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How Much House Can You Afford When Paying Off Student Loans?

While getting a college education and buying a home are both parts of the American Dream, they can come with a hefty price tag. And for many of us, that most likely means taking on substantial debt.

If you hold student loans when you start thinking about buying a house, you’re in good company. Americans collectively now hold almost $1.5 trillion in student loan debt , a number that has grown steadily in recent years.

On average, 70% of undergraduates leave school with an average of around $37,000 in student loans. When interest kicks in, that amount can balloon quickly.

When you’re ready to start house shopping, you may wonder, “Do student loans affect getting a mortgage?” Could they hold you back from getting approved for a house loan or obtaining acceptable terms, or do lenders look at student loans kindly because it’s “good” debt, as opposed to something like a credit card balance?

It’s true that college graduates who have student debt are less likely to own a home than their counterparts who left school debt-free. And those with higher student loan balances are also less likely to be homeowners than peers with lower amounts of debt.

But the good news is that student debt doesn’t have to hold you back from your dreams of becoming a homeowner. Here’s what you need to know about buying a house when you have student loans.

Getting a Mortgage When You Have Student Loans

When a lender is considering offering you a mortgage, they want to feel confident that you will pay them back on time. A key factor is whether they think you can afford the payment with everything else on your plate. To assess this, a lender will consider your debt-to-income ratio, or how high your total monthly debt payments are, relative to your income.

For the debt component, the institution will look at all your liabilities, from car loans, to credit card payments, to, of course, student loans. In the case of student loans, banks know that you’re likely to be responsible for that debt forever, since it usually can’t be discharged in a bankruptcy and it’s not secured to an asset that a lender can recover. Many industry professionals say that your debt-to-income ratio should ideally be below 36%, with 43% the maximum . If you have a high student loan payment or a relatively low income, that can affect your debt-to-income ratio and your chances of qualifying for a mortgage.

For example, here’s a hypothetical situation: Let’s say you earn an annual salary of $30,000, making your gross monthly income $2,500. Let’s assume you owe $275 per month on a car loan and have a credit card balance with a $100 monthly minimum payment.

And let’s say you have student loans with a minimum payment of $550 a month. All your debt payments add up to $925 a month. So your debt-to-income ratio is $925/$2,500 = 0.37, or 37%. That’s at the limit that some conventional lenders allow. So you can see how having a high student loan payment can affect your ability to qualify for a mortgage.

Another way that student loans can affect your chances of buying a home is if you have a history of missed payments. If you don’t make your minimum student loan payments each month, that gets recorded in your credit history.

When you fail to make payments consistently, your loans can become delinquent or go into default . Skipping payments is a red flag to your potential mortgage lender: Since you haven’t met your obligations on other loans in the past, they may fear you’re at risk of failing to pay a new one as well.

Estimate How Much House You Can Afford

Taking into account the debt-to-income ratio you just learned about, use this home affordability calculator to get a general idea of how much you can afford. This tool helps estimate the cost of purchasing a home and the monthly payment.

Improving Your Chances of Qualifying for a Mortgage

Your student loan debt is just one part of the picture. Lenders look at many other aspects of your financial situation to assess your trustworthiness as a borrower. By focusing on improving these factors, you may be able to increase your chances of getting a mortgage.

One of the most important things to address is your credit score, since this is a key measure lenders use to evaluate how risky it would be to lend to you. Your credit score is determined by many factors, including whether you’ve missed payments on bills in the past, how much debt you have relative to your credit limits, the length of your credit history, and whether you’ve declared bankruptcy.

If your credit score is below 650 or 700, you may want to work on improving it. Starting by consistently making your minimum payments, paying off debt, or responsibly opening a new credit line may help.

If keeping up with payments has been challenging in the past, setting up automatic payments through the lender or your bank can help you stay on track without having to memorize due dates. In the case of a bankruptcy, you’ll typically have to wait 10 years for it to disappear from your record.

