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Are you a little obsessed with planning your next big trip? We hear you! The excitement of seeing new places — whether that means a faraway tropical island or a neighboring state — is a powerful lure. But there’s one thing that may get in the way: Money.

Let’s be real, travel can be expensive. Even if you’re hopping in the car for a short weekend road trip, the cost of gas, food, entertainment, accommodations, and more can get a bit overwhelming. Fortunately, with a little bit of planning, you can make your travel dreams a reality. And it can all begin by creating a travel fund.

What Is a Travel Fund?

A travel fund is exactly what it sounds like — a fund exclusively used for gallivanting around the world. It’s a place to stash some cash that you don’t use for rent, bills, repaying student loans, or any other monthly financial obligations. This fund is just for your passion in life. And your passion is clearly traveling.

How to Fund Traveling

Unfortunately, a travel savings account will not grow by magic. If only! You’ll need to find ways to funnel some cash towards your travel plans. There are a variety of ways to do this. Perhaps you got a raise recently (nice!) and can put that amount directly towards travel. Or, maybe you can automatically whisk $25 or $50 per paycheck into your savings. Or, you might give up concert tickets or takeout food for a while to allow some wiggle room in your budget that goes towards paying for your next getaway. There are many options — some of which we’ll explore below.

Recommended: 15 Easy Ways to Save Money

Setting Up a Dedicated Travel Savings Account

There are a few options for where to keep your travel fund. Yes, you could keep your vacation fund in the same account as your day-to-day savings, but separating the fund could provide even more clarity.

Keeping your travel fund in a separate account can make it easy to see how close you are to reaching your travel goal. It allows you to see exactly how much money you’ve saved for the cause with ease. Having the money in a separate account also allows you to set up automatic contributions, just as you might already be doing with your other accounts.

Automating your savings towards travel means you can eliminate another task from your to-do list. You’ll be making progress toward your dream of cruising down the Nile without even having to think about it. And since it’s stashed separately, you don’t need to worry that you’ll use it on, say, entertainment or new shoes without realizing it.

Tips on Selecting an Account to Use

When it comes to setting up a dedicated travel fund, the first order of business is usually to pick an account type. There are a variety of options to choose from. Part of what will likely influence your decision is how long you plan on saving. If you want to take a trip in just a few months, a savings account may be a good vehicle. You can easily contribute to it, and you’ll earn some interest.

To help your travel fund grow faster, you may want to go with a high yield savings account. These accounts typically pay a much higher annual percentage yield (APY) than traditional savings accounts, giving you the ability to earn more on your money while still enjoying the security of a federally insured account. These days, many high-yield savings accounts offer APYs of up to 5% or more — many times more than the average national rate of 0.46%.

Some of these accounts may come with certain restrictions, like a limited number of withdrawals a month or maintaining a minimum balance, so be sure to read the fine print on each account you might be considering.

Another is a certificate of deposit (CD), which locks up your money for a particular term, typically from six months to a few years. This type of account can sometimes offer a more competitive interest rate than a traditional savings account but comes with withdrawal restrictions. If you choose to withdraw the money before the term ends, you’ll likely have to pay a penalty or fee.

Yet another option is to use a cash management account with a brokerage firm. These accounts are meant as an option for your uninvested money. They can also be great for putting away some extra money to save, but again — do read the fine print. Fees may be involved, plus commissions if a broker steps in to help you with your investments. Make sure that these won’t cut into your savings.

All of these options will allow you to keep your vacation fund separate from your checking account, emergency savings, or regular savings account. You may even be able to give it a unique name like “travel fund” or even more specific like “Tahiti fund.” It’s much more exciting to watch “dream trip to Bali fund” grow than just “account: 3283052.”

Growing Your Travel Fund

After you’ve created your unique travel fund, it’s time to put in some savings work. And that begins with your budget. If you already have a budget, that’s great. All you need to do is add in “travel fund” as a new line item and shift as much money as you feel comfortable moving to this new account each month.

But, if you’re starting from scratch, that’s OK too. Trying to save for the trip of a lifetime is just as good an excuse as any to start budgeting.

