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Q: How do I void a blank check?

To void a blank check, take a blue or black pen or marker and write “VOID” across the face of the check. You could also write “VOID” in the payee line, amount line, amount box, or the signature line.

Jun

2024

Tips for Voiding a Check

By Emily Greenhill Pierce | Budgeting & Goals, Financial Independence, money | Comments Off

If you’re asked to void a check, which often happens when you’re setting up direct deposit, you might not be sure how to do it. Checks are being used less often these days, and as a result, people may be unfamiliar with the way they work.

Fortunately, the process of voiding a check for direct deposit or for any reason is pretty simple.

Definition of a Voided Check

First of all, what is a voided check? When you write the word “VOID” on a blank check, it becomes a voided check meaning it cannot be used to draw money out of your account. This type of check is not used for deposit or cashing purposes.

Instead, the voided check can be used to set up direct deposit or bill pay. Establishing direct deposit or online bill pay eliminates the hassle of going to the bank to make payments or deposit your paycheck. It also automates your transactions to speed delivery and help you keep tabs on the money going in and out of your account.

Recommended: Can I Use Checks with an Old Address?

How Do You Void a Check?

To void a check, all you need is a blank check and a pen. Here’s how to complete the process:

• Take a blank check from your checkbook.

• Grab a blue or black pen.

• Write “VOID” in large letters across the face of the check. However, be sure not to cover the account numbers at the bottom. You could also write “VOID” in smaller letters on the payee line, amount line, in the amount box, and on the signature line, if you prefer.

• Write down the check number, recipient, and date in your checkbook and note that the check was voided so you don’t get confused by a skipped check when you balance your checkbook.

Reasons for Voiding a Check

There are practical uses for voiding a check including setting up direct payments or deposits, and automatic bill payments. Providing a voided check is a convenient way to share your banking information for such purposes. After all, copying your banking information (routing and account number) by hand leaves you vulnerable to mistakes.

Here are the top reasons to void a check:

• Set up direct deposit with your employer for wages, salary, or expense reimbursement. Employers often let workers set up direct deposit instead of receiving a physical paycheck, and a voided check speeds the process.

• Set up direct deposit for government benefits. Unemployment benefits and Social Security payments may be delivered by direct deposit instead of a mailed check. This way, both parties can enjoy the increased security of a digital transaction.

• Establish automatic bill pay for loans, utility bills, or other payments. You may have the option to set up automatic payments for bills such as an auto loan or mortgage. Setting up auto-pay helps ensure you don’t miss a payment.

• Void checks with mistakes. If you are writing a check from your checking account and make a mistake, you can write “VOID” across it, so no one uses or deposits it.

Voided vs Canceled Check

You may wonder what the difference between a voided and a canceled check is. When you make a void check, you are canceling a physical check you have in your possession. If you’ve lost a check (especially a blank one) or have sent out a check in error, that’s a different situation. You can contact your bank about stopping payment on the check.

When banks and credit unions talk about canceled checks, however, they are likely referring to ones that have already been used to transfer funds. The work of these checks is done, so to speak, so they are considered canceled.

The differences between a voided check and a canceled check are:

• You can void a check yourself. To cancel a check, however, a bank or credit union has already been involved.

• Voiding is quick and free. If you seek to cancel a check by stopping payment, it will involve time to speak to your bank, and there may be a fee charged to stop payment.

What to Expect After Voiding a Check

After you submit your voided check with the required paperwork for direct deposit, it may take a few days to complete the setup process. Typically, employers will establish the direct deposit within one or two paycheck cycles.

This is also true for government benefits like Social Security. Once direct deposit is established, you’ll know exactly when deposits will hit your account.

With direct deposit, you can use the money in your account immediately since there’s no temporary hold on deposits.

With auto-pay, funds are withdrawn from your account based on a bill’s due date. Some businesses give you a choice of dates to submit payment.

What if You Don’t Have Checks?

If you don’t have any checks, the first step to getting a checkbook is to open a new bank account. Many banks will give you pre-printed “starter checks” to use until your personalized ones arrive.

If you already have a checking account but no checks, you can contact your bank or credit union about ordering checks. They can usually be ordered online, via a mobile app, over the phone, or in person.

Alternatives to a Voided Check

Aside from a voided check, you have other options to establish autopay or direct deposit. Here are some alternatives:

• Direct deposit form. Some employers may let you use a direct deposit form without a voided check. In this case, ensure you complete your bank information correctly.