Another opportunity to improve your mortgage application is to strengthen your work history. Your employment matters to a lender because, if you’re at risk of losing your job, your ability to pay back the loan could change as well.

Gaps in employment, frequent job changes, or lack of work experience can all be red flags for a financial institution. If employment history is a weakness in your application, perhaps you can focus on finding a more stable role than you’ve had in the past. This could also be a matter of waiting until you’ve been in a new job for a couple of years before applying for a mortgage.

A third way to improve your prospects is to save more money for your down payment. If you have enough to put at least 20% down on a home, your student loans may become less of a factor for the lender.

You can save for a down payment by putting funds in an interest-bearing savings account or CD, asking for wedding guests to contribute to a “house fund,” earning more income, or even asking a family member for a gift or loan.

Another key area you could focus on is your debt-to-income ratio. Tackling some of your debts—whether student loans, credit card balances, or a car loan—could help lower that ratio. Another strategy is to increase your income, perhaps by asking for a raise, getting a new job, or taking on a side hustle.

Improving your debt-to-income ratio can make you more attractive to mortgage lenders because they will feel more confident that you can afford your new loan.

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

How Student Loan Refinancing May Help

Another way to potentially improve your debt-to-income ratio is to look into student loan refinancing. When you refinance your student loans with a private lender, you replace your existing loans—whether federal, private, or a mix of the two—with a new one that comes with fresh terms.

Refinancing can help borrowers obtain a lower interest rate than they previously had, which may translate to meaningful savings over the life of the loan. You may also be able to lower your monthly payments through refinancing, which can reduce your debt-to-income ratio.

Refinancing isn’t for everyone, since you can lose benefits associated with federal loans, such as access to deferment, forbearance, loan forgiveness, and income-based repayment plans.

But for many borrowers, especially those with a solid credit and employment history, it can be an effective way to reduce debt more quickly and improve the chances of getting a mortgage.

Don’t Let Student Loans Hold You Back

With Americans holding more student loan debt than ever before, it makes sense that this financial burden could pose a hurdle for some would-be homeowners. But student loans and mortgage applications aren’t mutually exclusive, and paying for your education doesn’t have to cost you your dream.

If you’ve been making payments on time and your debt is manageable relative to your income, your loans might not be an issue at all. If your loans do become a factor, you can take steps to get them under control, potentially improving your chances of qualifying for a mortgage.

Looking to get a handle on your student loans before applying for a mortgage? Refinancing your loans with SoFi may help you toward achieving your dream of homeownership.

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.
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 on credit.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

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What Is a Hybrid Account?

If you’re like many of us, you have a hard time making decisions. When placed in a situation where an important choice needs to be made, you beam at the idea of having the “best of both worlds.”

And hey, there really are some best of both world solutions that work. The spork, for example, is a quintessential best of both worlds fix. And cutlery advocates everywhere revel in the opportunity to transition from soup to salad without having to pick up a different utensil.

Fortunately, smart multi-functional solutions aren’t limited to the cutlery realm. There are plenty of hybrid products in the finance world, too. Because sometimes, managing your money on a day-to-day basis requires a balance that a one-size-fits-all product doesn’t quite achieve.

On this note, let’s talk a little bit about hybrid accounts—what they are, who might need them, and how the definition of a “hybrid account” might vary between financial institutions.

Defining the Hybrid Account

There are a variety of bank accounts available out there to consumers—the options can feel pretty overwhelming. And the type of accounts people are drawn to will depend on their financial situation, goals, and how they choose to organize their finances.

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. But on the flip side, it allows your money to gain interest the way it might in a long-term savings account.

Of course, every company is different, and each might have a different approach to crafting a “hybrid account.” But the main gist of a hybrid account is that it’s a multi-functional account that bears some resemblance to a day-to-day checking account and a long-term savings account. (Cue, the Hannah Montana “Best of Both Worlds” song.)

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.

