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A negative balance can happen all too easily: You might forget to note a purchase you made with your debit card or an automatic payment you set up. Or maybe you had an emergency pop up that required you to spend more than usual…and more than the money you had in your checking account.

The resulting negative bank balance can have a serious impact, leading to overdraft fees, declined transactions, or worse — account closure. Read on to learn more about negative bank account balances, including ways to avoid the problem, and what to do if you wind up with one.

What Is a Negative Bank Account Balance?

A negative account balance, also known as an overdraft, occurs when you spend more money than you have in your bank account. This happens when a bank allows a transaction to go through even though there are insufficient funds, effectively lending you money to cover the difference, often at the cost of an overdraft fee. The bank may also charge other fees until the balance is restored to zero or positive.

To help you visualize this, here’s an example:

•   Imagine you have $500 in your account, and you write a check for $515, because you thought you had a balance of $600.

•   If the bank pays the $515, you end up with an account balance of minus $15. That’s the difference between how much money you had in the account and how much the bank paid the person that cashed your check. The bank did you a favor by making up the difference.

What Makes a Bank Balance Negative?

Your balance goes negative when you have withdrawn more than you have in your account. This can happen if you make a transaction — such as ATM withdrawal, automatic bill payment, or debit card purchase — in an amount that exceeds the balance in your checking account. This is when overdraft protection kicks in. Instead of rejecting the transaction, the bank will cover the overage, allowing your account to go negative. Typically, you repay a negative balance with the next deposit of funds.

Here’s a closer look at how a negative bank balance can occur.

Miscalculation/Mistakes

Overdrafts can happen easily with miscalculations and mistakes. These are the most basic errors — say, getting the math wrong on how much is in your account, or forgetting about an automatic dedication that hits and takes your balance down lower than you believed it to be.

Multiple Ways to Withdraw From an Account

With all that’s going on in your life, it’s possible you’re not exactly sure what checks you’ve written have been cashed and what incoming checks have cleared. You may unwittingly make a payment or ATM withdrawal thinking you’re good, but discover you’re certainly not. Or perhaps when you’re calculating in your head how much you have, you forget about the money taken out through one of your monthly automatic bill payments.

What Happens if Your Bank Account Remains Negative?

Here are some of the issues a negative bank account can trigger.

Overdraft Fee

If your bank covers a transaction that puts your account in negative territory, it will typically charge a fee. It may charge that fee every time you make a transaction. If you make multiple transactions before you realize you have a negative balance, these can add up to a significant sum.

Account Closure

What happens if you don’t pay an overdrawn account? If you don’t fix your negative balance by depositing money into your account, or if you overdraw your account so often the powers that be at the bank raise their eyebrows, your days as a bank customer may come to a close. They can opt to shutter the account, and it can be difficult to reopen a closed bank account.

Credit Impact and Debt Collection

If the bank closes your account due to an ongoing negative bank account balance, it will likely report the closure to a banking reporting company (like ChexSystems). This negative information will stay on your record for up to five years, which could make it difficult for you to open a new bank account.

Also, a bank that closed your account due to unpaid overdrafts might sell your debt to a collection company, which could negatively impact your credit profile.

Differences Between Overdraft and Non-sufficient Funds

An overdraft fee is not the same thing as a non-sufficient funds (NSF) fee. Here’s a look at the difference:

•   An overdraft fee is what a bank or credit union charges you when they have to cover your transaction when you don’t have enough funds available in your account. It’s typically about $27

•   When a financial institution returns a check or electronic transaction without paying it, they may charge a non-sufficient funds fee. It’s usually about $18. The difference is, with a non-sufficient funds fee, the bank is not covering the shortfall; they are essentially rejecting the transaction.

What to Do With a Negative Bank Balance

Fortunately, a negative bank balance is not a problem without solutions. You can take steps to get back on track.

Check Your Recent Activity and Balance

Determine what went wrong and triggered the overdraft. Check your bank’s app (or go online) and also see what charges haven’t been paid or received. Do the math. This will give you an idea of where you stand and how soon you may be back in the positive zone for your balance.

Evaluate Upcoming Automatic Payments

Automating your finances can be a convenient tool, but if you are in overdraft, automatic payments could pop up and derail your efforts. Make sure to account for recurring payments when figuring out how to get your account out of a negative balance.

Deposit Money Into the Account

Once you understand your situation, take action. Deposit enough money to ensure that you won’t overdraw again. Remember to include not only the money you need to bring your balance back into positive territory, but ideally put in enough to give yourself some cushion.

