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Applying for a credit card is an important step in many people’s financial lives. It typically involves three steps: gathering your information, filling out your application, and waiting for approval and the potential impact on your credit score.

Here’s the lowdown on the key things to know to apply for a credit card — and most importantly, to get approved for a credit card.

What to Consider When Applying for a Credit Card

Before you worry about how to get a credit card, it’s helpful to first understand what a credit card is. As the first word in its name suggests, a credit card is a line of credit, which is a type of flexible loan that enables you to borrow money up to a fixed limit.

When an individual charges a transaction at a business that accepts credit card payments, the credit card company pays the merchant. The cardholder must then pay back the credit card company by a designated date. Otherwise, they’ll incur interest charges.

This basic premise of how credit cards work means the card company is taking a risk when extending credit to any individual. They assess that risk via an application that determines not only whether the individual gets approved for a credit card, but also factors like their credit card limit and annual percentage rate (APR) on a credit card.

Before applying, there are some important considerations that can help improve your chances of getting approved for a credit card.

Recommended: Tips for Using a Credit Card Responsibly

Learn About the Terms Associated with Your Credit Card

Evaluating different types of credit cards can feel overwhelming for a newbie, so it’s a good idea to get familiar with some basic credit card terms that are common across all credit cards. Here are some common terms you might run into in a credit card application and as you begin to use your new card:

•   Balance: Your balance is the amount of money you owe on your credit card. This can include purchases (even paying taxes with credit card) as well as any fees, balance transfers, and cash advances.

•   Balance transfer: A balance transfer is when you move money from one credit card to another credit card, ideally one with a lower APR. This can allow you to pay off your debt more easily, though you’ll often pay a balance transfer fee to move over the balance.

•   Billing cycle: A credit card billing cycle is the period of time between the regular statements you receive from your credit card company. Usually, billing cycles occur on a monthly basis.

•   CVV: The card verification value, or CVV number on a credit card, is a three- to four-digit number that appears on a physical credit card. It serves as an additional layer of security in transactions that occur over the phone or online.

•   Expiration date: A credit card expiration date represents when a credit card is valid until. Usually shown as a month and a year, you can use your credit card up until the last date of that month in that year.

•   Late fee: The late fee is a charge you’ll incur if you miss making at least your minimum payment by your payment due date. To avoid this fee, it’s important to always pay on time, even if you’re in the midst of disputing a credit card charge, for instance.

•   Minimum payment: The credit card minimum payment is the least amount you must pay each month on your outstanding balance. This can be a flat amount or a percentage of your outstanding balance.

•   Purchase APR: The APR for purchases represents the total annual cost of borrowing money through purchases made with your credit card. This APR applies only on remaining balances after the statement due date.

Decide on the Type of Credit Card You Need

There are a number of different types of credit cards out there that can serve different needs. For instance, there are:

•   Travel rewards credit cards

•   Cash back credit cards

•   Credit builder credit cards

•   Balance transfer credit cards

While most of the above types of cards are unsecured credit cards, meaning no deposit is required, there are also secured credit cards. These do require a deposit, though they may also be more accessible to those with limited or low credit.

Different types of cards offer different benefits, and they may also vary when it comes to things like annual fees or average credit card limits. Some programs, like SoFi Plus, provide additional perks and rewards, making it worthwhile to explore all available options before choosing a card.

There may also be differences in the requirements for getting approved. It’s not so much a question of how old you have to be to get a credit card — rather, cards may have varying requirements for minimum income or credit score needed to qualify.

Before applying, it’s a good idea to do some comparison shopping to find a card that not only fits your needs but also that you’re eligible for.

Check Your Credit Score

Your credit score is a number that indicates the likelihood that you’ll repay a debt. It’s based on your credit history, and banks use it as a tool for evaluating credit card applications and deciding whether to approve them.

Here are some common factors that can affect your credit score:

•   Payment history, including on-time payments, missed payments, and having an account sent to collections

•   Credit utilization, or how much one owes relative to their total available revolving credit

•   Length of credit history

•   Types of credit accounts

•   Recent activity, such as applying for or opening new accounts

Generally, the higher an individual’s credit score, the more creditworthy they’re considered. If using the FICO® scoring model, here’s a general breakdown of what various scores mean:

•   300-580: Poor

•   580-669: Fair

•   670-739: Good

•   740-799: Very good

•   800-850: Exceptional

It’s a good idea for an individual to know their score and their chances of getting approved before applying for a credit card. The minimum credit score for a credit card will vary depending on the type of card it is.

For example, rewards credit cards, which come with big perks, tend to require at least a good credit score. But some types of credit cards, such as secured credit cards, may be more accessible to those with lower credit scores because they pose a lesser risk to lenders. This can make the latter category more appealing if, for instance, you’re getting your first credit card.

It’s worth noting that pulling one’s own credit information is considered a “soft inquiry” and does not negatively impact their credit score. When you apply for a new credit card, however, it will generate a “hard inquiry,” which can lower your credit score temporarily.

Where to Apply for a Credit Card

Credit cards are offered through banks, credit unions, retailers, airlines, colleges and universities, and a host of other institutions. This means that there are a variety of places where one can apply for a credit card — and often a number of ways to apply.

You can apply for a credit card in person, such as at a bank branch or retail location. Or, you may apply over the phone. Most credit card issuers also offer online applications, which add convenience to the process.