• Preview a check. Some financial institutions let you “preview” your checks on your bank or credit union’s website before you order them online. If your financial insulation allows this, you might be able to print out the preview and write “VOID” across it.

• Enter bank information online. Depending on how your employer sets up direct deposit, you might have the option to connect directly to your bank account through your company’s payroll website. Just enter your bank information instead of supplying a voided paper check.

• Request a counter check at a bank branch. You may have the option to request a “counter check” at your local bank branch. You can use this specially printed check containing your bank information for your voided check. Some banks charge a fee for this service.

The Takeaway

Knowing how to void a check is a good skill to have, and it’s part of becoming a savvy financial consumer. When you write “VOID” on a check, it becomes a voided check you can use to set up auto-pay or direct deposit. Voided checks are not available for deposit or cashing.

Once you submit your forms and voided check, employers can usually establish direct deposit within a few days. Another option is to request a “counter check” from your bank branch and void that check, though some banks may charge a fee for this service.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

How do I void a blank check?

To void a blank check, take a blue or black pen and write “VOID” across the face of the check. You could also write “VOID” in the payee line, amount line, amount box, and the signature line.

How do I void a check for direct deposit?

You void a check for direct deposit by writing “VOID” across the face of the check with a blue or black pen. Or you could fill that in on the payee line, amount line, amount box, or the signature line.

How do I void a check I’ve already sent?

You can’t void a check you have already sent. You’ll have to cancel the check. To do this, first make sure the check hasn’t cleared yet. Then, make sure you have your account number, check number, dollar amount, and date you wrote on the check. Contact your bank or credit union to stop payment. This action may require a fee.

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4.00% APY
SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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Jun

2024

Avoid These 12 Common Retirement Mistakes

12 Common Retirement Mistakes You Should Avoid

By Rebecca Lake | invest, Investing, Preparing for Retirement | Comments Off

Part of planning for a secure future is knowing what retirement mistakes to avoid that could potentially cost you money. Some retirement planning mistakes are obvious; others you may not even know you’re making.

Being aware of the main pitfalls, or addressing any hurdles now, can help you get closer to your retirement goals, whether that’s traveling around the world or starting your own business.

Planning for Retirement

Knowing what not to do in retirement planning is just as important as knowing what you should do when working toward financial security. Avoiding mistakes when creating your retirement plan matters because of how those mistakes could affect you financially over the long term.

The investment choices someone makes in their 20s, for example, can influence how much money they have saved for retirement by the time they reach their 60s.

The younger you are when you spot any retirement mistakes you may have made, the more time you have to correct them. Remember that preparing for retirement is an ongoing process; it’s not something you do once and forget about. Taking time to review and reevaluate your retirement-planning strategy can help you to pinpoint mistakes you may need to address.

12 Common Retirement Planning Mistakes

There’s no such thing as a perfect retirement plan — everyone is susceptible to making mistakes with their investment strategy. Whether you’re just getting started or you’ve been actively pursuing your financial goals for a while, here are some of the biggest retirement mistakes to avoid — in other words, what not to do in retirement planning.

1. Saving Too Late

There are many retirement mistakes to avoid, but one of the most costly is waiting to start saving — and not saving automatically.

Time is a vital factor because the longer you wait to begin saving for retirement, whether through your 401(k) or an investment account, the less time you have to benefit from the power of compounding returns. Even a delay of just a few years could potentially cost you thousands or even hundreds of thousands of dollars in growth.

Here’s an example of how much a $7,000 annual contribution to an IRA that’s invested in mutual funds might grow by age 65. (Estimates assume a 7% annual return.)

• If you start saving at 25, you’d have $1,495, 267

• If you start saving at 35, you’d have $707,511

• If you start saving at 45, you’d have $307,056

As you can see, waiting until your 40s to start saving would cost you more than $1 million in growth. Even if you get started in your 30s, you’d still end up with less than half the amount you’d have if you start saving at 25. The difference underscores the importance of saving for retirement early on — and saving steadily.

This leads to the other important component of being an effective saver: Taking advantage of automatic savings features, like auto transfers to a savings account, or automatic contributions to your retirement plan at work. The less you have to think about saving, and the more you use technology to help you save, the more money you may be able to stash away.

2. Not Making a Financial Plan

Saving without a clear strategy in mind is also among the big retirement planning mistakes. Creating a financial plan gives you a roadmap to follow because it requires you to outline specific goals and the steps you need to take to achieve them.

Working with a financial planner or specialist may help you get some clarity on what your plan should include.

