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The cost to become a nurse or nurse specialist ranges from a few thousand dollars to hundreds of thousands. The cost rises with education level — from a two-year associate degree to a doctorate degree — but so do average earnings.

Nursing is also a career that’s always in demand. More than 194,500 new openings for registered nurses alone are expected each year over the next decade.

Keep reading for the average cost of nursing school, plus a look at average nursing salaries and how to pay for your nursing education.

Typical Nursing School Costs and Salaries

There are a number of routes to becoming a nurse or nurse assistant. Here are the main types, median pay (based on 2023 figures from the U.S. Bureau of Labor Statistics), and average educational costs.

Certified Nursing Assistant (CNA)

Becoming a CNA may require a high school degree, and you typically need to complete four to 12 weeks’ worth of courses, attend onsite training, and pass an exam.

The cost of a CNA program varies based on length and whether the program is state approved.

Average CNA tuition cost: $600 to $2,000

Median pay: $38,130 per year

Licensed Practical Nurse (LPN)

Also known as a licensed vocational nurse, an LPN must complete a state-approved educational program, which typically takes 12-18 months, and pass a licensing exam.

Average tuition cost: $4,000 to $15,000+

Median pay: $59,730 per year

Recommended: Guide to Nursing Student Loans

Registered Nurse (RN)

Registered nurses need at least a two-year Associate Degree in Nursing from an accredited college or technical school to practice.

Average ADN tuition cost: $3,000 to $17,000 per year

RNs with an Associate Degree in Nursing can seek a Bachelor of Science in Nursing (BSN) in an RN-to-BSN program, which usually takes one to two years to complete.

Average cost of online RN-to-BSN tuition cost: $2,800 to $10,000+

The American Association of Colleges of Nursing considers the four-year Bachelor of Science in Nursing the degree that provides the educational and experiential base for entry-level professional practice.

Average BSN tuition cost: $6,000 to $60,000+ per year

Median pay for all RNs: $86,070 per year

Advanced Practice Registered Nurse (APRN)

An advanced practice registered nurse holds at least a master’s degree in nursing. The four specialties are nurse practitioner, certified registered nurse anesthetist, certified nurse midwife, and clinical nurse specialist.

A Master of Science in Nursing will take one to two years to complete. The tuition cost is often higher than that to obtain a BSN.

Average MSN tuition cost: $12,000 to $100,000 per year

Master’s-level programs still allow grads to join the APRN ranks, but a doctorate is quickly becoming the standard, according to the American Association of Colleges of Nursing.

Most research-focused doctoral nursing programs grant a Ph.D. The Doctor of Nursing Practice (DNP) degree is more practice-focused.

Average DNP tuition cost: $20,000 to $75,000+

Median pay for nurse anesthetists, nurse midwives, and nurse practitioners: $129,480 per year

If you need to borrow in order to get through school, know that you’re in good company. Most nurses take out loans (federal and private student loans are available) to earn their professional titles.

Recommended: Grad Student Loans for Future Health Care Pros

Other Fees While Studying to Be a Nurse

When studying to become a nurse, students incur various fees beyond tuition. These include:

•   Textbooks: Nursing textbooks can cost several hundred dollars per semester, depending on the program and required materials.

•  Uniforms and equipment: Items such as scrubs, nursing shoes, stethoscopes, and other clinical supplies can add up to several hundred dollars.

•  Lab fees: Practical training sessions often come with lab fees to cover the use of specialized equipment and facilities.

•  Background checks and immunizations: Many programs require these for clinical placements, with costs ranging from $50 to $200 or more.

•  Licensing exams: Registration for exams like the NCLEX costs over $200, an essential step for licensure.

•  Liability insurance: Students may need professional liability insurance for clinical practice, costing $20 to $100 annually.

•  Transportation: Travel expenses for clinical rotations can vary depending on distance and frequency.

•  Professional memberships: Joining nursing organizations for networking and resources may cost $30 to $100 annually.

How to Pay for Nursing School

Paying for nursing school can feel overwhelming, but there are many options to help manage costs, including federal student loans, scholarships and grants, and private student loans.

Federal Student Loans

Students can apply for federal aid — including federal student loans, scholarships, grants, and work-study — by completing the FAFSA®, the Free Application for Federal Student Aid, each year.

It’s a good idea to submit the FAFSA even if you’re not expecting federal aid because other student aid programs piggyback off the application.

When it comes to paying federal loans back, many nurses choose to work for qualifying nonprofit or government organizations to take advantage of the federal Public Service Loan Forgiveness program, often pairing it with an income-based repayment plan.

