SoFi

Good news for drivers with excellent credit: The average auto loan interest rate for consumers with an 800 credit score is 5.25% for a new car and 7.13% for a used car, according to Experian’s 2024 State of the Automotive Finance Market report.

Consumers with high credit scores tend to secure the best loan rates and terms for any lending products, including auto loans. But many different factors impact the interest rate a borrower receives when they apply for a car loan.

Let’s dive into what auto loan interest rates you can expect, how they differ among lenders, and some steps you can take to get the best deal.

Average Used Car Interest Rate for 800 Credit Score

As mentioned, the average interest rate for a car loan with an 800 credit score is going to be 7.13% for a used car. Experian’s 2024 report found that borrowers with a credit score of 781 or higher access those rates on average.

Having a higher credit score generally leads to getting your hands on the best loan rates and terms. If a borrower has a credit score of 800, that means they have good credit habits that lenders like to see. If you’re just starting your credit journey, there are ways to help build your credit over time.

Factors That Affect Auto Loan Interest Rates

When you apply for an auto loan, lenders take a few factors into consideration when determining the loan amount, interest rate, and loan terms. Here’s a closer look.

Credit Score

Lenders evaluate your credit score to get an idea of how likely you are to make your loan payments on time. Having a high credit score shows that you know how to manage credit responsibly, and as a result, you can often secure a better interest rate. Borrowers with lower credit scores can make lenders nervous, so they’re often charged higher interest rates to balance out the risk.

What affects your credit score? Make consistent on-time payments, avoid hard credit inquiries, and keep your credit utilization ratio low to improve your score over time.

Lender

Whom you choose to borrow money from can impact the interest rate you receive. In general, you’re more likely to secure a better deal by getting a loan from a bank, credit union, or online lender than from a dealership — even if you have a lower credit score.

Amount Borrowed

The amount you borrow can impact your auto loan interest rate. A larger down payment helps lower your loan-to-value (LTV) ratio, which can lead to better loan rates and terms. A money tracker app can help you track and manage your finances.

Length of the Loan

If you can choose the loan term, you may be tempted to pick a long one. After all, the longer your loan term is, the lower your monthly payments will be. While lower payments can help you manage your monthly budget, you’ll end up paying more interest over the life of your loan. Longer loan terms are also often associated with higher interest rates, since there’s an increased risk a borrower defaults or pays off the loan early. You can use a spending app to create a budget that accommodates larger loan payments.

Economic and Market Conditions

Some factors that impact loan rates are out of your control. For example, current economic and market conditions affect the Fed rate, which in turn influences auto loan rates. Lenders also take certain market conditions into consideration, like vehicle demand and how well their current borrowers are repaying their loans on time.

How to Get a Better Auto Loan Interest Rate

If you want to spend as little as possible when you borrow money to finance a car purchase, there are a few ways you can help secure a lower interest rate.

To start, spend some time improving your credit score. Borrowers with a high credit score tend to access better interest rates because they pose less risk to the lender. Regular credit score monitoring can help you find ways to continuously improve your score.

It takes time to build credit, but making a large down payment can help immediately. You can also shop around for a lender to see who can offer you the lowest interest rate.

Recommended: What Is the Starting Credit Score?

How Often Do Auto Loan Rates Change?

Interest rates on lending products like auto loans change daily, so check the current loan rates before you walk onto a car lot. It’s also a good idea to get prequalified or preapproved ahead of time. That way, you have a better idea of what you can afford.

How to Use Average Car Interest Rates

It’s important to remember that average rates are just a helpful guidepost, not a guarantee. Understanding what the average car interest rate looks like can help you evaluate if you’re getting a good deal when shopping around for a car loan.

Where Are Auto Loan Rates Heading?

Unfortunately, there is no crystal ball that can help you predict exactly what auto loan rates will look like in the future. However, making an educated guess is possible. Thanks to recent interest rate cuts by the Federal Reserve, some economists believe we should continue to see auto loan rates drop in late 2024 into 2025.

Ways to Get a Better Car Loan Rate

If you’re looking for ways to get a better car loan rate, consider taking these steps:

•  Buy a more affordable car. Expensive cars come with more expensive car loans. If you can’t make a large down payment on a pricey car, look for a more affordable option.

•  Shop around. Apply for a car loan with a few different lenders to get an idea of which one can offer you the best terms at the right price.

•  Pay off your revolving credit. One quick way to get a credit score boost is to lower your credit utilization ratio by paying off any revolving forms of credit like a credit card or home equity line of credit.

•  Check your credit report for errors. You can check your credit score and report without paying. Once a year, check for errors that are harming your credit report and dispute any that you believe should be removed.

Recommended: How Often Does Your Credit Score Update?

The Takeaway

In 2024, the average used car loan interest rate for an 800 credit score is 5.25% for a new car and 7.13% for a used car. That said, these are just averages. The car you choose to buy, your down payment amount, your credit score, and the lender you work with can all impact what your actual interest rate ends up being. It’s a good idea to spend some time working on improving your credit score and to shop around for the right lender to avoid overspending on interest.

