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Even the most money-savvy person may have some false beliefs about money. Maybe you were raised with misconceptions about finances, such as investing is only for the very rich, or were given off-target advice from well-intentioned friends (telling you to always aim to buy a house vs. renting), for instance.

Incorrect beliefs about money can have a negative impact on how you manage your finances, potentially hindering your path to achieving your goals.

Why Debunking Money Myths Is Key to Financial Success

Being realistic about money can help you set reasonable financial goals and reach them in the short- and long-term. Whether you are feeling financially secure or are looking to better manage your finances, practicing healthy financial habits will serve you well in the long run.

That’s why debunking money myths is important. If you believe, for instance, that carrying lots of credit card debt is “normal,” you may not eliminate that monthly balance that’s dragging down your budget.

Here are some common misconceptions about money to avoid if you want to be financially fit.

10 Common Misconceptions About Money

Here, learn about popular money misconceptions and why it may be time to bust some financial myths.

1. You Need a Lot of Money to Start Investing

You do not need to be rich in order to invest: You can start investing with just a few dollars. The average stock market return is about 10% a year, as measured by the S&P 500 index. The S&P 500 Index return does not include the reinvestment of dividends or account for investment fees, expenses, or taxes, which would reduce actual returns. Investing has risks, and you’ll want to be comfortable with that notion and find investments that suit your risk tolerance.

Whatever you decide to do, investigate fees before you begin investing so you are prepared for any costs you will need to cover.

2. Budgeting Is Too Restrictive and Complicated

Regardless of how little or how much money you have, a budget is helpful for organizing your finances. If you feel budgeting is too restrictive and/or complicated, you probably just haven’t found the right budgeting method yet.

Making a budget could help you achieve financial stability. You need to budget so you can keep track of your spending, your debt, and your savings for future goals.

There are various techniques and tools (spreadsheets, journals, apps) for budgeting. One strategy is the 50/30/20 budget rule, in which 50% of your post-tax money goes towards necessary expenses (housing, food, utilities, and the like), 30% goes towards wants, and 20% is used for saving.

3. All Debt Is Bad Debt

According to Debt.org, 90% of American households have some kind of consumer debt. But keep in mind, not all debt is created equal. Some debt is considered good debt. Think about a mortgage: Once you’ve saved for a down payment, this financial product is typically a fairly low-interest loan that may help build your credit history (if managed responsibly) and also allows you to accrue equity in the home.

Bad debt, on the other hand, is high-interest debt, such as credit card debt, where interest rates are high and you aren’t building equity. Just because a lot of people may have this kind of debt doesn’t mean you should. It can snowball and keep you spending a chunk of money monthly that could otherwise be saved or invested.

4. A High Salary Automatically Makes You Wealthy

A common money misconception is that earning a high salary makes you wealthy. That is not necessarily true. People who earn a lot of money can spend a lot of it too. The key to building wealth is saving and investing your money so it can potentially grow over time. Even if you simply stash money in a high-yield savings account, compounding interest can help grow your wealth.

To look at it from another angle, say one person earns $50,000 a year, lives within their means, and saves and invests wisely. Then there’s a person who earns $500,000 but they own multiple houses, spend freely on luxuries, and haven’t yet gotten their act together in terms of saving and investing. The person who has the lower salary might actually be the wealthier of the two.

5. Buying a Home Is Always Better Than Renting

Buying a home is the quintessential American dream, but it’s not necessarily the right move for everyone. Whether to rent or buy ultimately depends on your personal situation and your aspirations.

You may have heard that renting is a waste of money, but it can provide flexibility for those who are not ready to buy a home or not interested in doing so. For instance, perhaps your work requires you to relocate often, or you only want to buy a house when your baby is older and you can pick the right school district. Maybe you’d rather pay off debt vs. save for a down payment. Or you just might not want the major expense of a mortgage, taxes, and home maintenance in your life. Whatever your situation may be, it’s important not to feel pressured into buying unless it’s the right move for you.

6. You Should Avoid Credit Cards to Stay Out of Debt

Using credit cards as a form of payment doesn’t mean you’ll go into debt. Spending more than you can afford to pay off what you owe, however, may put you on that path. If you use a credit card wisely and typically pay off the debt every month, this can be a factor that helps you build credit. It also keeps you from paying high credit card interest, which averages 24.35% as of July 2025.

However, if you are a person who tends to spend impulsively and not pay your credit card bill on time, this could negatively affect your credit score. This is why it’s important to manage your purchases and pay your credit card bills on time.

7. Saving for Retirement Can Wait Until You’re Older

This can be a dangerous myth to believe. If you are young and are investing for your retirement, you have time on your side. Your invested money can grow over time thanks to compounding returns. Here’s an example: If a 25-year-old invests $200 a month and earns a 6% return, they’ll have $393,700 by age 65. But if that same person starts saving at age 35, that same money at the same rate nets them $201,100, or about half of what they’d have if they started sooner.

It may feel as if retirement is a long way away, but the sooner you begin funding it, the more you are likely to have. If your employer offers a 401(k) plan, take advantage of contributing to it. If this isn’t offered at your place of work, you can open an individual retirement account (IRA) or a Roth IRA.

8. Talking About Money Is Taboo

Talking about money issues may seem like taboo, but it shouldn’t be. It can be healthy to talk about money troubles to close family and friends, because they may have ideas about how to approach a solution. Perhaps they experienced a similar issue in the past and can offer advice on how they handled it.

If you find it uncomfortable to talk to family or friends about your money concerns, you might want to consider speaking to a professional. For instance, there are non-profit credit counseling organizations, like the National Foundation for Credit Counseling that could help you if you are burdened with debt and feel overwhelmed.

