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By Derek Stratton |
Uncategorized |
Comments Off on Debit Card
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SoFi Debit Card
Put your spending power in your wallet and on your phone.
Tap and pay the way you want with a SoFi debit card. Every SoFi member gets a debit card when they open a SoFi Checking and Savings account.
Open an account
What’s a debit card and how does it work?
A debit card is a payment card that lets you spend money directly from your checking account. When you need to make a purchase:
In person:
Swipe, insert, or tap your bank debit card. Or tap your phone if you’ve added your card to your digital wallet. You may need to enter your PIN. SoFi debit cards are contactless and mobile wallet capable
Online or over the phone:
Use your card number to make purchases, expiration date, and security code. You can use a SoFi debit card anywhere Mastercard is accepted.
Activate your card in just a few moments using the SoFi app.
Open an account
Learn more about debit cards.
FAQs
How do I activate my debit card?
Easily and quickly activate your card using the SoFi app and following these step-by-step instructions.
What’s the difference between a debit and credit card?
Debit cards deduct directly from your checking account. Credit cards let you borrow money and pay later—typically with interest. Debit cards can help you with budgeting and avoiding debt. Credit cards can help build credit and may offer rewards.
Do you have to pay monthly for a debit card?
SoFi Checking and Savings—and the SoFi debit card—don’t have fees.
Is there a withdrawal limit on my debit card?
For SoFi checking accounts, the most you can withdraw in a day is $1,000. The daily debit card use limit is $6,000.
Am I able to lock my debit card?
Yes. You can lock your debit card in just a few taps using the SoFi app and these instructions.
Can I use my SoFi debit card in other countries?
Yes, you can use your debit card in most countries. Note that the Office of Foreign Assets Control prohibits business with certain countries and your SoFi debit card may not work in those locations. Learn more.
Is the SoFi debit card a prepaid card or a true debit card?
The SoFi debit card is a true debit card. You can use it to access funds in your checking account.
A Simplified Employee Pension (SEP) IRA is a retirement account—similar to a traditional IRA—for self-employed individuals and small business owners. It lets you make tax-deductible contributions and grow your savings tax-deferred until retirement.
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How does a SEP IRA work?
Who’s eligible for a SoFi SEP IRA?
To be eligible for a SoFi SEP IRA, you need to either be self-employed or a small business owner. SoFi doesn’t support multi-participant SEP IRAs. If you have employees, they aren’t eligible.
Who contributes funds to a SEP IRA?
As the employer, you contribute funds to your own SEP IRA.
Contribution limits
In 2025, you can contribute up to 25% of your total net earnings with a maximum of $70,000. In 2026, you can contribute up to 25% of your total net earnings with a maximum of $72,000.
Withdrawals
You may be subject to a 10% penalty if you withdraw before age 59 ½. Required minimum distributions begin at age 72 (or age 73, if you reach age 72 after Dec. 31, 2022).
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Why choose a SoFi SEP IRA.
Tax-deferred earnings.
With a SEP IRA, your retirement savings won’t be taxed until you withdraw.
Contribute more.
The contribution limits of a SEP IRA are much higher than a traditional IRA.
Various investment options.
From stocks, ETFs, alternative assets and more, there are a variety of investment options to choose from.
Easy and flexible.
There are no fees to establish a SoFi SEP IRA. Other fees apply. Plus, the plan is easy to manage and doesn’t require much paperwork.
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How to open a SEP IRA with SoFi:
Select your IRA account type.
Select SEP IRA as your account option.
Select how you’d like to invest.
You have the option to invest your money exactly how you want to or you can share your goals with us and we’ll do it for you.
Open an account.
Open an investment account through SoFi and share a few personal details.
Open a SEP IRA
Get more small business retirement resources.
See more investing articles
FAQs
What’s the difference between a solo 401(k) and a SEP IRA?
Both SEP IRAs and solo 401(k)s offer tax benefits and saving options for retirement. However there are a few differences. SEP IRAs have higher contribution limits and are a better option for small businesses that have employees (note that SoFi doesn’t support multi-participant IRAs). Solo 401(k)s offer Roth options and loans.
What are the disadvantages of a SEP IRA?
While a SEP IRA may be a great option for small business owners, there are a few considerations to keep in mind:
• There are penalties for early withdrawals. • No catch-up contributions, however, the contribution limits are much higher for SEP IRAs. • You can’t take a loan from your SEP IRA savings. • There isn’t a Roth option.
Does it cost money to open a SEP IRA?