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.

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

FAQ

What car loan interest rate can I get with an 800 credit score?

You can expect to find an average interest rate of 5.25% if you have an 800 credit score and are applying for a new car loan. Buying a used car? You can expect to encounter an average interest rate of 7.13%.

Is 800 a good credit score to buy a car?

Having a credit score of 800 is considered excellent. As a result, you can expect to access favorable auto loan rates and terms.

What is the average interest rate on a 72-month car loan?

It can be difficult to gauge exactly what a 72-month car loan interest rate will be, but it is safe to say it will cost more than a shorter-term loan. Choosing a 72-month car loan will result in lower monthly payments, but also in paying more interest.

Is 7% interest rate high for a used car?

A 7.00% interest rate for a used car is about average for borrowers with good credit.

What is a bad APR for a car?

As of Q3 2024, the average 60-month new car loan APR is 8.40%, according to the Federal Reserve Board. If you are offered an interest rate higher than that amount, you may want to work on improving your credit score before accepting a loan offer.

Is 5.90% APR good for a 72 month car loan?

If you can manage to secure a 5.90% APR for a 72-month car loan, you likely have a great credit score and a large down payment on your side.

---

About the author

---

Photo credit: iStock/Thx4Stock

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

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

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

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

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

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

SORL-Q424-019

Read more

After you purchase a new home, there are many things to budget for, including moving costs, new furniture, and ongoing expenses such as your mortgage. Although it may seem like many of the significant expenditures are out of the way once you close on a property, there are additional costs that can add up.

To avoid financial surprises, it’s wise to jot down and budget for all of the extra expenses you will encounter when you move into your new place. To help you organize your finances, here are the things to budget for after buying a house.

Moving-Out Expenses to Budget for

Before you take up residence in your new home, you must move all of your things. Even if you pack and move all your belongings yourself, you’ll still have to spend on things like boxes, packing materials, and a truck. And if you use movers, it will cost you even more.

Recommended: The Ultimate Moving Checklist

Moving Your Belongings

There are three main options for moving your belongings:

•   Renting a truck and doing it yourself. It’s more cost efficient than using professional movers, but DIY moving yourself still adds up. You’ll have to pay for the truck rental fee, gas, and damage protection. If you’re moving across the country, you may also have to factor in the costs of shipping some of your items. Even though you can enlist your friends and family to help you do the heavy lifting, the cost of moving yourself can still be significant, and it’s a lot of work.

•   Hiring movers. If you decide to use professional movers, it’s wise to shop around to find the best price. Here’s why: For moves under 100 miles away, the national average cost of moving is $1,400, and it ranges from $800 to $2,500. If you’re moving long distance, the average cost can be as high as $2,200 to $5,700. To cut costs, you can do your own packing, which may save you money.

•   Moving your things in a storage container. Another option is to use a hauling container — you load your things in it, and the container company moves it to your new location. This usually costs between $500 and $5,000, depending on the distance and how much stuff you’re moving. Long-distance moves will usually cost more than local ones.

Moving Supplies

If you decide to go the DIY moving route, you will need to buy boxes, bubble wrap, labels, and tape. And you likely have more items to wrap and box up than you think, which requires even more supplies.

Cleaning Supplies

You’ll probably want to clean your current property before you move out, and you’ll definitely want to clean the new place when you move in. That means buying mops, sponges, cleaning solutions, and paper towels. You may also want to get the carpets cleaned or hire a professional house cleaner if the place needs a deep cleaning.

10 Common Expenses After Buying a Home

Once the move is done, there are other expenses you’ll need to account for as you settle into your new abode. Here are a few things to budget for after buying a home.

Furniture and Appliances

You’ll likely bring some furniture and decor from your old place, but you’ll probably want to purchase some new things as well. For example, if the appliances are outdated, you might want to upgrade to new ones. And you may have more rooms to furnish, which requires additional furniture.

Consider opening a savings account for the new items you want to purchase. It can also help pay for any unexpected costs, such as having to replace a hot water heater that breaks.

Mortgage Payments

As a homeowner, every month you will making a mortgage payment that typically includes:

•   The principal portion of the payment. This is the percentage of your mortgage that reduces your payment over the life of the loan. The more you pay toward principal, the less you will have to pay in interest.

•   The interest. This is the amount you pay to borrow funds from the bank or lender to purchase your home.

If you are using an escrow account to pay your mortgage, other things may be included in your payment, such as your property taxes, insurance, and private mortgage insurance. This guide to reading your mortgage statement can help you understand all the costs involved in your mortgage payment.

Property Taxes

Property taxes are the taxes you pay on your home. In many cases, these taxes are the second most significant expense after your mortgage. Property taxes are based on the value of your home, which is typically governed by your state. The county you live in collects and calculates the sum due. Usually, property tax calculations are done every year, so the amount you owe may fluctuate annually.

