Home Loan vs. Mortgage: Key Differences

You’ll likely hear the terms home loan and mortgage used interchangeably, but the phrase “home loan” is an umbrella term that covers a variety of mortgages, home refinances, and home equity loans.

It’s helpful to understand the difference between a typical mortgage, used to buy a home, and the larger universe of home loans, which are sometimes used to tap the equity you’ve gained.

Key Points

•   A mortgage is a specific type of home loan used to purchase a home.

•   Mortgage types include conventional, jumbo, FHA, USDA, and VA loans, each with unique features.

•   There are other types of home loans, including home equity loans and cash-out refinances.

•   Both mortgages and other types of home loans are secured by the home.

•   Mortgages are for purchasing a home, but some mortgages allow borrowers to also obtain funds to make essential renovations.

What Is a Mortgage?

Let’s get this straight: Mortgages are home loans, used when buying a home or other real estate. When you take out a mortgage, your lender is loaning you the money you need to purchase a home in exchange for charging you interest. You’ll repay the loan and interest in monthly installments.

Mortgages are secured loans, meaning the property is used as collateral. If you fail to make mortgage payments, your lender can foreclose on the home to recoup its money.

In order to take out a mortgage, you’ll typically need to make a down payment equal to a percentage of the purchase price. Your down payment is the portion of the cost of the home that you aren’t financing and provides immediate equity in the property.

Buyers may put down 20% on conventional mortgages to avoid private mortgage insurance (PMI), but many buyers put down much less. In fact, the median down payment for all homebuyers was 18% in 2024, according to a National Association of Realtors® report. A mortgage calculator can help you determine what effect the size of your down payment will have on your monthly payments.

When shopping for a home, you can seek mortgage preapproval. After investigating your financial history, your lender will provide you with a letter stating how much money you can likely borrow and at what mortgage rate.

Types of Mortgages

There are several types of mortgages available. Mortgage insurance, in the form of PMI or mortgage insurance premiums (MIP), may be part of the deal. It’s good to understand PMI vs MIP.

•   Conventional mortgages are funded by private lenders like banks and credit unions. They are not backed by a government agency. You’ll typically need to pay PMI if you don’t make a 20% down payment; mortgage insurance is canceled when 22% equity is reached. Conventional conforming loans adhere to lending limits set each year by the Federal Housing Finance Agency.

•   Jumbo loans are mortgages that exceed the lending limits set for conventional loans. So a jumbo loan is a “nonconforming” loan. Conventional lenders issue jumbo loans, and the U.S. Department of Veterans Affairs guarantees a VA jumbo loan, possibly with no down payment.

•   FHA loans are made by private lenders and guaranteed by the Federal Housing Administration. You may qualify to make a down payment of as little as 3.5%. Upfront and annual MIPs are required, usually for the life of the loan.

•   USDA loans are backed by the U.S. Department of Agriculture and help low- to moderate-income households buy property in designated rural and suburban areas. No down payment is required. An upfront and annual guarantee fee are required. (Note: SoFi does not offer USDA loans at this time, but we do offer FHA and VA loans.)

•   VA loans are designed for active-duty and veteran military service members and some surviving spouses. VA loans don’t require a minimum down payment in most cases. There’s no MIP; there is a one-time funding fee.

What Is a Home Loan?

If a friend tells you they have a home loan, there’s a very good chance they are talking about the mortgage they used to purchase their home. But there is also a chance that they are referring to a home equity loan. As you ponder what is a mortgage vs. a home loan, it helps to get to know the home loans that aren’t purchase mortgages.

Types of Home Loans

A home equity loan is technically a second mortgage — assuming a homeowner is still paying their first mortgage. Home equity loans allow homeowners to borrow against the portion of their home they own outright. As with typical mortgages, home equity loans are secured using the home as collateral. But if an owner falls into foreclosure, in the home loan vs mortgage loan equation, the mortgage lender would be paid from the proceeds of the sale before the home equity loan lender.

The amount you’re able to borrow will be determined by a few factors, including your credit history and how much equity you’ve built — in other words, the current value of your house less any outstanding debt. The borrower may pay closing costs based on the loan amount.

It’s common for lenders to allow you to borrow up to 80%-85% of the equity you’ve established. The loan arrives in a lump sum. You repay the home equity loan with interest over a set period of time. If you miss payments, your lender can foreclose on the house.

A home equity loan is not to be confused with a home equity line of credit, or HELOC. A HELOC is also a second mortgage; your home equity is collateral. But it functions somewhat like a credit card. Rather than receiving a lump sum, you have a revolving line of credit and can borrow and repay the debt repeatedly as needed during a given time period — typically a decade.)