How to Apply for a Credit Card in 3 Steps

Ideally, by the time you sit down to actually apply for a credit card, you’ll have done the necessary homework to determine if you should get a credit card. This includes checking your credit score and potentially getting preapproved (though more on that later).

1. Gather the Necessary Information

The application process will be easier — and likely quicker — if you’re prepared. This means gathering any necessary documentation (more on what you’ll usually need in the next section) and having relevant information on hand, such as your income and Social Security number.

2. Fill Out and Submit an Application

Next, it’s time to fill out the application. There are a few ways you can do this: online, over the phone, or through the mail. It’s generally quickest to complete an application online.

You’ll need to fill in the requested fields and upload (or make copies of) any necessary documents. Once you submit your application, you should hear back within a few weeks at the most — sometimes, you’ll hear back almost the same day.

3. Be Ready for the Credit Impact and Repayment

As you wait for your credit card to arrive in the mail, you should take stock of the recent hit you took to your credit from the hard inquiry (typically, this will lower your score by several points for a brief period of time). It’s generally advised to avoid applying for multiple credit cards or loans within a short period of time to minimize the credit impact.

Also start to consider your strategy for how you’ll repay your credit card balance once you start swiping. Consider setting up automatic payments from your bank account each month to make sure you’re not late, or you might set a reminder on your phone or in your calendar.

What Do You Need to Apply for a Credit Card?

While application requirements will depend on the credit card issuer, what you need to apply for a credit card generally includes:

•   Annual income

•   Address and length of time at that address

•   Date of birth

•   Phone number

•   Social Security number

•   Employment status and sources of income

•   Financial accounts and/or assets

•   Financial liabilities

•   Country of citizenship and residence

Credit Card Preapproval and Prequalification

Getting prequalified or preapproved for a credit card means you’ve been prescreened for a credit card and meet at least some of the eligibility requirements. The two terms can be used interchangeably, though preapproval might carry slightly more weight in terms of your odds of eventual approval.

You’ll still need to go through the formal application to get approved for a credit card though, as neither preapproval or prequalification means you’ve been approved. The formal application process will involve a hard inquiry, whereas prequalification and preapproval generally only involve soft inquiries.

Still, preapproval or prequalification can be a good way to suss out potential credit card options and likelihood of getting approved before you move forward with an application and risk the impact to your credit.

What Happens If Your Application Is Turned Down?

Getting turned down for a credit card is indeed disappointing. When a credit card application is declined, you have the right to know why. You can request details about your application in the form of an adverse action letter, which includes the reason for the denial, details about your credit score, and notice of the right to dispute the accuracy of information provided by the credit reporting agency.

This can serve as helpful context for understanding why an application was declined. It can also help in determining what the appropriate next steps are for improving one’s chances of approval, if and when you apply for another credit card. For instance, you may consider applying for a credit card that has less stringent credit requirements, or you may take steps to build your credit score and try again at a later date.

Secured and Prepaid Credit Cards

If you were turned down for a credit card, you might take some steps to build your credit before trying again, or you might consider other options. Two alternatives you might look into are secured credit cards and prepaid credit cards.

With a secured credit card, you put down a deposit, which serves as collateral and usually acts as the card’s credit limit. Because there’s collateral there for the credit card issuer to fall back on if you fail to make your payments, secured credit cards are generally easier to get approved to than the more traditional, secured credit cards.

Prepaid debit cards don’t help you build your credit, as you’re not actually borrowing funds. Rather, you load the card with funds that you can then use in person or online. This can offer some of the convenience that a credit card offers over cash, without the application and approval process.

The Takeaway

Applying for a credit card can be a simple three-step process of gathering the required details, submitting an application, and handling the likely credit impact. You will probably have many options when selecting a card, so take your time to find the right fit.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

How do I choose a credit card?

Choosing a credit card is a personal decision that depends on your needs, preferences, financial habits, and eligibility. Before applying for a credit card that appears to fit your needs, it’s a good idea to check your credit score and any other requirements, such as minimum income, to improve your chances of getting approved.

How long does it take to get a credit card?

The length of time it takes to get a credit card can depend on a number of factors, including the eligibility requirements and how an application is submitted. Some online credit card applications offer fast or even instant approval, although it can take some additional time for the credit card to arrive in the mail.

Does your credit get pulled when applying for a credit card?

Generally, a credit card company will do a hard credit inquiry before extending final approval. However, there may be some scenarios where a credit card issuer may only do a soft inquiry, such as if an individual has been preapproved for a credit card or already has a banking relationship with the credit card issuer.

What are the requirements needed to get a credit card?

The requirements to get a credit card will typically vary from card to card. However, you’ll generally need to provide information on your annual income, your employment status, and your current debt obligations. Your creditworthiness also comes into play, though credit score requirements will differ depending on the card.

Can you get a credit card with no credit history?

It is possible to get a credit card with no credit history, though your options may be more limited. You may have an easier time getting approved for a secured credit card or a basic, no-frills credit card.

Photo credit: iStock/Dome Studio

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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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

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 .

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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Ready to buy your own home? There’s a lot to consider, especially if this is your first time applying for a mortgage and you’re carrying debt. While having debt is not necessarily a deal-breaker when you’re applying for a mortgage, it can be a factor when it comes to how much you’ll be able to borrow, the interest rate you might pay, and other terms of the loan.

Understanding how the home loan process works can help you decide whether it’s better to pay off debt or save up for a downpayment on a home. Here’s what you need to know.