Homeowners Insurance

Homeowners insurance helps protect your home from damage or destruction caused by events like a fire, wind storm, or vandalism. It can also protect you from lawsuits or property damages you are liable for. If someone slips and falls on your sidewalk, for instance, homeowners insurance will pay for the injured person’s medical bills and the legal costs if they decide to sue you.

The cost you pay for this coverage will vary by the type and amount of coverage you select.

Private Mortgage Insurance (PMI)

For borrowers who can’t afford a down payment that’s 20% of the mortgage value, lenders usually require private mortgage insurance (PMI). This type of coverage is designed to protect the lender if you default on your mortgage payments.

PMI can cost as much as a few hundred dollars per month, depending on the sum you borrow.

HOA Dues

This is a Homeowner’s Association fee, which goes toward the upkeep of property in a planned community, co-op, or condo. The amount can range from a couple of hundred dollars a year to more than $2,000, depending on the amenities you’re paying for (like a pool and landscaping). You typically pay HOA fees monthly, quarterly, or annually.

Utilities

Your utility payments include water, gas, electric, trash, and sewer fees. Some bills like water and electricity are based on the amount you use every month, so monitoring your electric and water usage, like taking short showers and turning lights off, can help lower your cost. Other payments, such as your trash or recycling, might be a fixed amount.

Lawn Care

Maintaining the curb appeal of your home requires landscape services and lawn care. If you choose to mow your own lawn, you may need to factor in the purchase of a mower, which can cost about $1,068 on average. If you hire a lawn service to cut your grass, you may pay $25 to $50 a week.

Pest Control

Pests, such as ants, ticks, rodents, or mice, can wreak havoc on your home and your family’s health. For these reasons, many homeowners hire a pest control company to prevent the infestation of pests around their homes. The company’s initial visit may cost between $150 to $300, then $45 to $75 for every follow-up.

Home Improvement Costs

As a homeowner, there are likely things you want to change about your house. From painting the walls to a complete kitchen renovation, transforming your property can add to the cost of owning a home. According to the HomeAdvisor 2023 State of Home Spending Report, homeowners spend an average of $9,542 on home improvement each year.

Additionally, as the features of your home age, you will need to replace and repair them accordingly.

Common Mistakes After Buying a Home

One of the most common mistakes people make when buying a home is spending more than they can afford. For instance, you may forget to factor in utilities, lawn care, HOA fees, costs of upkeep, and other hidden expenses that come with owning a home. It’s crucial to do your research to determine extra costs and add them up before you move forward with purchasing a property.

Another mistake new homeowners make is taking on too many DIY projects. TV shows can make home renovations look easy. However, many of these projects require professionals who know what they are doing. Attempting a home improvement project could cost you more to fix than hiring a pro in the first place. In fact, about 80% of homeowners that attempt their own renovation projects make mistakes — some of them serious.

Unless you can afford an expert, you may want to rethink purchasing a home that requires a lot of renovation.

The 50/30/20 Rule

For help planning your budget as a homeowner, you can use the 50/30/20 rule, which breaks your budget into three categories:

•   50% goes to to needs

•   30% goes to wants

•   20% goes to to savings

That means you’ll be budgeting 50% of your income to go toward necessities such as housing costs, grocery bills, and car payments. Then 30% will go toward things you want, such as entertainment (movies, concerts), vacations, new clothes, and dining out. The remaining 20% goes towards saving for the future or financial goals such as home improvement projects.

Using a 50/30/20 budget rule is simple and easy. It allows you to see where your money is going and helps you save.

Recommended: How to Track Home Improvement Costs

Lifestyle Tradeoffs in Order to Budget

With so many things to budget for after buying a home, you may need to cut back on spending. Start by looking at your discretionary spending and think about where you can trim back. For example, instead of eating out regularly, you can cook more meals at home. Or perhaps you can put your gym membership on hold and do at-home workouts for a while to stay in shape physically and financially.

Recommended: How to Budget in 5 Steps

The Takeaway

After you buy a house, there are many expenses you may not have accounted for, such as the cost of hiring movers; buying furniture; and getting your new place painted, cleaned, and ready to move into. Making a budget is vital to keep you on track financially, so you can enjoy your new home.

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.

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

FAQ

How much money should you have leftover after buying a house?

After buying a home, the amount you have left will vary depending on your financial situation. However, it’s a good idea to have at least three to six months of living expenses in reserve. That way, in case of an emergency, you can stay afloat financially.

Is it worth putting more than 20% down?

Putting more than 20% down on your home can help lower your monthly mortgage payment and interest because you’ll be borrowing less money. It also gives you more equity in your home from the beginning. But make sure you can afford to pay more than 20% in order not to stretch beyond your budget.

What’s the 50-30-20 budget rule?

