Getting a personal loan is typically a simple process, but it often requires at least a good credit rating and a stable income for approval. Banks tend to have stricter qualification requirements than private lenders. The type of personal loan you get — secured or unsecured — can also have an impact on how hard the loan is to get.
Once approved, you can use a personal loan for a wide variety of expenses, from planned home repairs to unexpected medical bills. Learn more about personal loans and how to increase the chances that you’ll qualify for one.
Key Points
• A higher credit score can increase the likelihood of personal loan approval and secure lower interest rates.
• Consistent and stable income shows the borrower’s ability to repay the loan.
• Secured personal loans, backed by collateral, are generally easier to obtain.
• Smaller loan amounts often have less stringent application requirements.
• Private lenders usually have more flexible lending criteria, but interest rates could be higher.
Types of Personal Loans
A personal loan is essentially a lump sum of money borrowed from a bank, credit union or online lender that you pay back in fixed monthly payments, or installments. Lenders typically offer loans from $1,000 to $100,000, and this money can be used for virtually any purpose. Repayment terms can range from two to seven years.
While there are many different types of personal loans, they can be broken down into two main categories: secured and unsecured. Here’s how the two types of personal loans work:
• Secured personal loans are backed by collateral owned by the borrower such as a savings account or a physical asset of value. If the loan goes into default, the lender has the right to seize the collateral, which lessens the lender’s risk.
• Unsecured personal loans do not require collateral. The lender advances the money based simply on an applicant’s creditworthiness and promise to repay. Because unsecured personal loans are riskier for the lender, they tend to come with higher interest rates and more stringent eligibility requirements.
Getting a Personal Loan From a Bank
In addition to the type of personal loan you choose, the lender you borrow from can have an effect on how hard the loan is to get. For many borrowers, their bank is an obvious first choice when the time comes to take out a personal loan.
Banks sometimes offer lower interest rates than other lenders, particularly if you’re already an account holder at that bank. However, they may also have steeper eligibility requirements, such as a higher minimum credit score, vs. online lenders.
Online banks tend to have a less time-consuming application process, and the loan may take less time to disburse.
Getting a Personal Loan From a Private Lender
A private online lender is a non-institutional lender that is not tied to any major bank or corporation. Online lenders are less regulated than banks, allowing faster application processes and more lenient eligibility requirements. However, some online lenders will have higher interest rates and fees compared to traditional banks, so it’s key to shop around.
Is It Harder to Get a Personal Loan From a Bank or Private Lender?
Generally speaking, you may need to meet more stringent financial qualifications to get a personal loan from a bank than a private lender. Your best bet, however, is usually to shop around and compare a variety of personal loan options, then see where you’ll get the most favorable interest rate and terms.
Here are the basic differences between getting a personal loan from a bank versus a private lender at a glance:
Bank
Private Lender
Interest rates may be lower, though eligibility requirements may be more stringent
Interest rates may be higher, but eligibility requirements may be more lenient
You could get lower rates or easier qualification requirements if you have an existing relationship with the bank
Some private lenders market personal loans specifically to borrowers with poor or fair credit — though at potentially high interest rates
You may have the option to visit the bank in person for a face-to-face customer service interaction
The entire process may be done online
Loans may take longer to process with some brick-and-mortar banks
Funds might be disbursed the same day or within a day or two
Is It Easier to Get a Small Personal Loan?
Generally, yes. Loan size is another important factor that goes into how hard it is to get a personal loan. It’s much less risky for a lender to offer $1,000 than $100,000, so the eligibility requirements may be less stringent — and interest rates may be lower — for a smaller loan than for a larger loan.
That said, there are exceptions to this rule. Payday loans are a perfect example. Payday lenders offer small loans with a very short repayment timeline, yet often have interest rates as high as 400% APR (annual percentage rate). Even for a smaller personal loan, it’s generally less expensive to look for an installment loan that’s paid back on a monthly basis over a longer term.
What Disqualifies You From Getting a Personal Loan?
There are some financial markers that can disqualify you from getting a personal loan, even with the most lenient lenders. Here are a few to watch out for.
Bad Credit
While the minimum required credit score for each lender will vary, many personal loan lenders require at least a good credit score — particularly for an unsecured personal loan. If you have very poor credit, or no credit whatsoever, you may find yourself ineligible to borrow.
Lack of Stable Income
Another important factor lenders look at is your cash flow. Without a regular source of cash inflow, the lender has no reason to think you’ll be able to repay your loan — and so a lack of consistent income can disqualify you from borrowing.
Not a US Resident
If you’re applying for personal loans in the U.S., you’ll need to be able to prove residency in order to qualify.
Lack of Documentation
Finally, all of these factors will need to be proven and accounted for with paperwork, so a lack of official documentation could also disqualify you.
How to Get a Personal Loan With Bad Credit
If you’re finding it hard to get a personal loan, there are some steps you can take to improve your chances of approval. Here are some to consider.
Prequalify With Multiple Lenders
Every lender has different eligibility requirements. As a result, it’s worth shopping around and comparing as many lenders as you can through prequalification. Prequalification allows you to check your chances of eligibility and predicted rates without impacting your credit (lenders only do a soft credit check).
Consider Adding a Cosigner
If, through the prequalification process, you find that you don’t meet most lender’s requirements, or you’re seeing exorbitantly high rates, you might check to see if cosigners are accepted.
Cosigners are usually family members or friends with strong credit who sign the loan agreement along with you and agree to pay back the loan if you’re unable to. This lowers the risk to the lender and could help you get approved and/or qualify a better rate.
Include All Sources of Income
Many lenders allow you to include non-employment income sources on your personal loan application, such as alimony, child support, retirement, and Social Security payments. Lenders are looking for borrowers who can comfortably make loan payments, so a higher income can make it easier to get approved for a personal loan.
Add Collateral
Some lenders offer secured personal loans, which can be easier to get with less-than-ideal credit. A secured loan can also help you qualify for a lower rate. Banks and credit unions typically let borrowers use investment or bank accounts as collateral; online lenders tend to offer personal loans secured by cars.
Just keep in mind: If you fail to repay a secured loan, the lender can take your collateral. On top of that, your credit will be adversely affected. You’ll want to weigh the benefits of getting the loan against the risk of losing the account or vehicle.