Request a Waived Fee

Your bank or credit union may have a sympathetic ear. Make a request to have your fee waived. They may be feeling generous, particularly if this is your first offense.

Pay the Fees

If you knock on the door of fee forgiveness and you get a no, pay what you owe. If you don’t, you’ll just make your situation worse, meaning the bank could close your account and turn the matter over to debt collection. While the bank may not close your account right away, taking action sooner rather than later is usually best.

Recommended: 10 Tips for Avoiding Overdraft Fees

Tips for Avoiding a Negative Bank Balance

There are ways to steer clear of a negative bank account balance. Try these tips:

•   Set up account alerts to let you know when your account balance reaches a certain number. If you know your account is getting low, you can take steps to avoid going into the negative balance zone.

•   Check your balance regularly. “Waiting until the end of the month to check in on accounts leaves you at risk of excess spending and potentially overdrawing your checking account, “ says Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “Checking in once a week leaves time to self correct and adjust your budget to help balance the numbers.”

•   Consider setting alerts to notify you before automatic deductions are made (many banks offer this option). That way, you can monitor your bank account and its balance to make sure you can cover the debit.

•   Explore what overdraft protection your bank offers. You may be able to link a savings account to your checking which can be tapped to cover overdrafts. It may cost you a fee for that transfer, but it’s likely not as steep as an overdraft fee. Your bank might also allow you to link a credit card (watch out for high interest rates here) to your checking account or to borrow from a line of credit. Know your options. While you don’t want overdrafts to be a regular occurrence, you do want to be protected in case they crop up.

The Takeaway

Having a negative bank balance means you overdrafted your account. This often triggers pricey overdraft fees , and can lead to other financial issues if this situation occurs often or isn’t remedied. It’s wise to keep tabs on your money and use tools that a bank may offer to help you avoid a negative bank account balance or resolve it quickly if it occurs.

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.

FAQ

Can I still use my debit card if my account is negative?

If your account is negative, you can only use your debit card if you’ve opted into your bank’s overdraft coverage program. Even with this coverage, using your card while your account is negative will likely lead to fees for each transaction.

How are non-sufficient funds different from an overdraft?

The key difference lies in what the bank does. With an overdraft fee, the bank covers your transaction even though you don’t have enough funds, then charges you a fee (typically around $27). With a non-sufficient funds (NSF) fee, the bank rejects the transaction and charges you a fee for doing so (usually around $18).

How do I avoid having a negative bank account?

You can avoid a negative bank account by regularly monitoring your balance, setting up account alerts for low funds or upcoming automatic payments, and exploring overdraft protection options like linking a savings account.

Can you go to jail for a negative bank balance?

Typically, no. A negative bank balance is a civil matter between you and your bank, not a criminal one. However, repeatedly writing bad checks with the intent to defraud, especially in large amounts, could potentially lead to criminal charges in some jurisdictions. This is rare and typically involves more than just a simple overdraft.

How long can you have a negative bank balance?

Each bank has its own policy. While your bank account won’t be closed immediately if you have a negative bank balance, it’s important to resolve the issue as soon as possible.

Photo credit: iStock/kupicoo

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Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

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See additional details at https://www.sofi.com/legal/banking-rate-sheet.
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SOBNK-Q425-029

Student loans are considered installment loans, or loans that are repaid through regularly scheduled payments or installments.

Revolving options, like credit cards, let borrowers take out varying amounts of money each month, repay it, and take out more money as they go.

Read on to learn more about student loans, installment loans, and revolving credit — plus how student loans may affect your credit.

What Is Revolving Credit?

Revolving credit is an agreement between a lender and an account holder that allows you to borrow money up to a set maximum amount (or credit limit). The account holder can borrow what they need as they need it (up to their credit limit) and choose to pay off the balance in full or make minimum monthly payments on the account.

As the account holder makes repayments, the amount available to borrow is renewed. Account holders can continue to borrow up to the maximum amount through the term of the agreement. Examples of revolving credit include credit cards and home equity lines of credit (HELOCs).

What Is Installment Credit?

Installment credit is a type of credit that allows a borrower to receive a lump sum loan amount up front, then make fixed payments on the loan over a set period of time. Before the borrower signs an agreement for an installment loan, the lender will decide on the interest rate, fees, and repayment terms, which will determine how much the borrower pays each month.

Common examples of installment loans include federal student loans, private student loans, mortgages, auto loans, and personal loans.