Checking Accounts

Let’s first take a look at checking accounts, which 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 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 current inflation rate, which is about 1.6% . That means your money is actually depreciating in value while it sits in the account—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.

High-Interest 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 , especially high-interest savings accounts. High-interest savings accounts are an alternative to traditional accounts, which may sometimes offer interest rates of 2% 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.

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 save for emergencies, or even to save for a vacation or a move across the country.

However, there are some downsides to high-interest savings accounts, too. They sometimes don’t allow consumers to use for direct payments. They are a place to store liquid assets, but there may be restrictions on the number of savings account transactions you initiate every month.

High-interest savings accounts often come with limitations such as a balance cap that limits the amount of money on which you can earn a high rate. If you’re considering this as an option, you may want to look closely at the fine print when choosing a high-yield checking or savings account.

Hybrid Accounts: the Details

Hybrid 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 accounts are often more likely to be offered by online institutions than traditional brick and mortar banks.

You may be wondering how this is possible and why all banks don’t offer similar products. The answer lies in the fact that traditional brick and mortar banks must pay for their storefront locations, the people who staff them, and ATMs.

They do so by charging fees and paying lower interest rates. Online financial institutions that don’t offer ground services can often afford to drop fees and pay higher rates while still offering services like checking and debit cards.

Introducing SoFi Money

SoFi Money® is a cash management account where you can save, spend, and earn all in one product. You can use it for day-to-day expenses, and there are no account fees. You can also use any ATM in the world that accepts Mastercard and we’ll reimburse all of your ATM fees (fee structure is subject to change).

Learn more about whether SoFi Money is the right cash management account for you.

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.
SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi Money Debit Card issued by The Bancorp Bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.


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How to Use Your First Real Paycheck as a New Grad

You’ve graduated from college, degree in hand, and are headed into the workforce. After countless applications, phone screens, and in-person job interviews, you’ve done it—you’ve secured your first, full-time job as an adult.

As you experience the thrill of getting your first paycheck, it can be tempting to splurge on a celebratory dinner or a new outfit for work. But before you spend your paycheck on something indulgent, it could be worth thinking about how to spend it more wisely. Here are our best tips for spending your first paycheck as you start your new job.

Set Up Your 401(k)

You’ll learn pretty quickly that you’ll end up losing a decent chunk of change to taxes. One way to offset that is to invest money in tax-advantaged accounts, including a 401(k). As a part of your offer package, you will likely receive information on the company’s benefits—including any healthcare and 401(k) options. It can seem easy to brush this information off as you get started in your career, but reviewing it closely is an important part of deciding whether to accept a job in the first place.

A 401(k) is an employer-sponsored retirement plan that allows both you and, depending on your plan, your employer to contribute to the account. Employers may offer a contribution match of a certain percentage or specific amount. Each employer offers contribution matches at their discretion, so if you’re not sure what your company offers, check with HR or consult company policy.

It’s never too early to start saving for retirement. The earlier you begin making contributions, the more time you give yourself to take advantage of compounding. Basically, the interest you earn can then be reinvested, allowing your money to grow over time.

Consider investing at least enough to take advantage of your employer match. If your employer matches 6%, contribute 6%. That way you’re not leaving any money on the table. (Once you set it up, the money you contribute will probably be taken directly out of your paycheck.)

Set Up a Checking and Savings Account

Before you get your first paycheck, set up a checking and savings account. If you already have these types of accounts, now is a good time to assess whether they are still a good fit for your current financial needs. Take the time to review interest rates at various banks and online financial companies.

For example, SoFi Money is a cash management account that earns you more and costs you nothing. You can easily access your money online or withdraw cash fee-free from 55,000+ ATMs worldwide.

Once you’ve set up your checking and savings accounts, consider setting up direct deposit. That way you don’t have to worry about depositing a check every time you get paid and you can start earning interest on that money as soon as it is payday.