How to Manage Debt before Buying a Home

Understand Your Debt-to-Income Ratio

When lenders want to be sure borrowers can responsibly manage a mortgage payment along with the debt they’re carrying, they typically use a formula called the debt-to-income ratio (DTI).

The DTI ratio is calculated by dividing a borrower’s recurring monthly debt payments (future mortgage, credit cards, student loans, car loans, etc.) by gross monthly income.

The lower the DTI, the less risky borrowers may appear to lenders, who traditionally have hoped to see that all debts combined do not exceed 43% of gross earnings.

Here’s an example:

Let’s say a couple pays $600 combined each month for their auto loans, $240 for a student loan, and $200 toward credit card debt, and they want to have a $2,000 mortgage payment. If their combined gross monthly income is $8,000, their DTI ratio would be 38% ($3,040 is 38% of $8,000).

The couple in our example is on track to get their loan. But if they wanted to qualify for a higher loan amount, they might decide to reduce their credit card balances before applying.

That 43% threshold isn’t set in stone, by the way. Some mortgage lenders will have their own preferred number, and some may make exceptions based on individual circumstances. Still, it can be helpful to know where you stand before you start the homebuying process.

Recommended: How to Prepare for Buying a New Home

Consider How Debt Affects Your Credit Score

A mediocre credit score doesn’t necessarily mean you won’t be able to get a mortgage loan. Lenders also look at employment history, income, and other factors when making their decisions. But your credit score and the information on your credit reports will likely play a major role in determining whether you’ll qualify for the mortgage you want and the interest rate you want to pay.

Typically, a FICO® Score of 620 will be enough to get a conventional mortgage, but someone with a lower score still may be able to qualify. Or they might be eligible for an FHA or VA backed loan. The bottom line: The higher your score, the more options you can expect to have when applying for a loan.

A few factors go into determining a credit score, but payment history and credit usage are the categories that typically hold the most weight. Payment history takes into account your record of making on-time or late payments, or if you’ve filed for bankruptcy.

Credit usage looks at how much you owe in loans and on your credit cards. An important consideration in this category is your credit utilization rate, which is the amount of revolving credit you’re currently using divided by the total amount of revolving credit you have available. Put more simply, it’s how much you currently owe divided by your credit limit. It is generally expressed as a percent. The lower your rate, the better. Many lenders prefer a utilization rate under 30%.

Does that mean you should pay off all credit card debt before buying a house?

Not necessarily. Debt isn’t the devil when it comes to your credit score. Borrowers who show that they can responsibly manage some debt and make timely payments can expect to maintain a good score. Meanwhile, not having any credit history at all could be a problem when applying for a loan.

The key is in consistency — so borrowers may want to avoid making big payments, big purchases, or balance transfers as they go through the loan process. Mortgage underwriters may question any noticeable changes in your credit score during this time.

Recommended: What Credit Score is Required to Buy a House?

Don’t Forget, You May Need Ready Cash

Making big debt payments also could cause problems if it leaves you short of cash for other things you might need as you move through the homebuying process, including the following.

Down Payment

Whether your goal is to put down 20% or a smaller amount, you’ll want to have that money ready when you find the home you hope to buy.

Closing Costs

The cost of home appraisals, inspections, title searches, etc., can add up quickly. Average closing costs are 3% to 6% of the full loan amount.

Moving Expenses

Even a local move can cost hundreds or even thousands of dollars, so you’ll want to factor relocation expenses into your budget. If you’re moving for work, your employer could offer to cover some or all of those costs, but you may have to pay upfront and wait to be reimbursed.

Remodeling and Redecorating Costs

You may want to leave yourself a little cash to cover any new furniture, paint, renovation projects, or other things you require to move into your home.

Be Aware of Housing Market Trends

Trends in the housing market may help you with prioritizing saving or paying down debt. So it’s a good idea to pay attention to what’s going on with the overall economy, your local real estate market, and real estate trends in general.

Here are some things to watch for.

Interest Rates

When interest rates are low, homeownership is more affordable. A lower interest rate keeps the monthly payment down and reduces the long-term cost of owning a home.

Rising interest rates aren’t necessarily a bad thing, though, especially if you’ve been struggling to find a home in a seller’s market. If higher rates thin the herd of potential buyers, a seller may be more open to negotiating and lowering a home’s listing price.

Either way, it’s good to be aware of where rates are and where they might be going.

Inventory

When you start your home search, you may want to check on the average amount of time homes in your desired location sit on the market. This can be a good indicator of how many houses are for sale in your area and how many buyers are out there looking. (A local real estate agent can help you get this information.)

If inventory is low and buyers are snapping up houses, you may have trouble finding a house at the price you want to pay. If inventory is high, it’s considered a buyer’s market and you may be able to get a lower price on your dream home.

Price

If you pay too much and then decide to sell, you could have a hard time recouping your money.

The goal, of course, is to find the right home at the right price, with the right mortgage and interest rate, when you have your financial ducks in a row.

If the trends are telling you to wait, you may decide to prioritize paying off your debts and working on your credit score.

Remember, You Can Modify Your Mortgage Terms

If you already have a mortgage, you may be able to make some adjustments to the original loan by refinancing to different terms.

Refinancing can help borrowers who are looking for a lower interest rate, a shorter loan term, or the opportunity to stop paying for private mortgage insurance or a mortgage insurance premium.