And for borrowers who opt to refinance student loans, those loans are installment loans as well.

Revolving Credit vs Installment Credit

Now that you know student loans are installment and not revolving credit, it’s helpful to understand how these two types of credit compare.

Here’s a high level overview on the differences between installment loans vs. revolving credit.

Revolving Credit

Revolving credit is a more open-ended form of credit obligation. Let’s use the example of a credit card:

1.   The cardholder uses the card to make purchases as they please, pays them off either in-full or partially each month, and continues to make charges on the line of credit.

2.   The amount of money the cardholder spends is their decision (up to their credit limit), and the amount of money they repay each month isn’t set in advance by the lender.

3.   The cardholder can pay off the account balance in full each month, or they can opt to pay the minimum and “revolve” the balance over to the next month (though this will accrue interest on the account).

An important note: To avoid any late fees or potential dings to your credit score, it’s important to pay your monthly revolving bill on time. It’s also wise to keep your balances low, as your credit utilization rate is a major factor in your credit scores.

Installment Credit

Installment credit is less open-ended than revolving credit. Installment credit is a loan that offers a borrower a fixed amount of money over a predetermined period of time. When a borrower signs the loan agreement, they know what the monthly payments will be and how they will need to make payments.

Let’s use the example of a student loan:

1.   The student borrows a specific dollar amount. The lender specifies the interest rate and repayment terms. In the case of federal student loans, interest rates and terms are set by federal law.

2.   The predetermined loan amount is released to the borrower. Typically, the funds are released in a single lump sum payment.

3.   The borrower repays the loan based on the agreed upon terms. Terms will be set by the lender for private student loans, or by law for federal student loans.

An important note: If you only have revolving credit (such as a credit card), taking out an installment loan can diversify your credit mix, which is a factor in determining your credit scores. While an installment loan adds to your total debt, its balance does not factor into your credit utilization ratio (which is specific to revolving credit).

Pros and Cons of Installment Credit

Student loans for undergraduate school, as well as student loans that are refinanced, are considered installment loans, which means they come with a starting balance, are disbursed to the qualifying borrower up front and in full, and are repaid over a set amount of time through a fixed number of payments. There are advantages and disadvantages to taking out an installment loan, and it’s important to be aware of them:

Pros of Installment Credit

Here’s a closer look at two key advantages of installment credit:

Predictable Payments

Installment credit payments are made on a set schedule that’s determined by the lender. This makes them a predictable, long-term strategy for paying off debt, and also makes it easier to factor them into your budget, especially if the installment loan has fixed interest rates.

The monthly payment for an installment loan with a variable interest rate may occasionally change.

Lower Interest Rates

Installment loans often feature lower average interest rates than credit cards or other forms of revolving credit. This can result in significant savings on interest charges over time, especially for large loan amounts.

Cons of Installment Credit

But there are also disadvantages to installment credit. Two key drawbacks include:

Accumulation of Interest

While often lower than credit card rates, interest on an installment loan is paid over the entire life of the loan, which can add up to a significant amount of money over time, particularly for long-term loans.

Prepayment Penalty

Some loans impose prepayment penalties if a borrower pays their loan off early. This isn’t necessarily the case for all installment loans — as mentioned, student loans generally don’t have prepayment penalties. But it’s important to read the fine print in the loan agreement to determine whether a prepayment fee will be triggered if the loan is paid off early.

Recommended: How to Avoid Paying a Prepayment Penalty

How Student Loans Affect Your Credit Score

Student loans, like other loans, are noted on your credit report and they may affect your credit in both positive and negative ways.

On the plus side, making consistent, on-time payments, can help borrowers establish a positive payment history, which is the most significant factor (35%) in a FICO® credit score. Successfully managing an installment loan can also help diversify your credit mix, which can also have a positive impact on your credit profile.

However, failing to make your loan payments can negatively impact your credit. A federal student loan payment is considered delinquent even when your payment is just one day late. After 90 days of missed payments, your loan servicer will report the delinquency to the national credit bureaus. Late payments can stay on your credit report for up to seven years.

(After 270 days of missed payments, your loan will go into default, which can have very serious consequences for your credit and your financial situation in general. If you are having trouble repaying your student loans, reach out to your lender or loan servicer right away to see what your options are.)

If you apply for a private student loan or student loan refinancing, lenders will typically do a hard credit inquiry, which may temporarily lower your credit score. Most federal student loans do not require hard credit inquiries.