The 50/30/20 rule means that you budget 50% of your expenses for needs (housing, groceries, loan payments), 30% for wants (entertainment, eating out, shopping), and 20% toward savings goals (retirement, renovations, new furniture).

---

About the author

---

Photo credit: iStock/ArtMarie

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

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

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.

SORL-Q224-1921152-V1

Read more

It’s natural to be curious about what credit score you start with at 18. You might assume you start with the lowest possible score of 300, but that’s not how it works. Instead, your credit score doesn’t exist until you begin generating financial data.

Good credit is vital to financial independence. Establishing credit early on can help you qualify for favorable rates and terms when you need to borrow money for a car or home. Here’s what you need to know about beginning credit scores and how you can build yours.

What Is Your Starting Credit Score?

Essentially, your credit score doesn’t exist until you begin building credit. Before that, if a financial institution requests your credit history, they will find nothing. Only when you use a credit card or pay utility bills will there be something to put on your credit report.

This doesn’t mean you will start with the lowest score possible, though. Neither will you start with a high credit score, since that requires a strong credit history and proof of solid financial habits. But if you get off on the wrong foot by not paying your credit card bill on time, you may start with a lower credit score.

Usually, you need at least one or two revolving accounts that have been active for at least three to six months to begin building credit. Creditors and lenders use various credit scoring models to determine your creditworthiness. Therefore, your number may differ across different platforms. For example, your FICO® Score and VantageScore range between 300 and 850, while other models, such as your auto loan score, may go up to 900 or higher.

Recommended: What Is the Difference Between Transunion and Equifax

Breakdown of Credit Score Factors

A number of factors affect your credit score. Here are the ones you should know about.

Payment History

A key factor in determining your credit score is whether you pay your bills on time. In fact, when calculating your FICO score, 35% comes from your payment history. Because it plays a significant role in your overall score, paying your bills on time is crucial.

Credit Utilization

Your credit limit is the maximum dollar amount you can charge on a credit card. Credit bureaus determine your credit utilization by dividing your outstanding balance by your total revolving credit limits. This shows credit bureaus how much credit you are using against the total credit you have.

A good rule of thumb is to keep your credit utilization ratio under 30%, both for each credit card and overall. Maintaining a low credit card balance or paying it off monthly will help you maintain a lower credit utilization ratio. This factor accounts for 30% of your overall FICO score.

Length of Credit History

The longevity of your credit history also plays a part in calculating your credit score. Credit bureaus will look at the number of years your accounts have been open. The length of your credit history accounts for 15% of your FICO score.

Recommended: Does Net Worth Include Home Equity

Credit Mix

Credit is usually broken down into three categories: revolving credit, installment credit, and service credit. With revolving credit, creditors give you a specific credit limit to spend as you wish. You can make the minimum monthly payments or choose to pay off your credit card balance every month. If you make the minimum payment, the remaining balance will carry over to the next month until you pay off the entire balance.

Installment credit is used for auto, mortgage, and other loans. With this type of credit, the creditor establishes a fixed monthly payment you agree to pay back over a set amount of time. Demonstrating that you can handle multiple types of credit can increase your credit score.

Last, service credit is when companies like home utilities or a cell phone provider report your payment history to a credit bureau. On-time payments to these businesses can help build your credit. This accounts for 10% of your FICO score.

Recommended: Should I Sell My House Now or Wait?

New Credit Inquiries

When you apply for new credit, creditors conduct a hard inquiry. This means they assess your creditworthiness by looking at your overall credit history. New credit inquiries and new accounts account for 10% of your score. Triggering a large number of credit inquiries in a short amount of time is considered risky and will negatively impact your credit score.

What Is Insufficient Credit History?

If you don’t have any credit accounts or your credit accounts are not reported to the three major credit bureaus (Experian, TransUnion, and Equifax), you may have an insufficient credit history.

Even if you establish credit but go a long time without using it or cancel your credit cards, your credit information might be removed from your credit file. In this case, you may also have an insufficient credit history.

How to Establish Credit History

Building credit might seem daunting. However, there are a few strategies to begin establishing a credit history from scratch. Here’s how.

Apply for a Secured Credit Card

Secured credit cards require applicants to put down a deposit. This deposit will usually act as your credit limit. You will still have to make monthly payments since the deposit is used as protection or collateral if you default.

A secured card will help you establish credit as long as the creditor reports to one of the three major credit bureaus. A secured credit card can act as a stepping stone to unsecured credit cards and other forms of financing in the future.

Become an Authorized User

To become an authorized user, someone needs to add you to an existing account held in their name. You will receive your own credit card, and the account history will go on your credit report.

Keep in mind, however, that since you’re not solely responsible for payments and the management of the account, this account may have less of an impact on your credit score than if you were the sole owner of the account.

Make On-time Payments

As noted above, your payment history counts as 35% of your score. Missing a payment can hurt your credit score and stay on your credit report for up to seven years. You can establish autopay to ensure you never miss a payment. However, you’ll still want to check your account monthly to ensure you weren’t overcharged.