Consider a Debt Payoff Plan

If you decide to make paying down your debt your goal, it can be useful to come up with a plan that gets you where you want to be. Many of the financial changes would-be buyers make to save money for a home will also work to help you pay down debt. In an April 2024 SiFi survey of 500 prospective homeowners, cutting back on nonessential expenses was the most popular step — 49% of people had tried it. Almost as many (41%) had taken on an additional job or side hustle. And more than one in four people (26%) had downsized their current living situation to cut costs.

As you think about saving to pay down debt, remember that not all debt is not created equal. Credit card debt interest rates are typically higher than other types of borrowed money, so those balances can be more expensive to carry over time. Also, loans for education are often considered “good debt,” while credit card debt is often viewed as “bad debt.” As a result, lenders may be more understanding about your student loan debt when you apply for a mortgage.

As long as you’re making the required payments on all your obligations, it may make sense to focus on dumping some credit card debt.

Recommended: Beginners Guide to Good and Bad Debt

The Takeaway

Should you pay off debt before buying a house? Not necessarily, but you can expect lenders to take into consideration how much debt you have and what kind it is. Considering a solution that might reduce your payments or lower your interest rate could improve your chances of getting the home loan you want.

When you consolidate your credit card debt, you typically take out a personal loan, ideally with a lower rate than you’re paying your credit cards, and use it to pay off all of your credit cards. You then end up with one balance and one payment to make each month. This simplified the debt repayment process and can also help you save money on interest.

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.

Saving up for a down payment is a common challenge for many prospective homebuyers. FHA loans allow qualifying borrowers to put as little as 3.5% down on a property, helping lower the barriers to homeownership for many.

With an FHA loan, borrowers may also be eligible for down payment assistance. But there are other out-of-pocket expenses to keep in mind when considering an FHA loan. Let’s take a closer look at FHA loan down payment requirements and how much money you’ll need to get to the closing table.

What Is an FHA Loan?

An FHA loan is a type of mortgage that’s issued by a lender, such as a bank or credit union, but insured by the Federal Housing Administration (FHA). The purpose of the FHA mortgage program is to make homeownership more affordable for low- to moderate-income buyers.

Since FHA loans are government-insured, they offer more flexible eligibility requirements for borrowers who might not qualify for a conventional home loan. FHA loans have lower minimum down payment and credit score requirements, making them popular with first-time homebuyers and applicants with limited savings or poor credit. Compared to conventional mortgages, FHA loan interest rates are typically lower, but will vary depending on the lender and on the borrower’s credit score and finances.


💡 Quick Tip: Buying a home shouldn’t be aggravating. SoFi’s online mortgage application is quick and simple, with dedicated Mortgage Loan Officers to guide you through the process.

FHA Loan Income Requirements

There aren’t any minimum or maximum income requirements to qualify for an FHA loan. However, there may be income limits for borrowers receiving down payment assistance through a state or local program.

In any case, lenders will look at an applicant’s ability to manage monthly mortgage payments and ultimately repay the FHA loan. Besides savings and assets, lenders assess an applicant’s debt-to-income (DTI) ratio, which measures the percentage of monthly income that goes toward debt payments. A lower DTI ratio is typically viewed as favorable. Depending on the lender, borrowers can get an FHA loan with a DTI ratio of up to 50%. In comparison, conventional loans typically require a DTI ratio of 43% or less.

Recommended: How Much is a Down Payment?

What Is the Down Payment Required for an FHA Loan?

Down payments are calculated as a percentage of the home purchase price. Historically, lenders looked for buyers to put down one-fifth of a home’s purchase price upfront. But you no longer always need to put down 20% on a house. The minimum down payment percentage for FHA loans depends on a borrower’s credit score.

The average down payment on a house in the U.S. was 13% in 2022. But with an FHA loan, borrowers with a credit score of 580 or more may qualify for a down payment of 3.5% of the home purchase price. Those with credit scores between 500 and 579 will need to put 10% of the home price towards a down payment. For a $400,000 house, this translates to $14,000 for a 3.5% down payment and $40,000 for a 10% down payment.


💡 Quick Tip: Generally, the lower your debt-to-income ratio, the better loan terms you’ll be offered. One way to improve your ratio is to increase your income (hello, side hustle!). Another way is to consolidate your debt and lower your monthly debt payments.

What Other Cash Will I Need to Close?

Besides the down payment, the remaining amount you need to close on a house will depend mainly on the home’s purchase price. Taking out an FHA loan requires paying an upfront mortgage insurance premium (MIP) of 1.75% of the loan total. It may be possible to roll this cost into the loan, which would increase the loan principal and monthly payment amount.

Buyers will also be on the hook for FHA loan closing costs, which typically range from 2% to 5% of the home’s purchase price. Borrowers can potentially avoid the upfront expense by rolling closing costs into an FHA loan. By financing closing costs, borrowers will pay a portion of the costs each month, plus interest. Note that financing closing costs can increase a borrower’s DTI ratio and potentially impact their ability to qualify for an FHA loan.

An alternative option to cover closing costs would be to ask for seller concessions. FHA loans allow the seller to contribute up to 6% of the home value for closing costs as a seller concession.

Recommended: What Do You Need to Buy a House?