Scholarships and Grants

Scholarships and grants for nurses provide valuable financial assistance to help cover the cost of education without the need for repayment. Many programs are available for nursing students at all levels, including undergraduate and advanced degrees.

Scholarships are often merit-based, while grants are typically need-based. Organizations such as the American Association of Colleges of Nursing and local health care providers offer funding opportunities. These resources reduce financial burdens, making a nursing career more accessible and affordable.

Recommended: SoFi’s Scholarship Search Tool

Private Student Loans

If federal aid does not cover the total cost of nursing school, private student loans are another option.

Private student loans are available from private lenders and generally allow students to borrow up to the school’s estimated annual cost of attendance. That includes tuition and fees, room and board (or living expenses), books, supplies, a personal computer, transportation, and childcare.

It’s important to keep in mind that federal protections and programs like income-based repayment apply only to federal student loans. Still, private student loans can fill gaps in need. Learn more in our guide to private student loans.

The Takeaway

How much is nursing school? Getting an associate degree can cost a few thousand dollars, whereas the full path leading to a master’s or doctorate can cost hundreds of thousands. A lot will depend on whether the school is public or private, whether you’re an in-state student, and whether you receive scholarships or grants.

Paying for nursing school usually requires a combination of financing options, including scholarships and grants, cash savings, and federal 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 much is nursing school for four years?

The cost of nursing school for four years varies by program and institution. A Bachelor of Science in Nursing (BSN) at a public in-state college averages $40,000-$80,000, while private colleges may cost $100,000-$200,000. Additional expenses include textbooks, clinical fees, and licensing exams, which can add several thousand dollars.

Is nursing school worth it financially?

Nursing school is often worth it financially due to strong job demand and competitive salaries. Registered Nurses (RNs) earn a median annual salary of $86,070, with growth opportunities in advanced practice roles. While upfront costs can be high, stable employment and earning potential make it a worthwhile investment.

What is the average debt after nursing school?

The average debt after nursing school depends on the degree program. Graduates with an Associate Degree in Nursing (ADN) typically owe just over $23,000, those with a Bachelor of Science in Nursing (BSN) owe nearly $30,000, and graduates with a Master of Science in Nursing (MSN) owe just under $49,000.

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Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 04/24/2024 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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SOISL-Q424-056

About 25.6 million Americans made a move in 2023, which amounts to 7.8% of the country’s population. As you may be aware, a move can be expensive. Current estimates reveal that a local move for the contents of a three-bedroom home costs approximately $2,200, while a long-distance move is easily twice that. What’s more, amid the chaos of purging and packing, it’s easy to forget some of the moving-related costs you might face.

To help you get organized and budget appropriately, read on for the full story.

Understanding Moving Expenses

While it may not be as fun as, say, budgeting for a wedding, figuring out costs for moving can be similarly complex. There can be numerous aspects to wrangle, from purchasing the proper packing supplies, to deciding whether to DIY your move or hire professionals, to understanding insurance needs. Consider the following.

Types of Moving Expenses

Here are some of the costs you are likely to incur when moving:

•  Transportation, or actually moving your possessions from point A to point B

•  Moving services, meaning having professionals load, transport, and unload your belongings

•  Packing, which usually involves cartons and bubble wrap (or you might pay to have movers pack delicate or valuable items)

•  Insurance to cover the value of your belongings as they are transported

•  Rent and security deposits. The location you’re moving to may require a security deposit and first month’s rent in advance.

•  Cleaning fees. You may have to pay to have your former and new residences cleaned.

•  Lodging. As you travel from your former home to your new place, you may have to stay a number of nights in a hotel or motel. Some people need to bridge the gap between homes with a short-term rental as well.

•  Storage. You might have to put some items in storage, depending on the timing and specifics of your move.

•  New furniture and appliances. Often, when people move, they discover they need to buy new pieces, whether that means window shades, a fridge, rugs, or a dining table.

Factors That Affect Moving Costs

There are numerous variables when you move, but here are a few key ones to consider:

•  How far you are moving. A move across town will involve less time, effort, and expense than a move across the country (or overseas).

•  How much you are moving. If you are a recent college graduate with just a few pieces of furniture, your move is likely to cost less than, say, a family of four packing up their whole home (basement and attic including) and relocating.

•  Time of year. Summer tends to be the busy season, with students leaving school and finding new places to settle and families wanting to get to their new house before the school year starts. This increased demand can increase prices.

