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What Is a Hybrid Account?

About 95% of Americans have a bank account, and many people have both a checking and a savings account. Sometimes, though, there may be advantages to what is considered a hybrid account, offering the best of both worlds (or at least some of the benefits of each).

For instance, you might have the ease of access that you get with a checking account: Hello, debit card! And you might also earn a higher interest rate, the way you might with some savings accounts vs. checking.

Financial institutions may offer different versions of hybrid accounts. Read on to learn about some of the most common features so you can decide if a hybrid bank account is right for you.

Defining the Hybrid Account

There are a variety of bank accounts available to consumers. And the type of accounts people are drawn to will depend on their financial goals, situation, and how they choose to organize their finances.

A hybrid account can merge the features of both checking and savings accounts. Here’s a bit more about hybrid accounts:

•   A hybrid account is one that combines the perks of a checking account with features of an interest-bearing savings account. Instead of linking your checking and savings account, they’re basically functioning as one cohesive account.

•   A hybrid account allows access to your money on a day-to-day basis, like a checking account would. That can mean that you may get a debit card to use with it.

•   On the flip side, it allows your money to grow the way it might in a savings account.

Of course, every financial institution is different, and each might have a different approach to crafting a hybrid bank account. But the main gist of a hybrid account is that it’s a bank account that bears some resemblance to a day-to-day checking account and a long-term savings account.

💡 Quick Tip: An online bank account with SoFi can help your money earn more — up to 4.60% APY, with no minimum balance required.

Different Types of Accounts

To understand what can make a hybrid account a useful tool, it’s helpful to first understand the features and pros and cons related to traditional checking and savings accounts and then compare.

Checking Accounts

Checking accounts usually allow you to deposit money, write checks, or use a debit card to pay for goods and services. There are typically no withdrawal limits, and you can often link a checking account to other accounts and credit cards. It might be the account you use to pay recurring bills each month, like a car loan or student loan payment.

Banks may pay you interest on the money that sits in your checking account. However, regular checking account interest rates are typically low, with an average rate of 0.06%.

These rates don’t always catch up with the national inflation rate, which is currently about 3.7%. That means your money is actually depreciating in value while it sits in the account. In the long term, this may not make checking accounts a particularly good place to park a lot of cash.

Checking accounts may also charge fees for the services they offer, such as monthly maintenance fees.

Get up to $300 when you bank with SoFi.

Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!


Savings Accounts

Savings accounts are another type of deposit account that you can open with your financial institution of choice. They usually earn some interest, with the current standard savings account earning about 0.46%.

However, high-yield savings accounts are an alternative to traditional accounts; they may sometimes offer interest rates of 4% or more. Higher-interest savings accounts can help you beat inflation so your money doesn’t lose value by growing at a slower rate than inflation. You may find these accounts offered at online banks vs. traditional ones.

Savings accounts are generally appealing because they are a separate place to store money you don’t necessarily want to use on day-to-day expenses. For example, it could be a good place to keep your emergency fund or even to save for a vacation or a move across the country.

However, there are some downsides to savings accounts, too. A few to note, which may or may not apply to only the high-interest variety:

•   They sometimes don’t allow consumers to use them for direct payments.

•   There may be restrictions on the number of savings account transactions you initiate every month.

•   There may be restrictions such as a balance cap that sets a limit on the amount of money on which you can earn a high rate.

•   There could be a minimum opening deposit and ongoing balance requirements to earn the higher interest rate. Or, if you fail to meet the amount, you might be assessed a minimum balance fee, which could offset the extra interest you’re earning.

If you’re considering this as an option, you may want to look closely at the fine print when choosing your savings account.

💡 Quick Tip: Most savings accounts only earn a fraction of a percentage in interest. Not at SoFi. Our high-yield savings account can help you make meaningful progress towards your financial goals.

Hybrid Accounts: the Details

Hybrid bank accounts will often take benefits from checking and savings accounts and combine them into one account. A hybrid account may allow you to use checks or a debit card for day-to-day transactions, while still offering the interest rates typically associated with a savings account. Hybrid bank accounts are often more likely to be offered by online vs. traditional banks.

Traditional brick-and-mortar banks must pay for their storefront locations, the people who staff them, and ATMs. They may do so by charging more and/or higher fees and paying lower interest rates, while online banks can often afford to drop fees and pay higher rates.

You may hear the term money market account (or MMA) used by some financial institutions when describing their hybrid accounts. Keep in mind that this is different from a money market fund, which is a type of investment.

Introducing SoFi Checking and Savings

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


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.



SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.


SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.


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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Can You Finance a Gap Year? Financing Options for Gap Year Students

Can You Finance a Gap Year? Financing Options for Gap Year Students

When students take a gap year, they typically take a semester or year off between high school and college in order to take advantage of experiential learning. While extraordinary opportunities may be awaiting you, you may struggle to think of ways to pay for the experience.

