SoFi

A financial hardship loan is a type of loan that can help people get through such monetary challenges as unemployment or medical debt.

Some people may have emergency savings to dip into or family or friends who can help them out if the unexpected happens. But for those who can’t access such resources, a hardship loan can offer the cushion needed until a person’s financial prospects brighten. There are a variety of hardship loans to consider, from personal loans to home equity borrowing, and each has its own application requirements.

What Is a Hardship Loan?

A hardship loan is a loan that can help you get through unexpected financial challenges like unemployment, medical bills, or caregiving responsibilities. These are considered a kind of personal loan, and they typically require you to validate that you are facing severe financial issues in order to qualify. If approved, you get a lump sum of cash and pay it back over time with interest.

That said, it’s wise for potential borrowers to be informed and carefully consider their terms and options so they don’t wind up incurring more debt than they can manage.

What Can You Use a Hardship Loan For?

As one of the types of personal loans, a hardship loan typically works much like any standard personal loan. The borrower receives a lump sum of money to use as they need, with few limitations. Potential uses could include:

•   Rent or mortgage payments

•   Past-due bills

•   Everyday expenses like groceries and transportation

•   Medical needs

A hardship loan could overwhelm already strained finances, however. Debt in any form will have to be repaid eventually, with interest, even in the case of hardship loans.

Hardship Borrowing Options

When you’re experiencing financial difficulties, you may feel the need to make a quick decision. But assessing your options can help you find the best solution for your needs and financial circumstances. Here are some options you may consider when looking for financing during times of hardship.

Personal Loans

A personal loan allows you to borrow a lump sum of money, typically at a fixed interest rate, that you’ll then repay in installments over a set amount of time. Unlike a credit card, which is revolving debt, a personal loan has a set end date. This allows you to know exactly how much interest you’ll pay over the life of the loan (a personal loan calculator can always help with that determination, too).

The common uses for personal loans are wide-ranging. In addition to using a personal loan to help cover current expenses, you could also use personal loans to consolidate high-interest debt that you may have incurred, whether due to hardship or other reasons.

Typically, personal loan interest rates are lower than credit card interest rates, making them an attractive alternative to credit cards. When it comes to getting your personal loan approved, expect lenders to look at your credit history, credit score, and other factors.

Recommended: How to Apply for a Personal Loan

Credit Cards

Some people also may use credit cards to cover hardship expenses. While this strategy can help in the moment, it can lead to larger bills over time.

For instance, a credit card that offers a 0% annual percentage rate (APR) could allow you to minimize interest charges throughout the promotional period. However, you’ll need to ensure the balance is paid in full before the introductory period ends. Otherwise, you could start racking up interest charges quickly, adding to your financial challenges.

Peer-to-Peer Lending

Peer-to-peer (P2P) lending is becoming more common as people seek out nontraditional financing. P2P loans are generally managed through a lending platform that matches applicants with investors.

While it may offer more flexibility than a traditional loan, a P2P lending platform still looks at an applicant’s overall financial picture — including their credit score — during the approval process. Like a traditional loan, a P2P’s loan terms and interest rates will vary depending on an applicant’s creditworthiness.

Generally, lenders in the P2P space will report accounts to credit bureaus just as traditional lenders do. So making regular, on-time payments can have a positive effect on your credit score. And, conversely, making late payments or failing to make payments at all can have a negative effect on your credit score.

Home Equity

If you own your home, you may consider borrowing against your home’s value. You could do this in the form of a home equity loan, a home equity line of credit (HELOC), or by refinancing your mortgage through a cash-out refinancing option.

With a home equity loan, you’ll pay back the amount borrowed (with interest) over an agreed-upon period of time. While a home equity loan is offered in a lump sum, a HELOC is a revolving line of credit that can allow you to withdraw what you need. However, HELOCs often have variable interest rates, which can make it challenging to plan for repayment.

With a cash-out refinance, on the other hand, you’d refinance your current mortgage for more than what you currently owe, allowing you to get a bit of extra cash to use as you need. This process replaces your old mortgage with a new one.

In all of the options outlined above, if you can’t pay back the loan or follow the agreed-upon terms, there’s the potential that you may lose your house.

401(k) Hardship Withdrawal

It also may be possible to withdraw funds from your retirement plan. Under normal circumstances, a penalty typically is incurred for early withdrawal. There’s a chance the penalty will get waived due to certain types of financial hardship, but exceptions are limited.

Additionally, making a hardship withdrawal from your retirement account means a missed opportunity for these funds to grow. This could potentially put your retirement goals at a disadvantage or later require you to come up with an alternative catch-up savings strategy. In other words, really pause to think it through before using your 401(k) to pay down debt or put toward current expenses.

Alternative Options

While you can use personal loans for a variety of financial needs, there may be other options to consider depending on your situation. For example, if you’re a single parent, you might consider seeking out loans for single moms or dads who have sole financial responsibility for their household. Here are some other options you might explore:

•   Employer-sponsored hardship programs: If you’re facing financial hardship, ask your employer if they have an Employee Assistance Program (EAP). Financial assistance might be offered to help employees who have emergency medical bills, who have experienced extensive home damage due to fire or flood, or who have experienced a death in the family. Employees will likely have to meet specific qualifications to receive EAP funds.