•  Services needed. If you are going to pack the contents of your studio apartment and have a friend with a van to help you move, you’ll likely spend considerably less than you will if you are a family of four who wants movers to pack and transport all your furniture and other items.

•  Storage. If you have to store all your possessions for a couple of weeks before you can have access to your new place, those costs can add up.

•  Access to locations. Someone whose move involves a single-level home with an ample driveway will likely have a shorter move than someone who lives in a 20th-floor apartment on a crowded city block. And shorter moves are less expensive than longer ones.

How to Create a Moving Budget

Once you know when and where you are moving, you can map out a moving budget.

•  Take inventory of what you want to move. Consider clothes, contents of your kitchen and bathroom(s), items stored in closets, and belongings in the attic, basement, and garage, if applicable. This will help you determine how big a truck you need and how much packing material you need.

•  Unless you’re planning to DIY your move, get multiple quotes from movers and carefully check reviews for the key contenders.

•  Don’t forget to add in line items such as packing materials, insurance, storage, and your daily expenses as you move.

•  Assess transportation and lodging costs as you move, plus pet boarding expenses, if needed.

•  Calculate the costs of getting settled in your new home: Rent, security deposit, new furnishings, cleaning fees, and so forth.

Once you have all the potential costs tallied, you can consider how to allocate funds to cover these expenses. Since moving costs can add up, you might want to think about ways to avoid putting the charges on a high-interest credit card.

Cost of Hiring Professional Movers

Next, take a closer look at one of the biggest expenses of moving: the cost of hiring a professional team to get you to your new home.

Average Cost of Hiring Movers

As you might guess, the cost of hiring movers can range widely depending on location, distance of the move, and how much you’re moving. Here are some general figures to be aware of:

•  For a local move (meaning 100 miles or less), costs typically range from $800 to $2,500.

•  For a long-distance move (more than 100 miles), costs are usually considerably higher, ranging from $2,200 to $5,700.

There can be additional fees to consider: extra insurance for valuable items, the cost of packing and moving supplies, the fee for professional packing of items, and special services for moving items like, say, a piano or a pool table. You may also want to calculate how much tipping your movers might cost; omitting that expense could be a budgeting mistake. Recommendations typically say between 10% and 20% of the cost of your move is appropriate.

Recommended: Personal Loan vs Credit Card: What’s the Better Option?

Tips for Saving Money on Professional Movers

As you contemplate moving and how much it will cost, you may want to try various ways to keep the price down:

•  Declutter before your move. The less stuff you have, the less packing materials you’ll need and the faster (and cheaper) your move will be.

•  Pack what you can. While valuable art or a prized guitar may not be good candidates for packing yourself, you can likely save money by packing, say, your clothes in your suitcases and duffel bags vs. paying a professional to do the job.

•  Move during the off-season. There’s less demand during seasons other than summer, so you might get a better deal.

While of course you want to stick to your budget, keep in mind that the cheapest quote for moving may not be the best option. A moving company’s reputation for safe, on-time services can matter more than a rock-bottom price.

DIY Moving: Budgeting and Expenses

Thinking of doing your own move? Consider these aspects:

•  The cost of renting a truck or van will require funding. As you might guess, the bigger the truck and the longer you use it, the more costly it will be. According to Angi.com, renting a truck can cost between $20 and $100 a day for a local move, but a long-distance move can incur charges of $300 to $2,000 or more a day. The average cost in the U.S. is about $1,000. (Keep in mind that you need to resolve what happens to a truck that you might drive cross-country to move. Can you drop it off at a location near your new home, or will you have to pay a fee for its return to its home base?

•  You’ll also need to budget for packing materials. Online packing calculators can help you determine your needs and the cost, but estimates say that for a small-to-medium home (a two-bedroom apartment or house), you’ll likely need to spend at least a couple hundred dollars on cartons, not including such supplies as bubble wrap ($2 for 10 feet) and tape ($2.50 and up per roll). Don’t forget some sturdy markers to help you label what’s inside each box.

•  You might rent reusable boxes (typically plastic ones) to use for your move. Another item that can be wise to rent is wardrobe boxes, which allow you to move clothing that’s hanging in your closet into these boxes for easy transportation.

•  Moving blankets are another expense. These can cost $10 and up a pop if you purchase them. You may be able to rent them from a moving company to use for your DIY move.

•  Don’t forget about dollies and hand trucks to get boxes from one location to another.

Recommended: Personal Loan Calculator

Hidden Moving Costs to Be Aware Of

As you get ready to move, don’t overlook these costs (some of which were mentioned above):

•  Storage costs for any items that need to be held securely before they can be moved into your new home. You might easily pay between $100 and $300 a month for this service. You also might need to pay insurance fees to protect your items.