No. You can open a SoFi SEP IRA at no cost.
What are the SEP IRA contribution limits for 2025 and 2026?
In 2025, you can contribute up to 25% of your net earnings, but no more than $70,000 to a SEP IRA. In 2026, you can contribute up to 25% of your net earnings, but no more than $72,000 to a SEP IRA.
When do I pay taxes on a SEP IRA?
You’ll pay income taxes when you withdraw in retirement. You may also be subject to a 10% tax penalty for withdrawing before age 59 ½.
Who pays taxes on a SEP IRA?
A SoFi SEP IRA account holder will pay taxes on their withdrawals during retirement. For multi-participant SEP IRAs, employers can claim a tax deduction for contributions they make to their employees SEP IRAs. SoFi doesn’t offer multi-participant SEP IRAs, however.
Can I cash out my SEP IRA?
Similar to other retirement plans, you can withdraw your contributions and earnings any time, but you may have to pay a tax penalty if you withdraw before age 59 ½.
Can I have a SEP IRA without employees?
Yes, you can have a SEP IRA without employees. In fact, SoFi only offers solo SEP IRAs.
By Annie Luc |
mortgage |
Comments Off on VA Mortgage Loan Calculator
VA Mortgage Calculator
VA Loan Calculator
If you’re considering financing your home purchase with a VA mortgage loan, you can estimate your costs with a VA mortgage loan calculator. Simply input your home purchase price, VA loan down payment amount, if any, VA loan period, interest rate, and payment frequency to calculate your monthly mortgage payment, total interest paid, and the total mortgage cost.
Preparing to buy a house? Call us for a complimentary mortgage consultation or get pre-qualified online.
What Is a VA Mortgage Loan Calculator?
A VA mortgage loan calculator is an online tool that can help you estimate the cost of borrowing with a VA loan. If you’re eligible for this type of mortgage, you might use a VA home loan calculator to determine how much home you can afford, based on your interest rate, down payment amount, and loan term.
Using a VA loan payment calculator doesn’t tell you how much you’re eligible to borrow, nor does it qualify you for a loan. It’s simply meant to be an informational tool that you can use to guide your decision-making when setting a home buying budget.
How to Use the VA Mortgage Loan Calculator
To use a VA loan calculator you’ll first need to gather some basic information. Specifically, you’ll need to know:
• How much you want to borrow
• Your down payment amount (VA loans don’t require a down payment, and many borrowers don’t make one.)
• An estimated interest rate you might qualify for
• Your loan term in years
• Loan payment frequency
You can then plug each of the numbers into a VA mortgage loan calculator in the corresponding space and the calculator does the rest. You’ll be able to see your:
• Mortgage payment amount
• Mortgage amount (the principal you are borrowing)
• Interest paid
• Total cost of mortgage (the principal plus the interest)
It’s quick and simple, and you can easily make adjustments to any of your inputs to see how your payment amount and interest might change. Mortgage calculators are helpful tools for any first-time homebuyer trying to estimate costs for different types of mortgage loans.
Benefits of Using VA Mortgage Loan Calculator
Using a VA loan payment calculator or home affordability calculator can allow you to see at a glance how much you might pay for a home loan. Estimating your mortgage costs before applying for a loan can help you to:
• Weigh the benefits of a larger vs. smaller down payment
• Calculate the total interest paid using a shorter or longer loan term
• Understand your monthly payment costs to ensure they’re affordable for your budget
Buying a home, with a VA loan or any other type of mortgage loan, can be a complex process and it’s to your advantage to be as prepared as possible before diving in. A VA home loan calculator can give you some hard numbers to work with so you can make the most informed decision possible when it’s time to choose a mortgage.
Remember, though, that in addition to your monthly payment on the mortgage (paying down a portion of what you borrowed, plus interest), you’ll also need to pay for property taxes and home insurance. So build these costs into your budget as well. If you want to see these extra costs factored into your monthly payments, use a mortgage calculator with taxes and insurance.
What Is a VA Loan?
A VA loan is a home loan that’s provided by a private lender but guaranteed by the federal government. VA loans are designed to help qualifying veterans, service members, and eligible surviving spouses purchase a home with minimal down payment and credit score requirements.
With the exception of the Native American Direct Loan (NADL) program, which is designed for Native American veterans and veterans married to Native Americans, the government doesn’t extend VA loans directly. Instead, the Department of Veterans Affairs (VA) guarantees the loan.