Keep Your Credit Balances Low

Once you get a credit card, resist the temptation to run up the balance. The amount of credit you’re using plays a role in your score. It’s best to keep your balances low and use under 30% of your total credit card limit.

How to Monitor Your Credit Score

An important component of building credit is monitoring your progress. Monitoring your credit can motivate you to keep building your score. It can also help you spot problems quickly, such as missed payments. Finally, keeping tabs on your credit will let you see how specific actions impact your score so you can better understand how credit scoring works.

The Takeaway

The credit history you start with at 18 is a blank slate. Your credit score doesn’t exist until you start building credit. To begin your credit-building journey, consider opening a secured credit card or ask a family member to add you as an authorized user on their account.

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.

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

FAQ

Is a credit score of 720 good?

Yes, a 720 credit score is considered good. However, increasing your score by 20 points will make it a very good score and help you receive more favorable interest rates and terms.

Does credit build before 18?

It’s possible to build credit before age 18 if you’re an authorized user on an adult’s account or you have a secured credit card. Many financial products, such as loans and credit cards, require you to be 18 or older to apply. Being an authorized user can be your first opportunity to establish credit history.

How can I quickly build my credit score?

Since your credit utilization ratio significantly impacts your credit score, paying off your credit card balances and increasing your limits can help you build your credit score promptly.

---

About the author

---

Photo credit: iStock/FG Trade

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

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

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.

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 .

SORL-Q224-1945504-V1

Read more

Anyone can use a money order to send or receive money. While money orders aren’t the most common tool, they’re usually simple to obtain and cash. To cash a money order at no charge, visit your local post office branch and present your money order at the window.

In this article, we outline where to cash postal money orders and what the process looks like.

What Is a Postal Money Order?

A postal money order is a type of financial certificate issued on paper by the post office. Similar to a paper check, the document is worth the amount of money determined by the person or company that purchased it. While you can obtain a regular money order from almost any bank, only the United States Postal Service (USPS) issues postal money orders.

Unlike a check, a postal money order is prepaid by the party sending it, so it can’t bounce. Money orders also never expire. A receipt is provided to the purchaser in case the money order is lost, stolen, or damaged. As a result, you can use a postal money order to securely send a payment through the mail.

Another advantage of money orders is that they are difficult to counterfeit. You can make a payment of up to $1,000 with a single order.

To send a money order, you must pay for it ahead of time using cash, a debit card, or a traveler’s check. Although it is possible to buy a regular money order with a credit card, you cannot put postal money orders on a credit card.

Recommended: What Is a Niche Bank?

How to Cash a Postal Money Order Step by Step

If you receive a postal money order, you can redeem its face value by cashing it. There is no advantage in keeping a postal money order long-term, since it doesn’t earn interest and cannot be used directly to make a purchase.

Here’s how to cash a money order at the post office for free:

1.    Bring the money order and a photo ID to a post office service counter.

2.    Sign the money order in view of the postal worker (do not sign it ahead of time).

3.    You will immediately receive the cash value of the money order.

Where to Cash a Postal Money Order

You can cash a postal money order in certain places outside the post office. Many banks will cash postal money orders, as long as you have an account there. Some grocery stores and retailers will cash money orders, too.

Because proof of ID is required, you cannot deposit money orders via a mobile banking app.

List of Places That Cash Money Orders

Here are some locations that may cash a postal money order:

•   Most banks. Check with your local branch.

•   Check-cashing retailer. Consumers without a bank account or nearby post office may cash money orders here for a fee.

•   International postal office. The post office offers special international money orders that can be cashed at banks and post offices in some other countries.

•   Rural mail carrier. Some mail carriers may cash money orders for rural customers if they have enough cash on hand.

•   Some supermarkets and major retailers. Search online for “places to cash a money order near me.”

Recommended: Alternative to Traditional Banks

How to Identify a Fake Postal Money Order

You’ll want to examine your money order before attempting to deposit it in order to ensure it’s authentic. Here are a few ways to spot a fraudulent postal money order:

•   Look closely at the paper. Valid postal money orders have special markings and designs to prevent fraud. Visit USPS.com to view a sample money order.

•   Review sum amount. If the dollar amount is faded, too large, or not printed twice on the paper, it could be fraudulent. All postal money orders must be under $1,000 and have the sum printed twice on the paper. International postal money orders cannot exceed $700, or $500 for El Salvador and Guyana.

If you think your postal money order is fake, contact the U.S. Postal Inspection Service at 1-877-876-2455.

Recommended: 7 Ways to Cash a Check Without a Bank Account

The Takeaway

Cashing a USPS money order is a straightforward process. Your local post office can cash a postal money order at no cost to you. You may also be able to cash a postal money order at a bank branch if you have an account there, or at your local supermarket.

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.

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

FAQ

Can you mobile deposit a USPS money order?

