Financial Topics Archives

Dec

2025

Can You Lose Your Home With a Reverse Mortgage?

By Kim Franke-Folstad | Home Ownership, mortgage | Comments Off

A reverse mortgage may help older Americans who find they need more money in retirement. It’s common for inflation and rising medical costs to be issues. A reverse mortgage allows them to convert some of their home’s equity into cash, which can benefit their financial situation.

Protections established over the past few years by the U.S. Department of Housing and Urban Development (HUD) focus on lowering the risk previously associated with reverse mortgages. What’s more, the federal and state governments have taken aim at deceptive marketing practices that can minimize the complex aspects of reverse mortgage agreements.

That said, it’s wise to proceed with caution. There are still considerable cons to reverse mortgages, and borrowers may be unaware of the finer points. One important fact: It is possible to lose your home if you don’t comply with all the loan terms. Take a closer look at this topic here.

Key Points

• Reverse mortgages allow eligible homeowners 62+ to convert home equity into cash.

• Most reverse mortgages are HECMs, insured by the government.

• Borrowers must stay current with property taxes, insurance, and maintenance.

• Defaulting can lead to having to repay the loan or lose the house.

• Alternatives to reverse mortgages include home equity loans, personal loans, and refinancing.

Why Do People Choose a Reverse Mortgage?

A reverse mortgage allows qualifying homeowners age 62 and older to convert part of the equity they’ve built up in their primary residence into money they can use to pay off their existing mortgage or for any other expenses that come up in retirement (from health care costs to home repairs).

The big selling point for reverse mortgages is that the loan usually doesn’t have to be paid back until the last borrower, co-borrower, or eligible nonborrowing spouse dies, moves away, or sells the home. And when it is time to repay the loan, neither the borrower nor any of the borrower’s heirs will be expected to pay back more than the home is worth.

Main Types of Reverse Mortgages

There are three basic types of reverse mortgages. The most common is a home equity conversion mortgage (HECM), which is the only reverse mortgage insured by the U.S. government and is available only through an FHA-approved lender. An HECM can be used for anything, but there are limits on how much a homeowner can borrow.

Note: SoFi does not offer reverse mortgages or home equity conversion mortgages (HECM) at this time.

There are also proprietary reverse mortgages, which are private loans that may have fewer restrictions than HECMs — including how much a homeowner can borrow.

And there are single-purpose reverse mortgages, which are typically offered by nonprofit organizations or state or local government agencies that may limit how the funds can be used. Most of the time, when someone refers to a reverse mortgage, though, they’re talking about an HECM.

Reverse Mortgage Terms to Know

There are safeguards in the reverse mortgage process that protect borrowers. However, there are also loan terms borrowers are required to uphold or risk defaulting and potentially triggering a mortgage foreclosure. They include:

Staying Current With Ongoing Costs

Borrowers must stay up to date on property taxes, homeowners insurance, homeowners association fees, and other costs, or they could risk defaulting on the loan. An assessment of a borrower’s ability to pay for those ongoing expenses is part of the reverse mortgage application process, and if it looks as though money might be tight, a lender may require a borrower to set up a reserve fund, called a “set-aside,” for those costs. (In this way, it’s akin to an emergency fund, which is there to cover expenses if needed.)

Maintaining Full-Time Residency

Borrowers (and eligible non-borrowers) must use the home as their primary residence — the home they occupy for most of the year. If they move out of the house or leave the home for more than six months, or receive care at a nursing home or assisted living facility for more than 12 consecutive months, it could result in the lender calling the loan due and payable.

The lender also may choose to accelerate the loan if the borrower sells the home or transfers the title to someone else, or if the borrower dies and the property isn’t the principal residence of a surviving borrower.

Keeping the Home in Good Repair

Because the home is collateral and may have to be sold to repay the loan, lenders may require borrowers to do basic maintenance that will help the property keep its value (e.g., repairing a leaky roof or fixing a problem with the electrical system). If an inspector feels the home is not being properly maintained, the lender could take action.

What Happens If a Reverse Mortgage Borrower Defaults?

If the homeowners default, the first thing that could happen is that future loan payments may be stopped. And if the problem isn’t corrected within the lender’s stated timeline, the loan may become due and payable, which means the money the lender has distributed to the borrower, plus any interest and fees that have accrued, must be repaid. In that case, the borrower typically has four options:

• They can pay the balance in full and keep their home.

• They can sell the home for the lesser of the balance or 95% of the appraised value and use the proceeds to pay off the loan.

• They can sign the property back to the lender.

• They can allow the lender to begin foreclosure.

No matter what the homeowners decide to do, the process could take months to complete. HECM lenders may offer borrowers additional time to fix the problem that put them into default, or the borrowers may qualify for extensions or a repayment plan.

But in the meantime, there could be other implications — if the homeowners are no longer getting money they need to pay their bills or if the lender reports the default to credit monitoring agencies — that could affect the homeowners’ credit scores.

A Few Alternatives to Consider

The advertisements some lenders use to sell their reverse mortgages can be convincing, and some seniors may see these loans as a convenient way to get some extra cash or as a much-needed lifeline.

But, as with any financial decision, there are advantages and disadvantages — and alternatives — to be considered. There are other ways homeowners may be able to get help that could be less complicated and less limiting than a reverse mortgage.

Here are a few options:

• Borrowers may wish to tap into their home’s equity with a traditional home equity loan or home equity line of credit. They’ll have to make monthly payments, and their income and credit history will be considered when they apply, but the terms may be more flexible and the overall cost may be lower than a reverse mortgage. Because the home is used as collateral, there’s still a risk of foreclosure.

• Low interest-rate personal loans might be another option for homeowners who qualify for a competitive interest rate based on their income and credit. Borrowers who don’t have much equity in their home may choose to look into this type of loan, which is unsecured and is paid out in a lump sum. While foreclosure is not a worry with a personal loan, there still may be consequences to the borrower’s credit rating if they don’t uphold the loan terms.

• Borrowers who are struggling to keep up with their bills in retirement may find that refinancing a mortgage with a new, lower-cost mortgage might be an option to help them lower their monthly payments and stay on track with their budget.

Or, if they need extra cash right away and can get a low enough interest rate, they may want to look into a “cash-out refinance,” which would involve taking out a new loan for a larger amount based on the equity they’ve built up during the years they’ve lived in the home.

Unfortunately, no matter which type of loan homeowners might choose, there could be risks.

The government requires a counseling session for reverse mortgage borrowers for a reason: They’re complex, and it can be helpful to have someone cover all the rules and costs involved.

