Financial Independence Archives

Dec

2025

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Aiming to Become a Millionaire? These Steps Could Help

By Samuel Becker | Financial Independence, Growing Wealth, invest, Investing, Preparing for Retirement | Comments Off

Table of Contents

Introduction to the Millionaire Mindset and Goals
Step 1: Try to Avoid Debt
Step 2: Invest Early and Consistently
Step 3: Make Saving a Priority
Step 4: Increase Your Income
Step 5: Cut Unnecessary Expenses
Step 6: Keep Your Financial Goals in Focus
Step 7: Consult With Investment Professionals
Step 8: Repeat and Refine Your Financial Plan
Additional Tips for Wealth Building
FAQ

Do you find yourself dreaming about what you would do if you were a millionaire? Maybe you fantasize about retiring early and traveling the world. Or perhaps what excites you is the thought of being able to donate to causes you care about. But, you might be wondering how to become a millionaire? You may suspect the only way you’ll ever be that rich is if you win the lottery.

Fortunately, the road to wealth isn’t that narrow; there are many ways to become a millionaire. For instance, some individuals retire with over a million dollars in savings because they made good financial decisions. Others may have started businesses that brought them success, advanced their careers so that they made enough to save seven figures, or made smart investments. Read on to learn more about how to become a millionaire, and strategies that could help get you there.

Key Points

• Eliminating high-interest debt through methods like the debt avalanche and building an emergency fund helps free up money for wealth-building investments and prevents future financial setbacks.

• Starting to invest early allows compounding returns to maximize growth over time, with strategies adjusted from aggressive to conservative as retirement approaches and circumstances change.

• Maximizing retirement account contributions through 401(k) employer matches and and contributing to IRA investments may help you make progress over time toward achieving millionaire status and financial security.

• Increasing income through career advancement, additional education, salary negotiations, or side hustles can provide more resources to save and invest, while cutting unnecessary expenses preserves existing wealth.

• Maintaining discipline by avoiding lifestyle inflation, staying focused on long-term financial goals, and consulting with investment professionals can help ensure sustained progress toward building millionaire-level net worth.

Introduction to the Millionaire Mindset and Goals

Many millionaires are not born into wealthy families or individuals who suddenly struck it rich. In fact, many millionaires are people who work for a living every day. In general, what tends to set them apart is that they have a millionaire mindset. They are smart and disciplined when it comes to their money. And they stay focused on their financial goals.

Defining What It Means to be a Millionaire

The true definition of a millionaire is someone with a net worth of at least $1 million. That means that their assets, minus any debt, is $1 million or more.

So, if you have $500,000 in savings and investments, plus a house that’s worth at least $500,000, you’d meet the criteria. If, that is, you own the house outright and don’t have a lot of debt such as car loans, student loans, or credit cards to pay off. But if you still owe money on your house and you’ve got a fair amount of debt to repay, you probably aren’t a millionaire. At least, not yet.

To do the math for your situation, total up your assets. Then subtract your debts from that amount. This will show you how close you are to reaching millionaire status, and possibly give you a sense of what you might have to do to get there.

Following these eight strategies can help when it comes to how to become a millionaire.

Step 1: Try to Avoid Debt

As we just saw in the example above, one thing that could be holding you back from becoming a millionaire is debt, especially if that debt is “bad debt,” a term often used for high-interest debt. Eliminating your debt is key because it’s difficult to build wealth if you’re paying a significant portion of your income toward interest.

Paying off debt could help free up money to invest and build wealth. One way to repay debt is to use the debt avalanche method. With this technique, you pay off your debts with the highest interest rates first and then focus on debts with the next highest interest rates (while still making minimum payments on all of your debt, of course).

Eliminating debt isn’t just about paying off existing debt, though, it’s also about avoiding the chances of going into debt in the future. Part of a debt payoff strategy could involve spending less so that you don’t need to rely on credit. You can also set a strict budget and pay with cash whenever possible.

In addition, you may want to create an emergency fund by setting aside a certain amount of money every month. That way, if you have a financial setback, you don’t have to go into credit card debt.

Recommended: Ready to build your emergency fund? Use our emergency fund calculator to determine the right amount.

Step 2: Invest Early and Consistently

Investing successfully doesn’t happen overnight. It takes time. That’s why you need to start early. There are a few rules to know that could help you improve your chances of becoming a millionaire.

Benefits of Compounding Returns

First, compounding returns can make all the difference. They can help your money grow, as long as the returns are reinvested.

Here’s how they work: Compounding returns depend on how much an investment gains or loses over time, which is known as the rate of return. The longer your money is invested, the more compounding it can do. That’s why some individuals start saving aggressively when they’re young.

Saving $100,000 by the time you’re 30 might not be possible for everyone, but the more you save early on, the greater impact it could have on your net worth.

And here’s the thing: Even if you’re in your 30s, 40s, or 50s now, it’s never too late to start saving. The important thing is that you start, period. And that you keep saving.

There are other investing strategies that could help as you work on how to become a millionaire. For instance, you could reduce the amount you spend on investment fees. High investment fees can have a big impact on your returns, so you might want to look into low-fee investments.

Also, you should make sure that you invest in a way that’s right for you throughout your life. That may mean investing more aggressively when you’re younger and gradually becoming more conservative in your investments as you get older and closer to retirement.

Step 3: Make Saving a Priority

Your savings is the amount of money you have left after paying taxes and spending money.

Many Americans aren’t saving enough to become a millionaire — in September 2025, the average personal savings rate was 4.7%, according to the Bureau of Economic Analysis. You’ll likely need to save more than three times that amount to become a millionaire.

Effective Saving Strategies for Long-term Wealth

To save for your goals, you might consider starting by investing in your company’s 401(k). Max out your 401(k) if you can. At the very least, invest at least enough to earn the employer match, if there is one. That way your employer is contributing to your savings.