To build a budget, you’ll want to start by figuring out your average monthly take-home income (what you earn after taxes are taken out). Next, it’s good to create a list of all your monthly expenses. You’ll want to include all the basics like rent or mortgage, car payments, student loans, credit card statements, food, gas, insurance, gym memberships, streaming accounts, and any money you currently put towards saving and investing. Make sure to get as granular as possible about your spending.

Next, subtract your average monthly expenses from your average monthly income to see how much you have leftover. If it’s more than $0, that’s excellent news! You can put the excess towards your travel fund. If not, you’ll need to find some places to cut back on spending.

Recommended: How to Make a Budget in 5 Steps

Finding Extra Cash for Your Travel Account

If you’d like that leftover number in your budget to be higher, maybe it’s time to take a look at both your spending and your current income level. Perhaps you can see where changes can be made.

One of the potentially easiest ways to create more cash for your travel fund is to look deeply at your monthly spending. Are you still subscribing to that streaming service you never (or rarely) watch? Are you signed up for the premium version of that social media platform you haven’t been on in months?

What about that gym membership? How’s that going for you? Go ahead and get rid of things that aren’t bringing you joy or are dispensable. Then, refocus those funds in your travel fund.

If there’s no room for cuts, then it might be time to increase your income. Of course, you could always ask for a raise at work, but if that doesn’t come through, explore some other options — like a side hustle. A side hustle is a gig you take on outside your normal work to make some extra money. If you can, pick something you really enjoy doing so it feels less like “work.” For example, if you love dogs but aren’t ready to own one, maybe walking dogs before work would be fun for you.

If you are a handy person who likes to fix things, creating a listing on a site like Thumbtack or TaskRabbit may be a good idea. If you have other talents like photography, writing, or graphic design, you might do some networking to see if you can drum up some freelance work. That way, you can get paid for what you love to do and save for what you love too.

Recommended: How Families Can Afford to Travel on Vacation

SoFi: Your Partner in Creating a Travel Fund

By now, you’ve committed to adjusting your budget and setting aside cash in a new fund. The only thing left to do is find the best place to stash your cash.

When choosing where to put your travel fund, you’ll want to find an account that pays a competitive yield, keeps your money safe, and allows you to easily access your funds when it’s time to set off for your next adventure.

SoFi Travel has teamed up with Expedia to bring even more to your one-stop finance app, helping you book reservations — for flights, hotels, car rentals, and more — all in one place. SoFi Members also have exclusive access to premium savings, with 10% or more off on select hotels. Plus, earn unlimited 3%** cash back rewards when you book with your SoFi Unlimited 2% Credit Card through SoFi Travel.

FAQ

How much should I keep in my travel fund?

To come up with a travel savings goal, you’ll want to determine how much you’ll need for your trip and when you want to take it. From there, you can determine how much you’ll need to transfer into your travel fund each month to reach your goal. For example, if your trip will cost $2,500 and you plan to travel in six months, you’ll need to set aside around $33 a month.

How do I set up a travel fund?

Setting up a travel fund can take only a matter of minutes. It can be as easy as opening a savings account online and then directing money towards it. You can also go into a brick-and-mortar bank to set up an account.

How can I save money on a travel fund?

To save money on a travel fund, look for a savings account that doesn’t charge monthly fees and offers a competitive interest rate. These two factors will help boost your savings and get you on your dream vacation as quickly as possible.

**Terms, and conditions apply: This SoFi member benefit is provided by Expedia, not by SoFi or its affiliates. SoFi may be compensated by the benefit provider. Offers are subject to change and may have restrictions, please review the benefit provider's terms: Travel Services Terms & Conditions.
The SoFi Travel Portal is operated by Expedia. To learn more about Expedia, click https://www.expediagroup.com/home/default.aspx.

When you use your SoFi Credit Card to make a purchase on the SoFi Travel Portal, you will earn a number of SoFi Member Rewards points equal to 3% of the total amount you spend on the SoFi Travel Portal. Members can save up to 10% or more on eligible bookings.