Homeowners may also want to pay a financial advisor and tap their expertise about what type of loan, if any, fits with their needs, goals, and where they are in their retirement.

Though reverse mortgages are available to homeowners starting at age 62, borrowers who expect to have a long retirement may choose to wait until they’re older to tap into their home equity, so they don’t risk running out of money in their later years.

The Takeaway

For people 62 and older who own their homes, getting a reverse mortgage may be a good way to get funds during retirement. If this is an option you’re considering, be sure to evaluate what responsibilities you’d have and the risks as well as the advantages. But know that there is information, counseling, and protection to help make it unlikely that you would lose your home after getting a reverse mortgage.

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FAQ

How do people lose their homes from a reverse mortgage?

With the most common type of reverse mortgage – a home equity conversion mortgage (HECM) – it’s possible for your lender to take your home if you don’t meet the mortgage obligations. These include staying current with ongoing costs (like property taxes, homeowners insurance, and homeowners association fees, for example), maintaining the property, and using it as your primary residence where you live more than half the year.

Do you give up your house in a reverse mortgage?

When you get a reverse mortgage, your lender does not own your house. You still retain the title and own your house for the duration of the mortgage, unless you default.

What is the six-month rule for home mortgages?

One of the conditions of the most common kind of reverse mortgage – a home equity conversion mortgage (HECM) – is that your home must be your primary residence. That means you must live there more than half the year – six months – or you will be violating the terms of the reverse mortgage.

*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.

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SOHL-Q225-072

Dec

2025

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Capital Markets Explained

By Colin Dodds | Growing Wealth, invest, Investing | Comments Off

Table of Contents

What Are Capital Markets?
What Is the Main Purpose of Capital Markets?
What Are the Types of Capital Markets?
Capital Markets vs. Financial Markets vs. Money Markets
Real-world Examples of Capital Markets
The Takeaway
FAQ

A capital market is an exchange or platform where individuals, institutions, governments, and other entities come together to buy and sell securities. Well-known capital markets typically include the stock, bond, and commodities markets.

Capital markets generally facilitate the trading of longer-term securities vs. money markets, where investors can buy short-term debt. Capital markets today may or may not have specific geographical locations, as most capital markets conduct business electronically.

Key Points

• Capital markets refers to platforms that enable entities to sell securities to raise funds for various purposes, and where investors can buy those instruments.

• Examples of well-known capital markets include the stock market, bond market, commodities market, forex market, and more.

• Capital markets can have physical locations in financial capitals such as Tokyo, London, or New York, but most securities trading is done electronically.

• Capital markets are a critical part of the global economy, as they make it possible for money to change hands with relative ease.

• Primary markets are where securities are issued for the first time, and secondary markets are where they’re traded subsequently.

What Are Capital Markets?

Capital markets perform a key economic role. They bring together those who need to sell securities and those who wish to buy them, thereby facilitating the movement of capital around the world. Capital markets include a wide range of securities markets where funds can be traded between companies, governments, institutions, and individuals for myriad reasons (like investing online).

Established capital markets include stock and bond markets, and commodities. Capital markets and money markets are distinct, though: money markets are where short-term debt is traded. Most capital markets are located in the world’s financial centers, such as London, New York, Singapore, and Hong Kong.

What Is the Main Purpose of Capital Markets?

As noted, the main purpose of capital markets is to bring buyers and sellers together, specifically, for those who want to transact in securities markets. This means that they’re a meeting place for organizations or entities (governments, companies, etc.) that need money to get it from those who are willing to lend it or buy equity (investors).

Capital markets are important to the functioning of the broader economy.

What Are the Types of Capital Markets?

There are different types of capital markets, including broad markets: primary and secondary markets.

Primary vs Secondary Market

Capital markets are commonly divided into primary and secondary markets. The primary markets are where issuers sell “new” securities, and where investors buy them.

The other side of the capital markets are the secondary markets. This is where investors buy and sell the securities that have already been issued, often through a self-directed investing account.

Stock Market vs Bond Market

Stock markets are probably the most well-known of the capital markets. They are where companies go to acquire the capital they need to grow, and where investors go to buy stocks, and find opportunities for their capital to grow.

Bond markets operate differently. For one thing, the bond market doesn’t have a central exchange. Instead, they sell over the counter (OTC). And most of the people who trade in this OTC market are professional traders, such as pension funds, investment banks, hedge funds, and asset managers.

A bond is similar to an IOU, in that investors agree to lend capital to a government, company, or other bond issuer in exchange for regular interest payments over time, and a guarantee their principal will be repaid when the bond matures.

Stock and bond markets are one way to divide up the capital markets. But there are other securities such as convertible bonds, convertible preference shares and other alternative securities that companies sell to raise capital.

Capital Markets vs. Financial Markets vs. Money Markets

Financial markets are a broader category that include both capital markets and money markets. People sometimes use all three terms interchangeably, but there are some distinctions.

Financial Markets

Financial markets, generally, are any venue in which individuals and institutions trade any financial asset, including stocks, bonds, currencies, derivatives, commodities, and alternative investments.

Capital Markets

Capital markets specifically refer to the places where companies and other entities go to raise capital. Some distinguish capital markets as the segment where investors can invest in longer-term securities, versus the short-term instruments available through money markets.

Money Markets

Capital markets are also distinct from money markets in that the money market is where investors trade short-term debt, generally less than one year. Money markets support entities that need the return from short-term debt instruments.

The key distinction between money markets and capital markets are the types of securities traded, their risk level, and duration.

Money market instruments are generally fixed-income securities, and as such can be considered lower risk than other securities traded in the capital markets.

Real-world Examples of Capital Markets

Here are a few examples of capital markets at work in the real world.

Example 1: A Company Goes Public (IPO)

Many companies will choose to conduct an initial public offering, or IPO, in an effort to raise capital in quantities that simply aren’t available through private investors. The public capital market creates the opportunity for millions of investors to buy stakes in the company.

A company will usually consider an IPO when it has grown in size and matured as an organization. From a size perspective, one common time to consider an IPO is when a unicorn company has reached a valuation of $1 billion, though many companies go public before this point.

For many companies, the day of its IPO represents the beginning of a new stage of growth. In addition to the funds raised in an IPO, the credibility and transparency of being a publicly traded company can make it easier and less expensive to borrow money in the future.

Example 2: A City Issues Bonds for a New School

To access public funding through a bond issue, a company or another entity will start by discussing its need for capital with an investment bank or banks, which will act as the underwriter. In some cases, an entity may issue bonds directly, without using an underwriter.