Another form of home loan is a cash-out refinance. In this case, a homeowner takes out a new loan to pay off their old one, but they also borrow a lump sum at the same time. What they can borrow is based on — you guessed it — their home equity.

Similarities Between a Home Equity Loan and a Mortgage

When you apply for a mortgage as part of the home-buying process, or when you seek a home equity loan as a homeowner, lenders will look into your financial history to help them establish terms and the interest rate for the loan. For example, they will examine your credit reports, often awarding more favorable terms and interest rates to those with higher scores. Mortgages and home equity loans are both secured loans. Both types of loan also usually involve an appraisal of the property that will secure the loan.

Differences Between a Home Equity Loan and a Mortgage

A mortgage must be used to purchase a specific property — or in some cases to purchase the property and make necessary renovations. There are fewer limitations on the money received from a home equity loan. Some borrowers use funds from a home equity loan or cash-out refi for renovations. Others use the money to pay off higher interest debt or send a child to college.

Mortgage interest can often be deducted if homeowners itemize their deductions. However, you can only deduct interest on a home equity loan if you use the loan to buy, build, or substantially improve your main or second home. So if you want to buy a boat, that deduction won’t hold water. Consult a tax advisor before you count on any type of deduction.

When You Should Consider a Mortgage

If you don’t have the cash to buy a home outright, you will have to finance the purchase with a mortgage. However, there are some considerations you may want to take into account. For example, the larger your down payment, the more equity you will have in your home and the smaller your monthly mortgage payments will be.

Because you have more equity in the home, the lender will see you as less risky. As a result, larger down payments also tend to translate into lower interest rates. So, consider putting down as much as you can afford to.

Also, even if you have the cash to pay for a home in full, you may consider a mortgage anyway. You may not want to tie up cash that could be used for other purposes, such as in an emergency. You may be able to invest that money and earn a return that’s higher than the interest rate you’d pay on the loan.

When You Should Consider a Home Loan

Many people choose to take out home equity loans to make home improvements. That can increase the value of your home, putting you ahead if you ever choose to sell.

You may also consider a home equity loan when consolidating other debt, including high-interest credit card debt. The average interest rate for a home equity loan remains significantly lower than the average credit card rate. As a result, it can make financial sense to pay off the more expensive debt with a new, cheaper loan.

There are times when a HELOC is preferable to a home loan: If you need funds but don’t need a huge sum all at once, or if you aren’t sure exactly how much you might need, you can borrow in increments with a HELOC and only pay interest on the portion of the credit line that you are actively using.

The Takeaway

A mortgage is one type of home loan, but it’s not the only type. There are other ways to borrow money using a home as collateral. A mortgage gets you into a new home, but a home equity loan or HELOC could help you fund a new kitchen or cover another big expense. Whether you’re looking for a mortgage, another type of loan, or a refinance, it’s always a good idea to compare rates and terms.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Why is a home loan called a mortgage?

“Mortgage” comes from the old French mort gage, meaning a death pledge — a morbid origin for the pledge you make to a lender to pay back the money you borrow.

Is a mortgage cheaper than a home loan?

Mortgages are a type of home loan. Your interest rate will depend on the type and size of your loan, your down payment, and your financial history, such as your credit score.

Can I use a home loan for reasons other than buying a home?

There are some circumstances when a home loan can be used for a reason other than making a purchase. Certain mortgages allow you to buy a home and make renovations to the property. And if you borrow based on your home equity — via a home equity loan, home equity line of credit, or cash-out refinance — you can use the funds for whatever purpose you wish.

Do home loans have lower interest rates than mortgages?

A mortgage is a type of home loan, but there are also other loans, such as home equity loans, that allow you to borrow against the equity you have built up in your home and that use your home as collateral. These loans often have a lower interest rate than an unsecured loan, such as a personal loan, but they typically still have a higher interest rate than a purchase loan. Exactly how rates compare will depend on how much you borrow, your credit score, and other factors.

Are there tax benefits for home loans vs. mortgages?

The potential tax benefits of a mortgage or other type of home loan such as a home equity loan are essentially the same. In 2025, the mortgage interest deduction allows taxpayers who itemize to count interest they pay on a loan related to building, purchasing, or improving a primary home against their taxable income, lowering the taxes they owe. The tax deduction also applies to mortgage interest paid on a residence. Consult a tax advisor to learn how this deduction might apply in your specific situation.