In addition, consider opening a traditional IRA or a Roth IRA and contribute as much as possible, up to the limit set by the IRS. These IRAs are tax-advantaged, so they’ll help with your tax bill, too.

And investigate other savings options, as well, such as contributing to a child’s 529 college savings plan.

Step 4: Increase Your Income

You can’t join the ranks of millionaires if you’re not bringing in more money than you need for your basic necessities. The more money you make, the more you can save and invest.

Tips for Boosting Earnings and Maximizing Income

Some ways to boost your income include asking for a raise or looking for a new higher-paying job. You could also go back to school to earn an advanced degree that could lead to a position with a higher income. Your current employer might even help you cover the cost; check with your HR department.

Another one of the ways to earn extra money is to take on a side hustle. You could tutor students on evenings or weekends, do freelance writing, or dog sit. And those are just some of the options to consider.

Step 5: Cut Unnecessary Expenses

Getting control of your spending is critical to building wealth. That doesn’t mean you have to cut back on everything that gives you pleasure, but you could consider the happiness return on investment you get from the money that you spend. How big of an apartment or home do you truly need to be content? What kind of car do you need? Do you have to buy lunch out every day or could you bring your own lunch from home?

Identifying and Eliminating Non-Essential Spending

You could find ways to cut back on the things that don’t matter so much, but not skimping to the point that you miss out on things you love. For example, maybe you need your gym sessions (and there are plenty of low-cost gyms out there), but you can do without purchasing a coffee every morning.

Also, you could focus on cutting back on big expenses instead of those that won’t have a huge impact on your budget. For example, dining out only once a month, adjusting your thermostat higher or lower depending on the season, or finding a less expensive, smaller home could help you save a significant amount of money over time.

Step 6: Keep Your Financial Goals in Focus

To become a millionaire, you’ll need to stay laser-focused on your financial goals. When everyone else around you is spending money, going on fancy vacations, and buying expensive cars, remind yourself what’s truly important to you. Keep your spending in check, continue to save and invest, and avoid taking on debt.

It takes discipline. But instead of thinking about the stuff you don’t have, appreciate all the good things in your life, like your family and friends. Remember that you’re saving for your future. You’ll be able to enjoy yourself then if you have the money you need to live comfortably and happily.

Think of it this way: You’re making yourself and your financial security the priority. Make that your mantra.

Step 7: Consult With Investment Professionals

Investing can be complicated because there are so many options to choose from. If you need help figuring out what investments are right for you, consider working with a qualified financial advisor.

Leveraging Advice for Wealth Building

A good financial advisor could help you select the right investments and the best investing strategies for your situation. They can also help you plan and budget to reach your goals. But be sure to be an active participant in the process. Ask questions, be involved. Why are they suggesting a specific investment? And if you don’t feel comfortable with something, say so.

Finally, be sure to check your investment performance regularly. Know what you are investing in, how much, and why.

Step 8: Repeat and Refine Your Financial Plan

The final step to becoming a millionaire is to stay committed to your goal and your plan. Keep saving and investing your money. Stay out of debt. Let time and the power of compounding returns kick in. Be patient.

But also, don’t be afraid to refine or change your plan if need be. For instance, as you get closer to retirement, you will likely want to choose safer, less aggressive investments. You can keep saving and growing money throughout different ages and stages, but your method for doing so can evolve to make sense for where you are in your life.

Additional Tips for Wealth Building

In addition to all of the strategies above, there are a few other techniques that may help you reach millionaire status.

Lifestyle Considerations and Spending Habits

As you work your way up the ladder and earn more money throughout your career, you may be tempted to increase your lifestyle spending, too. After all, you have more money now, so you may feel the urge to spend it.

But here’s the thing: Giving in to these temptations can be a slippery slope. It might start with a bigger house in a nice neighborhood, and then grow to taking extravagant vacations and driving a luxury car. Before you know it, you could be spending way more than you’re saving.

Try to avoid lifestyle splurging if you want to be a millionaire. Instead, take the extra money and save and invest it. That way, you’ll be able to reach your goal even faster.

The Takeaway

Becoming a millionaire is possible if you take the right approach. It involves saving and investing your money, spending wisely, and avoiding debt. You need to be disciplined and focused, and it won’t always be easy. But staying committed to your goals can reward you with financial security and success.

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FAQ

How much money does the average person save?

As of September 2025, the average personal savings rate in the United States was 4.7%, according to data from the Bureau of Economic Analysis.

How many millionaires are there in the U.S.?

There are nearly 24 million millionaires in the United States as of 2025, which is roughly 40% of the world’s total.

What steps can people follow to try and become a millionaire?

Some strategies that could help individuals reach $1 million net worths include avoiding debt, investing early and consistently, prioritizing saving, increasing income, cutting unnecessary expenses, keeping goals in focus, working with professionals, and periodically refining your financial plan.

Photo credit: iStock/pixelfit

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

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Dec

2025

Average US Salary by State

By Jacqueline DeMarco | Financial Independence, Life & Career, relay | Comments Off

The average salary in the U.S. is $66,622, according to the latest data from the Social Security Administration. How your salary compares will depend on your industry and skilI set, as you’d expect. What you might not realize is that your salary is also greatly influenced by where you live, since salaries go hand in hand with the cost of living.

Here’s a closer look at the average salary in the U.S. and how income varies from state to state.

Table of Contents

What Is the Average US Salary
Average Salary vs Median Salary
US Average and Median Salary by State
Why Do States Have Different Average Salaries
Which Regions Pay the Most
Which Regions Pay the Least
Should You Move to Make More Money?
The Takeaway

Key Points

• The average salary in the US varies depending on factors like occupation, location, and experience.

• Recent data indicate an average household income of $66,622 in the U.S.

• The cost of living and regional differences can impact salary levels across the country.

• High-paying states are typically on the East and West coasts, while pay tends to be lower in the South.

• It’s important to research salary ranges for specific occupations and locations when considering job opportunities.