9. More Money Will Solve All Your Problems

Yes, money can help take care of bills, but the old adage, “More money, more problems” may well be true, too. The secret to being financially secure is not about how much money you make, it’s about how well you manage it.

For instance, say you take a new job that pays twice your current salary. If you turn around and buy a pricier home and car and book some luxury vacations, you might be in more debt and experience more stress than before. The way to prevent this is by not living beyond your means.

Healthy budgeting and saving habits (such as automating your savings) are what can help solve problems.

10. Financial Planning Is Only for the Rich

Financial planning isn’t only for those who have hefty savings accounts, net worth, or investment portfolios. Although it may not be taught in school, financial literacy is important for all, and setting money goals can help you achieve your dreams. Too many people just open a checking account and then ignore their money.

You might be more comfortable working with a financial professional, but you don’t need one to manage your money. It’s totally your choice. You might also see what tools and services your bank offers, and investigate third-party options.

Budgeting and Saving Myths Debunked

There are several myths about budgeting and saving that are worth debunking. For instance, many people believe living on a budget is hard, complicated, time-consuming, and all about deprivation.

Not true! The right budget can help you stay on track financially and achieve your goals. What’s important is to experiment with different budgets to find one that suits your needs. You might use technology, such as a savings calculator to help you along.

Also, it’s a financial myth that you need a lot of money to save effectively. Regardless of your income and expenses, budgeting well can allow you to start saving regularly. Small amounts of money can really add up over time.

Recommended: Savings Goal Calculator

Investing and Retirement Myths Debunked

Here’s what is a common misconception about finances: that you need a lot of money to invest. Anyone can invest well, even starting with a small amount, and robo-advisors can help automate the process for you. On the topic of investing, it’s also a misconception that you don’t have to think about retirement until later. You’re actually likely to save more effectively when you start early (again, even with small amounts) than if you put more money in for a shorter period of time.

Another myth is that you don’t need to save for retirement because you can live off Social Security payments. However, many people find that those payments are not enough when they reach retirement age, especially with rising healthcare costs.

Debt and Credit Card Myths Debunked

A debt myth is that all debt is bad. Some kinds of debt, such as mortgages, charge relatively low interest and allow you to build wealth. However, when it comes to credit cards, there are some myths to conquer. For example, some people may believe that they should only pay the minimum amount on their monthly bill. This amount is the bare minimum, and paying just that can wind up locking you into a debt trap, without building up funds in your bank account because you’re struggling to pay off your debt.

Mindset and Lifestyle Myths Debunked

A mindset and lifestyle myth about money to debunk is that making more money means you’re wealthy. It might be true, but if you allow your spending to rise with every raise at work or money windfall, you could wind up less wealthy than you were before.

This is considered lifestyle creep. An example is when you get a new job and earn more, you go out and, say, lease a luxury car rather than putting the extra money into savings or investing. You live more lavishly, but you could be shortchanging your future.

How to Develop a Health Money Mindset

To develop a healthy money mindset, it’s helpful to devote some time and energy to learning how to manage your money well. That could mean reading up on finances, listening to podcasts, or taking an online course.

Goal setting is important, too. By establishing your short-, medium, and long-term goals, you can begin working toward achieving them. Budgeting well and talking with trusted friends and relatives for advice can help you get on the right track. Automating your savings so money seamlessly gets transferred into a savings account can be a smart move, too. You might also work with a financial planner or a financial therapist to help you in your money journey.

The Takeaway

Myths about money can stand in the way of your making the most of your finances. By avoiding these misconceptions, you’ll be better able to take control of your cash, budget, save, and invest wisely. These moves can not only help you achieve your goals, they can enhance your peace of mind, too.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

What is the biggest misconception people have about money?

There are many negative beliefs about money. Some include believing only rich people should invest their funds and that a person doesn’t need to think about retirement saving when they are young. These misconceptions can keep people from reaching their financial goals.

Is it true that you need money to make money?

While having money can help you make money, it’s not a requirement. By budgeting well and saving regularly (even small amounts), you can work toward generating wealth. A person who makes $50,000 could be wealthier than one who makes a multiple of that if they manage their money more wisely.

Why is it so hard to talk about personal finances?

It can be hard to talk about personal finances because many people are raised with the belief that one should never discuss money. It’s a myth about money that it’s a taboo topic. Unfortunately, this secrecy leads people not to share information that could help one another manage money better. Also, typically financial management skills aren’t taught in school, so many people clam up about the topic since they feel ignorant about it.

What’s a simple first step to fix my money mindset?

Often, the simple first step to fix your money mindset is to think about and recognize your attitudes. Do online research about money management and talk to friends whose money management you respect. Look at the interest rates on your credit card and student loans, try budgeting apps, and take other small steps that begin to put you in the driver’s seat financially rather than believing prevailing wisdom.

Maybe you think that there’s no point saving for retirement until you’re older or that investing is only for the rich. By being honest about your beliefs and then working to educate yourself and take steps toward financial management, you can fix your money mindset.

Is carrying a small credit card balance good for my score?

If you’ve wondered about what are some common money misconceptions, this is one! Carrying a balance doesn’t build your credit score. Among the habits that help maintain and build your credit score are always paying your card on time and keeping your credit utilization ratio (your balance vs. your credit limit) as low as possible. Under 30%, if not under 10%, is considered a good level.

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Federal loans allow you to stop or reduce your payments in some circumstances, such as by enrolling in grad school, for up to three years — which is known as deferment. Deferment on private student loans varies by lender, and not all lenders offer it.