Life insurance policies are available for children and are often marketed as paying out a death benefit if the child were to pass away as well as potentially providing a savings vehicle for the insured.

It’s a lot more comfortable to contemplate these policies funding, say, a child’s education than handling expenses at the time of death. But both are facets of these products. In addition, these policies can help prove a child’s insurability later in life. Let’s take a closer look if this coverage might be right for your family.

What Is Child Life Insurance?

Life insurance for children is similar to a policy for an adult. If premiums are paid regularly, then there’s the guarantee of a death benefit if the child dies. A parent, legal guardian, or grandparent takes out the policy (making them the policyholder). This person can be the beneficiary who would receive the death benefit, if applicable, but they don’t have to be.

Before getting into more detail about policies for children, here’s a brief overview of the two types of life insurance: term and permanent. Each is available for children as well as adults.

Term Life Insurance

As the name implies, term life insurance comes with a pre-determined term, often 10, 20, or 30 years. If the insured person dies within that time frame, then a death benefit is paid out to beneficiaries (people designated to receive those funds). At the end of the term, the policy may be able to be renewed, allowed to lapse, or converted into permanent life insurance. If the insured is still alive at the end of the term (and we hope they are), there is not a refund of the premiums paid. The service was there waiting but wasn’t tapped.

For a child, this would typically be an add-on to a parent’s insurance policy. It would be a death benefit-only policy, but it might be able to be converted into an adult policy when the insured reaches adulthood.


💡 Quick Tip: Term life insurance coverage can range from $100K to $8 million. As your life changes, you can increase or decrease your coverage.

Permanent Life Insurance

Unlike a term policy, permanent life insurance doesn’t expire as long as premiums are paid. Whenever the insured dies, a death benefit is paid. These plans also involve a savings vehicle, in which part of the premiums paid go into a cash account which can later be tapped or borrowed against. Premiums are typically higher than term life insurance (often several multiples of the term life insurance price).

When getting this kind of policy for a child, yes, there’s the death benefit for a worst-case scenario, but there’s also a component that builds a savings account, which is like a gift to the child. When the insured individual reaches adulthood (typically at 18 or 21 years of age, these policies often allow the now-adult to either take the policy’s cash value or continue payments and coverage.

How Does Life Insurance for Children Work?

The adult who plans to take out the policy will fill out an application. There isn’t a medical exam involved like there can be for adults, which streamlines the process.

Life insurance policies for children are often permanent life policies, meaning coverage can last their entire lives if premiums are kept up. Premiums stay the same over the lifetime of the policy, and part of the premium is invested and becomes a cash value that can be withdrawn during the child’s life. These are usually whole life policies, meaning the cash earns a fixed rate of interest.

Check the parameters of a policy that you’re considering buying. Many allow you to buy one for a child who is 17 years old or younger, although some policies won’t go up to age 17. The policyholder commonly transfers the policy to the child when they become adults, but this can be done at any time and some policies automatically transfer into the child’s name at a designated time.

For term life insurance for kids, an option is to add a rider (an optional add-on) to your own term life insurance policy. This can be an affordable option, and one rider may cover all of your children in incremental amounts. The child would be insured to adulthood, at which point the policy would lapse or could be extended by the now-grown child, if they assume paying the premium.

When Does Life Insurance for Kids Make Sense?

Here are four reasons why you might decide to buy life insurance for kids include:

•   Investment purposes

•   Because of health issues or concerns

•   To enhance future insurability

•   In case the worst happens

Here’s more about each.

Investment Purposes

As premiums are paid, the cash value of a whole life policy (a kind of permanent insurance) gradually increases. When your child takes over the life insurance policy, they can surrender — or cancel — it and collect the cash value.

They might choose to use it as collateral for a loan. Or they could keep paying for the policy, which will continue to increase the cash value. If this is your primary motivation, you may want to consider whether this goal is better served by another vehicle, such as a 529 savings account for college costs).

Health Issues or Concerns

If a child is born with health issues or your family has a significant, genetically determined health condition, having a life insurance policy may give you more of a sense of security.