If that’s the case, there are options that may help you pay for your gap year — beyond funding the costs out of pocket. Continue reading for more information on options you may want to consider should you find yourself in need of help funding your non-classroom experience.

Gap Year, Explained

First of all, what is a gap year and why do people take them?

Students may choose to take a semester or year off with the goal of getting a break from academics and prior to diving into postsecondary education. Students may choose to complete an internship, travel, study on their own, volunteer, or pursue other interests. Some students choose to pursue a gap year with the intention of discovering what it is that they want to major in or the career path they’d like to pursue.

Many students report a developed self- and cultural awareness, increased independence, and confidence after taking a gap year.

Students may choose to apply to colleges and universities during their senior year (and let colleges know of their plans to take a gap year), during their gap year or after they’ve completed their gap year. Waiting until later often gives them the advantage of being able to report on what they’ve learned during their time away from academics.

In some instances, a gap year may also be something for a student to do after college or in-between college and post-graduate study.

Planning Out Your Gap Year

It’s important to plan out your gap year ahead of time so you have a plan for how you’ll spend your time. It can be easy to waste time when you break from a traditional schedule. Having a plan ensures that you’ll have a better chance of achieving your goals — you might even curb expenses as well.

It may be helpful to break your plan down into measurable goals. For example, if you plan to travel, write down where you’d like to be on specific dates so you don’t miss any of your intended milestones. It’s also a good idea to budget for your gap year ahead of time so you know how much it will cost and the amount you’ll need per week or month to live on.

Options for Financing Your Gap Year

You can always finance your gap year with cash you or your parents have saved or with money from a well-meaning grandparent. However, not everyone has cash bankrolling their gap year. Let’s take a look at a few ways you may want to consider financing your gap year.

Gap Year Scholarship or Grant

A private entity may offer you a gap year grant or scholarship. A scholarship is free money that you don’t have to pay back that can come from a wide variety of entities, including clubs, organizations, foundations, charities, businesses, the government and individuals. It’s possible to find scholarships specifically for gap years, particularly for students who want to volunteer, improve certain skills, volunteer, develop a talent, or complete another type of experiential learning.

Grants are also a form of financial aid that doesn’t have to be repaid. Grants may also help you fund your gap year without having to repay the money. However, it’s important to check into the fine print on both college grants and scholarships to ensure that you fit the criteria. (Some scholarships and grants require you to get college credit in order to qualify.)

529 Account or College Savings

If you or your parents have college savings set aside in a brokerage account, savings or checking account, or a certificate of deposit (CD), you may want to use this money to pay for gap year expenses.

A 529 plan is an investment account that offers investment opportunities and tax advantages when used to pay for qualified education expenses. You may take withdrawals from a 529 plan to pay for qualified educational expenses for tuition, room, board, fees, books, equipment for classes, and other supplies at an accredited institution. If you meet these requirements, you won’t pay federal income tax.

However, if you spend the money on an expense that doesn’t qualify as a higher education cost (such as your plane ticket to go overseas). Be careful when using your 529 savings unless you’re attending a specific program through an accredited institution.

Find a Paid Internship or Part-Time Job

Obtaining a paid internship or part-time job can help you float some or all of the expenses of a gap year. For example, if you plan to spend your year volunteering at soup kitchens throughout a major city, a part-time job may help you pay for transportation to get there and also other living expenses. On the other hand, if you intend to use your gap year to gain work experience to discover your career goals, a paid internship may help you take care of all of your living expenses.

Recommended: Jobs to Help Pay for School Expenses

Apply for Financial Aid

Financial aid can refer to a wide range of types of money to pay for credits at college or career school.

Some gap year programs offer college credit, so you may be able to apply for federal financial aid using the Free Application for Federal Student Aid (FAFSA®). The FAFSA can give you access to grants, federal student loans, and other opportunities.

While you may have never had any intention of taking college credit during a gap year (you may feel that it defeats the purpose of a gap year!) but taking a college-credit class or two as part of your experience or doing a credit-based gap year program may help cover some of your costs.

Personal Loans

Taking out a personal loan involves borrowing money from a bank, online lender, or credit union that you repay in fixed installments. Personal loans are not backed by collateral, which also means they are called unsecured loans. (Secured loans, on the other hand, are backed by collateral, such as a house.) Personal loans often carry higher interest rates than some other types of loans. It may be difficult for someone to get a personal loan without a cosigner if they don’t have a long history of building credit.

It’s a good idea to be careful about taking out a personal loan due to these higher interest rates and having to bring a cosigner on board. That cosigner could end up paying for your loan if you default on the loan and ultimately, it could affect both of your credit scores.

Using Private Student Loans to Finance Gap Year

Private student loans are student loans that come from a bank, credit union, or other private lender. You probably cannot use private student loans to finance your time off from school if you plan to backpack across Europe, but if you do take a few classes as part of a gap year program, you may be able to use private loans to cover your costs. Check with lenders about their requirements before you apply and whether or not a particular program will qualify.