•   Borrowing from friends and relatives: Asking for an informal loan from a friend or family member is certainly an option for getting through financial hardship, although not one that should be considered lightly. Having clear communication about each party’s expectations and responsibilities can go a long way to keeping a relationship intact. Consider having a written loan agreement that outlines details about the loan, such as the amount, interest rate (even if it’s nominal), and when repayment is expected.

•   Community-based resources: There may be specific grants within your community available for people with emergency financial needs. Organizations like 211.org help individuals find the assistance they need. Community-based social services organizations also may be able to make referrals to other organizations as needed.

•   Government programs: Federal and state governments list resources on their websites for individuals seeking financial hardship assistance. Depending on your circumstances, you may be eligible for certain government programs that could help reduce expenses for food, childcare, utilities, housing, prescription medication, and others.

The Takeaway

Researching all of your options for financial relief is a wise move. You might find help from government or community resources, your employer, or a friend or family member. Or, you might consider options such as a financial hardship loan, a home equity loan, or a P2P loan. Understanding the total cost of getting help and repayment terms is an important step in the process.

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

FAQ

What qualifies as a hardship loan?

A hardship loan is a kind of loan that helps you afford unexpected expenses or get through an emergency. You might qualify for a hardship loan if you’re experiencing financial difficulties, such as job loss, medical bills, or home repairs.

What qualifies as financial hardship?

Some common scenarios that can qualify as financial hardship include being unable to repay a loan you took out in the past, being unable to keep up with debt payments due to unforeseen circumstances, and losing income so that you can’t afford your expenses.

What proof do you need for financial hardship?

You might need to show proof of financial hardship by submitting a termination notice if you’ve lost your job or a doctor’s certificate showing you are unable to work or have unpaid debt. You might be asked to submit bank statements or bills pending as well.

Photo credit: iStock/staticnak1983

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.

SOPL-Q125-021

If you need expensive dental work, you’re likely wondering how to pay for it. After getting a quote from your dentist and learning how little your insurance will cover, you may be thinking, I must be missing a way to afford this.

There’s good news and bad news when it comes to how to finance expensive dental work. Bad news first: Despite insurance, dental work can cost a lot out-of-pocket. The good news: While there’s probably not an easy solution to covering the whole bill, there are many tricks you can use to make your dollar stretch farther (and possibly even get a tax break while you’re at it).
Here, learn smart strategies about how to pay for dental work. Altogether, these ideas can add up to quite a discount off your dentist’s quote.

10 Ways to Pay for Dental Work

Many people cover their dental work by combining several of the strategies below. It’s tough to avoid paying out-of-pocket entirely, but you can often get a hefty discount off the original quote. Here, how to pay for dental work:

1. Dental Insurance

You should know that there’s a difference between a dental office that takes your insurance and a dental office that is in-network. A dentist may take your insurance even though they are out-of-network.
When a dentist says that they take your insurance, that likely means that they will file an insurance claim for you. But if your insurance doesn’t cover a procedure or service, the price will generally be set at your dentist’s discretion — and you’ll typically be responsible for paying the costs out-of-pocket.

Generally, using an out-of-network dentist means your insurance will cover less so you’ll pay more. Being in-network, on the other hand, usually means that your insurance company has prenegotiated the fees with the dentist, and they generally can’t charge more than that. So you’ll usually pay less with an in-network dentist.

Recommended: Does Cosigning Build Credit?

2. Medical Insurance

Dental work isn’t typically covered by medical insurance, but certain procedures may be covered if they’re deemed medically necessary. For instance, some kinds of oral surgery potentially can be billed as a medical procedure. Before you move forward with any dental work, it’s a smart idea to talk to your medical insurance company to find out what may be covered. This could help you afford a major dental bill.

Recommended: Guarantor vs. Cosigner: What Are the Differences?

3. Payment Plans

Paying a bill on a weekly or monthly basis can be much more manageable than paying it in a lump sum. That’s why many dental offices offer payment plans for procedures not covered by insurance.
Payment plans can be offered directly through your dentist’s office, or by third-party services like CareCredit. Ask about the specific terms of any payment plan offered. For example:

•   What procedures qualify for a payment plan?

•   Will they charge interest? And if so, how much?

•   Are other fees involved?

•   Do they have to check your credit first? If so, will it be a hard or soft inquiry?

Asking these questions beforehand can help keep you from getting blindsided by unexpected costs.

4. Flexible Spending Account

A Flexible Spending Account (FSA) is a special savings account offered through some employer benefit plans. FSAs allow employees to pay for certain out-of-pocket medical and dental costs with tax-free money.

The typical taxpayer saves about 30% in federal, state, Social Security, Medicare, and Unemployment taxes. That translates to a 30% discount off all eligible medical and dental expenses, which could be an idea for how to pay for expensive dental work.

FSA rules cap the amount of money that can be placed in the account each year ($3,300 for 2025 per the Internal Revenue Service, or IRS) and also dictate which types of expenses are FSA-eligible. Most routine dental work and orthodontia qualify: cleanings, X-rays, fillings, crowns, extractions, implants, and Invisalign.

FSAs can’t be used for any procedure that is considered cosmetic, including teeth whitening and veneers. But in some instances, if a typically cosmetic procedure is deemed medically necessary — as with some veneers — you may be able to use your FSA. Talk to your dental insurance company for more information.

One drawback of FSAs is that any funds that are unused at the end of the plan year are forfeited — so make sure you don’t leave any money on the table. In the plus column, because FSAs are funded with pretax dollars, they reduce your taxable income, which is always nice.

