to replace your current phone if it’s stolen. If not, you may want to consider other alternatives.

Your Card’s Annual Fee

If you’re signing up for a credit card solely for the cell phone protection feature, make sure the annual fee is worth it, assuming there is one. In some cases, it may be better money-wise to stick with your homeowners or renters insurance, or to purchase a separate cell phone insurance plan.

At the end of the day, you don’t want the costs to outweigh the benefits of a credit card.

How to Know If Your Credit Card Has Cell Phone Protection

The best way to find out if your credit card offers cell phone protection is to check your card agreement. It should detail what features are offered — and you could even learn about additional perks, such as credit card rental insurance or credit card travel insurance.

Granted, the fine print can sometimes feel overwhelming or difficult to wade through. Another option is to call your credit card company and ask whether your card has cell phone protection and if so, how you can qualify.

Filing a Cell Phone Protection Claim

If you need to file a claim, most credit card issuers require that you file a report within a certain amount of time, such as within 90 days of your loss. Contact your credit card issuer, and it will provide the next steps you’ll need to take.

Your issuer may direct you to forms you’ll need to fill out with information like details around the loss and any proof you can provide. Your credit card company will then keep you informed with any updates related to your claim.

Alternatives to Credit Card Cell Phone Protection

If you aren’t using a credit card to pay your cell phone bill or just aren’t sure whether credit card cell phone protection is the right choice for you, there are other options. You might consider these alternatives:

•   Homeowners or renters insurance: Many homeowners or renters insurance policies offer coverage for personal belongings. However, it typically covers theft and not damage or loss. Plus, you may face a higher deductible compared to what a credit card company may charge.

•   Purchase a separate cell phone protection policy: Your phone’s manufacturer or service provider may offer policies. Before signing on the dotted line, read the fine print carefully to see what the coverage limit and deductible are, as well as what losses are included.

Recommended: When Are Credit Card Payments Due

The Takeaway

Getting cell phone coverage from a credit card can be a great way to protect an item you use often. Plus, it could save you from purchasing a separate policy. Before moving forward with credit card cell phone protection, check to see whether the credit card is worth signing up for.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Can a cell phone be used to steal credit card details?

For the most part, the digital wallets used to store credit card information on your cell phone are safe. Still, you’ll want to do your research to ensure you’re choosing an app that has in place adequate protections. Also follow basic safety practices, like locking your phone, avoiding using digital payment devices over unsecured WiFi networks, and regularly reviewing your account for any fraudulent activity.

Is it safe to put your credit card details on your phone?

Generally yes, it’s safe to put your credit card details on your phone if you’re using e-wallet apps, such as Apple Pay and Samsung Pay. However, any type of credit card transaction can be vulnerable to fraud.

Is credit card cell phone protection worth it?

Credit card cell phone protection can be worth it if you want to guard against loss or theft for your phone that may cost you a lot of money to replace. You’ll want to weigh the card’s annual fee against the protection offered in order to determine if it’s truly worthwhile.


Photo credit: iStock/nunawwoofy

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.

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.

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Can You Pay Rent with a Credit Card?

Can You Pay Rent With a Credit Card?

From everyday purchases to splurges, consumers often turn to credit cards. Some even reach for the plastic to pay the rent. But is paying rent by credit card a good idea? And can you pay rent with a credit card even? The answer to both questions: It depends.

Whether you can pay rent with a credit card largely depends on your landlord’s rules, though there are potential workarounds. But even if you can figure out how to pay rent with your credit card, there are pros and cons to paying rent with a credit card that you’ll want to consider.

Do Landlords Allow Payment by Credit Card?

For renters tempted to reach for the plastic, the first likely question is whether this mode of payment is even accepted. The answer to whether you can pay rent with a credit card will depend on the landlord, though many do not allow it.

The reason many landlords don’t allow it is because accepting credit card payments causes them to incur fees. Due to how credit cards work, credit card transactions are subject to fees that are set by the financial institution that issues the card, the companies that partner with the financial institution (like Visa and Mastercard), and the processor responsible for securing and carrying out the credit card transaction.

The amount of these fees depend on a number of things, including the merchant’s total sales volume and how credit cards are processed. Businesses that process between $10,000 and $250,000 in credit card payments annually pay between 2.87% and 4.35% per transaction, according to Square. This means that if a tenant were to charge $1,000 in rent, the landlord would net about $957 to $971 — unless the cost of credit card processing was extended to the renter in the form of a surcharge. To avoid that bite, some landlords do not permit credit card payments for rent.

Even when a landlord does not allow people to pay rent using a credit card, there may be workarounds via third-party apps. These apps effectively charge renters a fee to convert their credit card payment into a form of payment their landlord accepts. Fees can range from 2.75% to 3% of every rental payment. Additionally, the landlord often has to agree to the arrangement.