How to Save for an FHA Loan Down Payment

Understanding how much house you can afford is a useful place to start to determine your housing budget and savings goal. Using an FHA loan mortgage calculator can help crunch the numbers to determine your down payment and monthly payment based on different loan terms. Not sure you will choose an FHA loan? Use a home affordability calculator to determine how much house you can afford.

With a savings goal in mind, calculate how much you can set aside each month after paying for debts and expenses. Consider cutting discretionary spending, such as dining out and travel, to increase monthly savings.

Buyers can also get the money they need for an FHA down payment in the form of a gift from family, friends, employer, charitable organization, or government program. Gifted funds need to be accompanied by a gift letter to show the lender that the money is going toward the down payment and doesn’t need to be repaid.

Is Down Payment Assistance Available for FHA Loans?

Borrowers who can’t afford a down payment on an FHA loan may be eligible for financial assistance. Down payment assistance can come in several forms, including grants and forgivable loans. These programs are available through local, state, and federal government programs, as well as nonprofit organizations.

Most down payment assistance programs are geared towards first-time buyers. They may include additional eligibility requirements, such as income limits and participation in homebuyer education courses. Consult a list of first-time homebuyer programs and loans to see what you might be eligible for. If it has been more than three years since you have owned a home, you may qualify for first-time homebuyer status.

Additional Cost Considerations for FHA Loans

In addition to the upfront costs of a down payment, closing costs, and MIP, there are other expenses to plan for.

The MIP includes an additional annual fee besides the 1.75% that’s required for closing. Annual payments range from 0.15% to 0.75% depending on the loan terms and loan-to-value ratio. The total annual cost is divided by 12 and spread out across the monthly payments in a given year. Note that MIP usually spans the life of the FHA loan unless a borrower refinances.

Depending on the property location, borrowers may also need to pay for flood insurance to get an FHA loan.

Pros and Cons of an FHA Loan

FHA loans are popular for their lower down payment mortgage requirements, but they’re not for everyone. Here are some advantages and drawbacks to consider when comparing home mortgage loan options.

Pros:

•   Smaller down payments

•   More lenient credit score requirements

•   No income limits

•   Can finance closing costs

Cons:

•   Required to pass an inspection and appraisal

•   Must be used for a primary residence.

•   Loan limits of $472,030 to $1,089,300 for a single-family home, depending on the cost of living by state.

•   Can require an inspection and stricter standards for the condition of the property.

The Takeaway

What is the minimum down payment for an FHA loan? Borrowers with credit scores of 580 or more can put just 3.5% down, while those with scores between 500 to 579 need to put 10% toward a down payment. The combination of lower minimum credit score and low down payment make FHA loans one attractive option for first-time homebuyers.

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

What is the lowest down payment for an FHA loan?

The lowest down payment for an FHA loan is 3.5% of the loan amount. Borrowers can explore down payment assistance programs to help cover the cost.

What is the down payment for an FHA loan 2023?

The down payment for an FHA loan in 2023 ranges from 3.5% to 10% depending on the borrower’s credit score.

What will disqualify you from an FHA loan?

Borrowers could be disqualified from an FHA loan based on a high debt-to-income ratio, poor credit, or insufficient funds to pay for the down payment, closing costs, and monthly mortgage payment.

Photo credit: iStock/Edwin Tan

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.

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The demand for dentists, like other health care professionals, is on the rise, partly due to an aging U.S. population and partly due to more attention on dental health with each generation. The aging population is likely to need additional oral care, some of which can include complicated procedures.

By learning about the average tuition costs and ways to pay for dental school, prospective students can figure out if a dental career is the right choice for their future.

Keep reading to learn more on the employment outlook for dentists, ways to pay for dental school, how to pay for dental school without loans, and more.

Employment Outlook for Dentists

The U.S. Bureau of Labor Statistics (BLS) projects there to be a 5% increase in available dentist jobs from 2023 to 2033. Dentists can work in a variety of settings, such as private practice — either on their own or with a partner — or in an outpatient care center, among others.

The median annual salary of a general dentist was $170,910 in 2023. For perspective, the median annual U.S. income in the same year was $65,470.

While dentistry pays well, it also costs a lot to become a dentist. Dental school programs typically take four years to complete after students have already completed a bachelor’s degree. A degree from an accredited dental school will be either a D.D.S. (Doctor of Dental Surgery) or a D.M.D. (Doctor of Dental Medicine).

Individual universities determine which degree is awarded, but they are both approved by the Commission on Dental Accreditation (CODA), a part of the American Dental Association (ADA). Whichever degree a dental graduate is awarded, chances are they may also have hundreds of thousands of dollars worth of student loan debt to contend with after graduation.

How Much Does Dental School Cost?

The range of dental school costs depends on whether a student is in-state (resident) or out-of-state (non-resident), and whether attending a public or private school. In-state public school tuition is typically going to be the least expensive option for most students.

According to the ADA, the average first-year cost of dental school (public or private), including tuition and mandatory fees, in 2023-2024 was $44,608 for residents and $75,163 for non-residents.

The cost difference between public schools and private schools can be substantial. The average resident cost for the first year of a public dental school program was $41,711, while the first-year cost for private dental school was $84,842 in 2023-24. After four years in school, students are looking at an average of $293,900 in debt.

Prospective students can compare the cost of dental schools and then determine how much they are willing to pay for their education. According to the ADA, there are 81 accredited dental schools throughout the United States and 10 in Canada.