5. Health Savings Account

A Health Savings Account (HSA) is similar to an FSA in several ways:

•   Both are funded with pretax dollars

•   Both are used to cover health care expenses

•   Both can be established through your employer, and funded with payroll deductions

But there are also key differences between an FSA and HSA:

•   HSAs must be used with a High Deductible Health Plan (HDHP)

•   The 2025 HSA funding cap is $4,300 for individuals, $8,550 for families

•   HSA funds roll over from year to year

•   You can set up an HSA through some health insurance companies and banks, making them a good option for the self-employed

If you don’t have access to an FSA — and you are currently covered by a high-deductible health plan — you can open an HSA at any time.

6. Negotiate With Your Dentist

The cost of dental work can actually be negotiable, depending on your dentist and your situation. First, have your dentist walk you through the treatment plan. Ask lots of questions, including:

•   Are all the procedures they’re suggesting equally urgent? Can some be postponed?

•   Can you get a discount by paying cash or the entire cost upfront? Some dentists give a percentage off for this.

•   If you don’t have insurance, ask if you can score an uninsured rate.

Some dentists will be flexible, and the worst that can happen is they say no. Another thing you can do is to have an honest conversation with your dentist about your financial situation. If your budget has no breathing room, see if they are open to giving you a discount or if they are willing to push out your bill for a few months.

If the planned dental work is important but not super urgent, you may be able to schedule your appointments so they straddle two plan years. For example, if your plan year is January-December, you might schedule half the appointments for December, and half for the following January. That way, you can take advantage of two annual benefit maximums for insurance and two years’ worth of FSA or HSA funds.

7. Get Work Done at a Dental School

Having work done at a well-regarded dental school may be an option to make expensive dental work more affordable. Search online to see if you live within easy distance of a dental school that offers discounted services. Some schools may provide lower-cost exams and procedures as a way of training their students and giving them real-world experience, under the supervision of skilled, highly trained dentists. The cost can be up to 50% lower than what you might find elsewhere.

If you have access to this and want to go this route, it can be wise to carefully check online reviews to hear how others’ experiences went and feel confident in your decision.

Recommended: Applying for a Loan With a Cosigner

8. Credit Card

In some circumstances, a credit card can be a suitable payment option for dental bills. If you have a card that offers rewards or cash back, it can also provide some benefits in return.

You might also consider looking for a medical credit card. These cards are issued by banks, credit unions, and other lenders and can only be used for health care and within a specific provider network.

Some medical credit cards defer interest for a period of time after your health care charges are incurred — much like 0%-interest cards. No interest is charged so long as those charges are paid off in full before the interest-free period expires. Late payments or balances that have not been fully paid before the deferment period ends can incur interest charges. Make sure you read the fine print and are comfortable with the fees involved before signing up for one of these cards.

Speaking of 0%-interest cards, they’re another option to finance expensive dental work. By law, these interest-free promotional financing offers must last at least six months. But the most competitive offers go well beyond this to offer 0% introductory APR financing for 18 months or longer.

Before you commit to a new card, it’s a good idea to shop around for the best terms and make sure dental work meets the requirements for any rewards. Credit card debt can be a significant financial issue, so it’s wise to know the exact benefits and downsides of this kind of card. You might want to consider getting a personal loan or borrowing from family instead.

9. Personal Loan

Because of this flexibility, many people use personal loans to pay for out-of-pocket medical expenses or to consolidate high-interest debts through a debt consolidation loan

Using a personal loan to finance dental work might be a better option than a credit card. The lower the interest rate, the lower your monthly payment. And personal loans tend to have lower interest rates than credit cards. As of December 2024, credit cards have an average interest rate of more than 20%, but online lenders may offer significantly lower personal loan interest rates (even less than half that percentage) to qualified borrowers.

By using a personal loan calculator, you can compare this option to, say, using a credit card or dipping into your savings.

How much you can borrow is also flexible, and getting approved for a personal loan can be done entirely online. In short, a dental loan might be a good option to cover additional dental needs, from basic fillings to more complex, high-cost procedures.

10. Emergency Fund

Tapping your emergency fund won’t offer a discount on your dental bill, but it can provide a way to pay it. One of the cornerstones of good financial management is to build an emergency fund, typically holding three to six months’ worth of living expenses. The typical scenarios for withdrawing funds from your emergency savings account include paying bills if you lose your income or taking care of an unexpected large medical, dental, or car repair bill. So if you receive a major dental bill and need cash, your emergency fund could be an answer.

Remember, emergency funds aren’t built in a day. Setting up automatic payments into this account from your checking can be a smart move; it’s fine if it’s a small sum like $25 per paycheck to start. And don’t forget to keep the money in a high-yield savings account so it can grow until you need to use it.

The Takeaway

When it comes to how to pay for expensive dental work, there is no one perfect solution. But there are a number of resources and tricks you can call upon to stretch your dollar. Discuss your options with your dentist to find out what discounts and payment plans they may offer. Avail yourself of an FSA or HSA to pay with pretax dollars, if possible, or pay your bill with a 0% interest credit card, rewards card, or medical credit card, among other tactics.

Another option is to finance your dental work with a personal loan.

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

FAQ

What can I use as financial assistance for dental work?