One thing you generally don’t want to do is simply stop making payments on your student loan. Whether your loans are federal or private, this puts you at risk of default, which can have a number of negative consequences.

Read on to learn more about student loan deferment, including what it is, how it works, its pros and cons, plus some alternative ways to get student debt relief.

What Is Student Loan Deferment?

Student loan deferment allows qualified applicants to reduce or stop making payments on their loans for up to three years. If you have a subsidized federal loan, no interest accrues during the deferment period. If you have an unsubsidized federal loan, interest will accrue and will be added to the loan amount (or capitalized) at the end of the deferment period.

Deferments are available on federal loans including Direct Loans, FFEL Program loans, and Perkins Loans.

Private student loans may or may not offer deferment options to borrowers. If you have questions about your private student loan, you’ll want to check in with your lender directly.

How Does Student Loan Deferment Work?

If you have a federal student loan and are no longer in school at least half-time, you will need to apply to defer payments on your student loan. This usually involves submitting a request to your student loan servicer. You will also likely need to provide documentation to show that you meet the eligibility requirements for the deferment (more on eligibility requirements below).

If you have an unsubsidized federal student loan and are granted deferment, interest will continue to accrue during the deferral period. You will have the option to either pay the interest as it accrues or allow it to accrue and be capitalized (added to your loan principal balance) at the end of the deferment period.

Deferments are available on federal loans including Direct Loans, FFEL Program loans, and Perkins Loans.

If a private lender offers deferment, they will likely have their own forms and requirements.

Why Defer Student Loans

Applying for deferment may make sense if you are facing short-term difficulty paying your student loans, since a deferment can provide you with the opportunity you need to stay afloat financially. And, if you have a subsidized loan, deferment won’t make your loan any more expensive in the long run.

Deferring student loans also won’t directly impact your credit score.

Why Not Defer Student Loans

If you’re able to stay on top of your loan payments, then deferment likely doesn’t make sense. If you think that you may have long-term difficulty making your monthly loan payments, deferment may not be the best option, either.

If you have an unsubsidized federal loan, interest will continue to accrue during deferment. At the end of the deferment period, this interest will be capitalized on the existing loan amount (or the principal loan value). Moving forward, interest will be calculated based on this new total. So essentially, you are accruing interest on top of interest, which can significantly increase the amount of interest owed over the life of the loan.

Pros and Cons of Student Loan Deferment

Student loan deferment can help borrowers who are struggling financially, but it may not be the right choice for everyone. Here are some pros and cons to consider when evaluating deferment options for federal student loans.

Pros	Cons
Borrowers are able to temporarily suspend or lower the monthly payments on their student loans.	On most federal student loans, interest continues to accrue. This may significantly increase the total cost of borrowing over the life of the loan.
Borrowers may qualify for deferment for periods of up to three years.	Because interest may continue to accrue during deferment, other options — like income-driven repayment plans — may be more cost-effective in the long term.

Types of Student Loan Deferment

For federal student loans, there are a few different deferment options. Here are the details on some of the most common reasons borrowers apply for deferment.

In-School Deferment

Students who are enrolled at least half-time in an eligible college or career program may qualify for an in-school deferment. If you are enrolled in a qualifying program at an eligible school, this type of deferment is generally automatic. If you find the automatic in-school deferment doesn’t kick in when you are enrolled at least half-time in an eligible school, you can file an in-school deferment request form.

Unemployment Deferment

Those currently receiving unemployment benefits, or who are actively seeking and unable to find full-time work, may be able to qualify for unemployment deferment. Borrowers can receive this deferment for up to three years.

Note that under the new ‘Big, Beautiful Bill,” loans made after July 1, 2027 are no longer eligible for deferments based on unemployment hardship.

Economic Hardship Deferment

This type of deferment may be an option for borrowers who are receiving merit-tested benefits like welfare, who work full-time but earn less than 150% of the poverty guidelines for your state of residence and family size, or who are serving in the Peace Corps. Economic hardship deferments may be awarded for a period of up to three years.

Note that under the ‘Big, Beautiful Bill,’ loans made after July 1, 2027 are no longer eligible for deferments based on economic hardship.

Military Deferment

Members of the U.S. military who are serving active duty may qualify for a military service deferment. After a period of active duty service, there is a grace period in which borrowers may also qualify for federal student loan deferment.

Cancer Treatment Deferment

Individuals who are undergoing treatment for cancer may qualify for deferment. There is also a grace period of six months following the end of treatment.

Other Types of Deferment

There are other situations and circumstances in which borrowers might be able to apply for deferment. Some of these include starting a graduate fellowship program, entering a rehabilitation program, or being a parent borrower with a Parent PLUS Loan whose child is enrolled in school at least half-time.

Consequences of Defaulting on Federal Student Loans

If you simply stop making payments as outlined in your loan’s contract, you risk defaulting on your student loan. Default timelines vary for different types of student loans.

Most federal student loans enter default when payments are roughly nine months, or 270 days, past due. Federal Perkins Loans can default immediately if you don’t make any scheduled payment by its due date.