The Takeaway

A gap year can help “gappers” explore career goals, develop confidence, volunteer, and more. If you’re thinking carefully about a gap year, you also might be worried about the cost of taking that time off. Consider putting together a list of costs, goals, and plans so you can make sure that your gap year goes off without a hitch. From there, you can start planning how you’ll cover your expenses during your time away from the classroom.

Finally, don’t forget that you can always put together a combination of sources of funding. For example, you can pay for your gap year with a combination of scholarships, money saved, and internship money.

3 Student Loan Tips

  1. Need a private student loan to cover your school bills? Because approval for a private student loan is based on creditworthiness, a cosigner may help a student get loan approval and a lower rate.
  2. Even if you don’t think you qualify for financial aid, you should fill out the FAFSA form. Many schools require it for merit-based scholarships, too. You can submit it as early as Oct. 1.
  3. It’s a good idea to understand the pros and cons of private student loans and federal student loans before committing to them.

SoFi private student loans offer competitive interest rates for qualifying borrowers, flexible repayment plans, and no fees.

FAQ

How much should I budget for a gap year?

The amount you should budget for a gap year depends on your personal circumstances. It also depends on what you plan to do. Living at home with your parents and volunteering in your community will likely cost less than hopping on a plane and spending a year abroad. No matter what your plan, it’s best to get an estimate of your expenses ahead of time and then use that as a basis for your budget throughout your gap year.

How can I get funding for a gap year?

There are many ways to get funding for a gap year. Depending on your situation and circumstances, you may consider tapping into scholarships, grants, a 529 account, college savings, through a paid internship or part-time job, financial aid, personal loans or private student loans. There’s no single way to fund your gap year, and you may also want to consider a combination of different sources to pay for it.

How long should a gap year be?

A gap year can be any length of time, but they typically last between two weeks and one year.


Photo credit: iStock/Pekic

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


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.


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 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.

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Credit Counseling, Explained: A Comprehensive Guide

Credit counseling services can be a smart way to access professional financial advice at a low cost — or, in some cases, even for free. Usually nonprofits, these organizations can offer educational materials, workshops, and one-on-one counseling with trained financial professionals to help you make an achievable plan to repay your debts, set up a sustainable budget, and more.

It’s important to understand, however, the difference between credit counseling organizations and debt settlement agencies. The latter are usually for-profit companies that may not always be acting with your best interests in mind.

Here’s what you need to know about credit counseling, including how to tell when you might need it.

What Is Credit Counseling?

Credit counseling is a free or low-cost service offered by what are usually nonprofit organizations. Credit counselors can work with you one-on-one to offer fiscal advice and get your finances in order. For example, a credit counselor might help you:

•   Plan a debt repayment strategy

•   Create an overall debt management roadmap

•   Set up or retool your budget

•   Learn how to get a free and accurate copy of your credit report and scores

Many credit counseling services also offer educational resources, like flyers or online information, and workshops or classes that can help many people learn more about how to manage their money at once.

In some cases, credit counselors may offer to reach out to your creditors directly to negotiate with them, which could help you save money. Counselors may be able to get late fees waived, attain a longer repayment period, or ask for lower interest rates.

However, this is not the primary or sole function of credit counseling agencies, and not all credit counselors offer this service.


💡 Quick Tip: A low-interest personal loan from SoFi can help you consolidate your debts, lower your monthly payments, and get you out of debt sooner.

How Does Credit Counseling Work?

Every individual credit counseling agency is different, and they each have their own process that they can walk you through. But in most cases, you’ll be offered an initial consultation with a credit counselor, which may take place online, in person, or over the phone.

During this meeting, the counselor will likely ask a series of questions about your financial standing, and may help you develop a budget or create a debt repayment plan on the spot. Depending on your needs, follow-up appointments may be offered, and you may also get invitations or access to free classes, workshops, educational resources, and more.

In all cases, a credit counseling agency should have your best interests at heart, and should be willing to offer you free information about their services. If a credit counseling agency requests you to pay high fees or pay up front, or refuses to work with you if you can’t afford to pay, you should look for a different organization.

Credit Counselors vs Debt Settlement Agencies

It’s easy to get credit counseling organizations mixed up with debt settlement agencies, but the two are very different — and the difference is critical. Whereas credit counselors are usually non-profit organizations that offer free or low-cost help, debt settlement agencies are very much for-profit companies.

Furthermore, debt settlement agencies charge for the service of negotiating debt settlements with your creditors or collections agencies, rather than offering a more holistic financial education or plan.

Unfortunately, many creditors refuse to negotiate with debt settlement agencies, so hiring one is often a waste of your time. If you do choose to work with a debt settlement agency, remember that under Federal Trade Commission rules , you can’t be charged for their services until they are rendered successfully. Because, again, many creditors simply won’t talk to these companies. If you pay up front, you could be out of luck). In other words, if a debt settlement agency attempts to charge you up front, take your money and run.