To finance expensive dental work, you may have to employ a few different tricks. First, if you have an FSA or HSA, paying your bills with pretax funds will net you an effective 30% discount. You can also schedule work to straddle two plan years so that your dental insurance and FSA/HSA cover twice the annual amount. If you’re uninsured, explain your financial situation to your dentist to see if they’ll offer a discount. And consider taking out an unsecured personal loan.

Can I use a personal loan as financial assistance for dental work?

Yes, a personal loan can be a great option for covering expensive dental work, compared to high-interest revolving credit. Shop around for the best rate and terms, and read the fine print to make sure you fully understand the fees involved for any option you are considering.

Is it hard to get financial assistance for dental work?

It will take some work on your part, but financial assistance is available for low-income patients through dental schools, clinical trials, United Way, Medicare, and Medicaid. Find out what kind of assistance you may be eligible for on the U.S. Department Health & Human Services website at HHS.gov.

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.

SOPL-Q424-063

The change of seasons often brings on a flurry of cleaning and a home refresh. If you’re looking for some budget-friendly changes that will bring new life to your rooms, we have those for you.

Before you start, try to clear any clutter you may have. If you tend to hoard, begin your refresh by donating or throwing away items you no longer use. You may also want to review this list of home improvements that can increase the value of your home.

Living Room

Whether you’re entertaining guests or just hanging out, your living room should feel inviting and reflect your style, yet also be functional and versatile.

1. Paint

A fresh coat of paint can do wonders for any living space. Picking neutrals like white or beige ensures a clean and timeless look.

2. Statement furniture

If you don’t have the budget to buy all new furniture, you may want to consider picking one or two new pieces, such as an eye-catching chair or coffee table, that will update your space.

3. Area rug

A quality rug can anchor a room and add a subtle splash of color. It’s also a good idea to make sure it’s sturdy enough to handle high traffic. Adding a rug pad can be worth the additional cost because it feels luxe underfoot and prolongs the life of your rug.

4. Lighting

How you light a room can affect its overall feel. Installing dimmers can enable you to adjust the lighting depending on the mood you’re trying to set. A new floor or table lamps can also allow you to subtly adjust lighting.

5. Clutter containment

If you still have a lot of “stuff” after your initial purge, you may want to consider storing it in decorative receptacles such as woven baskets or a storage ottoman. This is especially useful for kids’ toys.

6. Framing

Buying nice frames to create a gallery on blank walls, or even just to display family photos on a side table, can really personalize your space. Consider a digital photo frame for convenient streaming.

7. Window treatments

Blinds or curtains can add depth to a room. The most affordable option is to buy premade curtains and rods from a home décor store and install them yourself. Measuring carefully is the key to success.

8. Sofa spruce-up

Purchasing a bold couch cover and swapping out your throw pillows can be a quick and inexpensive way to add color and patterns to your space. Toss a blanket over the arm of the sofa for both added texture and warmth.

9. Go green

Plants have always been a simple and effective way to bring life into a space. Good news if you don’t have a green thumb: You can now download an app (Planta is one example) that will help you remember to care for them properly.

10. Switch it up

Looking for a zero-cost home refresh option? You can try rearranging your furniture. Using apps like Modsy for floor plan ideas can help you find options that complement your lifestyle and make the most efficient use of your space.


💡 Quick Tip: Loans typically offer lower interest rates than credit cards. Consider a SoFi home improvement loan to fund your next renovation.

Kitchen

Dreaming about that perfect HGTV kitchen? You can use our calculator to estimate just how much a full remodel may cost you. (Hint: The average cost of a kitchen remodel taps in at more than $50,000.) Never fear: You can still refresh your kitchen with some of the following affordable upgrades — no permits or contractor required.

11. Cabinet facelift

If your cabinets are looking dated, you may want to try putting a fresh coat of paint on them. For an added touch, consider changing out the hardware and installing new handles and drawer pulls.

12. Seat swap

You may want to consider upgrading worn or outdated bar stools in exchange for something sleeker. If purchasing new stools isn’t in your budget, get out your staple gun and try changing the upholstery.

13. Appliance upgrade

If your appliances aren’t working as well as they used to, or they’re nearing the 10 year mark, it may be time to replace them. Although this can get expensive, you can find bargains on bundles, especially during holiday sales, and some outlet stores offer steep discounts on open box appliances.

14. Fill a wall

If you have unused wall space, you may want to consider installing floating shelves for smaller items such as cookbooks, plants, and other knick knacks. Not only will the extra shelving provide more storage in your kitchen, but it can also create an eye catching display.

15. Light it up

For a style update with a big impact, you can look into replacing old lighting fixtures with modern pendants. They come in such a wide variety of styles and price points that there’s something for just about anyone’s taste and budget.

16. Combine decor with utility

It’s easy to warm up a space with an attractive fruit bowl, colorful wall clock, or pretty serving tray. If you’re adding a TV to your kitchen, consider one that will display art or photos when you aren’t watching your favorite shows.

17. Streamline storage

Your storage areas can also be the focus of a spring upgrade. Toss expired foods from your pantry and do a deep clean of your fridge and freezer. If you want to really get organized, consider storing your dry goods and refrigerated items in clear canisters and bins for easy identification and access, and using drawer dividers to separate utensils.

Recommended: Interior Decoration Tips for Furnishing A New Home

Bathroom

In an ideal world, a bathroom remodel would include a new vanity, tile, and hardware. However, even if a demo is more idealistic than realistic, that doesn’t mean this space is out of bounds. Start small with a few less costly changes.