You can use a personal loan for a range of purposes, such as to cover emergency expenses, to pay for a large expense or vacation, or to consolidate high-interest debt. Personal loans aren’t hard to get but you usually need good credit and a reliable source of income to qualify. The better your financial situation, the lower the interest rate will usually be.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.
SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.
FAQ
Is it hard to get a personal loan?
Personal loans aren’t necessarily hard to get, but you typically need good credit and reliable income to qualify. Secured personal loans (which require pledging something you own like a savings account or vehicle) are generally easier to qualify for than unsecured personal loans.
Is it hard to get a personal loan from a bank?
Banks tend to have more stringent qualification requirements for personal loans than private online lenders. Getting a personal loan from a bank can be a good move if you have good to excellent credit and an existing relationship with a bank.
What disqualifies you from getting a personal loan?
You will be disqualified for a personal loan if you do not meet a lender’s specific eligibility requirements. You may get denied if your credit score is too low, your existing debt load is too high, or your income is not high enough to cover the loan payments.
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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 .
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 Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®
A credit card’s annual percentage rate (APR) represents the cost of borrowing money from a lender, typically stated as an annual interest rate. Thus, the APR on a credit card is an important number to know before charging a purchase — especially if you plan on carrying a balance on your credit card account.
Read on to learn more about credit card APRs and how they are determined.
Key Points
• APR, or annual percentage rate, represents the annual cost of borrowing money through a credit card.
• Interest charges begin on any balance not paid by the statement due date.
• Various transactions, such as cash advances and balance transfers, have distinct APRs.
• Promotional APRs often provide a 0% interest rate for a limited time.
• Late payments over 60 days can trigger a higher penalty APR.
What Is a Credit Card’s APR?
A credit card’s APR refers to the annualized cost of using your credit card to borrow funds. When an individual charges a purchase from a merchant that accepts credit card payments, they’re actually borrowing money from the credit card issuer. The credit card issuer pays the merchant, and the cardholder pays the credit card issuer based on the terms of their credit card agreement.
Depending on the type of transaction and when it’s paid back, some purchases may be subject to interest given how credit cards work. For instance, the purchase APR applies to any balance remaining after the statement due date. Interest is determined based on the credit card’s APR.
How Is APR Determined?
Because actual interest charges are calculated based on the credit card APR, it’s a good idea to get familiar with how APR is determined.
An integral part of what a credit card is, credit card APR is not a set rate that’s the same for every credit card and credit card holder. Rather, the interest rate on a credit card will depend on a number of factors, such as the cardholder’s credit score, what type of credit card it is (for example, whether it’s a rewards card or a card for people with low credit ratings), how the card is being used, and the current economic conditions (such as the prime rate).
In the U.S., the average credit card interest rate is currently 22.25%, per the most recent data released by the Federal Reserve. That being said, there is a great deal of variance in APRs.
A good APR for a credit card is one that results in the lowest interest charges — which means the lower, the better.
The concept of charging interest on borrowed money is not unique to credit cards. From car loans to mortgages, all types of loans have an interest rate attached. But one way credit card APR differs from the interest rates on some other lending products is that the interest charges on credit card transactions may vary depending on the type of transaction a cardholder makes.
Understanding the different types of credit card APRs can help an individual better anticipate actual interest costs before they apply for a credit card. Here are some common types of APR on credit card purchases.
Introductory APR or Promotional APR
It’s not uncommon to see credit card offers touting no interest — though it’s important to note that 0% APR is not usually a permanent credit card feature.
• If a credit card offers an “introductory” or “promotional” APR, that generally means that the rate offered is only applied for a limited time. After that, the interest reverts to another (typically higher) APR.
• How interest is applied to an introductory or promotional APR period will depend on the specific wording of the offer. For example, if a credit card offers a zero-interest promotional period (“0% APR for X months”), that means no interest is charged during that specified offer period. These periods are typically between six and 18 months.
Once the offer period ends and the APR reverts to the standard rate, interest is only charged on any outstanding balances from the date the promotional period ended. (Other terms, such as always making the credit card minimum payment by the due date, may also apply in order for the promotional rate to be valid.)
• A promotional APR that defers interest doesn’t work in quite the same way. With deferred interest, the promotional or introductory rate only applies if the balance is paid in full by the end of the offer period. But interest on any remaining balance will be calculated based on the date of purchase, not the end of the offer period.
That’s why it’s important to be mindful of whether your spending is within your budget, even if it is technically within your credit card limit.
While the specifics of a promotional or introductory APR offer should be clearly spelled out in the terms and conditions, one way to spot such an offer is to look out for conditions — for example, “no interest if paid in full within 12 months.”
Cash Advance APR
It may be possible to draw cash from a credit card at an ATM or using convenience checks. However, credit card cash advances are often subject to a different (usually higher) APR and may begin to accrue interest starting from the transaction date.
Balance Transfer APR
Some credit cards may offer a lower APR rate for balances transferred from higher APR cards, which can be helpful if you’re looking to pay off high-interest debt. The balance transfer APR will usually only apply on a promotional or temporary basis, as noted above.
Purchase APR
This is the standard APR that is applied to most regular purchases charged to a credit card. It applies on any balance that remains after the statement due date. This is why, even if you’re disputing a credit card charge, for instance, it’s smart to pay off as much of your balance as you can to avoid interest accruing.
Penalty APR
Just as it sounds, penalty APR is a penalty fee. It’s higher than the regular purchase APR and kicks in as a result of payments that are more than 60 days late. The terms associated with penalty APR are disclosed in the credit card agreement.
While credit cards can be a useful tool for managing cash flow (and even earning rewards and perks), it’s important to understand the costs involved. This includes understanding how credit card interest works and how credit card APR applies to credit card balances. Credit card APRs can vary widely, and it can be important to know what rate applies when so you can use your cards responsibly.
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FAQ
What does the APR not include?
Although the interest rate and when it’s applied may vary depending on the type of transaction, APR typically applies to any funds that are drawn from one’s credit card.
Do you pay credit card APR monthly?
Whether APR is charged depends on the type of transaction and when it’s paid off. For regular purchases, there is no credit card APR at all so long as the balance is paid in full by the statement due date.
Is APR based on current balance?