Enhance Insurability

When purchasing a life insurance policy for a child, you are ensuring they have some insurance if they have a major health-altering diagnosis during the term of the insurance. There may be the possibility of extending this coverage.

The Worst Happens

Nobody likes to think about losing a child. If this traumatic event does occur, life insurance will help to cover funeral expenses without being subject to income tax. This can help to eliminate the financial worry of funeral costs and allow you to grieve without this concern. The policy may also cover therapy in this worst-case scenario and/or loss of wages if you were to take a leave of absence from work in the aftermath of this situation.

Recommended: Life Insurance Definitions

Benefits of Child Life Insurance

What you’ve just read outlines some of the reasons why it can make sense to buy life insurance for kids. It can serve as an investment vehicle; provide security if health is a concern; boost future insurability, and cover expenses if the worst situation happens.

Here are some other benefits to consider:

•   Life insurance for children tends to be very affordable. The younger a child is when you purchase the policy, the lower the premium.

•   With whole and term life insurance, premiums remain the same, guaranteed, as long as payments continue being made.

•   With a guaranteed insurability rider on the policy, more coverage can be purchased for that child without the need to answer health questions. This is true even when they’re adults depending on the policy type.

•   If the child later accesses the cash value in the policy, they can use the money for their own unique needs — whether that’s for college tuition, a wedding, a car, or house.

Recommended: 8 Popular Types of Life Insurance for Any Age

How Much Is Life Insurance for Children?

Premiums are based upon the amount of the policy and the age of the child when the policy is first taken out. In some cases, this may be as young as birth or 14 days. Price varies based on gender.

Coverage amounts are typically much lower than for a policy that insures an adult. After all, the goal here isn’t to replace the loss of earning power. Instead, the limits usually range from $10,000 to $100,000, but some companies may allow more than $100,000. At the time of writing this post, a child who is four years old or younger can often be insured for a $10,000 policy for under $5 a month, and a $50,000 one for under $20 a month.

Prices increase incrementally as the child ages. By the time that they’re ages 15 to 17, a $10,000 policy may be closer to $8 per month and a $50,000 one about $35 monthly.


💡 Quick Tip: With life insurance, one size does not fit all. Policies can and should be tailored to fit your specific needs.

The Takeaway

Child life insurance allows parents, legal guardians, and grandparents to apply and pay for a policy on behalf of a child. While a child doesn’t have earning power you are seeking to protect, there are benefits to this kind of policy, including creating a savings vehicle for the child. Take a careful look at the insurance options and your family’s financial goals to determine if this is the best path for you.

SoFi has partnered with Ladder to offer competitive term life insurance policies that are quick to set up and easy to understand. Apply in just minutes and get an instant decision. As your circumstances change, you can update or cancel your policy with no fees and no hassles.

Photo credit: iStock/FatCamera

Coverage and pricing is subject to eligibility and underwriting criteria.
Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers- for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.
Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other, SoFi Technologies, Inc. (SoFi) and SoFi Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under LadderlifeTM policies. SoFi is compensated by Ladder for each issued term life policy.
Ladder offers coverage to people who are between the ages of 20 and 60 as of their nearest birthday. Your current age plus the term length cannot exceed 70 years.
All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal advice.

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

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

Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.

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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If you’re a homeowner, you may know those “uh-oh” moments when the basement floods or the roof leaks. If you’re in that situation, you may well need a considerable amount of cash to pay for repairs ASAP.

In this guide, you’ll learn the ballpark prices for some of the most common home repairs so you are better prepared if an emergency strikes. You’ll also gain insight into some financing options so if you find yourself dealing with an unexpected and significant bill, you can decide which source of funding is best for your needs.

How Much Do Common Home Repairs Cost?

From the roof to foundation, there are a lot of things in and on a home that might need to be repaired. Among these features are things that might be emergency home repairs at some point, whether that means you’ve discovered black mold in the basement or a kitchen appliance has conked out. Here, learn about some of the most common home repair costs.


💡 Quick Tip: Some lenders can release funds as quickly as the same day your loan is approved. SoFi personal loans offer same-day funding for qualified borrowers.