Ways to Pay for School

There are a variety of ways to pay for college, including student loans, savings, financial aid, and scholarships. Here’s a closer look at your options:

Federal Student Loans

Federal student loans are installment loans available to students. To apply, students fill out the Free Application for Federal Student Aid (FAFSA®) each year. Federal student loans have fixed interest rates that are set annually by Congress, offer different repayment options, and have some borrower protections and benefits such as deferment and the option to pursue Public Service Loan Forgiveness.

However, there are borrowing limits for federal student loans, and other changes are coming to the federal student loan program as of the summer of 2026, so students may need to review other sources of financing when determining how they’ll pay for college.

Private Student Loans

Private student loans are installment loans you can use to pay for a college education. Private student loans are offered by private lenders. To apply for them, borrowers can browse the offerings of individual lenders like banks, credit unions, and online lenders and decide which private student loan works best for their finances. As a part of the application process, lenders will generally review the applicant’s (or their cosigner’s) credit history and credit score among other factors.

Private student loans can help bridge funding gaps after other sources of financing — such as federal loans, grants, and scholarships — have already been exhausted. This is because private lenders are not required to offer the same borrower protections as federal student loans. If you think private student loans are an option for you, shop around to find competitive terms and interest rates, and be sure to read the terms and fine print closely.

As mentioned, a borrower may choose to refinance private student loans at a later date, especially if they can qualify for more beneficial terms or a lower interest rate. Federal student loans can also be refinanced, but if a borrower chooses this option, they will lose access to federal benefits and protections like federal deferment and forgiveness.

Personal Savings

Using personal savings to pay for college means less debt and more flexibility. Not only that, but it costs significantly more to borrow money to pay for college than it does to use personal savings.

Using personal savings to pay for college means less debt and more flexibility. Using savings also allows you to save money on interest, which can make college less expensive. That said, not everyone has enough savings to cover the full cost of attending college.

Grants

Unlike student loans, which require repayment, grants are a type of financial aid that doesn’t require repayment. Grants are typically based on financial need. Completing the FAFSA will put you in the running for federal, state, and institutional grants.

Recommended: The Differences Between Grants, Scholarships, and Loans

Scholarships

A scholarship is a lump sum of funds that can be used to help a student pay for school. Scholarships usually don’t have to be repaid, and can be need-based or merit-based. You can find out about scholarships through your high school guidance office, college’s financial aid office, or by using an online scholarship search tool.

Work-Study Programs

Federal work-study programs allow students with financial need to work on- or off- campus and earn money through part-time jobs. The program encourages students to do work related to their course of study or community service.

Work-study programs are funded by the federal government. Students may be awarded a certain work-study amount by filling out the FAFSA. Not all schools participate in federal work study, however, so if you are interested in this option, make sure your school offers it.

The Takeaway

Student loans are a common form of installment credit. This means they are dispersed as a lump sum and require making fixed, regular payments over a predetermined period. Unlike revolving credit such as credit cards, student loans offer predictable budgeting and often come with lower interest rates.

Managing student installment loans responsibly can positively impact your credit profile. However, late or missed payments can have serious negative consequences. Understanding the differences between installment and revolving credit, and exploring various funding options for education, can empower you to make informed financial decisions for your academic journey and beyond.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

Is a student loan an installment loan?

Yes, a student loan is an installment loan. This means you receive a lump sum of money up front and repay it over a set period with a predetermined number of regular payments.

Is a student loan a revolving loan?

No, a student loan is not a revolving loan. Revolving loans, like credit cards, allow you to borrow varying amounts up to a set credit limit, repay, and then borrow again. Student loans are installment loans, meaning you receive a lump sum and repay it with fixed, scheduled payments over a set period.

What are the benefits of an installment student loan?

The benefits of an installment student loan include predictable payments, which makes budgeting easier, and often lower interest rates compared to revolving credit. They also allow you to finance a major purchase like an education and can help diversify your credit mix.

Can student loans help build credit?

Yes, student loans can help build credit. Making regular, on-time payments on your student loan demonstrates responsible financial behavior, which contributes positively to your payment history — a major factor in your credit score. Successfully managing an installment loan like a student loan can also help diversify your credit mix, which can further enhance your credit profile.

What’s the difference between federal and private student installment loans?

Federal student loans generally offer lower rates and more borrower protections, such as income-driven repayment and potential for loan forgiveness. Also, they typically do not require a hard credit inquiry. Private student loans, offered by banks and other financial institutions, may have fewer borrower protections and repayment options, and usually require a credit check and potentially a cosigner. Interest rates and terms for federal loans are set by law, while private loan terms depend on the lender and borrower’s creditworthiness.