Pros of Paying Rent With a Credit Card

There’s a famous old saying: “Just because you can doesn’t mean you should.” But there are some scenarios when charging the rent might make sense. Here are some of the potential pros of paying rent with your credit card.

Flexibility

Rent schedules are typically fairly rigid, with payment due at the same time each month. Though this regular schedule can be a boon for budgeting, it can be challenging for gig workers or anyone else with irregular pay periods that don’t line up with when rent is due.But if a cardholder charges the rent, that money becomes due only when their credit card bill is due, providing greater flexibility on the actual payment date.

However, it’s important to stay strict about honoring your credit card due date. Making late credit card payments can result in credit card interest charges, late fees, and even a hit to one’s credit score.

As such, individuals may want to leverage credit cards for flexibility only if they are sure they’ll have the money available when their credit card payment becomes due. In other words, even if charging rent to your credit card offers more flexibility, it’s still necessary to budget for rent each month.

Earn Rewards

While there are many basic credit cards on the market, there are also cards that reward people for spending. Rewards can come in the form of cash back, points that can be redeemed toward travel and other perks, and airline miles. For those with reward credit cards, paying rent by credit card can represent a great opportunity to rack up spending and earn those perks.

However, it’s important to do the math. Third-party fees or credit card payment surcharges can cancel out any benefit a cardholder may earn, or even ultimately cost more if fees are greater than the reward offering.

Cover Immediate Expenses

If you’re short on cash, paying rent with a credit card can buy you some time. By putting what’s likely one of your largest expenditures on your credit card, you can free up funds for more immediate expenses. Then, you’ll have a bit of time to restock your bank account by the time your credit card bill comes due.

If you do this, however, you’ll want to make sure you’re ready to pay off your credit card balance in full by the end of the month, rather than just the credit card minimum payment. Otherwise, you’ll end up accruing interest on top of the money you’ll still owe for rent.

Also take notice if you regularly charge the rent out of necessity. If you do, this merits taking a closer look into the root causes. You’ll want to figure out how you might address those issues in your monthly budget instead of constantly relying on your credit card for backup.

Cons of Paying Rent With a Credit Card

Charging the rent can be a risky proposition, given what a credit card is. Here are additional reasons why paying rent with a credit card may not be a good idea.

There May Be Extra Fees

As discussed, some landlords and third-party payment companies may tack on a surcharge for credit card payments. Let’s say the surcharge is 3%, or an extra $30 on $1,000 in monthly rent. While that may not sound like much, it adds up to $360 a year — money some individuals may prefer to spend elsewhere.

Landlord surcharges aren’t the only cost that can make it more expensive to pay rent by credit card. Making a credit card payment even a day late can increase the total amount due, thanks to interest charges and late fees. And the later the debt — in this case, rent — is paid off in full, the more interest that will accrue.

Though interest rates vary by credit card, they are often higher than other lending products, like personal loans. The average credit card annual percentage rate is over 21%. Worse, the interest compounds, so each month that cardholders do not pay off the rent in full, they’ll incur interest on both the balance and the interest that has accrued.

It Can Affect Credit Score

If you put your rent on your credit card but then don’t handle your credit card debt responsibly, it could have negative implications for your credit. Behaviors like regularly missing credit card payments can lead you to have a bad credit score, which can have serious repercussions down the road.

Your credit score reflects your creditworthiness, or the risk you pose to lenders. The number (300 to 850 for the FICO® Score and VantageScore models) affects how likely it is for you to be approved for another credit card (or a mortgage or other loan) and the interest rate you’ll have to pay. You may also need to maintain a minimum credit score to rent an apartment.

Because rent tends to be a significant expenditure in most people’s budgets, you’ll want to ensure that you’ll have the funds on hand to pay the balance in full if you do choose to charge the rent.

It Can Increase Your Credit Utilization Rate

Even if you make your payments on time, paying rent with a credit card can still affect your credit score. That’s because scores are based in part on an individual’s credit utilization ratio, which is the proportion of credit being used relative to the total available amount.

When it comes to credit utilization, the lower the better. Individuals with high credit utilization are at risk of hitting their credit limit (which can also ding their credit score). With rent likely making up a large proportion of the average individual’s expenditures, such payments can significantly increase total credit utilization. The same principle applies to other major charges as well, such as if you were to buy a car with a credit card.

Should You Pay Your Rent With a Credit Card?

Whether to pay rent with your credit card ultimately depends on your financial situation. As discussed, there are some major downsides to paying rent with your credit card, such as paying extra fees and potentially harming your credit score. You could even get into a cycle of debt if you charge your rent and then aren’t able to pay off your credit card balance in full to avoid interest charges.