Roof

A home’s roof has a certain life expectancy, generally based on the material used. A roof made of asphalt shingles might last from 15 to 30 years, while concrete- or clay-tiled roof could last for more than 50 years.

Regular roof inspections are a good way to identify any minor problems, which may typically cost about $220, but can vary with your specific home and the region you live in. Minor repairs might include:

•   Gutter cleaning.

•   Patching leaks.

•   Replacing shingles.

•   Repairing flashing.

Issues found during a roof inspection might average $1,100. Replacing a roof, a major expense, may be necessary at some point in the life of a home. For an average-sized home, a completely new roof can cost $9,217 on average.

Foundation

Foundation issues can show up as cracks in a home’s walls, floors that are not level, gaps around windows, or doors that don’t close properly. Fixing these symptoms of a foundation issue won’t solve the underlying problem, but repairing the foundation at the earliest sign of the symptoms may mean a less costly foundation repair.

Hiring a structural engineer can be a good first step if there appear to be major foundation problems, as they won’t be trying to sell a product to fix any potential problems, so will likely be unbiased. A structural inspection typically costs about $600.

•   Cracks in a foundation that don’t affect the structure are minor repairs but are best not ignored, lest they lead to major issues. Potential cost: between $250 and $800.

•   A leaking foundation might be the cause of those cracks. Waterproofing a foundation, which may involve excavating around the foundation, installing tile drains, filling cracks, and then coating the structure with a sealant, can cost anywhere from $2,000 to $7,000.

•   A house with a settling or sinking foundation may have flooring that is warped or sloping, doors and windows that don’t open and close properly, or even exterior cracks, or other apparent issues. The cost generally depends on the type of repair. Raising a house using piers can cost between $1,000 and $3,000, while jacking might be between $600 and $1,600.

Water Damage

Water damage in a basement might be due to flooding from a storm or broken water line, for example, and is best fixed quickly so mold doesn’t grow and become another issue to take care of. In addition to being an unpleasant sight, standing water can cause structural or electrical issues in a home. Extraction of the water is generally the first step in this type of repair, followed by any necessary structural repairs.

•   For simple fixes, such as cleaning up after an overflowing toilet, the cost might be around $150.

•   Water damage restoration, though, is a bigger ticket item, averaging between $1,300 and $5,600, though it could go higher. If your entire home’s wood flooring is warped by water damage or basement flooding wrecks your electrical panel, that could spiral into five figures.

Recommended: How Much Does It Cost to Finish a Basement?

Mold

If the above water issues are not fixed in a timely manner, mold can grow on the surfaces, requiring additional necessary repairs. In addition to damaging any surface mold grows on, it’s also a serious health hazard, potentially causing allergic reactions, asthma attacks, and skin irritation.

Mold remediation costs average between $5,000 and $30,000 for a 2,000 square foot home. If the mold issue is localized (say, just in the attic or basement), your costs could be anywhere from $500 to $7,500 on average, depending on the specifics of your situation.

Pests and Rodents

Pests and rodents in a home can be more than just annoying. Infestations might cause major damage to a home if left untreated. One-time pest control costs around $450 on average. Ongoing services may cost $50 or more a month.

Attics can be inviting spaces to rodents like mice, rats, or squirrels, or other animals such as raccoons or bats. Eliminating the problem can cost $200 to $600 typically.

HVAC

A home’s heating, ventilation, and air conditioning (HVAC) systems control the regulation and movement of air throughout the building. Like other components in a home, it’s wise to have an HVAC system inspected regularly to catch any problems before they become serious (as in, needing to pull together the cost of replacing an HVAC system). A standard tune-up for an HVAC system might cost between $150 and $450, with any potential repairs added to that. Some companies might offer ongoing maintenance plans, which could be a cost saver over time.

And what if the entire HVAC system needs replacing? Your price tag could be between $5,000 and $12,000 or higher. This could be a good opportunity to investigate any rebates available. For instance, if you buy an eco-conscious heat pump, you might find rebates as part of the Inflation Reduction Act.


💡 Quick Tip: Unsecured home improvement loans don’t use your house as collateral — a relief for many homeowners.

