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If you’re looking to start or grow a side hustle or small business, you might think a business loan is the right next step. A personal loan, however, is another popular financial product that you also might be able to use. For instance, by using it to free up some cash elsewhere in your budget, you could put more of your income toward funding your business.

Because there are potential benefits and disadvantages to both types of financing, it’s important to understand the differences. You’ll find that information here and be better equipped to decide whether a business loan vs. personal loan might work best for you.

What Is a Personal Loan?

A personal loan is a source of financing that a borrower typically can use for just about any legal personal purpose. That said, you typically cannot use the money from a personal loan directly for your business. You might instead use the lump sum to consolidate credit card debt, which could free up funds in your overall budget to put back into your business.

Typically, you’ll find unsecured personal loans, with the borrower agreeing to pay back the full amount, plus interest, in fixed monthly payments within a predetermined time frame.

Some lenders also offer secured personal loans, however,which means some form of collateral is involved. Also, some offer personal loans with variable interest rates.

How Personal Loans Work

When you apply for a personal loan, you can expect the lender to review your personal financial information — including your credit score, credit reports, and income — to determine your eligibility. In general, the better your credit, the better your chances of receiving a lower interest rate.

Personal loan amounts vary, but some lenders offer personal loans for as much as $100,000.

Although most personal loans have shorter repayment terms, the length of a loan can vary from a few months to several years. Typically, they last from 12 to 84 months.

What is a Business Loan?

A business loan is a type of financing used specifically to pay for business expenses. It could be used to purchase equipment or inventory, for example, or to fund a new project.

There are many kinds of small business loans available — with different rates and repayment terms — including Small Business Administration (SBA) loans, equipment loans, micro loans, and more. Rates, terms, and loan requirements also can vary significantly depending on the lender.

How Business Loans Work

Applying for a business loan tends to be more complicated than getting a personal loan. For one thing, you’ll likely have to submit more paperwork to back up your application, including your business’s financial statements and an up-to-date business plan. The lender also usually will want to review your personal and business credit scores. And you may have to be more specific about what the loan will be used for than you would with a personal loan.

If your business is brand new, lenders may be reluctant to give you a business loan. Some lenders might ask you to put up some type of collateral to qualify.

Differences Between Business and Personal Loans

There are several factors you’ll want to understand when considering the difference between a personal loan vs. a business loan, including the loan costs, how you plan to use the money, and how much you hope to borrow. Here’s a look at a few basic differences.

Cost Differences Between Business and Personal Loans

Whether you’re considering applying for a business loan or a personal loan, it’s important to be clear about how much it could cost you upfront and over the life of the loan.

Interest Rates

Interest rates for business loans can be lower than for the interest rates for personal loans, but the rates for both can vary depending on the type of loan, the lender you choose, and your qualifications as a borrower.

Fees

Fees also can affect the upfront and overall cost of both personal and business loans, so it’s a good idea to be clear on what you’re paying. Some of the more common fees for business loans and personal loans that you might see include origination, application, packaging, and underwriting fees, and late payment and prepayment penalties.

Some fees may be subtracted from the loan amount before the borrower receives the money. But fees also may be folded into a loan’s annual percentage rate (APR) instead, which can increase the monthly payment.

Down Payment

Business loans may be available for larger amounts than a personal loan. For a larger business loan — a substantial SBA loan or commercial real estate loan, for example — you could be required to come up with a down payment. This amount can add to your upfront cost. However, just as with a mortgage or car loan, a larger down payment can help you save money over the long term, because you’ll pay less in interest.

Whether you’ll need a down payment, and the amount required, may depend on your individual and business creditworthiness.

Different Uses for Business and Personal Loans

One of the biggest differences between business vs. personal loans is the way borrowers can use them.

•   A business loan can be used to finance direct business costs, such as paying for supplies, marketing, a new piece of equipment, business debt consolidation, or a business property. But it typically can’t be used for indirect business costs, which means a borrower can’t pay off personal debts with the money or buy personal property with it.

•   Some business loans have a very specific purpose, and the borrowed money must be used for that purpose. For example, if you get an equipment loan, you must buy equipment with it. Or, if you get a business car loan, you must buy a business car with the money.

•   With a personal loan, you have tremendous flexibility in how you use the loan, although that usually does not include business purposes. Rather, you can use a loan to pay off credit card debt, fund a home improvement, or pay an unexpected medical or car repair bill. Personal loans are typically smaller than business loans, and they generally come with a shorter repayment term. It can be helpful to have a clear intent for how the money will be spent and to keep separate records for business and personal expenses.

Differences When Applying for Business and Personal Loans

The criteria lenders look at can be very different when approving a small business loan vs. a personal loan. Here’s what you can expect during the application process.

Applying for a Personal Loan

When you apply for a personal loan, your personal creditworthiness usually plays a large role in the application and approval process.

•   Lenders typically will review a borrower’s credit scores, credit reports, and income when determining the interest rate, loan amount, and repayment term of a personal loan.

•   Generally, you can expect to be asked for a government-issued photo ID, your Social Security number, and/or some other proof of identity.

•   You also may be asked for proof of your current address. And the lender will want to verify your income.

Applying for a Business Loan

When you apply for a business loan, your personal finances still will be a factor, though other aspects of your application will be reviewed carefully.

•   The loan underwriters also will evaluate your business’s cash flow, how long you’ve been in business, your profitability, the exact purpose of the loan, trends in your industry, your business credit score, and more.

•   The lender may ask for a current profit-and-loss statement, a cash-flow statement, recent bank statements and tax returns for the business, your business license and a business plan, and any other current loan documents or lease agreements you might have.

•   You also will have to provide information about your collateral if you are applying for a secured loan.

Recommended: Understanding Credit Score Ranges

Structural Differences in Business and Personal Loans

Knowing the differences in how personal loans vs. business loans are structured could help you decide which is right for you and your business. A few factors that might affect your choice include:

Loan Amount

A business loan may be more difficult to apply for and get than a personal loan, especially if your business is a startup or only a few years old. But if you can qualify, you may be able to borrow more money with a business loan. While personal loan amounts typically top out at $50,000 to $100,000, some SBA loans can go as high as $5.5 million.

Loan Length

You’ll likely find personal and business loans with both short and long repayment terms. But generally, personal loans have shorter terms (typically one to seven years), while some business loan repayment periods can be up to 25 years.

Tax Advantages

If you have a business loan, deducting the interest you pay on the loan may be possible when filing income taxes if you meet specific criteria.

With a personal loan, it might get a little more complicated. If you use the borrowed money only for business costs, you may be able to deduct the interest you paid. But if you use the loan for both business and personal expenses, you would only be able to deduct the percentage of the interest that was used for qualifying business costs.

And you should be prepared to itemize deductions, documenting exactly how you spent the money. Your financial advisor or tax preparer can help you determine what’s appropriate.

Support

Along with the traditional banking services you might expect to get with any type of loan, a business loan also may come with operational support and online tools that can be useful for owners and entrepreneurs.

Risk

When you’re deciding between a personal vs. business loan, it’s also a good idea to think about what could happen if, at some point, the loan can’t be repaid.