Unfortunately, you cannot use mobile deposit for USPS money orders. Instead, you must deposit it in person with a valid ID.

Where can I cash a money order for free?

You can cash a postal money order for free at your local post office. You may also be able to cash it at your local bank branch.

Can you cash a money order online?

Since you need proof of ID to deposit a postal money order, you usually can’t deposit it online.

---

About the author

---

Photo credit: iStock/Delpixart

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

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

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.

SORL-Q224-1945540-V1

Read more

Despite the obvious appeal of side hustles — more money! — they’re not for everyone. If your side hustle makes you stress out, neglect relationships, or miss opportunities at your day job, then consider it a bad idea. Side hustles are only beneficial when they help you accomplish goals without sacrificing what matters most.

Side hustles are often promoted as a simple way to generate extra cash or fulfill your passions. However, the often-ignored price tag is physical and mental strain. Not to mention the time requirement and potential financial commitment necessary to get a gig going.

Read on to find out how to evaluate your options and goals before taking on a side hustle.

What Is a Side Hustle?

A side hustle refers to a second job or source of income that people pursue outside their primary employment. The purpose may be to earn extra money, pursue a pet project, or develop skills in a different area.

A side hustle can take various forms, from freelance work or consulting to selling handmade crafts or driving for a rideshare service. Renting out property and offering tutoring services also qualify. The point is leveraging your time and skills to pad your budget or explore a wider field than your day job allows.


💡 Quick Tip: We love a good spreadsheet, but not everyone feels the same. A free budget app can give you the same insight into your budgeting and spending at a glance, without the extra effort.

Pros and Cons of a Side Hustle

Browse the pros and cons below, and make a mental note of how many of each apply to your situation. If one side of the scales is considerably heavier, your decision may be obvious.

Pros of a Side Hustle

Here’s a breakdown of the benefits of a side hustle:

•   Develop Your Career: Side hustles can provide a valuable opportunity to develop skills, gain experience, and broaden your professional horizons. By taking on projects or roles outside your main job, you may acquire new competencies to help advance your career or get a promotion. Additionally, side hustles can demonstrate initiative, entrepreneurial spirit, and versatility to potential employers, enhancing your marketability and opening up new opportunities.

•   Switch Up the Norm: A side hustle allows you to break away from the routine of your primary job. This variety can be refreshing and stimulating, helping to prevent boredom and burnout. Whether you’re pursuing a different passion, exploring a new industry, or experimenting with creative projects, having a side hustle can inject excitement and fulfillment into your life outside work.

•   Build Your Network: Side hustles often involve interacting with different people and communities, which can expand your professional network. Whether you’re collaborating with clients, partners, or fellow freelancers, each connection presents an opportunity to exchange ideas, learn from others, and potentially uncover new career prospects. Building a diverse network through your side hustle can provide valuable support, mentorship, and referrals in your professional journey.

•   Channel Creativity: Side hustles offer a platform for expressing your creativity, passions, and interests outside your primary job. Whether it’s writing, photography, crafting, or any other form of expression, a side hustle can bring more meaning and fulfillment than your 9-to-5. This outlet can serve as a source of inspiration, relaxation, and personal growth, enriching your life beyond the confines of your main occupation.

•   Increase Income: One of the most practical benefits of a side hustle is the extra money. Whether saving for a major purchase, paying off debt, or simply seeking financial security, the income from your side hustle can provide greater financial flexibility and stability. Likewise, having multiple streams of income can be a buffer against economic uncertainty and provide a safety net in case of job loss or another hardship.

Cons of a Side Hustle

On the other hand, these are the potential drawbacks of a side hustle:

•   Less Time to Relax: Side hustles require time and effort, eroding your leisure time. Working 60+ hour weeks can lead to fatigue and even burnout. When juggling your day job, side hustle, and personal commitments causes you to lose sleep, your quality of life can become unsustainably low.

•   Distraction from Work: A side hustle can encroach on your attention and focus during work hours. Constantly thinking about your other gig, responding to email, or taking calls while at your main job can detract from your performance. If colleagues or supervisors perceive your divided attention, this can also strain your professional relationships and undermine your credibility.

•   Managing the Stress of Two Jobs: Managing the demands of a side hustle on top of your primary job and personal responsibilities can significantly increase stress. Deadlines, client expectations, financial pressures, and the need to constantly switch between different roles and tasks can elevate anxiety. Chronic stress associated with balancing multiple commitments can affect your mental and physical health over time.

•   Sustainable Prices Can Be Elusive: Setting prices or negotiating rates for your side hustle services can be challenging, especially if you’re just getting started or dealing with imposter syndrome. Striking the right balance between competitiveness and fair compensation can be tricky, and you may encounter situations where clients or customers undervalue your work. Plus, breaking into a competitive market may require setting prices so low that you work at a loss for the first few months or even years. As a result, your side hustle may ding your budget instead of adding to it.