Can I refinance a home loan into a mortgage or vice versa?

A mortgage is a type of home loan, so homeowners who refinance a mortgage typically emerge from the process with a new mortgage. Those who undertake a cash-out refinance get a new mortgage that pays off their first loan and leaves them with a lump sum of cash to use as they wish, such as on a renovation project.


Photo credit: iStock/Brandon Ruckman

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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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.


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

¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.
You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.
In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.


Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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Guide to Paying for Certified Registered Nurse Anesthetist (CRNA) School

Guide to Paying for Certified Registered Nurse Anesthetist (CRNA) School

Certified registered nurse anesthetists (CRNAs) are nurses with graduate-level education who provide anesthetics to patients in surgical and other procedures.

Currently, nurse anesthetists must have a registered nurse (RN) license and a master’s degree from a nurse anesthesia educational program accredited by the Council on Accreditation (COA) of Nurse Anesthesia Educational Programs or a Master of Science in Nursing (MSN) program. Nurse anesthesia programs typically range in length from 24 to 51 months. By 2025, all CRNAs must have a Doctorate in Nurse Anesthesia Practice (DNAP), according to the COA. It typically takes two years for a student with an MSN to earn a doctorate.

Continue reading for a look at nine tips that can help you learn how to pay for CRNA school.

Key Points

•   Certified Registered Nurse Anesthetists (CRNAs) require advanced education, typically a master’s degree from an accredited program, with a shift towards requiring a Doctorate in Nurse Anesthesia Practice (DNAP) by 2025.

•   CRNA school costs vary significantly, with tuition and fees ranging from around $45,000 to over $138,666 depending on the institution.

•   Funding options for CRNA school include federal student loans, grants, scholarships, and private loans, with potential employer sponsorship for tuition reimbursement.

•   Financial strategies for managing CRNA school expenses include choosing less expensive schools, saving money in advance, and utilizing federal financial aid through FAFSA.

•   Additional funding sources like grants and scholarships specifically for nurse anesthesia students are available through professional associations like the American Association of Nurse Anesthetists (AANA).

How Much Does CRNA School Cost?

You may have already spent a few years paying for nursing school to get your registered nursing degree, but how much does it cost to further your education to become a nurse anesthetist?

The total cost of CRNA school (including tuition, clinical fees and other expenses) can vary widely, depending on whether you choose to attend an out-of-state institution, a private college, or an in-state university.

For example, the 2021-2022 tuition and fees at Loma Linda University in Loma Linda, California, are an estimated $138,666. In contrast, tuition and fees are approximately $45,000 for Arkansas State University’s. Note that there may be additional costs associated with a CRNA degree, such as books, supplies, or exam fees.

Note that the average nursing school cost can vary widely, ranging from $6,000 for an associate degree to over $100,000 for an advanced degree.

9 Tips to Help You Pay for CRNA School

Let’s take a look at nine tips you can use to pay for CRNA school, from choosing a less expensive school to answering the question, “Will financial aid pay for CRNA school?”

1. Choose a Less Expensive School

You can save money by choosing a less expensive school and/or by making sure that you have residency in the state of the university you want to attend. For example, the total cost of attending Georgetown University’s DNAP program for the first year is $140,693, $86,361 for the second year and $75,884 for the third year.

The cost to attend the University of Iowa is $85,553 if you’re an in-state resident or $159,206 if you’re an out-of-state resident.

It’s important to compare and contrast the costs of several programs before you decide which school will both meet your needs and help you save money.

2. Save Money

You may also want to consider saving money for college to limit the amount of money you’ll have to borrow for CRNA education. Knowing the costs of the schools on your shortlist can help you earmark a certain amount of money to set aside. However, remember that you may receive scholarships and grants that you don’t have to pay back. You might not need to save for the complete costs of a nurse anesthetist program. One way to understand your exact costs is to meet with the financial aid office of the schools you’re considering. They’ll give you an idea of the type of institutional financial aid you could qualify for.

There are a wide variety of ways to save, including through a general savings account, certificate of deposit (CD) or a 529 plan, which is a state tax-advantaged plan that will allow you to withdraw funds tax-free to cover nearly any type of college expense. 529 plans may also have additional state or federal tax benefits.

3. FAFSA and Financial Aid

The Free Application for Federal Student Aid (FAFSA®) refers to a form you can complete to determine your eligibility for student financial aid. Learn more about the FAFSA with SoFi’s comprehensive FAFSA guide.

You can qualify for federal student aid, including grants and federal student loans, through the FAFSA. You may also have to file the FAFSA in order to qualify for institutional scholarships.