Should you get a VA loan to buy a home and default on the payments for any reason, the VA would step in to minimize losses for the lender. VA loans are just one type of government-backed mortgage, alongside home loans backed by the U.S. Department of Agriculture (USDA) and Federal Housing Administration (FHA) loans.
Pros and Cons of a VA Loan
VA loans can offer some advantages to homebuyers. Some of the most attractive features of VA mortgage loans include:
• No down payment requirement
• No private mortgage insurance (PMI) requirement
• Low, fixed interest rates
• Potentially easier approval than conventional mortgage loans
• No prepayment penalties for paying your loan off early
There are, however, some drawbacks. Perhaps most significantly, VA loans are not available to every homebuyer. You must meet specific requirements to qualify.
Additionally, the VA home loan program has restrictions concerning the types of properties you can buy. If you’re interested in buying a multi-unit rental property for investment income, for instance, you can’t use a VA loan unless you plan to live in one of the units. You’ll need to get any home you plan to buy appraised, and some properties may require inspection from a structural engineer.
VA loans have funding fees, which are due at closing. You could roll the fee into the loan so you pay nothing out of pocket, but that will increase your cost of borrowing in the long term. If you’re putting nothing down, you’ll be starting with zero equity in the property.
VA Loan Requirements
Before you can apply for a VA loan you’ll first need to request a Certificate of Eligibility (COE) to show a lender that you qualify based on your service history and duty status. You can request a COE online through the VA website.
Minimum service requirements are tied to your duty status. Service members meet the guidelines if they’ve served at least 90 continuous days on active duty with no breaks. Requirements for veterans are based on when you served.
For example, if you served any time between August 2, 1990, and the present you meet the minimum active-duty service requirement so long as you completed:
• 24 or more continuous months, OR
• At least 90 days for which you were called or ordered to active duty, OR
• At least 90 days if you were discharged for a hardship or reduction in force, OR
• Less than 90 days if you were discharged due to a service-connected disability
Different requirements apply to National Guard and Reserve members. If you were discharged, you could still obtain a COE if your discharge is related to:
• Hardship
• The convenience of the government (you must have served 20 months of a two-year enlistment required)
• Early out (you must have served 21 months of a two-year enlistment)
• Reduction in force
• Certain medical conditions
• Service-connected disability
If you were dishonorably discharged or discharged for bad conduct, you may not be eligible for VA benefits, including eligibility for VA loans.
Aside from service requirements, you’ll also need to meet credit score and income requirements for a VA loan. The VA does not set a minimum credit score but lenders can. Credit score and income thresholds can vary by lender, but the higher your score is, the easier it may be to get approved.
VA Mortgage Loan Process
The VA loan process starts with obtaining your COE. You’ll need to have this to show to a lender as proof of your eligibility for a VA loan.
Once you’ve checked off that step, you’re ready to use a VA loan calculator to crunch some numbers. If you have a target purchase price in mind, using a VA mortgage calculator can tell you if that amount is realistic, based on your estimated payments.
The next step is choosing a lender. You may want to go through the mortgage preapproval process, sharing some basic information with multiple lenders to get home loan quotes. As you compare VA loan lenders, consider:
• Interest rates
• Fees
• Minimum credit score and income requirements
• Length of loan terms
If you’ve found a home you want to buy and have made an offer, you can apply for a VA loan. You’ll fill out the lender’s application and agree to allow a hard credit check. You’ll need to have the home inspected and appraised by VA-approved professionals.
The lender may ask for supporting documentation, such as bank statements, investment statements, or an explanation of negative marks on your credit. If you get the green light for a VA loan, the lender will finalize the paperwork so you can prepare for closing.
At closing, you’ll hand over any down payment funds you plan to offer and pay the loan fee unless you’re rolling it into the mortgage. Once you’ve signed off on all the paperwork you can start moving in. Your first payment to a VA loan is usually due on the first day of the first full month after closing.
Reviewing tips to qualify for a mortgage can give you a better idea of what you need to do to improve your approval odds. For more advice on getting the mortgage that’s right for your personal situation, visit a home loan help center.
How Does a Down Payment Work?
A down payment is money you pay in advance against a home’s purchase price. For example, say you want to buy a $300,000 home and plan to put 20% down. You’d give the lender $60,000 at closing and finance the remaining $240,000.
VA loans don’t require a down payment but you can offer one if you’d like to finance a lower amount. A down payment gives you an automatic equity stake in the property, and offering one for a VA loan may help you qualify for better terms.