💡 Quick Tip: An online money tracker makes monitoring your spending a breeze: You can easily set up budgets, then get instant updates on your progress, spot upcoming bills, analyze your spending habits, and more.

When Does a Side Hustle Make Sense?

Several ingredients are key for a side hustle to make sense for your situation. First, it’s essential to have a clearly defined reason for pursuing a side hustle. For example, you may want to generate income, follow a creative impulse, or pave a path to a new career. This clarity of purpose will guide your efforts and motivate you throughout your side hustle journey.

Second thorough research is crucial to understanding the market, demand, competition, and potential challenges associated with your chosen side hustle. This is significant even if you don’t have financial aspirations for your other gig.

For example, if you’re interested in fitness, is your specific angle better suited for a blog or a YouTube channel? Will you create a social media presence to drive more traffic? What kind of value are you delivering to your audience?

In a different vein, if you want to become a rideshare driver, which company offers the best pay? Do you have a presentable vehicle that you’re willing to put miles on? Answering these kinds of questions will help you make informed decisions and set realistic expectations. Not doing your homework will likely bring a lack of results, monetary loss, and frustration.

Next, understand the time commitment your side hustle will require. For instance, a few hours of woodworking on the weekend is less demanding than taking a constant flow of orders on Etsy. If your schedule is already full to the brim from your primary job, family responsibilities, and personal pursuits, incorporating a side hustle can do more harm than good. Even if you work a side gig with your significant other, it’s not the same as spending quality time together.

Finally, your side hustle should fit into the larger picture of your goals and values. For instance, you might start a side hustle in order to build a $5,000 emergency fund. Or you could take a software engineering course in the evenings that will help you eventually switch careers. In any case, your side hustle should have specific benefits and point toward a defined objective. Otherwise, you’ll burn time without accomplishing much.

The Opportunity Cost of a Side Hustle

The “opportunity cost” of a side hustle depends upon the resources you invest. When you dedicate yourself to anything, you lose opportunities to engage in leisure activities, spend time with family and friends, and take vacations. In essence, the opportunity cost of a side hustle equals the value you place on other aspects of life that matter most.

Also ask yourself what is the financial cost of your side hustle? You might have to invest money to purchase materials or pay for marketing. You might also give up overtime at your primary job. That’s cash that could go into savings, investments, or paying off debt.

Likewise, your time could be going into skill development for your day job, leading to promotions or raises. Plus, your employer might sponsor specific types of professional development, resulting in free training that moves your career forward and increases your salary.

Ultimately, the opportunity cost of a side hustle varies depending on individual circumstances, goals, and priorities. It’s essential to carefully consider these factors and assess how the benefits of the side hustle compare to the time and money.

Examples of Side Hustles

While there are unusual ways to make money, side hustles are typically more accessible. Here are some side hustles that match with a range of backgrounds and skill sets:

•   Freelancing: Offer services such as writing, graphic design, programming, bookkeeping, and more. You’ll take projects on a contract basis with multiple clients.

•   Dog Walking: Providing exercise and companionship for dogs by taking them on walks on a regular or as-needed basis.

•   Blogging: Creating and maintaining a consistent feed of valuable written content on a topic you love or have expertise in. Find out how much it costs to start and run a blog.

•   Non-Medical Senior Care: Assisting elderly individuals with daily tasks (shopping, bathing, housework, etc.) and providing companionship to support their wellbeing.

•   Babysitting: The tried-and-true income-generator for teenagers and adults alike. You’ll care for children in the evenings and on weekends when parents are busy or need a break.

•   Personal Assistant: Providing administrative support and assistance to individuals or businesses. You’ll manage schedules, run errands, and handle correspondence. You can also be a virtual assistant and provide numerous essential services (bookkeeping, arranging travel, etc.), therefore creating a side hustle from home.

•   Handyman: Offering services to repair, maintain, and improve residences. You can specialize in one or more areas: plumbing, electrical work, carpentry, or general home tasks.

•   Crafting: Creating handmade goods and artwork, such as jewelry, clothing, and home décor, to sell online or at craft fairs.

•   Cooking/Baking: Crafting you can eat! Get to work in the kitchen to make treats, desserts, or meal kits for sale.

•   Private Tutor: Providing personalized academic instruction to students in a particular subject or skill, often on a one-on-one basis.

•   Self-Publishing: Writing and publishing books or other written works independently, without the involvement of traditional publishing companies. Self-publishing is inexpensive because your work will be accessible as an ebook.

•   Teaching Online Courses: Creating and delivering educational courses or tutorials on a specific topic via online platforms is another side hustle from home.

•   Product Tester: Testing and reviewing products or services for companies or brands, often providing feedback and insights based on personal experience.

•   E-Commerce: Selling products or services online through a website or online marketplace, which may involve sourcing or creating products, managing inventory, and handling customer inquiries and orders.

When Is a Side Hustle Not Worth It?