3. Missing Out on Your 401(k) Match

The biggest 401(k) mistake you can make is not contributing to your workplace plan if you have one. But after that, the second most costly mistake is not taking advantage of 401(k) employer matching, if your company offers it.

The employer match is essentially free money that you get for contributing to your plan. The matching formula is different for every plan, but companies typically match anywhere from 50% to 100% of employee contributions, up to 3% to 6% of employees’ pay.

A common match, for example, is for an employer to match 50% of the first 6% the employee saves. If the employee saves only 3% of their salary, their employer will contribute 50% of that (or 1.5%), for a total contribution rate of 4.5%. But if the employee saves 6%, they get the employer’s full match of 3%, for a total of 9%.

Adjusting your contribution limit so you get the full match can help you avoid leaving money on the table.

4. Bad Investing Strategies

Some investing strategies are designed to set you up for success, based on your risk tolerance and goals. A buy-and-hold strategy, for example, might work well for you if you want to purchase investments for the long term.

But bad investment strategies can cause you to fall short of your goals, or worse, cost you money. Some of the worst investment strategies include following trends without understanding what’s driving them, or buying high and selling low out of panic.

Taking time to explore different investment strategies can help you figure out what works for you.

5. Not Balancing Your Portfolio

Diversification is an important investing concept to master. Diversifying your portfolio means holding different types of investments, and different asset classes. For example, that might mean a mix of stocks, bonds, and cash.

So why does this matter? One reason: Diversifying your portfolio is a form of investment risk management. Bonds, for instance, may act as a balance to stocks as they generally have a lower risk profile. Real estate investment trusts (REITs) may be a hedge against inflation and has low correlation with stocks and bonds, which might provide protection against market downturns. However, it’s important to understand that diversification does not eliminate risk.

Balancing your holdings through diversification — and rebalancing periodically — could help you maintain an appropriate mix of investments to better manage risk. When you rebalance, you buy or sell investments as needed to bring your portfolio back in line with your target asset allocation.

💡 Quick Tip: For investors who want a diversified portfolio without having to manage it themselves, automated investing could be a solution (although robo advisors typically have more limited options and higher costs). The algorithmic design helps minimize human errors, to keep your investments allocated correctly.

6. Using Retirement Funds Too Early

Although the retirement systems in the U.S. are generally designed to help protect your money until you retire, it’s still possible to take early withdrawals from personal retirement accounts like your 401(k) or IRA, or claim Social Security before you’ve reached full retirement age.

• Your 401(k) or IRA are designed to hold money you won’t need until you retire. Take money from either one before age 59 ½ and you could face a tax penalty. For example, 401(k) withdrawal penalties typically require you to pay a 10% early withdrawal tax on distributions. You’re also required to pay regular income tax on the money you withdraw, regardless of when you withdraw it.

Between income tax and the penalties, you might be left with a smaller amount of cash than you were expecting. Not only that, but your money is no longer growing and compounding for retirement. For that reason, it’s better to leave your 401(k) or IRA alone unless it’s absolutely necessary to cash out early.

And remember that if you change jobs, you can always roll over your 401(k) to another qualified plan to preserve your savings.

• Similarly, your Social Security benefits are also best left alone until you reach full retirement age, as you can get a much higher payout. Full retirement age is 67 for those born in 1960 or later.

That said, many retirees who need the income may feel compelled to take Social Security as soon as it’s available, at age 62 — but their monthly check will be about 30% lower than if they’d waited until full retirement age. If you can, wait to claim your benefits and you’ll typically get substantially more.

7. Not Paying Off Debt

Debt can be a barrier to your retirement savings goals, since money used to pay down debt each month can’t be saved and invested for the future.

So should you pay off debt or invest first? As you’ve seen, waiting to start saving for retirement can be a mistake if it potentially costs you growth in your portfolio. However, it’s critical to pay off debt, too. If you’d like to get rid of your debt ASAP, consider how you can still set aside something each payday for retirement.

Contributing the minimum amount allowed to your 401(k), or putting $50 to $100 a month in an IRA, can add up over time. As you get your debts paid off, you can begin to divert more money to retirement savings.

8. Not Planning Ahead for Future Costs

Another mistake to avoid when starting a retirement plan is not thinking about how your costs may change as you get older. Creating an estimated retirement budget can help you get an idea of what your day to day living expenses might be. But it’s also important to consider the cost of health care, specifically, long-term care.

Medicare can cover some health expenses once you turn 65, but it won’t pay for long-term care in a nursing home. If you need long-term care, the options for paying for it include long-term care insurance, applying for Medicaid, or paying out of pocket.