Alternative Options for Managing Credit Card Debt

While working with a credit counseling organization can be a great way to access low-cost help in many different financial areas, it’s not the only way to eliminate credit card debt. There are plenty of self-directed strategies that can help you get your money right, right from home.

For instance, debt consolidation is one tactic that may help you get a handle on your credit card debt. Here’s how it works.

To consolidate credit card debt, you’d take out a new loan or a new credit card that allows balance transfers at a 0% interest rate. (Yes, it sounds counterintuitive to fix credit card debt by taking out another loan or line of credit, but hear us out.)

Then, you pay off all of your credit card debts with the personal loan, or transfer all of your balances onto the new credit card. In either case, you’ll now be left with a single monthly payment rather than multiple payments, which can be hard to keep up with and easy to forget about.

Both tactics can also help you save money on interest, too, which can help you get out of debt faster and more efficiently. Different types of personal loans often have lower interest rates than credit cards do, and if you go the balance transfer route and choose a card with a 0% rate, you may save yourself from paying any additional interest at all.

Beware, though: Those 0% balance transfer rates are usually only promotional, and wear off after a certain period of time, like a year. At that point, if you hadn’t paid off the balance in full, you’d likely be stuck paying double-digit interest on whatever was left over once again.


💡 Quick Tip: Swap high-interest debt for a lower-interest loan, and save money on your monthly payments. Find out why SoFi credit card consolidation loans are so popular.

The Takeaway

If you’re struggling with credit card debt or simply looking for professional financial help from a budget-friendly source, pursuing credit counseling can be a smart step to take. These nonprofit organizations offer a variety of different workshops, services, and materials that can help you fashion a more sustainable financial future.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.


SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

FAQ

What is the purpose of credit counseling?

Credit counseling exists to help people find better ways to manage their money and to create sustainable budgets and debt management strategies. Usually nonprofit organizations, credit counseling agencies may offer workshops, educational materials, and one-on-one counseling services at a low cost, or even for free, to people who need some help getting their money right.

What is the credit counseling process?

While each credit counseling organization is different, in most cases, you’ll be offered an initial credit counseling consultation appointment that may last about an hour and take place in person, on the phone, or through a video conferencing platform. You may be offered follow-up appointments as well as educational resources and workshops. While most credit counselors are part of nonprofit organizations, there still may be some fees associated with their services, though these are usually much lower than a professional financial advisor’s fees.

Do you need credit counseling?

Only you can decide if you need to pursue credit counseling, but if you’ve been struggling with credit card debt and found yourself unable to create or stick to a sustainable debt repayment strategy, credit counseling could help.


Photo credit: iStock/Rockaa

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.


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 .

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

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

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

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How to Apply for a Personal Loan

By now, you’ve probably already calculated how much of a personal loan you can get. And you likely have a solid understanding of the personal loan requirements to get approved. You may be wondering about the next step in the process: how to get a personal loan.

Applying for a loan can be relatively simple, as long as you understand the options available to you, meet the lender’s requirements, and have the necessary paperwork in order ahead of time. Here’s what you need to know.

1. Prequalify for a Personal Loan Through Multiple Lenders

The first step in applying for a personal loan is to get prequalified. You can get a personal loan from a few different sources, including a bank, credit union, or an online lender. Each has its pros and cons.

Personal Loan from a Traditional Bank

One drawback of getting any type of personal loan from a bank is that it can take longer to be approved compared to an online lender. However, banks have greater lending power, so you might be able to get a larger loan. Plus, many banks will not charge an origination fee.

Pros

Cons

In-person application High credit score requirements
Low or no origination fees High maximum APRs
Low minimum APRs Slow approval

Personal Loan from a Credit Union

Credit unions are likely to offer the lowest APRs and have low fees to boot — two advantages if you’re already a member of one. However, there are potential tradeoffs. Smaller credit unions tend to have limited digital offerings compared to national banks, and it may take borrowers longer to get approved for a personal loan.

Pros

Cons

Lower interest rates than banks and online lenders You have to be a member
Low fees Digital offerings may be more limited
Members may find it easier to get a loan with a credit union vs. a bank Slow approval

Personal Loan from an Online Lender

With an online lender, your personal loan application is approved and managed entirely online — there is no opportunity to sit down with a loan officer. Depending on whether you’d prefer to apply for a loan online vs. in person, this could be either an advantage or a disadvantage.

If you visit an online loan aggregator site, you can apply for preapproval and receive multiple loan options. From there, you can easily compare the rates and terms, but be sure to confirm the fees and charges.

Pros

Cons

You can easily compare rates and terms of online lenders on aggregator sites Fast approval process, with funds deposited sometimes within one business day
Get multiple loan offers from an aggregator site with no hard credit pull Potentially high fees
The loan application process can be managed completely online If you don’t have a great credit score, you might face a high APR

Awarded Best Online Personal Loan by NerdWallet.
Apply Online, Same Day Funding


Does Preapproval Hurt My Credit Score?

