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

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

Do Landlords Allow Payment by Credit Card?

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

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

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

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

Pros of Paying Rent With a Credit Card

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

Flexibility

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

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

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

Earn Rewards

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

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

Cover Immediate Expenses

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

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

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

Cons of Paying Rent With a Credit Card

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

There May Be Extra Fees

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

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

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

It Can Affect Credit Score

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

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

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

It Can Increase Your Credit Utilization Rate

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

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

Should You Pay Your Rent With a Credit Card?

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

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

Steps for Paying Rent With a Credit Card

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

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

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

Alternatives to Paying Rent With a Credit Card

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

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

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

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

The Takeaway

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

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

Enjoy unlimited cash back rewards with fewer restrictions.

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

SoFi Credit Cards are 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.

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

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

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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If you plan to take out a $300,000 mortgage, the costs of the loan can vary considerably based on your rate, term, property tax and insurance costs, and whether you need mortgage insurance.

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

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

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

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

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

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

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

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

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

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

How Much Income Is Needed to Qualify?

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

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

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

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

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

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

How Much of a Down Payment Is Needed?

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

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

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

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

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

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

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

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

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

Recommended: A Guide to Buying a Single-Family Home

What Are the Parts of a Mortgage Payment?

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

Principal

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

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

Interest

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

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

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

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

Escrow

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

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

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

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

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

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

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

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

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

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

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

Recommended: A Guide to Mortgage Relief Programs

How to Get a $300k Mortgage

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

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

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

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

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

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

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

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

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

Recommended: SoFi’s 2022 Home Loan Help Center

Where to Get a $300k Mortgage

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

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

The Takeaway

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

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

Check your rate in just minutes

FAQ

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

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

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

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

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

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

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Photo credit: iStock/Vertigo3d

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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.

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

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

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

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

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Cryptocurrency — sometimes referred to as blockchain technology — is a hybrid between a currency and an investment. There are many different types of cryptocurrencies, with Bitcoin being the most well-known. As the popularity of cryptocurrency continues to increase, banks and other issuers are coming out with crypto credit cards and crypto debit cards.

While these two types of cards both allow cardholders to earn cryptocurrency, there are some key differences between a crypto credit card vs. crypto debit card. It’s important to understand how they differ so you can make the right choice for your financial situation.

Recommended: What is a Charge Card

What Is a Crypto Credit Card?

The term crypto credit card usually refers to a type of credit card that allows cardholders to earn cryptocurrency as a reward. Cryptocurrencies are often more volatile than other types of rewards you can earn, so make sure you’re prepared for that level of volatility before signing up for a crypto credit card.

Just like with any other credit card, crypto credit cards draw from a line of credit. Cardholders must pay back their balance in full each month in order to avoid incurring interest charges. Purchases and payments on crypto credit cards are usually made with U.S. dollars, though some cards may allow cardholders to use cryptocurrency held in an associated account.

Recommended: How to Avoid Interest On a Credit Card

How Crypto Credit Cards Work

Crypto credit cards earn rewards in a very similar way to most other rewards credit cards. With each purchase you make using the card, you’ll earn cryptocurrency.

As an example, say your crypto credit card earns 3% back at restaurants. If you make a $100 restaurant purchase, your crypto wallet will get credited with $3 of cryptocurrency.

Pros and Cons of Using a Crypto Credit Card

Especially given the volatility of cryptocurrency, there are a number of upsides and downsides to take into consideration before using a crypto credit card:

Pros of Using a Crypto Credit Card	Cons of Using a Crypto Credit Card
Can earn cryptocurrency rather than other types of rewards	Fewer crypto credit card options than other types of rewards credit cards
Easier way to start investing in cryptocurrency	Cryptocurrencies can be volatile and/or lose value
Cryptocurrency may increase in value	Can’t control the timing of your crypto investment

What Is a Crypto Debit Card?

A crypto debit card is a type of debit card that withdraws crypto directly from your wallet to make purchases. However, when you make a purchase, the merchant gets paid in fiat currency, which means a conversion must take place from your type of cryptocurrency into U.S. dollars.

Many crypto debit cards also allow you to access your cryptocurrency wallet at merchants or ATMs that don’t normally accept cryptocurrency. This can give you added flexibility and access to your cryptocurrency funds.

Additionally, some crypto debit cards also can earn cryptocurrency as rewards.

How Crypto Debit Cards Work

Like a regular debit card, most crypto debit cards operate on one of the major card networks (Visa, Mastercard, etc). This allows you to use your crypto debit card anywhere that these networks are accepted. While more and more merchants are starting to accept various forms of cryptocurrency, using a crypto debit card can give you better access to your cryptocurrency wallet.