If the bond issuer doesn’t have a rating from a bond-rating agency, the bank will help the borrower get in touch with the right rating agencies.

Once the terms of the bond are agreed upon, and the rating assigned to it, the bank sets up meetings with institutional investors. If they respond positively, then the bonds go to the investors who agreed to buy it over the course of the meetings leading up to the issuance date.

Example 3: Capital Markets in Real Estate

There are several ways that capital markets can serve or operate within the real estate sector. For instance, if a real estate developer needed to raise capital to fund a project, they could securitize it and sell shares, such shares of a real estate investment trust (REIT). Or, if a city needed to fund a project, they could sell shares of municipal bonds to raise the money to do it.

Further, there are financial instruments that are backed by real estate, such as mortgage-backed securities.

The Takeaway

The term capital markets encompasses the in-person and electronic exchanges where companies, governments, institutions, and other entities go to obtain capital from investors.

While the term financial markets is often used to indicate the means by which all types of securities and investment are traded, capital markets tends to refer to the platforms that facilitate the trading of equities and longer-term debt instruments.

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FAQ

What are capital markets in simple terms?

Capital markets bring together companies and other entities that need capital for various purposes, and investors who are willing to buy the securities they offer.

What is the capital market vs the stock market?

The stock market is an important subset of capital markets. It’s where companies that issue shares of their stock can find willing investors.

What is a primary market vs a secondary market?

A primary market is where securities or certain assets are issued for public sale for the first time, and a secondary market is where those securities or assets are subsequently traded or transacted.

Who are the main participants in capital markets?

Broadly, the main participants in capital markets are issuers, or those looking to sell equity or debt for funding, and investors, who are those looking to spend or lend capital in exchange for equity. Intermediaries could also be included, and those include market makers who connect issuers and investors.

Is the foreign exchange (forex) market a capital market?

Yes, the forex market could be considered a type of capital market.

Photo credit: iStock/Ivan Pantic

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SOIN-Q425-047

Dec

2025

A smiling young woman with a high bun and glasses types on a laptop at a sunny table with books, perhaps researching scholarships for women.

10 Popular Scholarships for Women

By Sarah Li Cain | Going to College, Student Loans, student_loan | Comments Off

Scholarships are free money that can help fund an undergraduate or graduate degree. There are plenty of scholarships for women, including some with a purpose to encourage more females to pursue careers where they’re considered underrepresented, as well as scholarships to help them attend college.

Spending some time researching and applying for scholarships you may be eligible to receive could help you pay for college tuition. Keep reading to learn more on 12 top scholarships for women to help pay for college.

Table of Contents

What Types of Scholarships Are There for Women?
Are There Scholarships for Women in STEM?
Popular Scholarships For Women

Key Points

• Scholarships for women can be need-based or merit-based, with some targeting underrepresented fields like STEM, business, and aerospace.

• Examples include AAUW Selected Professions Fellowships ($20,000) and Women in Aerospace Foundation ($5,000).

• Specialized opportunities exist for groups such as Native American students (AIS Scholarship: $500-$2,000), Chicana/Latina students ($1,500), and nursing students (ANNA scholarships: $1,000–$3,000).

• Many scholarships also support women pursuing graduate degrees or career mobility, including accounting and statistics-focused awards.

• Deadlines and eligibility vary widely — early research and preparation are key, as many opportunities go unclaimed due to lack of applications.

What Types of Scholarships Are There for Women?

There are plenty of scholarships available for women, including scholarships for undergraduate students and scholarships for graduate students.

Scholarships may be need-based or merit-based awards. Each one will have specific qualifying and application requirements. Scholarships, essentially, can be like finding free money for college.

Some scholarships may also be location-based, such as those for residents of certain states or for specific schools. There are even some unclaimed scholarships you may be eligible for.

You can use SoFi’s scholarship finder to find and apply for scholarships you qualify for.

💡 Quick Tip: Fund your education with a competitive-rate, no-fees-required SoFi private student loan that covers up to 100% of school-certified costs.

Need-Based vs. Merit-Based Scholarships

Need-based scholarships for women are awarded primarily based on financial need. They’re designed to support applicants whose household income, life circumstances, or financial barriers make paying for education challenging. These scholarships often require documents like tax returns or FAFSA information to show that the applicant genuinely needs financial assistance to pursue her goals.

Merit-based scholarships, on the other hand, focus on achievements rather than financial background. They reward academic excellence, leadership, community involvement, or exceptional talent in areas such as STEM, arts, or athletics. Rather than evaluating income, these scholarships assess accomplishments, grades, or demonstrated potential, making them accessible to women who have excelled in their chosen paths.

Scholarships for Women Returning to School

Scholarships for women returning to school are a type of scholarship designed to help ease the financial burden many face when re-entering higher education after time away. These awards recognize that women often step out of school for reasons like caregiving, career shifts, or financial challenges, and they aim to make the transition back more accessible and affordable. Many of these scholarships consider factors such as financial need, life circumstances, or the desire to advance in a new career path.

Three examples of scholarships for women returning to school include P.E.O. Program for Continuing Education (PCE), Society of Women Engineers (SWE) Reentry Scholarships, and the Jeannette Rankin Foundation Scholarship.

Are There Scholarships for Women in STEM?

There are many scholarships for women who are pursuing careers in science, technology, engineering, and math (STEM). According to the U.S. Equal Employment Opportunity Commission, 29% of all STEM workers are women, with math, engineering, and computer-related jobs being the least represented.

Government organizations, industry associations, and even technology companies offer industry-specific scholarships (we’ll talk more about some of them below). For instance, companies like Google or associations such as the Society for Women Engineers (SWE) offer scholarships for women.

Fields Commonly Supported by STEM Scholarships

STEM scholarships commonly support fields that drive innovation and require strong technical skills, such as engineering, computer science, and the physical and biological sciences. Many programs also fund studies in mathematics, technology, and emerging areas like cybersecurity, data science, and renewable energy. These fields are often prioritized because they face workforce shortages and play a critical role in economic growth and scientific advancement.

Organizations That Support Women in STEM

Many organizations exist to support women pursuing careers in STEM by providing scholarships, mentorship, networking opportunities, and professional development. Five specific organizations include:

• Society of Women Engineers (SWE): Provides scholarships, networking, mentorship, and professional development to women in engineering and technology.

• AnitaB.org: Focuses on advancing women in computing through conferences (like the Grace Hopper Celebration), research, and organizational programs.

