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Mobile deposits to your account usually take around one or two business days to clear. This can make it a fast and convenient method to get funds into your bank account simply by using an app on your mobile device.

If you are experiencing delays, there could be an easy explanation for why that’s happening. Read on to learn more about how mobile deposits work and how to avoid delays in their clearing.

How Long Does a Mobile Check Take to Deposit?

Mobile deposit involves snapping a photo of a check and depositing it via your financial institution’s app. That means no visit to a bank branch or ATM is required to deposit a check. Once the account holder uploads their check to the mobile app, the funds usually do not become immediately available (as is the case with depositing cash). It typically takes one or possibly two business days for the funds to clear and become available for use.

In some cases, it can take a few days for the bank to verify the check. The amount of the check can impact this timeline, as can the rules and processes each bank has surrounding mobile deposits.

Typical Processing Times by Bank

How long does mobile deposit take? It varies. Here is the processing time for mobile deposit for several banks:

•   Bank of America: For those in Eastern and Central time zones, deposits by 5pm ET on a business day should be available the next business day; for those in Mountain and Pacific time zones, deposits by 8pm PT on a business day should be available by the next business day.

•   Chase Bank: Chase Bank’s cutoff time for processing mobile deposits is 11pm ET on business days, with funds generally available the next business day. Deposits submitted after 11pm ET or on a non-business day are processed the following business day.

•   Citi: For Citi Mobile deposits, the cut-off time is 6pm ET on a business day. Deposits made before this time are typically processed the same day, while those made after 6pm ET or on a non-business day (weekends or holidays) will be processed the next business day.

•   PNC Bank: Deposits made before 10pm ET on a business day are typically available the next business day. There’s also a PNC Express Funds option for immediate access, but it involves a fee of 2.50% of the check amount, with a minimum of $2 each for checks under $100.

•   SoFi: For mobile deposits of checks deposited by 5pm ET, a portion will be available the next business day and the remainder no later than the third business day. For large checks, a portion will be available on the next business day; the remainder will be available no later than the fifth business day.

•   Wells Fargo: For mobile deposit, Wells Fargo has a 9pm PT cutoff time. Deposits made before that should be available on the next day after the deposit; otherwise, expect the day after the deposit credit date or possibly longer.

What Factors Might Cause Mobile Deposit Delays?

As briefly noted, certain factors can slow down the mobile deposit process. Knowing how to avoid these delays with future deposits can help speed up the timeline.

Here are a few factors that can slow down deposits (or stop them all together if not fixed):

Deposit Limits and Bank Policies

Checks for large denominations, whether deposited to checking or savings accounts, often take longer to clear than a check that is for a smaller amount. It can require more time to verify that the check is good. You may find that checks in amounts over $5,000 or $5,500 take more time to become available. Exactly how long it takes for a large check to clear typically varies from bank to bank.

In addition, banks may only accept mobile deposits up to a certain limit per day or month. For instance, some banks cap mobile deposits at $7,500 per month for some types of accounts, while others may have up to $20,000 deposited via app in a given month.

Time of Deposit and Business Days

Your banking app and/or website will likely tell you what the cutoff time is for mobile deposits to be processed. For example, if you are making a mobile deposit at 10:15pm ET on a Monday night and the app says the processing cutoff time is 10pm ET, your deposit probably won’t be available on Tuesday. Rather, it will probably be available on Wednesday, one full business day later.

Recommended: How to Manage Your Money

Check Amount and Source

As noted above, checks in excess of $5,000 can take longer to process than smaller checks. You may also find that international and third-party checks take longer to be verified and be processed than standard domestic checks.

Also, delays may occur if your account is new or not in good standing.

The Takeaway

Mobile deposits typically clear in one or two business days if deposited before a bank’s cutoff time. Every institution is different, so it might be smart to confirm with your bank’s customer service. And by following a couple of quick checkpoints, you can likely avoid any hitches that could cause a delay. Because in today’s impatient world, there’s usually no need to wait very long to get access to your money.

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

FAQ

Are mobile check deposits available immediately?

It usually takes around one or two business days for deposits to go through. Following instructions from the bank carefully and noting deadlines regarding uploads can help you avoid delays.