18. Hardware update

Replacing your outdated sink, bath and shower hardware can boost the appeal of just about any bathroom. By adding matching towel racks, door hooks, and vanity knobs and handles, you can achieve a cohesive upgrade that doesn’t break the bank.

19. Target: toilet

If your porcelain throne is starting to show wear and tear, it may be time to replace the lid and seat. You can go all in and buy a new toilet for just a couple hundred dollars, although you will likely need a plumber as well.

20. Mirror modern

If you have a long vanity with two sinks, you may want to consider installing two separate mirrors with bold frames. Mirrors with LED backlighting offer a more modern hotel-like look.

21. Shower showcase

The shower curtain is one of the first things people see when they walk into a bathroom. Introduce a new look by finding a curtain with a cool pattern and adding a new curtain rod and rings.

22. Spa retreat

A bamboo bath mat that’s easy to clean and water-resistant can elevate your space. So can candles or a diffuser. Add attractive shelving — or simply swap in plush new towels — and you’ll instantly create a serene scene that could compete with any day spa.

23. Accessorize

Placing your soap dispenser and toothbrush holder on a decorative tray easily gives your bath a tidy boost. Take a good look at all the personal care products that are visible in your space. Stow unattractive or less frequently used products in drawers and make sure what’s still visible is in attractive containers.

24. Grout out

No budget for new tiles? Put some elbow grease into cleaning the grout on your existing tile floor and walls, or regrout the entire space for a cleaner, brighter look.


💡 Quick Tip: You never know when you might need funds for an unexpected repair or other big bill. So apply for a HELOC (a home equity line of credit) brokered by SoFi today: You’ll help ensure the money will be there when you need it, and at lower interest rates than with most credit cards.

Bedroom

Your bedroom should be your haven after a long day of work, but you don’t need to do a complete bedroom remodel to reap more relaxation. Just make a few changes to create a more peaceful setting.

25. Headboard

For a few hundred dollars, you can find an upholstered headboard that’s both fashionable and easy to assemble. It can create a dramatic difference in your bedroom’s appearance.

26. Paint

It’s pretty easy to refresh your walls over a weekend. If you want to liven up your space with some color, stick with soft hues such as pale blue or gray. For the I-hired-a-decorator feel without the price tag, consider removable wallpaper.

27. New linens

To quickly liven up a boring bed, you can replace old sheets, blankets and pillows. Opt for soothing colors and muted patterns that will create a peaceful sleeping environment.

28. Floors

Whether you have wooden floors or carpet, layering an area rug can help to create a cozy environment. For a luxurious feel, try shag or sheepskin rugs.

29. Lighting

Designing a unique lighting setup doesn’t have to be hard or expensive. You may be able to freshen up your space by installing plug-in sconces (which require no rewiring) on each side of your bed. It can save table space and add decor to your wall.

30. Side tables

For a budget-friendly furniture refresh, just replace your bedside tables. Look for a pair with concealed storage to cut down on the cluttered look.

31. Closet clutter

Custom closets can get expensive very quickly. But you can get your closets under control by installing affordable hanging bars and shelves that not only look good, but help you organize your wardrobe.

32. Floor mirrors

A full-length floor mirror will reflect light and make your room feel bigger — not to mention that it comes in handy when you’re pulling together your daily outfit.

33. Art & photos

Many designers suggest thinking of your walls as a blank canvas to display your style and the people you love. You can achieve this by hanging your favorite photos or artwork in eye-catching frames.

What is Your Home Missing Quiz

The Takeaway

Even small changes can make your home feel new again. Figure out how much you want to spend on your home refresh before you start so you can prioritize which changes are most important to you. Staying within your budget by choosing upgrades that you can do yourself, shopping secondhand stores, and comparing prices carefully.

Inspired to tackle a larger home makeover project? A home improvement loan may be the way to go. SoFi’s no-fee home improvement loan could help you foot the bill of your kitchen reno or bathroom demo, with no collateral required. Plus, it’s possible to get your funds the same day* which can help fast track your remodel.

Learn more about how a home improvement loan can help with your remodel.

Photo credit: iStock/KatarzynaBialasiewicz

^* Same-Day Personal Loan Funding: 82% of typical SoFi Personal Loan applications, excluding Direct Pay Personal Loans and Personal Loan refinance, from January 1, 2022 to January 1, 2023 that were signed before 7pm ET on a business day were funded the same day.

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 Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SOHL0224004

If you’re in the market for a home, you may have come across the term “single-family home” and wondered what it means and if that is what you are looking to buy.

Generally, a single-family home refers to a freestanding home set on its own piece of property. It can be occupied by a single individual or a large family, as long as it’s occupied by a single household.

Owning a single family home comes with a number of benefits, including more privacy and space than other types of residential properties. However, this type of home also tends to come with a higher price tag and more responsibility. Here’s a closer look at what single family homes are and the pros and cons of buying one.

What Is a Single-Family Home?

Generally speaking, the term single-family home refers to a home that is designed for, occupied by, and maintained by one person or household. When you buy a single-family home, you will own both the home and the property it sits on. This is in contrast to other types of properties, such as condominiums (condos), where you only own the interior of your unit and share ownership of common areas with other homeowners in the complex.