• Association for Women in Science (AWIS): Advocates for women across all STEM disciplines by offering mentorship, career resources, and policy engagement.

• National Center for Women & Information Technology (NCWIT): Works to increase women’s participation in computing through education programs, research, and community-building initiatives.

• Girls Who Code: Offers after-school clubs, summer programs, and resources to close the gender gap in technology by equipping young women with coding skills.

Recommended: Scholarships for STEM Students

Popular Scholarships For Women

Below are 12 scholarships available to women that could help you avoid taking on too much student loan debt:

Pepperdine Legacy Partners (PLP) Helen Young Scholarship

Scholarship amount: $5,000

Application deadline: February 15

The Pepperdine Legacy Partners (PLP) Helen Young Scholarship is formerly known as the Associated Women for Pepperdine (AWP) Scholarship. It is one of the largest women’s groups awarding scholarships for female Christian students (though, men can receive this scholarship, too). There are several awards up for grabs, and scholarships can be renewed.

To qualify, applicants need to be students at Pepperdine University, current and active members of the Church of Christ, submit a letter of recommendation from a leader of the Church of Christ, and fill out the Free Application for Federal Student Aid (FAFSA®) application.

Gertrude M. Cox Scholarship

Scholarship amount: $1,000

Application deadline: March 1

The Cox Scholarship aims to encourage women to pursue professions related to the statistics field. There are two scholarships, one for a female early on in their graduate career, and the other for a woman at a more advanced level. Applicants need to be permanent residents or citizens in the U.S. or Canada and be admitted to a full-time graduate statistics program of the year the scholarship is awarded.

Jeannette Rankin Women’s Scholarship Fund

Scholarship amount: Up to $2,500

Application deadline: February 13

This scholarship is for women age 35 or older who are considered low-income and enrolling into a not-for-profit accredited educational institution. Women can pursue an associate’s or bachelor’s degree, or technical or vocational education. To apply, applicants need to demonstrate financial need and answer questions based on their academic and career goals.

American Association of University Women (AAUW) Selected Professions Fellowships

Scholarship amount: $20,000

Application deadline: October

The AAUW awards multiple scholarships, and the Selected Professions Fellowships is one of them.

Women may apply if they intend on pursuing full-time studies at an accredited U.S. institution in a field where women have had historically low enrollment. For instance, scholarships are awarded for women pursuing degrees in STEM and engineering.

Eligibility criteria include women who can prove they have shown promise of high academic excellence and distinction.

American Indian Services (AIS) Scholarship

Scholarship amount: $500-$2,000

Application deadline: July 1 to November 1 (depending on when the applicant’s classes start)

The AIS Scholarship aims to help Native American students enrolling in an accredited institution pursue higher education. Awards are given on a quarterly basis, though you’ll only need to apply once per year.

Eligibility requirements include being at least one-quarter of an enrolled member, or descendant of an enrolled member of a U.S. Federally Recognized Native American Tribe, enrolled at least half-time, and completed the FAFSA. This award is currently only available to undergraduate students.

Educational Foundation for Women in Accounting Scholarships

Scholarship amount: $1,500-$5,000

Application deadline: Varies (most end April 30)

The Educational Foundation for Women in Accounting offers multiple scholarship opportunities for women pursuing undergraduate, graduate, or postgraduate degrees in accounting. Applicants may apply to more than one scholarship excluding the Women in Transition and Women in Need awards, of which students can only apply to one.

Eligibility criteria varies, though most will require applicants to provide transcripts, demonstrate financial need, and prove they’re committed to working in the accounting field.

Patsy Takemoto Mink Education Foundation Scholarship

Scholarship amount: $5,000

Application deadline: New information released May 2026

The Patsy Takemoto Mink Education Foundation Scholarship provides financial support to low-income women of color who are pursuing education or vocational training to improve their career prospects. Named after Congresswoman Patsy Takemoto Mink, the scholarship aims to help women overcome economic barriers and gain skills for long-term self-sufficiency.

Applicants must demonstrate financial need, academic potential, and a commitment to completing their educational or training programs, making it an important resource for women seeking to advance their careers and achieve personal and professional growth.

American Nephrology Nurses Association Career Mobility Scholarships

Scholarship amount: $1,000 to $3,000

Application deadline: November

The American Nephrology Nurses Association, or ANNA, offers Career Mobility Scholarships ranging from $1,000 to $3,000 designed to support qualifying members who are pursuing an advanced or BSN degree in nursing. Qualifying criteria includes being a current full ANNA member for at least one year, enrolled or accepted into a qualifying nursing program, and a 250-word essay outlining the potential impact of the scholarship.

Chicana Latina Foundation Scholarships

Scholarship amount: $1,500

Application deadline: Next application cycle will open on January 1

Self-identifying Chicana or Latina college students living in qualifying California counties can apply for a $1,500 scholarship. They need to be students attending an accredited community college, college, or university full-time and meet certain academic requirements. Plus, they’ll need to attend the Chicana Latina Foundation (CLF) Leadership Institute and CLF Annual Awards Dinner if selected for a scholarship.

To apply for this scholarship, applicants will be required to submit one letter of recommendation from a counselor/professor or community member.

Undergraduate students need to submit unofficial or official transcripts from their current degrees and one letter of recommendation. Graduate students will also need to submit a resume or CV in addition to providing a transcript and letter of recommendation.

💡 Quick Tip: Master’s degree or graduate certificate? Private or federal student loans can smooth the path to either goal.

The Women In Aerospace Foundation Scholarship

Scholarship amount: $5,000

Application deadline: June

The Women In Aerospace Foundation aims to promote careers in the aerospace field — this scholarship program is one of the ways it does so. The organization awards four $5,000 awards to women who are rising juniors and seniors working for a bachelor’s degree in engineering, math, or science.

To qualify, applicants need to be currently enrolled in an accredited U.S. college or university, plan to enroll the next academic year, and complete a minimum of 2.5 academic years of full-time college. Applicants also need to have a minimum of a 3.0 GPA.

P.E.O. Program for Continuing Education

Scholarship amount: Up to $4,000

Application deadline: 30 days from when a local P.E.O. chapter recommends you

The P.E.O. Program for Continuing Education (PCE) is a need-based grant up to $4,000 to support women in the U.S. and Canada whose education has been interrupted and who wish to return to school to complete a degree or certification that will improve their employability.