4. Work More

If you’re already working as a nurse, you may want to consider picking up some more hours in order or prepare to save for your CRNA degree. It’s important to note that since nurse anesthesia programs are so labor intensive, most students find it difficult to work while attending CRNA school. However, you can certainly save up as much as possible prior to entering school in order to save as much as possible. If you must work, you may want to strictly limit your hours, but that’s a personal decision.

5. Getting an Employer to Pay for Your Education

Will a hospital pay for CRNA school?

Hospitals and groups often offer tuition reimbursement to offset loan debt. However, you may have to sign a tuition reimbursement payback agreement, which means you may have to pay back your reimbursement if you leave the company within a specific amount of time.

Ask your human resources office and read the fine print if your hospital has an agreement to see if you need to repay tuition if you get laid off or fired.

6. Grants

Grants are “free money” that you typically don’t generally have to pay back. The American Association of Nurse Anesthetists (AANA) offers nurse anesthesia grants to develop research for member CRNAs to develop healthcare policy, the science of anesthesia, education, practice/clinical or leadership opportunities. The Foundation will reimburse up to 15% indirect costs with proper documentation.

The AANA grants listed above are research grants, but you may be able to tackle state grants, school grants for graduate students and other types of grants by filing the FAFSA. The best way to learn more is to ask more questions through the financial aid offices of the schools you’re considering.

7. Scholarships

Like grants, you also do not have to pay back scholarships.

The AANA also offers scholarships. Students who are AANA members and currently enrolled in an accredited nurse anesthesia program may be eligible for scholarships as long as you’re in good standing in your program, meet the application requirements, and apply online.

In addition, the university you plan to attend may also offer merit-based scholarships. Contact your school’s financial aid office to see what they offer and how to apply.

8. Private Student Loans

Private student loans originate with a bank, credit union, or online lender, not the federal government like in the case of federal student loans. Private student loans can fill in the gaps between tuition as well as your savings, grants, scholarships, and federal student loans.

It’s a good idea to explore the interest rates, fees, repayment terms, discharge, and repayment options among private student loan lenders.

The application process usually involves submitting information about your personal information, school you plan to attend, graduation date, and loan amount you need. You must also agree to the lender’s terms and conditions.

It’s important to note that private student loans don’t offer the same borrower protections, like income-driven repayment plans, as federal student loans, so they are typically considered an option only after they have thoroughly reviewed all other financing opportunities.

Recommended: Private Student Loan Guide

9. Direct PLUS Loans

Similar to student loans for undergrads, you can also get student loans for graduate school. You do have to repay loans.

As a graduate student, you can become eligible for federal loans that come from the U.S. Department of Education, including Direct Unsubsidized Loans and Direct Plus Loans. You can borrow up to your cost of attendance. Direct Unsubsidized Loans have a lower interest rate and origination fee than the Direct PLUS Loan, also called the Graduate PLUS Loan.

For Direct Unsubsidized Loans for graduate students disbursed on or after July 1, 2023 and before July 1, 2024, the fixed interest rate for Direct Unsubsidized loans is 5.50%. Direct PLUS Loans first disbursed on or after July 1, 2023, and before July 1, 2024, have a fixed interest rate of 8.05%.

The benefits of federal loans include a six-month grace period before beginning repayment as well as flexible repayment plans with Public Service Loan Forgiveness eligibility. This means that as long as you make 120 qualifying monthly payments under a qualifying repayment plan, you might get your loans forgiven as long as you work full-time for a qualifying employer.

How Much CRNAs Can Expect to Make?

Nurse anesthetists can expect to make a median salary of $214,200 per year or $102.98 per hour, according to the Bureau of Labor Statistics. The job outlook for these jobs will grow about 38% from 2022 to 2032.

The Takeaway

There are a lot of ways to make your dreams of becoming a CRNA a reality. You may want to consider filing the FAFSA to qualify for federal loans, grants, and other types of funds. The AANA may also offer scholarships that you qualify for, but don’t forget to check with your employer or other sources, such as local businesses, for other funds.

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

Can you get paid for going to CRNA school?

You typically cannot get paid to attend CRNA school. However, universities often offer a wide variety of financial aid options, through both merit-based and need-based aid. You may need to file the FAFSA in order to qualify for certain types of aid. Check with the financial aid office at the universities you’re considering for more information about your financial aid options.

The American Association of Nurse Anesthetists (AANA) also offers nurse anesthesia grants and scholarships to students who qualify.

How much does CRNA school cost?