Consequences of defaulting on federal student loans includes:

•  Immediately owing the entire balance of the loan

•  Losing eligibility for forbearance, deferment, or federal repayment plans

•  Losing eligibility for federal student aid

•  Damage to your credit score, inhibiting your ability to qualify for a car or home loan or credit cards in the future

•  Withholding of federal benefits and tax refunds

•  Garnishing of wages

•  The loan holder taking you to court

•  Inability to sell or purchase assets such as real estate

•  Withholding of your academic transcript until loans are repaid

Consequences of Defaulting on Private Student Loans

The consequences for defaulting on private student loans will vary by lender but could include repercussions similar to federal student loans, and more, including:

•  Seeking repayment from the cosigners of the loan (if there are any cosigners)

•  Calls, letters, and notifications from debt collectors

•  Additional collection charges on the balance of the loan

•  Legal action from the lender, such as suing the borrower or their cosigner

To avoid these negative consequences, it’s best to contact your lender as soon as you think you may miss a payment. Your lender may be more willing to work with you prior to your loan entering default.

Recommended: Private Student Loan Consolidation

Who Is Eligible for Student Loan Deferment?

To be granted a deferment on federal loans, borrowers need to meet certain criteria.

You may be eligible if you’re:

•  Enrolled at least part-time in college, graduate school, or a professional school

•  Unable to find a full-time job or are experiencing economic hardship

•  On active military duty serving in relation to war, military operation, or response to a national emergency

•  In the 13-month period following active duty

•  Enrolled in the Peace Corps

•  Taking part in a graduate fellowship program

•  Experiencing a medical hardship

•  Enrolled in an approved rehabilitation program for the disabled

Borrowers who re-enroll in college or career school part-time may find that their federal student loans automatically go into in-school deferment with a notification from their student loan provider.

Loans may also keep accruing interest during deferment — depending on what types of federal student loans the borrower holds. Borrowers are still responsible for paying interest if they have a:

•  Direct Unsubsidized (Stafford) Loan

•  Direct PLUS Loan

If you don’t pay the interest during the deferment period, the accrued amount is added to your loan principal, which increases what you owe in the end.

Recommended: Student Loan Deferment in Grad School

What if You Have Private Student Loans?

Private lenders aren’t required to offer deferment options, but some do. For example, some might allow you to temporarily stop making payments if you:

•  Lose your job

•  Experience financial hardship

•  Go back to school

•  Have been accepted into an internship, clerkship, fellowship, or residency program

•  Face high medical expenses

Typically, even while a private student loan is in deferment, the balance will still accrue interest. This means that in the long term, the borrower will pay a larger balance overall, even after the respite of deferment.

In most cases, even with accrual of interest, deferment is preferable to defaulting. Borrowers with private loans could contact the lender to ask what options are available.

The Limits of Student Loan Deferment

Keep in mind that deferment is not a panacea. By definition, it’s temporary. Federal student loan borrowers will ultimately need to go back to making payments once they are no longer deferment-eligible. For example, a borrower’s deferral might end if they leave school, even if their ability to pay has not improved.

Federal loans can only be deferred for up to three years. With private loans, there may not be an option to defer at all, and if it is an option, the limit may be no more than a year.

Other Options for Reducing Federal Student Loan Payments

Besides student loan deferment, you have other choices if you can’t afford the total cost of your monthly payments. Here’s a look at some alternatives to deferment.

Income-Driven Repayments

For a longer-term solution, you may want to consider an income-driven repayment plan.

If you qualify, you may be able to reduce your monthly payment based on your income. Enrolling in an income-driven repayment plan won’t have a negative impact on your credit score or history. On certain income-driven repayment plans, student loan balances can be forgiven after 20 or 25 years, depending on the payment plan that the borrower is eligible for.

Starting on July 1, 2026, income-driven repayment plans PAYE, ICR, and SAVE will be replaced by a new Repayment Assistance Plan (RAP). The existing IDR plans will be eliminated by July 1, 2028. With RAP, payments range from 1% to 10% of adjusted gross income with terms up to 30 years. After the term is up, any remaining debt will be forgiven.

Forbearance

Student loan forbearance is another way to suspend or lower your student loan payments temporarily during times of financial stress, typically for up to nine months in a 24-month period under the new Repayment Assistance Plan. Generally, forbearance is not as desirable as deferment, since you will be responsible for accrued interest when the forbearance period is over no matter what type of federal loan you have.

When comparing deferment vs. forbearance, you’ll want to keep in mind that there are two types of forbearance for federal student loan holders: general and mandatory.

General student loan forbearance is sometimes called discretionary forbearance. That means the servicer decides whether or not to grant your request. People can apply for general forbearance if they’re experiencing:

•  Financial problems

•  Medical expenses

•  Employment changes

General forbearance is only available for certain student loan programs, and is only granted for up to nine months at a time. At that point, you are able to reapply for forbearance if you’re still experiencing difficulty. General forbearance is available for:

•  Direct Loans

•  Federal Family Education Loan (FFEL) Program loans

•  Perkins Loans

Mandatory forbearance means your servicer is required to grant it under certain circumstances. Reasons for mandatory forbearance include:

•  Serving in a medical residency or dental internship

•  The total you owe each month on your student loan is 20% or more of your gross income

•  You’re working in a position for AmeriCorps

•  You’re a teacher that qualifies for teacher student loan forgiveness

•  You’re a National Guard member but don’t qualify for deferment

Similar to general forbearance, mandatory forbearance is granted for up to nine month periods, and you can reapply after that time.

Another Option to Consider: Refinancing

Depending on your personal financial circumstances, another long-term solution could be student loan refinancing. This involves applying for a new loan with a private lender and using it to pay off your current student loans. Qualifying borrowers may be able to secure a lower interest rate or the option to lengthen their loan’s term and reduce monthly payments. Note that lengthening the repayment period may lower monthly payments, but will generally result in paying more interest over the life of the loan.

Refinancing could be a good option for borrowers with strong credit and a solid income, among other factors. Unlike an income-driven repayment plan, your monthly payment wouldn’t change based on your income.