Ways to Pay for Dental School

Even though dental school tuition can be expensive, students have options when figuring out how to pay for dental school. Students can explore scholarships, grants, fellowships, and service programs to help pay for dental school.

Federal and private student loans are also an option. After graduating from dental school, some borrowers may consider refinancing their student loans as they pay off dental school debt. Continue reading for more details on paying for dental school.

1. Scholarships and Grants

Scholarships and grants are awards that, in most cases, don’t have to be repaid. For students without the means to pay for tuition and other costs from personal savings, exploring these options may be a good place to start.

Dental schools may offer scholarships and grants to students who meet certain academic standards or who are working towards a certain type of degree, for example. When researching dental schools, prospective students may consider asking financial aid offices about available scholarships and grants.

Along with reaching out to schools, students may want to research scholarships and grants through organizations like the American Dental Association, the American Association of Public Health Dentistry, or the American Dental Education Association. There are also a variety of online scholarship search tools that students can use to find scholarships.

Recommended: What Is a Scholarship & How to Get One?

2. Service Programs

Several service programs can help pay for dental school, including:

•   National Health Service Corps (NHSC): This federal program offers scholarships and loan repayment options to dental students who commit to working in designated Health Professional Shortage Areas (HPSAs) after graduation. Scholarships cover tuition, fees, and living stipends, while loan repayment programs reduce educational debt in exchange for a minimum service obligation of two years.

•   Armed Forces Health Professions Scholarship Program (HPSP): Provided by branches of the U.S. military, HPSP covers full tuition for dental school, offers a monthly living stipend, and may include bonuses. Participants serve as military dentists for a designated number of years after completing their education, gaining valuable clinical experience and leadership training.

•   Indian Health Service (IHS) Loan Repayment Program: This program is aimed at improving dental care access in Native American and Alaska Native communities. Dentists receive up to $40,000 in loan repayment for a two-year service commitment at an IHS or Tribal site. Participants can extend their service for additional loan repayment benefits.

•   Public Health Service Commissioned Corps: This program allows dentists to serve as officers in the U.S. Public Health Service, providing care in federal agencies like the Centers for Disease Control and Prevention (CDC), Bureau of Prisons, or the Food and Drug Administration (FDA). Participants may receive loan repayment assistance and competitive salaries.

•   State-based programs: Many states offer incentives such as scholarships, grants, or loan repayment programs to dental professionals willing to practice in rural or underserved areas. These programs vary by state and may require service commitments ranging from two to five years.

Each program offers financial relief but requires a contractual commitment to serve specific populations or organizations.

3. Federal Student Loans

Completing the FAFSA® (Free Application for Federal Student Aid) form is the first step students should take to determine eligibility for federal financial aid. To fill out the form, they will need to provide personal identification and financial records.

Federal student loans for graduate and professional school students are either Direct Unsubsidized Loans or Direct PLUS Loans. Students may borrow up to $20,500 each year in Direct Unsubsidized Loans, and eligibility is not based on financial need.

If a student has costs in excess of that borrowing limit, they may want to consider a Direct PLUS Loan. Like a Direct Unsubsidized Loan, eligibility for a Direct PLUS Loan is not based on financial need, although a credit check is required.

Students are encouraged to ask the financial aid office at their school about school-based loans that might be available. Some federal funds are offered to schools instead of directly to students and are tied to certain eligibility requirements.

4. Private Student Loans

It’s always recommended that students exhaust all federal student loan options before considering a private student loan. But if there is still a financial need, a private student loan may be the right choice for some students. Private student loans are available from private lenders and are awarded based on factors including your income, credit history, and credit score, among other factors.

Considering Student Loan Refinancing

After graduating, dentists may consider refinancing their student loans to secure a more competitive interest rate or more favorable terms. Refinancing also allows borrowers to combine all their loans into a single loan. This won’t be the right choice for all borrowers because when you refinance federal loans you’ll lose access to any federal benefits — like any loan forgiveness options.

Should you refinance your student loans? The answer is personal and will depend on factors including the amount of student debt you currently have, your credit score, income, and whether you are your income, and whether you are refinancing with or without a cosigner.

Recommended: Student Loan Refinance Guide

5. Employment

Dental school is rigorous, but if students have the time and energy, they may want to consider working to supplement their educational costs. The federal work-study program is available to graduate and professional students with financial need, and has the same eligibility requirements and position availability as it does for undergraduate students. Financial aid offices at individual schools will have information pertaining to this program.

Training grants and fellowships, an option some dental students might find appealing, are sources of funding that often include a stipend and sometimes cover part of a student’s tuition.

These programs are designed to further a student’s education in a specific research area that interests them. They differ from simple grants in that there is a work component to them.

The Takeaway

Dental school can be expensive but can lead to a fulfilling and lucrative career. When determining how to pay for dental school, students can explore dental school scholarships, grants, federal student loans, and private student loans.

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

FAQ

How do students afford dental school?

Students afford dental school through a combination of federal and private student loans, scholarships, grants, and work-study programs. Some seek financial aid through military service or dental school repayment programs. Budgeting, saving, and seeking loan forgiveness options also help manage the significant costs associated with dental education.

Does FAFSA cover dental school?

Yes, FAFSA can cover dental school by determining eligibility for federal financial aid, including Direct Unsubsidized Loans and Grad PLUS Loans. While FAFSA doesn’t directly pay for dental school, it provides access to federal loans and grants, helping students finance their education and manage costs effectively.