What Is the Average US Salary (2025)

The national average salary is $63,795. That is the sum of all incomes divided by the number of workers. Where someone lives, their industry, education level, and current demand for that job all contribute to how much a worker earns per year.

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Average Salary vs Median Salary: What’s the Difference?

The Bureau of Labor Statistics (BLS) provides data on median pay. As of Q4 2024, the median weekly earnings of full-time workers was $1,192, or $61,984 per year. The median is the midpoint in the data set, with 50% of incomes falling above that figure, and 50% below.

Why are the average and median income figures different? With averages, unusually high or low numbers can skew the results. For instance, multi-millionaires or billionaires might drive the average higher than what the typical worker actually makes. The median is less affected by outliers.

US Average and Median Salary by State in 2025

The following chart shows both the average and median income (in single income households) in each state, according to data from Forbes and the U.S. Census Bureau.

State	Average	Median
Alabama	$53,394	$59,605
Alaska	$66,130	$82,512
Arizona	$63,045	$66,340
Arkansas	$51,251	$54,658
California	$76,960	$74,819
Colorado	$71,968	$77,331
Connecticut	$73,736	$81,285
Delaware	$65,998	$75,674
Florida	$60,216	$62,973
Georgia	$61,256	$62,468
Hawaii	$65,042	$78,745
Idaho	$55,640	$68,781
Illinois	$67,122	$66,950
Indiana	$56,410	$60,351
Iowa	$56,410	$61,283
Kansas	$56,264	$64,518
Kentucky	$54,018	$57,509
Louisiana	$53,435	$53,821
Maine	$60,008	$66,369
Maryland	$73,632	$81,293
Massachusetts	$80,330	$81,170
Michigan	$60,590	$64,579
Minnesota	$66,706	$72,319
Mississippi	$47,569	$51,554
Missouri	$57,574	$59,605
Montana	$55,910	$65,242
Nebraska	$58,074	$63,813
Nevada	$58,906	$64,412
New Hampshire	$66,102	$84,017
New Jersey	$73,986	$83,102
New Mexico	$57,512	$56,766
New York	$78,624	$69,135
North Carolina	$59,717	$61,811
North Dakota	$59,051	$66,813
Ohio	$59,883	$61,617
Oklahoma	$53,456	$55,362
Oregon	$66,706	$70,266
Pennsylvania	$61,922	$66,923
Rhode Island	$66,602	$72,515
South Carolina	$54,246	$59,661
South Dakota	$53,227	$63,862
Tennessee	$56,035	$59,052
Texas	$61,235	$61,460
Utah	$61,069	$78,917
Vermont	$62,774	$65,712
Virginia	$70,054	$75,756
Washington	$78,125	$86,558
West Virginia	$52,208	$57,979
Wisconsin	$59,509	$66,106
Wyoming	$57,928	$61,866

Recommended: Salary to Hourly Calculator

Why Do States Have Different Average Salaries?

The chart shows that the average salary in some states is quite different from the average salary nationwide. That’s partly because the cost of living, which affects how much a company pays its employees, varies significantly by state.

Also, inflation impacts states to varying degrees.

In addition, industries with a concentrated presence in certain states — such as banking or automobile manufacturing — can affect the overall quality of job opportunities in that area.

Which Regions Pay the Most?

Salaries tend to be higher in some areas of the country. Cities on the West Coast and in the Northeast have some of the highest average salaries:

• Massachusetts

• New York

• Washington

• California

• New Jersey

• Connecticut

• Maryland

Remember, while these states have higher incomes, they may also have a much higher cost of living and higher housing prices.

Recommended: 25 Highest-Paying Jobs in the US

Which Regions Pay the Least?

The South is home to states that tend to pay the least:

• South Carolina

• Kentucky

• Louisiana

• Alabama

• Arkansas

• West Virginia

• Mississippi

To determine what your personal cost of living is, try tracking your expenses with a free budget app for a few months.

Recommended: Biweekly Money-Saving Challenge

Should You Move to Make More Money?

It’s important to remember that just because a state has a higher average salary, that doesn’t mean it’s more profitable for workers to live there. Higher salaries tend to correlate with a higher cost of living.

Before making a major move, first try living below your means. One reason that people who make more money still have trouble paying their bills is the phenomenon of lifestyle creep. This is when your so-called needs expand to consume your current salary.

One of the most effective ways to counteract lifestyle creep is to downsize your home. Reducing your housing expenses to less than 30% of your gross income can help you pay down debt, increase savings, and become more conscious of how lifestyle choices affect spending.

💡 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 average annual average salary in the U.S. is $66,622. The median annual salary, which is often less skewed by outlying numbers, is $61,984. It’s worth noting that average and median salaries vary quite a bit by state. States in the Northeast and on the West Coast tend to pay higher salaries, while those in the South often pay less. What’s stopping people from moving to a higher paying state? Often, it’s housing prices, which rise along with the cost of living in “richer” states.

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FAQ

How much do the top 10% of Americans make per year?

The top 10% of Americans earn $167,639 per year. Some top earners live in higher cost of living areas, so it can be more revealing to see how much the top 10% earn in your state.

What percentage of Americans make over $75K?

Only 12.1% of Americans make in the $75,000 to $99,999 range. An additional 17% make between $100,000 and $149,000, and 15.7% earn in the $50,000 to $74,999 range.

Which U.S. state has the highest salary?

Massachusetts is the state with the highest annual income of $76,600. This salary is significantly more than the national average salary of $63,795.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

Photo credit: iStock/artpipi

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Dec

2025

A smiling woman in overalls carries a box with a plant in a new rental apartment.

What Credit Score Is Needed to Rent an Apartment in 2025?

By Sheryl Nance-Nash | Credit, Financial Independence, relay | Comments Off

While there’s no universally required credit score needed to rent an apartment, having a solid credit score can certainly help your chances of a landlord handing you a set of keys. In general, a landlord will look for a credit score that is at least “good,” which is generally in the range of 670 to 739. However, that can vary by landlord or property manager, as well as the location in which you’re renting.