Like other types of interest, APR is a percentage of the balance owed on a credit card. How APR is applied to various types of purchases and when interest begins to accrue typically depends on the type of transaction and is detailed in the credit card agreement. Most regular balances only begin to accrue interest if any amount is remaining after the statement due date.
What happens if you pay more than the minimum balance on your credit card each month?
Purchase APR typically is applied to any balance remaining after the statement due date. By paying more than the minimum balance, an individual will reduce the amount of funds that are subject to interest.
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SoFi Credit Cards are 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.
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 .
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 Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®
Think that internships are just for students? Think again. College grads can also snag internships. An internship can be a good way to gain work experience when a full-time job is hard to find. It can also provide an opportunity to test-drive a field you are interested in but not sure is right for you.
Getting an internship after graduation can help you gain exposure to the work world, add to your resume, and build professional experience.
Here, you’ll learn more about internships for recent graduates, what a postgraduate internship is like, and how to find one.
Key Points
• Postgraduate internships help recent graduates explore career options and reduce the stress of transitioning to postgraduate life.
• Both paid and unpaid internships offer valuable career development opportunities, though paid internships may provide more hands-on experience.
• A strong resume and tailored cover letter are essential for standing out in internship applications.
• Practicing interview skills and following up with thank-you emails may enhance the chances of securing an internship.
• Networking during internships can lead to mentorship, job leads, and recommendations, crucial for career advancement.
Benefits of a Postgraduate Internship
There are a lot of reasons why college graduates might consider doing a postgrad internship. Aiming to go right into a full-time job after graduating may be the right choice for some people, but there are some benefits to completing an internship first.
• A postgraduate internship can allow graduates to explore their career options before making a long-term commitment.
Not every student is going to have an exact goal in mind for what job they’d like to have after graduating, and most degrees will give students more than one option to consider. Starting an internship after graduation can give you the ability to test out a variety of jobs and also allow you to live in different locations and see what suits you.
• Another benefit to applying for internships instead of full-time jobs is that it may limit some of the stress of transitioning to postgrad life. Applying for full-time jobs could feel like a big commitment for graduates who are coping with the end of their college experience. Internships can make for a great in-between, a stepping stone for graduates to use to get their feet wet in the professional world and hopefully experience less stress as they settle into their postgraduate life.
• Internships also provide graduates with valuable hands-on experience and potentially a connection to their first full-time job. Getting a degree is important, but it isn’t the same as having previous experience in the field.
Doing a postgrad internship can help recent graduates develop and sharpen their skills and fill out their resume. Some internships may even transition into full-time jobs with the same company. For employers, it can be easier to hire someone they’ve already seen in action.
• Getting an internship can also help recent graduates build up their network outside of college. Developing relationships within the field of interest can benefit students when they start their job search after completing their internship.
What postgraduate internships are like will vary tremendously from position to position, and industry to industry. An internship for recent graduates at, say, a veterinary clinic vs. an investment bank could be the proverbial “night and day.”
There are, of course, some common concerns and questions about these gigs. If you’re considering applying for postgraduate internships, the first question most people are going to have is: Is it paid?
The answer to this question will vary by internship and by industry. For example, internships in banking, accounting, and government are often paid.
The determination for whether or not an internship will be paid can depend on how much the student is benefitting from the experience vs. the company.
• An unpaid internship is usually more learning-based and the recent grad will be gaining knowledge and skills from it. Unpaid internships are generally legal as long as the intern is the primary beneficiary of the internship, rather than the company (though individual states often have their own standards and criteria for unpaid internships).
• A paid internship usually involves the company benefiting more from the grad’s efforts than the person does.
Another way to look at the position is that if it’s paid, the postgraduate can do the same tasks as employees and get hands-on knowledge that way. If the recent grad is not paid, they may only be able to observe what the paid employees are doing and perform adjacent tasks. This can, however, still be useful.
Because internships are usually short-term commitments, most of them won’t provide the same benefits that full-time employees have. There may be other perks though, such as social events and vacation days off. What’s more, some internships may cover the cost of housing and other expenses, such as transportation.
Another point to recognize is that a graduate internship will give you experience in the world of work, which can boost your confidence as you job hunt. You get used to how businesses function, how colleagues interact, and how employees prioritize competing responsibilities. All good intel!
Getting an internship will require some effort, and it’s often better to start before you get your diploma as things can be competitive. Here are some ways to start your hunt for a graduate internship:
• Network with professors and alumni and utilize your school’s career center.
• Graduates can use platforms like LinkedIn or their school’s alumni database to find people in their chosen career fields to reach out to. Grads should get comfortable communicating with these people and being clear about what types of internships they’re looking for. These conversations can help open doors that otherwise may have been hard to find.
• Internships (paid and unpaid) are increasingly posted on online job sites. Take a look using “internship” as a keyword, and you may be surprised to find a good number of opportunities.
Get Your Resume Ready
It’s also key to have a resume and cover letter ready to go. These may have to be tweaked for each internship, but at least you’ll have a starting point. If a recent graduate is searching for an internship in a specific field, then they might be able to get away with making minimal changes.
If you haven’t already honed yours, check in with your school’s career services office, or look at the many templates and examples online. Experiment with them, and have a trusted family member or mentor review it from the perspective of, “Would I interview this person based on this resume?”
Grads should be creative (but not untruthful) when listing their skills and experiences on their resume. Even if you haven’t had a full-time job yet, you’ve probably picked up valuable skills at part-time jobs and in college that merit inclusion. Holding a job of any sort can show that you are a responsible, hard-working individual.
Practice Your Interview Skills
Preparing for interviews will also help recent graduates snag an internship. A few pointers:
• It’s vital to do research on the company before the interview for a postgrad internship. Review things like the company’s mission, what their current projects are, and what the company culture is like. Having knowledge of the company can highlight that the applicant has done their research and is excited about potentially joining the company.
• Preparation for interviews also includes studying common internship interview questions and prepping for those. You can find them online, from friends’ experience, and likely from your school’s career services office. The interview will be less nerve-racking when you know what to expect. It’s also helpful to prepare a couple of your own questions to ask the interviewer. This shows an interest in the company and commitment to learning more.
• Many interviews take place by video meetings today. Get familiar with the possible ways these are conducted (Zoom vs. Microsoft Teams, say). It can also be wise to check your connectivity in advance and log in early.
