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Building wealth is a journey, and there are times when we need a little support along the way. Just like a therapist can help you work through your emotions, or a personal trainer can push you to new fitness heights, a financial planner can help you zero in on your financial goals.

But where do you start? These 10 questions can help you maximize your financial planning sessions and prepare for whatever comes next in your life.

(And don’t forget: If you subscribe to SoFi Plus — or have an eligible direct deposit with SoFi — you’ll get unlimited access to virtual financial planning sessions. All SoFi members get an initial 30-minute consultation at no cost too. Just download the SoFi app and register.)

1. Why should I work with you?

It may sound blunt, but it’s the most important question. Get a feel for their working style and priorities, and (if possible) get recommendations from other clients. You should also properly vet them. Find out:

•   How they are paid: The National Association of Personal Financial Advisors (NAPFA) recommends a “fee only” method of compensation (meaning no commissions) in order to reduce conflicts of interest and increase transparency.

•   What licenses they hold: Are they a Certified Financial Planner® or Chartered Financial Analyst?

•   Whether they’ve had any disciplinary actions taken against them: Checking the CFP Board’s database and FINRA’s Broker Check is a good start.

2. How does my current financial health look?

Besides meeting all of your monthly obligations, are you on track to achieving your financial goals? A financial planner can give you an honest assessment of your overall financial health and how prepared you are for the future. You should come away knowing where you stand not only with your monthly income and expenses, but retirement and college savings, investments, and debt payments.

3. Am I prepared for an emergency?

Many experts recommend having enough cash to cover at least three to six months’ worth of basic living expenses. And the median (aka typical) emergency savings amount among U.S. workers is just $5,000, according to a recent survey from the Transamerica Center for Retirement Studies. In fact, 40% of Americans surveyed by U.S. News & World Report in January said they didn’t have enough cash or savings to cover a $1,000 emergency expense.

Ask your financial planner how much you should have in your emergency fund (this SoFi calculator can help), and how best to build that savings up so you’re covered when you need it most.

4. What’s the best way to conquer my debt?

Nearly 2 in 3 U.S. credit card holders with debt said they have delayed or avoided financial decisions because of that debt, according to a Bankrate survey. If your credit card bills are stifling your plans, loop your financial planner in ASAP to discuss payoff strategies (like the debt snowball method). You can also ask if debt consolidation or credit counseling might be warranted.

5. How much should I be saving for retirement?

There are lots of different ways to estimate what you’ll need in retirement, including having a certain multiple of your annual salary saved by the time you’re 30, 40, etc.

Your financial planner can show you what you’re projected to have by your target retirement date at your current savings rate, based on benchmarks, as well as explore whether there are opportunities to adjust your investment strategy or sock more money away. (For example, by using a Health Savings Account in addition to a 401(k) and/or IRA.)

What’s key is sharing your vision for your retirement. Will you travel a lot? Do you plan to downsize your home? Will you continue to work part-time? Those insights can help them help you.

6. Am I taking on the right amount of risk with my investments?

This past April had some of the biggest one-day stock market swings in decades, so it’s natural to wonder about risk — and feel a little skittish.

And a lot depends on your own risk tolerance, which you’ll want to assess with your financial planner. But as a rule of thumb, the younger you are, the more risk you can generally take on with your investment portfolio — assuming you’re playing the long game. In other words, if you’re saving for retirement and have decades to go, you’ve got more time to recover from downturns and weather the market’s ups-and-downs.

If you’re nearing retirement age, however, you have a shorter horizon, which could lower your risk tolerance. Your financial planner can weigh the risks and your time horizon to help you determine how much to keep invested in stocks vs. bonds, and how much cash to hold.

7. Is my money working hard enough for me?

You’ve worked hard for your money, but is it working for you? Cash tends to lose value over time because of inflation. If you have a lot of idle cash, you may be losing out on opportunities to earn passive interest or investment income. One survey suggested that 82% of Americans aren’t even using a high-yield savings account. Talk to your financial planner about how you can leverage the markets (and the power of compound returns) to maximize growth potential in a way that suits your risk tolerance.

