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An estimated 20% of Americans have $10,000 or more in credit card debt.

Five-figure credit card debt, and the interest that accrues along with it, can feel overwhelming. It’s the kind of debt that keeps people up at night, and prevents them from pursuing their other financial goals.

But, that debt doesn’t have to stick around forever. With a strategy, chipping away at a $10,000 in credit card debt is achievable. Here are some options for how to pay off $10,000 in credit card debt.

Tips for Paying Off $10,000 in Credit Card Debt

Paying down $10,000 in credit card debt takes discipline and time. These tips and tools could help speed up the journey toward debt freedom.

Consider a Side Hustle

If your budget doesn’t have much wiggle room to make extra payments toward credit card debt, you might consider finding ways to generate more income. Starting a side hustle could be a powerful way to pay down a $10,000 credit card debt faster. Whether it’s grabbing a job in the gig economy or taking a catering job on the weekends, you can put those paychecks toward your credit card debt.

Ask for a Raise

If time is limited for a side hustle, think of how you could make more money in your current role. Is it time to ask for a raise, for instance?

Similarly, switching jobs may land you a higher salary. Just make sure that extra income goes toward debt payoff, and not lifestyle creep.

Switch to Cash

When you’re paying down $10,000 in credit card debt, it’s important to avoid accruing a higher balance. Adding more debt can not only feel discouraging, it can extend your payoff timeline.

As you tackle paying down debt, consider avoiding any further spending on credit cards. That can take the form of paying for things in cash, or using a debit card where you can only spend what you actually have. Making a switch to cash means you’re less likely to add to your burden of debt.

Debt Management Plans

While tips and tricks may help you pay down $10,000 in credit card debt, you may have to consider a larger overall strategy to move you towards payoff. Having a debt management plan in place can take some of the pressure away and could put you on a track toward paying off debt faster.

Two popular methods to accelerate debt repayment include the snowball and avalanche method.

Snowball Method

The snowball method prioritizes paying off small debts first and working your way up. Here’s how:

1.    Make the minimum monthly payments on all debts.

2.    Take inventory of all your debts and order them from lowest outstanding balance to highest.

3.    Put any extra cash toward the smallest balance debt.

4.    Repeat this until the lowest debt is paid off.

5.    Next, move onto the next lowest debt, adding the surplus cash from step 2 to this card’s monthly payments.

6.    Continue to repeat this process, scaling up to the high-balance debts once you pay off the lower ones.

While this method can seem counterintuitive because of the interest that high balances can generate, starting off with small wins has psychological benefits for some. Having those wins early on may motivate you to move forward.

If you tend to be more disciplined and don’t mind playing the long game, you might prefer the debt avalanche method to pay off $10,000 in debt. Here’s how to deploy the avalanche method:

1.    Make minimum payments on all debts.

2.    Compile all your debt, and order it by interest rate from highest to lowest.

3.    Put any extra cash toward the debt with the highest interest rate.

4.    Repeat until the highest-interest debt it paid off.

5.    Move onto the debt with the next-highest interest rate. Put any extra cash toward this balance until it’s paid off.

6.    Continue this process, prioritizing the highest interest debt first, until all balances are settled.

Typically, the debt avalanche saves more money in interest payments in the long run. However, it can take time to see a win with this method, as opposed to debt snowball.

Recommended: Creating a Credit Card Debt Elimination Plan

Credit Card Debt Forgiveness

Credit card debt forgiveness is not as simple as waving a magic wand at your balances and watching them disappear. Forgiveness does not mean the debt’s completely erased, and it comes with its own drawbacks.

Credit card debt forgiveness only becomes an option when a cardholder stops paying their debt and the credit card company sells the outstanding balance to a debt collector. From there, you can negotiate with the debt collector as to how much debt to repay.

Debt collectors typically buy debts for far less than their face value, and thus are willing to recuperate just a portion of the initial amount owed. For example, if you owe $10,000 in credit card debt and it goes to collections, you may be able to negotiate to settle the debt for just $5,000. That payment may be a lump sum or small payments over time.

While credit card debt forgiveness means paying less than the total owed, it has a fair share of drawbacks. Neglecting credit card debt can wreak havoc on a person’s credit score, and you’ll still need to pay some portion of the debt.

Additional Options for Paying Off Debt

Credit card debt forgiveness isn’t the only route toward paying off $10,000 in credit card debt. Depending on your situation, one of the following solutions may work.

Balance Transfers

Some credit card companies allow cardholders to make credit card balance transfers. That means you transfer the outstanding balance from one credit card to another, often with an introductory low interest rate or no interest.

Balance transfers do come with fees, but depending on how much you owe and how much you could save on interest, it could be worth it in the long run. However, keep in mind the interest rate the balance transfer offers may be for a limited time. You’ll want to pay off the remaining balance before the rate rises, or you could owe more than you did before the transfer.

Personal Loans

There are a number of common uses for personal loans, including paying off credit card debt. Often, a personal loan will have a lower interest rate than credit cards, which could help you pay down your debt faster and save on interest. If you’re struggling to figure out how to pay off $10,000 in credit card debt, consolidating multiple balances into a single loan also may streamline the process.