• Thank your interviewer, always. And be sure to send a thank-you email after the interview. Use it as an opportunity to reiterate your interest in the job and your skills. And if you are offered an internship, research how to accept a job offer.
Repaying Your Student Loans
In addition to job (or internship) hunting, graduates will also have to face the reality of paying back their student loans. The exact timing for when repayments start will vary by the type of loan. Graduates should keep this in mind when applying for internships and full-time jobs and develop a budget for their postgrad life.
For federal loans, there are a couple of different times that repayment may begin.
• Students who borrowed a Direct Subsidized, Direct Unsubsidized, or Federal Family Education Loan (FFEL), have a six-month grace period after graduation before they’re required to make payments.
• When it comes to the Grad PLUS loan, graduate and professional students with PLUS loans will be on automatic deferment while they’re in school and up to six months after graduating or after you drop below half-time enrollment status.
With the repayment period coming up, some graduates may consider refinancing their student loans. With student loan refinancing, a private lender pays off the existing loan with another loan, ideally at a lower interest rate, which can help lower monthly payments.
While both federal and private student loans can be refinanced, when federal student loans are refinanced by a private lender, they are no longer eligible for federal benefits and protections like deferment and forgiveness. Graduates will want to consider this before deciding to refinance any federal loans.
Postgrad internships can help students build their resume, expand their networks, and gain valuable job experience. Depending on factors like the company and industry involved, postgraduate internships may or may not be paid. Students still exploring their career options may find value in pursuing a postgraduate internship, whether or not it brings in income.
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 any college grad do a postgraduate internship?
Generally, yes — many large companies offer postgraduate internships for recent college grads. Postgraduate internships tend to be available in a wide range of fields, including business, health, arts, finance, tech, and engineering. To help find them, check online job sites and company career pages.
Are postgrad internships worth it?
While it depends on the specific internship, in general, many postgraduate internships are worth it. Some of these internships are paid, so you’re earning money, for one thing. But regardless of whether they offer a paycheck, postgrad internships can give you the opportunity to make professional contacts, learn new skills, and sharpen skills you already have for your future career. Some postgrad internships even lead to full-time jobs.
Do postgrad internships help you get a job?
It’s possible. Many large corporations that offer postgraduate internships use them as a way to recruit and train future full-time employees. Even if a postgrad internship isn’t a direct pathway to a job, you’re gaining experience and making important contacts in your field. That could help give you an edge over other candidates in a job search.
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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.
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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.
Sometimes, student loan debt can start to feel like it’s slowing you down. Maybe the interest rate is too high, you’re not happy with your loan terms, or you’re frustrated with the lender’s customer service. If so, you have the right to look for a new lender and transfer your debt to a different company.
However, you can’t simply ask a new lender to take on your debt with the same terms. To transfer your student loan, you generally need to take out a new loan with a new lender or servicer. The process of switching will be different depending on whether your student loans are private or federal, and it may involve consolidating the loan or refinancing.
If you’re thinking about a loan transfer, keep in mind that there’s no guarantee you’ll end up in a more favorable situation just by switching lenders. Here’s what you need to know about student loan transfers.
Key Points
• Private student loans can be transferred to a new lender through student loan refinancing.
• Federal student loans can be transferred to a new loan servicer through federal student loan consolidation or through private student loan refinancing.
• Changing loan servicers by refinancing federal loans with a private lender results in loss of federal benefits.
• The only way to transfer a Parent PLUS loan from a parent to a student is by refinancing the loan in the child’s name.
• It’s possible, though generally not advisable, to transfer private student loan balances to a credit card with a 0% introductory rate, which might save a borrower interest, but only if the loans are paid off within the short promotional period.
How Do I Transfer Student Loans to Another Private Lender?
If you have private student loans, the main way to transfer your debt to another lender is to refinance your loans. This involves taking out a new loan with a different lender and using it to pay off your current student loans. Moving forward, you only make payments on your new loan to your new lender.
If you have multiple private student loans, refinancing can simplify repayment by giving you only one monthly payment to manage. And, if your financial picture has improved since you took out your original private student loan(s), you may be able to qualify for a lower interest rate. Another perk of refinancing is the ability to lengthen your repayment timeline to reduce your monthly payment amount. Keep in mind, though, that a longer repayment period will generally end up costing you more in the long run.
You’ll need to meet certain criteria to be eligible for private student loan transfer via student loan refinancing. Most lenders have a minimum income threshold as well as a minimum credit score (often in the upper 600s). If you don’t meet the income or credit requirements, you may be able to qualify by adding a cosigner.
Many lenders offer prequalification, which lets you see what type of rates and terms you may be able to qualify for without impacting your credit score. To find the loan with the best rate, it can be a good idea to shop around and compare lenders through prequalifying. Once you find a lender you want to work with, you’ll need to officially apply for the student loan refinance.
Can I Transfer My Sallie Mae Loans to Another Lender?
Currently, Sallie Mae only offers private student loans. Prior to 2014, however, the lender serviced federal student loans. If you want to refinance a Sallie Mae loan you took out before 2014, you’ll need to check whether it’s federal or private before moving forward.
If you took out a Sallie Mae loan after 2014, it’s a private student loan, and you can refinance the loan with another private lender. This might be a good idea if you can qualify for a lower interest rate.
What’s the Difference Between a Lender and a Loan Servicer?
While the terms lender and loan servicer are often used interchangeably, they are not the same thing. Here’s a look at how they differ.
Student Loan Lender
A lender is an institution or company that originates and funds the student loan. In other words, they’re the one lending you the money. For example, if you apply for a federal student loan, the federal government is your lender. If you apply for a private student loan, you can choose between a number of private lenders.
A Student Loan Servicer
A federal student loan servicer is the middleman between you and the federal government (the lender). Servicers handle your student loan billing and payments, and they keep track of whether you pay your loans on time. They will help you if you’re having trouble with your repayment plan or need to change your address or other personal information.
You do not get to pick your servicer. During the course of your federal student loan, your servicer might change a few times. For example, if you had a loan with Great Lakes, it was likely transferred to Nelnet some time between March 2022 and June 2023. You’ll typically get notified of a student loan transfer two two weeks prior to your transfer date.
If you have a federal student loan and you’re not sure who your servicer is, you can log in to your account on StudentAid.gov to find out.