A larger down payment can also lower your monthly payment. If you’re using a VA loan payment calculator or any other mortgage calculator to estimate costs, you can see how your payment might change based on how much you put down.
The easiest way to lower the down payment requirement on a mortgage is to choose a home loan option that doesn’t require you to bring a lot of money to the table. VA loans, USDA loans, and FHA loans all have low or no down payment requirements.
Aside from that, you could opt to use gifted money to make a down payment. Down payment gifts must come from an approved person or entity, and you must document them properly. Specifically, you must be able to show in writing:
• Who made the gift
• How much was gifted
• When it was gifted
There must also be wording that specifies that any money you receive is a gift and doesn’t need to be repaid to the donor.
Ready to start your home buying journey?
Get in touch with a Mortgage Loan Officer for a complimentary mortgage consultation. If you’re ready to jump in, get pre-qualified online in minutes.
Average Mortgage Down Payment in 2024
Through the first quarter of 2024, the average home down payment was 13.6% of the purchase price, according to Realtor.com®. In median dollars, the typical down payment over the same period was $26,000. Down payments for second homes and investment properties were 27.9% and 27.3%, respectively.
An often-repeated rule of thumb for down payments is 20%, assuming that you’re getting a conventional mortgage loan. So if you’re buying a $250,000 home, you’d need $50,000 for the down payment.
If you’re considering a government-backed mortgage, however, you don’t have to aim for 20%. Again, VA loans allow you to buy a home with $0 down. That’s an advantage if you don’t have a lot of money saved toward a down payment, or don’t want to part with all your cash.
How much should you put down on a home? It depends on your financial situation and overall goals.
You might choose a larger down payment if you:
• Want a smaller mortgage loan
• Prefer a lower monthly payment
• Have plenty of extra cash to cover emergencies or required maintenance and upkeep
On the other hand, you may put less money down if you:
• Don’t want to drain your cash savings
• Qualify for a low or $0 down payment mortgage, such as a VA loan
• Can handle the mortgage payment that would be needed to finance 100% of the home
While you’re shopping for a home, you can park your down payment funds in a high-yield savings account. You can earn some interest on the money and enjoy convenient access when you’re ready to use it.
The Takeaway
A VA home loan calculator can shed light on what you might pay for a VA mortgage. If you’re ready to buy a home but aren’t sure how the process works, start by familiarizing yourself with some of the most important home-buying terms and use mortgage calculators to explore the costs of different types of loans with different down payment amounts and interest rates.
SoFi offers VA loans with competitive interest rates, no private mortgage insurance, and down payments as low as 0%. Eligible service members, veterans, and survivors may use the benefit multiple times.
Our Mortgage Loan Officers are ready to guide you through the process step by step.
FAQ
How do I find out how much VA loan I qualify for?
Getting preapproved can give you an idea of how much you might be able to borrow with a VA loan. The mortgage preapproval process involves sharing some basic information with a lender to get a home loan quote. VA loan preapproval doesn’t guarantee that you’ll be able to get a loan but it can help you estimate your borrowing power.
How much can you borrow on a VA loan?
The amount you can borrow on a VA loan can depend on your credit score, income, and details of the property. For 2025, the maximum VA loan limit for most counties is $832,750. The limit increases for high-cost counties, up to $1,249,125. These limits apply to single-family homes.
What is the 1% rule on a VA loan?
The 1% rule on a VA loan refers to the maximum amount a lender can charge for an origination fee. Origination fees are paid to cover the cost of processing the loan. These fees are typically paid at closing, along with other closing costs and your down payment.
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.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
By Derek Stratton |
Uncategorized |
Comments Off on Traditional IRA
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Traditional IRA
Reward your future self with a tax-deferred traditional IRA.
Save now and handle taxes later. With a Traditional IRA, your retirement savings aren’t taxed until you withdraw them in retirement.
Open a Traditional IRA
For other IRA options, check out SoFi’s Roth IRA and SEP IRA accounts.
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What is a traditional IRA?
A traditional individual retirement account (IRA) is a tax-advantaged retirement savings account that anyone with earned income can contribute to. When you add money to your account, the tax-deductibility of your contributions may depend on your income bracket, but your investments will grow tax-deferred until you withdraw them during retirement (unlike a Roth IRA, where contributions are made with after-tax dollars).
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Kickstart your retirement with a traditional IRA.
Tax-deferred benefits.
Potential earnings accumulate without worrying about annual taxes—you only pay tax when you withdraw your money.
Secure retirement income.