You can also consider keeping your spending money in a checking account and setting up automatic transfers to your savings account. It’s an easy way to force yourself to save some cash at the beginning of your career.
An interest-bearing savings account is a great place to store your emergency fund. Conventional wisdom suggests saving anywhere from three to six months of living expenses to cover emergency expenses, such as unexpected medical bills or car repairs.

We know you just got started at your new job and may not be ready to think about these scenarios, but, in the event that you get laid off or the company goes out of business, having an emergency fund will allow you to stay afloat until you find your next gig. Even contributing $50 per paycheck to your emergency fund can help set you up with a little safety net should something unexpected happen.

Make Payments for Student Loans

Another important expense you should factor into your first paycheck is student loan payments. Even if you start your new job during your student loan grace period, you should probably consider your monthly payments and start setting the money aside. If you have unsubsidized loans, use the money to make interest-only payments on your loans.

If you have subsidized loans, it’s possible to save some, then use the money you have saved to make a lump-sum payment on the loans when your grace period ends. Both of these options can help set you off on the right foot when it comes to student loan repayment. By factoring your student loan payments into your budget upfront, you get used to not using that money for casual spending on things like dinner out or drinks with friends.

It’s also a good time to review your repayment plan on your student loans. If you have federal student loans there are a variety of repayment plans to choose from, including the standard 10-year repayment plan and four income-driven plans. If you have a combination of private student loans and federal student loans, you could consider refinancing them with a private lender, like SoFi, in the hopes of securing a lower interest rate.

With a lower interest rate you could potentially reduce the money you spend on interest over the life of the loan. This could be a great option if you are on a standard repayment plan and are interested in securing a lower interest rate.

If you’re taking advantage of federal programs like deferment, forbearance, income-driven repayment, or Public Service Loan Forgiveness, refinancing your student loans may not be for you, as you will no longer qualify for those programs.

To see how much refinancing could impact your loan, take a look at SoFi’s student loan refinance calculator. When you refinance with SoFi there are no prepayment penalties or origination fees.

Start an IRA

Even if you’re already contributing to a 401(k), setting up an IRA could be beneficial. There are two kinds of IRAs, traditional and Roth. When you contribute to a traditional IRA, the contributions are deducted from your taxes, meaning you’ll pay taxes on distributions when you retire.

When you contribute to a Roth IRA, your contributions are taxed upfront but can be withdrawn in retirement tax-free—and that includes any capital gains you’ve earned.

You can contribute up to $6,000 to either type of IRA annually. If you are over the age of 50, you can contribute an additional $1,000 as catch-up contributions.

An added benefit to opening a Roth IRA: You could use it to fund part of a down payment on the future purchase of a home. As long as the Roth IRA has been open for five years, you’re allowed to withdraw $10,000 from your Roth IRA to buy your first home without any taxes or penalties. This could be a good start for saving for retirement or for your first house.

Still Have Money Left? Treat Yourself

If after paying your monthly expenses and contributing to your various savings goals you still have money leftover, you can use it to splurge on something you’ll really enjoy like trying out a new restaurant, buying tickets to a concert or a sports game, or having a night out on the town.

Or, you could use the additional money to save up toward another short-term goal—maybe an international adventure, a TV, or a new bed frame. Or if you’re feeling frugal, use the extra money to make an additional payment on your student loans.

Paying more than the monthly minimum is one of the fastest ways to accelerate your student loan repayment. At the end of the day, you’re working to earn money to live your best life, so make sure you are enjoying it and saving for your long-term financial goals at the same time.

If you’re ready to tackle your student loan debt, consider refinancing with SoFi. See what your new interest rate could be in two minutes or less.

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.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
SoFi Money®
SoFi Money is offered through SoFi Securities LLC, member FINRA / SIPC . Neither SoFi nor its affiliates are a bank.


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Consolidating Student Loans with a Spouse

Whether you just got married or you’ve been with your spouse for years, you may be thinking about combining your finances.

Doing so can be challenging, especially if you both have different perspectives on managing money. But it can also help simplify your financial plan and potentially even help you save money.