Either way, you’ll want to keep in mind that refinancing federal student loans with a private lender means you no longer have access to any federal borrower protections or payment plans. So, if you are taking advantage of things like income-driven payment plans or deferment, you likely don’t want to refinance. But for other borrowers, student loan refinancing might be a useful solution.

If you have more than one student loan, refinancing could also simplify your repayment process.

Recommended: A Guide to Refinancing Student Loans

The Takeaway

If you take out a federal student loan and at some point need to pause or reduce your payments, you may be able to qualify for deferment, forbearance, or an income-driven repayment plan. Each option has its pros and cons.

If you’re considering a private student loan (or refinancing your federal loans), keep in mind that private loans don’t come with government-sponsored protections like forbearance and deferment. However, private lenders may offer hardship and deferment programs of their own.

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

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

How long can you defer student loans for?

Depending on the type of deferment you are enrolled in, federal loans can be deferred for up to three years. Private student loans may not offer an option to defer payments, and if they do, the limit will be set by the individual lender.

Why would you defer student loans?

Deferment can be helpful if you are facing a temporary financial hurdle because they allow you to pause or reduce your payments for a period of time.

Are there any reasons not to defer student loans?

Most loans will continue to accrue interest during periods of deferment. When the deferment is over, this accrued interest is then capitalized on the loan. This means it’s added to the existing value of the loan. Moving forward, interest is charged based on this new total. This can significantly impact the total amount of interest that a borrower has to pay over the life of a loan.

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

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

SoFi 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.

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.

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

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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Getting into a top tier MBA program can be competitive. The top 10 programs have an average acceptance rate of around 20%. But the elite of the elite accept even fewer applicants. The acceptance rate at Stanford Graduate School of Business, one of the most challenging schools to get into, is just 6.9%.

With such low acceptance rates, any boost to an application can be advantageous to an MBA (or “B School”) candidate. To elevate an MBA application, some candidates choose to seek the assistance of an MBA application consultant.

MBA application consultants, also known as MBA admissions consultants, can help candidates finetune their application with the hopes of improving their chances of acceptance. If you’re considering applying for a top MBA school, here’s helpful information about the value an MBA application consultant could bring to the admission process.

What Is an MBA Application Consultant?

Since getting into an elite school can be a monumental task, some candidates may need additional support. An MBA admissions consultant, also known as a B School consultant, can offer candidates an advantage in the demanding world of the MBA admissions process. These consultants tend to be highly skilled communicators and have extensive knowledge about the MBA admissions process.

MBA application consultants provide services including program selection, essay brainstorming, essay review, resume review, interview preparation, and more.

Candidates can choose to work with MBA application consultants on an hourly basis or select a package approach to navigate the entire application process.


💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.

Benefits of Working with a MBA Consultants

There are certain circumstances where an MBA applicant may benefit from working with an application consultant. Most of the benefits surround highlighting the work that schools want to see and bringing the applicant’s personality to life.

A good MBA admissions consultant will go above and beyond suggesting and reviewing an application — they will help the applicant understand what they bring to the table.

In addition to helping an applicant brainstorm essay content, here are a few other ways they can add value to the application process.

Expressing Authenticity and Vulnerability in Application

When writing a strong essay, general recommendations suggest expressing authenticity through humor or vulnerability to let your personality shine through. Colleges, even business schools, often look at an applicant’s essay to get a deeper sense of who they are, what they value most, and any actions they’ve taken towards their beliefs.

While it’s unlikely you can get into an MBA program based on a stand-out essay alone, a strong piece of writing will be another valuable piece of your total application.

If writing is not your strong suit, an MBA admission advisor could help you overcome this hurdle and help schools see your personality.

Editing Short-Answer Essays

Currently, the MBA application trend is gearing toward more of a short essay format with restrictive word limits. For example, Columbia Business School has a 500-word limit on essays.

To help applicants meet these essay requirements, MBA admissions consultants can effectively edit down their writings. Many MBA candidates do not have college experience or training in advanced expository writing or editing. With this in mind, they may need the help of an admission consultant with advanced editing skills to meet the restrictive word count.

Addressing Communication Challenges

Those who haven’t taken a lot of coursework in writing, such as STEM (science, technical, engineering, or mathematics) students, may benefit from essay assistance. While STEM professionals may have higher GMAT scores, they may struggle to write a strong essay.

These challenges might be intensified for international applicants who have low English competency. Working with a consultant can help this group of candidates steer clear of any essay defects that could potentially disqualify them.

Recommended: Tips on How to Pay for MBA School

How Much Do MBA Admission Consultants Cost?

Cost is a significant consideration when deciding whether or not to hire an MBA admission advisor. One-on-one MBA application coaching can run around $195 per hour. For a three-school full package deal, you might pay $12,000 or more.

Although these costs can seem astronomical, you may want to consider the potential pay-off: The average starting salary for MBA graduates was $120,000 in 2024 (that’s significantly higher than the average starting salary for people who only have a bachelor’s degree).

Recommended: Finding & Applying to Scholarships for Grad School

Should You Consider Hiring an MBA Admission Consultant?

Here are several examples of groups of applicants that might benefit the most from an application consultant’s guidance.

•   For applicants who want to apply at one of the most popular business schools, like the University of Pennsylvania’s Wharton School or the Harvard Business School, a consultant’s help may be valuable. Even if an applicant has a 3.9 GPA, a 750 GMAT score, and five years of experience working at one of the schools’ prestigious employers, such as McKinsey, competition can still be intense.

•   Candidates who want to enroll at one of the top MBA programs such as Carnegie Mellon University’s Tepper School of Business or the Kelley School of Business at Indiana University, the aid of a consultant is useful.