Photo credit: iStock/SDI Productions

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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.

SOISL-Q425-031

A deck can turn your backyard into a dream destination. But the reality is, building one isn’t cheap.

A new 400-square-foot wood deck can set you back between $10,000 and $20,000 in 2025, according to HomeGuide, a home improvement website, while Angi put sthe average cost at $8,258. Project costs can vary based on where you live, the materials you use, the size of the deck, and other factors.

Whatever your deck plans entail, you’ll want to make sure you’re financially prepared. Here’s a closer look at the factors that can impact how much you could pay to have a professionally built deck added to your home.

Get an Idea of Labor Costs

No matter what kind of deck you’re building, count on labor taking up a big chunk of the budget. Generally speaking, it’s around 38% to 50% of the overall project costs. (The rest of the budget typically goes toward covering the cost of materials and other smaller expenses.)

One way to get a rough idea of how much you’ll pay for labor is to use the rule of two. This method involves estimating the total cost of the project (labor plus materials) and dividing that amount by two. The result is the estimate of labor costs.

The rule of two also works the other way around. Say you get a quote from a contractor who will be building your deck. To get an idea of the total cost of the project, simply multiply the labor cost you’ve been quoted by two.

While this method can provide a solid starting point as you plan your budget, it doesn’t factor in any unexpected costs that may crop up as your deck is being built.


💡 Quick Tip: With home renovations, surprises are inevitable. Not so with SoFi home improvement loans. There are no fees required, and no surprises.

Consider the Decking Materials

Another important factor to consider is the material you want to use for your deck. More durable decking material will likely cost you more, but could save in the long run with minimal upkeep or less-expensive repairs. Here’s a look at the average cost of common materials, according to Angi:

•   Pressure-treated wood: $2 to $5 per square foot

•   Composite decking: $12 to $22 per square foot

•   Bamboo: $3 to $10 per square foot

•   Cedar: $3 to $7 per square foot

•   Redwood: $5 to $35 per square foot

•   Metal: $15 to $20 per square foot

Of course, price is just one factor. You’ll also want to think about the climate where you live. Do you get a lot of snow in the winter? Is it very humid in the summer? Be sure whatever decking material you choose can stand up to the environment.

Choose a Design That Fits Your Budget

After materials and labor, the actual design of a deck can influence the overall cost of the project. To help keep prices low, you may want to stick with a simple design, traditional, squared-off corners, or even a smaller deck.

One affordable option? A ground-level deck, which sits within 30 inches from the ground. Because it’s so low, this type of deck requires fewer materials and structural reinforcements. And you won’t need to add a railing or stairs, which can be additional savings.

Factor In Additional Costs

While labor, materials, and design are the major players in a construction budget, there are other costs you’ll want to consider.

Permits are one example. Most towns and cities require permits for additional structures like decks. Deck contractors are usually well-versed in this process, and most will include the price of permits in their quotes.

If you’re building the deck yourself — or your contractor won’t pull a permit — you’ll need to handle the red tape yourself. Start by calling your local building department and explaining the project to them. If a permit is required, they can explain how the process works and provide you with the correct application form.

It’s also a smart move to factor in any costs you may incur once the deck is built. For instance, the new addition could increase your home insurance premiums. (Your agent can explain what changes, if any, you’ll need to make to your policy.)

You may also be hit with a higher property tax bill, since the addition of a permanent fixture like a deck typically increases a home’s value. To get an estimate of the change, contact your local building and tax departments.

Comparison Shop

Construction is similar to plumbing or automotive repair in that if you aren’t an expert, it can be hard to gauge the price. Whether you’re hiring a contractor or a carpenter, it can help to ask for bids from a few local professionals to ensure you have the right person for the job — and your budget. Ask potential candidates to provide photos of their projects and names of previous clients you can call.

For a long-term investment like a deck, going with the cheapest option might not be the best strategy. While there are ways to potentially lower the cost of a new deck, be sure you’re not sacrificing quality for price. After all, this is something that you and your family will hopefully be using for years.

Ways to Pay For a New Deck

While a deck brings comfort and enjoyment, the cost of building one can be significant. Here are some common financing options to explore. Including home improvement loans and home equity loans.

Personal Loan

If you need to access funds quickly, don’t want to use your home as collateral, and can afford to make the monthly payments, consider a personal loan.