•  Any temporary housing you may need

•  Transportation costs. You may be in a situation in which you fly cross-country but need to ship your car (the average cost of shipping a car is $1,650). Or maybe you’ll drive, triggering gas, lodging, and road food costs.

•  If you’re moving to a different state and have a car, you’ll need to apply for a new license and register your car with the local DMV, which can wind up costing a couple hundred dollars. That’s another item to add to your moving expenses checklist.

•  You will likely need to update documents and do a significant amount of address changing for all your online and other accounts. You might face some delays in receiving payments (such as passive income), so that is worth considering in advance as well.

•  Security deposit and first month’s rent, if applicable, at your new place. Also utilities setup and any transfer fees; locks and smoke and carbon monoxide detectors

•  Stocking your kitchen at your new home (pantry and grocery expenses are not insignificant)

Tips for Reducing Moving Expenses

Here are some ways you can bring down your moving costs (some were already referenced above):

•  Downsize as much as you can before moving. The less you have, the faster and cheaper your move can be.

•  Find affordable or free moving materials. Options can include getting free cartons and other supplies from friends and family, sourcing boxes from local retailers, or renting things like plastic containers, wardrobes, and moving blankets vs. purchasing them.

•  Schedule your move appropriately, avoiding the busy and pricey summer high season.

•  Check the Internal Revenue Service’s allowable tax deductions and reimbursements for moving. The IRS website shares details of what you might qualify for.

Planning for Additional Moving Expenses

Part of the goal of this planning is to help you avoid putting many of these potential charges on your credit card, since they typically charge high interest rates. Maybe you can dip into funds held on reserve: That’s what emergency savings are for.

You can also use a 0% interest credit card, crowdsource from friends and family, or consider a personal loan.

Personal loans are a form of installment debt, where you receive a lump sum that you then repay in equal monthly payments. There are different types of personal loans, so you can choose the terms that best fit your budget and circumstances.

Believe it or not, moving expenses are one of the most common uses for personal loans. And because of their relatively low fixed rates compared to high-interest credit cards, you can roll in related new-home expenses like new furniture and painting.

Recommended: Get Your Personal Loan Approved

The Takeaway

Moving is a major financial commitment, but it doesn’t have to break the bank. When planning a move, first decide whether you’re going to DIY or hire pros. Then make a list of other expenses: packing supplies, funds for a security deposit at your new place, and new furniture and household items. You may need to tap your savings or take out a personal loan to afford these charges.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

FAQ

What are the typical costs associated with moving?

A local move (meaning less than 100 miles) can cost from $800 to $2,500, while a long-distance move can cost a couple of thousand dollars and up. Costs include professional movers or truck rental, packing supplies, transportation to your new location, possibly lodging, and costs such as a security deposit and new vehicle registration at your new home.

What is a reasonable amount for moving expenses?

There is no one figure that’s reasonable for moving expenses. The amount of possessions you need to move, how far you are moving, and when you are moving are among the factors that matter. It can also impact costs if you hire professional movers vs. doing it yourself. In general, a move can easily cost at least one or two thousand.

What are ways to lower the cost of moving?

To lower the cost of moving, you might do the move yourself with friends and family, source free boxes from local retailers, and declutter before you move, not after.

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.

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 .

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

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.

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SOPL-Q424-053

While revolving credit provides borrowers with flexibility, too much revolving debt can be crippling. Even with falling interest rates, the most vulnerable credit card holders can use some help.

Let’s look at ways of dealing with mounting revolving debt. But first, here’s a primer on what revolving debt is and how it differs from installment debt.

A Closer Look at Revolving Debt

There are two main categories of debt: revolving and installment. Revolving credit lets you borrow money up to an approved limit, pay it back, and borrow again as needed. The two most common revolving accounts are credit cards and a home equity line of credit (HELOC).

HELOCs are offered to qualified homeowners who have sufficient equity in their homes. Most have a draw period of 10 years, followed by a repayment period. A less common type of revolving credit is a personal line of credit, usually obtained by an existing customer of a lending institution.

Then there are credit cards, which became part of the American fabric in the 1950s, starting with the cardboard Diners Club card. You can choose to make credit card minimum payments, pay off the entire balance each month, or pay some amount in between. If you don’t pay off the full balance when it’s due, your balance will accrue interest.

That’s one of the quiet dangers of revolving debt: If you haven’t reached your limit, you can continue to borrow while you owe money, which adds to your debt and to the amount of interest accruing on it.