•   If your business defaults and it’s a business loan, the impact to your personal credit would depend on how the loan is set up.

◦   If you’re listed as a sole proprietor or signed a personal guarantee, it’s possible you could be sued, your personal and/or business credit scores could take a hit, and your personal and business assets could be at risk.

◦   If your business is set up as a distinct legal entity, on the other hand, your personal credit score might not be affected — but your business credit score could suffer. And it could be more difficult for you to take out a business loan in the future.

Structural Differences in Business and Personal Loans
	Business Loans	Personal Loans
Loan Amount	Typically come in larger amounts (up to $5 million)	Generally are limited to smaller amounts (up to $100,000)
Loan Length	Usually have longer repayment periods (up to 25 years)	Generally have shorter terms (a few months to a few years)
Tax Advantages	Interest paid on a business loan is often tax-deductible	Interest paid on a personal loan is usually not tax-deductible
Support	Lenders may offer operational support and online business tools to borrowers with business loans	Lenders may offer more personal types of support to borrowers with personal loans
Risk	Defaulting on a business loan could affect the borrower’s business credit score or business and personal credit scores (based on how the loan is structured)	Defaulting on a personal loan could affect the borrower’s personal credit score

Pros and Cons of Business Loans

There are advantages and disadvantages to keep in mind when deciding whether to apply for a business loan vs. personal loan.

•   A business loan can be more difficult to get than a personal loan, especially if the business is new or still struggling to become profitable.

•   If you qualify for a business loan, you may be able to borrow a larger amount of money and get a longer repayment term.

•   A business loan also can make it easier to separate your business and personal finances. {Personal loans typically can only be used for personal expenses, as the name indicates.)

•   There could be fewer personal consequences if the business defaults on the loan.

Pros of Business Loans	Cons of Business Loans
Borrowers may qualify for larger amounts than personal loans offer	Applying can require more time and effort
Longer loan terms available	Qualifying can be difficult
Interest rates may be lower	Collateral and/or a down payment may be required
Interest is usually tax deductible	Loan must be used for business purposes only
Lenders may offer more business-oriented support	New businesses may pay higher interest rates
Debt may be the responsibility of the business, not the individual (depending on loan structure)	Responsibility for the debt could still land on individual borrowers

Recommended: Can You Refinance a Personal Loan?

Pros and Cons of Personal Loans

A personal loan vs. business loan can have advantages and disadvantages to consider.

•   Personal loans can offer borrowers more flexibility than business loans in terms of usage, though those uses must typically be for personal expenses, such as paying for a home renovation or a vacation.

•   They’re generally easier to qualify for and may have lower interest rates.

•   One major hurdle may be that you cannot use them for any business expense in most situations. You could use them to free up cash in your budget which you might then apply to a business purpose.

Pros of Personal Loans	Cons of Personal Loans
Application process is usually quick and easy	Lending limits may be lower than business loans
Qualifying can be less challenging than with a business loan because it’s based on personal creditworthiness	Borrower doesn’t build business credit with on-time payments
Can typically only use funds for personal expenses	Defaulting can affect personal credit score/finances
Most personal loans are unsecured	Interest rates are generally higher than for a business loan
Interest usually isn’t tax-deductible	Shorter loan terms than business loans typically offer

Is a Business or Personal Loan Right for You?

Considering the differences between a personal loan and a business loan can help you decide which is right for your needs. You may want to do some online research, compare rates and terms, and/or ask a financial professional or business mentor for advice before moving forward with this important decision. Here are some things to think about as you look for a loan that’s a good fit for your personal and professional goals.

A business loan may make sense if:

•   You’re seeking a lower interest rate and/or repayment term.

•   You want to keep personal and business expenditures separate.

•   You’ve been successfully running your business for a while.

•   You need more money than you can get with a personal loan.

•   You hope to build your business credit.

•   You want to limit your liability.

A personal loan may make sense if:

•   Your goal is to use the money for personal purposes, which might free up funds in your budget for business expenses.

•   You plan to use the money for both business and personal expenses.

•   You can find a personal loan with a lower interest rate than a comparable business loan, and the lender approves the loan for business expenses.

•   You want to get the money as quickly as possible.

•   You are seeking a shorter repayment term.

•   You don’t want to secure the loan with collateral.

•   You feel confident about your personal ability to repay the loan.

Recommended: Can I Pay Off a Personal Loan Early?

The Takeaway

If you’re seeking funding to start or grow your business, you may decide to apply for a business loan. Another approach: You might apply for a personal loan, which could be used for personal purposes, freeing up money in your budget that could go toward your business. Personal loans are typically easier to apply for and offer quicker access to funds, but often at a somewhat higher interest rate and shorter term vs. business loans. Also, business loans usually offer significantly higher loan amounts and the interest can be tax-deductible. It’s worthwhile to consider the tax and credit implications of each type of loan too, among other factors.

FAQ

Are business loans more expensive than personal loans?

Business loans typically have lower interest rates than personal loans. However, these two loans aren’t interchangeable: one is for business uses, the other for personal expenses.

Can I use a personal loan for business?

Most (but not necessarily all) personal loans can be used for just about any personal use. Check the fine print, and follow the lender’s guidelines.

Are startup loans personal loans?

There are a few different options for funding a startup, including SBA loans, family loans, or crowdfunding platforms. But if you have good credit and are confident you can make the monthly payments, taking out a personal loan could be an effective strategy for funding a startup, if the loan permits that usage.

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Photo credit: iStock/MicroStockHub

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.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOPL-Q425-040

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College cost of attendance is an estimate of the total cost of attending college for one academic year. It includes the cost of fall and spring tuition, books, supplies, room and board, transportation, loan fees, and other miscellaneous expenses.

Here’s how to calculate the cost of attendance, why it matters, and how it can affect financing an education.

The Cost of Attendance for College

The cost of attendance (COA) for college is an estimate of the total cost of attending a college for one year, and is often referred to as the “sticker price.” It includes both direct expenses (those billed by the university like tuition, fees, and on-campus housing) and indirect expenses (those not billed by the school such as books, supplies, transportation, and personal expenses).

Cost of attendance is used to help colleges determine the amount of financial aid a student is eligible for, including grants, scholarships, and federal student loans.

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

The Difference Between Cost of Attendance and Tuition

Tuition covers the actual cost of academic instruction. COA, on the other hand, includes other expenses the student will likely incur while attending college. COA includes things like room and board, books and supplies, and transportation costs.

Schools are required to publish the COA on their website so the information is readily accessible to students. Schools also generally publish more than one COA. For example, state universities may list a COA for in-state vs. out-of-state students. Most colleges will provide multiple COAs based on different student scenarios, such as living on or off campus.

The COA is calculated by financial aid offices using previous student spending, surveys, and local cost data. Your actual costs may be different than the COA.

What Is the Average College Cost of Attendance?

According to the College Board, the average cost of attendance at public four-year institutions in 2025-2026 was $30,990 for in-state students and $50,920 for out-of-state students. The average cost of attendance at private nonprofit four-year institutions in 2025-2026 was $65,470.

Think of COA as a rough budget for the year. It includes tuition and fees, along with expenses outside the classroom like food, transportation, and supplies.