Can I Change My Student Loan Servicer?
You can’t change your federal student loan servicer directly. However, if you’re willing to do some legwork, there are two main ways to move your federal student debt to a new servicer or lender.
If you want to keep your federal loan status but switch to a different loan servicer, you can transfer your loans by consolidating them into a Direct Consolidation Loan. If your main objective is to save on interest, you may want to look into refinancing your student loans with a private lender. Read below to learn more about each scenario.
What About Consolidating My Student Loans?
One way to switch loan servicers is to consolidate your federal student loan(s). This allows you to transfer the debt to a different servicer but keep your federal student loan status, since the lender will still be the federal government.
The consolidation process lets you combine several federal student loans into a single, easier-to-manage Direct Consolidation Loan. While it does not reduce your interest rate, it can lower your payment by extending the term. The downside is that the extended term will mean you pay more in interest over time.
Since not all federal loans have the same interest rate, the interest rate on a new Direct Consolidation Loan will be a weighted average based on your current loan amounts and interest rates. Any unpaid interest is added to your principal balance. The combined amount will be your new loan’s principal balance. You’ll then pay interest on the new principal balance.
Consolidation can be a good option if you are unhappy with your servicer or have several servicers and want to simplify your student debt by having only one payment.
If you have Federal Family Education Program or Parent PLUS loans, you need to consolidate to be eligible for income-driven repayment, public service loan forgiveness, and other relief programs.
Another way to change your federal student loan servicer is to refinance your federal student loans with a private lender. If you also have private student loans, you can refinance them together with federal loans, giving you a single loan payment each month.
Generally, refinancing federal student loans may make sense if you can qualify for a lower interest rate. If you have higher-interest federal student loans, such as graduate PLUS loans or Direct Unsubsidized Loans, you may be able to get a lower rate by refinancing. To qualify for the best rates on a private student refinance, you generally need to have strong financials (or can recruit a cosigner who does).
It’s important to note that refinancing federal student loans with a private lender means losing federal protections, such as income-driven repayment plans, federal deferment and forbearance programs, and loan forgiveness options like Public Service Loan Forgiveness (PSLF).
If you’re interested in refinancing your federal loans, it’s a good idea to review offers from multiple lenders to find the best deal. Many private lenders will allow you to prequalify via a soft credit check so you can see your likely new interest rate without negatively impacting your credit score.
What About Transferring My Student Loan Balance to a Credit Card?
You generally can’t pay federal student loans with a credit card. If you have private loans, however, another option for student loan transfer is to move the balance onto a credit card and pay your monthly bills there. Some credit card issuers allow student transfers, but not all.
Generally speaking, this tactic only makes sense if you can qualify for a card with a 0% introductory rate and can pay off the entire balance before that promotional period expires (often between 12 and 21 months). Otherwise, you could be left paying even more in interest than you would with the original loan.
To see if you can manage this repayment schedule, simply divide your loan balance by the number of months you would need to pay it off before interest applies. Also check to make sure the credit card offers a high enough credit limit to accommodate your loan, and find out if there are any transfer fees.
If you decide it’s a good deal and are confident you can make it work, you would apply for the credit card and, once approved, give your credit card account details to your loan servicer. Your credit card issuer would then pay off your private student loan debt and move the balance to your credit card account. Moving forward, you only make payments to the credit card issuer.
Is It Possible to Transfer Student Loans From Parent to Student?
The federal government does not offer a way to transfer Parent PLUS loans to the child. However, if you’re looking to have your Parent PLUS loans transferred to your child, refinancing the loans with a private lender allows you to do that.
To make this type of loan transfer, you’ll first need to identify Parent PLUS refinance lenders that allow loan transfers. After that, your child may want to prequalify with a few of these lenders to see where they can get the best rate.
If your child meets the lender’s qualifications on their own, you can fully transfer the loan to them. If they don’t, you can serve as a cosigner on the refinanced loan and work with them to meet the lender’s cosigner release requirements. Many lenders allow cosigner release after a set number of successful payments.
The Takeaway
If you’re interested in transferring your student loans to a new servicer or lender, you have some options. If you have federal student loans, you can consolidate your loans to get a different servicer. If you have federal, private, or a mix of both types of student loans, another option for loan transfer is to refinance your loans with a private lender.
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
What happens if my student loans are transferred to a new servicer?
If your federal student loans are transferred to a new loan servicer, you will be notified at least two weeks in advance and provided with the new servicer’s name and contact information, according to the Education Department. The new servicer will take over the loan, and they should reach out to you when the loan transfer is complete. At that point, they will handle the billing, payments, and customer service for your student loans.
Can I stop my student loans from being transferred?
Generally, you cannot stop your federal loans from being transferred to a new loan servicer. Federal loans are owned by the Education Department, which assigns them to a servicer. If the contract with that servicer ends, your loans will be transferred to a new loan servicer.
Can a student loan transfer lower my payments?
Transferring your student loans might lower your monthly payments if you refinance the loans and qualify for a lower interest rate. You could also lower your payments by extending the payment term through refinancing — or with a federal Direct Consolidation Loan — but a longer loan term will cost you more in interest over the life of the loan. Be aware that refinancing federal student loans into private loans makes them ineligible for federal benefits like income-driven repayment and forgiveness.
SoFi Student Loan Refinance Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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If someone asked you to describe your “dream home,” what picture would pop into your mind? A single-family home with a big backyard, or a high-rise condo with a view? Maybe you’ve always longed to live on a houseboat.
Only you can decide which of the many house types out there is best for you or your family. This guide to the different types of homes available to buyers could help narrow your search.
Key Points
• There are a wide variety of home types, including apartments, condos, co-ops, single-family homes, tiny houses, townhomes, modular homes, manufactured homes, cabins, floating homes, and more.
• Detached, land-heavy homes typically cost more and carry more maintenance burden, while smaller or shared-wall types (condos, townhomes) tend to be more affordable but come with trade-offs.
• Popular types of home architectural styles include Cape Cod, contemporary, farmhouse, midcentury modern, split-level, and more.
• The best home-type for you will depend on your priorities: privacy, budget, location, community, maintenance load.
• To purchase a home, you’ll need a down payment, a solid credit score to qualify for the best available interest rate, and a good debt-to-income ratio.