With an average of $37,172 in student loan debt per borrower , it’s more important than ever to find ways to simplify and accelerate the debt repayment process. Refinancing student loans with a spouse could help you achieve both goals.

Consolidating Through the Department of Education

If you have federal student loans, you can consolidate your loans with a Direct Consolidation Loan .

If you do, the Department of Education will take the weighted average of the interest rates from all of your loans and round it up to the nearest one-eighth of a percent.

This means that consolidating your loans with the government may help simplify your loan repayment, replacing several monthly payments with just one.

Consolidating student loans with a spouse isn’t an option through the Direct Loan Consolidation program. You can only combine loans with your name on them, making it impossible to add your spouse.

Refinancing Your Student Loans

While the federal government won’t let you consolidate student loans with your spouse, a private student loan lender, like SoFi, will.

The process isn’t always straightforward, though. Typically, you would apply for a refinancing loan and add your spouse as a cosigner. Not only would this help you combine your finances, but it could also help you spend less money in interest on your new loan.

That’s because your interest rate is typically determined by your creditworthiness and income, and adding a cosigner with a strong credit history and solid income can help you secure a lower rate, even if your credit history is strong on its own.

To give you an idea of how much you can save on interest, let’s say your (not consolidated) federal student loan debt is $30,000 with a weighted average interest rate of 6%. (For the record, the 6% interest rate is a hypothetical based on a federal graduate and undergrad loans, which currently have fixed interest rates of 5.05% on the low end and 7.6% on the high end, depending on the loan.) On a 10-year Standard Repayment Plan , your monthly payment would be around $333, and you’d pay about $9,967 in interest over the life of your loans.

Now, let’s say you were to refinance your student loans with a private lender and qualified for a 5% fixed rate with your spouse as a cosigner. If you were to keep a 10-year repayment term, your monthly payment would be about $318, and you’d pay around $8,184 in interest.

That’s a savings of nearly $1,783 that you can use for other financial goals. To see how refinancing could impact your student loans, you can take a look at our easy-to-use student loan refinance calculator.

Considerations to Think About

Student loan debt and marriage may be a challenge, so it’s important to make sure refinancing student loans with your spouse is a good choice for your situation.

The primary consideration is that both you and your spouse as a cosigner would be legally responsible for paying off the debt. This means that if you experience financial hardship and miss payments or default, it could ruin both of your credit histories.

Some student loan refinance lenders offer a cosigner release program that allows you to remove a cosigner after a set number of consecutive, on-time payments.

Another thing to consider is that refinancing federal student loans will result in the loss of certain benefits the Department of Education provides. Specifically, private lenders typically don’t offer income-driven repayment plans. Also, you won’t be eligible for certain federal student loan programs, including Public Service Loan Forgiveness.

So as you consider the benefits of consolidating student loans with a spouse through refinancing, make sure you also include the drawbacks in your process.

Finding Out Your Potential Savings

Having student loans in a marriage can be challenging, but with open communication, you can stay on track.
If you’re even remotely considering refinancing your student loans with your spouse as a cosigner, check your rate offers to see if doing so can save you money. Whether or not you qualify for a lower interest rate, exploring the option may help make your decision easier.

When you refinance with SoFi, there are no prepayment penalties or origination fees. Find your rates in just two minutes.

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.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
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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Avoiding Loan Origination Fees

In theory, getting a loan should be as simple as filling out an online application—but that’s not always the case. There are a number of factors to consider and information you’ll need to understand before deciding on a loan.

First off, you’ll want to know your credit score and find out what type of interest rates and terms you can qualify for. You’ll need to figure out how much money you can afford to borrow. And if you’re taking out a mortgage, there are also additional home-buying costs to consider—like appraisals, inspections, and closing costs.

One thing you should always look out for—regardless of the type of loan you are applying for—is lender origination fees.