According to The College Board, the average published cost for tuition and fees for the 2023-24 school year was $11,260 for students at public four-year institutions with in-state tuition and was $41,540 for students at private nonprofit four-year universities.

Recommended: What is the Average Cost of College Tuition?

What Does Cost of Attendance Include?

A college or university’s COA includes:

•  Tuition (the amount you owe to attend college for classes and instruction)

•  Fees (additional charges to cover the costs of certain services)

•  Housing (the cost of living on campus)

•  Meal plans (the cost to dine on campus)

•  Institutional health insurance (if required)

•  Indirect expenses (textbooks, a reasonable amount for a laptop, local transportation, and other personal expenses).

Recommended: Ways to Cut Costs on College Textbooks

Finding a School’s Cost of Attendance

Hunting down a university’s COA is an important first step in calculating the expenses around college and how to pay for it. Since legislation passed in 2011, it’s mandatory for U.S. two-year and four-year institutes to share the COA on their websites. However, that doesn’t mean it’s always easy to find.

One way to look for the COA online is to simply put “[NAME OF SCHOOL] + COST OF ATTENDANCE” into a search engine.

Or anyone can go the old-school route and call a college’s financial aid office to get the information over the phone.

A school will also include its cost of attendance on a student’s financial award letter.

College Cost of Attendance List

The COA for colleges can vary widely depending on a school’s location, whether it is private or public, and other factors. Some programs may have additional fees and costs (like lab fees) which could increase the cost of attendance for certain majors or programs.

The following table provides an overview of the published COA for undergraduate students living on-campus at several schools around the country during the 2025-2026 school year. Costs are for first-year undergraduates and assume the student will be living on campus.

School	Type	Cost of Attendance
Cornell University (Ithaca, NY)	Private	$96,268
Dartmouth College (Hanover, NH)	Private	$95,490
Rice University (Houston, TX)	Private	$91,562
Vanderbilt (Nashville, TN)	Private	$97,374
University of Chicago (Chicago, IL)	Private	$98,301
California Institute of Technology (Pasadena, CA)	Private	$93,912
Gonzaga University (Spokane, WA)	Private	$79,798
University of California (Los Angeles)	Public	In-state: $43,137 Out-of-state: $80,739
University of North Carolina (Chapel Hill)	Public	In-state: $27,766 Out-of-state: $64,846
University of Massachusetts (Amherst)	Public	In-state: $38,455 Out-of-state: $61,727
University of Oregon (Eugene)	Public	In-state: $38,607 Out-of-state: $68,931
Oklahoma State University (Stillwater)	Public	In-state: $33,700 Out-of-state: $49,220
University of Alabama (Tuscaloosa)	Public	In-state: $34,608 Out-of-state: $58,530
University of Michigan (Ann Arbor)	Public	In-state: $38,548 Out-of-state: $84,164

*2022-2023 school year COA.

Can I Borrow More Than the Cost of Attendance?

No, you typically cannot borrow more than the cost of attendance (COA) because student loans are generally capped at the COA, minus any other financial aid you receive. This limit ensures you don’t borrow more than you need for your educational expenses.

💡 Quick Tip: It’s a good idea to understand the pros and cons of private student loans and federal student loans before committing to them.

Cost of Attendance and Net Price

Net price is the actual amount a student is expected to pay after grants and scholarships have been deducted from the cost of attendance. It represents the “real” cost to the student because it subtracts gift aid, which doesn’t need to be repaid, from the total cost.

Colleges typically have a net price calculator on their websites. You enter your information into the calculator and it will show you what students like you currently pay to attend the college. This number isn’t binding but can give you an idea of what types of aid are available at that school. The numbers you get from the net price calculator isn’t binding on the college, but it can give you a good idea of what types of aid you’ll be eligible for at that school.

Paying for College

While net price may be lower than COA, it may still be shockingly high. The question remains, how will you pay for college?

Students often rely on a variety of financing options. A great first step is to fill out the FAFSA®. This is how students can apply for all forms of federal aid, including federal grants, scholarships, work-study, and federal student loans. If your financial aid package isn’t enough to cover the cost of attending your chosen college, there are other funding options to consider. Here are some to keep in mind:

Private Student Loan

Private student loans are available through banks, credit unions, and online lenders. Interest rates and loan terms are generally determined by an applicant’s personal financial factors such as credit score and income. Consider shopping around at a few different lenders to find the best rate and terms for your personal situation.

Applicants without an extensive credit history or a relatively low credit score may find that adding a cosigner to their application can help them qualify for a loan or qualify for more competitive rates and terms.

For those interested in pursuing a graduate degree, there are student loans for graduate programs available, too.

Credit Card

Schools may allow students to pay for their tuition with a credit card. Most schools do charge a fee (often between 2% to 3%) for this convenience, which can offset any rewards you may be earning on your credit card. In addition, credit cards have fairly substantial interest rates. Therefore, paying for tuition with a credit card may not make the most financial sense.

On the other hand, when credit cards are used responsibly, they can be helpful tools to help students establish and build their credit history. Students could use credit cards to pay for books, food, gas, or other transportation costs. Be sure to pay attention to interest rates and pay off your credit card each month to avoid credit card debt.

Personal Savings

If you have been saving for college, using those funds to pay for tuition or other college costs can help you avoid borrowing for college. When you borrow student loans to pay for college, you’ll end up paying interest, which increases the total cost of your education. By paying for some expenses with savings, you may be able to reduce the overall bill.

Scholarships

Often awarded based on merit or other personal criteria (like gender, ethnicity, hobbies, or academic interest), scholarships are available from a variety of sources, including employers, individuals, private companies, nonprofits, communities, religious groups, and professional and social organizations. You can find out about opportunities through your high school guidance office, the financial aid office of your chosen college, and by using an online scholarship search tool.

The Takeaway

The cost of attendance (COA) is a vital metric for anyone planning to attend college. It represents the estimated total yearly cost including both direct costs like tuition and fees, and indirect costs such as housing, books, and personal expenses.

While the COA can seem daunting, it’s important to remember that the “net price” — what you actually pay after grants and scholarships are applied — is often much lower. By thoroughly researching a school’s COA, using net price calculators, and exploring all available funding options, including federal aid, scholarships, savings, and private student loans, you can make informed decisions to cover your education costs responsibly.

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

What does cost of attendance mean for college?

The cost of attendance (COA) is an estimate for the total cost of attending a college for a single year. The COA includes tuition, room and board, books and supplies, transportation, and other miscellaneous personal costs. The items required for inclusion in the COA are outlined by federal law and each college or university is required to publish the details for the college’s COA on the school website.

What is the difference between cost of attendance and tuition?

A school’s tuition is the price for academic instruction. The cost of attendance includes the cost of tuition in addition to other expenses including room and board, books and supplies, transportation, and more.

How much does college cost per year?

The cost of college can vary based on many factors including your location, whether you attend a private or public university, if you receive in-state vs. out-of-state tuition, and the type of program you are enrolled in. According to the College Board, the average cost of attending a four-year nonprofit private institution was $65,470 during the 2025-26 school year. During the same time period, the average cost for tuition and fees at public four-year institutions with in-state tuition was $30,990.