In order to be preapproved for a personal loan, a lender will check your credit history. Typically, the lender will only perform a “soft” credit inquiry, which will not affect your credit score. A preapproval determines if you’re eligible for a loan before you formally apply.

Applying for a loan triggers a “hard” credit inquiry, which could pull down your credit score because you have applied for additional credit.

You can check with a lender to find out what type of check they will do to preapprove you for a personal loan.

Recommended: Personal Loan Glossary: Loan Terms to Know Before Applying

What Do I Need to Prequalify for a Personal Loan?

To qualify for a personal loan, you will need to first determine how much you want to borrow and how much you can afford to pay each month to pay off the loan. How much you can pay each month will determine the term (length) of the loan.

How much you want to borrow will depend on what you want to use the money for. While there are few limitations on how you spend the personal loan funds, it’s wise to borrow as little as possible because you will be paying interest on what you owe.

When you fill out the application, the lender will ask you for personal information. Typically, this includes:

•   How much you want to borrow and for what purpose

•   Proof of your net income and assets

•   Your contact information and social security number

2. Compare Your Options

Getting preapproved from various lenders is critical if you want to try to get the best rates and terms. The preapproval will show you the amount of the loan you qualify for, the APR, term, and any origination fees. By comparing multiple lenders, you can find the loan that will cost you the least. Be sure to check all the fees that may apply.

If you’re trying to get better loan terms, you may want to explore adding a cosigner who has a good credit score. Doing so may help the lender view you as less of a risk, and they may be inclined to offer you a lower interest rate. However, keep in mind that if you make late payments or default on the loan, the cosigner’s credit will suffer, as will your own.

how to apply for a personal loan

3. Gather Required Documents

Before you sit down to fill out an online application or visit a bank or credit union, gather all the documents you will need. These will likely include:

•   ID, such as your driver’s license or passport

•   proof of address, such as a recent utility bill

•   proof of employment and earnings (paystub)

•   your social security number

•   your education history

4. Apply for a Personal Loan

Once you have all your documents on hand, you are ready to fill out either an online or in-person loan application. If you are applying online, you will be required to scan the documents and upload them with the application.

Recommended: Exploring the Pros and Cons of Personal Loans

How Long Does It Take to Get a Personal Loan?

The amount of time it takes for your loan application to be approved and processed depends on the lender. Online lenders tend to be the fastest. Submitting the application online only takes a few minutes, provided you have all your documents on hand, and approval can take one or two business days. You can expect to see the funds deposited into your bank account within one to three business days of approval.

Banks and credit unions, on the other hand, tend to be slower. You may need to apply for a loan in person and, depending on your relationship with the institution and your financial history, getting approved could take one to three business days. You might need to wait three business days or more to receive the funds.

Does Everyone Get Approved for a Personal Loan?

Not everyone is approved for a personal loan. Lenders consider your credit score, payment history, income, and debt-to-income ratio when deciding whether to approve someone for a personal loan.

Credit Score

The higher your credit score, the lower your interest rate will be. This is because if your credit history is good, the lender considers you low risk. A high interest rate is what protects a lender from the risk of lending to someone who might default on the loan. A score of 640 or more is generally considered enough for a borrower to potentially qualify for a loan from some lenders. If your credit score is low, consider bringing on a willing cosigner with a better credit score.

Payment History

How you’ve managed loan payments in the past is something that a lender will consider. If you have paid off loans on time and made timely credit card payments, the lender may not consider you high risk and could be more likely to approve your application. If you have a history of late payments, however, you might find it more difficult to get approved for a loan.

Income

Lenders want to make sure you can pay back what you borrow. They’ll look at your income to make sure it is steady and that you can afford to make the payments each month. Some lenders might request your W-2 tax forms, bank statements, or recent pay stubs. Others could require verification from your employer of stated income and to confirm current employment.

Debt-to-Income Ratio

Your debt-to income (DTI) ratio shows how much you are already paying toward debt each month and is an indicator of how well your current income can cover an additional monthly loan payment. If you have no spare cash left over after paying existing debts, such as credit cards and mortgage, you likely cannot make the payments on a personal loan. A DTI ratio of 35% or lower is considered favorable for a personal loan.

What Do You Do If You Are Denied a Personal Loan?

There could be many reasons your loan was declined. Your credit score might not be high enough, your DTI ratio could be too high, or perhaps you failed to provide the right paperwork. Find out why your loan was denied so that you can fix the problem.

If your loan application is declined,you can receive a free copy of your credit report. Check that the information on the report is accurate. See if you can boost your credit score by opening new accounts that report to the credit bureaus (if you’re trying to establish your credit), maintaining low balances, and making on-time payments.

Note that applying too often for new loans or accounts triggers hard credit checks, which can lower your credit score. Another option is to find a cosigner. A cosigner with a good credit rating might help you to secure a personal loan with a favorable rate.

If you have a high DTI ratio, you might have to pay down some of your existing debt in order to receive a loan with good rates. Alternatively, you might consider taking out a smaller personal loan and supplementing the rest from other sources.