How long does it take for a mobile deposit to go in?

How long it takes for a check to clear by mobile deposit is usually one or two business days via mobile deposit. However, this can be delayed if the check is for a large amount, is deposited after a bank’s cutoff time, or has issues with the way in which it was submitted.

Why is my mobile deposit taking so long?

Mobile deposit delays can be caused by a variety of factors such as using a blurry photo of the check, entering information incorrectly, or not endorsing the check properly. Double-check all key details before submitting the deposit to speed up the timeline. Also, international and third-party checks usually take longer to clear.

Are there limits to how much money can be deposited using mobile?

Some banks do have limits on how much money can be deposited via mobile in a given time period. In some cases, this will vary with the specific type of account you hold or it might be specific to your own banking profile. For instance, some banks allow for up to between $7,500 and $20,000 in mobile deposits monthly depending on a client’s particulars. Check with your financial institution for details.

What should I do if my mobile deposit doesn’t clear?

Contact your bank’s customer service and ask about the situation. This is why it’s always important to keep the paper check until you are sure it has cleared via mobile deposit. The bank can let you know whether there was an issue (say, with the upload of the image, the signature, or the check’s funding) and recommend next steps.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

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

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
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.

SOBNK-Q225-104

A checking account can be a convenient place to store your cash and manage daily transactions. Among its benefits: You can usually make as many transfers in and out of the account as you like. Also, your funds are likely to be insured.
There are, however, some cons, too. You probably won’t earn much or any interest for parking your money in a checking account, and you may be hit with an array of fees that nibble away at your funds.

Here, take a closer look at checking account pros and cons so you can pick the right financial product to suit your needs.

What Is a Checking Account?

Simply put, a checking account is a safe place to stash funds and enable the flow of money in (what you earn and receive) and out (what you spend).

Whether held at a brick-and-mortar bank, an online bank, or a credit union, a checking account is often the hub of a person’s financial life. Your pay can be seamlessly direct-deposited, if you like.

For your everyday spending, you might schedule automatic payments for your mortgage and utilities, write a check when paying for a doctor’s appointment, and tap your debit card when treating yourself to a wine tasting with friends on the weekend.

Benefits of Checking Accounts

Here’s a closer look at the pros and cons of a checking account, starting with the upsides.

Security

Yes, you could stuff your money under the proverbial mattress, but with a checking account, you have a secure spot for it, where it can’t get lost, stolen, or damaged.

If your bank is insured by the FDIC (Federal Deposit Insurance Corporation) or, in the case of a credit union, the NCUA (National Credit Union Administration), your account will typically be covered up to $250,000 per depositor, per insured institution, for each account ownership category.

Easy Access to Cash

Checking accounts allow you to access your money quickly and easily, whether you need to pay for a meal or something unexpected, like a school donation. Setting up direct deposit allows your paychecks to be transferred directly into your checking or savings account, with some banks offering access to cash up to two days early.

You can then tap your funds by using your checking account’s debit card, writing checks, snagging some cash from the ATM, or making a transfer.

Pay Bills Conveniently

Here’s another benefit of a checking account: Having a checking account means you can get your bills taken care of without much effort. You might set up recurring payments to a car loan, for instance, or use a digital payment app to send money to your roommate, a friend, or your yoga teacher. You can also typically move funds quickly via wire transfer, which can be especially useful for international transactions, and other methods as well.

Debit Card for Purchases

When you open a checking account, you’re usually provided with a debit card that’s linked to the account. Similar to a credit card, you can typically use your debit card to pay in person or online for anything from this week’s groceries to a cool new pair of shades to a matcha latte.

Unlike a credit card, however, debit cards pull funds directly from your checking account. They usually only let you dip into funds you actually have on deposit, which can help you keep spending in check and stay on budget, not to mention avoid credit card debt.

Rewards

Some checking accounts come with rewards that can be a nice perk. For example, when you open an account, you might get a sign-up bonus. Who doesn’t like free money? Or your debit card may carry rewards, similar to those of a credit card, such as cash back.

Direct Deposit Benefits

Direct deposit can be a seamless way to get paid; in fact, more than 95% of Americans get paid this way, according to National Payroll Week. Direct deposit sends cash, ready to spend, straight into your bank account, so you don’t have to deal with depositing a check or cash.