Read on to learn more about how your credit score can affect renting an apartment — and how you can approach renting if you have a lower credit score.

Table of Contents

What Credit Score Do I Need to Rent an Apartment?
What Landlords Look at on Your Credit Report
Benefits of Good Credit When Renting an Apartment
How to Monitor Your Credit Score
What to Expect
The Takeaway

Key Points

• A ‘good’ credit score, typically 670 to 739, increases rental application approval chances.

• Landlords consider credit score, debt-to-income ratio, and past rental history for tenant selection.

• Higher credit scores provide a significant advantage in competitive rental markets.

• For bad credit, placing the lease in a better credit holder’s name or adding a cosigner is recommended.

• Prospective tenants should monitor and improve their credit score before apartment hunting.

What Credit Score Do I Need to Rent an Apartment?

Truth is, the answer to what credit score you need to rent an apartment is a bit squishy. In general, you’ll have a better chance of approval if your credit score is at least deemed “good.”

What’s considered good? Credit scores are generally classified as follows per FICO® (keep in mind that different scoring models may vary):

• Exceptional: 800-850

• Very good: 740-799

• Good: 670-739

• Fair: 580-669

• Very poor: 300-579

There also are variables that can affect whether your credit score qualifies you to rent an apartment. For example, if you live in a city where there is huge demand for apartments, landlords may give preference to those with higher credit scores.

Can You Get an Apartment if One Person Has Bad Credit?

If one person has bad credit, know that it will likely make it tougher for you to get an apartment. Landlords have a lot of leeway and can follow criteria of their choosing.

Still, it’s not impossible even if it is trickier. One smart strategy in this situation is to put the lease in the name of the person whose credit and income is best. You could also offer to show your income or provide a reference.

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What Landlords Look at on Your Credit Report

When your landlord reads your credit report, they will be looking for clues about your financial health and habits.

Of much importance is your debt-to-income ratio. In a nutshell, this is the amount of your monthly pre-tax income that gets spent on debt payments. It’s certainly not news to you that filing for bankruptcy can have a negative impact on one’s credit. A landlord also may be spooked if you have hefty credit card balances.

Your credit history disclosed on your credit report also may include your rental history, since some landlords and rental property managers share your data with the credit bureaus. This can be a plus if you’ve been doing the right thing; if not, this can work against you.

Too many hard inquiries also can raise red flags for a landlord. This is because frequently applying for different types of credit could suggest financial instability, which increases risk in the eyes of lenders — as well as landlords.

How to Rent an Apartment with a Lower Credit Score

Just because your credit score isn’t stellar doesn’t mean you’re resigned to sleeping on a friend’s couch or living with your parents. There are ways to rent an apartment even with a lower credit score.

Pay a Higher Security Deposit

One way to show that your credit history is just history is by offering to make a higher security deposit. Say you are required to pay first and last month’s rent upfront. To sweeten the deal, maybe you tack on a couple additional months of rent.

If you want to instill confidence in your potential new landlord, this might do it. Just make sure you actually have the room in your budget to offer up the cash.

Get a Cosigner

While getting a cosigner may put a damper on feeling like you’re finally a grownup, it may be worth sucking it up and getting a creditworthy parent or other trusted individual to cosign for your apartment. This can give your landlord peace of mind if someone is willing to pay the rent on your behalf if you’re unable to.

Just keep in mind that your cosigner will be on the hook if you miss a payment, and that cosigners generally must meet even steeper credit score and income requirements.

Play Up Your Income

Maybe your credit score is nothing to brag about, but you’ve worked hard and now have your finances in order, with solid savings and a good income. If you could show that you earn three or four times your rent on a monthly basis, that might divert attention from your lousy credit score. Additionally, if you have a solid stash in your savings account, that can also give your landlord assurance that you have the funds to cover your monthly rent.

Consider Getting a Roommate

Adding a roommate to your lease or rental agreement can increase your creditworthiness and your qualifying income. This is especially the case if you can find a roommate with good credit — and get your landlord to pull their credit first.

Benefits of Good Credit When Renting an Apartment

A landlord needs more than their gut instinct to help them determine who to rent to, which is why a credit score carries a lot of weight when it comes to getting your rental application approved. A good or — better still — an excellent score can give landlords the confidence to consider you for the apartment, especially if all other signals they get when checking on your background indicate they should give you the green light.

Having a solid credit score can help you to snag the apartment you want, and avoid the hassles associated with trying to secure an apartment when your credit isn’t as great, such as getting a roommate or a cosigner. Especially if you live in a city with a competitive rental market, a good credit score can be a serious edge.

How to Monitor Your Credit Score

Ideally, you want to monitor your credit and get a copy of your credit report before you start apartment hunting. It’s important to know where you stand, and if there are any errors, you want to fix them right away.

You can get free weekly credit reports from the three national credit reporting agencies: Equifax, Experian and TransUnion via AnnualCreditReport.com.

While your credit report provides information on your various credit accounts and their balances and your payment history, it does not include your credit score. You can check your credit score by looking at a loan or credit card statement or through an online credit score checker. You can also buy a score directly through credit reporting companies. Even if you might have checked your credit score not that long ago, don’t skip doing so again — your credit score updates every 30 to 45 days.

If your score is low, consider taking steps to improve it before jumping into your apartment search. Actions like paying down credit card balances and making sure you don’t have any more late or missed payments for a stretch can show progress.

What to Expect in 2025

According to Zillow, a surge in apartment construction in 2024 is finally catching up with demand. As a result, rental affordability is at its best level in four years, and landlords are offering record-high concessions.

But that doesn’t mean housing prices are cheap. Apartment rents have risen 36.1% since the start of the pandemic. As of September 2025, the typical asking rent is $1,979.