•   Candidates that have communication challenges but want to apply to a top 25 school, may need the assistance of a consultant. A consultant can help with their essay and interview performance.

For MBA candidates who only need useful resources and information to put together a concrete application for a top 50 school, a consultant might not be worth the cost. Some candidates might do just as well on their own or using an online application consulting platform (such as ApplicantLab ), which can cost considerably less.

On the other hand, candidates who want guidance, support, and help with their skills set may get value working with an MBA admissions consultant.

Selecting the Right MBA Admissions Consultant

Before comparing different MBA application consultants, it’s a good idea to first develop an idea of your needs and likelihood of acceptance. Maybe you need to focus on strategy and essay writing. In this case, you might want to make those areas the top priority when searching for a consultant.

When considering consultants, it’s important to have a clear understanding of the services they offer. For example, if a professional offers to write an essay for you, you may want to steer clear, since this isn’t an offering a consultant should provide. If the consultant is a member of an association, such as the Association of International Graduate Admissions Consultants (AIGAC), it shows that the consultant must uphold a professional standard.

It can also be wise to ask friends, family, and colleagues for referrals when beginning a search. They may have some experience working with an MBA admissions advisor or relevant firms.

As you contemplate getting your MBA, it’s also wise to delve into how to finance your education, including fellowship awards, which are similar to scholarships, since this is money that doesn’t need to be repaid. Other options are student loans, such as MBA student loans.

The Takeaway

If you are pursuing admission to an MBA program, an MBA application consultant can help you optimize your submission materials during the process. Depending on your particular situation, this may or may not be an effective path to follow. Regardless of whether you decide to work with an MBA admission consultant or not, you may need some help paying for your business education expenses. MBA funding options include federal loans, and private MBA student loans.

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

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

Are MBA consultants worth it?

Deciding whether an MBA consultant is worth it is a highly personal decision. It can depend upon such factors as how prepared an applicant is, how competitive the program they are applying to is, how comfortable they are expressing themselves on an application, and whether they can afford the expense required to work with a consultant.

How much do MBA admissions consultants cost?

There is a wide range of prices for MBA admissions consulting. Currently, some figures say that the average cost is around $12,000 for a 3-school package. This is a considerable cost, but for students looking at financing a graduate degree and deriving a well-paying job from it, the amount may be worthwhile.

How much does an MBA application cost?

Prices for applying to an MBA program vary widely. Currently, the cost can be anywhere from about $30 to about $300 per application. There may be the opportunity to have fees waived for qualifying students.

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About the author

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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.

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

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

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

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

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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If you’re on the standard 10-year repayment plan and your federal student loan payments are high relative to your income, a student loan income-driven repayment plan may be an option for you.

Income-driven repayment bases your monthly payments on your income and family size. Due to recent legislation, your options for income-driven plans will be changing over the next few years.

Read on to learn about which repayment plans are currently available and what to expect in the near future.

What Is an Income-Driven Repayment Plan?

Income-driven student loan repayment plans were conceived to ease the financial hardship of government student loan borrowers and help them avoid default when struggling to pay off student loans.

Those who enroll in the plans tend to have large loan balances and/or low earnings. Graduate students, who usually have bigger loan balances than undergrads, are more likely to enroll in a plan.

The idea is straightforward: Pay a percentage of your monthly income above a certain threshold for 20 or 25 years. On the Income-Based Repayment (IBR) plan, you are then eligible to get any remaining balance forgiven.

Income-driven repayment plans are also the only repayment options that will help you qualify for the Public Service Loan Forgiveness program. (Standard Repayment also qualifies, but you probably wouldn’t have any debt left to forgive after 10 years.)

In mid-2025, about 12.3 million borrowers were enrolled in an income-driven repayment plan.


💡 Quick Tip: Often, the main goal of refinancing is to lower the interest rate on your student loans — federal and/or private — by taking out one loan with a new rate to replace your existing loans. Refinancing may make sense if you qualify for a lower rate and you don’t plan to use federal repayment programs or protections. Note that refinancing with a longer term can increase your total interest charges.

How Income-Driven Plans Differ from Standard Repayment?

So, how do income-driven repayment plans work? Do income-driven repayment plans accrue interest? And how do they compare to the Standard Repayment Plan?

Income-driven repayment adjusts your monthly student loan payment in accordance with your income and family size. It also extends your loan terms to 20 or 25 years. These plans are meant to provide relief for borrowers who have trouble affording payments on the standard plan. If your income changes, your monthly payments will change along with it.

Your loans do accrue interest on an income-driven plan, but the IBR plan offers some relief. Specifically, the government will pay any interest charges that your monthly payments don’t cover on subsidized loans for up to three years. However, you’re responsible for all the interest after this three-year period. You always have to pay the interest that accrues on unsubsidized loans.

By contrast, the Standard Repayment Plan doesn’t calculate your monthly payments based on your income. Instead, it gives you a fixed monthly payment based on a 10-year repayment term (or a 10- to 30-year term for Direct Consolidation Loans). By making this payment each month, you’ll pay off your full balance at the end of your term. The minimum payment on the Standard Plan is $50.

Federal student loans automatically go on Standard Repayment unless you apply for an alternative. If you prefer an income-driven plan, you can apply for it on the Federal Student Aid website.

Types of Income-Driven Repayment Plans

There are currently three income-driven repayment plans open to borrowers: Income-Based Repayment, Income-Contingent Repayment, and Pay As You Earn. The SAVE plan is no longer available, and a new plan called the Repayment Assistance Plan will be introduced in the summer of 2026. Here’s a closer look at each plan.