The costs of CRNA school depends on a wide range of factors, including whether you plan to attend an in-state or out-of-state institution or plan to attend a private or public school.

For example, Georgetown University, a private institution, costs $140,693 for the first year, $86,361 for the second year and $75,884 for the third year. On the other hand, the full cost to attend the University of Iowa is $85,553 for three years as an in-state resident or $159,206 as an out-of-state resident.

How much do CRNAs typically make?

As a nurse anesthetist, you can expect to make a median salary of $214,200 per year or $102.98 per hour, according to the Bureau of Labor Statistics.


About the author

Melissa Brock

Melissa Brock

Melissa Brock is a higher education and personal finance expert with more than a decade of experience writing online content. She spent 12 years in college admission prior to switching to full-time freelance writing and editing. Read full bio.



Photo credit: iStock/FatCamera

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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.


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


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3 Ways to Pay for Your Kid’s Braces

Braces can help correct dental alignment issues (like crowded, gapped, or crooked teeth) and give your child a beautiful smile. But if an orthodontist visit is in your future, prepare for sticker shock: Depending on the type of appliances they recommend and severity of the dental problem, kids’ braces can run well into the thousands of dollars. If you haven’t been saving up for this developmental milestone, you may be wondering: How do I pay for braces?

Fortunately, you do have some options, including payment plans, flexible spending accounts, and loans. Here’s a look at ways to make covering the high cost of braces more manageable.

What’s the Average Cost of Braces?

The cost of getting braces varies depending on the area, dentist, and type of braces, but you can expect to shell out anywhere from $3,000 to $10,000.

Here is a look at typical costs for different types of orthodontic treatment:

•   Metal braces (traditional braces): $3,000 – $7,000

•   Ceramic braces (tooth-colored braces): $4,000 – $8,000

•   Lingual braces (braces that go on the back surfaces of your teeth): $8,000 – $10,000

•   Invisible braces (custom-made trays that straighten your teeth over time): $4,000 – $7,400

If you have dental insurance, it might partially cover a child’s orthodontic treatment. Policies vary but many dental plans will cover 50% of the cost of braces with a $1500 lifetime maximum per child. While this still leaves you on the hook for the remainder, it can make a significant dent in your total out-of-pocket expenses.

Also keep in mind that many practices offer a discount (often 5%) on your braces cost if you choose to pay for the treatment up front.

Recommended: 8 Smart Tips To Finance Expensive Dental Work

Smart Options to Pay for Braces

Here’s a look at some ways to make orthodontic treatment costs more manageable.

1. Asking Your Orthodontic Office About Payment Plans

Many orthodontic offices offer flexible payment plans that allow you to stretch the cost of braces over a specified period. One common scenario is interest-free financing that spreads payments across two years. This can make the payments (typically debited monthly from your checking or saving account) more manageable.

For example, an interest-free, 24-month payment plan, with no required down payment, would make a $5,000 orthodontic treatment cost about $209 per month, assuming you don’t have any insurance coverage. If your dental plan covers some of your costs, your monthly, of course, will be less.

Payment policies will vary from office to office, so it’s a good idea to ask about payment plans, including any interest or financing charges associated with the plan, as well as the duration of the payment period. By understanding the terms up front, you can make an informed decision about which practice you want to use and how you will pay for the braces.

Recommended: Guide to Paying for Dental Care With a Credit Card

2. Using a Flexible Spending Account or a Health Savings Account

Flexible spending accounts (FSAs) and health saving accounts (HSAs) are offered as a part of healthcare plans by some employers. Both allow you to set aside pre-tax dollars to be used toward eligible expenses, which often include orthodontic treatment.

With an FSA, you determine how much you want your employer to set aside for the year (up to the FSA limit). You then need to use the funds for qualified medical expenses before the end of the year, (though you may be able to roll over a certain amount to the following year.

To save to an HSA, you must enroll in a high-deductible health insurance plan, or HDHP (as defined by the government). Each year, you decide how much to contribute to your HSA, though you can’t exceed government-mandated maximums. If you have an HSA through your workplace, you can often set up automatic contributions directly from your paycheck. Typically, you get a debit card or checks linked to your HSA balance, and you can use the funds on eligible medical expenses.

Unlike an FSA, your HSA balance rolls over from year to year, so you never have to worry about losing your savings.

3. Taking out a Loan

If the above options aren’t available or sufficient to cover the cost of braces, you may want to consider getting a personal loan. These loans, available through banks, online lenders, and credit unions, are usually unsecured (meaning you don’t need to put up any collateral) and can be used for almost any type of expense, including your kid’s braces. In fact, healthcare costs are a common reason why people apply for a personal loan.