If you do decide to move forward with paying rent with a credit card, proceed with caution. Do the math to make sure the rewards you may earn will actually offset the cost of any fees you’ll incur. Also verify that you’ll have the funds available within your monthly budget to pay off your accumulated credit card balance, especially since a hefty charge like rent can drive up credit utilization.

Steps for Paying Rent With a Credit Card

How you’ll pay rent with a credit card depends on whether your landlord will directly accept credit card payments for rent or whether you’ll need to go through a third-party app.

•   If your landlord does accept credit card payments: In this case, you’ll either pay your landlord directly or through an online payment portal. You’ll need to provide your credit card information, including your account number, expiration date, and CVV number. Make sure to verify the total amount. Also check to see whether there are any fees involved and if so, how much those will run.

•   If you need to go through a third-party app: Renters who need to go through a third party in order to pay rent with a credit card will first need to set up an account with one of the apps that provides this service. Make sure to find out what fees are involved before proceeding. You’ll then complete your credit card transaction through the intermediary, which will then pass along the funds to your landlord, either with a check or directly to their bank account.

Alternatives to Paying Rent With a Credit Card

Paying rent with a credit card is more like a last resort than a go-to option. If you’re wondering how to pay rent when you’re in a bind, here are some alternatives to consider:

•   Borrow money from family or friends: If you’re really in a pinch, consider asking a trusted family member or friend if they can lend you the funds. This will save you interest, and it will also save your credit score from the impact of a hard credit inquiry. Just make sure to reach an agreement about how and when you’ll pay back the money — otherwise, it could negatively affect your relationship.

•   Talk to your landlord: If you’re really struggling to come up with rent for the month, consider reaching out to your landlord. Especially if you’ve been prompt with rent payments in the past, they may be sympathetic and offer a little breathing room. Just make sure to come up with a plan in the meantime, as a break on rent won’t last forever.

•   Reach out to rental assistance resources: Another option for those who are having a hard time making rent payments is seeking out assistance. There might be local nonprofits, charities, or even government groups in your area that can offer help to those in need. You may also look into resources like 211.org or the CFPB.

The Takeaway

Can you pay rent with a credit card? Sometimes. But is it a good idea to pay rent with a credit card? If all of the numbers make sense, it could be. You’ll want to weigh both the potential pros of charging your rent to a credit card, like possibly earning rewards or gaining flexibility, against the downsides, such as possible repercussions for your credit score.

If paying with plastic is tempting, your choice of card can make a big difference in the ultimate benefits you receive. The SoFi Credit Card, for instance, allows you to earn generous cash-back rewards and possibly lower your APR through on-time payments.



1See Rewards Details at SoFi.com/card/rewards.


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.

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.

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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How Much a $300,000 Mortgage Will Cost You

How Much Will a $300,000 Mortgage Cost You?

If you plan to take out a $300,000 mortgage, the costs of the loan can vary considerably based on your rate, term, property tax and insurance costs, and whether you need mortgage insurance.

Read on to learn how much a $300,000 mortgage could cost over the life of the loan.

What Are the Monthly Payments on a $300k Mortgage?

In April 2022, Redfin found that the monthly mortgage payment on the median asking price home had risen 39% from a year earlier, thanks to rising mortgage rates.

Ouch. But calculating the average monthly payment on $300,000 mortgages is not straightforward.

The lower the interest rate, the lower the monthly mortgage payment, holding other loan terms constant. The interest rate can be calculated differently for different types of mortgages. For instance, fixed-rate mortgages maintain a steady interest rate, whereas an adjustable-rate mortgage fluctuates over time based on market conditions.

The mortgage term also affects mortgage costs. The 30-year fixed-rate mortgage is by far the most popular choice, but a 15-year loan translates to a higher monthly cost for a $300,000 mortgage yet much less total interest paid.

Owning a home comes with annual property taxes based on the local tax rate and the home’s assessed value, which can change over time. Generally, this expense is divided across your monthly mortgage payments.

Your down payment also matters. Borrowers putting less than 20% down on a conventional mortgage usually need to pay for private mortgage insurance, often 0.5% to 1.5% of the original loan amount per year, until the mortgage balance reaches 80% (homeowner requests cancellation) or 78% of the home’s value, or the mortgage hits the halfway point of the loan term.

FHA loans require mortgage insurance premiums, which will last for the whole loan term if your down payment is less than 10%. MIP ranges from 0.45% to 1.05% of the loan balance, divided by 12 and added to your monthly payments.

Homeowners insurance is typically required by mortgage lenders regardless of the down payment amount.