With this type of loan, you borrow a lump sum from a lender, which you’ll pay back with interest. The money can be used for almost anything, including paying for a new deck. Personal loans are usually unsecured, which means they don’t require collateral. Instead, a lender will consider a borrower’s creditworthiness.

Most lenders offer a personal loan amount of $50,000, though some lenders offer lending up to $100,000. Repayment terms are usually two to seven years, and interest rates are typically fixed.

Recommended: Personal Loan Calculator

Fixed-Rate Home Equity Loan

If you’ve built up equity in your home and have a one-time cash need, you may want to look into a fixed-rate home equity loan.

This loan type, which uses your home as collateral, is fairly straightforward: You receive a lump-sum payment from the lender, which you’ll repay over a period of time with a set interest rate. The term of these loans typically spans five to 15 years, and the amount you borrow must be repaid in full if you sell your home. If you’re unable to make the payments, you could risk losing your house.

Note that the closing costs may be similar to the cost of closing on a home mortgage. As you’re comparison shopping, be sure to ask about the lender’s closing costs so you can prepare your budget accordingly.

Home Equity Line of Credit (HELOC)

If your deck addition turns into an ongoing project, and you want some flexibility to pay as you go, then a home equity line of credit (HELOC) may be a good fit.

A HELOC is revolving debt, meaning that as you pay down the loan balance, you can borrow it again during the draw period. That’s when you can use, or draw, funds against the line of credit, typically 10 years. After that, you can no longer draw funds. (Another important time period to keep in mind? The repayment period, which is the amount of time you have to repay the loan in full.)

Note that unlike a fixed-rate home improvement loan, a HELOC’s interest rate is variable. This means it changes to reflect the current interest rate, which could cause your monthly loan payment amounts to vary.

No-Interest Credit Cards

With a no-interest, or 0% APR, credit card, you won’t be charged any interest on your purchases for a set period of time. Some cards also extend the temporary 0% APR to balance transfers.

A no-interest credit card comes with low borrowing costs, which could make it an attractive way to finance a new deck. But qualifying for one of these cards can be difficult. And when the promotional period ends, a potentially high APR will start accruing on the remaining balance.

The Takeaway

Adding a deck onto your home can be a great way to enjoy your backyard and add to the value of your home. When budgeting for the cost to build a deck, you’ll want to factor in labor, materials, design, and extra expenses like permits, insurance premiums, and property taxes. Enlisting the help of a reputable, licensed contractor or carpenter can help ensure you get the deck you want, at a price you can afford.

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

FAQ

How much should I budget for a deck?

A deck can cost anywhere from $2 to more than $75 per square foot, depending on size, material, complexity, and labor. The national average for a professionally constructed deck is about $7,320 or about $30 to $60 per square foot.

How much would a 20 x 20 foot deck cost to build?

A 20×20 deck (400 square feet) costs approximately $16,000 to $24,000 for professional installation. The price can vary significantly based on materials and labor.

Can you build a deck for $5,000?

It may be possible to build a deck for $5,000. If it’s a small deck, you use inexpensive materials, and/or you do some of the work yourself, you may be able to construct a deck for that price. The average deck currently costs slightly more than $8,000.

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.

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Wedding bands are a symbol of a couple’s eternal love and commitment, but they’re also an added expense in the wedding budget. According to the wedding site The Knot, wedding bands can cost around $600 to $1,200 each. One way to potentially score a deal on your rings is by shopping during strategic times of the year.

Sales often occur in the weeks between Thanksgiving and Christmas. And you may find a bargain during September and October, when jewelers need to clear out old stock before the holidays.

But February, the month devoted to lovers, can also be a good time to shop for wedding bands. Here’s why.

Reasons to Buy Your Wedding Bands in February

There are a few reasons why you may want to shop for wedding rings during the shortest month of the year.

It’s a Popular Time for Proposals

Many people pop the question between Christmas Eve and New Year’s Day, and Valentine’s Day continues to be one of the most popular holidays for couples to get engaged.

Jewelers know this, and they often prepare for the influx of business by rolling out promotions on engagement rings and wedding bands. Consider hitting the stores between New Year’s Day and Valentine’s Day, before the crowds show up. And if you can, shop during an off-peak time of day when the store is quieter. You may find it easier to try to negotiate a better price for your bands.


💡 Quick Tip: Need help covering the cost of a wedding, honeymoon, or new baby? A SoFi personal loan can help you fund major life events — without the high interest rates of credit cards.