Is it possible to go to dental school for free?

It is possible to attend dental school for free through scholarships, grants, and service-based programs. Options include military scholarships, school-specific awards, and programs like the National Health Service Corps, which cover tuition in exchange for service commitments in underserved areas after graduation. Financial aid opportunities vary by eligibility.

About the author

Kylie Ora Lobell

Kylie Ora Lobell is a personal finance writer who covers topics such as credit cards, loans, investing, and budgeting. She has worked for major brands such as Mastercard and Visa, and her work has been featured by MoneyGeek, Slickdeals, TaxAct, and LegalZoom. Read full bio.

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When Jennifer S. clocked in on her first day of work as a nurse at a major hospital, she remembers thinking, “I’ve got this.” And she did. Nursing school had prepared her well for working in the emergency room.

She felt less confident about navigating her finances, however. Jennifer had to balance her living expenses and long-term goals with $40,000 in student loans while earning $25 an hour.

She cooked meals at home and kept her expenses low. Jennifer also created a monthly nursing budget to help organize her finances. “I saw that I should start saving a little more during the second half of the month, when I usually had leftover money, in case I needed it for the next month’s bills,” she says.

In addition, Jennifer discovered ways she could make extra money. Consider this nursing budget example: She switched to overnight shifts making an additional $7,000 a year. When a hurricane hit her state, she worked around the clock at the hospital for a week — and earned roughly $6,000, which she put toward a down payment on a home. And she routinely picked up per diem and travel assignments.

Why You Need a Nursing Budget

It’s an interesting time to be a nurse. On one hand, staffing shortages and burnout worsened during the pandemic, and the nursing shortage is expected to continue to grow until 2035. The rising cost of higher education, including how to pay for nursing school, has resulted in a growing number of students graduating with debt.

According to the latest figures from the American Association of Colleges of Nursing (AACN), roughly 70% of nurses take out nursing student loans to pay for school, and the median student loan debt is between $40,000 and $55,000.

On the plus side, nurses have some leverage. The profession is in such high demand right now that some hospitals are offering incentives like sign-on bonuses, shorter hours, and student loan repayment help.

And in general, nurses can earn a good salary. According to the latest data from the U.S. Bureau of Labor Statistics, the median income for a registered nurse in 2023 was $86,070. The median income for a licensed practical nurse or licensed vocational nurse was $59,730. The median income for a nurse anesthetist, nurse midwife, or nurse practitioner — fields that typically require a master’s degree — was $129,480 per year. Nurses who are willing and able to take on additional shifts, work overnight, or accept lucrative travel assignments stand to make even more.

If you’re a new nurse who is figuring out your finances, a nursing budget is a good place to start.

How to Budget as a Nurse

With tens of thousands of dollars’ worth of student loans to repay, it’s helpful for nurses to create a budget to manage their money, cover their living expenses, pay down the debt they owe, and plan for their financial future. Here’s how to do it.

•   Set financial goals. Think about your short-term and long-term aspirations. These might be things like saving $2,000 in your bank account, paying off your student loans, or investing for retirement. Knowing what you’re working toward will help give you the motivation to get there.

•   Calculate your income. Look at your pay stubs to see how much you’re bringing home each month. That’s the amount you have to work with.

•   Determine your expenses. Pull out all your bills and add up how much you’re spending each month for rent, food, utilities, loan and credit card payments, and so on. Be sure to include “fun” expenses such as dining out, entertainment, and self-care costs.

•   Find a budgeting method that works for you. There are different types of techniques, such as the 50/30/20 rule that divides your budget into different categories: 50% for essential expenses like rent, utilities, food, car payments, and debt payments; 30% for discretionary expenditures such as eating out, travel, and shopping; and 20% for goals like saving for a home, your child’s education, and retirement. There’s also the envelope budgeting system, which has you put cash monthly into envelopes for each spending category like housing and food. Once the money in an envelope is gone, you’ll need to wait until the next month to spend in that category again or take money from another envelope. Explore the different methods and choose the one that works best for your lifestyle.

•   Review your nurse budget regularly and update it as needed. Make adjustments as your situation changes. For instance, maybe your car breaks down and you need extra money for emergency repairs. Or perhaps you get a raise that increases your income. Tweak your budget accordingly.

Common Financial Challenges for Nurses

As a nurse, you’ll face some unique money-related challenges. For example, you may have work expenses, such as purchasing a uniform, comfortable shoes, and certain tools to do your job. Many hospitals and clinics require you to buy your own stethoscope, for instance. And working long shifts or irregular hours may leave you with less time for cooking so that you end up spending more money on takeout.

In addition, as a nurse, you may decide to pursue an advanced degree like a master’s to move up the ladder and earn more money. That could mean taking out new student loans to cover the cost of your continuing education, in addition to the loans you already have.

These financial challenges are all things to factor into your nurse budget so that you have a plan for paying them off.

Watch Your Spending

Even when you’re on a budget, it can be easy to fall into the habit of overspending because there are different ways to supplement your income as a nurse. “When I was doing travel assignments, I just kept working,” Jennifer says. “At the time, I didn’t realize it would stop, so I didn’t think to save as much as I could have.”

In fact, lifestyle creep can be a common pitfall, especially when you start earning more money, says Brian Walsh, CFP, senior manager, financial planning for SoFi. Spending more on nonessentials as your income rises can potentially wreak havoc on your savings goals and financial health. That’s why budgeting for nurses is so important.