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SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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

SOISL-Q425-022

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If you’re trying to build your credit, it may take a while. Pulling out of debt can be hard, especially when unexpected bills or job loss hits. And negative marks can stay on your credit report for seven or even 10 years.

This can be a challenging situation, but knowing what can positively impact your score can help you navigate this situation. Read on to learn more about what it takes to manage debt responsibly and help build your score.

Factors that Can Influence Your Credit Score & Report

A credit score gives a numerical value to a person’s credit history. It can help give lenders a big-picture look at a potential borrower’s creditworthiness. These scores (there isn’t just one) provide lenders with insight into how reliable a person might be when it comes to repaying their debt.

This can influence a lender’s decision on whether or not to loan a person money, how much money they are willing to lend, and the rates and terms for which a borrower qualifies.

Since credit scores are so widely used, it’s easy to see why some individuals may be interested in improving their credit scores. First, it might be helpful to understand the factors used to actually determine your score. Here’s a snapshot of what goes into a FICO® Score, since that is the credit score used by many lenders right now.

•   Your payment history accounts for approximately 35% of your FICO Score, making it one of the most influential factors. Even just one missed or late payment could potentially lower a person’s credit score.

•   Credit utilization ratio accounts for 30% of your score. Credit utilization ratio is your total revolving debt in comparison to your total available revolving credit limit. A low credit utilization ratio can indicate to lenders that you are effectively managing your credit. Typically, lenders like to see a credit utilization ratio that is less than 30%.

•   The length of your credit history counts for 15%, and that may be a good reason not to close an account that you use infrequently. It might help add to the length of your history.

•   Your credit mix accounts for 10% of your score. While not a good reason to go out and open a new line of credit, the bureaus do tend to prefer to see a mix of accounts vs. just one kind of credit.

•   The last component, also at 10%, is new credit, meaning are you currently making a lot of requests for credit. The number of hard credit inquiries in your name could make it look as if you are at risk of financial instability and are seeking ways to pay for goods and services.

Credit Issues: How Long Do They Linger?

Negative factors like late payments and foreclosures can hang around on your credit report for a while. Generally, the information is included for around seven years.

Bankruptcy is an exception to this seven year guideline—it can linger on your credit report for up to 10 years, depending on the type of bankruptcy filed. Bankruptcies filed under Chapter 7 can be reported for up to 10 years from the filing date. Bankruptcies filed under Chapter 13 can be reported for seven.

While a late payment will be listed on a credit report for seven years, as time passes it typically has less of an impact. So if you missed a payment last month, it will have more of an effect on your score than if you missed a payment four years ago.

These numbers are important to know when you are working to build your credit.

How Long Does It Take for Your Credit Score to Go Up?

Here’s a look, in chart form, at how long it takes for different negative factors to drop off your credit report.

Factor	Typical credit score recovery time
Bankruptcy	7-10 years
Late payment	Up to 7 years
Home foreclosure	Up to 7 years
Closing a credit card account	3 months or longer
Maxing out a credit card account	3 months or longer, depending on how quickly you repay your debt
Applying for a new credit card	3 months typically

Disputing an Error on Your Credit Report

Checking your credit report can help you stay on top of your credit. You’ll also be able to make sure the information is correct, and if needed, dispute any mistakes. There could, for instance, be a bill you paid long ago on your report as unpaid, or perhaps account details belonging to someone else with a similar name erroneously wound up on your report.

There are three major credit bureaus — Equifax®, Experian®, and TransUnion®. You can request a copy of your credit report from each of the three credit bureaus at no cost. You can visit AnnualCreditReport.com to learn more. Checking in with each report may feel a little repetitive, but it’s possible that the credit bureaus could have slightly different information on file.

If you find that there are discrepancies or errors, you can dispute the mistake. You’ll have to write to each credit bureau individually. Generally, you’ll need to send in documentation to support your claim. Once you’ve submitted your dispute letter, the bureaus typically have 30 days to respond.

It’s possible that a bureau will require additional supporting documentation, which can lead to some back and forth within or sometimes after the 30 days. It could take anywhere from three to six months to resolve a credit dispute, though some of these situations will take more or less time depending on complexity.

Staying on Top of Efforts to Build Credit

Sometimes, resolving issues on a credit report isn’t enough to build a bad credit score. On the bright side, credit scores aren’t permanent. Here are a few ideas for helping you to build your credit.

Improve Account Management

If you’re struggling to keep up with accounts with a variety of financial institutions, it could be time to simplify. Take stock of your investments, debts, credit cards, and savings or checking accounts. Is there any opportunity to consolidate?

Having your accounts in one, easy-to-check location can make it simpler to ensure you never miss an alert or important deadline. Automating your finances and using your bank’s app to regularly check in with your accounts (say, a few times a week can be a good cadence) can make good money sense as well, helping you keep on top of payment deadlines and when your balance might be getting low.

Make Payments On-Time

Did you know that your payment history (as in, do you pay on time) is the single largest factor in determining your credit score? Lenders can be hesitant to lend money to people with a history of late payments. So make sure you’re aware of each bill’s due date and make your payments on time. One idea? As mentioned above, you could set up autopay so you don’t even have to think about it.

Limit Credit Utilization Ratio

It could help to set a realistic budget that leads to a fair credit utilization ratio, meaning that your credit balances aren’t too high in relation to your credit limit. Some accounts will let you set up balance alerts that can warn you as you inch closer to the 30% guideline of the maximum you want to reach. Another option could be paying your credit card bill more frequently (for example, setting up a mid-cycle payment in addition to your regular payment).

Strategize to Destroy Debt

When it comes to paying off debt, having a plan can help. For example, using a credit card can be an effective way to build your credit history, but if not used responsibly, credit card debt can be incredibly difficult to pay off.

Not only that, it could end up impacting your credit score (say, if your credit utilization ratio creeps up above 30%, as noted above). As a part of your plan to build your credit after negative factors have occurred, you might consider putting a debt repayment plan into place.

Your finances and personal situation will be a major factor in the debt payoff plan that works best for you. If you need some inspiration, the methods below may be helpful to reference in your quest to pay off debt. If you decide that one of these options works for you, here’s how you might go about them.

The Snowball

The snowball method of paying off debt is pretty straightforward.

•   To put it into action, you would organize your debts from smallest to largest, without factoring in the interest rates.

•   Then you’d continue to make the minimum payments on all of your debts while paying as much as possible on your smallest debt.

•   When the smallest debt is paid off, you’d then roll that money into debt payments for the next smallest debt — until all of your debt is repaid.

This strategy is all about changing behavior and building in incentives to help keep you going. Starting with the smallest debt means you’d see the reward of paying it off faster than if you had started with the larger debt. While this method can help keep you motivated and laser-focused on eliminating your debt, it isn’t always the most cost effective, since it doesn’t take into account interest rates.

The Avalanche

The debt avalanche method encourages you to focus on your highest-interest debts first.

•   Prioritize debts with the highest interest rates by putting any extra cash towards them.

•   Continue to make the minimum payments on all of your other debts.

This technique could help save money in interest in the long run. And it could even help you pay off your debts sooner than the snowball method.