💡 Quick Tip: Generally, the larger the personal loan, the bigger the risk for the lender — and the higher the interest rate. So one way to lower your interest rate is to try downsizing your loan amount.

The Takeaway

When it comes to applying for a personal loan, you have a few different sources to explore: banks, credit unions, and online lenders. Each has advantages and disadvantages.

To find the best loan rates and terms available to you, consider getting preapproved from multiple lenders and seeing which loan will cost you the least. You’ll also want to gather essential documents before you fill out the application. This may include your ID, proof of address, proof of employment and earnings, social security number, and education history. If your loan application is declined, find out what the issue was so you can fix it. The solution may involve boosting your credit, lowering your debt-to-income ratio, or taking out a smaller personal loan.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

FAQ

Does everyone get approved for a personal loan?

Individuals may be denied a loan from a lender because they do not meet the requirements. A lender will consider your credit score, payment history, income, and debt-to-income ratio when deciding whether to qualify you for a loan. You also are required to submit documentation, such as proof of identity, residency, income, and your social security number.

What do you do if you are denied a personal loan?

If you are denied a personal loan, find out the reason why. Lenders are required to issue an adverse action notice informing you why you were denied. The most common reasons are a low credit score, a poor payment history, a high debt-to-income ratio, insufficient income, or failure to provide the right documents. If your credit score is too low, check your credit report for inaccuracies. Then, you might have to take steps to improve your score.

If your debt-to-income ratio is too high, try to pay down some of your debt. Other options are to apply for a smaller loan, find a cosigner with a good credit score, request a cash advance from an employer, or ask family or friends.

How long does it take for a personal loan to be processed?

A bank or credit union might take up to a week to deliver funds to your account. However, online lenders deliver funds within one to five days once you are approved.


Photo credit: iStock/PeopleImages

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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.


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 .

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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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15 Creative Ways to Save Money

You may not think of saving money as being a creative pursuit, but with a little effort, you can find fresh (and even fun) ways to help you stash away some cash. This can make the pursuit more engaging and motivating.

Perhaps your goal is to save for the down payment on a house or build up your kid’s college fund or simply take a great vacation next year. You can try some clever methods to make saving money more interesting and maybe a bit exciting.

Read on to learn such tactics as partnering up with a savings buddy and tapping your DIY skills. You’ll also learn ways to make the most of the cash you sock away. Get set to save more.

15 Creative Ideas to Save Money

You are probably familiar with some of the usual tactics for saving money, such as comparison shopping and clipping coupons. If you’re ready to mix things up and try some less common tactics, consider the following 15 quirky but effective ideas.

1. Identifying Your Saving Goals

2. Finding a Saving Buddy

3. Seeking Out Free Activities

4. Getting Creative and DIY

5. Gamifying Savings

6. Swapping Goods and Trading Skills

7. Increasing Income

8. Switch Your Bank

9. Split Your Direct Deposit into Checking and Savings

10. Change Your Due Dates for Bills

11. Save Every $5 Bill

12. Take Advantage of Cash Back Credit Cards

13. Round Up Your Purchases Automatically

14. Consolidate Credit Card Debt with a Personal Loan

15. Automate Your Savings into an Investment Account


💡 Quick Tip: An online bank account with SoFi can help your money earn more — up to 4.60% APY, with no minimum balance required.

1. Identifying Your Saving Goals

Not sure how to make saving money fun or prioritize it? You could start by identifying your goals. Are you saving up for a big purchase, like a down payment on a house? Are you saving for your child’s future education?

Once you’ve figured out what you want to accomplish, you could determine a target amount of money you’d like to save. While this number might change over the course of your savings journey, you can always readjust your plan.

If you have an idea of how much money you’d like to work toward saving, you can consider diving deeper into your finances to pinpoint realistic objectives. You can use a tracking and budgeting tool, such as SoFi Financial Insights, to get a big-picture snapshot of your money and drill down on ways to save.

Once you’ve reviewed your individual financial circumstances and have a better idea of your savings goal(s), you could try these fun ways to save money.

2. Finding a Saving Buddy

With the right company, even the most mundane tasks can be enjoyable. You could talk about your savings goals with your friends and family members to potentially identify a saving buddy with similar objectives.

An ideal saving buddy will be supportive of your financial goals, offer good advice, and have a positive money mindset.

Checking in with your buddy regularly could help keep you both stay on track and you can celebrate each other’s accomplishments. This person might also be able to talk you down if you’re on the verge of making a big impulse buy. If you’re stressed about how to make saving money fun, you could brainstorm creative tactics with your saving buddy and implement them together.

3. Seeking Out Free Activities

Saving money does not have to be synonymous with missing out on exciting opportunities around you. You could enjoy free activities offered in your area.

Perhaps your local park offers free theater performances or concerts in the summer, or your area bookstore hosts interesting literary panels and author discussions with no attendance fee. Think about the resources provided by your local library, such as book clubs, language exchange programs, craft nights, and movie screenings.