Electrical

Electrical issues in a house can vary from minor repairs, such as replacing an outlet, to wiring overhauls that may require professional help.

•   Hiring an electrician to replace a home’s outlets, light fixtures, and switches can cost around $280 on average. For someone who is confident in their DIY skills, this relatively simple job can be done for about $5 per outlet.

•   Replacing a circuit breaker or the entire electrical panel is something homeowners might leave to a professional. Costs will depend on the number of breakers being replaced or, in the case of replacing the electrical panel, how many amps. Panel replacement or upgrade can be anywhere from $2,000 to $6,000.

•   Rewiring a home can be quite expensive and include other repairs, such as plaster or drywall repair. To rewire an entire home, a homeowner might expect to pay between $2,500 and $6,000 for a three-bedroom house.

Ways To Finance an Emergency Home Repair

Even with regular inspections and maintenance, sometimes emergency home repairs are necessary. Some roof tiles may blow away, allowing rain in, or mold can take root in a damp basement. How to pay for home repairs (especially major ones) might involve using a variety of sources, depending on what is available and a person’s individual financial circumstances.

Homeowners Insurance

Homeowners insurance may be the first source most homeowners look to when needing to pay for emergency home repairs. The policy will stipulate what is covered, how much the company will pay, and any amount the homeowner might be responsible for, such as a deductible.

Some things a typical homeowners insurance policy might cover are costs to repair or rebuild after a disaster, replacement of personal belongings that were destroyed because of a disaster, or the costs of alternative housing while repairs are being made or a house is being rebuilt.

Emergency Fund

If there is a sufficient amount in an emergency fund, paying for an unexpected home repair with cash on hand is an option that won’t incur interest. How much to save in a home repair emergency fund will depend on the home’s size, age, and value. Older or more expensive homes might mean higher repair costs.

A typical recommendation is to save between 1% and 3% of a home’s value in a home repair emergency fund. So for a home valued at $500,000, this means having between $5,000 and $15,000 saved for emergency home repairs. This is a goal to work toward, but even having $1,000 in savings can be helpful.

If you do dip into your fund to fix your house, it can be like an emergency home repair loan, without any interest charged or monthly repayment schedule.

Home Equity

Homeowners who have built up equity in their homes may choose to use that equity to get money for home repairs. Using this type of financing, however, does come with some risk because the home is used as collateral. If the borrower defaults, the lender may seize the home as a way to repay the debt.

There are two types of loans that are based on a home’s equity: home equity loans and home equity lines of credit (HELOCs).

•   A home equity loan is a fixed-rate, lump-sum loan. It has a set repayment term, and the borrower makes regular, fixed payments consisting of principal and interest.

•   A HELOC also uses the equity a homeowner has built up, but the borrower does not receive a lump sum. Instead, they access the loan funds as needed until the loan term ends. Funds can be borrowed, repaid, and borrowed again, up to the limits of the loan.

HELOCs are variable-rate loans and consist of two periods: a draw period and a repayment period. The draw period is the time during which money can be borrowed, and might be 10 years. The repayment period is the time during which the loan is repaid and might last for 20 years. The combination of the two would make this example a 30-year HELOC.

Recommended: The Different Types Of Home Equity Loans

Assistance Programs

If emergency home repairs are required but the homeowner can’t afford to pay for them, assistance programs might be an option to look into.

•   Government loan or grant assistance. The U.S. Departments of Housing and Urban Development (HUD) , Agriculture (USDA), and Veterans Affairs (VA) offer grants and loans to eligible homeowners for home repairs and improvements.

•   Disaster relief. HUD offers several programs for homeowners affected by federally declared disaster areas. HUD partners with other federal and state agencies to provide relief in the form of mortgage assistance, relocation, food distribution, and other types of disaster relief.

•   Community Assistance Programs. Funding assistance may be able to be found by looking at local sources, such as county or city governments or charities. A good place to start a search is through HUD’s state listings .