The Fireball

The fireball method combines the snowball and avalanche methods in a hybrid approach designed to help you blaze through costly debt so you can focus on the things that matter most to you.

•   The first step in this method is to go through all of your debts and categorize them as either “good” or “bad.”

•   “Good” debts are those that tend to contribute to your financial growth and net worth; they also tend to have relatively lower interest rates. Good debt might be a student loan that helps you launch your career or a mortgage that allows you to own a home.

•   Debts with high interest rates that don’t go towards building wealth (such as credit card debt) are often considered “bad.” With this method, you can list your “bad” debts from the smallest amount to the largest amount.

•   Then you’d take a look at your budget and see how much money you have to funnel toward making extra debt payments. While making the minimum monthly payment on all outstanding debts, you’d direct the extra funds toward the bad debt with the smallest amount due.

•   When that smallest balance is repaid in full, you’d apply the total amount you were paying on that debt to the next smallest debt. Then you’d continue this pattern, moving through each outstanding bad debt until they are all paid in full.

An important note: While you are moving through your higher-interest debts, you would still follow the normal payment schedule on your lower-interest debts.

By focusing on the debts with the highest interest rates first, this method could save you some change when compared with the snowball method. And, since you’re then targeting bad debt from the smallest balance to the largest, you could still benefit from the same psychological boost as you see your debt shrink, one payment at a time.

Create a Goals-Based Approach

Having financial goals could possibly help you streamline your efforts. If you’re actively working toward saving for, say, a down payment, you may feel less inclined to spend money elsewhere.

You could try setting short-term, mid-term, and long-term goals. In the short-term your goals might be as simple as tracking your spending and setting up a budget. Or perhaps saving for a big vacation that’s a year or so away. For mid-term goals, you might think about something a little further out, like buying a house or saving for a child’s education. Long-term goals are often things like (you guessed it) saving for retirement.

Writing down your goals and setting a time for when you’d like to reach them can help you set up your plan.

Consolidate Your Debt

If you are working on building your credit and want to pay down your credit card balances, one option could be a personal loan to consolidate that high-interest debt.

A debt consolidation loan can offer a couple of benefits. For instance, it can simplify paying your debts since you can combine multiple debts into one simple payment. This can be easier to pay on time than multiple bills with different due dates.

Also, a personal loan may offer a more favorable interest rate and terms than credit cards, potentially allowing you to pay less and get out of debt sooner.

The Takeaway

It can take a few months to several years (a decade even) to repair credit. Much will depend on your particular situation and what damaged your credit and by how much. By managing debt responsibly, you can build your score. Different debt payoff methods or a debt consolidation loan are among the options to help positively impact your score.

FAQ

How long does it take to build credit from 500 to 700?

There’s no set amount of time that it will take to build a credit score from 500 to 700. It could take a year or two or longer. It will depend on such factors as whether you pay bills on time, avoid taking on new debt, and manage your balances well, among others

How long does it take to repair your credit score?

Repairing a credit score can take a few months to several years, depending on your particular scenario. You might see small improvements in as little as a couple of months if you pay off credit card debt, or it can take years to recover from, say, a bankruptcy.

Will my credit score go up if I pay off all my debt?

Typically, your credit score will go up if you pay off all your debt. Among the positive impacts are lowering your debt-to-income (DTI) ratio.

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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.

*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.

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.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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The housing market is rising in some areas of America and falling in others. If you find yourself in a hot seller’s market, it can be challenging to buy a house, but doing so, even with a low down payment, is possible.

Lenders are willing to approve mortgages with lower down payment requirements if you qualify and are comfortable with paying mortgage insurance.

Read on for advice on navigating the real estate market if you have a small down payment but a fair amount of competition from other prospective buyers.

What Is Considered a Low Down Payment?

While many people believe you need at least a 20% down payment to buy a house, the average down payment by a first time homebuyer at the end of 2025 was 10%. And low-down-payment mortgage loans — even home loans with zero down payment — do exist.

Given the wide range above, what’s actually considered a low down payment? Popular mortgage programs out there may require as little as 3% down, and a couple of more specific home loan programs allow 0% down.

The reason why that 20% down payment figure keeps popping up is that any amount less than that will likely entail some form of mortgage insurance, an ongoing fee charged by most lenders.

💡 Quick Tip: You deserve a more zen mortgage. Look for a mortgage lender who’s dedicated to closing your loan on time.

Challenges of Buying in a Seller’s Market With a Small Down Payment

If you’re wondering how to buy a house with a low down payment, it’s important to acknowledge a painful truth in today’s housing market: There’s truth to the saying “cash is king,” and that continues to be evident in a seller’s market, where real estate investors who pay all cash frequently outbid prospective first-time homebuyers. All-cash sales have risen to a historic high of 26% in 2025, according to the National Association of Realtors. Be ready for these potential challenges if you intend to buy a house with a small down payment.

Longer Closing Time

Closing on a home with a mortgage-contingent offer to buy takes longer than closing with a cash offer. There’s often more paperwork, and underwriters will require time to ensure that your financials are in order before green-lighting your mortgage.

Lenders May Disagree With Mortgage Minimums

Just because a mortgage loan program allows for low-down-payment mortgage loans for qualified buyers doesn’t mean a lender will accept a down payment of 3%. Lenders have wide latitude to dictate their own terms, and it’s fairly common for them to set their own minimum down payment requirement somewhere above what the stated minimum for the program is.

Home Sellers May Be Nervous About Your Ability to Close

While it’s true that all funds from your down payment and mortgage transfer to the seller at closing, many sellers still buy into the old “bird in hand” adage when it comes to accepting offers. A higher down payment signals a buyer’s financial capacity and is, therefore, more attractive in the eyes of the homeowner.

If sellers accept a bid with a low down payment, they may run an increased risk of the buyer being rejected at the last minute by the mortgage lender.

In a deal involving a mortgage backed by the Federal Housing Administration (FHA), if the home is appraised for less than the agreed-upon price, the sellers must match the appraised price or the deal will fall through. FHA guidelines require home appraisers to look for certain defects. If any are found, the sellers may have to repair them before the sale.

Struggles With Competitive Offers and Bidding Wars

When your down payment is limited, you may find it difficult to compete in a bidding war. To help your case, if you are obtaining a conventional loan, seek out mortgage preapproval before beginning your home search in earnest. And consider writing a “love note” to the seller in your offer letter. Compliment something you especially like about the house and try to find some common ground with the seller that will appeal to their emotions. Thank the seller for considering your offer.

Recommended: Private Mortgage Insurance (PMI) vs. Mortgage Insurance Premium (MIP)

Types of Low-Down-Payment Mortgages

If you’re trying to score a home with a small down payment, there are some ways you can approach it to increase your odds. Some of the most popular low-down-payment mortgage programs are:

FHA Loans

FHA loans backed by the Federal Housing Administration, allow for a down payment as low as 3% to 5%. The government guarantee makes these loans more palatable for mortgage lenders and easier for a homebuyer to afford.

Fannie Mae HomeReady

Buyers who are within 80% of area median income for the census tract where a home is located can put down just 3% with this program. You don’t need to be a first-time buyer to take advantage of this program, however if all buyers are first-timers, you may be required to take a homebuyer education class.