In most cases, a single-family home is defined as one that is freestanding and not attached to homes owned by other individuals. However, the government has a broader definition. According to the U.S. Census Bureau, a single-family home includes fully detached homes, as well as semi-detached row houses and townhouses. In the case of attached units, the units must be separated by a ground-to-roof wall in order to be classified as a single-family structure. Also, these units must not share heating/air-conditioning systems or utilities.

In some places, a single-family home is defined in part by how many kitchens it has. Depending on zoning laws, adding a second full kitchen to an in-law’s apartment, for example, can cause a house to be redefined as a multi-family building. If you’re planning on doing this type of renovation, be sure to check local zoning laws beforehand.

Whether a home is classified as a single-family or multi-family home can have an impact on the type of mortgages you qualify for. Both single-family homes and two- to four-unit properties fall under residential lending guidelines. (A property with five or more units is considered commercial property.) You can use a conventional mortgage to purchase a home with four or fewer units, whether it’s a single- or multi-family home. If you’re buying a multi-family home with five or more units, you must use a commercial mortgage. Commercial mortgages have different terms than residential mortgages do.


💡 Quick Tip: When house hunting, don’t forget to lock in your home mortgage loan rate so there are no surprises if your offer is accepted.

Pros and Cons of a Single-Family Home

As you shop for homes, it’s important to consider the various advantages and disadvantages of a single-family residence.

Some of the advantages are:

•   More space Single-family homes tend to offer more space than other types of housing, and it belongs to you alone. They may have large yards where children and dogs can play or where you can plant a vegetable garden. They may also have storage in attics, garages, or basements, which aren’t shared between multiple units.

•   Privacy Single-family units that don’t share walls with neighbors offer more privacy. You are less likely to hear neighbors’ activities, and they are less likely to be bothered by yours.

•   More design features Single-family homes may be available in a broader range of designs and layouts, from Cape Cods or colonials to ranch homes and contemporary designs. You can also make changes to the building or landscape design without input from neighbors with a shared interest in the space.

•   Room to grow Single-family homes may offer you more options for additions if you have a growing family or if aging parents may come to live with you. For example, single family detached homes with larger plots of land may allow additions that wouldn’t be possible in condo units.

•   May offer higher appreciation Single-family homes tend to appreciate in value more than condos and townhouses.

•   Option to rent As the sole owner of a single-family home, you have the option to rent out the house if you decide to move and wish to hang on to the property.

While these factors are attractive, it’s important to weigh potential disadvantages of buying a single-family home as well. Here are some to keep in mind:

•   More expensive Single-family homes tend to be more expensive than other types of homes. That can mean a larger down payment and higher closing costs, and your mortgage payments may be higher.

•   More maintenance Unless your single-family home is part of a homeowner association (HOA) that provides basic services, you’ll be in charge of all home maintenance like lawn mowing and roof repairs. You’ll either have to take the time to do it yourself or hire help.

•   Possible HOA fees Planned developments usually require HOA fees to cover the upkeep of common areas and shared structures.

•   Less income potential With multi-family homes, you have the option to live in one unit while renting out the others. This allows you to bring in regular income to cover the cost of the mortgage and maintenance expenses.

Finding a Single-Family Home

Before you start looking for a single-family home, you’ll want to first determine how much home you can afford. You might start by calculating mortgage costs and getting prequalified for a home loan; prequalification often only takes a few minutes and provides an estimate of how much you might be able to borrow and at what rate (without impacting your credit).

You’re probably already searching real estate listings online and noting the property types. You might also want to do some research on housing market trends, especially if you live in one of the nation’s real estate hot spots.

You may also want to engage a real estate agent. They have expertise in local housing and zoning laws, know whether a list price is fair or above or below average, and can help you negotiate the price of a home you’re interested in buying.

If there’s any question about how a house is zoned, you can often look up zoning information through a particular city’s website.

Recommended: First-Time Home Buyer’s Guide

Who Should Get a Single-Family Home?

Single-family homes are a good fit for people who can cover the higher price tag, want privacy and flexibility, and are willing to take on a lot of responsibility.

If you qualify as a first-time homebuyer, there may be help available to buy a single-family home in the form of down payment assistance and low- or no-interest loans.

If you’re looking for a more affordable home and don’t mind giving up some privacy, you might want to consider a condo or townhouse.

A condo is like an apartment but is available for purchase. These units share walls with neighboring units, but you generally won’t have to worry about maintaining the property.

A townhouse, on the other hand, has multiple stories and will share one or two walls with other units. Like condos, townhouses are typically less expensive than single-family homes. Unlike a condo, you’ll own the property that the townhouse sits on.

If you’re looking to invest in real estate, you might consider buying a multi-family home. While this will likely cost more than a single-family home, you may be able to recoup the added cost (and, over time, earn even more) by collecting rent from tenants.


💡 Quick Tip: To see a house in person, particularly in a tight or expensive market, you may need to show the real estate agent proof that you’re preapproved for a mortgage. SoFi’s online application makes the process simple.

If You’re Thinking of Purchasing a Single-Family Home, SoFi Home Loans Can Help

Single-family homes are one of the most popular real estate options and often what people envision when they think about achieving the dream of home ownership.

This type of property typically sits on a parcel of private property and doesn’t share walls with neighbors, affording you a high level of privacy. You generally have more control over making enhancements to your home than you have with other types of properties, and usually have access to extra storage, including exterior storage space like a shed or garage.

However, don’t forget to consider the added responsibilities and costs when deciding on the right type of home for you and your family.

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.

FAQ

How much does a single-family home cost?