8. How should I plan for major life events, such as buying a home, having children, or sending my kids to college?

The average cost of college has more than doubled since 2000. Mortgage rates and property prices have made it increasingly unaffordable to buy a house. And childcare and healthcare costs can feel prohibitive. Ask your financial planner how you can best prepare for the financial milestones you have ahead of you, including by using tax-advantaged accounts.

9. How can I protect my family in case something happens to me?

A will and a life insurance policy can help safeguard your loved ones’ financial future, but only if you’ve planned ahead. Just 31% of U.S. adults have a will, according to Trust & Will. And choosing the best type of life insurance for your situation (like term vs whole life policies) can feel complicated. Ask a financial planner to help you strategize the best approach to make sure your family is taken care of.

10. What’s next?

End every session by asking about next steps. What should be on your to-do list? When should the next check-in be? How (and how often) can you reach out with questions?

Finances can be stressful, but talking things out with an expert can help ease your mind and prepare you for whatever economic headwinds come next. And whether you choose to work with a financial planner or not, remember: Knowledge is power. The more you educate yourself, the more control you’ll have over your financial future.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

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The past five years have presented many Americans with financial headaches of all sorts: high grocery costs, steep housing prices, job uncertainty, COVID-related setbacks, and more. To cope with busted budgets and expenses that just can’t wait, more and more households are borrowing money in the form of unsecured personal loans. As of April 2025, the average balance per consumer stood at more than $11,600, according to TransUnion®.

To learn more about why people get personal loans and how those personal loans are used, in April SoFi conducted its Real Borrowers, Real Reasons survey. We talked to 1,000 adults across the country who have taken out at least one personal loan in the past five years. More than one-third of them had secured two or more during that time period.

We asked them about their loan rates and terms, how much they borrowed, what they’ve been using the money for, and their experience managing the loan payments. Read on for the intriguing results.

Key Findings

Some highlights of SoFi’s 2025 Real Borrowers, Real Reasons survey:

•   58% of people borrowed less than $10,000.

•   43% of respondents have fully paid off their loan.

•   Nearly half (48%) paid off their loan within two years.

•   One in four people used their personal loan for debt consolidation, the most common motive.

•   64% reported interest rates of 9.00% or below.

•   Even so, respondents most commonly identified high interest rates as the biggest challenge to managing their loans.

In analyzing the personal loan statistics, we found that people tended to borrow moderately (most took out less than $10,000) and pay their personal loans back promptly. Given the chance, the vast majority (79%) would do it all over again, since most people (65%) felt the loan left them in a better financial position.

However, one in five respondents felt their finances did not improve after the loan and, in retrospect, regret using a loan for the purpose they chose.

Who We Surveyed

•   More than half of our respondents were Gen Xers (30%) and Millennials (31%).

•   27% were baby boomers and 11% members of Gen Z.

•   ust over 75% identified themselves as White, with 10% identifying as Black or African American.

•   Roughly 40% hail from the southern U.S., while fewer than 15% live in Western states.

•   About 30% have incomes of $100,000 or more; almost 36% earn between $50,000 and $100,000.

•   6.6% had borrowed $50,000 or more.

What We Learned: Personal Loan Statistics

Here, take a closer look at how much people borrowed, for how long, and at what interest rate, along with other key findings from the SoFi Real Borrowers, Real Reasons survey.

Most People Borrow Less Than $10K

The majority (58%) of respondents took out personal loans of less than $10,000. Specifically, 23% accessed between $5,000 and $9,999, 25% borrowed between $1,000 and $4,999, and 10% secured less than $1,000. The most common use of funds by the “less than $5,000” club? Emergency expenses.