FDIC Insurance Protection

As noted above, most financial institutions (but not all) are insured by either the FDIC or NCUA. In the very rare event of a bank failure, you would be protected from loss up to those limits of $250,000 per depositor, per account ownership category, per insured institution. Note: Some institutions offer programs that provide even more than $250,000 in insurance.

Cons of Checking Accounts

As you might guess, there are advantages and disadvantages to checking accounts, as is the case with most financial products. Checking accounts are designed to serve customers’ everyday, short-term money needs and can have a few potential downsides to consider.

Low or No Interest Earned

While your money is sitting in your checking account, it is probably earning very low, if any, interest. For instance, as of June 2025, the average interest checking account rate was a meager 0.07% of one percent, according to the FDIC. Translated into dollars and cents, that means that if you kept $5,000 in your checking account for a year, you would only earn $3.50 in simple interest.

That said, there are high-yield and premium checking accounts available that pay heftier interest rates. These may come with minimum deposit and balance requirements. Online-only banks frequently offer these accounts without those barriers, however, and with interest rates that are several times higher than the national average.

Potential Overdraft and Other Fees

Sooner or later, many people will try to transfer more money out of their checking account than they actually have on deposit. It could be a simple math error, or they might have forgotten about that on-the-fly payment they made to contribute to, say, a friend’s baby shower gift.

Not having enough money in your checking account can lead to overdraft fees. The average charge currently stands at a steep $25 to $35, with an average (as of 2024) of $27.08. Also, even if you have overdraft protection — meaning you have linked accounts so that money can be pulled from savings into checking to cover payments, if needed — you may still be charged a fee. However, it’s likely to be lower than an overdraft charge.

Also, check the fine print when signing up for a new checking account: There can be other fees, such as account maintenance and out-of-network ATM fees (more on those below).

Security Risks

While banks are extremely safe overall, there is always a small possibility of a security risk (such as a hack). Losing or having your debit card stolen and used without your authorization is another concern— and it can be a common one. A card thief could potentially gain access to the funds in your checking account.

It’s vital to report the issue within two days of noticing the card is missing so that you’ll be liable for no more than $50 in unauthorized usage. Otherwise, you could be liable up to $500 or more depending on the circumstances.

Minimum Balance Requirements

Some checking accounts require the account holder to maintain a certain balance to avoid monthly account fees. Or they might want account holders to keep a certain sum on deposit in order to earn a premium interest rate. Depending on the institution, this minimum deposit could be several hundred or more than a thousand dollars. If your balance dips below this amount, you could be hit with fees and/or lose your interest rate.

Recommended: Ways to Manage Your Money

When a Checking Account Makes Sense

Quite simply, checking accounts make sense for the vast majority of Americans. It typically serves as the hub of one’s daily financial life.

Some people, though, are unbanked, meaning they have not (or are not able) to access the usual banking services. If you are seeking a checking account and haven’t been able to secure one, you can try a few other options:

•   It might be easier to get an account at a credit union, if you qualify for one based on where you live, your profession, or other factors.

•   Your banking history may reveal some issues, such as multiple overdrafts, as tracked by ChexSystems (a kind of reporting agency for the banking industry). In this situation, you might qualify for a second-chance account. This kind of account may have higher fees and/or minimum balance requirements, but it can be a good way to show that you can handle an account responsibly. In some cases, a second-chance account can be a stepping stone to a standard checking account.

When Other Accounts May Be Better

There are some situations in which another kind of account could be better than a checking account. A few scenarios to consider:

•   If you are hoping to park your money for a while and earn interest vs. spend it, a savings account can be a good bet. Some savings accounts have limits on how many transactions can occur per month (check the fine print). Whether or not that applies, you will likely earn a higher interest rate than you would with a checking account. For instance, the current average interest rate for a savings account is 0.38% vs. 0.07% for checking.

•   For those who want their money to earn still more money, a high-yield savings account can offer still more earning potential. At the time of publication, some online-only banks were offering rates in the range of 4.5%.