The median price for an existing single-family home — one that’s already standing, not new construction — was $387,600 as of November 2023, according to the National Association of Realtors.

How much do I need to build a single-family home?

The cost of building a single-family home (not including land) can range anywhere from $42,000 to $900,000-plus depending on the home’s type and size and where you build. On average, the cost to build a house in the U.S. is about $329,000.

Can you get a loan to build a single-family home?

If you’re planning to build a single-family home from scratch, you can apply for a construction loan. With this type of loan, money is usually advanced incrementally during construction, as the home-building project progresses. Typically, you only pay interest during the construction period. Once the construction is over, the loan amount becomes due, and it is converted into a regular mortgage.

Photo credit: iStock/Dean Mitchell

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 Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SOHL0124013

Renting out a room in your house can be a good source of extra income but generally isn’t something you want to do on a whim. From legal and financial considerations to aesthetics, there are lots of things to think about before offering the space to a potential housemate.

Here are some things to consider before renting out a room in your house.

What Are Some Room Rental Options?

Renting out a room in your house doesn’t have to mean having one long-term renter, although that’s certainly one way to go. Here’s a look at a few different rental options.

Short-term Rental

One option you might consider is offering short-term rentals through a service such as Airbnb or Vrbo. This could be a good option if you live in an in-demand tourist area or have a home in an out-of-the-way locale that might attract someone looking for a place to relax and unwind. Some travelers prefer to stay somewhere that feels more like a home than a hotel.

Recommended: 25 Things to Know When Renting Out an Airbnb

Long-term Rental

Having a housemate who is planning to rent a room in your home for an extended period of time can be one way to have a steady income for that time period. It’s a good idea to have a formal rental agreement that clearly outlines expectations of both parties.

Furnished or Unfurnished Rental

Whether to offer a furnished or unfurnished space will probably be determined by the type of renter you’re looking for. If you live in a college town, prospective renters might not have any furnishings of their own, so will likely be looking for a furnished rental. As with a short-term rental mentioned above, a furnished rental will probably be a given. A potential long-term housemate, though, may have their own furnishings to bring to the space.

What Financial Considerations Are There?

For some people, the sole reason for renting a room in their house is to have some extra income. With income, though, generally come expenses.

Return on Investment

It’s not likely that a spare room is ready for a renter without some updating and perhaps even some repairs. Keeping a record of how much money you spend preparing the space will help you determine if you’re coming out ahead financially. It may take some time to recoup the money you spend before you make a profit. And it’s a good idea to have a record of any ongoing expenses you incur to make sure you’re charging enough rent to offset those costs.

Recommended: What Is Considered a Good Return on Investment?

Taxes

In most cases, there will be income tax implications, so it’s wise to treat renting a room in your house as a business of sorts. As such, it’s a good idea to consult a tax professional who can answer detailed questions about rental income.

The IRS considers rental of part of your property, such as a spare room, as taxable income. And, like some business expenses, there are expenses related to this type of rental that are tax deductible. Any deductions claimed must be directly related to the portion of the home that is used for rental purposes and is generally calculated as a percentage of the home’s total square footage.

Recommended: 25 Tax Deductions for Freelancers

Are There any Legal Considerations?

It’s wise to look at your state’s landlord-tenant laws as a first step. Some states are more landlord friendly, while other states have a wide range of protections for tenants, putting more limitations on landlords’ rights.

Even if you’re just renting out a room to an acquaintance, you’ll likely still be considered a landlord and must adhere to regulations that apply to your situation. The Fair Housing Act protects potential tenants from discrimination except in limited circumstances. Shared housing is one of those circumstances because the government concluded that sharing one’s personal space has “significant privacy and safety considerations” in a U.S. Court of Appeals ruling.

Neighborhood Restrictions

Aside from governmental legal considerations, it’s a good idea to check your apartment lease or your neighborhood or homeowner’s association, if you have one, as some homeowner’s associations may have regulations about leasing all or part of your home. If you’re renting a home or apartment, your lease may specify whether you’re allowed to sublease or if you’re restricted from doing so.

Your homeowner’s insurance policy may also include a clause related to leasing part of your home. Some companies may allow you to rent a room in your home without any change to your policy, while others may disallow it completely. There’s a chance you may see an increase in your premium, as well. To be on the safe side, it’s a good idea to let your insurance agent know of any change in your home’s occupancy.

Recommended: Condo vs Townhouse

Screening Tenants

Finding the right person to share your personal space may take some time. You likely have certain things you’re looking for in a potential renter along with other things that might be deal-breakers. Maybe you’re looking for a non-smoker who has a solid rental history. A rental application is one tool that can help you find a housemate that fits the bill.

You may want to run a credit check and a background check on any applicants who are truly interested in renting a room in your house. These checks generally have fees associated with them, and it’s a good idea to specify in the rental application who will be responsible for paying for credit and/or background check.

The applicant’s permission is required to run either of these checks and they are entitled to know if the results of either a credit or background check resulted in the denial of their rental application. It’s important to make sure you’re complying with fair housing laws when screening potential tenants and aren’t discriminating against certain applicants.

Rental Agreement

Having a formal, written lease in place will go a long way in protecting both you and your renter. A thorough agreement might include:

•   The leasing period — it’s typical for a lease to be for one year, but if you’re renting a room to college students, you may consider a shorter lease for the duration of the school year. This section might specifically note the move-in and move-out dates.