Bridal Fairs Are Kicking Into Gear

Many bridal expos are held in February and March, offering couples a chance to see the latest wedding band styles without the sales pressure. Vendors are there to give tips as well as a good pitch, and some may offer limited-time, expo-related discounts.

Gather up information and coupons at the bridal fair, then give yourselves a day or two to regroup and possibly go make a purchase.

The Timing Works for a Summer Wedding

Jewelers typically recommend shopping for wedding bands at least three to four months before your wedding date — longer if you have your heart set on a one-of-a-kind design. That will give you time to look and look again, get the rings sized, and have any engraving or other customizing done.

For couples getting married in the summer — peak wedding season — this will mean starting the ring buying process in February.

How to Shop for Wedding Bands

No matter what time of year you shop for a wedding ring, it’s a good idea to do a little prep work before you hit the stores. Here are some things to consider doing ahead of time.

Set a Budget

You want bands you’ll love forever, but not at a price that will put you in debt for the rest of your lives. At the start, let your jeweler know what your budget is, and they can work with you to find rings within that range.

Consider a Wedding Set

If you haven’t settled on an engagement ring yet, you may want to look into purchasing a wedding set. This set includes your engagement ring and a matching wedding band. Buying both at the same time could save you money.

Shop Around

As with most major purchases, you’ll want to shop around for wedding bands. Visit different jewelers, including online shops, and don’t be afraid to ask questions about the pros and cons of different metals, gemstones, and designs.

Once you find the bands you want, try negotiating for a better price. You may be able to increase your chances of getting a deal by offering to pay all cash.

How to Pay For Your Wedding Bands

A wedding ring is usually cheaper than an engagement ring, but it can still take a significant bite out of your budget.

According to The Knot, the typical men’s wedding band costs around $600, while the average woman’s band runs closer to $1,200. Prices can vary widely based on a number of factors, including the metal type, overall design, and gemstones.

Here, a few common ways to finance wedding rings.

No-Interest Credit Cards

Larger jewelry stores usually offer some sort of in-store financing, including no-interest credit cards. You can also apply for one directly with a lender.

This option lets you buy the bands you want today, which is a major benefit. And it could make good financial sense if you’re able to pay off the balance before the promotional period ends. However, if you can’t, you’ll have to pay interest on whatever you owe. And that interest rate probably will be higher than other credit card or loan offers available to you.

Buy Now, Pay Later

Think of buy now, pay later (or BNPL) as a kind of installment payment plan. It allows you to purchase your wedding bands today and then spread out payments over a set number of weeks or months, often for zero or low interest. Klarna, Afterpay, and Affirm are all common examples of BNPL providers.

Usually, no minimum credit score is required for approval. Rather, providers will consider the amount available on the debit or credit card you’re using in the transaction, your history with that lender, and key details about the item you’re buying.

Also, a soft credit check is typically conducted to approve or reject your request, but it does not impact your credit score.

As with a no-interest credit card, if you pay off the BNPL plan as planned, you may not incur interest or fees. But if funds aren’t paid on time, or a longer-term plan is chosen, you could be hit with a high interest rate and/or late fees.

Personal Loan

You can get a personal loan from a bank, credit union, or online lender. Many, but not all, personal loans are unsecured, which means you won’t need to put up any collateral, such as a house or car. Instead, lenders will consider your creditworthiness.

Most personal loans are paid back within three to five years, and the interest rate tends to be higher if there is no collateral. The better your credit score is, the lower the interest rate and monthly payment will be. However, the lower the payment, the longer it might take you to pay off the loan.

Generally speaking, once you’re approved for a wedding loan, you can receive funds within days. In some cases, you may be able to get the money within a day or two. This quick influx of cash can come in handy if you’re planning to haggle for a better price on the band.

Recommended: Personal Loan Calculator

The Takeaway

Wedding bands currently cost on average between $600 and $1,200, but you may get a better deal by shopping in February and other sale seasons. Be sure to shop around, and when you find the ring you want, don’t be afraid to try haggling. In terms of financing your purchase, options include savings, no-interest credit cards, and personal loans.

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

FAQ

What is the best time of year to buy a wedding ring?

It can be wise to buy a wedding ring six to eight months before the ceremony to allow time for sizing, engraving, and other types of customization. That said, there may be sales at certain times of year to help make wedding rings more affordable. February, since it includes Valentine’s Day, can be a good month to shop for wedding bands.

What is the three-month rule for wedding rings?