35% of Borrowers Have Multiple Personal Loans

Within the past five years, more than one in three respondents had taken out multiple personal loans, with over a quarter carrying two loans. Still, the majority (65%) limited their unsecured personal loans in the last half-decade to just one.

32% Repaid Their Loan Within Two Years

The amount of a personal loan usually correlates with its term length, so moderate loans are generally paid off in a few months or years. More than half of borrowers took on less than $10,000 in personal loan debt; nearly half of borrowers were able to pay off their loans within two years.

41% of Borrowers Received an Interest Rate Below 10.00%

More than four out of every 10 borrowers paid a rate between 5.00% and 9.00% on their loans. Almost one-quarter of respondents reported interest rates below 5.00%, while less than half that number are paying 15.00% or more.

Usually, the people with higher incomes were the ones scoring loan rates under 5.00% — but not always. Almost 35% of people earning $15,000 to $19,999 reported similarly low APRs.

53% of Borrowers Are Still Repaying Their Loan

More than half of borrowers are still in the process of paying off their most recent personal loan, compared to 43% who’ve fully paid it off.

Sizable subsets of borrowers reported that they had paid off their loans promptly or, in some cases, ahead of time. For example:

•   33% of people with one- to two-year loans were able to pay them off in 12 months or sooner.

•   30% of people with three- to four-year terms were able to pay off their loans in two years or less.

Why People Took Out Personal Loans

The uses of personal loans are many and varied, and SoFi’s survey respondents named an array of reasons for taking out personal loans. Some had big plans for the money, such as renovating their home, buying a car, traveling, or hosting a wedding.

Other borrowers had needs that they hadn’t foreseen, such as emergency expenses (say, needing a major household or car repair or being hit with a sky-high medical or dental bill).

Read on to see the specifics.

25% Used Their Loans to Consolidate Debt

Refinancing existing debt is a classic strategy for shrinking your monthly bills, and one-quarter of our survey respondents cited debt consolidation as their loan’s primary purpose.

Fully 70% of that group used the money to consolidate credit card debt, a smart move given how much lower personal loan rates can be. For example, in February 2025, the average 24-month personal loan rate was 11.66%, while the average credit card APR (annual percentage rate) was 21.37%.

By securing a debt consolidation loan, 81% of people reported that the move lowered their monthly payments.

20% Put Their Personal Loan Toward Home Improvement or Renovation

One in five people said they borrowed money for home improvement or renovations. These respondents tended to take on practical projects, such as remodeling the kitchen or bath (22%) or repairing their property’s roof or foundation (20%).

Another 15% used a personal loan to consolidate debt from previous loans, including payday loans.

Almost half of the group (48%) said the changes were necessary repairs or safety upgrades. More than a quarter (28%) of the borrowers revamped their homes in order to reflect their personal comfort or lifestyle.

Roughly 18% used the money to make changes that would improve their home’s property value. Fewer than 5% said the renovations were made in preparation for selling their homes, whether that involved updates or staging fees.

17% Snagged a Personal Loan to Buy or Repair a Car

Financing a car with a personal loan can offer some benefits over getting a car loan, including less buyer risk, freedom from a down payment, more power in negotiations, and potential savings on car insurance.

Indeed, among the survey respondents who said they used personal loans for car expenses, 43% said they bypassed auto loans because a personal loan came with better terms and lower rates. One in four felt it was simpler to apply for the personal loan than an auto loan.

Of those who used their personal loans for automotive costs, 70% said they spent the money to buy a vehicle. More than half of them (or 39% overall) opted for used cars rather than new ones (31% overall). Almost one-quarter (24%) reported they used their loan for major auto repairs.

15% Paid Emergency Expenses With Their Loan

Due to financial uncertainty and the steady squeeze of inflation, Americans’ savings rate has plunged since 2020. The 15% of respondents who used personal loans to deal with emergencies pointed to housing issues (29%), income gaps due to job loss (25%), and medical or dental needs (17%).

More than 60% of this group said they had no rainy-day savings or other financial resources to help them through the emergency.