A side hustle may not be worthwhile because of the toll on your physical, mental, and financial wellbeing. Here are more specific ways that a side hustle can negatively impact your life:

•   Burnout: Working an 8-hour job and dedicating 2 to 4 additional hours per day to your side hustle leaves little room for anything else. The demands of a side hustle can result in excessive stress, fatigue, and burnout.

•   Missed Career Advancements: Devoting significant time and energy to a side hustle may detract from opportunities for advancement in your primary job. They can also keep you from visualizing a sustaining career. So if you’re in a job you don’t like, a side hustle can act as a bandage instead of a cure. It’s advisable to focus on switching vocations instead of supplementing your income through another unsatisfying side job.

•   Unhealthy Lifestyle Habits: A demanding side hustle may lead to poor eating choices due to lack of time for meal prep, insufficient exercise, and disrupted sleep. Over time, these habits damage physical health and overall quality of life.

•   Strained Relationships: Spending excessive time on a side hustle can strain relationships with family, friends, and romantic partners. Missing significant events or quality time with loved ones due to work commitments can lead to feelings of resentment and isolation.

•   Financial Costs: Some side hustles require upfront investments of time and money, for purchasing inventory or equipment, marketing expenses, or training courses. If the return on investment does not justify these costs, the side hustle may not be financially sustainable in the long run.

•   Not-So-Passive Income: Many side hustles require active participation and ongoing effort to generate income, which can limit scalability and long-term earning potential. Without the ability to create passive income streams, you’ll constantly trade time for money without achieving financial freedom.

•   Neglecting Personal Growth: A side hustle that consumes all available time and energy may leave little room for hobbies or other interests. Over time, this can lead to stagnation and dissatisfaction with your lifestyle.

Side Hustle Tips

A side hustle can quickly get out of hand or detract from your life if you’re not careful. Here’s how to create a practical side hustle that serves your needs:

•   Start Small: When beginning a side hustle, starting with manageable tasks or projects that don’t require a significant investment of time or resources is wise. Starting small allows you to test the waters, gain experience, and assess the viability of your chosen side hustle without taking on too much risk. As you gain confidence and experience, you can gradually expand and scale your side hustle over time.

•   Play to Your Strengths: Identify your special skills, interests, and areas of expertise, and leverage them in your side hustle. By focusing on activities that align with your strengths, you’re more likely to enjoy the work, excel at it, and differentiate yourself from competitors. This approach also allows you to maximize your earning potential by offering high-value services or products that cater to a specific niche or market. Remember, this doesn’t mean you must stick to your current skill set. Your interests and abilities can also lead you to pick up new skills.

•   Maintain Your Performance at Work: Balancing a side hustle with a full-time job means prioritizing high performance and professionalism in your primary job while pursuing your side hustle. To that end, it’s recommended to set boundaries for the time you dedicate to your side hustle and to manage your schedule efficiently. By maintaining your performance at work, you can preserve your job security and opportunities for advancement.

•   Aim at a Goal Instead of a Job: Instead of treating your side hustle as just another job, set out to achieve specific goals or milestones that align with your long-term aspirations. Whether your goal is to generate additional income, pursue a passion project, or transition to full-time entrepreneurship, having a clear vision and purpose for your side hustle will keep you motivated and focused on what truly matters to you. By focusing on goals rather than simply exchanging time for money, you can create a more fulfilling and meaningful side hustle.

The Takeaway

Side hustles can be a bad idea when they damage your quality of life. While picking up a side gig can create more income, this result must be weighed against other priorities, including advancement in your day job, time dedicated to relationships, and alternatives that slowly but surely create passive income.

Asking yourself whether a side hustle is a good move might not be the most relevant question. Instead, you can ask yourself if a second job makes sense after developing a clear vision of the future.

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.

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

FAQ

Are side hustles risky?

Side hustles can be risky because of the opportunity cost of picking up extra work. Specifically, a side hustle can drain time and financial resources, add unmanageable stress to your life, and lead to worse quality of life because of the sacrifices required to work a second job. As a result, it’s essential to evaluate your circumstances and identify your goals before starting a side hustle.

Are side hustles a waste of time?

Side hustles can be an excellent way to generate more income, develop yourself professionally, or transition to a different career. However, they can also be a waste of time if you don’t set goals and create a realistic plan when starting. So a carefully planned side hustle that fits into the larger picture of your life can provide massive benefits, while picking up more work to simply stay busy can lead to missed opportunities in your professional and personal life.

Is starting a side hustle really worth it?

Starting a side hustle can be worth it for additional income, pursuing passions, or expanding your skill set. However, it requires careful consideration of the potential drawbacks, such as time constraints, increased stress, and the risk of hindering career advancement. Ultimately, the value of a side hustle depends on your aligning it with personal goals, managing resources effectively, and maintaining a healthy work-life balance.

---

About the author

---

Photo credit: iStock/JLco – Julia Amaral

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

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

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

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

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

SORL0324010

Read more