Thinking ahead about those kinds of costs can help you develop a plan for paying for them should you require long-term care as you age. How do you know if you’ll need long-term care? You can consider the longevity factors in your family, as well as your own health, and gender. Women tend to live longer than men do, almost 6 years longer, which often puts older women in a position of needing long-term care.

9. Not Saving Aggressively Enough

How much do you need to save for retirement? It’s a critical question, and it depends on several things, including:

• The age at which you plan to retire

• Your potential lifespan

• Your cost of living in retirement (i.e. your lifestyle)

• Your investment strategy

Each of these factors requires serious thought and possibly professional advice in order to come up with estimates that align with your unique situation. Investing in the resources you need to understand these variables may be one of the most important moves you can make, because the bottom line is that if you’re not saving enough, you could outlive your savings.

10. Making Unnecessary Purchases

If you need to step up your savings to keep pace with your goals, cutting back on spending may be necessary. That includes cutting out purchases you don’t really need to make — but also learning how to be a smarter spender.

Splurging on new furniture or spending $5,000 on a vacation might be tempting, but consider what kind of trade-off you could be making with your retirement. Investing that $5,000 into an IRA means you’ll miss the trip, but you’ll get a better return for your money over time.

11. Buying Into Scams

Get-rich-quick schemes abound, but they’re all designed to do one thing: rob you of your hard-earned money. Investment and retirement scams can take different forms and target different types of investments, such as real estate or cryptocurrency. So it’s important to be wary of anything that promises “free money,” “200% growth,” or anything else that seems too good to be true.

The Federal Trade Commission (FTC) offers consumer information on the most common investment scams and how to avoid them. If you think you’ve fallen victim to an investment scam you can report it at the FTC website.

12. Gambling Your Money

Gambling can be risky as there’s no guarantee that your bets will pay off. This is true whether you’re buying lottery tickets, sitting down at the poker table in Vegas, or taking a risk on a new investment that you don’t know much about.

Either way, you could be making a big retirement mistake if you end up losing money. Before putting money into crazy or wishful-thinking investments, it’s a good idea to do some research first. This way, you can make an informed decision about where to put your money.

Investing for Retirement With SoFi

Retirement planning isn’t an exact science and it’s possible you’ll make some mistakes along the way. Some of the most common mistakes are just not doing the basics — like saving early and often, getting your company matching contribution, paying down debt, and so on. But even if you do make a few mistakes, you can still get your retirement plan back on track.

Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

Help build your nest egg with a SoFi IRA.

FAQ

Why is it important to start saving early?

Getting an early start on retirement saving means you generally have more time to capitalize on compounding returns. The later you start saving, the harder you might have to work to play catch up in order to reach your goals.

What is the first thing to do when you retire?

The first thing to do when you retire is review your budget and financial plan. Consider looking at how much you have saved and how much you plan to spend to make sure that your retirement is off to a solid financial start.

Photo credit: iStock/Morsa Images

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Jun

2024

Refinancing Student Loans During Medical School: What to Know

By Jennifer Calonia | Going to College, Student Loans, student_loan | Comments Off

Editor's Note: For the latest developments regarding federal student loan debt repayment, check out our student debt guide.

A career in medicine can be rewarding, but the high cost of medical school means many students take on additional student debt on top of their existing undergraduate student loans.

Some students defer student loan payments while they’re in medical school and others choose to refinance their student debt. The right choice for you depends on a number of factors, such as whether you have federal or private student loans. Here’s what to know about refinancing student loans during medical school.

What You Can Expect to Pay

Going to medical school is expensive: The average cost of medical school is $264,704 for four years at a private institution and $161,972 at a public medical school, according to the Education Data Initiative.

Many students need loans to cover the high cost of medical school tuition and other educational expenses. In fact, 70% of medical school students use loans specifically to help pay for medical school (as opposed to undergraduate debt). The average medical school graduate owes $250,995 in total student loan debt, which includes undergraduate debt.

If you don’t have the option for in-school deferment for your undergraduate loans while you’re enrolled in med school, refinancing your undergraduate student loans might be worthwhile and may help lower your loan payments while you’re in medical school. Here’s what you need to know to decide if refinancing loans as a medical student is right for you.

Can You Refinance Student Loans During Medical School?

Whether you have federal or private student debt, you can technically refinance your student loans at any time along your journey toward becoming a physician.

During a student loan refinance, you can combine multiple student loans of any type — federal and private — into one new refinance loan. This new loan is from a private lender, and comes with a new interest rate and different loan term.