Financing braces, of course, comes with interest, which will add to the total cost of the treatment. However, personal loans generally have lower interest rates than credit cards. They also provide you with a lump sum up front, which might help you get a discount for paying in full (if your orthodontist offers that). Plus, you’ll get a set monthly payment you can budget for.

When exploring personal loans to pay for braces, it’s important to shop around and look for a loan that offers favorable rates and terms and fits within your budget.

The Takeaway

The cost of a child’s braces can seem daunting. Fortunately, there are several options available to help you manage the expense. Whether you choose a payment plan offered by your orthodontist, utilize a flexible spending account or health savings account, or opt for a loan, careful planning and research can help you to find a solution that works for your family’s financial situation.

If you’re interested in exploring personal loan options for braces, SoFi could help. SoFi personal loans offer competitive, fixed rates and a variety of terms. Checking your rate won’t affect your credit score, and it takes just one minute.

Pay for your kid’s braces — without taking on high-interest debt.


About the author

Julia Califano

Julia Califano

Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.



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.


Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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What Is a Parent PLUS Loan?

When an undergraduate’s financial aid doesn’t meet the cost of attendance at a college or career school, parents may take out a Direct PLUS Loan in their name to bridge the gap.

These loans are available to parents when their child is enrolled at least half-time at an eligible school. Before you apply, it’s important to understand the benefits and challenges of this kind of federal student loan.

A “Direct” Difference

First, to clarify, there are federally funded Direct Loans that are taken out by students themselves. Then there are federally funded Direct PLUS Loans, commonly called Parent PLUS Loans when taken out by parents to help dependent undergrads.

To apply for a Parent PLUS Loan, students or their parents must first fill out the Free Application for Federal Student Aid (FAFSA®).

Then a parent typically applies for a PLUS Loan on the Federal Student Aid site. A credit check will be conducted to look for adverse events, but eligibility does not depend on the borrower’s credit score or debt-to-income ratio.


💡 Quick Tip: Some lenders help you pay down your student loans sooner with reward points you earn along the way.

Pros of Parent PLUS Loans

At least 3.5 million parents (and in some cases, stepparents) have taken out Parent PLUS Loans to lower the cost of college. Here are some upsides.

The Sky’s Almost the Limit

The government removed annual and lifetime borrowing limits from Parent PLUS Loans in 2013, so parents, if they qualify, can take out sizable loans up to the student’s total cost of attendance each academic year, minus any financial aid the student has qualified for.

Fixed Rate

The interest rate is fixed for the life of the loan. That makes it easier to budget for the monthly payments.

Flexible Repayment Plans

The options include a standard repayment plan with fixed monthly payments for 10 years, and an extended repayment plan with fixed or graduated payments for 25 years.

More College Access

PLUS Loans can allow children from families of more limited means to attend the college of their choice.

Loan Interest May Be Deductible

You may deduct $2,500 or the amount of interest you actually paid during the year, whichever is less, if you meet income limits.

Recommended: Are Student Loans Tax Deductible?

Cons of Parent PLUS Loans

Many Parents Get in Too Deep

The program allows parents to borrow without regard to their ability to repay, and to borrow liberally, as long as they don’t have an “adverse credit history.” (If they did have a negative credit event, they may still be able to receive a PLUS Loan by filing an extenuating circumstances appeal or applying with a cosigner.)

The average Parent PLUS borrower has more than $29,000 in loans, a financial hardship for many low- and middle-income families.

And if a student drops out, parents are still on the hook.

Interest Accrual

PLUS loans are not subsidized, which means they accrue interest while your child is in school at least half-time. You’ll need to start payments after 60 days of the loan’s final disbursement, but parents can request deferment of repayment while the student is in school and for up to 6 months after. Interest will still accrue during that time.

The Rate

The current interest rate for Direct PLUS Loans is 8.05%

Origination Fee

The government charges parents an additional fee of 4.228% of the total loan.

Fewer Repayment Options

Parents who struggle with payments typically have access only to the most expensive income-driven repayment plan, which requires them to pay 20% of their discretionary income for 25 years, with any remaining loan balance forgiven. And parents must first consolidate their original loan into a Direct Consolidation Loan.

Options to Pay for College

Instead of PLUS Loans, private student loans may be used to fill gaps in need.

Private lenders that issue private student loans typically look at an applicant’s credit score and income and those of any cosigner. The lenders set their own interest rates, term lengths, and repayment plans. Some do not charge an origination fee.