Your credit score can impact if you get approved for a personal loan, as well as what interest rate you receive. If you have a less than stellar credit score, you may not get approved.

Using a personal loan calculator can help you determine if this strategy will net you savings and, if so, how much.

Recommended: Types of Personal Loans

The Takeaway

Paying down $10,000 in debt might not be easy, but with the right strategies, it is possible. This could mean adopting an aggressive payoff method or looking for additional options to pay down the debt, like personal loans.

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

FAQ

How do I get out of credit card debt with high interest?

You have options when it comes to paying off credit card debt. One to consider is the avalanche method, which involves paying off the card with the highest interest rate first while making minimum payments on other cards. Then, move on to the debt with the next-highest interest rate, and continue the process until you have no more balances.

Should I seek credit card forgiveness?

Credit card forgiveness isn’t common. That said, you may be able to negotiate with your creditor to reduce the amount you owe, which can help relieve some of your debt burden.

How long will it take to pay off $10k in credit card debt?

The length of time it will take you to pay off $10,000 in credit card debt depends largely on the amount of your monthly payment and your card’s APR. Consider this example: If you have an APR of 21.95%, and make monthly payments of $500, it will take you 26 months to pay off the debt. If you can swing a larger monthly payment of $1,000, it would take you 12 months.

Photo credit: iStock/ArtistGNDphotography

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.

SOPL-Q225-008

Payday loans are also called cash advance loans, deferred deposit loans, post-dated check loans, or check advance loans. They are short-term, high-interest loans. People who use these loans tend not to have access to other types of lending, and this is a last resort to get them through to the next paycheck.

Many states consider these loans predatory because of their high interest rates and financing fees. Some states place caps on the fees and interest rates or ban this type of lending completely.

Read on to find out what a payday loan is, how they work, and other options for those who need a short-term loan or cash advance.

What Is a Payday Loan?

Payday loans, also known as cash advances, are high-interest, short-term loans, typically for $500 or less. They are notorious for having very high interest rates and fees. There are few payday loan requirements, but borrowers typically need to be over 18, have a checking account in good standing, and show that they earn a secure income.

Consumers can find these types of loans through online lenders, apps, and local brick-and-mortar merchants. The loan amount is typically paid back by direct debit once the borrower receives their next paycheck. Alternatively, loans may be secured with a post-dated check.

How Does a Payday Loan Work?

Consumers fill out an application with a lender and show proof of identity, a recent pay stub, and a bank account number if required.

Borrowers have to secure the loan with a post-dated check or agree to have the funds debited from their account when they are paid, usually in two weeks. Loans are usually between $50 and $1,000, and funds are deposited within a day or two. Borrowers can also receive cash.

People with bad credit and access to better financing tend to use these loans to help them get by temporarily. However, payday loan problems are well-known: High interest rates and exorbitant fees can trap someone in spiraling debt if they cannot repay the loan on time.

The Consumer Financial Protection Bureau states, “More than four out of five payday loans are re-borrowed within a month, usually right when the loan is due or shortly thereafter.” Borrowers then face even higher financing fees and interest rates compounding their debt load.

Many states place caps on the interest rates and fees charged for payday loans; some states, such as New York, have outlawed them completely.

What Are the Requirements for a Payday Loan?

Most working adults qualify for a payday loan. Here are the most common standards.

Age

Borrowers must be at least 18 years of age.

Proof of Income

Applicants have to show proof of income, such as a pay stub.

Citizenship

Consumers may have to show proof of U.S. citizenship.

Bank Account

Borrowers need to have a bank account that is in good standing.

Payday Loan Interest Rates

Depending on the state, interest rates for payday loans can carry a 400% annual percentage rate (APR) or more.

In states that cap interest rates on payday loans, lenders may instead charge a fee that is a percentage of the amount loaned. Finance charges can be between $15 and $30 for each $100 borrowed.

Payday Loan Amounts

Payday loan amounts are usually $100 to $1,000. In some states, a borrower is allowed only one payday loan at a time. Other states, like Texas and Nevada, offer unlimited payday loans for customers.

Alternatives to a Payday Loan

Rather than take out a high-interest payday loan, there are better options for people in a precarious financial situation.

Credit Cards

If the borrower has a credit score, using a credit card is a safer bet than a payday loan. The average credit card interest rate is around 21%, while payday loan interest can be over 400%. However, if the borrower needs the cash to pay bills such as rent or utilities, that is often not possible with a credit card.

Cash Advance Loans

A cash advance loan puts cash immediately into your bank account. These loans are offered by online lenders, such as Earnin. These companies don’t charge loan financing fees but ask for “tips.” So, a borrower might tip between 5 and 15% of the advance. These apps are often marketed as payroll benefits, and they charge membership and service fees.

TSP Loans

A TSP account is a tax-deferred retirement savings and investment plan that offers Federal employees the same tax advantages as a 401(k) retirement plan. If you have a TSP retirement account, you can take out a loan from that plan without having to pay tax or penalties. However, you must pay the amount back to the account within five years with interest (which will be much lower than the interest on a payday loan).