This can be a great option to pricey movie or concert tickets. And here’s a way to save money on streaming services: You could try a free service like Hoopla or Kanopy, which are offered at no cost to library card holders.

4. Getting Creative and DIY

Here’s another clever way to save money: Adopt a DIY (do-it-yourself) attitude. You could create things using materials you already own instead of buying new products. You can save money on food by meal-prepping for the week ahead; think about recipes that incorporate ingredients you already have in your pantry.

You could make your own household cleaners out of vinegar, lemon rinds, and herbs or face masks using fresh ingredients like avocado, tea, honey, and oatmeal. There are ways to reuse materials that might otherwise be thrown out or recycled: Newspapers and coupon booklets could make fun wrapping paper, for instance.

5. Gamifying Savings

If you’re looking to break up the monotony of saving, you could consider incorporating games and challenges into your overall savings plan. A friendly competition with your saving buddy could be seeing who can save the most money every week, month, and/or year.

Creating small rewards for reaching your goals might be an incentive, too. (Bonus points if these rewards are free!) No-spend weeks, where you refrain from spending any money for seven days, also might help with saving. If you succeed at that, you might want to ramp up to a 30-day no-spend challenge. You can tailor this to cut down on all discretionary spending or just a single category, such as dining out.

6. Swapping Goods and Trading Skills

Getting serious about saving money doesn’t mean you need to give up “luxuries” such as exercising, new clothes and accessories, or home goods. Trading skills and swapping goods are two potential examples of how to make saving money fun while not depriving yourself of the things you want.

You could go to your favorite yoga studio and ask if they have a work-trade program where you can do administrative duties in exchange for classes. A clothing swap with your friends could refresh your closet at no cost.

You might also consider an informal exchange with skilled friends. For example, if you’ve been eyeing an original painting from your artist pal but don’t have the funds to pay her, you could offer your website design services (or some other helpful skills) for the painting.

7. Increasing Income

Sometimes, cutting down on expenses might not be the most effective way to reach a savings goal. It might be easier, in some cases, to make a bit more money than to reduce costs, especially if you are spending more than 50% of your income on non-discretionary expenses like groceries and debt payments. (That’s the figure established by the popular 50/30/20 budget rule, that half of your take-home income goes toward necessities.)

You could reflect on your particular skills and/or hobbies to see if there is a way to translate one of them into an income stream. For example, if you love to knit, you could start an online store for your yarn creations. Or you could offer your writing or editing services in a freelance capacity. A successful low-cost side hustle could help bring additional money into your bank account and add more fun and enjoyment in your life.

Recommended: 39 Passive Income Ideas to Build Wealth

8. Switch Your Bank

If your financial institution seems to be charging you endless fees and offers little interest on your savings account, consider switching banks.

You might consider an online bank. Because these institutions don’t have brick-and-mortar locations to fund, they can pass those savings along to customers in the form of lower or no fees and higher interest rates.

You might also consider a credit union instead of a big name bank. Credit unions are run as financial co-ops, meaning each member has a stake in business. As nonprofits, they are designed to serve their members, typically paying higher interest rates on deposits and charging lower fees.

Get up to $300 when you bank with SoFi.

Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!


9. Split Your Direct Deposit into Checking and Savings

If you have regular paychecks, one of the easiest ways to start saving a bit more money is to guarantee some automatically ends up in a separate savings account, making it that much harder to spend. If you have a checking account, odds are you have a savings account too, or at least access to one.

Maybe you find it hard to remember to put some money away into savings or harder still to force yourself to part with it. If so, splitting your direct deposit into two accounts helps make sure your savings grows every paycheck, without you needing to worry about transferring the money. Check with your HR department or your online pay system to see if you can add a bank account and designate a certain amount of each paycheck to go into your savings account as part of your direct deposit.

Most banks also have the option to set up recurring transfers yourself between your accounts. If you don’t have the option to split up your paycheck or would prefer not to, your bank can likely automate your savings with a transfer the day after you get paid. You won’t have to think twice about stashing money away.

💡 Quick Tip: As opposed to a physical check that can take time to clear, you don’t have to wait days to access a direct deposit. Usually, you can use the money the day it is sent. What’s more, you don’t have to remember to go to the bank or use your app to deposit your check.

10. Change Your Due Dates for Bills

Having extra money in your savings account doesn’t help if you are constantly pulling from it to pay bills.

If you are overdrafting frequently or borrowing from savings, especially at certain times of the month when big payments are due, consider this unique way to save money: Change the due dates of some of your bills. Sometimes spreading out your larger payments — like credit card bills or student loans — throughout the month can help when those more inflexible due dates, like rent, roll around.

By changing the date of some of your bills, you will hopefully avoid overdraft or NSF fees. This will encourage you to not touch your savings account, as opposed to pulling from it every time your checking account balance gets precariously low.