Credit Card

Using a credit card to finance unexpected and urgent work on your home may seem like an easy fix. It can certainly be a quick way to pay for such repairs and a viable option if you’re thinking of how to pay for home repairs with no money withdrawn from your bank account. There are pros and cons to using a credit card for this purpose.

•   On the positive side: If the credit card is a zero-percent-interest card — and the balance can be paid in full before the promotional period ends — this can be a way to pay for an emergency home repair without paying interest.

•   As for disadvantages, credit cards are more likely to have high-interest rates, which can add a significant amount to the account balance if not paid off quickly.

•   Credit cards also come with borrowing limits. A major emergency home repair might max out this limit or even exceed it.

•   In addition, using all available credit can potentially have a negative effect on a borrower’s credit score. It can raise a person’s credit-utilization ratio. And if they are applying for a loan, it could raise their debt-to-income ratio, which might make getting a favorable loan rate a challenge.

Should I Get a Home Repair Loan?

Another option to pay for emergency home repairs might be a home improvement loan, which is a type of personal loan.

•   An unsecured personal loan does not use collateral, like a home equity loan or HELOC, so the borrower is not risking losing their home if they can’t repay the loan. The potential loan value is also not limited by the amount of equity in the home.

•   An unsecured personal loan may be funded more quickly than a home equity loan or HELOC. Because there is no collateral to determine a value for, this cuts out a potentially time-consuming step included in secured loans.

•   How can you use a personal loan? They can be tapped for a variety of reasons, not just emergency home repairs. If there are expected repairs, planned repairs, or home renovations that might make a home more livable, an unsecured loan can be a good option.

The Takeaway

It’s probably safe to say that nobody likes to think about emergencies. But it’s wise to be prepared in the event that one arises. When pricey home repairs are required, a personal loan may be the option that works best for your financial situation.

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.

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.

SOPL1023029

Dealing with substantial student loan debt can be overwhelming, especially if you find yourself struggling to make your payments.

Fortunately, there are some options that may help minimize the amount of money you pay back on your federal student loans, such as the Income-Driven Repayment (IDR) and Public Service Loan Forgiveness (PSLF) programs.

When trying to figure out how to get rid of student loans, it’s important to understand that you might be able to reduce your monthly payment with a student loan refinance. Or you may be able to temporarily postpone your federal loan payments through deferment or forbearance.

Options to Get Out of Repaying Student Loans Legally

1. Loan Forgiveness Programs

Depending on your eligibility, there are a few different federal loan forgiveness programs available to borrowers with federal student loans. These programs could help you get out of paying a portion of student loan debt as they forgive your loan balance after a certain number of years.

President Joe Biden proposed a federal student loan debt cancellation of up to $20,000 for those who met household income eligibility. However, the Supreme Court ruled against Biden’s plan, saying the president did not have the necessary authority to take such action. Since then, President Biden has announced various programs to provide relief for those carrying federal loans, along with calling attention to existing plans.

Each forgiveness program has different eligibility criteria.

Teacher Loan Forgiveness

This federal student loan forgiveness program forgives the loans of highly qualified teachers. Depending on the subject area they teach, teachers who meet the eligibility requirements may have up to $17,500 or up to $5,000. Teachers are eligible to apply for this loan forgiveness program after they have completed five years of service.

Recommended: Explaining Student Loan Forgiveness for Teachers

Public Service Loan Forgiveness

This program is designed for those working in public service. In order to qualify, applicants must meet the programs eligibility requirements, including:

•   Work for a qualified employer

•   Work full-time

•   Hold Direct Loans or have a Direct Consolidation Loan

•   Make 120 qualifying payments on an income-driven repayment plan

Borrowers who are interested in pursuing PSLF will have to follow strict requirements in order to qualify and have their loan balances forgiven.

2. Income-Driven Repayment Plans

Income-driven repayment plans for federal student loans tie a borrower’s monthly loan payments to their income and family size.

The repayment period for income-driven repayment plans varies from 20 to 25 years. While these plans help make loan payments more affordable for borrowers, extending the loan terms may result in accruing more interest over the life of the loan.