•   A CD (or certificate of deposit) can be another way to earn a higher return on money you keep in a bank. However, these don’t offer the accessibility of a checking account. You agree to keep your funds on deposit in return for the bank guaranteeing a certain interest rate and are usually penalized if you withdraw funds before the end of your time.

•   For those who want spending power without a checking account, prepaid debit cards can deliver. You load funds onto them and can then spend or pay bills with them. They are typically backed by a major network, like Visa or Mastercard.

•   One other option is to use digital payment services, such as Venmo and PayPal. These can allow you to move funds to shop and otherwise spend without a bank account.

Checking Account Features To Consider

If you are looking for a checking account, you may want to focus on these three considerations:

ATM Access and Fees

Since accessibility is a key selling point of checking accounts, you likely want your money to be within easy and affordable reach. Check out a financial institution’s network of ATMs and make sure they are near your usual haunts.

Also see what the charges are for using an out-of-network bank: Certain banks (especially online-only ones) may waive those usual out-of-network fees that can ding you; these currently average $4.77 a pop.

Online/Mobile Banking

Today, it’s par for the course for financial institutions to provide online banking features and mobile banking apps, but some provide more robust, user-friendly digital services and offer them for free.

As you consider your options, you might look for a bank that helps you save automatically. A round-up function that nudges purchases up to the next whole dollar amount and adds the extra money to your savings can be valuable.

Also helpful are dashboards that allow you to see your money (earnings, spending, and savings) and credit score at a glance, for no extra charge. This feature can help you budget better.

Overdraft Protection

As mentioned above, many people have those “oops” moments and overdraw their accounts. Some banks will give you free overdraft protection up to a certain sum. For instance, they might cover up to $50 of your overdraft without charging you the standard fees. This can be a valuable feature when you are deciding which financial partner is right for you.

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Get access to higher APY, credit card cash back rewards, discounts, and more.

Account Maintenance Fees

As noted above, some banks will charge monthly account maintenance fees for holding a checking account at their institution. It can be one of the ways that banks make money. These fees can range from, say, $5 to $12 a month or more, which can take a bite out of your budget.

You may find that some banks, especially online ones, offer no-fee checking accounts. Or a financial institution may waive fees if you keep a certain amount on deposit across your accounts or if you meet other requirements.

Customer Service and Support

Another factor to consider is the kind and quality of customer service and support a financial institution offers. Some people may gravitate toward online banks which typically have 24/7 online support by phone or text chat. Others may prefer banking with a traditional bank where they can meet in-person with team members. Consider what’s important to you to make the best decision for your news.

The Takeaway

For many people, a checking account can be a reliable hub for their personal finance needs. You can store your earnings securely and still easily access your money to pay bills and fund daily purchases.

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

FAQ

Are checking accounts free?

Some are. You can often find free checking accounts from traditional and online-only banks as well as credit unions. While these accounts may be billed as “free,” keep in mind that some fees may apply, say, if you overdraft your account.

What happens if my checking is overdrawn?

If your checking account is overdrawn, that means you have tried to withdraw more money than you have in your account. This can lead to payments not being processed (a check bouncing, for example) and charges piling up. By linking a checking and savings account, you may be able to have funds automatically transferred from savings into checking to cover the shortfall. Your bank may charge you a fee, whether they cover the shortfall through overdraft protection or not.

Can I have multiple checking accounts?

There is usually no limit on how many checking accounts you can have. It can be convenient to have one for, say, your salary and your living expenses and another for a side hustle and related expenses.

Are checking accounts FDIC insured?

Most but not all checking accounts are FDIC-insured. You can look for this feature before opening an account. With FDIC insurance, you are covered for up to $250,000 per depositor, per account ownership category, per insured institution in the very rare event of a bank failure. Some banks have programs that offer even higher amounts of insurance.

Do checking accounts offer fraud protection?

Most banks will refund you if your account is hacked or your debit card is used without permission, provided you report it in a timely fashion. Check with your financial institution about their policies, but note that if you willingly sent money to an individual or business that turned out to be a scam, refunds are less likely.

Photo credit: iStock/SDI Productions

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

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

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
^Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.


¹SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at SoFi.com/banking/fdic/sidpterms. See list of participating banks at SoFi.com/banking/fdic/participatingbanks.

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.