The Takeaway

You’ll want to shoot for having a good credit score — generally in the range of 570-739 — to get an apartment. While you may be able to still get an apartment if you don’t have solid credit, it will make it more challenging with the competition you’re likely to face.

If you have the luxury of time, do what’s necessary to improve your score so that when you begin your search, you’ll be an ideal candidate. An online credit monitoring tool can make it easier.

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

Photo credit: iStock/MixMedia

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.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

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 .

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

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

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

SORL-Q425-029

Dec

2025

A young woman is sitting on the floor, looking at her phone near a laptop, wondering if she should pay off her car loan or student loans first.

Should I Pay Off My Car Loan or Student Loans First?

By Rebecca Safier | Debt Payoff, Financial Independence, Student Loans, student_loan | Comments Off

Table of Contents

Understanding Your Debt Types
Factors to Consider When Prioritizing Debt
Benefits of Paying Off Car Loans First
Advantages of Prioritizing Student Loans
Develop a Debt Repayment Strategy
The Takeaway

If you’re juggling a car loan and student loans, you might be wondering which debt to prioritize. While it’s important to keep up with minimum payments on all your loans, making extra payments on one of these types may help you save money on interest.

The decision of whether to pay off a car loan or student loans first ultimately depends on your personal financial situation. Here, we’ll look at the benefits of paying off each, what factors to consider, and how you can best decide which option is right for you.

Key Points

• Looking at the interest rates and total cost of car loans and student loans can be a helpful way to compare them.

• Prioritizing the loan with the highest interest rate can generally save borrowers the most money.

• Federal student loans are more flexible than car loans, providing income-based repayment options and opportunities for potential loan forgiveness.

• Interest on student loans may be tax deductible. New car loans may qualify for a tax break if purchased between 2025 and 2028.

• Paying off a car loan first can prevent possible repossession of the car in the case of loan default.

Understanding Your Debt Types

First, it’s important to understand the difference between student loans and car loans. Student loans may be federal or private, and they might come with fixed or variable interest rates. They’re unsecured loans, meaning they’re not backed by collateral. Auto loans, on the other hand, are a secured form of debt.

Secured Debt

Secured debt is a type of loan backed by collateral, meaning the lender can seize the pledged asset if the borrower fails to repay.

Car loans are secured by your vehicle. If you fall behind on car loan payments, a lender can repossess your car. Car loans commonly have fixed interest rates and repayment terms of 36 to 84 months.

Unlike student loans, auto loans don’t usually offer much flexibility if you’re having trouble making payments. And car loan payments can be costly — the average car payment in 2025 is $745 a month for new cars. By comparison, the average student loan payment is estimated to be about $536 per month in 2025, according to the Education Data Initiative.

Unsecured Debt

Unsecured debt is a loan that isn’t backed by collateral. Both federal student loans and private student loans are unsecured forms of debt.

Federal student loans qualify for various benefits and plans that can help lower student loan payments, such as income-driven repayment, as well as programs to temporarily pause payments if needed, like deferment and forbearance. Federal student loans are also eligible for forgiveness programs such as Public Service Loan Forgiveness.

Private student loans don’t have as many benefits as federal loans, but some private lenders will let you modify or postpone payments if you run into financial hardship. You might also explore refinancing student loans to see if you can qualify for a lower interest rate or more favorable terms that might help make your payments more manageable.

Factors to Consider When Prioritizing Debt

There are several things to think about when deciding whether to pay car or student loans first. Some of the main considerations include your loan’s interest rate, tax implications, repayment terms, and the impact on your credit score.

Interest Rates and Total Costs

It typically makes sense to pay off the loan with the highest cost of borrowing first. This usually means the loan with the highest interest rate. If your student loan has a rate of 5.00%, and your car loan has a rate of 10.00%, paying off the car loan would save you more money in the long run.

Along with the interest rate, consider whether the loan carries any other fees, such as a prepayment penalty. Student loans don’t charge penalties for prepayment, but a car loan might. Compare each loan’s annual percentage rate (APR), as this figure takes both interest and fees into account.

Tax Implications and Deductions

Another factor has to do with tax deductions. The student loan interest deduction allows you to deduct up to $2,500 a year in student loan interest from your taxable income, depending on your modified adjusted gross income (MAGI). At certain income limits, student loan tax deduction phase-outs begin. In 2025, if your MAGI is less than $85,000 a year if you’re a single filer, and $170,000 if you’re married and filing jointly, you can qualify for the full deduction. If you earn between $85,000 and $100,000 ($170,000 and $200,000 if married filing jointly), you can make a partial deduction.

Car loans may also qualify for a tax deduction. Beginning in the 2025 tax year, the new One, Big, Beautiful Bill Act permits taxpayers to deduct up to $10,000 in interest paid on qualifying auto loans — even if they use the standard deduction. This deduction applies only to new, U.S.-assembled vehicles purchased after December 31, 2024, and only for personal (not business) use. The benefit phases out for individuals with modified adjusted gross income (MAGI) over $100,000 (or $200,000 for joint filers).

Loan Terms and Repayment Periods

Student loans tend to have more flexible repayment terms than car loans. Federal student loan borrowers are eligible for various repayment plans, including the Standard Repayment Plan and income-driven repayment plans. Keep in mind that for new loans taken out on or after July 1, 2026, borrowers will be limited to the standard plan or the new Repayment Assistance Program (RAP).

Car loans don’t qualify for many options. You’ll often choose a repayment term of three to seven years and be expected to pay monthly on your agreed-upon rates and terms. If you can’t make payments, the lender can repossess your vehicle.

Impact on Credit Score and Financial Flexibility

Neither type of payoff is universally better for your credit score, as it depends on your situation. Paying off a car loan can boost your score by reducing installment debt and freeing up cash flow, but it may slightly lower your credit mix. Paying down student loans, which are typically long-term, can improve your payment history and lower your overall debt burden. Paying off either one should have a positive impact on your credit score.

It’s also important to consider your financial situation. If your student loan payment is higher, for example, you may want to pay that off first to free up more cash.