To be eligible, women must be recommended by a local P.E.O. chapter, be U.S. or Canadian citizens or permanent residents, have had at least 24 consecutive months as a non-student, and be enrolled in an accredited program that leads to employment or advancement. They must also be within 18 consecutive months of completing their program, and they cannot already hold a master’s degree or be enrolled in a doctoral program.

Recommended: Grants for College

Society of Women Engineers Scholarship

Scholarship amount: $1,000-$5,000

Application deadline: Emerging First Year Scholars – February 2, 2026; Collegiate/Graduate Scholars – March 31, 2026; India Scholars – March 31, 2026

The Society of Women Engineers (SWE) Scholarship program offers robust financial support to women pursuing undergraduate or graduate degrees in engineering, engineering technology, or computing at ABET-accredited schools. Award amounts typically range from $1,000 to $5,000, though some awards may be higher depending on donor funding.

To apply, candidates submit an application with their transcripts, a personal essay, and a letter of recommendation. One application allows you to apply for all scholarships you’re eligible for, including Emerging First Year Scholars, Collegiate/Graduate Scholars, and India Scholars.

The Takeaway

Applying for one of the many scholarships for women can be a smart tactic if you’re trying to figure out how to pay for your college education. In addition to the scholarships listed here, there are a variety of other opportunities — many scholarships go unclaimed because they don’t receive enough applications. It doesn’t hurt to submit an application since the worst they’ll say is “no,” and the benefits are well worth it.

There are other ways to help cover the cost of college as well, and you’ll likely want to explore your options to see what makes the most sense for your situation.

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.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

Are there scholarships specifically for women over 30?

Yes, there are scholarships specifically for women over 30. Organizations like the American Association of University Women (AAUW) and the Jeannette Rankin Foundation (JRF) offer financial aid to support women returning to education or pursuing career advancement. Check their websites for eligibility and application details.

Can women in trade schools apply for scholarships?

Yes. Women in trade schools can apply for many scholarships specifically created to support women pursuing skilled trades. These scholarships are offered by trade associations, nonprofits, unions, and private organizations to help cover tuition, tools, exams, and training costs, encouraging more women to enter high-demand technical fields.

Are there scholarships for women of color?

Yes, there are scholarships for women of color. Organizations like the United Negro College Fund, Hispanic Scholarship Fund, and Asian & Pacific Islander American Scholarship Fund offer financial aid to support diverse students. Additionally, many universities and professional groups have specific programs for women of color.

How competitive are scholarships for women in STEM fields?

Scholarships for women in STEM fields are highly competitive due to the growing emphasis on diversity and inclusion. Many organizations, such as the Society of Women Engineers and the National Science Foundation, offer these scholarships, but the number of applicants often exceeds the available awards. Strong academic performance, relevant experience, and compelling essays are crucial.

What documents are typically required to apply for women’s scholarships?

Most women’s scholarship applications require proof of identity, transcripts, letters of recommendation, and a personal essay. Many also ask for financial information, a resume, and documentation showing eligibility, such as enrollment verification, income details, or proof of belonging to a specific group, field, or demographic the scholarship supports.

Photo credit: iStock/valentinrussanov

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

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., Puerto Rico, U.S. Virgin Islands, or American Samoa, 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 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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

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.

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SOSLR-Q425-047

Dec

2025

A young man wearing glasses and a black shirt and holding a pen looks intently at his computer while sitting at a desk.

Applying for Student Loan Economic Hardship Deferment

By Casey Bond | Fresh Out of School, Student Loans, student_loan | No Comments

Table of Contents

What Is Economic Hardship Deferment?
Which Loans Qualify for Economic Hardship Deferment?
Who Qualifies for Economic Hardship Deferment?
Pros and Cons of Economic Hardship Deferment
Alternatives to Economic Hardship Deferment
The Takeaway

Managing student loan payments can feel overwhelming, especially if you’re experiencing financial difficulties. Fortunately, there are several options available to federal student loan borrowers in a tough financial situation.

One option, Economic Hardship Deferment, temporarily pauses payments for qualifying federal student loan borrowers who are experiencing severe financial difficulty.

Read on to find out how Economic Hardship Deferment works, what the eligibility requirements are, how to apply, and whether deferment is the right option for you

Key Points

• Economic Hardship Deferment allows eligible borrowers to pause federal student loan payments for up to three years due to severe financial difficulties.

• Eligibility is based on income and family size, or participation in certain assistance programs; those serving in the Peace Corps may also be eligible.

• Subsidized federal loans do not accrue interest during deferment, while unsubsidized loans do accumulate interest, increasing total repayment costs.

• Not all loans qualify for Economic Hardship Deferment, such as private student loans.

• Alternatives to deferment include forbearance, income-driven repayment plans, Public Service Loan Forgiveness, or refinancing.

What Is Economic Hardship Deferment?

Student loan deferment allows eligible borrowers to reduce or pause their student loan payments for a specific period of time. There are several types of deferment, including Economic Hardship Deferment, which is for those who are facing serious financial trouble. This deferment allows borrowers who meet the requirements to temporarily pause their student loan payments.

How Long Economic Hardship Deferment Lasts

Economic Hardship Deferment is available for up to three years. Borrowers who are approved for the program can take deferment for up to 36 consecutive months, as long as they continue to meet the eligibility requirements. All participants (except those in the Peace Corps) need to reapply each year.

While current borrowers are eligible for this type of deferment, changes are coming to the program. As part of President Trump’s “One Big Beautiful Bill,” federal student loans taken out on or after July 1, 2027, will no longer be eligible for Economic Hardship Deferment.

How Interest Accrues During Deferment

The way interest is handled during deferment depends on the types of federal student loans a borrower has — subsidized or unsubsidized. For subsidized student loans, the government pays the interest on the loans during deferment. With unsubsidized student loans, however, interest will continue to accrue on the loan. If the borrower doesn’t pay the interest during deferment, the interest will capitalize and be added to the principal balance of the loan at the end of the deferment.

Not only will they then have a new, larger balance to pay off on their unsubsidized loans, but any future interest payments will be calculated on top of the new, higher balance — meaning they will be paying interest on interest. This means that the total amount paid over the life of the loan will be higher.

Which Loans Qualify for Economic Hardship Deferment?

Many federal loans qualify for Economic Hardship Deferment, including Direct Loans, Federal Family Education Loans (FFEL), Stafford Loans, and Perkins Loans. As noted previously, any loans borrowed on or after July 1, 2027 will no longer be eligible for Economic Hardship Deferment.