The lender will repay your original loans that were included in the refinance process. You’ll then repay the lender, based on the details of your refinance loan agreement, in incremental monthly payments.

Another Option for Federal Student Loans During Medical School

It’s important to know that if you have federal student loans, refinancing them will remove you from the federal student loan program.

Keeping your federal student loans within the Department of Education’s loan system gives you access to benefits and protections that can be useful while in medical school, like extended deferment or forbearance.

Generally, automatic student loan deferment is applied to federal Direct Loans of borrowers who are enrolled at least half-time at an eligible school. If your federal student loans from your undergrad program weren’t placed on in-school deferment status, reach out to your school and ask them to report your enrollment status.

This student loan refinancing alternative can postpone your monthly payment requirement until after you leave school. However, if you borrowed Direct Unsubsidized Loans or Direct PLUS Loans, you’re responsible for repaying interest that accrues during this time.

Pros of Refinancing During Medical School

A student loan refinance during medical school can offer benefits.

Extend Your Loan Term

Generally, once you’ve signed your student loan agreement you’ve committed to a specific repayment term. For example, if your private student loan has a 5-year term, you’ll need to repay the loan’s balance, plus interest, in that time period.

However, repaying your loan balance while attending medical school might be difficult. With a student loan refinance, you can choose to prolong your repayment timeline over a longer term, like 10 or 15 years.

Lower Monthly Payments

By extending your student loan refinance term, your monthly installment payments become smaller since they’re stretched over a longer period. Prolonging your loan term can result in paying more interest over the life of the loan. However, it affords you a lower monthly payment so you have more funds in your budget toward the day-to-day cost of medical school.

Some Refinancing Lenders Offer Deferment

Some refinancing lenders offer borrowers the option to defer their student loan refinance payments while in medical school. Generally, you’ll need to meet the lender’s minimum enrollment status and possibly meet other requirements.

This benefit, however, isn’t offered by all lenders so always confirm with the lender before finalizing any student loan refinance offer.

Recommended: A Guide to Refinancing Student Loans

Cons of Refinancing During Medical School

Although there are benefits to refinancing your student loans, there are downsides to this repayment strategy as well.

You Could Pay More Interest Over Time

Extending your loan term causes you to pay more interest throughout the life of the loan, assuming you don’t make extra monthly payments. This means that you’ll ultimately pay more overall for your undergraduate degree.

You’ll Lose Access to Loan Forgiveness

If you refinance federal student loans, you’ll lose access to federal benefits and protections. Physicians who expect to work in the government or nonprofit sector might be eligible for loan forgiveness under the Public Service Loan Forgiveness (PSLF) program.

To be eligible for forgiveness, you must have eligible Direct Loans, and have made 120 qualifying payments toward your federal loan debt while working for a qualifying employer. After PSLF requirements are met, the program forgives the remainder of your eligible federal loan balance.

You’ll lose access to this significant benefit if you refinance federal loans into a private refinance student loan.

Should You Refinance Your Student Loans?

Student loan refinancing is a strategy that can be advantageous for certain borrowers in specific circumstances. For instance, it might be a good option for borrowers who already have a private undergraduate loan and simply want to lower their interest rate to save money.

It can also be a strategy to extend your term if your main goal is to lower your monthly undergraduate loan payments. Borrowers who have adequate savings, reliable income while in medical school, and who are confident that they won’t participate in programs, like PSLF, might benefit most.

Assess your current financial situation, and talk to your loan servicer or undergraduate loan lender to get a full understanding of your repayment options during medical school.

Refinancing Student Loans With SoFi

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

Can you refinance student loans in residency?

Yes, you can refinance student loans while in residency. However, if you refinance federal loans, it will make that portion of your student debt ineligible for federal loan forgiveness in the future.

Do doctors ever pay off their student loans?

Yes, doctors pay off their student loans, though how they do so can vary. Some start making small payments during residency or apply for an income-driven repayment plan, while others refinance or pursue loan forgiveness programs.

When should I refinance my medical student loans?

Exploring a private student loan refinance can be done at any time, especially if your income is stable and your credit has improved since you first took out the loan. If you have federal student loan debt, consider whether you’ll pursue loan forgiveness at any point along your career journey. If you might, your student loans must be kept within the federal loan program to be eligible for forgiveness.