While many lenders charge origination fees, what they call those fees and the amount they charge can vary quite a bit. Before you settle on a lender, here are some things you need to know about origination fees, so you can make the best borrowing decision for your financial situation.

What are Origination Fees?

An origination fee is a fee the lender charges for a new loan. It’s a one-time fee charged at the time the loan closes. The fee covers the costs the lender incurs for processing and closing your loan.

How much a lender charges and what the fee is called varies based on the type of loan and the lender. A traditional origination fee is usually calculated as a percentage of the loan amount—and that percentage depends on the type of loan.

There are a variety of other origination fees that lenders may charge which are a flat amount rather than a percentage of the loan amount. Other fees that lenders may charge to originate a loan could be called processing, underwriting, administration, or document preparation fees.

Mortgage Loan Origination Fees

When you apply for a mortgage loan, there are a variety of costs associated with closing the deal on your new home. These will include lender fees and other third party fees. Lender origination fees are typically paid by the borrower as part of these closing costs and have to be paid, along with closing costs and down payment, at the time the loan closes.

Mortgage lenders are required to give you a Loan Estimate within three days of your application so you can compare loan costs, terms, and APRs with other lenders’ offers. You’ll typically be provided with a Loan Estimate form. On average, mortgage origination fees are about about 0.5% to 1% of the total loan amount —but with additional fees, your closing costs could be 2% to 5% of the total loan.

Personal Loan Origination Fees

When you take out a personal loan, the lender may charge an origination fee in one of two ways. Some lenders take the origination fee out of the distributed loan amount. That means if you were approved for a $10,000 personal loan with a 5% origination fee of $500, then you would receive $9,500.

Other lenders may charge an origination fee by adding the fee to the loan amount. This means that a 5% fee on a $10,000 would bring you to a $10,500 loan. If this is the case, your monthly payment will be a little bit higher. Be sure you find out which way your lender expects origination fees to be paid, so you can plan accordingly.

Origination fees for personal loans can range from 1% to 8% of the loan amount depending on your credit score and the length of the loan. The origination fee typically depends on the amount of the loan you’re requesting, the loan terms (repayment period and interest rate), your credit score and financial history, if you have a cosigner, and potentially what you’re using the personal loan for.

Some lenders, like SoFi, don’t charge origination fees on personal loans, so it can be worth shopping around. If the lender lets you pre-qualify without a hard credit check, then you can compare the loan estimates, including the APR and any fees.

Another thing to consider when comparing your personal loan options is your alternatives to a personal loan. For example, if you’re going to use a personal loan to pay for medical expenses or pay off credit card debt, then consider comparing costs. What would it cost you (in interest) to pay your debt down on the credit card instead of using a personal loan? What would a personal loan with an origination fee cost you? You’ll probably want to do your due diligence just to ensure you’re getting the right deal for you.

Avoiding Origination Fees

As with many things, origination fees may be negotiable. The more you understand about the type of loan you want and the terms of the loan, the better prepared you will be to have this conversation with your lender.

While you are researching your loan options, be sure to compare what you’ll be paying overall—including the terms of the loan, the interest rate, and any fees—to figure out which lender matches your needs.

One way to effectively compare and contrast different loan options is to take a look at each loan’s APR. This is the loan’s annual percentage rate and it provides a more comprehensive look at the cost over the life of the loan. It factors in the fees and costs associated with the loan, in addition to the loan’s interest rate. The Truth in Lending Act requires that all lenders disclose an APR for all types of loans, including personal loans and mortgages.

It’s important to evaluate all of your options—including the mortgages and personal loans that SoFi offers. You can start your application for both types of loans online, and you’ll be able to find out what rate you could qualify for in just minutes.

When you take out a loan at SoFi, you become a SoFi member and are eligible for even more benefits, like community events and career services.

Ready to get started with the home-buying process? Check out SoFi Mortgages, which come with no hidden fees.

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.
SoFi Mortgages are not available in all states. Products and terms may vary from those advertised on this site. See for details.
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

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