President Biden has announced the creation of the Saving on a Valuable Education (SAVE) Plan , which replaces the existing Revised Pay As You Earn (REPAYE) Plan. Borrowers on the REPAYE Plan will automatically get the benefits of the new SAVE Plan.

The SAVE Plan, like other income-driven repayment (IDR) plans, calculates your monthly payment amount based on your income and family size. According to the White House, the SAVE Plan provides the lowest monthly payments of any IDR plan available to nearly all student borrowers.

Starting next summer, borrowers on the SAVE Plan will have their payments on federal undergraduate loans cut in half (reduced from 10% to 5% of income above 225% of the poverty line).

A beta version of the updated IDR application was made available in early August 2023 and includes the option to enroll in the new SAVE Plan. The DOE says that if you apply for an IDR plan (such as the SAVE Plan) in the summer of 2023, your application will be processed in time for your first federal student loan payment due date.

Recommended: The SAVE Plan: What Student Loan Borrowers Need to Know About the New Repayment Plan

3. Disability Discharge

When working out how to get rid of student loans, take into account that It may be possible to have federal student loans discharged if you have a permanent disability. To be eligible for the disability discharge, you need to show the Department of Education that you are not able to earn an income now or in the future because of your disability.

To do so, you need to get an evaluation from a doctor, submit evidence from Veterans Affairs, or show that you are receiving Social Security Disability Insurance. You cannot apply for disability discharge until you have been disabled for 60 months unless a doctor writes a letter saying that your disability and inability to work will last at least 60 months.

4. Temporary Relief: Deferment or Forbearance

Federal student loan repayment was put on pause over three years ago due to the Covid-19 shutdown. As part of the agreement reached in the Debt Ceiling bill, the Department of Education’s student loan forbearance program ends in 2023, with interest resuming on September 1, 2023 and payments due beginning in October 2023.

However, in late June, President Biden announced the creation of the On-Ramp Program . The Department of Education is instituting a 12-month “on-ramp” to repayment of federal student loans, running from October 1, 2023 to September 30, 2024, so that “financially vulnerable borrowers” who miss monthly payments during this period are not considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies.

Apart from the On-Ramp Program, forbearance and deferment both offer borrowers the ability to pause their federal student loan payments if they qualify.

Depending on the type of loan you have, interest may continue to accrue even while the loan is in deferment or forbearance. However, applying for one of these options can help borrowers avoid missed payments and potentially defaulting on their student loans.

Note that private student loans don’t offer the same benefits as federal student loans, but some may offer their own benefits.

5. Student Loan Refinancing

This option won’t get rid of your student loans, but it could help make student loans more manageable. By refinancing your student loans, you can potentially qualify for a lower interest rate, which can possibly lower your monthly payments or save you money on interest over the life of your loan.

If you refinance with a private lender, you can also change the length of your student loan. While private lenders can refinance both your federal and private student loans, you do lose access to the protections that federal student loans provide, such as income-based repayment programs, on the amount that is refinanced.

6. Filing for Bankruptcy: A Last Resort

Bankruptcy is a legal option for the problems caused by people struggling with how to take out student loans. However, it is rare that student loans are eligible for discharge in bankruptcy. In some instances, if a borrower can prove “undue hardship,” they may be able to have their student loans discharged in bankruptcy.

Filing for bankruptcy can have long-term impact on an individual’s credit score and is generally a last resort. Before considering bankruptcy, review other options, such as speaking with a credit counselor or consulting with a qualified attorney who can provide advice specific to the individual’s personal situation.

Recommended: Bankruptcy and Student Loans: What You Should Know

The Takeaway

When you are learning how to take out student loans, the future debt may not be obvious. It can be challenging to pay student loan debt, but there are options that can temporarily reduce or eliminate your payment. It is only in extremely rare circumstances that student loans can be discharged in bankruptcy.

For federal student loans, some options that can help alleviate the burden of student loan debt include deferment or forbearance, which may be helpful to those who are facing short-term issues repaying student loans. Another avenue to consider may be income-driven repayment plans, which tie a borrower’s monthly loan payments to their income, helping make monthly payments more manageable.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

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

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