Conventional 97 Loan

This loan allows first-time homebuyers of any income level to put only 3% down and finance the other 97% of their purchase with a fixed-rate mortgage with a term of up to 30 years. A credit score of 620 is required, although it will take a score of 680 to take full advantage of the features of this loan. At least one buyer must be a first-timer, and if all buyers are first-time homebuyers, a homeowner education course is usually required.

Conventional Mortgage

If you don’t qualify as a first-time homebuyer you can still obtain a low-down-payment home loan with a down payment as low as 5%. Conventional mortgage loans can be either fixed or adjustable rate, and you could take anywhere from 10 to 30 years to repay what you owe, depending on the mortgage term you choose. You’ll need a credit score of 620, and the higher your score, the better the interest rate you will likely be offered. If you put down less than 20%, you’ll need to pay for private mortgage insurance (PMI) with your monthly payment until you have 20% equity in your home.

Recommended: Home Affordability Calculator

Types of No-Down-Payment Mortgages

It is also possible to buy a house with no money down at all. Here are two common no-down-payment mortgages you may want to explore:

VA Loan

A VA loan backed by the U.S. Department of Veterans Affairs, allows eligible active-duty military members, veterans, reserve members, National Guard members, and certain surviving spouses to purchase a home with a zero-down-payment mortgage. If you think you might be eligible for a VA loan, your first step is to obtain a Certificate of Eligibility from the VA. Then you’ll obtain the loan from a lender (most will require a 620 credit score or better). While there is no mortgage insurance required, there is usually a VA funding fee.

USDA Loan

USDA loans are for low- and moderate-income buyers living in rural areas. The fixed-rate loan allows for the purchase of a new home but also allows borrowers to wrap some renovation costs into a home purchase. The loan can be used for modular or manufactured housing. There is no down payment or minimum credit score required for this loan.

💡 Quick Tip: Not to be confused with prequalification, preapproval involves a longer application, documentation, and hard credit pulls. Ideally, you want to keep your applications for preapproval to within the same 14- to 45-day period, since many hard credit pulls outside the given time period can adversely affect your credit score, which in turn affects the mortgage terms you’ll be offered.

Pros and Cons of Zero-Down-Payment Mortgage Loans

There are both benefits and disadvantages to going into homeownership with no down payment. Here are a few points to think about.

Recommended: Home-Buying Process Checklist

How Down Payment Assistance Can Help

If you’re struggling to come up with a down payment and a zero-down-payment loan isn’t an option, you may be able to get help. Consider exploring both of these options:

Down Payment Assistance (DPA) Programs

Many governments and nonprofits offer down payment assistance programs for first-time homebuyers — those who have not owned a principal residence in the past three years. The funds may come in the form of a loan or a grant. Some lenders can even assist you in qualifying for these programs to help offset the upfront costs of homebuying.

Cash Gift for Down Payment

Finally, you can also ask a family member, or sometimes a domestic partner, close friend, or employer, to help with the down payment by contributing gift money. The money can’t come with any strings attached, and a gift letter will likely be required by the lender. This is a popular option for parents and in-laws who want to help their children buy a first home.

Low- or No-Down-Payment Considerations

Mortgage Insurance

Buyers who put down less than 20% on a home purchased with a conventional mortgage can expect to have to pay for private mortgage insurance until they reach 20% equity in their home. Those who finance their home with an FHA loan will need to pay an upfront and annual mortgage insurance premium for the life of the loan. Some other government-backed loans also have similar fees.

Higher Cost Overall

Home loans cost money, in the form of interest. And because more of the home’s price must be financed when you put down a low down payment (or none at all), the total cost of the home will be greater than if some or all of the home purchase was covered by cash.

Less Equity Initially

The larger the down payment on a home, the more equity the buyer has on move-in day. Of course, you will build equity with your monthly mortgage payments, but in a process called mortgage amortization, a greater proportion of your monthly payment goes toward interest in the early years of a home loan, with less going to pay down the principal. The balance shifts gradually over the years of your loan, but you build equity slowly at the outset of a home loan.

The Takeaway

Buying a home with a small down payment is possible, even in a seller’s market. With preparation and the right mortgage lender, you may be able to land a place to call your own even with a low down payment — or no down payment at all.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

What mortgage has the lowest down payment?

Homebuyers who qualify can get a VA mortgage (backed by the U.S. Department of Veterans Affairs) or a USDA loan (from the U.S. Department of Agriculture) with no down payment at all. For other loan types, the lowest down payment amount is 3%.

Are zero-down mortgages a good idea?

Zero-down-payment home loans can help you get settled into a home sooner, but there are a few things to consider: You will not have any equity in your home at the outset, and equity builds slowly in the earliest years of a home loan. Your zero-down-payment loan will also be larger than the loan you would have if you made a down payment, so over the long haul, you will pay more for the home. However, if buying with no down payment allows you to take advantage of low interest rates, it might be worthwhile.

Is it harder to get your offer accepted with a small down payment?

If a seller is considering similar offers, the buyer with the larger down payment might have an edge. Being preapproved for a home loan can give you an advantage, however. If you can’t make a large down payment, consider obtaining preapproval.

Can a low down payment affect your mortgage rate?

Lenders may perceive buyers with lower down payments to be a greater risk, so a low down payment can sometimes result in a higher interest rate.

Are there programs to help first-time buyers compete in a seller’s market?

There are both national and local programs to help first-time homebuyers, including first-time homebuyer loan programs and down payment assistance programs. While these programs are not designed specifically to help buyers in a seller’s market, they certainly can’t hurt.

Should I wait for a buyer’s market if I only have a small down payment?

Whether or not to wait for a buyer’s market will depend on how soon you wish to buy a home and which local market you’re searching in. If waiting will allow you to build money for a larger down payment or improve your credit score, it might be worthwhile. The same is true if you foresee any reason the market might cool in the future. But if you need to settle down now, consider exploring nearby housing markets that might be a little less heated. And line up your mortgage preapproval to position yourself for success.

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Photo credit: iStock/sturti

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency. ^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency. Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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In the ever-evolving landscape of real estate, the U.S. foreclosure market often unveils key trends that will shape the future of homeownership. According to property data provider ATTOM, the number of housing units with foreclosure filings in October was 36,766, up 3% from the prior month and 19% from a year ago. Rob Barber, CEO of ATTOM, notes that “Foreclosure activity continued its steady upward trend in October, the eighth straight month of year-over-year increases.”

Nationwide, one in every 3,871 housing units had a foreclosure filing in October 2025. Foreclosure starts increased nationwide by nearly 20% from last year. States with the greatest number of foreclosure starts in October 2025 included Florida, Texas, California, Illinois, and New York. Borrowers should stay up to date on their mortgage payments and work closely with their lenders to explore options for assistance if needed.

Read on for the foreclosure rates in October 2025 – plus the top three counties with the worst foreclosure rates in each state.

50 State Foreclosure Rates

As previously noted, foreclosure rates saw an increase compared to the previous month and year. Read on for the October 2025 foreclosure rates for all 50 states — beginning with the state that had the lowest rate of foreclosure filings per housing unit.