About 14% Used the Loan for Medical or Dental Bills

Even those who have health insurance may not find 100% of medical costs covered, thanks to deductibles and copayments. That may be why 7.6% of all borrowers used personal loans to pay their medical expenses. Of that group, three out of five people specified paying for emergency care, surgery, or dental needs.

An additional 4.1% of all borrowers said they were paying medical bills as part of debt consolidation. Also, of the 17% who used their loans for emergency expenses, about two dozen people (2.6% of all respondents) reported that the emergency involved medical or dental costs.

8% of Borrowers Spent Their Loans on Fun Events

Not all personal loans are used for stressful emergencies. Almost one in ten borrowers had positive plans for the cash they received (think a wedding or travel).

Travel

Getting out of town has gotten pricier, with airfares soaring 25% in the past year. To help cover any shortfalls, 5% of respondents secured vacation loans. Almost two-thirds of this group used their money for leisure travel, and most of the rest (22%) spent their cash on family visits.

Weddings

The large majority (82%) of those who took out wedding loans borrowed up to half the total cost of their nuptials. For almost two-thirds of all wedding borrowers (64%), the loans paid 25% to 50% of the expenses.

More than one in three couples (36%) put their loan proceeds toward securing the right venue for their ceremony or reception. Almost one quarter (24%) used the money to have the festivities captured on film or video. One in five spent the cash on drinks and catering for their guests.

Family Planning

Raising a family is expensive, but only a small share of survey respondents (1.7%) used their most recent personal loan to pay for family planning expenses.

Among this group, fertility treatments motivated 17% of borrowers, while 38% cited child care costs.

The Borrower Experience

Taking out and then paying off an unsecured personal loan can be a smooth transaction — or it can be bumpy. Many of our survey respondents opted to keep things simple by working with a bank or credit union they were already familiar with. Even so, a majority (58%) of all participants reported issues with high interest rates, monthly payments, or lining up a satisfactory lender.

42% Borrowed From Their Current Bank or Credit Union

More than four in 10 respondents chose to borrow from a familiar source: the bank or credit union where they already have accounts. This arrangement typically allows for the greatest convenience when making monthly payments.

Some borrowers searched farther afield, with 10% of all respondents saying that choosing the right lender was the hardest part of their loan experience.

37% Said It Was Easy to Manage Their Loan

Borrowers with fixed income often found their personal loans’ unvarying monthly payments to be manageable. In our survey, most retirees with loans (58%) said that it was not a challenge to manage their personal loans. Employed workers were far less likely to say that, whether they work part-time (29%) or full-time (32%).

30% Cited High Interest Rates as Their Biggest Challenge

Three in 10 participants in our survey told us that borrowing costs were the toughest aspect of servicing their loans. Among respondents who found loan management challenging (629 respondents or 63%), almost half (299 or 47.5%) blamed it on high interest rates. This was the case for more than one-third (34%) of full-time workers.

Fully one-third (33.3%) of respondents in the Northeast singled out high interest rates as their biggest challenge.

18% Struggled to Make Monthly Payments

Fewer than one in five respondents to SoFi’s Personal Loan Survey found payments difficult. The western US represents the largest share of respondents (23.3% or roughly one in four) who say they had difficulty making the monthly payments on their personal loan.

2% of Borrowers Defaulted or Went into Collections

Just a handful of respondents ended up being seriously delinquent on their personal loans, leading to default or collection actions against them. Personal loans are typically unsecured, so there’s little risk of losing collateral — but in some cases, borrowers can be sued and have their wages garnished for repayment.

89% of Respondents Were Happy to Use a Loan for Their Chosen Purpose

Almost 90% of people say they have been satisfied with their loan. That said, roughly 11% of borrowers say using a loan for their chosen purpose was a mistake, with 9% saying they “somewhat” regret the loan. And indeed, when asked to consider whether they’d make the same choice again, 21% of all respondents answered “no.”