A traditional IRA can help you have the retirement you’ve dreamed of. Consider pairing your IRA with a 401(k) to potentially improve your savings.
Potential tax deductions.
Depending on your income and if you have an employer-sponsored 401(k), you may be eligible for a tax deduction from your IRA contributions.
Simple setup process.
Typically, you can open a traditional IRA online in just a few minutes.
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Use SoFi’s IRA calculator to find out how much your retirement savings could accumulate over time.
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Traditional IRAs vs. Roth IRAs
In some cases, it may make sense to open a Roth IRA instead of or in addition to a traditional IRA. While contributions to a traditional IRA may be tax-deductible, you’ll owe taxes on withdrawals later. With a Roth IRA, contributions are made with after-tax dollars, but qualified withdrawals in retirement are tax-free. Factors like your current income, tax bracket, and retirement goals all play a role in helping you decide between a Roth IRA versus a traditional IRA.
Why choose a SoFi traditional IRA?
There’s plenty to love about traditional IRAs, and SoFi adds even more to the list.
Enjoy a user-friendly and easily accessible online platform.
How to open a traditional IRA with SoFi:
Choose an IRA account type.
Select traditional IRA. Other options include Roth and SEP.
Select how you’d like to invest.
You choose how hands on you want to be with your investments—do it yourself (Active Traditional IRA) or have us do it for you (Automated Traditional IRA).
Open an account.
After you’ve opened your account, add money to your IRA by making a single or recurring deposit from your bank account. You can also rollover your 401(k) to your new account.
Open a Traditional IRA
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Choose your investment approach.
Automated traditional IRA: < br/>A hands-off approach.
Overwhelmed by your investment options or not sure where to start? We’re here to help. Just tell us about your overall retirement and investment goals and our robo-advisor will build and manage a custom portfolio for your traditional IRA – just for you.
Active traditional IRA: < br/>Do it yourself.
If you want to be hands-on and select your own investments in your traditional IRA, active investing is the option for you. Be your own investor and pay no commissions on your trades.
Get more IRA resources and education.
See more investing articles
FAQs
When do I pay taxes on a traditional IRA?
Typically, you don’t pay taxes on a traditional IRA until you withdraw money in retirement. Your contributions are tax-free.
Who can contribute to a traditional IRA?
Any individual who has earned income—or their non-working spouse if filing jointly—can contribute to an IRA.
How do I contribute to a traditional IRA?
You can contribute to a traditional IRA with cash, a check, a direct bank transfer, or a rollover from another qualified retirement account.
Can I open a traditional IRA on my own?
Anyone with taxable income can open an IRA on their own. In fact, IRAs can only have one account holder, so you can’t open an IRA with another person.
Is it worth opening a traditional IRA?
Traditional IRAs can be a great way to save for retirement while enjoying tax-deferred growth. Different types of retirement accounts have different rules and qualifications, so be sure to do your research before selecting the best option for your situation. Here are a few things to consider before opening a traditional IRA:
• If you withdraw earnings before age 59 ½, you’ll pay a 10% penalty plus taxes. • Contribution limits may be lower than other retirement plan options, such as an employer-sponsored 401(k). • Once you hit age 73, you’re required to take required minimum distributions (RMDs). • Unlike a 401(k), you can’t borrow against an individual retirement account.
Does it cost money to open a traditional IRA?
Typically, it doesn’t cost anything to open an IRA. SoFi IRAs have no startup costs. However, in some instances, some brokers or providers may require a minimum amount to open your account.
What are the traditional IRA contribution limits for 2025 and 2026?
In 2025, traditional IRA contribution limits are $7,000 for people under age 50 and $8,000 for people 50 and older. In 2026, the contribution limits are $7,500 for people under age 50 and $8,600 for people 50 and older.
Can I make catch-up contributions to my traditional IRA?
Yes, if you’re aged 50 or older, you can make up to $1,000 in catch-up contributions to your traditional IRA in 2025 and up to $1,100 in catch-up contributions in 2026.
What are the tax implications of traditional IRA rollovers and conversions?
There are typically no tax implications if you directly rollover money from an existing qualified traditional IRA or 401(k) into a new traditional IRA. There are rollover rules to consider depending on how you complete it, however. An IRA conversion is a taxable event and has different tax rules to consider.
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Prepare for your retirement with a SoFi Traditional IRA.