However, note that when you pay with a crypto debit card, you’re selling some of your cryptocurrency and exchanging it for dollars. Because you may be selling at a higher or lower price than what you bought it for, this constitutes a taxable event. You’ll need to do the work of keeping track for tax purposes. Additionally, you could incur a fee for the conversion.

Recommended: Can You Buy Crypto With a Credit Card

Pros and Cons of Using a Crypto Debit Card

As you can see, there are pros and cons to this type of card. Here’s what to keep in mind when choosing crypto debit cards:

Pros of Using a Crypto Debit Card	Cons of Using a Crypto Debit Card
Better access to your crypto wallet	Fewer crypto debit card than other types of rewards debit cards
Opportunity to earn rewards and/or perks	Cryptocurrencies can be volatile and/or lose value
More convenient to use than other crypto redemptions	A debit card may be less secure than a cryptocurrency wallet
	Taxes or fees may apply

Recommended: Tips for Using a Credit Card Responsibly

Differences Between a Crypto Credit Card and a Crypto Debit Card

There are a few important differences between a credit card and debit card, and it’s important to know these differences when considering a crypto debit card vs. crypto credit card. Specifically, here are the essential differences to keep in mind:

	Crypto Credit Card	Crypto Debit Card
Rewards	Most crypto credit cards offer rewards	Fewer debit cards offer rewards
Using cryptocurrency	Purchases don’t spend from your crypto wallet	Cryptocurrency is withdrawn from your wallet with each purchase
Credit check on application	Yes	No

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

The Takeaway

Crypto credit cards and crypto debit cards both rely on cryptocurrency, but in different ways. A crypto debit card withdraws crypto directly from your wallet to make purchases. Purchases on a crypto credit card use a credit line issued to you in your local currency, but you may earn crypto rewards with every purchase.

If you’re looking for a non-crypto rewards credit card, you might consider a cash-back rewards credit card like the SoFi Credit Card. You can earn unlimited cash-back rewards, which you can use to invest in fractional shares, redeem for statement credit, or other financial goals you might have, like paying down eligible SoFi debt. Learn more and start earning credit card rewards today.

Apply for a SoFi Credit Card!

FAQ

Is it safe to use a crypto credit card or crypto debit card?

There are many different crypto credit cards and crypto debit cards. Look for one that is issued and branded by a reputable company. Even if you have a reputable card, know that there is still some risk, as anyone who gets your card number might also be able to access the cryptocurrency funds in your e-wallet.

Will buying crypto with a credit card amount to a cash advance?

If you want to buy crypto with a credit card, be aware that many credit card issuers will not allow you to buy directly with your card. And for those credit card issuers that do allow you to buy crypto with a credit card, the purchase may be treated as a cash advance. Cash advance transactions come with additional fees and often carry higher interest rates, so make sure you’re aware of those specifics before buying crypto with a credit card.

How are crypto credit and debit cards taxed?

Generally speaking, any time you use cryptocurrency to pay for something, you’re triggering a taxable event. This would likely include purchases made with a crypto debit card. The IRS has currently not given specific guidance on the taxability of crypto earned as a reward for purchases. Consult with your tax advisor if you’re not sure about how your crypto credit and debit cards will be taxed.

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

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

SoFi Credit Cards are 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.

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


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.

¹Members earn 2 rewards points for every dollar spent on purchases. No rewards points will be earned with respect to reversed transactions, returned purchases, or other similar transactions. When you elect to redeem rewards points toward active SoFi accounts, including but not limited to, your SoFi Checking or Savings account, SoFi Money® account, SoFi Active Invest account, SoFi Automated Invest account, SoFi Credit Card account, or SoFi Personal, Private Student, Student Loan Refinance, or toward SoFi Travel purchases, your rewards points will redeem at a rate of 1 cent per every point. For more details, please visit www.sofi.com/card/rewards?cardtype=c. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA/SIPC. SoFi Securities LLC is an affiliate of SoFi Bank, N.A.

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Editor's Note: For the latest developments regarding federal student loan debt repayment, check out our student debt guide.

Wondering how to handle your student loans? Knowledge and a solid plan are powerful — especially when it comes to your loans. The first step in managing student debt is to know how much you owe and keep tabs on the terms.

Then, take a look at loan forgiveness options. With an understanding of how much you owe, you can make progress toward repaying your debts.

5 Things to Help Manage Student Debt

These five high level tips can help you figure out how to handle your student loans. If you’re looking for more in-depth information, SoFi offers a full library of student loan resources with tips and strategies to help you deal with your student loans.

1. Know What You Owe

The first step in tackling your student loan debt is knowing exactly how much you owe, and the terms associated with each loan. It can be scary to meet your loan debt head-on, but you can’t take steps to get out of debt until you know exactly how much you owe.