Pay As You Earn Repayment Plan (PAYE)

PAYE is currently available to borrowers, but it’s set to close and won’t be accepting new enrollments on or after July 1, 2027. Since PAYE will be shutting down, you’ll have until July 1, 2028 to switch to Income-Based Repayment or the new Repayment Assistance Plan.

To qualify for PAYE, you must be a new borrower as of October 1, 2007 and have received a Direct loan disbursement on or after October 1, 2011. Plus, you’re only eligible if your monthly payment on PAYE is less than what it would be on the Standard 10-year plan.

PAYE sets your monthly payments to 10% of your discretionary income and extends your loan terms to 20 years. Find out more about how PAYE compares to REPAYE (which is now closed).

Income-Based Repayment Plan (IBR)

While most of the current income-driven repayment plans will close in the coming years, IBR will remain open and available to current borrowers. If you’re currently on SAVE, PAYE, or ICR, you have the option of switching to IBR when (or before) your plan gets shut down.

On Income-Based Repayment, you’ll pay 10% of your discretionary income each month on a 20-year term if you first borrowed after July 1, 2014. If you borrowed before that date, your monthly payment percentage will be 15% and your repayment term will be 25 years.

IBR will forgive your remaining balance if you still owe money at the end of your term (after the Department of Education finishes updating its systems). PAYE and ICR no longer offer loan forgiveness, but you can get credit for your PAYE and ICR payments if you switch to IBR.

Income-Contingent Repayment Plan (ICR)

The Income-Contingent Repayment plan is the only income-driven option for borrowers with Parent PLUS loans (and you have to consolidate first). It sets your payments to 20% of your discretionary income and has a repayment term of 25 years. Note that the discretionary income calculation for ICR is different (and less generous) than the one used for the other income-driven plans.

Similar to PAYE, the deadline to enroll in ICR is July 1, 2027, and you have until July 1, 2028 to switch to IBR or RAP. Otherwise, you’ll automatically be moved to RAP. If you’re a parent borrower, you may want to enroll in ICR while you still can. Parent loans are not eligible for RAP, so you won’t have an income-driven repayment option if you miss the ICR enrollment deadline.

Income-Sensitive Repayment Plan

The Income-Sensitive Repayment plan is open to low-income FFEL borrowers. Direct loans, which replaced FFEL loans in 2010, are not eligible. On Income-Sensitive Repayment, your monthly payments will increase or decrease based on your annual income. You’ll make payments on your loans for up to 10 years.

SAVE Plan (Saving on a Valuable Education)

The SAVE plan is no longer available, but some SAVE borrowers remain in limbo as they wait to see what’s next for their student loans. Introduced by the Biden administration in 2023, the SAVE plan offered lower monthly payments and faster loan forgiveness than the other income-driven options.

It was struck down by legal challenges from Republican-led states, and SAVE borrowers were placed in an interest-free forbearance starting in the summer of 2024. Interest started accruing again on August 1, 2025, and the DOE is encouraging borrowers to switch to an alternative plan.

However, some SAVE borrowers are waiting it out to extend their forbearance as long as possible. Those who don’t make a move may end up in IBR and see their payments resume in mid-2026. SAVE will be eliminated completely by June 30, 2028.

RAP Plan (new Repayment Assistance Program)

The Trump administration’s “One Big Beautiful Bill” created the RAP program and will implement it starting in the summer of 2026. Existing borrowers will be able to access RAP or IBR, while new borrowers as of July 1, 2026 will only have RAP or the new Standard Repayment Plan.

While the existing IDR plans use discretionary income, the new RAP will base your payments on your adjusted gross income (AGI). Depending on your income, you’ll pay 1% to 10% of your AGI over a term that spans up to 30 years.

If you still owe money after 30 years, the rest will be forgiven. The government will cover unpaid interest from month to month, as well as make sure your loan’s principal goes down by at least $50 each month.

All borrowers are required to pay at least $10 per month on RAP. This plan may offer lower monthly payments than the current IDR options, but you could also pay more interest over the life of the loan due to the longer repayment term.

How Income-Based Student Loan Repayment Works

In general, borrowers qualify for lower monthly loan payments if their total student loan debt at graduation exceeds their annual income.

To figure out if you qualify for a plan, you must apply at StudentAid.gov and submit information to have your income certified. The monthly payment on your income-driven repayment plan will then be calculated. If you qualify, you’ll make your monthly payments to your loan servicer under your new income-based repayment plan.

You’ll generally have to recertify your income and family size every year or allow the DOE to access your tax information and recertify for you. Your calculated income-based payment may change as your income or family size changes.


💡 Quick Tip: When rates are low, refinancing student loans could make a lot of sense. How much could you save? Find out using our student loan refi calculator.

Pros and Cons of Income-Driven Repayment

Pros

•   Borrowers gain more affordable student loan payments.

•   Any remaining student loan balance is forgiven after 20 or 25 years of repayment on the Income-Based Repayment plan.

•   An economic hardship deferment period counts toward the 20 or 25 years.

•   The plans provide forgiveness of any balance after 10 years for borrowers who meet all the qualifications of the Public Service Loan Forgiveness (PSLF) program.

•   The government pays all or part of the accrued interest on some loans in some of the income-driven plans for a period of time.

•   Low-income borrowers may qualify for payments of zero dollars, and payments of zero still count toward loan forgiveness. On the new RAP option, the minimum monthly payment will be $10.

•   The IBR plan and new RAP plan offer some interest benefits if your monthly payments don’t cover your full interest charges.