Recommended: Student Loan Consolidation vs Refinance

Benefits of Paying Off Car Loans First

Paying off a car loan before your student loan can have several advantages, especially since car loans don’t have as much repayment flexibility or offer any tax benefits for vehicles that are strictly for personal use. Here are some reasons to consider prioritizing your car loan over your student loans.

Eliminating Secured Debt

Defaulting on a car loan could lead to losing your car. The sooner you can pay off your secured car loan, the sooner you’ll own your car outright and you won’t have to worry about the possibility of car repossession.

Potential Savings on Interest

Car loans may come with higher interest rates than student loans, so paying off the auto loan first could lead to more savings. Keep in mind, though, that if you purchased a new car in 2025, you could qualify for the new car loan interest deduction. Savings on interest mostly applies to vehicles purchased in or before 2024, used vehicles, or foreign brand vehicles.

Let’s say, for example, that you owe $15,000 on a car loan at a 10.00% rate and a $15,000 student loan at a 5.00% rate, and that both loans have five years left on their repayment.

If you put an extra $100 per month toward your car loan, you’d save $1,232 on interest and get out of debt nearly a year and a half sooner. If you put that extra $100 toward your student loans, you’d also get out of debt about a year and a half sooner but you would save just $574 in interest charges. Our student loan payoff calculator can help you crunch the numbers on your student debt.

You could also consider refinancing your car loan for a better rate to help save on interest. This option might be worth exploring if interest rates are lower now than when you originally took out the loan.

Building Equity in Your Vehicle

The faster you pay down your car loan, the more equity you’ll hold in your vehicle. That means you’ll own more of your car outright, which could come in handy if you ever want to sell it. Plus, you’ll be less likely to end up underwater on your car loan, which can happen when the debt you owe on your vehicle exceeds what the vehicle is worth.

Lower Monthly Obligations and Insurance Costs

Paying off your car loan can significantly reduce your monthly financial obligations, freeing up room in your budget for savings, investments, or other expenses. Once the loan is gone, you’re no longer responsible for a sizable installment payment each month, which can improve overall cash flow. In addition, some lenders require comprehensive and collision insurance coverage for financed vehicles, meaning you may be able to lower your insurance costs once the car is fully paid off.

Advantages of Prioritizing Student Loans

Although it often makes sense to prepay a car loan before a student loan, there are certain advantages to paying off student loans first. Here are some scenarios where you could benefit from prepaying your education debt:

• Your student loans have a variable rate: Some private student loans have a variable rate that can increase and make your borrowing costs unpredictable. If you’ve been dealing with a rising variable rate, you may want to pay off those loans as quickly as you can. You might also explore refinancing those loans, which could allow you to switch to a fixed (and potentially lower) interest rate.

• You’re considering filing for bankruptcy: If you’re in dire financial straits, you might be looking into potentially erasing or restructuring your debts through bankruptcy. Although it’s possible to discharge student loans in bankruptcy, the process is notoriously difficult. It may be easier to discharge a car loan through bankruptcy than a student loan.

Access to Federal Loan Protections and Forgiveness

Federal student loans come with a variety of borrower protections, but you may not require any of them for managing your student loan debt. If you aren’t pursuing loan forgiveness, for instance, you might focus on paying off your federal loan debt.

Income-Driven Repayment Options

Federal student loans also come with income-driven repayment plans, where your monthly payments are based on your income and family size. If you aren’t using that benefit, it might make sense to prioritize paying off your student loans before your car loan.

Recommended: Student Loan Refinancing Calculator

Develop a Debt Repayment Strategy

Once you’ve decided which loans to pay off first, it’s important to develop a strategy for repayment. Here are some steps to take.

Create a Budget and Debt Snowball

Start with making a budget so you have a clear sense of your income and expenses. Track your spending, and look for areas where you could cut back. By reducing your spending, you might find room in your budget to direct extra payments toward your debt.

There are debt pay-off strategies that can help. For example, with the debt snowball method, you pay off the loan with the smallest balance first. Then you work on paying off the next smallest loan and so on. The debt avalanche, in contrast, targets the loan with the highest interest rate first, and then the loan with the next highest interest rate, and it can save you the most money in the long run.

The debt snowball may not save you as much money as the debt avalanche, but it can be psychologically rewarding to pay off a debt in full before moving onto the next one.

Seek Additional Income Sources

After budgeting and cutting down on spending, you might explore ways to increase your income. This could mean going for a promotion and raise at work or finding a new job. You could also consider taking on a side hustle, such as driving for a ride-sharing service or doing freelance tutoring.

By setting up additional income streams, you’ll have more cash to put toward your loans and get out of debt faster.

Negotiate with Lenders

If you’re looking to modify payments or adjust your interest rate, try negotiating directly with your lender. Notify the lender that you’re having difficulty repaying the loan and see if they might be willing to work with you. Depending on the type of loan, the lender might offer a repayment plan or reduce the loan interest rate. Although there’s no guarantee of success, it’s worth a try.

Consider a Hybrid Approach to Paying Off Both Loans

A hybrid approach — paying more than the minimum on both your car loan and student loans — can be a smart strategy if you’re unsure which to prioritize. By splitting extra payments, you reduce both balances simultaneously, chip away at interest, and avoid neglecting one debt while focusing on the other. This method also preserves financial flexibility, allowing you to adjust your payoff strategy if your income, expenses, or interest rates change over time.

The Takeaway

While there’s no one-size-fits-all answer to whether you should pay off a car loan or a student loan first, paying off the loan with the highest interest rate can generally save you the most money. For many borrowers, that may be their car loan. If your student loans have high interest rates, you might consider refinancing your student loans.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

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

FAQ

Is it better to pay off higher interest debt first?

Paying off high-interest debt first usually makes the most financial sense, since it will save you more money in the long run. However, it’s important to keep up with the minimum payments on all your debts so you don’t end up in delinquency or default.