As you think about where you’d like to live or what you need to buy a house, you can probably rule out a few of these home types right away. From there, it may be helpful to look at the pros and cons of different home types side by side to narrow your search.
1. Apartments
The definition of an apartment can get a bit complicated because it changes depending on where you live. When someone talks about how to buy an apartment in New York City, for example, they might be referring to a condo or co-op.
Generally, though, an apartment is one of several residential units in a building owned by one person or company, and the owner rents each unit to individual tenants.
There are some pluses to that arrangement, especially if you take advantage of amenities like a gym or swimming pool. Monthly costs for utilities and insurance may be low, too. Because it’s a rental, though, you can’t build any equity. Also, if you want to stay or go, or make some changes to the apartment, you’re typically tied to the terms of your lease.
Pros and Cons of Renting an Apartment
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Pros:
• Do not need a big down payment
• Repairs usually aren’t the tenants’ responsibility
• Lower monthly bills (especially if rent includes utilities)
• May have shared amenities
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Cons:
• May have to come up with a large security deposit
• Tenants don’t build equity (so there’s no return on investment)
• Tenants can lose their deposit if they break their lease
• Can’t make changes without permission
2. Condos
If you like some of the upsides of apartment living but you want a chance to build equity with each payment, you may enjoy owning a condo. Condo living isn’t for everyone — a house vs. condo quiz could help you decide between those types of homes — but a condo is a good choice for some.
You’ll share walls with other residents but will own your unit. That means you’ll be in charge of the repairs and upkeep on the interior, but you won’t have to worry about lawn maintenance, cleaning and fixing the pool, or exterior repairs. (You’ll likely pay a monthly or quarterly fee to cover those costs, though.)
When you purchase a condo, you’ll have a chance to build equity over time as you make your home loan payments, but if the homeowners association (HOA) is poorly managed, your condo may not increase in value the way a home you care for yourself might.
Pros and Cons of Buying a Condo
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Pros:
• Owners often can build equity
• Mortgage may be less expensive than that of a single-family home
• Less maintenance than a single-family home
• Shared amenities
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Cons:
• Owners pay for interior maintenance
• Less privacy than a single-family home
• Condo fees add to monthly payment
• Single-family homes may increase in value faster
3. Co-ops
When it comes to condos vs. co-ops, it’s important to understand the differences if you’re shopping for a home or plan to.
The main difference is the ownership arrangement: When you buy into a co-op, you aren’t purchasing your unit; you’re buying shares of the company that owns the property. The market value of your unit determines the number of shares you own. Your shares determine the weight of your vote in what happens in common areas, and you’ll also split maintenance costs and other fees with your fellow residents based on how many shares you own.
Because co-op residents don’t actually own the units they live in, it can be challenging to find financing. Instead of a mortgage, you may have to get a different type of loan, called a co-op loan or share loan. And because of co-op restrictions, it may be difficult to rent out your unit.
Still, buying into a co-op may be less expensive than a condo, and you may have more control over how the property is managed.
Pros and Cons of Buying into a Co-Op
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Pros:
• Often less expensive than a similarly sized condo
• Shareholders have a voice in how the property is managed
• Partners may have a say in who can purchase shares
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Cons:
• May be difficult to find financing
• May require a larger down payment than a condo purchase
• Co-op restrictions can make it tougher to buy in, and to rent your unit
4. Single-Family Homes
When someone says “house,” a single-family home is the type of structure most people probably think of — with a backyard, a garage, maybe a patio or front porch. Even if the yard is small, the house sits by itself. That can mean more privacy and more control over your environment.
Of course, that autonomy can come with extra costs, including higher homeowners insurance, taxes, maintenance and repairs, and maybe HOA fees.
The down payment and monthly payments also can be challenging, but buyers usually can expect the value of their home to increase over time.
And if you need money down the road — for a child’s education or some other planned or unexpected expense — you may be able to tap into home equity. Or you might plan to pay off the mortgage in 20 or 30 years and live rent-free in retirement.
• Change or update your house in any way you choose (following HOA rules, if they apply)
• Rent out your house if you choose, or renovate and sell for a profit
• May have shared amenities as part of an HOA
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Cons:
• Single-family homes tend to cost more than condos
• Maintenance and repairs can get expensive
• Property taxes (and HOA fees if applicable) can add to homeownership costs
• Putting in and maintaining a pool or gym may be up to the homeowner
• Utilities and energy costs are often higher than in condos or townhomes
5. Tiny Homes
Tiny homes, which usually have 400 square feet of living space or less, have a huge fan base. Some tiny houses are built to be easily moved, giving the owner physical freedom. Some are completely solar-powered and built to be eco-friendly. Many can be constructed from kits.
One downside is finding a place to legally park the tiny home. In most parts of the country, they are classified as recreational vehicles, not meant to be lived in full time, and usually only allowed in RV parks or campgrounds.
Another challenge is tiny house financing. Options include a personal loan, builder financing, a chattel mortgage (a loan for a movable piece of personal property), and an RV loan if the tiny house meets the Recreational Vehicle Industry Association’s definition of an RV: “a vehicular-type unit primarily designed as temporary living quarters for recreational, camping, or seasonal use.”
A not-tiny consideration is making use of such a small space. Many people may not last long in a tiny home.
Pros and Cons of Buying a Tiny Home
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Pros:
• Low costs all around
• Environmentally efficient
• Easy to relocate if on wheels
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Cons:
• Limited legal parking locations
• Financing can be a challenge
• It’s tiny!
6. Townhomes
A townhome or townhouse can look and feel like a detached house, in that it has its own entrance and may have its own driveway, basement, patio or deck, and even a small backyard. But these row houses, which are often found in cities like New York City, San Francisco, and Washington, D.C., and usually have multiple stories, share at least one common wall with a neighboring home.
Those shared walls can make buying a townhouse more affordable than a comparable detached home. And owners who belong to an HOA with neighboring homes generally don’t have to worry about exterior upkeep, although owners of townhouses classified as fee simple are responsible for exterior maintenance of their structure and sometimes the surrounding yard.
The HOA also may offer some amenities, but that monthly or quarterly HOA fee will add to overall costs, and may rise over time.