11. Save Every $5 Bill

This is a classic adult remix of the piggy bank you had as a kid. Only this time, instead of squirreling away quarters, take every $5 you get and put it in a separate drawer at home. Keep all of these $5 in the back of a closet somewhere, tucked away and out of sight.

Once you get into the habit of identifying $5 as “no spend” bills, you’ll find it can really be a creative way to save money — depending on how much cash you use in a typical day, of course.

The benefit of this method is that $5 isn’t really enough to miss if you are just putting away a bill or two, but that at the end of the year, it can easily add up to enough cash to help with holiday shopping, a loan payment, or even a nice charity donation without having to touch your savings in the bank.

12. Take Advantage of Cash Back Credit Cards

Need another clever way to save money? Simply put, if you have a credit card that has a decent rewards program, you can likely get your rewards in cash. While getting cash back won’t boost your savings directly, it can allow you to spend rewards points instead of your savings.

However, if you tend to carry over a balance on your credit card, cash back cards may not be a good solution for you right now.

13. Round Up Your Purchases Automatically

There are plenty of apps available to round up your purchase to the nearest dollar and then save the change for you. Your bank may offer this kind of savings tool, which can be an easy way to save money automatically.

The amount these apps save for you is small, so you aren’t likely to notice $1 or even a few cents when it transfers, but it can add up to hundreds stashed away per year.

14. Consolidate Credit Card Debt with a Personal Loan

If your credit card debt is preventing you from saving as much as you would like, you might use a personal loan as a creative way to shake up your finances.

If you owe money on more than one credit card or have a high balance relative to your credit limit, the rates on a personal loan could help lower your monthly payments. Often, taking out one personal loan to pay off credit cards can help you with savings in the long run. While you’ll still be paying off the personal loan, the interest rate is likely to be significantly lower than that of the credit cards. That means you can probably pay off the total sooner, leaving more cash free for savings.

15. Automate Your Savings into an Investment Account

It’s the age-old financial advice worth repeating here: If your company offers a match on your 401(k) savings, take advantage of it! If your company match is 6%, you should set your contribution for at least 6% to get the most out of your retirement funds.

It can be simple to creatively save money using the following technique. Most company wealth management accounts can be set to automatically deduct contributions from your paycheck, but you can schedule other automatic investments too. You can make scheduled, recurring transfers between your bank account and your wealth management account.

You get to select the dollar amount, the date and the frequency you want. This is a great way to put your savings to good use — send it into an investment account. There are plenty of other technologies available to help make this easy, too.

Why Is Making Saving Money Fun Important?

Trying tactics like the ones above can help make it fun to save money. That’s important for a couple of good reasons. Shaking up your savings routine can make socking away cash seem fresh and more engaging, meaning you are more likely to get the job done. Basically, it can rev up your motivation to save money.

Also, when you find a technique that is fun, such as a no-spend challenge, it can help encode the new savings behavior in your routine. If it’s enjoyable, you are more likely to keep up the good work.

How Can You Make the Most of the Money You Save?

When you save money, you likely want it to grow over time, not just sit there. One good way to do that is to stash your money in an interest-earning account. This will be especially effective if the financial institution where you save charges low or no fees and doesn’t have high minimum opening deposit or balance requirements.

You might look for a high-interest or high-yield savings account. These can pay a significantly higher rate than standard savings accounts, and your money will be accessible and likely insured by the Federal Deposit Insurance Corporation, or FDIC, or NCUA (the National Credit Union Administration).

Optimizing Your Savings

Beyond the creative ways to save that you just learned, there are other important ways to optimize your savings.

•   Budgeting wisely can help you better understand your personal finances. It can help you get a grip on your earnings, spending, and savings. When you see where your money goes, you can tweak your spending to help funnel more towards savings.

•   Putting a spending limit on your credit card (or cards) can help you rein in spending, which can reduce high-interest credit card debt and allow you to save more.

•   Lastly, it you are struggling to put away money, one dramatic move that can help you save more is to move to an area with a lower cost of living. Whether that means moving across town or across the country, it could make a major difference in your finances.

The Takeaway

Putting away money for your future does not need to be a boring task; there are countless fun ways to save money that could be customized to your specific financial needs and wants. From finding a savings buddy to gamifying your saving, creative tactics can help enhance your motivation and your ability to put away cash.

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


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

What is a clever way to save money?

There are several clever ways to save money. Automating savings so you don’t have to remember to transfer funds is one good tactic; so is giving yourself a no-spend challenge, finding free activities, and doing a skills swap to reduce spending.

How can you save $1000 in 30 days?

To save $1,000 in 30 days, you can try a spending freeze, a savings challenge, and/or use a card that gives you cash back. Make sure you are keeping the money you save in a high-yield savings account.

What is the 50 30 20 rule?

The 50/30/20 budget rule is a popular technique for managing your money. It advises spending 50% of your take-home pay on the needs of life (housing, food, healthcare, etc.), 30% on the wants in life (such as dining out, Ubers instead of public transportation, travel, and so forth), and 20% goes into sayings.


SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.


SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.


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.

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.

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