Can I deduct student loan interest on my taxes?

It depends on your income. The student loan interest deduction lets you deduct the interest you pay on student loans, up to $2,500 a year if your modified adjusted gross income (MAGI) is less than $85,000 for single filers and $170,000 if you’re married and filing jointly. If you earn between $85,000 and $100,000 ($170,000 and $200,000 if married filing jointly), you can make a partial deduction. Anything more than that and you cannot take the student loan interest deduction.

Can I claim car loan interest on my taxes?

Yes, you may be able to claim a deduction for car loan interest starting 2025, but only under certain conditions. The loan must be for a new, U.S.-assembled vehicle purchased for personal use, and the deduction is capped at $10,000 per year. This temporary benefit applies through tax year 2028, and you’re eligible whether you itemize or take the standard deduction.

What happens if I default on my car loan or student loans?

A car loan is secured by your vehicle, and if you default on the loan, the lender can repossess your car. Student loans are unsecured, so a lender can’t take your personal property. However, the government can garnish your wages, tax refunds, and Social Security benefits if you default on a federal student loan. Defaulting on private and federal student loans can also damage your credit, and a private lender could potentially take you to court to try to collect the money.

Can paying off a car loan early hurt your credit score?

Paying off a car loan early may cause a small, temporary dip in your credit score because it closes an active installment account and slightly reduces your credit mix. However, the impact is usually minor, and becoming debt-free often outweighs the short-term change in your score.

Should I refinance my car loan or student loans before paying them off?

Refinancing your car loan or student loans before paying them off can be beneficial if you qualify for a lower interest rate or better terms. Lower monthly payments or reduced interest costs can free up cash and make repayment more manageable. However, compare fees, credit requirements, and federal loan benefits before refinancing.

Photo credit: iStock/damircudic

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

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.

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

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.

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

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.

SOSLR-Q425-059

Dec

2025

To secure a $10K personal loan, requirements will vary, and your credit can affect the rates and terms you’re offered. Read on for the full story.

$10,000 Personal Loan: Everything You Need to Know

By Jason Steele | Budgeting & Goals, Financial Independence, personal_loan | Comments Off

Table of Contents

Reasons to Get a $10,000 Personal Loan
Pros and Cons of Taking Out a $10,000 Personal Loan
$10,000 Personal Loan Terms
$10,000 Personal Loan Monthly Payments
What Credit Score Do You Need To Get a $10,000 Personal Loan?
Can You Get a $10,000 Personal Loan With Bad Credit?
How Long Does It Take to Get a $10,000 Personal Loan?
Requirements for a $10,000 Personal Loan
Top $10,000 Personal Loan Lenders
How to Compare $10,000 Loan Offers
Tips for Getting Approved for a $10,000 Loan
The Takeaway

A personal loan can be a relatively low-interest way to access a lump sum of cash, which is usually paid back in monthly payments. This kind of unsecured installment loan (meaning you don’t need to put up collateral) can be used for a variety of purposes. For example, you might pay off high-interest credit card debt, fund a home renovation, or finance a family reunion trip to the beach next summer.

Here, you’ll learn the full story on one popular option, a $10,000 personal loan.

Key Points

• A personal loan can provide a low-interest lump sum, which borrowers can use for various purposes, including debt consolidation and home renovations.

• Monthly payments for personal loans depend on factors like the loan amount, interest rate, and repayment term, with fixed or variable rates available.

• Typical requirements for qualifying include a credit score in the good range or higher, a steady income, and an active checking account, although options exist for those with lower scores.

• Fees, such as origination fees, can increase the overall cost of a personal loan, and borrowers should focus on the annual percentage rate (APR) for clarity.

• Fast processing times for personal loans are common, with many lenders offering same-day or next-day funding after approval, provided applicants have the necessary documentation.

Reasons to Get a $10,000 Personal Loan

Many prospective borrowers are attracted to personal loans because of the freedom and flexibility that they offer compared to some alternatives. Reasons to get a $10,000 loan might include the following:

• To pay off an unforeseen expense, such as costly car repairs or a major medical bill. (A borrower might use a lesser sum, like a $5,000 personal loan, in some situations.)

• To consolidate other debts. For example, assume you have a $10,000 balance between two credit cards, each having an interest rate of over 20%. You might be able to secure a $10,000 personal loan with a significantly lower interest rate to pay off that debt.

• To pay for a home renovation.

• To start a side hustle.

• To cover wedding expenses, such as venue costs, catering, or attire, through a wedding loan.

• Any other legal need for a cash infusion.

Pros and Cons of Taking Out a $10,000 Personal Loan

Consider the pros and cons of taking out a $10,000 personal loan as you explore this option.

Pros of a Personal Loan	Cons of a Personal Loan
Quick access to cash	Increased debt
Potentially lower interest rate than credit cards	Potential fees and prepayment penalties
Flexible use of funds	Typically cannot use for business purposes or tuition
Can build credit if payments are made on time	Can lower credit if payments are late or missed

$10,000 Personal Loan Terms

Depending on the lender, the repayment periods typically range from 12 months to 84 months.

You can shop around for a personal loan with terms that allow for affordable monthly payments. Keep in mind that a longer term likely means you will pay more interest over the life of the loan.

When calculating the overall costs of a personal loan, consider such factors as the principal amount borrowed, interest rate, fees, and the loan term. You might use an online personal loan calculator to help you tally up costs.

Note: Also keep in mind that some personal loans are secured loans, meaning that you put up collateral which the lender can take ownership of if you default on the loan. Be clear on whether the loan you seek is secured or unsecured.

$10,000 Personal Loan Monthly Payments

Personal loans are typically repaid over a multi-year term through monthly payments. The cost of the monthly payments is influenced by the interest rate that applies to the specific loan. Interest rates are essentially the fees charged by the lender for providing the loan.