Photo credit: iStock/Edwin Tan

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

SOSL-Q224-1917189-V1

Jun

2024

7 Tips to Help You Use Your Credit Cards Wisely

By Becca Stanek | Credit, Financial Independence, personal_loan | No Comments

If you’re saddled with credit card debt, you’re not alone. Average credit card balances increased by 10% in 2023 to $6,5013, according to Experian’s 2023 Consumer Credit Review. And according to a November 2023 Bankrate survey of 2,350 U.S adults, a full 49% of cardholders carry credit card debt from month to month. Considering the average credit card interest rate in the U.S. today is 24.71%, that average balance could end up costing Americans quite a bit in interest.

Using your credit card wisely can help you not only avoid having to make hefty interest payments, but can have a positive impact on your credit, since 30% of your FICO® Score is determined by your amounts owed. If you’re working on getting out of — and staying out of — credit card debt, here are some tips on being a savvy credit card user.

How to Use a Credit Card Wisely: 7 Tips

If you have a credit card, it’s crucial that you use your credit card responsibly. Here are some tips to keep in mind to ensure your credit card usage stays in check.

1. Always Try to Pay Off Your Statement Balance in Full

With average interest rates topping 24%, credit cards can be a very expensive way to borrow money. It’s important to pay off your statement balance in full after each billing cycle if you want to avoid dealing with high-interest charges.

If you’re already in the habit of paying your balance in full when it comes due, you could consider leveraging your credit card spending to earn favorable reward points, such as points toward travel or cash back rewards.

2. Cut Your Interest Rate if You Have Credit Card Debt

If you have a large balance or multiple cards, paying off your credit card debt is likely top of mind. It could help to consolidate your credit card debt with a personal loan. Debt consolidation generally makes sense if you can get a lower interest rate than you’re currently paying on your balances. This can help you save money and pay your debt off faster. Debt consolidation also simplifies repayment by giving you just one bill to pay each month.

If you have a large balance on just one card, you might look into getting a 0% interest, balance-transfer credit card. You would then transfer your current high-interest debt onto this card and make sure you pay it off during the promotional period to get the interest-rate savings. You generally need good or excellent credit to qualify for a 0% interest card, however. Also keep in mind that balance-transfer credit cards typically charge a fee of 3% or 5% of the total balance you transfer to your new card.

3. Make Sure to Pay on Time

This one may seem like a no-brainer, but it’s still worth discussing. Paying your statement balance even one day after the due date can trigger a steep late fee, on top of interest if you’re not paying off the card in full. Also, since payment history is 35% of your FICO Score, paying late can also potentially hurt your credit. Consider putting your credit card bills on autopay if you have a history of an occasional late payment.

4. Build an Emergency Fund to Avoid Turning to Credit Cards in a Bind

Emergencies happen and, ideally, you’d be able to turn to your savings instead of leaning on a credit card to take care of an unexpected expense. If you don’t have an emergency fund yet, it might be a good goal to prioritize once your credit card debt is under control. In general, an emergency fund makes for a much better safety net for these situations.

5. Use the Snowball Method to Help Pay Off Debt More Quickly

If you’re paying off multiple debts, the popular snowball debt-payoff method may help you pay them off faster. Here’s how it works:

• Make a list of all of your debt balances from largest to smallest, then target the account with the smallest balance to pay off first. Put extra money towards that balance each month while paying the minimum on the others.

• Once the target account is paid off, add the amount that you were allocating to that debt to the next-smallest balance, while paying the minimum on the rest.

• Repeat this process until all debt balances are paid off.

For many, this method works by providing incremental victories from knocking out smaller debts, which can offer momentum toward tackling larger balances.

Recommended: How to Pay Off Debt in 9 Steps

6. Keep Your Card Open Even After You Pay Off the Balance

Having access to available credit that you don’t use can help to improve your credit profile. This is because you’ll be using a smaller percentage of your available credit. Remember, “amounts owed” accounts for 30% of a FICO Score. One of the elements that FICO considers in this factor is your credit utilization ratio — how much of your available credit you are actually using.

To lower your credit utilization low, it can help to keep a card you’ve paid off open and, if you do use it, to pay off the balance in full each month.

7. Try Sticking to Cash to Reduce Credit Card Spending

Paying in cash rather than putting everything on the credit card can help you better track — and control — of your spending. The key is to withdraw a set amount of cash to cover your expenses for the week and only spend that amount.

To try this method, you’d want to decide how much you need to spend each day and put that amount of cash in your pocket. When it’s gone, you’re done spending for the day. It may take a lot of discipline, but if it helps you successfully pay off your credit card debt, it could be worthwhile.

The Takeaway

Using your credit card responsibly is key to avoid racking up interest charges and potentially harming your credit score. You’ll want to ensure you make at least the minimum payment on time each month and, if you can, pay off your balance in full. Other tips for using credit wisely include ensuring you have an emergency fund and considering sticking to cash for more strict budgeting guide rails.