You may want to compare annual percentage rates among lenders, and decide if a fixed or variable interest rate would be better for your financial situation.

Any time a student or parent needs to borrow money for education, a good plan is a good idea.

Sometimes scholarships can significantly reduce the amount of money that needs to be paid out of pocket for college, and personal savings and wages can also help. But it isn’t unusual for students to also need to take out loans.


💡 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.

Refinancing a Parent PLUS Loan

The goal of Parent PLUS Loan refinancing is to get a lower interest rate than the federal government is charging.

And student loan refinancing may allow children to transfer PLUS Loan debt into their name.

Refinancing could potentially lower your interest rate, which gives you the option to either:

•  Reduce your monthly payments

•  Pay the loan off more quickly, which may allow you to pay less interest over the life of the loan

Note that Parent PLUS Loans come with certain borrower protections, like the income-based repayment option and Public Service Loan Forgiveness, that you would lose if you refinanced. Also note that if you refinance with an extended term, you may pay more interest over the life of the loan.

Eligibility for refinancing Parent PLUS loans depends on factors such as your credit history, income, employment, and educational background.

The Takeaway

Millions of parents have used federal Parent PLUS Loans to help pay for their children’s college education. Anyone tempted to take out one of these loans may want to know the pros, cons, and options.

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.

SoFi private student loans offer competitive interest rates for qualifying borrowers, flexible repayment plans, and no fees.


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About the author

Julia Califano

Julia Califano

Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.



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 FOREFEIT YOUR EILIGIBILITY 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., 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 04/24/2024 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.

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Can You Refinance Student Loans More Than Once?

Refinancing your student debt can have many benefits, including saving money on interest, lowering your monthly payments, or changing your repayment terms. But can you do it more than once? And, if so, should you?

Yes. And maybe.

There is no limit on how many times you can refinance your student loans. If your finances and credit have improved since you last refinanced and/or market interest rates have gone down, it may be worthwhile to refinance your loans, even if you’ve refinanced before.

That said, refinancing multiple times isn’t always worthwhile. Here are key things to consider before you refinance your student loans more than once.

Key Points

•   There is no limit to how many times you can refinance student loans, as long as you qualify each time.

•   Refinancing again can be beneficial if your credit has improved, interest rates have dropped, or you need different repayment terms.

•   Lower interest rates can reduce overall costs, and some lenders offer better repayment options or promotional discounts.

•   Frequent refinancing can impact your credit score, extend repayment (increasing total interest paid), and require time and effort.

•   Before refinancing again, compare interest rates, loan terms, lender reputation, and fees to ensure it’s the right decision.

How Many Times Can You Refinance Student Loans?

Technically, there is no limit to the number of times you can refinance your student loans with a private lender. In fact, as long as you qualify, you can refinance your student loans as many times and as often as you’d like. And given that lenders often don’t charge prepayment penalties or origination fees, there may be no extra cost involved with refinancing your student loans again.

Refinancing student loans again generally makes the most sense when your finances or credit score improves or interest rates decline. In these cases, it may be possible to save thousands of dollars in interest by reducing your interest rate by a couple percentage points.

If you’re not able to get a lower rate, however, refinancing may not make sense, especially if it extends your repayment term, leading to higher costs.

Also keep in mind that if you only have federal student loans, refinancing with a private lender may not be your best option, since it means giving up government protections like income-driven repayment plans and Public Service Loan Forgiveness.

When Should You Consider Refinancing Your Student Loans Again?

If you’ve already refinanced your loans with a private lender, here are some key reasons why you might consider refinancing again.

Your Financial Situation Has Changed

If you have experienced a significant improvement in your credit score, income, or overall financial health since your last refinance, you may be eligible for a better loan rate and terms than you did even a year ago. In fact, some borrowers with limited or poor credit might refinance their loans multiple times as their credit score improves and they become more desirable applicants.

Interest Rates Have Come Down

Student loan rates are not only tied to your creditworthiness, but also current economic conditions. If market interest rates have dropped since your last refinance, you might be able to secure a lower rate, reducing your overall interest payments. Even a small reduction in interest rates can lead to substantial savings over the life of the loan.

It’s a good idea to keep an eye on market trends and compare current rates to what you’re paying to determine if refinancing again makes financial sense.

Recommended: 3 Factors That Affect Student Loan Interest Rates

You’re Looking for Different Loan Terms

Changing loan terms can also be a reason to refinance again. Perhaps your initial refinance resulted in a longer loan term to lower your monthly payments, but now you’re in a better financial position and can afford higher payments to pay off your loan faster.