50. South Dakota

The Mount Rushmore State nabbed the 50th spot once more for its foreclosure rate in October. Having 398,903 total housing units, the fifth-least populous state had a foreclosure rate of one in every 26,594 households with 15 foreclosures. The counties with the most foreclosures per housing unit were (from highest to lowest): Minnehaha, Yankton, and Pennington.

49. Montana

Listed as 44th in population, the Treasure State rated 49th for its foreclosure rate in October. With 25 foreclosures out of 522,939 housing units, Montana’s foreclosure rate was one in every 20,918 homes. The counties with the most foreclosures per housing unit were: Blaine, Sweet Grass, and Dawson.

48. Vermont

In 49th place for population, the Green Mountain State ranked 48th for its foreclosure rate in October. Of the state’s 337,072 housing units, 19 homes went into foreclosure at a rate of one in every 17,741 households. The three counties in the state with the most foreclosures were: Rutland, Addison, and Windham.

47. Mississippi

Ranked 34th in population, the Magnolia State experienced 93 foreclosures out of 1,332,811 total housing units. This puts the foreclosure rate at one in every 14,331 homes and into the 47th spot in October. The counties with the most foreclosures per housing unit were (from highest to lowest): Wayne, Jefferson, and Copiah.

46. West Virginia

Ranked 39th in population, the Mountain State claimed the 46th spot for the month of October. It has a total of 859,653 housing units, of which 65 went into foreclosure. This means that the foreclosure rate was one in every 13,225 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Jefferson, Berkeley, and Wetzel.

45. North Dakota

The Peace Garden State’s foreclosure rate was one in every 9,865 homes. This puts the fourth-least populous state — with 374,866 housing units and 38 foreclosures — into 45th place. The counties with the most foreclosures per housing unit were (from highest to lowest): Hettinger, Bowman, and McIntosh.

44. Kansas

The Sunflower State ranked 44th for highest foreclosure rate in October. With 1,285,221 homes and a total of 136 housing units going into foreclosure, the 35th most populous state’s foreclosure rate was one in every 9,450 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Anderson, Ottawa, and Decatur.

43. Wisconsin

With 304 foreclosures out of 2,750,750 total housing units, America’s Dairyland and the 20th most populous state secured the 43rd spot with a foreclosure rate of one in every 9,049 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Kewaunee, Langlade, and Marquette.

42. New Hampshire

The Granite State, and the 41st most populous state in the U.S., ranked 42nd for highest foreclosure rate. New Hampshire saw 72 of its 644,253 homes go into foreclosure, making for a foreclosure rate of one in every 8,948 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Coos, Hillsborough, and Rockingham.

41. Rhode Island

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The eighth-least populous state placed 41st for highest foreclosure rate in October. A total of 58 homes went into foreclosure out of 484,615 total housing units, making the foreclosure rate for the Ocean State one in every 8,355 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Washington, Providence, and Kent.

40. Oregon

The 27th most populous state ranked 40th for highest foreclosure rate in October. Of the Pacific Wonderland’s 1,838,631 homes, 234 went into foreclosure, making for a foreclosure rate of one in every 7,857 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Lake, Umatilla, and Clackamas.

39. Nebraska

Ranking 37th in population, the Cornhusker State placed 39th in October with a foreclosure rate of one in every 7,506 homes. With a total of 855,631 housing units, the state had 114 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Red Willow, Webster, and Wayne.

Recommended: Tips on Buying a Foreclosed Home

38. Minnesota

Ranked 22nd for most populous state, the Land of 10,000 Lakes obtained the 38th spot for highest foreclosure rate in October. It has 2,519,538 housing units, of which 365 went into foreclosure, making the state’s foreclosure rate one in every 6,903 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Isanti, Wadena, and Wabasha.

37. Hawaii

The Paradise of the Pacific, and the 40th most populous state, came in 37th for highest foreclosure rate. Of its 564,905 homes, 84 went into foreclosure, making for a foreclosure rate of one in every 6,725 households. Only three of the five counties in the state saw foreclosures. They were (from highest to lowest): Hawaii, Honolulu, and Kauai.

36. Washington

Sorted as 13th in population, the Evergreen State ranked 36th for its foreclosure rate in October. Of its 3,262,667 housing units, 496 went into foreclosure, making the state’s foreclosure rate one in every 6,578 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Garfield, Clallam, and Franklin.

35. Alabama

Listed as 24th in population, the Yellowhammer State came in 35th for highest foreclosure rate in October. Of its 2,316,192 homes, 361 went into foreclosure, making for a foreclosure rate of one in every 6,416 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Jefferson, Geneva, and Chilton.

34. New Mexico

The 36th most populous state claimed the 34th spot for highest foreclosure rate in October. Of the Land of Enchantment’s 949,524 homes, 151 went into foreclosure, making for a foreclosure rate of one in every 6,288 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Valencia, Torrance, and Chaves.

33. Missouri

Coming in at 19th in population, the Show-Me State took the 33rd spot for highest foreclosure rate in October. Of its 2,809,501 homes, 459 went into foreclosure, making for a foreclosure rate of one in every 6,121 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Scott, Mississippi, and Barton.

Recommended: What Is a Short Sale?

32. Kentucky

With a total of 2,010,655 housing units, the Bluegrass State saw 329 homes go into foreclosure, thus landing in 32nd place in October. This puts the foreclosure rate for the 29th most populous state at one in every 6,111 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Whitley, Bath, and Grant.

31. Tennessee

Ranked 16th in population, the Volunteer State endured 521 foreclosures out of its 3,095,472 housing units. This puts the foreclosure rate at one in every 5,941 households and in 31st place for the month of October. The counties with the most foreclosures per housing unit were (from highest to lowest): Lake, Crockett, and Hawkins.

30. Virginia

With 620 homes going into foreclosure, the 12th most populous state ranked 30th for highest foreclosure rate in October. Having 3,654,784 total housing units, the Old Dominion saw a foreclosure rate of one in every 5,895 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Staunton City, Emporia City, and Buena Vista City.

29. Pennsylvania

The Keystone State had the 29th highest foreclosure rate. The fifth-most populous state saw 995 homes out of 5,779,663 total housing units go into foreclosure, making the state’s foreclosure rate one in every 5,809 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Monroe, Philadelphia, and Snyder.

28. Wyoming

The country’s least populous state claimed the 28th spot for highest foreclosure rate in October. With 275,131 housing units, of which 50 went into foreclosure, the Equality State’s foreclosure rate was one in every 5,503 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Carbon, Campbell, and Sublette.

27. Alaska

The Last Frontier saw 59 foreclosures in October, making the foreclosure rate one in every 5,406 homes. This caused the third-least populous state, with a total of 318,927 housing units, to claim the 27th spot. The boroughs with the most foreclosures per housing unit were (from highest to lowest): Dillingham, Haines, and Bethel.

26. Massachusetts

The 15th most populous state ranked 26th for highest foreclosure rate in October. Of the Bay State’s 3,014,657 housing units, 591 went into foreclosure, making for a foreclosure rate of one in every 5,101 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Hampden, Berkshire, and Dukes.