•   Rent amount — including the due date, how you would like to collect it, and any late fees you might charge.

•   Security deposit — the amount and conditions for returning or withholding it at the end of the lease.

•   Utility costs — are they included in the monthly rent or will the renter be responsible for paying their share of the total bills?

•   Shared spaces — expectations around common areas like the kitchen, living room, and bathroom.

•   Pets — are they allowed or not, as well as policies about pet messes and noise.

•   Cleaning and maintenance — will the renter be responsible for regular house cleaning, including private and common areas, and home maintenance, inside or out?

•   Parking — if there is a parking space available, is it included in the rent or is it a separate charge?

Covering a wide variety of things in a rental agreement can go a long way in avoiding misunderstanding and miscommunication between you and your tenant. Having an attorney review the agreement is a good way to make sure you’re not missing important elements. Lease agreements are legally binding contracts when signed by both parties.

It’s also a good idea to do a walk-through of the room with the tenant before signing the lease and again before they move out. Any damage can be documented (e.g., carpet stains, scratches on woodwork, torn window screen, among other things) so it’s clear that the tenant isn’t responsible for that damage. A final walk-through can be done before the tenant moves out, during which any additional damage can be documented and accounted for.

What Are the Costs of Renting a Room in Your House?

You may encounter costs preparing a room to be rented as well as ongoing expenses related to having another person living in the home.

Preparing the Room for Rental

Safety for you and your tenant are important concerns. You may want to make sure doors and window locks are in good working order. Your tenant will likely want their room to be private, so a keyed lock on their door can go a long way to easing any concerns they might have about living in someone else’s home. Providing a combination safe for the tenant’s valuables might be a nice gesture.

Installing locks on doors to any areas you don’t want your tenant to have access to is another layer of safety you may want to consider.

Fixing loose railings, sticking doors or windows, flooring trip hazards, and doing other home maintenance that could become safety issues is important in making your home and the individual room an attractive rental prospect for tenants.

You may want to make some cosmetic changes, too.

•   Painting the walls a neutral color may allow a prospective tenant to imagine their belongings in the room, instead of bright colors that might be a distraction to them. Using an easy-to-clean paint finish, like satin instead of flat, may also save you some effort after your tenant moves out.

•   If the room is carpeted, you might consider having the carpet cleaned, either professionally or using your own carpet cleaner. If the room is furnished with upholstered furniture, it can also be cleaned. Doing so will help the room look and smell fresh.

•   If you’re renting a furnished room, make sure the furnishings are clean and in good condition. Even used furniture can be presentable.

•   If the tenant will have a private bathroom space, the fixtures should be as modern as possible, but more importantly, clean and working. If the faucet drips, if the bathtub leaks, if the toilet runs — make the repairs before renting the room.

•   Is the bathroom a shared space? You might consider adding some baskets or other types of storage for the tenant’s personal hygiene products. Making a cabinet available for their own use would be nice if there is space to do so.

•   Cleaning, decluttering, and updating other shared spaces such as the living room and kitchen can make your home look more inviting, possibly increasing your chances of finding a renter.

•   You might consider adding some storage space for a tenant’s use. It could be as simple as a stand-alone cabinet or a designated area in a basement or garage. The rental agreement could specify what isn’t allowed to be stored (e.g., no hazardous chemicals) and how much storage space is allotted. A prospective tenant might feel more comfortable storing belongings if the space is able to be secured.

Recommended: 20 Renter-Friendly House Updates

Increased Utility Costs

An extra person living in the house will likely increase utility usage. Costs for gas, electric, water, sewer, and other utilities will probably be more than you typically pay without an extra person in the house. You may want to calculate your average utility costs over the past year to have an idea what an extra person’s use might add to those costs.

Some landlords include the cost of utilities in the cost of rent, while others might require the tenant to cover a percentage of each monthly utility bill. When renting out a room in your house, it may not be convenient to have separate utility connections for a renter.

Covering the Cost of Making Your Room Rental Ready

Depending on how much work needs to be done, getting a room in your house ready for someone to rent could be a few hundred dollars or a few thousand dollars. You may be able to keep costs down by doing some of the work yourself, but you might need to hire a professional contractor for some tasks you don’t have the skills to tackle or don’t feel comfortable doing on your own. It can help to think of this as an investment with a potential for a return in the form of rental income.

Taking some time to save money for the expense of getting a room in your house rental ready can be a smart choice. It can at least be one way to pay for some basic tasks, while considering other funding sources for more expensive repairs.

If you don’t have cash on hand, you could put all these expenses on one or more credit cards. But because credit cards carry such high interest rates, you might want to avoid racking up a credit card bill you can’t pay down any time soon.

Homeowners who have equity in their homes might consider taking out a home equity loan or home equity line of credit. These secured loans use your house as collateral. The application process can be lengthy and typically requires an appraisal of your home. Also, you risk losing your home if you don’t repay the loan.

Another option is to apply for a personal loan. Personal loans are typically unsecured loans, which means you don’t have to put up any collateral to qualify for them. Many personal loans also have fixed interest rates.

The Takeaway

From your personal comfort level for sharing your space with someone to financial and legal considerations, there are lots of things to consider before deciding to rent out a room in your house. You may need to complete some repairs to make the space safe for a tenant, and there may be some decor updating necessary to interest potential renters. However, you can likely more than make up for these upfront costs in rental income.

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

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q224-1908123-V1