Recommended: Credit Card Rules to Live By

Revolving Debt vs. Installment Debt

Now let’s take a look at installment debt. It differs from revolving debt in a few key ways — namely, how you borrow money, how you pay it back, and how interest is calculated.

Installment credit comes in the form of a loan that you pay back in installments every month until the loan is paid off. Think mortgages, auto loans, personal loans, and student loans.

Installment loans can be secured with collateral, or they can be unsecured. Some loans could have fees, and the interest rate may fluctuate, depending on whether you have a fixed or variable rate loan. The loan amount is determined when you’re approved.

There are benefits and drawbacks to both types of debt. Let’s take a look.

Revolving Debt Pros and Cons

Pros:

•   Borrow only what you need

•   Can access credit quickly

•   May qualify for high borrowing limit

Cons:

•   Will have a credit limit

•   Can have high interest rates

•   Can be easy to run up a big balance

Installment Debt Pros and Cons

Pros:

•   Can cover large or small expenses

•   Payments are predicable

•   Can refinance to a lower rate

Cons:

•   Interest applies to the entire loan amount

•   Can’t add to the loan amount once it’s finalized

•   Long repayment terms are possible

Secured and Unsecured Debt

Now is a good time to touch on secured vs. unsecured debt (and why credit card debt is especially pernicious). Mortgages, HELOCs, home equity loans, and auto loans are secured by collateral: the home or car. If you stop making payments, the lender can take the asset.

An unsecured loan does not require the borrower to pledge any collateral. Most personal loans are unsecured. The vast majority of credit cards are unsecured. Student loans are unsecured, and personal lines of credit are usually unsecured.

That means lenders have no asset to seize if the borrower stops paying on unsecured debt. Because of the higher risk to lenders, unsecured credit typically has a higher interest rate than secured credit.

Which leads us to the common credit card trap: The average annual percentage rate (APR) for credit cards accruing interest was 22.63% in early 2024 … and rising. The APR on a credit card includes interest and fees.

Perhaps you can see how “revolvers” — borrowers who carry a balance month to month — can easily get caught in a trap. The average household of credit card revolvers owes $6,380 according to recent data from TransUnion. Some owe much more.

Recommended: Personal Loan vs Personal Line of Credit

Types of Revolving Credit

As we discussed earlier, common types of revolving credit accounts include HELOCs, credit cards, and personal lines of credit. Each type has features and benefits that are worth knowing.

A credit card, for instance, is convenient to use — especially for everyday purchases — and may come with extra benefits like rewards programs, airline miles, or cashback offers. Depending on the card, you might also have access to purchase protection, which reimburses you for damaged or stolen items.

With a HELOC, you leverage your home’s equity to get the funds you need, up to an approved limit, during a typical 10-year draw period. A HELOC can be a good option if you’re looking to pay for home improvements or ongoing expenses or to cover a financial emergency.

Have a less-than-predictable income or facing a major ongoing expense, like a home renovation? If you have good credit, a personal line of credit may be the right choice. It’s flexible, so you can withdraw money as you need it, though your lender may set a minimum draw amount.

How Revolving Debt Can Affect Your Credit Score

Both installment and revolving debt influence your score on the credit rating scale, which typically ranges from 300 to 850.

Your credit utilization ratio is a big factor. It’s the amount of revolving credit you’re using divided by the total amount of revolving credit you have available, expressed as a percentage.

Most lenders like to see a credit utilization rate of 30% or lower, which indicates that you live within your means and use credit cards responsibly.

The most important element of a FICO® Score is payment history. It accounts for 35% of your credit score, so even one late payment — a payment overdue by at least 30 days — will damage a credit score.

And unfortunately, late payments stay on a credit report for seven years.

Tips for Managing Revolving Debt

Ideally, we’d all avoid interest on credit cards by paying off the balance each month. But if you do carry a balance, you have plenty of company. Forty-six percent of Americans carry a balance on active credit card accounts, recent data from the American Bankers Association shows.

If your revolving credit card debt has become unwieldy, there are ways to try to get it under control.

Budget Strategies

The fastest ways to pay off debt call for creating a budget to plan how much you will spend and save each month.

With the avalanche method, for example, you pay off your accounts in the order of highest interest rate to lowest. The 50/30/20 budget works for some people: Those are the percentages of net pay allotted toward needs, wants, and savings.

Debt Consolidation

Do you have high-interest credit card balances? You may be able to transfer that debt to a credit card consolidation loan.