Pros and Cons of Buying a Townhome
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Pros:
• May cost less than a similar single-family home
• Little or no outdoor maintenance
• Shared amenities
• Several mortgage options
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Cons:
• HOA fees may be high
• HOA restrictions
• Multiple levels may be a problem for some
• Less privacy, more noise from neighbors
7. Modular Homes
A modular home is made up of sections that are built in a factory, transported to a homesite, and assembled on a foundation there. This makes them different from traditional stick-built homes, which are constructed completely on-site. Both types of houses are held to the same local, state, and regional building codes.
Because the assembly-line part of the process is cost-effective, a modular home may be less expensive. Also, because weather isn’t a factor for part of the work, you can probably expect fewer delays.
Most modular homes are sold separately from the land. So if you already own a piece of property or like the idea of building outside a traditional neighborhood, a modular home might be a good choice.
Many people who choose a modular home use a construction loan for the build or a construction to permanent loan. A personal loan or use of home equity from an existing home are other options.
Pros and Cons of Buying a Modular Home
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Pros:
• Can be less expensive than a similar stick-built home
• May experience fewer construction delays
• Quality is as high or higher than a site-built home
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Cons:
• Land, site prep, and other costs are separate on new modular homes
• Future buyers may prefer stick-built homes
• Financing can be tricky
8. Manufactured Homes
Manufactured homes, formerly known as mobile homes, are built completely off-site and then transported to the homesite and placed on a temporary or permanent foundation.
Manufactured homes are not held to the same local, state, and regional standards as stick-built or modular homes. Instead, they must conform to construction and installation standards set by the U.S. Department of Housing and Urban Development, and local land use and zoning regulations restrict where they can be placed.
Of course, there are plenty of communities that are designed just for manufactured homes, although the land in many of these “parks” is rented, not owned.
A growing number of lenders are providing conventional and government-insured mobile home financing. The loans, backed by the Federal Housing Administration (FHA) or U.S Department of Veterans Affairs (VA), are offered by approved lenders.
The most common method of financing is an installment contract through the retailer. Depending on your situation, a personal loan or chattel loan could provide a shorter-term path to financing a manufactured home.
Pros and Cons of Buying a Manufactured Home
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Pros:
• The entire home is built off-site, so no weather delays
• More affordable than other detached homes
• May be able to move the home from one site to another
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Cons:
• Financing may be more challenging
• Lot fees may be high and rising
• You own the home but not the land under it
9. Cabins
Most people tend to think of a cabin as a cozy second home that’s made of logs or covered in cedar shakes, but there’s no reason a cabin can’t be your primary residence.
Just as with any other type of property, the price of a cabin can vary based on size, age, location, and amenities. If there’s an HOA, those fees can add to the cost.
If you’re considering a cabin because you’re buying a vacation home — aka a second home — know that loans for second homes have the same rates as primary homes. A 20% down payment is typical.
Pros and Cons of Buying a Cabin
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Pros:
• You’re buying your very own getaway
• You’re buying a rental property
• Could become your primary home in the future, or a legacy for future generations
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Cons:
• A second home could mean two loan payments and two sets of bills
• You might have to do repairs at inconvenient times
For owners, the big advantage of a multifamily home is that it offers flexibility. Homeowners can buy a home with multiple units and rent out the spaces for extra income. Or an adult child or parent might decide to move into that secondary space.
These properties can be a good investment.
Do accessory dwelling units make a property a multifamily? It depends. Fannie Mae says a property may be classified as a two-unit property or single family with ADU based on the characteristics of the property.
Pros and Cons of Buying a Multifamily Home
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Pros:
• Can share costs with others (renters or family members)
• Keeps multigenerational family members close but gives them their own space
• Can be a good investment
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Cons:
• May be more expensive than a single-family home
• Managing renters could be stressful
• Lack of privacy
11. Houseboat or Floating Home
Living in a home that’s actually on the water — not just near it — can be a dream come true … or a challenge.
Some floating homes are as big as a small house — and are built to be lived in in the same way — only on a floating foundation. Houseboats or liveaboards are typically much smaller than floating homes and more mobile, and they may not have the amenities a larger home can offer.
There are also substantial differences in what it can cost to buy and maintain these water residences. A floating home may cost much more upfront than a houseboat, but the insurance, taxes, and day-to-day costs of keeping a houseboat operating can run higher. And there may be more loan options available, including traditional mortgages, for those buying a floating home.
Pros and Cons of Living on a Houseboat
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Pros:
• Constant view of water and nature
• Often cheaper than traditional housing, with lower property taxes and maintenance costs
• Reduced carbon footprint and often simpler, more eco-friendly living
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Cons:
• Regular maintenance can be time-consuming and costly
• Strict rules and regulations can limit where you can dock and how you can use your houseboat
• Smaller living areas can be restrictive, especially for larger families
12. Duplexes and Triplexes
Duplexes and triplexes make for a good home and also a solid investment opportunity. These multi-unit properties allow you to live in one unit while renting out the others, providing a steady stream of passive income. This arrangement can significantly offset your mortgage and other living expenses, making homeownership more affordable and financially viable.
Additionally, living on the property can help you keep a closer eye on maintenance and tenant relations, ensuring that everything runs smoothly and that your investment remains in good condition.
• Renting out the additional units can provide a steady stream of passive income
• Multiple units can reduce the financial impact of a single vacancy
• Multi-unit properties often appreciate in value over time
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Cons:
• The purchase price of a duplex or triplex is typically higher than that of a single-family home
• Managing multiple tenants can be time-consuming and may require more hands-on involvement
• Living in close proximity to tenants can sometimes lead to privacy issues
Luxury Homes
Luxury homes are a class apart, offering an unparalleled level of comfort, style, and sophistication. These properties are designed to provide a premium living experience, often featuring spacious and elegantly appointed rooms, high-end finishes, and state-of-the-art amenities.
Beyond the physical attributes, luxury homes are often located in prime areas, offering access to the best schools, shopping, dining, and entertainment options. These properties are typically situated in prestigious neighborhoods or gated communities, providing a sense of security and privacy.
But you get what you pay for, and luxury homes can run into the millions. You may need a jumbo loan to finance the property, and those come with stricter qualification criteria, including high credit scores and significant cash reserves.