By Annie Luc |
Uncategorized |
Comments Off on Debt Consolidation Calculator
Debt Consolidation Calculator
By Janet Siroto | Updated January 16, 2026
If you’re dealing with debt (especially high-interest debt that seems to be rising despite your best efforts to pay it off), you may want to consider your options to eliminate it.
A debt consolidation calculator can be a valuable tool to help you see exactly how much you owe and how you might benefit from debt consolidation. With debt consolidation, you get one new loan, ideally at a lower cost, and that is used to pay off an array of debts. You can then focus on paying off your new, single loan and getting rid of that amount of debt hanging over you.
By consolidating multiple debts into a single loan, you only have one monthly payment to track and manage, making it easier to stay on top of your finances.
Explore the benefits and drawbacks of debt consolidation, and learn how a calculator can help you make an informed decision.
How to Use the Debt Consolidation Calculator
With a debt consolidation calculator, you can enter the details of your debts (say, credit card debt, a medical bill, a car loan) and see how you could save with a debt consolidation loan.
Step-by-step Guide to Using a Debt Consolidation Calculator
Here’s how debt consolidation calculators typically work.
Enter Details About Your Debts
Enter Details About Your Debts
To start using a loan consolidation calculator, you will enter such facts as the balance of each debt you want to consolidate, the interest rate, and the monthly payments you are making. You can then see your results, which can include:
• Total balance
• Combined interest rate (the average weighted balance for all the debts you have entered into the calculator)
• Total monthly payment (the amount you pay monthly toward your debts)
• How long until you will be free of this debt given your current situation
Input Details About Your Financial Profile
Input Details About Your Financial Profile
Next, you’ll add information about, say, your credit score, and desired payoff time frame.
See Your Options
See Your Options
Once this data is put into the consolidation loan calculator, you can see how a debt consolidation loan might help make paying off your debt more affordable.
💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. SoFi personal loans come with no-fee options, and no surprises.
Benefits of Debt Consolidation
Here are some of the key upsides to debt consolidation:
• Simplifying debt management with a single payment
• Lowering interest rates and monthly payments, thereby saving you money
• Possibly shortening the period of time in which you are paying off this debt
• Potentially improving credit score and financial stability
It’s important to be aware of these facets of debt consolidation loans:
• Your financial profile (your credit score range, for instance) can impact what offers you receive for debt consolidation loans. If you have poor credit, you may not qualify for a lower interest rate option.
• When you consolidate your debt, you still have debt. It doesn’t go away and you need to keep up with your payments.
• Debt consolidation doesn’t necessarily make the problem that caused your debt go away. If you are prone to impulse spending or live in an area with a high cost of living that has you struggling to pay bills, a debt consolidation loan may only be of temporary benefit.
💡 Quick Tip: Swap high-interest debt for a lower-interest loan, and save money on your monthly payments. Find out why credit card consolidation loans are so popular.
How to Choose a Debt Consolidation Option
If you’re considering a debt consolidation method, it’s worthwhile to review your potential options, including but not limited to a debt consolidation loan. These can include:
• Debt consolidation loans from a financial institution typically give you a sum of money to pay off your debts and then move on to eliminating your one new loan. You may also hear these referred to as unsecured personal loans, though some secured options may be available.
• Balance transfer credit cards, which can allow you to move your credit card balance to a card with a temporary zero-interest card (typically for up to 18 months), giving you breathing room to pay down your debt.
• A home equity loan (provided you have equity in a home to borrow against) can be a possibility, but you could lose your property if you don’t keep up with payments.
• A retirement plan loan could help you pay off your debt. While you do get your hands on cash, your retirement fund will be smaller and could face penalties and taxes.
• You might also look into working with a debt counselor to get a fuller view of your possibilities, especially if you are really struggling to keep up with what you owe. They may be able to advise you on debt management plans.
As you review your options, you should look carefully at debt consolidation loan offers. You can compare interest rates and terms from different lenders, as well as potential fees and other aspects of the loan.
Only you can decide which debt consolidation loan might be best for your needs or whether a different option is the right choice for handling your debt.
Using a debt consolidation loan calculator can help you see what your payments might look like if you replaced various debts with a single debt consolidation loan. These consolidation loans can simplify paying off your debt and may be able to save you money.
Whether or not you agree that credit card interest rates should be capped, one thing is undeniable: Credit cards are keeping people in debt because the math is stacked against you. If you’re carrying a balance of $5,000 or more on a high-interest credit card, consider a SoFi Personal Loan instead. SoFi offers lower fixed rates and same-day funding for qualified applicants. See your rate in minutes.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