How Much Income Is Needed to Qualify?

When taking out a home loan, lenders often ask for proof of consistent income, such as W-2s. But income is just one aspect of your personal finances a lender will evaluate to determine if you qualify for a mortgage on a $300,000 house.

Lenders use borrowers’ debt-to-income ratio to get a more holistic assessment of their ability to make monthly payments. DTI is calculated by dividing your monthly debt payments by your gross monthly income, then coming up with a percentage.

For example, if you gross $5,000 a month and have a $400 car payment and a $600 student loan bill, your DTI ratio is 20%.

A DTI ratio of 43% is usually the highest a borrower can have to obtain a qualified mortgage, according to the Consumer Financial Protection Bureau. However, lenders may prefer a lower DTI ratio — usually below 36% — for greater certainty that borrowers can afford their mortgage payments.

Programs like the FHA loan and Fannie Mae HomeReady® loan allow a DTI of up to 50% when compensating factors like a higher credit score exist.

Your credit history is another important factor to qualify for a mortgage on a $300k house, and will determine the rate you’ll pay.

How Much of a Down Payment Is Needed?

So how much do you have to put down for a $300k mortgage? The traditional ideal of a 20% down payment is not always necessary or doable. In fact, the latest median down payment is 13%.

How much you need for a down payment depends on the mortgage type, the lender, and if you’re planning to occupy or rent the property.

This is how much you’ll need to put down for different loan types.

•   Conventional loan: As little as 3% down for a primary residence. Buying a second home or investment property typically calls for at least 10% down and 25% down, respectively.

•   FHA loan: As little as 3.5% down if your credit score is 580 or higher. Borrowers with lower credit scores will need to put down at least 10%.

•   VA loan: Usually available with no down payment. This option is only available for active and veteran service members and some surviving spouses.

•   USDA loan: No down payment required. Eligibility is based on income and buying a home in a designated rural area.

But do down payment requirements change for different types of houses?

If you’re planning on buying a duplex or up to four units, you’d still qualify for residential financing, with the same parameters, if you plan to live in one of the units.

Recommended: A Guide to Buying a Single-Family Home

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.


What Are the Parts of a Mortgage Payment?

What you pay to your lender each month includes more than just what you owe on the loan. The mortgage payment consists of the principal, interest, and potentially, escrow costs.

Principal

The principal portion of the mortgage payment goes toward gradually paying the amount initially loaned to you.

When you start making mortgage payments, the amount paid toward the principal is somewhat low. Over time, greater proportions of each monthly payment will chip away at the principal balance.

Interest

The interest rate — how much you’re being charged to borrow the money — is determined by the type of loan, your personal finances, and market factors outside your control.

Borrowers with high credit scores are usually able to snag the best rates. Just a 1% increase in mortgage rate can add tens of thousands of dollars over the life of a 30-year loan.

The bulk of the mortgage payment goes toward interest at the beginning of an amortized loan.

You may be able to recoup some of the interest cost through the mortgage interest deduction.

Escrow

Most lenders require an escrow account to roll tax and insurance bills into monthly mortgage payments. This includes property taxes, homeowners insurance, and, if applicable, mortgage insurance.

How Much Interest Will Be Paid on a $300k Mortgage?

If you have a fixed-rate loan, the total interest can be easily calculated for the life of the loan. Borrowers with a 30-year fixed-rate mortgage at 5.6% APR would pay about $320,000 in interest on a $300,000 home loan.

Shortening the loan term to 15 years and getting a rate of 4.8% APR would reduce the total interest paid to $121,302.

With an adjustable-rate mortgage, the interest rate can change over time with market conditions.

Try out this mortgage payment calculator to see how much you might pay in interest with different rates and down payments. You can also toggle the amortization chart on a desktop.

How Much Is the Mortgage on a $300k House?

Using the previous example of a 30-year fixed-rate loan with a 5.6% annual percentage rate, the principal and interest would be $1,720 per month, and would total about $620,000 over the 30 years. To capture the full mortgage cost, you also need to estimate the tax and insurance costs.

•   PMI (if applicable): often 0.5% to 1.5% of the original loan amount but up to 2.25%. Assuming a 1% rate, monthly PMI would be $250, with $21,303 the total amount of PMI you’d pay until you reach 20% equity.

•   Homeowners insurance: $2,305 on average annually, or $192 per month.

•   Property taxes: 0.28% to 2.49% of assessed value on average, depending on U.S. state. Most states have a homestead exemption that gives homeowners a tax break.

Recommended: A Guide to Mortgage Relief Programs

How to Get a $300k Mortgage

Prospective homebuyers can take steps to help qualify for a $300k mortgage and obtain more favorable terms.