Consolidating high-interest credit card balances into a lower-rate personal loan will typically save you money. Most personal loans come with a fixed rate, which results in predictable payments, and just one a month.

Installment loans do not count toward credit utilization. So using a personal loan to pay off higher-interest revolving debt will lower your credit utilization ratio (a good thing) as long as you keep those credit card accounts open. (Yes, closing a credit card can hurt your credit score.)

Homeowners using a home equity loan or HELOC to consolidate high-interest credit card debt can substantially lower their monthly payments. However, their home will be on the line, and closing costs may come into play.

Another method, cash-out refinancing, is a good move only when a homeowner can get a better mortgage rate and plans to stay in the home beyond the break-even point on closing costs.

Balance Transfer

A balance transfer card is another way to deal with high-interest debt. Most balance transfer credit cards temporarily offer a lower or 0% interest rate. But they may charge a balance transfer fee of 3% to 5%, and they require vigilance.

Make one late payment on the new card, and you’ll usually forfeit the promotional APR and have to pay a sky-high penalty APR. You’ll need to keep track of the day when the promotional rate expires so any balance is not subject to the high rate.

Debt Settlement

A debt settlement company may be able to reduce a pile of unsecured debt. There are many drawbacks to this route, though.

You will usually stop paying creditors, so mounting interest and late fees will cause your balances to balloon. Instead, you’ll make payments to an escrow account held by the debt settlement company. Funding it could take up to four years.

What’s more, your credit scores will be damaged, there is no guarantee of a successful outcome, it can be very expensive, and if a portion of your debt is forgiven, it probably will be considered taxable income.

This and bankruptcy options are considered last resorts. If you do go with a debt settlement company, know that those affiliated with the American Fair Credit Council agree to abide by a code of conduct.

Credit Counseling

A credit counseling service might be able to help. The Federal Trade Commission advises looking for a nonprofit program, but it adds that “nonprofit” does not guarantee that services are free, affordable, or even legitimate.

Look into credit counseling organizations affiliated with the National Foundation for Credit Counseling, National Association of Certified Credit Counselors, or Financial Counseling Association of America.

The Department of Justice keeps a list of approved credit counseling agencies. Also check with state and local consumer agencies.

A credit card hardship program addresses temporary setbacks. However, not all card companies have one.

The Takeaway

Revolving credit offers flexibility, but if left unchecked can devolve into runaway revolving debt. Credit card debt is especially pernicious, thanks to high interest rates charged to revolving balances. Debt consolidation, one approach to tame mounting revolving debt and the stress that comes with it, aims to lower your monthly payments.

Another option to consider is a lower-interest loan. It will result in a smaller monthly payment amount and just one payment to keep track of each month. The personal loan tends to be funded fast, has a fixed rate, and usually comes with no fees required.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

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.

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 .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

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.

SOPL-Q424-019

There’s no such thing as a good time to lose your job. Unfortunately, a layoff typically does not stop the influx of bills.

Luckily, individuals who find themselves in such a tough position have options. Before resorting to pulling out the big guns, like forbearance or other alternatives that can potentially hurt your credit, it’s worth taking a look at all of the choices on the table. That way, you’ll fully understand your options and their implications before making a move when you’ve lost your job and can’t pay your bills.

Assess Your Financial Situation

Whether you’ve lost your job or are in a precarious employment situation, getting your financial house in order is an important first step. Start by evaluating your current income and recurring expenses and looking for areas where you can cut back.

A good way to keep monthly spending in check is to create a budget, either on your own or with the help of a budget planner. If you’ve lost your job and your income has dropped, you’ll want to prioritize the essentials: food, utilities, housing, and transportation.

Explore Financial Assistance Options

Even with modified spending habits and a new budget, a loan due is a loan due — or at least a situation that won’t go away without dealing with it. Here are some options to consider.

Reaching for Lifelines

Even with modified spending habits and a new budget, a loan due is a loan due — or at least a situation that won’t go away without dealing with it. The reason you lost your job will form a fork in the road of sorts about how to proceed.

Unemployment Benefits

If you voluntarily quit without good cause, then unemployment benefits probably will not be available. But usually the first part of a survival plan for unemployment is to get into the system for unemployment, if possible. To get started, an unemployment benefits finder can help, as can exploring unemployment resources by state.

Hardship Loans

These types of personal loans are designed to help borrowers overcome a job loss or other financial difficulty. Whether they’re unsecured or secured, hardship loans for unemployed borrowers can provide much-needed funds during a difficult time. You may be approved within a couple of days and could receive the money in about a week or less.