25. Michigan

Ranked 10th in population, the Wolverine State secured the 25th spot with a foreclosure rate of one in every 4,776 homes. With a total of 4,599,683 housing units, the state had 963 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Muskegon, Monroe, and Hillsdale.

24. New York

With 1,792 out of a total 8,539,536 housing units going into foreclosure, the Empire State claimed the 24th spot in October. The fourth-most populous state’s foreclosure rate was one in every 4,765 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Broome, Orange, and Tioga.

23. Arkansas

Listed as the 33rd most populous state, the Land of Opportunity ranked 23rd for highest foreclosure rate in October. The state contains 1,382,664 housing units, of which 293 went into foreclosure, making its latest foreclosure rate one in every 4,719 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Cleveland, Poinsett, and Van Buren.

22. Louisiana

Sorted as 25th in population, the Pelican State placed 22nd for highest foreclosure rate in October. Louisiana had a foreclosure rate of one in every 4,602 households, with 455 out of 2,094,002 homes going into foreclosure. The parishes with the most foreclosures per housing unit were (from highest to lowest): Iberville, Ascension, and Beauregard.

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21. Colorado

The 21st most populous state ranked 21st for highest foreclosure rate in October. Of the Centennial State’s 2,545,124 housing units, 562 went into foreclosure, making for a foreclosure rate of one in every 4,529 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Morgan, Sedgwick, and Pueblo.

20. Indiana

The 17th largest state by population, the Crossroads of America landed the 20th spot in October with a foreclosure rate of one in every 4,421 homes. Of its 2,953,344 housing units, 668 went into foreclosure. The counties with the most foreclosures per housing unit were (from highest to lowest): Blackford, Noble, and Jasper.

19. Arizona

Sorted as 14th in population, the Grand Canyon State withstood 722 foreclosures out of its total 3,142,443 housing units. This puts the foreclosure rate at one in every 4,352 homes and into the 19th spot in October. The counties with the most foreclosures per housing unit were (from highest to lowest): Pinal, Yuma, and Cochise.

18. North Carolina

The ninth-most populous state claimed 18th place for highest foreclosure rate. Out of 4,815,195 homes, 1,135 went into foreclosure. This puts the Tar Heel State’s foreclosure rate at one in every 4,242 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Camden, Pender, and Rowan.

17. Maine

Ranked 42nd in population, the Pine Tree State placed 17th for highest foreclosure rate in October. With a total of 746,552 housing units, Maine saw 177 foreclosures for a foreclosure rate of one in every 4,218 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Sagadahoc, Waldo, and Penobscot.

16. Connecticut

With 376 of its 1,536,049 homes going into foreclosure, the Constitution State had the 16th-highest foreclosure rate at one in every 4,085 households. In this 29th most populous state, the counties that had the most foreclosures per housing unit were (from highest to lowest): Greater Bridgeport, Northeastern Connecticut, and Naugatuck Valley.

15. Georgia

Ranked eighth in population, the Peach State took the 15th spot for highest foreclosure rate in October. Of its 4,483,873 homes, 1,101 were foreclosed on. This puts the state’s foreclosure rate at one in every 4,073 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Johnson, Newton, and Wilkes.

14. Oklahoma

The Sooners State landed the 14th spot in October. With housing units totaling 1,763,036, the 28th most populous state saw 462 homes go into foreclosure at a rate of one in every 3,816 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Canadian, Jackson, and Marshall.

13. Idaho

Ranked 38th in population, the Gem State received the 13th spot due to its 206 housing units that went into foreclosure in October. With 776,683 total housing units, the state’s foreclosure rate was one in every 3,770 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Washington, Gooding, and Gem.

12. New Jersey

With a foreclosure rate of one in every 3,716 homes, the Garden State ranked 12th for highest foreclosure rate in October. The 11th most populous state contains 3,775,842 housing units, of which 1,016 went into foreclosure. The counties with the most foreclosures per housing unit were (from highest to lowest): Sussex, Cumberland, and Atlantic.

11. Texas

The Lone Star State withstood 3,441 foreclosures in October. With a foreclosure rate of one in every 3,456 households, this puts the second-most populous state in the U.S., with a whopping 11,890,808 housing units, into 11th place. The counties with the most foreclosures per housing unit were (from highest to lowest): Liberty, San Jacinto, and Franklin.

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10. California

The country’s most populous state ranked 10th for highest foreclosure rate in October. Of its impressive 14,532,683 housing units, 4,265 went into foreclosure, making the Golden State’s foreclosure rate one in every 3,407 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Shasta, Mendocino, and Kings.

9. Utah

The Beehive State placed ninth for highest foreclosure rate in October. Of its 1,193,082 housing units, 364 homes went into foreclosure, making the 17th most populous state’s foreclosure rate one in every 3,278 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Tooele, Millard, and Box Elder.

8. Maryland

Ranked 18th for most populous state, America in Miniature took eighth place for highest foreclosure rate in October. With a total of 2,545,532 housing units, of which 778 went into foreclosure, the state’s foreclosure rate was one in every 3,272 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Baltimore City, Calvert, and Somerset.

7. Iowa

The Hawkeye State had the seventh highest foreclosure rate in October. With 443 out of 1,427,175 homes going into foreclosure, the 31st most populous state’s foreclosure rate was one in every 3,222 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Wapello, Tama, and Cherokee.

6. Ohio

The Buckeye State placed sixth in October with a foreclosure rate of one in every 3,079 homes. With a sum of 5,271,573 housing units, the seventh-most populous state had a total of 1,712 filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Fayette, Knox, and Seneca.

5. Nevada

Ranked 32nd in population, the Silver State took the fifth spot for highest foreclosure rate in October. With one in every 2,747 homes going into foreclosure, and a total of 1,307,338 housing units, the state had 476 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Lyon, Churchill, and Mineral.

4. Delaware

The sixth-least populous state in the country, the Small Wonder nabbed fourth place in October. With one in every 2,710 homes going into foreclosure and a total of 457,958 housing units, the state saw 169 foreclosures filed. Having only three counties in the state, the most foreclosures per housing unit were (from highest to lowest): Kent, New Castle, and Sussex.

3. Illinois

The Land of Lincoln had the third-highest foreclosure rate in all 50 states in October. Of its 5,443,501 homes, 2,118 went into foreclosure, making the sixth-most populous state’s foreclosure rate one in every 2,570 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Clinton, Lee, and Coles.

2. South Carolina

The 23rd most populous state had the second-highest foreclosure rate in October with one in every 1,982 homes going into foreclosure. Of the Palmetto State’s 2,401,638 housing units, 1,212 were foreclosed on in October. The counties with the most foreclosures per housing unit were (from highest to lowest): Dorchester, Lee, and Spartanburg.

1. Florida

The third-most populous state in the country has a total of 10,082,356 housing units, of which 5,512 went into foreclosure. This puts the Sunshine State’s foreclosure rate at one in every 1,829 homes and into first place in October. The counties with the most foreclosures per housing unit were (from highest to lowest): Osceola, Charlotte, and Okeechobee.

The Takeaway

Of all 50 states, Florida had the most foreclosure filings (5,512), and South Dakota had the least (15). As for the states with the highest foreclosure rates, Florida, South Carolina, and Illinois took the top three spots.

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