The lowest interest rates are typically offered to consumers with a good to excellent credit history and may also be influenced based on other factors including their current income. Generally speaking, lenders charge lower interest rates if they think an applicant is likely to repay their loan in a timely way.

The following chart shows the impact that interest rates have on the monthly payment and also how choosing a longer-term loan can increase the overall cost of the loan.

Principal	Interest Rate	Loan Term	Monthly Payment	Total Interest Paid
$ 10,000	6.0%	24 months	$ 443.21	$ 636.95
$ 10,000	10.0%	24 months	$ 461.45	$ 1,074.78
$ 10,000	6.0%	48 months	$ 234.85	$ 1,272.81
$ 10,000	10.0%	48 months	$ 253.63	$ 2,174.04

Personal loan interest rates are generally fixed, which means the monthly payment will remain the same. Variable-rate personal loans are offered by some lenders, and payments will be influenced by market conditions.

$10,000 Personal Loan Fees

In addition to interest, some lenders charge origination fees that will also increase the overall cost of the loan.

The combination of the interest rate and any applicable fees is the annual percentage rate (APR) of the loan. Calculating the APR is necessary for determining the true cost of the loan. Recent Federal Reserve data shows the average APR of a 24-month personal loan to be 11.14%.

It’s important for applicants to closely review the terms of any potential loan agreement. For example, a lender may charge a late fee when payments are not received on time, and some may have prepayment penalties that apply if a borrower pays off the loan ahead of schedule.

What Credit Score Do You Need To Get a $10,000 Personal Loan?

Your credit score is a three-digit number that a lender checks to assess your creditworthiness. The most popular credit scoring systems (like FICO® Score) usually range from 300 to 850. Your credit score is calculated largely based on your credit history because past consumer behavior tends to predict the future.

Here are the usual credit score ranges according to FICO:

• 300 to 579: Poor

• 580 to 669: Fair

• 670 to 739: Good

• 740 to 799: Very good

• 800 to 850: Excellent or exceptional

There’s no single credit score needed for getting a personal loan. Keep in mind that a $10k loan is close to the average personal loan amount (the current average is $11,724). Rates may vary depending on the size of your loan.

Can You Get a $10,000 Personal Loan With Bad Credit?

In general, you need a good credit score to qualify for a personal loan. If you have bad credit (say, in the poor or fair range), you might still be able to secure a loan, but potentially at a higher interest rate. If your credit score is in the very good or exceptional range, you may qualify for even more favorable interest rates and terms.

If a personal loan with bad credit is more expensive than you like, you might look into personal loan alternatives, such as a salary advance or using credit cards.

How Long Does It Take to Get a $10,000 Personal Loan?

Personal loans are known for offering fast processing — or funding — times, particularly among online lenders. Many lenders today offer same-day or next-day funding of personal loans after approval. Applicants should be properly prepared with the documentation necessary to confirm their identity, address, and income, as well as current bank statements.

Requirements for a $10,000 Personal Loan

Requirements will vary across lenders. However, qualifying for a $10,000 personal loan typically requires a credit score in the good range, an active checking account, and a steady, verifiable income, among other factors.

Top $10,000 Personal Loan Lenders

Here’s a look at some of the current leading personal loan lenders, along with interest rate ranges.

Lender	Minimum Credit Score	APR Range	Loan Amounts
SoFi	None	8.74% to 35.49%	$5,000 to $100,000
LightStream	660	6.49% to 24.89%	$5,000 to $100,000
PenFed	None	7.99% to 17.99%	$600 to $50,000
Discover	660	7.99% to 24.99%	$2,500 to $40,000
Citi	Undisclosed	9.99% to 19.49%	$2,000 to $30,000

How to Compare $10,000 Loan Offers

When comparing offers for a $10,000 personal loan, keep these tips in mind:

• Focus on the APR vs. simply the interest rate to get a better idea of the actual costs of borrowing, with fees included.

• Look at the total cost of the loan over its term. You’ll see that a longer term typically reduces your monthly payment but means you pay more interest over the life of the loan.

• Do look into the fees involved, such as origination and late fees, as well as prepayment penalties. These can make a significant difference in some situations, so you want to take out a loan with a “no surprises” understanding.

Tips for Getting Approved for a $10,000 Loan

If you’re thinking about applying for a $10K personal loan, here are some ways to help improve your odds of success. You’ll see that understanding and optimizing your creditworthiness can be an important step.

• Work on maintaining or building a credit score that’s at least in the good range, if not very good or exceptional for the most favorable terms.

• Check your credit report for any errors and work to correct any that you find.

• Calculate your debt-to-income ratio, or DTI, and focus on keeping it below 36% for the best odds of approval.

• Only borrow how much you actually need, since applications for higher sums can face a more stringent approval process.

• Gather all of your documentation (such as pay stubs, tax returns, and bank statements) needed for personal loan approval in advance

• Prequalify for a loan and compare offers carefully.

The Takeaway

If you’re considering a personal loan, it’s a good idea to take the time to compare the various options available and make sure you understand the terms and costs of a loan. Those with lower credit scores are likely to encounter fewer choices and higher interest rates and fees, while those with a strong financial profile may have a number of solid offers to choose among.

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

SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.

FAQ

What is the monthly payment on a $10,000 personal loan?

The monthly payment on a $10,000 personal loan will fluctuate based on your credit score, the loan’s interest rate and fees, and the term of the loan, among other factors.

Do I need at least a 620 credit score to get a $10,000 loan?

There is no formal minimum credit score needed for getting a personal loan. Different minimums may apply across the various institutions that offer personal loans in the $10,000 range. Those with a 640 or higher credit score are likely to find a number of options for a $10,000 personal loan; those with higher scores may have more options as well as more favorable terms.

How long will it take to get a $10,000 loan?

Fast-funding options including same-day and next-day loans are common for 10,000 dollar loans. As long as you are prepared with some basic documentation that verifies your identity, address, and income, rapid approval and funding may be available.

Photo credit: iStock/Edwin Tan

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