Forbearance and Deferment Programs

Many lenders have forbearance and deferment programs in place for their customers, but it’s generally up to the customer to reach out and ask for help.

Forbearance — a pause in monthly payments toward a loan — is an option offered in many lending agreements. The terms vary, but it can open the door to a revised agreement that may allow for decreased or delayed payments for a specific period of time. Some lenders may even offer to reduce the interest rate charged on the debt.

On the surface, this sounds positive, but note that these options can significantly affect your credit scores. The impact depends on the type of loan and the lender. What’s more, interest will usually accrue and be added to your principal balance at the end of a forbearance period.

Communicate With Lenders

As we mentioned, it’s a good idea to contact your lenders as soon as possible if you’ve lost your job and are struggling to make your monthly payments. Discuss your situation with them, and explain how your job loss is impacting your ability to repay your debt.
Then explore options that may be available to you. Two strategies to consider:

•   Negotiate a reduced balance on the account. Most creditors would rather receive a partial payment than none at all. If you’re having a difficult time making ends meet, you may want to propose paying a lump sum for less than what you owe. If the lender agrees, be sure to get the arrangement in writing.

•   Ask about hardship programs. Depending on the lender, you may be offered relief measures like a lower interest rate, waived late fees and penalties, a temporary pause in payments, or lower minimum payments.

Explore Loan Modification or Refinancing

Instead of falling into potential debt traps like payday loans or credit cards with high interest rates, look for solutions that make monthly payments more affordable — without saddling you with hefty interest rates and fees. A loan modification or refinancing are two such options.

With a modification, a lender agrees to change your loan’s rate, repayment term, or both to an amount you can afford. For example, they may extend the number of years you have to pay back the loan, lower your interest rate, or reduce your principal balance. Keep in mind that lenders are under no obligation to offer loan modifications, and they’ll likely first require you to provide proof of financial hardship.

Another option is to explore refinancing opportunities. While it can be harder to qualify for refinancing when you don’t have a job, it is possible. Lenders like to see borrowers with a strong credit history and a good debt-to-income ratio. Asking a trusted friend or family member to be a cosigner may also help bolster your application.

As you weigh your choices, consider enlisting the help of a financial advisor or mortgage specialist who can help you find the solution that’s right for you.

Build an Emergency Fund

Losing a job can be stressful, but there are ways to prepare financially while you’re still employed. One effective strategy is to build an emergency fund.

There are several approaches you can use to help you establish a safety net, including:

•   Creating a budget — and sticking to it

•   Building a savings plan so you’re able to cover at least three to six months’ worth of unexpected expenses

•   Exploring high-yield savings accounts

•   Automating your savings contributions

•   Paying down debt

Seek Professional Guidance

If you’re struggling to pay off your loans after losing a job, you may think you have to figure out all the answers on your own. You don’t. Help is available.

•   Consult with a financial planner or credit counselor. These professionals can help you manage your finances after a job loss and get back on firmer financial ground once you land a new job.

•   Seek assistance from nonprofit organizations. Services vary by organization but may include resume building programs, education and training opportunities, and job placement programs.

•   Consider debt counseling or debt consolidation. With debt counseling, a professional will offer advice on your finances and debt, help you create a budget and debt management plan, and provide financial education. Debt consolidation is when you combine multiple debts into a single loan, ideally with a lower interest rate. However, it may lead to longer payment terms or involve fees.

The Takeaway

The main thing to remember for anyone who is out of work and still responsible for loans is: You are not alone. It might seem difficult, even impossible, but it is doable — and even the longest journeys begin with taking the first steps.
After you’ve started tracking your expenses, cutting back on costs, and reaching for lifelines through unemployment benefits and your lender, the next step in dealing with loan payments after a job loss is to explore your options. Rather than turning to potential debt traps like payday loans and credit cards, you might consider jobless loans.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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 .

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.

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.

SOPL-Q424-055

Loans have become an integral part of American financial life. We need a mortgage to buy our first home, and an auto loan to purchase a car. More recently, people are turning to personal loans to cover surprise bills and avoid high-interest credit card debt. But just because you need a loan doesn’t mean a lender is going to give you the loan — and interest rate — you want.

If you’re struggling to qualify for a loan, a friend or family member may be able to help by becoming a co-borrower. By leveraging their income, credit score, and financial history, you may qualify for better loan terms. Let’s dive into the details.

Understanding Co-Borrowers

As you’re considering your options, a natural first question may be, what is a co-borrower? Essentially, a loan co-borrower takes on the loan with you, and their name will be on the loan with yours. They will be equally responsible for paying the loan back and will have part ownership of whatever the loan buys. When you take out a mortgage with someone, the co-borrower will own half the home.