SOBNK-Q225-103

A hospitalization or medical treatment can carry a price tag that packs a serious punch, with Americans owing an estimated $220 billion in healthcare debt.

If you’re among those unable to pay medical bills, insult can get added to injury in the form of damage to your credit score. That’s because once a medical bill becomes delinquent, many hospitals and individual medical providers will send it to collections.

Even though unpaid medical bills might affect your credit report, there are steps to take to potentially lessen the impact.

Do Medical Bills Hurt Your Credit?

Unpaid doctor or hospital bills typically don’t automatically hurt your credit score. Because most health care providers do not report to the credit bureaus, medical debt would have to get sent to collections in order to eventually appear on your credit report and have a potential effect on your credit score. The point at which medical providers will sell the debt to a collection agency is after it’s 60 to 120 days past due, depending on the provider.

The Consumer Financial Protection Bureau (CFPB) has been working to lessen the impact of medical debt on credit. As things currently stand, the three credit bureaus — Experian®, Equifax®, and TransUnion® — have set a one-year waiting period from the date of service until the medical debt is included on a consumer’s credit report. This is intended to make sure there’s enough time to solve any disputes with insurers and allow for delays in payment.

The three major credit bureaus also no longer include unpaid medical bills in collections on a person’s credit report if the amount owed is less than $500. And in even better news, medical debt that was in collections but is now paid off isn’t included on credit report (usually, collections accounts take seven years to drop off a report).

On top of all that, some scoring models don’t weigh medical debt as heavily as they do other types of debt when calculating credit scores. In fact, some models may exclude unpaid medical debt entirely. So while medical bills can affect your credit, the effect might not be as drastic as other types of unpaid debt.

As of mid-2025, the courts were weighing whether other guidelines about medical debt and credit would be enacted. It can be wise to research whether new rules have gone into effect if you are dealing with this kind of debt.

Can Medical Bills Be Removed From My Credit Report?

Unlike other types of debt, medical collections debt will no longer appear on your credit report once it is paid. Unpaid medical debt, however, can appear on your credit report for up to seven years if it remains unpaid. Fortunately, as time goes by, the account in collections counts less toward your credit scores.

If your bill was sent to collections by mistake, you may be able to have it removed by proving the error. Collect as much evidence as you can to make your case, such as credit card or checking account statements. You also might ask for payment records from your medical provider’s billing office.

You can file a dispute with the credit bureau that’s reporting the error. The credit bureau will then investigate and respond to you within 30 days. You may also receive email updates from the credit bureau regarding the status of your dispute.

Does Paying Off Medical Collections Improve Credit?

If you pay off medical collections debt, it will get removed from your credit report, which will have a positive impact on your credit score, and potentially a significant one. This is a recent change — previously, paid medical collections debt remained on credit reports for up to seven years.

One option to explore if you’re seeking to pay off your medical collections debt and thus get it removed from your credit report is to get your health insurance company to pay the debt. If you have reason to believe your insurance company should have paid a medical bill, ask your insurer to reconsider your insurance claims.

What to Do if You Can’t Pay Your Medical Bills

If the balance on your medical bill is your financial responsibility, but you’re unable to pay it, there may be ways to relieve your medical debt. Here are some options to consider:

•   Ask the medical provider to set up a payment plan. Discuss this option with your medical provider to find a plan that is manageable with your monthly budget.

•   Review your explanation of benefits the insurance company provides. Look out for billing errors or consider negotiating some of the medical charges, both of which could lower the total amount due.

•   Consider getting a temporary part-time job. This may help bring in extra income that you can put toward the medical debt.

•   Get assistance from a patient advocate. This might be an option worth considering if you can’t get the provider to budge on the payment.

•   Apply for a personal loan. Medical debt is one of the common uses for personal loans. If you can secure a personal loan that has a lower interest rate than credit cards, this may offer another option for payment.

   You may see these loans called medical loans. And note that your personal loan approval and the interest rate you’re offered on the loan will depend on your credit record and other factors.

Recommended: How to Get Approved for a Personal Loan

Being Proactive About Medical Bills

Just because you made your copay at the doctor’s office doesn’t necessarily mean the bill is settled. Additionally, the fact that the provider has billed your health insurance company doesn’t automatically mean the amount will be accurate or even paid.