•   Budget: First, it’s important to estimate how much you can afford.

•   Check your credit: Assess your credit history and take care of any late payments to improve your FICO® scores.

•   Get pre-approved: Starting the mortgage pre-approval process with one or more lenders gives you tentative approval for a loan amount and type, making you a more competitive buyer.

   Consider the interest rate, fees, and closing costs among lenders when shopping for a mortgage.

•   Make an offer: When you find a home that meets your needs and budget, consult with a real estate agent to submit an offer with your pre-approval letter.

•   Apply for the mortgage and get loan estimates: Now that you have a property address, you might want to request loan estimates from a number of lenders. A loan estimate is a three-page standard form that details the loan after you apply for a mortgage. Applying with more than one lender within 14 to 45 days counts as a single credit inquiry.

•   Choose a lender, and wait for the lender to verify your finances and appraise the property to underwrite the loan.

•   Close the deal: Get your cash to close and homeowners insurance ready and finalize the paperwork to close on your $300,000 mortgage.

Recommended: SoFi’s 2022 Home Loan Help Center

Where to Get a $300k Mortgage

The Consumer Financial Protection Bureau and others recommend getting quotes from multiple lenders. Buyers can choose from banks, credit unions, online lenders, and mortgage brokers to finance a home purchase.

While we’ve identified the interest rate and loan term as key information to compare, keep an eye out for fees paid directly to the lender, like origination fees and mortgage points.

The Takeaway

How much will a $300,000 mortgage cost you? The interest rate, loan term, insurance costs, and taxes will determine the amount you pay each month and over the life of the loan.

As you begin comparing lenders, give SoFi a look. SoFi fixed rate mortgage loans require as little as 3% down for qualifying first-time homebuyers.

Check your rate in just minutes

FAQ

How much is a $300,000 mortgage per month?

The monthly payment on a $300,000 mortgage depends on the loan length, interest rate, whether mortgage insurance is required, and more.

How much do I need to earn to get a mortgage of $300,000?

The required annual income to get a $300,000 mortgage is affected by your other debts and the down payment amount.

Can I get a $300,000 mortgage with a bad credit history?

You might be able to obtain a $300,000 mortgage with subpar credit, but the terms may be less competitive. For instance, borrowers with credit scores from 500 to 579 could be eligible for FHA loans, but they’ll have to make a down payment of at least 10% instead of 3.5%.


Photo credit: iStock/Vertigo3d

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


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


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

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.

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.

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

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5 Ways to Get Affordable Life Insurance for Families

5 Ways to Get Affordable Life Insurance for Families

Life insurance can provide families peace of mind and financial support in the event that the policy holder dies. If you’re the primary breadwinner for your household, then a life insurance policy can help pay funeral expenses, survivors’ day-to-day living costs, and children’s college costs.

Finding affordable life insurance starts with understanding your needs and budget. There are plenty of options you can choose from when shopping for coverage.

Why Should Families Have Life Insurance?

Life insurance is designed to pay out a death benefit to beneficiaries after the insured person dies. Life insurance can provide reassurance that should something happen to you, your dependents will be taken care of.

A life insurance policy can be a key part of personal insurance planning, which also encompasses homeowners or renters, auto, health, and disability insurance. If you have a family, life insurance can help your loved ones meet the following needs:

•   Replace lost income. If the sole or main income-earner dies, life insurance can help to replace their lost income and cover day-to-day expenses.

•   Pay final expenses. Funeral and burial costs can be expensive, and cremation is not necessarily any cheaper. Proceeds from life insurance can pay all of the associated costs, relieving financial stress during an already trying time.

•   Clear outstanding debts. If you leave behind a mortgage, student loans, credit cards, or other debts, a life insurance policy can be used to pay them off so your loved ones aren’t stuck with overwhelming debt.

•   Pay college expenses. If you have children, your life insurance policy can help pay for their higher education costs or secondary education expenses if they attend private school.

•   Cover basic living expenses. Even if you leave no major debts behind, your loved ones may need money to pay for utilities, groceries, and other everyday bills.

•   Fund retirement for a surviving spouse. Life insurance can help to fill a retirement planning gap for couples when a surviving spouse is not left with a nest egg.

In short, life insurance can help with a variety of expenses. Having a death benefit can help your loved ones avoid having to tap into other financial resources, or it can create a cushion if they lack other resources.

Recommended: How to Buy Life Insurance

How Much Life Insurance Do Families Need?

How much life insurance you need usually depends on your income. A general rule of thumb is to purchase a policy that’s equivalent to seven to 10 times your annual income. So if you make $100,000 a year, you’d need a policy with a death benefit of $700,000 to $1 million.