Spouses often co-borrow when buying property, and when taking out a personal loan for a home improvement or remodeling project. In other circumstances, two parties become co-borrowers in order to qualify for a larger loan or better loan terms than if they were to take out a loan solo.

Having a co-borrower can help two people who both want to achieve a financial goal — like first-time homeownership or buying a new car — put in a stronger application than they might have on their own. The lender will have double the financial history to consider, and two borrowers to rely on when it comes to repayment. Therefore, the loan is a less risky prospect, which may translate to more favorable terms.

Recommended: All About Variable Interest Rate Loans

Qualifying as a Co-Borrower

If you’re planning to have a co-borrower on your personal loan application, it helps to understand what criteria you both must meet in order to be accepted by the lender. Let’s take a closer look at common factors lenders consider.

Credit Score

A credit score can have a significant impact on whether your loan application is approved and what terms you’re offered. There’s no magic number, but generally speaking, lenders prefer to see a score of 670 or higher. You and your co-borrower may want to check your credit scores for free before you apply.

Proof of Income and Employment

To help them determine whether co-borrowers can afford loan payments, a lender will likely want to see proof of a stable income and employment. You both may be asked to provide recent pay stubs, tax returns, and bank statements. You might also be asked to show a letter from your employers verifying your employment status, how long you’ve both been employed, and your salaries.

Debt-to-Income Ratio

Debt-to-income ratio, or DTI ratio, is a comparison of your monthly debts to your gross monthly income (before taxes). Lenders use this information to help determine how risky it would be to loan money to a borrower. It can affect your ability to borrow money and the interest rate you’ll receive. Generally, lenders like to see a DTI that’s no higher than 36%, though there may be some wiggle room.

In addition to the above, lenders also usually consider:

•   Financial history. This includes recent bankruptcies, judgments, and liens.

•   Age. Many lenders have a minimum age for co-borrowers, typically 21 to 25 years of age.

•   Citizenship. Co-borrowers generally must be either citizens or permanent residents of the U.S.

Co-Borrower Process

Applying for a loan with a co-borrower? The application process is fairly similar to the one you’d follow if you were applying alone.

A good first step is to reach out to your lender and start the prequalification process. If your co-borrower has a strong credit profile, that could improve your odds of qualifying for better rates and terms.

Next, you and your co-borrower will need to complete the loan application. You’ll also both undergo credit checks, and the lender will evaluate your finances. You may be asked to provide documentation like pay stubs, bank statements, or tax forms.

Within a few days or so, you’ll find out if you’re approved and what your loan terms are. Once you agree to the terms, your loan funds will be disbursed, usually within a week. Your lender will also share details about how to make monthly payments.

Co-Borrower vs. Cosigner

A cosigner plays a slightly different role than a co-borrower. A cosigner’s income and financial history are still factored into the loan decision, and their positive credit standing benefits the primary applicant’s loan application. But a cosigner does not share ownership of any property the loan is used to purchase. And a cosigner will help make loan payments only if the primary borrower is unable to make them.

Cosigning helps assure lenders that someone will pay back the loan. Typically, a cosigner has a stronger financial history than the primary borrower. This can help someone get approved for a loan they might not qualify for on their own, or secure better terms.

No matter which route you choose, there are potential credit implications to keep in mind. For example, when you apply for a loan, the lender will likely do a hard credit pull. This may cause credit scores to temporarily dip for you and your cosigner or co-borrower.

Both parties may also see a drop in their credit score if monthly payments are late or missed altogether. (And remember, cosigners will be on the hook for making loan payments if the main account holder can’t.) On the flip side, on-time payments can help boost or build credit scores.

When should you choose a cosigner vs. a co-borrower? The answer depends on your situation and goals. If you intend on sharing ownership of whatever you buy with the loan, then a co-borrower may be a good choice. If you simply need someone with a strong credit history to bolster your loan application, then consider using a cosigner.

Recommended: What Is Revolving Credit?

The Takeaway

Taking out a loan is a big decision, and doing so with a co-borrower carries additional risks. A co-borrower is a partner in the loan and any property the loan is used to purchase. If one borrower cannot make their payments, the co-borrower will be on the hook for the full amount. But if both parties can come to an agreement about how they’ll handle any financial hardships, co-borrowing can have major benefits. By pooling their income and debt, they may lower their debt-to-income ratio and qualify for a mortgage or personal loan with a lower interest rate and better terms.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

Photo credit: Stocksy

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.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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