•   If you haven’t received a statement from your medical provider’s billing office within a few weeks of your appointment or hospital stay, it might be a good idea to call for a billing update. Catching errors early in the billing process can help keep medical bills off your credit report and in turn, prevent medical bills from affecting your credit score.

•   If you know ahead of time that you won’t be able to pay the entire amount owed, contacting the provider’s billing office and trying to negotiate a payment plan may be a good first step. If you can come to an agreement, it’s a good idea to get it in writing. If you can’t reach an agreement, start exploring other options, making sure to weigh the pros and cons and crunch the numbers, such as with a personal loan calculator.

•   Should a collection agency employee contact you about a bill that you think has been paid or should have been paid by insurance, stay calm. Ask if you can call back with information that shows there’s no open balance.

The Takeaway

If you have unpaid medical bills on your credit report, focusing on getting them paid has the potential to make a real difference in your financial future. Staying on top of medical bills can mean extra vigilance, but the effort is worth it to keep medical debt from affecting your credit. You might work out a payment plan or take out a personal loan when medical debt is too high to pay out of pocket.

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

FAQ

Can medical debt ruin your credit?

Yes, medical bills can negatively impact your credit if they are turned over to collections, but there are recent changes to how they’re reported. While unpaid medical bills can be sent to collections and potentially affect your credit score, once paid, they come off your report. Also, the three major credit bureaus no longer include medical debt under $500 on credit reports.

Do medical bills fall off after 7 years?

Unpaid debts that are in collection typically stay on your credit report for seven years. However, if you pay medical debt that’s gone to collection, it is treated differently. It comes off your credit report.

Can you ignore medical debt?

It’s not wise to ignore medical debt or any debt, for that matter. Unpaid debt can accrue interest and penalties and can be put into collection, which can harm your credit score. It can be a good idea to talk to your medical provider about negotiating your bill or setting up a payment plan if you cannot pay your debt. Or you might consider a personal loan.

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SOPL-Q225-106

An employee’s student loan repayment benefit from their employer is not taxed as income now through the end of 2025. Thanks to the CARES Act of 2020, employees are able to take advantage of up to $5,250 in tax-free student loan payment contributions from their employer. The Consolidated Appropriations Act, which was signed into law in December 2020, extended this tax break until December 31, 2025.

For employees lucky enough to work for a company that offers a student loan repayment program, the benefits of this perk are clear: Employees get “free money” from their employers to help pay down their student loans.

Employer Student Loan Repayment Benefit and Taxes

Under employer student loan repayment programs, employers help employees pay back their student loans in amounts that vary from company to company. This monetary assistance can be a great help to individuals struggling with student loan debt — and may even ultimately have an impact on the economy. However, prior to 2020, employer contributions were subject to both payroll and income tax, which means that for employees, the benefit wasn’t quite as big as it might first appear.

That changed in early 2020, when the Coronavirus Aid, Relief, and Economic Security (CARES) Act expanded on this financial assistance by making all employer-match contributions up to $5,250 tax-free, exempt from both payroll and income tax.

While the measure implemented in the CARES Act was due to expire in January 2021, the Consolidated Appropriations Act signed by President Donald Trump in December 2020, extended that tax-free benefit for another 5 years, with a new expiration of December 31, 2025.

Understanding Employer Match of Student Loan Repayment

What is an employer student loan repayment program? It’s a way for companies to help alleviate their employees’ student loan debt burden by offering them a match (up to $5,250, tax-free) on payments they make toward their student loans every year. Employers make a regular contribution to an employee’s student loan balance, say $100 a month for example, while the employee continues to make regular payments.

In this way, employees can pay down more of their student loan balance and/or interest. Prior to the CARES Act, an employer’s student loan contributions were considered taxable income, but now through the end of 2025, they will be tax-free and fall under the same maximum (up to $5,250), as tuition reimbursement benefits from an employer.

There are a number of services available to companies who are looking to manage this kind of benefit. Just like the companies designed to help HR departments manage other benefits like health care, financial institutions can help assist with student loan repayment plans.