Private student loans do not qualify for Economic Hardship Deferment. Some private lenders may offer their own hardship programs with their own specific qualifications and application process. If you have private student loans and you’re experiencing financial difficulty, ask your lender if they have a hardship program.

Eligibility Differences Between Subsidized and Unsubsidized Loans

The eligibility criteria for an economic hardship deferment is the same whether your federal loans are subsidized or unsubsidized. The difference lies in the way the interest is handled on these loans during deferment.

As mentioned above, the government pays the interest on subsidized student loans during deferment. But for unsubsidized student loans, interest will continue to accrue on the loans during deferment. If the borrower doesn’t pay the interest over that time, the interest will capitalize and be added to the principal balance of the loan at the end of the deferment period.

Who Qualifies for Economic Hardship Deferment?

You may qualify for Economic Hardship Deferment if you meet one of the following requirements:

• You receive payments from a federal or state economic assistance program such as Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI), or Temporary Assistance for Needy Families (TANF)

• You serve in the Peace Corps

• You are working full-time and your gross monthly income is less than or equal to the federal minimum wage, which is currently $7.25 an hour, or 150% of the poverty guideline for your state and family size — whichever is greater.

Income Thresholds and Other Qualification Criteria

Here’s how to know if you meet the income guideline for Economic Hardship Deferment. First, determine your family size. This includes you, your spouse, any children who receive more than half of their support from you, any unborn children who will be born during the deferment period, and anyone else living with you for whom you provide at least half of their support.

Next, using the chart below, find your family size and then compare your gross monthly income with 150% of the poverty guideline in your state to see if you qualify.

150% of the Poverty Guideline for 2025 — Monthly Basis

Number of people in family	48 contiguous U.S. states and D.C.	Alaska	Hawaii
1	$1,956.25	$2,443.75	$2,248.75
2	$2,643.75	$3,303.75	$3,040.00
3	$3,331.25	$4,163.75	$3,831.25
4	$4,018.75	$5,023.75	$4,622.50
5	$4,706.25	$5,883.75	$5,413.75
6	$5,393.75	$6,743.75	$6,205.00
7	$6,081.25	$7,603.75	$6,996.25
8	$6,768.75	$8,463.75	$7,787.50
Amount to add for each additional person in family	$687.50	$860.00	$791.25

Documentation Needed to Apply

To apply for Economic Hardship Deferment, borrowers must fill out and submit an Economic Hardship Request Form to their loan servicer. On the form, you will need to provide personal information including your address, phone number, email address, and Social Security number. You will also need to indicate the type of federal loan you are requesting Economic Hardship Deferment for.

In addition, you will need to supply documents proving your eligibility for the program. This includes:

• Proof of your monthly income, such as a pay stub or your most recent federal income tax return

• Documentation of any previous Economic Hardship Deferment you may have had

• Documentation of payments to you from a federal or state public assistance program (such as SNAP or TANF), if applicable

• Documents certifying your period of service as a Peace Corps volunteer, if applicable.

Pros and Cons of Economic Hardship Deferment

Temporarily pausing student loan payments through Economic Hardship Deferment has a number of advantages and drawbacks. Those considering deferment should carefully weigh the pros and cons.

Pros

• For borrowers in financial distress, a temporary reprieve from student loan payments may help allow them to get back on their feet financially and prevent them from potentially defaulting on their student loans.

• There is no accrual of interest for subsidized student loans during deferment.

• Deferment is available for up to three years (most borrowers must reapply each year).

Cons

• Interest accrues on unsubsidized loans. If a borrower does not pay the interest on these loans during deferment, the interest capitalizes and is added to the principal loan balance, which typically costs the borrower more money over time.

• Not all loans qualify for deferment, including private student loans.

• If a borrower is pursuing student loan forgiveness, a period of deferment may not count toward their forgiveness requirements.

Alternatives to Economic Hardship Deferment

For borrowers struggling to pay their student loans, deferment is not the only option. Some alternative methods to consider include:

Forbearance

Forbearance allows a borrower to temporarily stop or reduce their monthly student loan payments. The main difference between student loan deferment vs. forbearance is that with forbearance, interest accrues on all types of loans, whether they are subsidized or unsubsidized. However, the interest is not capitalized on most types of loans when forbearance ends. Periods of forbearance generally do not exceed 12 months.

Income Driven Repayment Plans

There are currently three income-driven repayment (IDR) plans — Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR). These plans base a borrower’s monthly payments on their discretionary income and family size.

IDR plans also stretch the repayment timeline to 20 or 25 years. If you’re on the IBR plan and you have any remaining debt after that time, you are eligible for student loan forgiveness.

Under Trump’s “One Big Beautiful Bill,” the PAYE and ICR plans will be closed to new borrowers as of July 1, 2027. And as of July 1, 2026, there will be just one plan open to new borrowers that is similar to the existing IDR plans — the Repayment Assistance Program (RAP).

RAP will base your payments on your adjusted gross income (AGI). Depending on your income, you’ll pay 1% to 10% of your AGI over a term of up to 30 years. If you still owe money after that, any remaining balance will be forgiven. Also, on RAP, the government will cover your unpaid interest from month to month.

Public Service Loan Forgiveness (PSLF) Program

Borrowers with federal Direct Loans who work in public service full-time for a qualifying not-for-profit or government agency, may be eligible for Public Service Loan Forgiveness. Borrowers pursuing PSLF must make their payments under the IBR plan; after 120 qualifying payments, they may be eligible to have their student loans forgiven through PSLF.

Student Loan Refinancing

Another option some borrowers may want to consider is student loan refinancing. With refinancing, a borrower replaces their current loans with one new loan from a private lender. Ideally, the new loan will have a lower interest rate, which could lower the borrower’s monthly payments and save them money over the life of the loan.

A student loan refinancing calculator can help borrowers see what they might save with refinancing.

It’s important to understand that if you refinance federal student loans with a private lender, you will lose access to federal benefits such as income-driven repayment, Economic Hardship Deferment, and Public Service Loan Forgiveness. If you think you may need these programs, refinancing may not be the right option for you.

The Takeaway

Federal student loan borrowers facing serious financial difficulties may qualify for Economic Hardship Deferment, which temporarily pauses their monthly payments for up to three years. For borrowers with subsidized loans, the government covers their interest during the deferment period.

Borrowers must apply for and be approved for Economic Hardship Deferment. Those who don’t qualify, or individuals who want to explore other options, might consider income-driven repayment plans, Public Service Loan Forgiveness, or student loan refinancing to help manage their payments.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

How do I apply for economic hardship deferment?