Even if one person brings in most of the income, both partners can benefit from having life insurance, especially if you have kids. If one person is the primary caregiver and they pass away, that can create new costs for the one who’s left behind.

For example, if you worked while your partner stayed home, you might need to spend money on daycare or in-home care, cleaning services, lawn care services, and other expenses to cover household tasks that they might have handled so that you can continue to work. Or if you choose to take an extended bereavement leave to care for your children, then life insurance can ensure that you’re able to meet your expenses during that time.

Recommended: How Much is Life Insurance

Types of Life Insurance for Families

There are two main types of life insurance: Term life and permanent coverage. Term life insurance is designed to cover you for a set term. For example, you might purchase a 20-year term policy. If you pass away within that term, the policy can pay out a death benefit to your family. Otherwise, the policy expires at the end of the term.

Permanent life insurance covers you for life, as long as the premiums are paid. One of the most common options for permanent life insurance is whole life. With whole life insurance, part of each premium payment is deposited into a cash value account. The account earns interest, and you can withdraw the cash you accumulate or borrow against it. When you die, the policy pays a death benefit to your loved ones, less any amounts you’ve withdrawn or borrowed against.

So which is better for families, term life vs. whole life insurance? The answer depends on your needs and budget. If you’re looking specifically for affordable life insurance for families, then term life is likely the better option. You don’t get lifetime protection or cash value accumulation, but generally, premiums for term life coverage tend to be lower than whole life.

By the way, you can typically convert term insurance to permanent insurance (such as whole life) at a higher premium if you want to keep your insurance longer than the term.

Making whole life insurance affordable is more challenging, as lifetime coverage means that your insurers are virtually guaranteed to have to pay out a claim. As such, they can charge higher premiums for the same death benefit. Age and health can also play a part in determining term life or whole insurance costs. Coverage is usually cheaper when you’re younger and healthier, so waiting to buy insurance could prove more expensive.

Recommended: What is Life Insurance

How to Get Affordable Life Insurance for Families

If you’re on the hunt for an affordable life insurance policy, it’s important to do your research to know what options are available. You may have access to life insurance already without realizing it. It’s also good to consider exactly what you need a life insurance policy to do for you and whether it makes sense to purchase coverage for children or grandparents as well.

1. Review Your Workplace Insurance Benefits

It’s possible that you may already have some life insurance in place to protect your family if your employer offers group coverage as an employee benefit. That type of life insurance covers a group of employees up to a certain benefit amount. For example, you might have $50,000 in group life insurance that your employer pays for. You may have the option to purchase additional coverage and increase the death benefit, with premiums deducted from your paychecks.

Group life insurance may not provide the full amount of coverage you need. But it can be a good starting point for getting an affordable life insurance policy if your employer is picking up the tab for the premiums. Check with your HR department or benefits coordinator to see if group life is offered at your job and how to enroll in coverage.

2. Opt for Term Life, If Possible

As mentioned, term life insurance can be a cheaper option than whole life insurance. If you’re not interested in building cash value and you don’t necessarily need lifetime coverage, term life may be preferable to whole life.

When purchasing term life insurance, think carefully about how long you’d like to keep the coverage in place. If you’re 30 years old and have two kids, for example, you might want a 20-year term policy, which could help pay for their college costs if something were to happen to you before they reach adulthood.

On the other hand, if you’re in your 40s and don’t think you’ll need coverage that long, you might choose a 10-year term policy instead. The longer the term and the larger the death benefit, the more life insurance will cost you in premiums.

Recommended: Why Life Insurance is Important

3. Weigh the Benefits of Life Insurance for Children or Grandparents

Life insurance policies for children are typically permanent life policies. You pay in premiums and part of that money builds cash value. When your child reaches adulthood, they can take over the policy or withdraw the cash value and use the money to pay for college, buy a car, or fund other financial goals. (If their health has changed this could also be the only insurance they are able to get.)

Should you buy life insurance for children? It’s an important question to ask if you’re looking for life insurance for the entire family. You can purchase life insurance for kids at fairly low premiums, and your child can decide later if they’d like to keep the policy or cash it in. Another alternative: You might be able to grow that money by investing the premiums you would have paid to life insurance into a 529 college savings account or investment account for your kids instead.

Purchasing a burial insurance policy for your aging parents can make sense if you don’t want to be facing a large bill from the funeral home while you’re grieving. Burial coverage is generally the most affordable life insurance for seniors, since it has a low death benefit. You may be able to get coverage for as little as $50 a month.

4. Choose Guaranteed Renewal

If you’re purchasing term life and you think there’s a chance that you might need coverage for longer than the initial term, consider getting a policy with guaranteed automatic renewal. Having that benefit built in means that you can renew your policy once the initial term expires, without being subjected to an increase in premiums due to age or health. Just be aware that your new premiums will likely be much, much higher.