Cons

•   Stretching payments over a longer period means paying more interest over time.

•   Forgiven amounts of student loans are free from federal taxation through 2025, but usually the IRS treats forgiven balances as taxable income (except for the PSLF program).

•   Borrowers in most income-based repayment plans need to recertify income and family size every year.

•   If a borrower gets married and files taxes jointly, the combined income could increase loan payments.

•   The system can be confusing to navigate, especially with all the legal challenges and recent legislation.

Other Student Loan Repayment Options

If you’re wondering, “Is an income-driven plan good for me?” consider the fact that income-driven repayment plans aren’t your only option for paying back student loans. Here are a few alternatives that are currently available.

Standard Repayment Plan

The Standard Repayment Plan involves fixed monthly payments over 10 years. Starting in the summer of 2026, the new Standard Plan will have fixed payments over a term that’s based on your loan amount. Your term will be 10 years if you owe less than $25,000 and go up to 25 years for balances over $100,000.

Graduated Repayment Plan

The Graduated Repayment Plan spans 10 years for most loans, but it can go from 10 to 30 years for consolidation loans. On Graduated Repayment, your monthly payments start out low and increase every two years. Like the current Standard Plan, you’ll be out of debt at the end of your term. However, you’ll end up paying more interest on this graduated plan. Graduated Repayment may be a good fit for borrowers whose income is low starting out but expect it to increase over time.

Extended Repayment Plan

Extended Repayment gives you 25 years to pay back your loans, but you must owe more than $30,000 and have borrowed after October 7, 1998. You can choose fixed payments or graduated payments. Unlike IBR, there’s no loan forgiveness at the end of the Extended Plan. Your monthly payments will go down when you extend your term, but you’ll pay more interest overall.

How to Qualify for Income-Driven Repayment

You can apply for income-driven repayment on the Federal Student Aid website. The process typically takes about 10 minutes. Here’s more on how to change your student loan repayment plan to an income-driven one.

Required Documentation

When you apply for an IDR plan, you can upload documentation verifying your income or allow the DOE to access your tax information and import it into your application. Along with sharing your income, you’ll need to provide your mailing address, phone number, and email. If you’re married, you’ll also provide your spouse’s financial information.

Annual Recertification Process

Every year, you have to recertify, or update, your income and family size so your loan servicer can adjust your monthly payments accordingly. This recertification is required even if your income or family size hasn’t changed.

If you fail to recertify your plan, your servicer will no longer base your payments on your income. Instead, you’ll pay the amount you would on the standard 10-year plan. If you fail to recertify IBR, you’ll have the added consequence of interest capitalization, meaning your interest charges will be added to the principal balance of your loan.

You can recertify your plan on the Federal Student Aid website by uploading documentation of your income. Alternatively, you can allow the DOE to access your federal tax information and automatically recertify your plan for you.

If you don’t give your consent for this (or aren’t eligible for auto-recertification), you’ll have to manually recertify your plan each year.

The Takeaway

Income-driven repayment can offer relief if you’re struggling to afford your monthly payments. These plans adjust your monthly student loans bills based on your income while giving you a lot more time to pay back your debt. Plus, income-driven plans (and the current Standard Plan) are the only plans that qualify for PSLF. A downside of IDR plans, however, is that you’ll likely pay more interest with an extended term.

Your options for IDR will also be changing due to recent legislation from the Trump administration. Most of the current plans will be shut down, leaving only Income-Based Repayment for current borrowers or the new Repayment Assistance Plan. For those who borrow after July 1, 2026, the only income-driven plan option will be the Repayment Assistance Plan. Staying informed about these changes will help you decide which income-driven repayment plan is best for you.

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.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

Is income-based repayment a good idea?

For borrowers of federal student loans with high monthly payments relative to their income, income-based repayment can be a good idea. Just be aware that your options will be changing in the coming years.

What is the income limit for income-based student loan repayment?

Some income-driven repayment plans require that your monthly payments be less than on the standard 10-year plan. You’ll generally meet this guideline if your student loan debt is higher than your discretionary income or makes up a big portion of your income.

What are the advantages and disadvantages of income-based student loan repayment?

The main advantage is lowering your monthly payments, with the promise of eventual loan forgiveness on the IBR plan if all the rules are followed. Plus, income-driven plans are essentially the only ones that qualify for PSLF. A disadvantage is that you have to wait for 20 or 25 years depending on the plan you’re on and how much you owe. You’ll likely also pay more interest on this longer term.

How does income-based repayment differ from standard repayment?

With the standard repayment plan, your monthly payments are a fixed amount that ensures your student loans will be repaid within 10 years. Under this plan, you’ll generally save money over time because your monthly payments will be higher. With income-driven repayment, your monthly loan payments are based on your income and family size. These plans are designed to make your payments more affordable. If you still owe a balance after 20 or 25 years on IBR, the remaining amount is forgiven.

Who is eligible for income-based repayment plans?

With the PAYE and IBR plans, in order to be eligible, your calculated monthly payments, based on your income and family size, must be less than what you would pay under the standard repayment plan. Under the ICR plan, any borrower with eligible student loans may qualify. Parent PLUS loan borrowers are also eligible for this plan if they consolidate their parent loans first.

How is the monthly payment amount calculated in income-based repayment plans?

With income-based repayment, your monthly payment is calculated using your income and family size. Your payment is based on your discretionary income, which is the difference between your gross income and an income level based on the poverty line. The income level is different depending on the plan. For IBR, your monthly payment is 10% or 15% of your discretionary income, depending on when you borrowed.

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

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.

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

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

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

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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.

SOSLR-Q325-013

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