To apply for Economic Hardship Deferment for federal student loans, you must fill out and submit an Economic Hardship Deferment Request Form to your loan servicer. Along with the form, you will need to provide proof of their income, such as pay stubs. Additional documentation may be required, depending on your specific situation.

Does interest accrue during economic hardship deferment?

Interest accrues during economic hardship deferment only on unsubsidized federal student loans. If a borrower doesn’t pay the interest during the deferment period, it is capitalized and added to the principal balance of the loan when the deferment ends. Interest does not accrue on subsidized loans during deferment.

How long can economic hardship deferment last?

Economic Hardship Deferment can last for up to three years. However, borrowers must reapply for it yearly unless they are serving in the Peace Corps.

Can I qualify for deferment if I’m unemployed?

You may be eligible for an Unemployment Deferment for up to three years if you are unemployed and receive unemployment benefits, or you are looking for full-time employment and haven’t been able to find a job. To apply, you can fill out an Unemployment Deferment Request Form and submit it to your loan servicer.

What happens after economic hardship deferment ends?

After an economic hardship deferment ends, you are responsible for making your federal loan payments once again to avoid delinquency or default. If your loans were unsubsidized and you didn’t pay the interest during deferment, the interest will typically be capitalized and added to your principal loan balance, which will increase the amount you owe. Borrowers with certain types of loans, such as Perkins loans, may be eligible for a six-month grace period after deferment. But check with your loan servicer to be sure.

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

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

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.

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.

SOSLR-Q425-051

Dec

2025

A smiling couple sits on a couch with their arms around each other, looking out an open window.

Using a Co-Borrower on a Joint Personal Loan

By Janet Schaaf | Debt Payoff, Home Ownership, personal_loan | No Comments

If your credit is not quite up to a lender’s preferred level to get favorable interest rates and terms on your own, you might consider a joint personal loan. With this type of loan, you would have a co-borrower, an additional borrower who is obligated to repay the debt alongside you, the primary borrower. A co-borrower who has solid credit, income, and other financial credentials can help you qualify for a personal loan.

Here are key things to know about using a co-borrower on a personal loan.

Table of Contents

What Are Joint Personal Loans?
Why Do People Use Joint Personal Loans?
How Much Can You Save With Joint Personal Loans?
Factors That Affect Joint Loan Approval
What Credit Score Is Required for a Joint Personal Loan?
Individual vs Joint Loan Applications
Cosigned Loan vs Joint Personal Loan: The Advantages
Cosigned Loan vs Joint Personal Loan: The Disadvantages
Where Do You Find a Joint Personal Loan?
Tips for Applying for a Joint Personal Loan
The Takeaway

Key Points

• Joint personal loans involve two borrowers (a primary and a co-borrower) who share equal responsibility for repayment and ownership of the loan funds.

• Using a co-borrower with strong credit can help improve approval chances, secure lower interest rates, and potentially qualify for a larger loan amount.

• Unlike cosigners, who are only responsible for repayment if the primary borrower defaults, co-borrowers have equal ownership and repayment responsibilities throughout the life of the loan.

• Common uses for joint personal loans include debt consolidation, funding large expenses, or managing shared financial responsibilities, particularly among couples or family members.

What Are Joint Personal Loans?

Joint personal loans are loans that take into account multiple borrowers’ creditworthiness in the approval process. There are typically two borrowers on this type of loan — a primary and a secondary borrower — to establish joint personal loan eligibility.

Being a co-borrower on a loan comes with different rights and responsibilities than being a cosigner on a loan.

• Co-borrowers, along with the primary borrower, have equal ownership of loan funds or what is purchased with the loan funds and are equally responsible for repayment of the loan over the life of the loan.

• Cosigners have no ownership of the loan funds or what they’re used to purchase, and they are responsible for repayment only if the primary borrower fails to make payments.

How to Use Joint Personal Loans

If you don’t feel confident about qualifying for a loan, or have concerns about a potentially higher interest rate due to your overall creditworthiness or other reasons, finding a reliable co-borrower might help improve your chances of approval, along with the interest rate and terms you’re offered.

Couples can use a joint personal loan for a wide variety of purposes, including consolidating high-interest debts, paying for a large expense or event (like a wedding), or funding a remodeling project.

Recommended: Using Collateral on a Personal Loan

Why Do People Use Joint Personal Loans?

One common reason why someone might consider a joint personal loan is that they cannot qualify for a loan on their own, or they would like to snag a lower interest rate or qualify for a larger loan amount than they could on their own.

Some reasons people may seek a co-borrower are:

• They don’t have a long credit history.

• They’ve just entered the workforce.

• They’re in the process of rebuilding their credit.

• They are seeking a larger loan than they could on their own.

How Much Can You Save With Joint Personal Loans?

Having two borrowers on one personal loan may help you to qualify for a more favorable interest rate than if just one person’s income and credit are considered. Different lenders will have different qualification requirements, though, so it’s a good idea to compare lenders.

Using a joint personal loan for debt consolidation can be one way to lower the amount of interest paid on outstanding debt. Again, how much savings is accomplished depends on multiple factors, such as the interest rate offered and how long it takes to pay down the debt.

Factors That Affect Joint Loan Approval

Here are some important points about applying for a loan with a co-borrower and understanding what impacts your odds for approval.

Combined Income and Debt Obligations

When your application for a joint personal loan is reviewed, the lender will look at your combined income and debt obligations. Perhaps the primary borrower has a relatively low income and high debt load. By adding a co-borrower who has a strong salary (say, a spouse’s salary in the six figures) and minimal debt, the odds for loan approval could be enhanced.

Say that the primary applicant has a debt-to-income ratio, or DTI, of 48%, which is above the 36% many lenders prefer. If a co-borrower has a DTI of 22%, the couple’s DTI as a whole is 35%, bringing it to a level that may gain approval.

Credit History of Both Applicants

Similarly, lenders will take into account both applicants’ creditworthiness. Perhaps the primary borrower has what’s known as a thin file, meaning they don’t have a very deep credit history, or has a fair credit score. If their co-borrower has a credit score in a higher range (very good or exceptional), that could convince a lender to approve the loan and potentially at a lower rate and with more favorable terms. The co-borrower could help assure the lender of the duo’s creditworthiness.

What Credit Score Is Required for a Joint Personal Loan?

There is no definite answer to this question, but, in general, applicants with higher credit scores qualify for loans with lower average personal loan interest rates. And, vice versa, applicants with lower credit scores generally qualify for loans with higher interest rates.