And if you do find yourself in credit card debt, consider exploring solutions like the snowball method or securing a lower interest rate through a personal loan.

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

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.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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.

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 .

SOPL-Q224-1910257-V1

Jun

2024

Cheapest States to Go to College in the United States

By Austin Kilham | Going to College, Student Loans, student_loan | Comments Off

The cost of attending college in the U.S. can be quite expensive. In addition to tuition and fees, students may need to cover the cost of room and board, and other expenses like books and lab fees.

To help students going to college manage their budgets, it’s important that they carefully weigh their options when it comes to public and private schools. In-state tuition at public colleges can be far cheaper than out-of-state tuition or the price of attending private nonprofit schools.

College Tuition in the United States

The United States has some of the highest tuition costs, and prices have risen over time. Some of the factors that drive increasing prices are increased demand from students and increased availability of financial aid.

Colleges have also added amenities to their campuses to help attract higher-paying students. The cost of these amenities can account for as much as $3,000 per student per year. Schools are also spending more on administration.

Average College Tuition

The cost of colleges varies depending on whether students choose to attend public or private institutions. Public schools generally have different costs for in-state versus out-of-state tuition.

The average tuition in 2024 at a public, four-year school for in-state students is $9,750 per year. Students attending a public four-year program from out-of-state could expect to pay $28,386, according to Education Data Initiative.

Students who wished to attend a private nonprofit four-year college paid an average of $38,421.

In addition to tuition and fees, students have to cover other costs, such as the price of room and board, transportation, and other expenses. These additional expenses will vary depending on whether you’re living on or off-campus, but they can add more than $10,000 to the price of attending school. The average cost of attendance for students attending a public four-year in-state program is $27,146 for the 2023–2024 school year. Out-of-state students had an average of $45,708. And students attending a private nonprofit four-year program had an average annual cost of attendance of $55,840.

States With the Cheapest College Tuition

College tuition prices vary widely by state at public four-years institutions. Generally speaking, public colleges in the South and the West are the cheapest to attend. Colleges in the Northeast are the most expensive. Vermont has the most expensive in-state tuition and fees, topping out at $17,180. New Hampshire is a close second at $17,170. To learn more, take a look at the annual study published by the College Board that tracks trends in college pricing and financial aid.

Here’s a look at the states with the cheapest in-state tuition and fees at four-year flagship university programs over the 2023–2024 school year.

Wyoming

University of Wyoming
In-state tuition and fees: $6,700
Out-of-state tuition and fees: $22,480

Florida

University of Florida
In-state tuition and fees: $6,380
Out-of-state tuition and fees: $28,660

Montana

University of Montana
In-state tuition and fees: $8,150
Out-of-state tuition and fees: $31,620

Idaho

University of Idaho
In-state tuition and fees: $8,820
Out-of-state tuition and fees: $28,050

North Carolina

University of NC-Chapel Hill
In-state tuition and fees: $9,000
Out-of-state tuition and fees: $39,340

Nevada

University of Nevada: Reno
In-state tuition and fees: $9,010
Out-of-state tuition and fees: $25,970

Mississippi

University of Mississippi
In-state tuition and fees: $9,410
Out-of-state tuition and fees: $26,980

South Dakota

University of South Dakota
In-state tuition and fees: $9,430
Out-of-state tuition and fees: $12,940

West Virginia

West Virginia University
In-state tuition and fees: $9,650
Out-of-state tuition and fees: $27,360

Arkansas

University of Arkansas
In-state tuition and fees: $9,750
Out-of-state tuition and fees: $28,770

Paying for College

Because the price of college tuition, fees, and room and board can be so high, many students have to take out student loans, apply for grants and scholarships, or apply for student aid in order to make college affordable. Students may take out federal loans or private loans to help them pay for school. They will have to repay these loans through a series of monthly payments with interest.

Federal student loans are offered by the U.S. Department of Education under the William D. Ford Federal Direct Loan Program. This program offers four types of federal loans:

• Direct Subsidized Loans are available to undergrads who demonstrate financial need. Interest on these loans is covered by the Department of Education while the students are enrolled in school at least half-time.

• Direct Unsubsidized Loans are available to undergrads, graduate students, and professional students and are not made based on need.

• Direct PLUS Loans are for graduate and undergraduate students and parents of dependent undergrads. Eligibility is not based on financial need.

• Direct Consolidation Loans allow students to combine federal loans into a single loan.