While you’re starting to establish your spending habits, Walsh recommends using cash or a debit card for purchases. Automate your finances whenever possible by doing things like pre-scheduling bill payments.

Develop Your Savings Strategy

A sound savings plan can help you make progress toward your short- and long-term goals and provide a sense of security. Walsh suggests nurses set aside 20% of their income for retirement and other savings, like building an emergency fund that can cover three to six months’ worth of your total living expenses. He recommends placing it in an easy-to-access vehicle, like money market funds, short-term bonds, CDs, or a high-yield savings account.

The remaining 80% of your income can go toward current living expenses, including monthly student loan payments.

Jennifer found success by adopting a set-it-and-forget-it approach to saving. “Whenever I worked a per diem shift, I got in the habit of putting $100 or $200 of every check into a savings account,” she says. Before long, she had a decent-sized nest egg and peace of mind.

Explore Different Investments

One simple way to build up savings is to contribute to your 401(k) or 403(b) retirement plan, if one is available to you, and tap into a matching funds program. There’s a limit to how much you can contribute annually to one of these plans. In 2024, the amount is $23,000; if you’re 50 or older, you can contribute up to an additional $7,500, for a total of $30,500. In 2025, you can contribute up to $23,500 to a 401(k), and if you’re 50 or older, you can contribute an extra $7,500, for a total contribution of $31,000.

If you don’t have access to an employer-sponsored retirement plan, there are other ways to save for the future. “Start by figuring out what your targeted savings goal is,” Walsh says. If you’re going to save a few thousand dollars, you can consider a traditional IRA or Roth IRA. Both can offer tax advantages.

Contributions made to a traditional IRA are tax-deductible, and no taxes are due until you withdraw the money. Contributions to a Roth IRA are made with after-tax dollars; your money grows tax-free and you don’t pay taxes when you withdraw the funds in retirement. However, there are limits on how much you can contribute each year and on your income. In 2024 and 2025, you can contribute up to $7,000 to an IRA annually with an additional $1,000 for individuals 50 and up.

Ideally, Walsh says, you’re saving more than a few thousand dollars for retirement. If that’s the case, then a Simplified Employee Pension IRA (SEP IRA) may be worth considering. “Depending on how your employment status is set up, a SEP IRA could be a very good vehicle because the total contributions can be just like they are with an employer-sponsored plan, but you control how much to contribute, up to a limit,” he says. What’s more, contributions are tax-deductible, and you won’t pay taxes on growth until you withdraw the money when you retire.

Another option is a health savings account (HSA), which may be available if you have a high deductible health plan. HSAs provide a triple tax benefit: Contributions reduce taxable income, earnings are tax-free, and money used for qualified medical expenses is also tax-free.

Depending on your financial goals, you may also want to consider after-tax brokerage accounts. They offer no tax benefits but give you the flexibility to withdraw money at any time without being taxed or penalized.

Take Control of Your Student Loans

You have different priorities competing for a piece of your paycheck, and nursing school loans are one of them. You may need to start repaying loans six months after graduation, and options vary based on the type of loan you have.

If you have federal loans and need extra help making payments, for example, you can look into a loan forgiveness program or an income-driven repayment (IDR) plan, which can lower monthly payments for eligible borrowers based on their income and household size.

If you’re struggling to make payments, you may qualify for a student loan deferment or forbearance. Both options temporarily suspend your payments, but interest will continue to accrue and add to your total balance.

You can also explore the option of student loan forgiveness. There are a number of student loan forgiveness programs for nurses, such as the NURSE Corps Loan Repayment Program. If you work for a government or nonprofit organization, you can look into the Public Service Loan Forgiveness Program to see if you qualify.

Chipping away at a student loan debt can feel overwhelming. And while there’s no one-size-fits-all solution, there are a couple of different debt pay-off approaches you may want to consider. With the avalanche approach, you prioritize debt repayment based on interest rate, from highest to lowest. With the snowball approach, you pay off the smallest balance first and then work your way up to the highest balance.

While both have their benefits, Walsh says he often sees greater success with the snowball approach. “Most people should start with paying off the smallest balance first because then they’ll see progress, and progress leads to persistence,” he explains. But, he adds, the right approach is the one you can stick with.

Consider Whether Student Loan Refinancing Is Right For You

When you choose refinancing, including medical professional refinancing, a private lender pays off your existing loans and issues you a new loan. This combines all of your loans into a single monthly bill, potentially reduces your monthly payments, and may give you a chance to lock in a lower interest rate than you’re currently paying. A quarter of a percentage point difference in an interest rate could translate into meaningful savings if you have a big loan balance, Walsh points out.

A student loan refinancing calculator can help you determine how much refinancing might save you.

Still, refinancing your student loans may not be right for everyone. By choosing to refinance federal student loans, you could lose access to benefits and protections, like the current pause on payment and interest or federal loan forgiveness plans. Be sure to weigh all the options and decide what makes sense for you.

Recommended: Student Loan Refinancing Guide

The Takeaway

Nursing can be a rewarding career, with flexibility and opportunities to add to your income. However, as a new nurse, you are likely trying to stretch your paycheck to cover student loan debt and everyday expenses. Fortunately, by using a few smart strategies, such as budgeting and saving, and exploring options like refinancing, you can start to pay down your loans—and reach your financial goals.

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.

Photo credit: iStock/FatCamera

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

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.