Lenders tend to be risk-averse and prefer to lend money to people who they believe will repay it in full and on time. An applicant’s credit report — a summary of how responsible they are with credit that has been extended to them in the past — and credit score are tools lenders use to assess risk.

Before applying for a joint personal loan, it’s a good idea to review your credit report. If there are errors or discrepancies, you can file a dispute with the credit reporting agency. If you have poor credit or a limited credit history, you might consider taking some time to improve your credit profile before applying for a loan. Lenders will look at both applicants’ credit reports during the joint personal loan approval process, so it’s worth it for your credit to be in good shape.

Individual vs Joint Loan Applications

The basic process of applying for a loan is the same, no matter the number of applicants. Lenders will typically request the same information on either an individual or a joint loan application: proof of identity and address and verification of employment and income, in addition to any lender-specific information. For an individual loan application, there is just one person’s information to verify. Joint loan applications require information for each applicant.

Individual	Joint
Only one applicant’s creditworthiness is considered in the approval process.	Creditworthiness of both applicants is considered in the approval process.
One income is considered in the approval process.	Combined incomes of all applicants are considered in the approval process./td>
Only one applicant signs the loan application.	The loan application is specifically for more than one applicant, and both must sign it.
One borrower is responsible for repaying the loan.	All borrowers are responsible for repaying the loan.

Cosigned Loan vs Joint Personal Loan: The Advantages

Arguably, the primary borrower on either a cosigned loan or a joint personal loan has a bigger advantage than the cosigner or co-borrower. Depending on one’s perspective, however, all parties involved can reap benefits from these partnerships.

The Advantages of Choosing a Cosigned Loan

The advantage lies almost exclusively with the primary borrower on a cosigned loan. If they default, the cosigner is responsible for repaying the loan, although the primary borrower’s credit will likely be negatively affected. Ownership of the loan funds or what they purchased with the money is solely the primary borrower’s.

A personal loan cosigner’s main advantage may be in the form of a benevolent feeling from helping a close friend or family member.

The Advantages of Choosing a Joint Personal Loan

The main advantages of a joint loan are two-fold. There is equal ownership of the loan funds or the property purchased with those funds. Choosing a joint loan also means you may be able to present a more positive financial profile when applying than you could alone, signaling to lenders that it’s more likely the monthly loan payments will be made. This could pay off with a lower interest rate and more favorable terms.

Because joint loans give both co-borrowers equal rights, they are well-suited for people who already have joint finances or own assets together.

Cosigned Loan vs Joint Personal Loan: The Disadvantages

Both cosigned and joint loans include an additional borrower. However, a co-borrower taking out a joint loan has different rights and responsibilities than a cosigner, which can be risky.

The Disadvantages of Choosing a Cosigned Loan

The disadvantages of a cosigned loan lie mostly with the cosigner, not the primary borrower. The cosigner does not have any ownership rights to the loan funds or anything purchased with the loan funds. They are, however, responsible for repayment of the loan if the primary borrower fails to make payments.

The cosigner’s credit can be negatively affected if the primary borrower defaults on the loan, and their future borrowing power could be affected if a lender decides extending more credit would be too risky.

The Disadvantages of Choosing a Joint Personal Loan

People who already share financial responsibilities — married couples or parents and children, for example — may be the ones who consider joint personal loans, so there is typically some familiarity present.

That trust matters because co-borrowers have equal ownership rights to the loan funds or what the loan funds purchased. And it’s also important to have confidence in a co-borrower’s ability to repay the loan because each borrower is equally responsible for repayment over the entire life of the loan.

What’s the Better Loan Option?

If you’re seeking a loan with a spouse or relative and one of you has the strong credit history needed to get a favorable interest rate and terms, then a joint loan as co-borrowers may be right for you.

However, if you’d rather have a loan in your name with a little added security, then having a cosigner may make more sense.

No matter which situation you find yourself in, it’s important to weigh all of the options and do the necessary research that will allow you to arrive at the best joint personal loan option for you. (You might also consider personal loan alternatives as part of your research.)

After all, taking out a loan and repaying it responsibly has the power to put someone on a path to a more secure financial future, but it can also come with risks for each party.

Where Do You Find a Joint Personal Loan?

It’s not uncommon for lenders to offer joint personal loans, but some research is necessary to find the right lender for your unique financial situation.

Looking at lenders of joint personal loans online is a good first step. Prequalifying to check joint personal loan eligibility is a fairly quick and easy process.

If you’re already an established customer at a local bank or credit union, you may also want to look at loan options there.

Tips for Applying for a Joint Personal Loan

If you decide to pursue a joint personal loan, consider these points to make the process easier.

Communicate Financial Responsibilities Clearly

As you apply for a joint personal loan, it’s wise to make sure you both agree on the details, such as the loan amount, the monthly payment you can afford, and who will pay it (will you split it 50/50?), and when. Develop a contingency plan if you struggle to make a payment.

Compare Lenders and Loan Terms Together

It’s also important to make sure the two of you are aligned on reviewing and deciding upon your loan. It’s wise to consider at least a few loan offers to see what rates and terms are available. For instance, a shorter loan term can mean higher monthly payments but less interest paid over the life of the loan. That might be preferable, if you can afford it, versus a longer term with a lower monthly payment, because that winds up often costing more in total.

Also make sure you both understand the consequences of late or missed payments before embarking on the loan together.

The Takeaway

Co-borrowers may help a primary borrower secure a personal loan by presenting a more positive financial profile and securing more favorable rates. However, these joint loans also require a great deal of forethought since both borrowers have access to the funds and responsibility for repaying the debt.

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

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

FAQ

Can you apply for joint personal loans?

As long as the lender allows co-borrowers, you can apply for a joint personal loan.

What is the maximum amount of people for a joint personal loan?

Typically, a joint personal loan has two co-borrowers, but the maximum number of co-borrowers is up to the individual lender. Some allow for more than two borrowers.

Do joint personal loans get approved faster?

It’s likely to take more time for a joint personal loan to be approved than an individual loan because the lender will check the credit of each applicant.

Does a joint loan affect both credit scores?

Yes, a joint loan affects both borrowers’ credit scores. If loan payments are made on time, the borrowers could see a positive impact on their credit. If, however, payments are late or missed entirely, that can negatively impact each of the borrowers’ credit.

Can one person be removed from a joint personal loan?

Removing one person from a joint personal loan is dependent on the lender’s specific guidelines. It can be a complicated process that may involve refinancing the loan into a new individual loan, provided the solo borrower qualifies.

*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.

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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