This can help inform how much you’ll pay each month and how long it will take to pay off your debt. SoFi’s student loan payoff calculator will give you an idea of your loan payoff date.

If you aren’t sure, find out if you have a combination of federal and private student loans. Confirm your loan servicer and identify the monthly due dates for loan payments. Federal student loans come with some benefits like a six-month grace period and protections like deferment options. SoFi’s student loan help center has additional resources detailing the differences between private and student loans and much more.

2. Find Out If You Qualify for Biden’s Loan Forgiveness Plan

In August 2022, President Biden announced his loan forgiveness plan. He also announced the final extension of the pause on student loan payments that has been in effect since the beginning of the COVID-19 pandemic. Federal student loan payments are set to resume in January 2023.

Under Biden’s forgiveness plan, federal student loan borrowers earning up to $125,000 (as individuals) or $250,000 for those filing jointly may qualify for up to $10,000 in forgiveness. Pell Grant recipients may qualify for up to $20,000 in forgiveness.

Amounts forgiven under this plan will not be considered taxable on the federal level. Some states have announced that they will charge income tax on forgiven amounts.

The application is expected to go live in October 2022. Borrowers can make sure that their contact information is accurate in their Student Aid account to receive updates. You can also opt in for text alerts here.

The application for loan forgiveness will be open until December 2023.

Private student loans do not qualify for federal loan forgiveness programs.

3. Choose a Payment Plan

Federal student loan borrowers can change their repayment plan at any time without incurring any fees. Here’s a brief overview on the different types of plans:

•   Standard Repayment Plan spreads payments evenly over 10 years. The extended plan.

•   Graduated Repayment Plan. On this plan payments start lower and then gradually increase over time. Repayment takes place over 10 years.

•   Extended Repayment Plan can have either fixed or graduated payments and repayment takes place over 10 years.

•   Income-Driven Repayment Plans. There are four types of income-driven repayment plans that tie a borrower’s income to their loan payments. Repayment takes place over 20 or 25 years. At the end of the repayment period, the remaining balance is forgiven (though this amount may be taxable).

This may also be a good time to evaluate whether or not you want to pursue a loan forgiveness plan like the Public Service Loan Forgiveness program. Individuals who work for a qualifying nonprofit may qualify to have their loans forgiven after making 120 on-time payments. Amounts forgiven under PSLF are generally not considered taxable income.

Consider Student Loan Refinancing

If you have private student loans, the repayment terms for them were likely set at the time you borrowed the loan. Student loan refinancing is one option that could allow you to adjust the terms on your loans. Keep in mind that extending your loan terms generally results in lower monthly payments, but may increase the amount of interest you owe over the life of the loan.

Unlike consolidation through the federal government, a borrower may secure a more competitive interest rate through refinancing which could potentially reduce the amount of money a borrower owes over the life of their loan. Learn more about consolidating vs. refinancing.

If refinancing is intriguing, you can take a look at this student loan refinancing calculator to see how your loan may change if you refinance. Note that refinancing federal loans will eliminate them from any federal benefits or programs, including forgiveness programs.

4. Automate Loan Payments

Setting up automatic payments with your loan servicer is one of the easiest ways to make sure you never miss a payment. Most loan servicers will let you set up automatic payments within your account online. If you’re having trouble, contact your loan servicer.

5. Make a Big Picture Budget

It’s easy to get tunnel vision when you are so focused on student loan repayment. So keep in mind that student loans are only part of your overall financial picture.

Take the time to budget and make room for other financial goals, like saving for retirement. In addition to budgeting monthly for food, entertainment and utilities, you might have a car loan and rent or a mortgage to pay. Personal finance tools like SoFi Relay can help you track your spending and income, so you can stay on top of your financial goals.

Recommended: Student Loan Refinancing Guide

Not all accounts are free by any means, but SoFi Checking and Savings® has no account fees. It’s a bank account online that offers cash-back rewards. Money can be tucked into vaults for goals or an emergency fund. Checks can be deposited from your phone, and more.

The Takeaway

How to manage student loans? The first priority is knowing exactly what you owe. Choose the repayment plan that works for you, and take advantage of Biden’s recently announced loan forgiveness program if you qualify.

You can always reevaluate your current pay-off strategy or loan terms. Some may find that refinancing — combining all loans into one new private loan, with a new, hopefully, lower, interest rate and/or new term — may make sense for their personal situation.

If refinancing student loans seems appealing, it’s easy to check your rate. When you sign up for any SoFi product and become a member, you gain access to a range of exclusive SoFi member benefits like career coaching.

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

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