5. Be Selective About Riders

Life insurance riders can enhance your coverage. While some may be included at no charge, others can increase your premiums by a few dollars each. Some of the most commonly added riders include:

•   Accelerated death benefit

•   Accidental death

•   Guaranteed insurability

•   Waiver of premium

•   Child rider

•   Critical illness coverage

•   Disability coverage

Any of these riders can make your policy more comprehensive. But if affordable life insurance is the goal, then it’s important to consider whether they’re worth the added cost. Accelerated death benefit riders, for instance, pay out benefits while you’re still living to help with end of life care. That could be worth paying for if you’re concerned about developing a terminal illness. However, you won’t use that benefit if you die in an accident or from old age.

Recommended: How Long Do You Have to Have Life Insurance Before You Die

Tips for Saving Money on Life Insurance

Finding affordable life insurance can be a challenge, but it helps to have a strategy. Do your homework so you’re not buying more coverage than you need or choosing the wrong kind of policy. Here are a few more tips for saving money on life insurance as a family:

•   Consider an online insurance company, which may charge lower premiums than a traditional insurer.

•   Buy sooner rather than later to get the best rates available for your age and health.

•   Ask your insurance company about any discounts you may qualify for.

•   Get multiple life insurance quotes to compare rates across companies.

•   Take care of yourself as much as possible, since staying healthy can influence your insurance rates.

With most life insurance policies, you may be asked to complete a medical exam. This exam is used to determine your health status and how much you’ll pay for premiums. You can, however, opt for a no exam policy if you’d like to get covered online without having to see a doctor.

The Takeaway

Finding affordable life insurance may seem a little overwhelming, but it doesn’t have to be. Start by reviewing your workplace benefits for group coverage that might be subsidized by your employer. Then, given a choice between term life and whole life insurance, term life is the more affordable option. Also, the sooner you purchase a policy the better, since premiums are tied to your age and health. Last, shop around for the best deal, and ask if you qualify for discounts.

You can start your search for life insurance online with SoFi. We’ve partnered with Ladder to make it easy to find affordable life insurance plans with coverage ranging from $100,000 to $8 million. You can get a quote and apply online in minutes.

Get a free life insurance quote with SoFi.


Photo credit: iStock/gradyreese

Coverage and pricing is subject to eligibility and underwriting criteria.
Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers- for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.
Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other, SoFi Technologies, Inc. (SoFi) and SoFi Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under LadderlifeTM policies. SoFi is compensated by Ladder for each issued term life policy.
Ladder offers coverage to people who are between the ages of 20 and 60 as of their nearest birthday. Your current age plus the term length cannot exceed 70 years.
All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal advice.


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

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How To Find Affordable Car Insurance for College Students

How To Find Affordable Car Insurance for College Students

If you’re the parent of a student driver, finding affordable car insurance is likely a top priority. Adding a college student to your insurance policy can drive up the cost of premiums, since they’re generally considered high-risk drivers. And students who purchase their own policies usually pay much more to get covered than when they’re added to a family policy. But there are ways to lower car insurance costs, from choosing a higher deductible to insuring your student based on mileage.

As you shop around, it’s important not to focus only on premiums. In case of an accident, coverage levels and deductibles can make an “affordable” policy suddenly seem quite pricey. We’ll walk you through the process so you can get the most for your money.

Recommended: How to Lower Car Insurance

What Is the Most Affordable Car Insurance?

There’s no one answer that applies to all drivers in all states, because insurers set different prices based on proprietary risk profiles and algorithms. But generally speaking, the cheapest affordable car insurance will be a policy with minimal coverage.

Finding affordable car insurance for college students can be especially challenging, since insurers tend to view them as being higher risk. A student doesn’t need to have accidents or tickets on their driving record to land in the high-risk category. They simply have a short driving history, which works against them.

A comprehensive policy will be more expensive than one that carries the minimum coverage required by the state. Although it can be cheaper to skip full coverage for a college student, keep in mind that they might incur higher out-of-pocket costs for repairs if they’re involved in an accident.

Recommended: How to Get Car Insurance

Does a College Student Need Their Own Car Insurance Policy?

One of the most important questions to ask for personal insurance planning with kids is whether your student will stay on your policy or get their own. The answer depends on their living arrangements while they’re in school. If you have a student listed on your policy and your home is their permanent residence, they should be able to remain on your policy — even if they’re temporarily living in a dorm or off-campus apartment.

Parents’ coverage can still apply to a student’s vehicle if they’re taking it with them to school, even in another state. The insurance company may, however, adjust the premiums for the vehicle based on where it’s located and being used, not where it’s registered.