Recommended: Defaulting on Student Loans

Companies with Student Loan Repayment Benefits

The number of companies offering employer student loan repayment programs has doubled since 2021 from 17% to 34% in 2023. To get a sense of what kinds of programs different employers offer, here are several examples of companies who have this incentive in place:

•   In 2019, Chegg, the education technology company best known for online textbook rentals, offers its entry level and manager level employees $5,000 annually toward student loan debt. Higher-level employees receive up to $3,000.

•   Estée Lauder, the cosmetics company, launched their student loan benefit program in 2018 by offering $100 monthly for payback, with a cap of $10,000 total.

•   In 2017, Fidelity, the brokerage firm, offers up to $15,000 in student loan repayment for its full-time employees, and up to $7,500 for part-time employees.

•   Also in 2017, Live Nation, entertainment and events, began contributing $100 monthly to student loans, maxing out at $6,000 in repayment.

•   Penguin Random House, the book publisher, reimburses up to $1,200 yearly (capped at $9,000) for student loans to full-time employees who have been with the company at least one year.

•   PwC, in the financial services industry, offers $1,200 annually and up to $10,000 total for student loan payments.

•   SoFi offers one of the more unique employer student loan repayment programs on the market, offering $200 a month in reimbursement with no cap.

Implementing a student loan repayment program with a matching contribution will depend on a company’s size and resources.

But this kind of incentive can appeal to potential new employees. Most companies do not require employees who leave the organization to repay the benefit. Paid out monthly, it can help with the most burdensome student loan payments, which some employees might find more valuable than, say, a year-end bonus.

So that employees can make the most of student loan repayment benefits and pay down loans in the most efficient way possible, it’s always a good idea for them to evaluate their current payment plan. For some individuals with federal student loans, switching to an income-driven repayment plan or consolidating their loans could make monthly loan payments more manageable.

For individuals with both private and federal student loans, it might make sense to consider refinancing your student loans through a private lender, such as SoFi. Refinancing combines multiple student loans — federal or private — into a single loan with one monthly payment. It can potentially lower your interest rate or give you access to more favorable loan terms.

That said, refinancing with a private lender means forfeiting access to federal loan benefits like income-driven repayment plans, deferment, and public service loan forgiveness. Nonetheless, if your credit score and earnings have improved since graduating from college, refinancing might be a way to pay less in interest with a lower interest rate and a shorter repayment term.

Save on Student Debt while Saving for Retirement

Helping employees pay down student loan debt, while also still saving for retirement, is a benefit that could really increase the appeal of an employer loan repayment program.

In 2018, the IRS cleared a path for employers to create a different kind of student loan payoff program that could help attract employees. The program was created by Abbott Laboratories, but companies of all sizes could use a similar approach.

The IRS allowed Abbott to help its employees save for retirement and pay down student debt with a program that allows employees who use at least 2% of their eligible salary to pay down a qualifying student loan to get a 5% contribution from Abbott annually into their 401(k).

Abbott’s program might inspire more employers to implement similar programs, where the company can make a tax-free contribution to the employee’s 401(k) on the condition the employee makes student loan payments.

The Takeaway

With the Consolidated Appropriations Act, which gave an extension of the rules set forth in the CARES Act, employer student loan repayment contributions up to $5,250 are payroll-tax and income-tax free until December 31, 2025. For individuals whose company offers such a benefit, this makes it more useful than ever before in paying down student loan debt.

Just like a 401(k) retirement match, a company that offers a student loan repayment program is basically offering you extra money. For many employees, even an extra $100 a month could be enough to help them get out of debt faster and feel more confident about their financial security.

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.

FAQ

Is the student loan repayment benefit taxable?

The employer student loan repayment benefit is not taxable through the end of December 2025. That means employees may get up to $5,250 in tax-free student loan contributions from their employer — if their employer offers the benefit — until December 31, 2025.

Is a loan repayment taxable income?

A student loan repayment benefit offered by an employer is not taxed as income through December 31, 2025, thanks to the Consolidated Appropriations Act, which was signed into law in 2020.

What is the student loan repayment benefit for employees?

The student loan repayment benefit for employees is offered by some companies to help their employees pay back their student loans. The amount an employer contributes differs from company to company. Employer contributions up to $5,250 are payroll-tax and income-tax free until December 31, 2025.

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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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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.