Pros and Cons of Buying a Luxury Home
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Pros:
• Luxury homes can enhance your daily living experience
• Owning a luxury home can be a symbol of success and wealth
• Luxury homes tend to hold their value well and appreciate over time
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Cons:
• The purchase price is significantly higher than most other home types
• Maintenance, utilities, property taxes, and insurance for luxury homes can be much higher
• The pool of potential buyers for a luxury home is smaller, which can make it more challenging to sell or rent out
Comparing House Types
Whether you’re thinking about buying a single-family home, condo, tiny home, houseboat, or townhome, it’s important to keep your priorities in mind. Here are a few things to consider:
Finding Your Fit
If privacy is a priority, you might consider a …
• Single-family detached home
• Tiny home (on a large lot)
• Modular or manufactured home
• Cabin
• Luxury home
If space is a priority, you might consider a …
• Single-family detached home with an open floor plan
• Larger condo, townhome, or co-op
• Larger floating home
• Luxury home
If affordability is a priority, you might consider a …
• Smaller single-family home
• Condo, co-op, or townhome
• Tiny house
• Modular or manufactured home
• Cabin
If a sense of community is a priority, you might consider a …
• Single-family home with community amenities
• Condo, co-op, townhome, or apartment
• Multifamily home
If uniqueness is a priority, you might consider a …
• Tiny home
• Cabin
• Floating home or houseboat
If schools are a priority, you might consider …
• Any home in a neighborhood that’s conducive to families with young children
If public transportation is a priority, you might consider a …
• Condo, co-op, townhome, multifamily home, or single-family home in a larger town or city
Popular Types of Home Architectural Styles
Home architectural styles vary widely, each offering unique aesthetic and functional features that cater to different tastes and lifestyles. Below are 11 options to consider.
1. Cape Cod
Typically featuring a steeply pitched roof with a small overhang and a central chimney, Cape Cod homes are often one or one-and-a-half stories tall with dormer windows to increase attic space. The exterior is usually clad in shingles or clapboard, and the interior is characterized by cozy, efficient layouts with hardwood floors and wood-paneled walls.
2. Colonial
A colonial home is a symmetrical, two-story design with a centered front door, evenly spaced multi-pane windows, and a simple, traditional look. It often features brick or wood siding, a gabled roof, and a classic, balanced layout with living areas downstairs and bedrooms upstairs.
3. Contemporary
A contemporary home features clean lines, open floor plans, and large windows that bring in natural light. It often uses modern materials like glass, steel, and smooth wood finishes. The design focuses on simplicity, minimal ornamentation, and a seamless connection between indoor and outdoor spaces.
4. Craftsman
A craftsman home is known for its warm, handcrafted feel, featuring a low-pitched roof, wide front porch with thick square or tapered columns. It also may have exposed beams or rafters. These homes often use natural materials like wood and stone, with built-in cabinetry and detailed woodwork inside for a cozy, inviting look.
5. Greek Revival
Greek Revival homes are often large and grand. They feature tall columns or pilasters, symmetrical facades, and a bold, prominent entryway. These homes often have white or light-colored exteriors, pedimented gables, and large windows. The overall look is grand, formal, and elegant, emphasizing strong architectural lines and historic character.
6. Farmhouse
A farmhouse-style home is warm, simple, and functional, often featuring a large front porch, gabled roof, and spacious, open interior layout. Natural materials like wood and stone are common, along with neutral colors and cozy finishes. The style balances rustic charm with comfortable, family-friendly design.
7. Midcentury Modern
A midcentury modern home is known for its clean lines, minimalist design, and integration with nature. These homes often feature flat or low-pitched roofs, large windows, and open floor plans that emphasize natural light and indoor-outdoor flow. Materials include wood, glass, and steel.
8. Ranch
Ranch homes — the most popular home style — are single-story homes with long, low, horizontal layouts. They usually feature an open floor plan, large windows, and easy access to the outdoors, often through sliding doors leading to a patio or yard. The style emphasizes simplicity, accessibility, and casual living.
9. Split-Level
A split-level home has staggered floor levels, typically with a main living area on one floor and short sets of stairs leading to upper and lower levels. This layout provides separation between spaces, such as bedrooms upstairs and a family room or basement downstairs. The style maximizes square footage on smaller lots while maintaining an open feel.
10. Tudor
A Tudor home is known for its steeply pitched roofs, tall narrow windows, and decorative half-timbering on the exterior. The design often includes brick or stone details, giving it an old-world, storybook charm. Inside, you’ll often find cozy rooms, wood accents, and traditional craftsmanship.
11. Victorian
A Victorian home was built in the Victorian era, and often features intricate trim, patterned shingles, and vibrant exterior colors. These houses usually have steep roofs, bay windows, and wraparound porches. Inside, Victorian homes tend to include detailed woodwork, high ceilings, and a mix of formal, elegantly styled rooms.
The Takeaway
Understanding the different types of homes before you begin your search for a place to live can help you find your dream home more quickly, and free you up to take on other homebuying tasks. Besides choosing the type of home you want, you’ll also have to decide how to finance this important purchase if you’re not paying cash. A good way to start is to shop and compare rates.
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
What type of house is cheapest?
Condos, co-ops, townhomes, and manufactured homes all tend to be less expensive than single-family homes. Among new single-family homes, modular homes tend to be the least expensive because they are made in a factory and assembled on-site.
What is the difference between a modular and manufactured home?
A modular home is built in sections at a factory and transported to the site for assembly, often adhering to local building codes. A manufactured home, or mobile home, is entirely constructed in a factory and placed on a permanent chassis, following federal standards.
Which home type is best for first-time buyers?
The best type of home for first-time buyers depends on their lifestyle, preferences, budget, and goals. Condos and townhomes generally have lower prices and less maintenance, but single-family homes offer more space and privacy.
Can you get a mortgage for any type of home?
Yes, you can get a mortgage for various types of homes, including condos, townhomes, and single-family homes. Each has specific requirements and may involve different loan programs, but most lenders offer mortgages for these home types, making it accessible for buyers to finance their purchase.
What style of home is most popular?
Ranch-style homes are currently very popular due to their single-story design, which offers easy accessibility and open floor plans. Modern and contemporary styles are also gaining traction, especially among younger buyers, for their sleek designs and energy efficiency.
Photo credit: iStock/CatLane
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
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 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.
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.
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 Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®