The three-month rule says that an engagement ring should cost the equivalent of three months’ worth of salary. This concept was developed as a marketing tactic almost a hundred years ago.

How much should you spend on an engagement ring?

How much you spend on an engagement ring (or if you buy one at all) is a very personal decision. A long-standing guideline is to pay around three months’ worth of salary, but that was developed as part of a marketing program, so it’s really up to each couple to decide what amount they feel comfortable with.

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.

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When it comes to your money, the more you know, the better equipped you are to make informed financial decisions. One piece of your overall financial picture that you may want to understand is how much you’re “worth.” This information can help you understand where you are with your finances now and what you need to do to reach your goals for the future.

Before we look at a net worth growth calculator table that shows you how you compare against other people your age, let’s dive a bit deeper into what net worth is and why it’s important.

What Is Net Worth?

Net worth is simply a total of all your assets minus any debts you have.

Those assets can include cash, real estate, intellectual property, and other items like jewelry, stocks, insurance policies, and bonds. The cash may come from a job you have or from unearned income, such as your Social Security payment

Having multiple assets does not necessarily mean you have a high net worth, particularly if you also carry significant debt. For example, you may have a million-dollar mansion, but if you have debts of $500,000, your net worth dwindles rapidly.

💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.

How Does a Net Worth Calculator Work?

There are many personal net worth calculators available online, though you don’t need one to calculate your net worth. Just take the total amount of all your assets and subtract the total amount of your liabilities:

Some calculators will also factor in future growth so you can understand what your net worth will be in the future, as the value of your assets grows.

Recommended: What Is Disposable Income?

How to Calculate for Net Worth

As you can see, it’s fairly easy to calculate your net worth, though it may take time to gather the values of all your assets, such as the current value of a piece of high-end jewelry. But once you do, you can add up all your assets and then subtract your liabilities to calculate your net worth.

What Is the Average American Net Worth?

Knowing your own net worth is one thing, but where does it stand against other people in your age bracket? Generally, people see an increase in their net worth the older they get, and it can be helpful to use a net worth percentile calculator by age to see where you stand.

Here’s the average net worth by different age groups, according to the most recent data available from the Federal Reserve.

Why Is Net Worth Important?

Calculating your net worth is smart because it can help you understand where you’re strong financially (maybe you have little debt) and where you’re weak (maybe you’ve overextended your credit to buy your home).

It may also help you make plans for the future. For example, if your net worth is high, you might explore strategies for reducing taxable income, such as contributing more to a tax-deductible retirement account. And if your net worth isn’t where you’d like it, you can take steps to improve it.

💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

How to Increase Your Net Worth

If you’ve used a liquid net worth calculator, or compared your net worth to the table above and don’t feel like your numbers are as high as you’d like them to be, you can do a few things to increase your net worth.

If your debt levels are high, you can increase your net worth by decreasing that debt. Get a plan for paying off credit cards, student loans, car loans, and home mortgages. Consider increasing the amount you pay on each slightly to shorten your repayment period and decrease the amount of interest you pay on these loans and credit cards.

Creating a budget is one way to keep tabs on your finances as you’re paying off debt. A money tracker app can help make the job easier.

If you don’t have an abnormally high amount of debt but want to increase your assets, you might explore making more money. If you’re still in the workforce and have the ability to make a career change, you might consider cultivating potential high-income skills that could help you command a higher salary.

If you’re retired, you could take on part-time flexible work.

Recommended: Smart Financial Strategies to Reach Your Goals

The Takeaway

You may not be able to match the likes of Jay-Z and Beyoncé when it comes to net worth, but knowing yours can help you make smart financial decisions for the future. To figure out your net worth, you can subtract the total amount of your liabilities from the total amount of your assets. You can also use a personal net worth calculator; some will even factor in future growth.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

How do I calculate your net worth?

Net worth can be calculated by subtracting all your liabilities from your assets. In other words, subtract everything you owe (debts, loans, credit card debts) from everything you have (cash, property, real estate, jewelry, stocks).

What is a good net worth by age?

A “good” net worth depends on your financial goals and age. For example, the average net worth for 35-44 year-olds is $548,070. Yours may be higher or lower than this.

What net worth is considered rich?

According to a 2025 survey conducted by Charles Schwab, Americans need an average net worth of at least $2.3 million to feel wealthy. However, that amount varies based on where you live.

Photo credit: iStock/Kanatip Chulsomlee

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This content is provided for informational and educational purposes only and should not be construed as financial advice.

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

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