Conversely, you might need to extend your loan term to lower monthly payments due to a change in financial circumstances. Just be aware that extending your repayment term can cost you more money in interest over time.

What Are Some Advantages of Refinancing Multiple Times?

Before you decide to refinance your student loan again, it’s important to know the advantages and disadvantages of this strategy. Here’s a look at some of the pros of refinancing more than once.

•   Save money: Refinancing multiple times can help you take advantage of lower interest rates as your financial situation improves or as market rates decrease. Each reduction in interest rates can save you money over the life of your loan. You can also shorten your loan term to pay off your debt faster, which can also reduce what you pay in interest.

•   Better lender benefits: Refinancing with a different lender can provide access to better benefits, such as more flexible repayment options and hardship programs (such as deferment or forbearance). Choosing a lender that offers these benefits can provide additional financial security.

•   Promotional offers: Some lenders will offer special promotions or discounts for refinancing with them — if you see a great deal, it may be worth making the switch to that lender.

What Are Some Disadvantages of Refinancing Multiple Times?

Refinancing again also has potential drawbacks. Here are some to consider.

•   Credit impact: When you formally apply for a refinance, the lender runs a hard credit inquiry, which can negatively affect your credit score. While a single inquiry has a minimal impact, multiple inquiries in a short period can lower your credit score.

•   You could end up paying more: If you refinance to a longer repayment term, or even the same term every few years, you’re extending the amount of interest payments you make. This can keep you in debt longer and increase the total amount of interest you pay. If you refinance to a variable-rate student loan, the rate could also go up during the life of the loan.

•   Time and effort: The process of refinancing can be time-consuming, involving research and making comparisons between lenders, as well as paperwork and credit checks. Doing this multiple times requires a significant investment of time and effort. It might not always be worth it if you won’t save much money with your new loan.

Things to Look for When Refinancing

If you’re considering another refinance, it’s important to look at the following factors to ensure you’re making a smart financial decision.

•   Interest rates: Compare the offered interest rates with your current rate to ensure you’re getting a better deal.

•   Fixed vs. variable rates: Variable-rate loans have interest rates that typically start off lower, but can fluctuate based on market rates. The rate could climb if the rate or index it’s tied to goes up (and vice versa). Variable-rate loans might be a good choice for shorter-term loans. The longer the loan term, the bigger the chance of a rate hike.

•   Loan terms: Evaluate the terms of the new loan, including the length of the loan and monthly payment amounts. Keep in mind that a longer term can lead to lower payments but increase the total cost of your loan in the end.

•   Fees and costs: Be aware of any fees associated with the refinance and calculate whether the savings outweigh these costs.

•   Lender reputation: Research the lender’s reputation and customer service to ensure you’re working with a reliable and supportive institution.

•   Borrower benefits: Consider the benefits offered by the lender, such as flexible repayment options, forbearance, or deferment.

Recommended: How Soon Can You Refinance Student Loans?

Refinancing Your Student Loans With SoFi

Refinancing student loans multiple times can be a strategic move to save money and better manage your debt. While there’s no limit to how many times you can refinance, it’s important to carefully consider the costs, benefits, and your financial goals each time.

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

Can I consolidate student loans more than once?

Typically, you can’t consolidate federal student loans into a Direct Consolidation Loan more than once. However, you may be able to do this if you have federal loans that were not included in a previous consolidation, or you previously consolidated loans under the Federal Family Education Loan (FFEL) consolidation program. Remember that federal consolidation does not lower your interest rate.

With private student loan consolidation, called refinancing, there is no limit on the number of times it can be done. Each refinance creates a new loan with new terms, so you’ll want to evaluate the benefits, interest rates, and any potential fees before deciding to refinance again.

How many times can you refinance a loan?

There is typically no set limit on how many times you can refinance a loan, including student loans. As long as you qualify, you can refinance your student loans as many times and as often as you’d like. Each refinance involves taking out a new loan to pay off the existing one, so it’s important to consider factors like interest rates, loan term, and any associated fees.

How many times can you take out student loans?

There’s no set limit on how many student loans you can take out, but the federal government and private lenders do impose lending limits based on dollar amount.

For federal student loans, there are annual and aggregate (lifetime) limits based on your degree level and dependency status. For private student loans, lenders set their own annual and aggregate student limits. Often, they will cover up to the annual cost of attendance minus other financial aid each year.


About the author

Julia Califano

Julia Califano

Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.



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 FOREFEIT YOUR EILIGIBILITY 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.


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.

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

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