To apply for federal student loans and other forms of federal aid, students are required to fill out the FAFSA®, or Free Application for Federal Student Aid, each year.

Recommended: FAFSA Guide

Private student loans may be available through private lenders, such as banks and online lenders. These institutions set their own terms, interest rates, and loan amounts. When determining individual rates and terms, lenders will generally evaluate the applicants credit history, among other factors. Private student loans are typically considered a last resort when it comes to financing college because they aren’t required to offer the same borrower benefits or protections (like income-driven repayment options) as federal student loans.

There are also various sources of financial aid that can help students pay for school. It can come from federal, state, school, and private sources.

• Grants, such as federal Pell Grants, are a form of financial aid that doesn’t need to be paid back, unlike student loans.

• Scholarships are funds offered to students often based on academic performance, an area of study, or special talents. Scholarships also do not generally need to be repaid.

• Work-study programs allow students to earn money while they are in school. Students may qualify for the federal work-study program based on financial need.

• Many schools offer financial aid or scholarships.

The Takeaway

College can be a huge expense, but there are also a lot of benefits of a college education. As you’re choosing schools, it’s important to evaluate all of your options and think seriously about choosing one that’s in your budget as well as finding manageable ways to pay for it. That may mean attending the public school in the state you live in. And if you live in one of the states with the cheapest in-state tuition, you may pay less than $10,000 a year to go to school.

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.

FAQ

How much does college cost on average in the U.S.?

The estimated cost of attendance for one year of college is $27,146 for in-state students at public four-year schools, $45,708 per year for out-of-state students at public four-year colleges, and $55,840 for students at private nonprofit schools.

What state has the cheapest tuition?

States with the cheapest tuition include Florida, Wyoming, and Montana.

Photo credit: iStock/Bet_Noire

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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.

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.

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.

SOIS-Q224-1917029-V1

Tips for Voiding a Check

Definition of a Voided Check

How Do You Void a Check?

Reasons for Voiding a Check

Get up to $300 when you bank with SoFi.

Voided vs Canceled Check

What to Expect After Voiding a Check

What if You Don’t Have Checks?

Alternatives to a Voided Check

The Takeaway

FAQ

How do I void a blank check?

How do I void a check for direct deposit?

How do I void a check I’ve already sent?

12 Common Retirement Mistakes You Should Avoid

Planning for Retirement

12 Common Retirement Planning Mistakes

1. Saving Too Late

2. Not Making a Financial Plan

3. Missing Out on Your 401(k) Match

4. Bad Investing Strategies

5. Not Balancing Your Portfolio

6. Using Retirement Funds Too Early

7. Not Paying Off Debt

8. Not Planning Ahead for Future Costs

9. Not Saving Aggressively Enough

10. Making Unnecessary Purchases

11. Buying Into Scams

12. Gambling Your Money

Investing for Retirement With SoFi

FAQ

Why is it important to start saving early?

What is the first thing to do when you retire?

Refinancing Student Loans During Medical School: What to Know

What You Can Expect to Pay

Can You Refinance Student Loans During Medical School?

Another Option for Federal Student Loans During Medical School

Pros of Refinancing During Medical School

Extend Your Loan Term

Lower Monthly Payments

Some Refinancing Lenders Offer Deferment

Cons of Refinancing During Medical School

You Could Pay More Interest Over Time

You’ll Lose Access to Loan Forgiveness

Should You Refinance Your Student Loans?

Refinancing Student Loans With SoFi

FAQ

Can you refinance student loans in residency?

Do doctors ever pay off their student loans?

When should I refinance my medical student loans?

7 Tips to Help You Use Your Credit Cards Wisely

How to Use a Credit Card Wisely: 7 Tips

1. Always Try to Pay Off Your Statement Balance in Full

2. Cut Your Interest Rate if You Have Credit Card Debt

3. Make Sure to Pay on Time

4. Build an Emergency Fund to Avoid Turning to Credit Cards in a Bind

5. Use the Snowball Method to Help Pay Off Debt More Quickly

6. Keep Your Card Open Even After You Pay Off the Balance

7. Try Sticking to Cash to Reduce Credit Card Spending

The Takeaway

Cheapest States to Go to College in the United States

College Tuition in the United States

Average College Tuition

States With the Cheapest College Tuition

Wyoming

Florida

Montana

Idaho

North Carolina

Nevada

Mississippi

South Dakota

West Virginia

Arkansas

Paying for College

The Takeaway

FAQ

How much does college cost on average in the U.S.?

What state has the cheapest tuition?

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