Good News! 65% Are Better Off Financially After Their Most Recent Personal Loan

Almost two-thirds of survey participants said that, over time, their loans helped improve their financial situation. Fifteen percent, or about one in seven people, aren’t ready to make that judgment yet.

The Takeaway

SoFi’s Real Borrowers, Real Reasons survey sheds light on the who, how, and why aspects of personal loans as 1,000 people revealed their experiences. Most borrowers in our survey were able to secure loan rates well below the national average, which may help explain how 63% of respondents were able to pay off their loans in two years or less. Almost two-thirds concluded that the loan left them in a better financial position, whether they used it for emergency expenses or fun spending.

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.

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This article appeared in SoFi's On the Money newsletter. Not getting it? Sign up here.

As many Americans shift to thrift, cutting back is more than sensible — it’s cool.

Social media feeds are filling up with proud posts about setting “no buy/low buy” rules, and influencers are increasingly “deinfluencing” people from buying stuff. Post-pandemic “revenge spending” has been replaced with “revenge saving.” For many young adults, “nights out” are out.

Data backs up the frugal trend: Spending at restaurants, bars, and hotels fell 11% in May, contributing to the smallest monthly increase in overall consumer spending since 2020.

Americans’ personal savings rate (aka the % of disposable income that people save vs. spend) is ticking back up, rising to 4.5% in May from 3.5% in December. Workers are contributing a record share of their paychecks to their 401(k)s.

Young, Smart, and Trying Not to Go Broke

The switch is especially noticeable among young adults. From January to April, purchases among people 18 to 24 were down 13% year-over-year, while spending among older groups rose, according to Circana market research data cited by the Wall Street Journal.

Unemployment rates among Americans in their early 20s has ticked up this year as entry-level jobs get tougher to find. Meanwhile, for the first time since the pandemic began, not paying your federal student loans has serious consequences.

So what? As tariff price-hikes loom and economic jitters grow, many Americans are tightening their belts. Here are a few ways to embrace financial restraint the cool way — and maybe even have fun doing it:

•   Go for the thrill of the “treasure-hunt”: Whether it’s poring through the racks at Ross or thrifting at a second-hand store, finding a hidden gem in the racks never disappoints. Plus, your friends will be impressed by that vintage Levi’s vest you discovered for $5.

•   Go out by staying in: Join the Gen Z homebody trend by skipping $20 bar cocktails. Instead, host a cozy dinner party, a potluck buffet, a boardgame night, or a pizza-making experience at home. Your friends (and your wallet) will love you for it.

•   Give DIY a try: Compliments feel even better when you can say you did it yourself. It doesn’t have to be as complicated as retiling your own kitchen, either. Instead of dropping $6 on a Starbucks latte, pull up a few videos and learn how to become your own barista (and maybe your own chef). Then post your creations.

•   Make saving a game: Participate in one of the many challenges going viral on social media (like the 100-envelope challenge). Financial experts generally recommend setting aside enough to cover three to six months’ worth of living expenses in an emergency savings fund, and you can give yourself a little treat each time you hit one of your monthly goals.

•   Curate “freemium” experiences: From concerts in the park and gallery openings to open-mic and line-dance nights, Googling free events near you can pay off. (Pro tip: Some things, like cultural events sponsored by foreign consulates, may even have free food.) Instead of paying $40 for a workout class, follow a tutorial or get friends together for a group backyard workout. Or, get some (free!) fresh air with an outdoor jog.

•   Get creative with upcycling: It’s not just good for the environment — it’s also good for your wallet. You can upcycle by finding new purposes for old things (think: turning an ill-fitting skirt into a top, using plastic containers and candle jars as storage). Sustainability is always in style.

Related Reading

Why We Need to Bring Back House Parties (TIME)

Trade Tensions Drive Consumers to Cut Back. ‘Something Has to Give,’ Analyst Says (CNBC)

What You Can Save By Doing It Yourself (SoFi)

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

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