If a student moves out of their parents’ home and sets up their own permanent residence somewhere else, then they need to purchase their own car insurance policy. Car insurance is typically priced based on the vehicle the student drives, so if they have an older car they may still be able to find affordable car insurance on their own.

Recommended: 10 Tips for the Cheapest Way to Rent a Car

How To Find Affordable Car Insurance for College Students

The best place to start is often with your current car insurance company. Your insurer can walk you through how much it might cost to keep your student on your policy versus having them purchase their own policy. They can also advise you on how much coverage is appropriate to have, based on your student’s driving history and habits, and the condition of their vehicle.

Next, you can shop online to compare car insurance options for students. Getting quotes from multiple insurers is helpful, since you can compare that to what you’re paying currently to see whether any cheaper options exist. You may find that it’s more cost-efficient to move your policy elsewhere so that your child can benefit from cheaper rates.

When weighing insurance carriers, don’t focus solely on the premiums. While that number is important, since it determines what you’ll pay monthly or annually for insurance, it’s not the only cost to consider. You’ll also need to weigh the deductible, which is an amount you or your student must pay before your coverage kicks in.

There are two basic types of deductibles: high or low. Choosing a higher deductible can reduce premiums but means you’ll pay more out-of-pocket if you need to file a claim. A lower deductible can be more manageable for a college student who doesn’t have much savings, but the trade-off is a higher monthly premium.

Even if you’re adding your student to an existing family policy, review the policy and costs with them in some detail. It’s a good opportunity for students to learn about car insurance terms, financial decision-making, and the price of living independently.

Recommended: Does Auto Insurance Roadside Assistance Cover Keys Locked in a Car

Ways To Save Money on Car Insurance

Car insurance costs aren’t necessarily set in stone. There are several ways parents and students can make it more affordable. Here are some practical tips on how to lower car insurance:

•   Ask about discounts. Many car insurance companies offer discounts for students who earn good grades or complete driver education training. Safe driving discounts may also be an option for students with a good driving record.

•   Keep up with maintenance. Keeping your student’s car in good shape can help reduce the risk of an accident caused by a malfunction. You can try saving on car maintenance costs by doing basic things like oil changes or fluid top-ups yourself.

•   Get insured by mileage. Some car insurance companies base their policies on how many miles you drive. If your student is staying close to home and has a fairly short commute to school and work, then you can potentially find affordable car insurance that prices policies based on mileage.

•   Look for group discounts. If you belong to a professional or business association, or an alumni group, for example, you may be able to get a discount on insurance just for being a member. Warehouse clubs can also offer car insurance discounts to members as well.

•   Encourage safe driving. Accidents can make your premiums skyrocket, so it’s a good idea to go over the basics of safe driving with your student. You may also want to enroll them in a defensive driving class to help them feel more comfortable on the road.

•   Look online. You might start your search for good affordable car insurance with your brick-and-mortar insurer, but it’s also helpful to consider what online insurance companies have to offer. You may be able to find cheaper rates on car insurance for students online versus traditional insurance companies.

Recommended: How Much Does Insurance Go Up After an Accident?

Consider Bundling Insurance for College Students

Here’s one more thing to add to your list of insurance tips for first-time drivers: Try bundling. Bundling car insurance with other types of insurance is another opportunity for college students to save money. If your student is getting their own car insurance, they can help keep costs down by bundling it with renters insurance or life insurance.

Renters insurance covers personal belongings when you live in rental housing. It can also provide personal liability protection and pay your day-to-day living expenses if you have to seek temporary housing because your rental unit is damaged.

Life insurance can pay out a death benefit to beneficiaries after the insured dies. A young, healthy college student may not see an immediate need for life insurance, but it can come in handy if they’ve taken out student loans. Students who cosigned loans with a parent, for example, can take out a policy and name their cosigner as beneficiary. That way, parents aren’t left having to pay back the loans themselves.

Recommended: How Long Do You Have to Have Life Insurance Before You Die

The Takeaway

Students who purchase their own policy usually pay much more than when they’re added to a family policy. Either way, you can offset higher premiums by considering less liability coverage, a higher deductible, or a policy based on your student’s mileage. And make sure to ask your insurer about discounts for good grades, defensive driving classes, and company affiliations.

You can simplify your search by getting a quote for auto insurance online with SoFi. We’ve teamed up with Experian to provide free car insurance quotes online so you can find a great deal. You can match up your current coverage to compare rates, pick the option that looks right, and buy coverage all in one sitting.

Get an auto insurance quote with SoFi in minutes!


Photo credit: iStock/pepifoto

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

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

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