Personal Loans

For consumers with a good credit score, banks and online lenders offer unsecured or secured personal loans. Unsecured loans are not backed by any collateral and will have a higher interest rate than a secured loan, but not as high as a payday loan.

Unexpected expenses can be paid for with a personal loan and at a lower interest rate. Many people take out personal loans to pay off credit card debt because the interest rate on a personal loan is less than the interest rate paid on their credit card debt. Getting approved for a personal loan can be easier if you have good credit.

Loan payback terms can be between two to seven years, with loan amounts typically between $1,000 and $50,000 or higher. If you manage the payments on a personal loan responsibly, you can build up a strong credit history. That is not the case with a payday loan, which is not typically reported to credit rating bureaus.

The Takeaway

Payday loans are short-term loans that cash-strapped consumers use to get by until their next paycheck. The borrower is expected to repay the loan on their next payday, or they may submit a post-dated check. Interest rates are extremely high because of the risk to the lender that the borrower will default. Unfortunately, this is often the case, and borrowers can find themselves spiraling into debt as interest and fees accumulate. For this reason, some states have banned payday loans.

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

FAQ

What are the requirements to get a payday loan?

Most working adults qualify for a payday loan. A borrower needs to be 18 or over, show proof of income (a paystub) and citizenship, and have a bank account.

Is proof of income a requirement for a payday loan?

A lender requires proof of income because they want to know you have the means to pay the loan back. A recent pay stub or similar documentation is typically enough.

Is taking out a payday loan a good idea?

Basically, no. A payday loan should only be used as a last resort, and if you are sure you can pay back the loan in two weeks. Even then, the interest you will pay will be much higher than a cash advance or a short-term loan from an online lender.

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.

SOPL-Q225-010

Legal fees can get expensive. Whether you need to hire an attorney for a divorce case, to represent you against criminal charges, or to guide you through the adoption process, the cost can be prohibitive — but that doesn’t mean you should move forward without legal counsel.

Instead, there are a few different ways to pay for a lawyer, including personal loans. We’ll review how to get a loan for legal fees, as well as other options available to you.

What Are Loans for Legal Fees?

While you cannot find a loan designed specifically for legal fees, you can take out a personal loan to cover your legal costs. If your lawyer mentions taking out a loan for payment, they’re likely referring to a personal loan.

How Do Loans for Legal Fees Work?

Personal loans for legal fees work much like any other personal loan. You borrow a sum of money, and pay it back — with interest — over a period of time.

Loan rates and terms vary by financial institution. In general, the longer the loan term, the higher your annual percentage rate (APR) will be. However, because the repayment is spread out over more years, the monthly payments tend to be lower. Personal loan terms usually range between two and seven years.

When you get a personal loan for legal fees, you’ll get the lump sum from the lending institution to pay your lawyer. Some banks offer same-day funding. Then, rather than owing the lawyer, you’ll owe the lender until the loan is paid off in full.

Keep in mind that, in addition to interest, some personal loans include origination fees and prepayment penalties.

Typical Legal Loan Requirements

When you go to apply for a personal loan, the lender may have a few requirements you’ll have to meet. These may vary by financial institution.

Credit Score

A key factor in getting approved for a legal loan is your credit score. In general, the higher your credit score, the better your chances of approval and at a lower interest rate.

The credit score you need for a personal loan will vary by institution. Some lenders may even grant personal loans to borrowers with bad credit. In those cases, fees and APRs are typically very high.

Speaking of your credit score, most lenders offer soft pulls for personal loans to see if you’re qualified. But once you apply, expect a hard inquiry on your credit report, which will temporarily lower your score.

Debt-to-Income Ratio

Lenders also factor in your debt-to-income (DTI) ratio when considering your loan application. Your DTI ratio is the total amount of your monthly debts (think car payment, student loan payments, credit card bills, mortgage, etc.) divided by your monthly income.

The lower your DTI ratio, the better your chances of getting approved for a personal loan for legal fees with favorable rates and terms.

Proof of Income and Employment

To get a legal fee loan, you’ll need to demonstrate your ability to repay it to the lender. That means that lenders may want to see proof of income and employment, such as a signed letter from your employer, pay stubs, and/or W-2 forms.

Self-employed and need a personal loan? You’re not out of luck. Lenders may just want to see your tax returns and/or bank deposit info.

Origination Fees

Some lenders charge a loan origination fee when you take out a personal loan. This is a one-time fee at the start of the loan that covers the administrative costs of processing the loan. (If you’ve ever bought a house, you likely paid a mortgage origination fee as part of your closing costs.)

Personal loan origination fees might be flat fees or a percentage of the loan amount. Not every lender charges these fees.

Collateral

Loans for legal fees are usually unsecured personal loans, meaning they’re not backed by any collateral. Other examples of unsecured loans are traditional credit cards and student loans, where you can borrow money without putting up assets as collateral. Because there’s no collateral, fees and interest rates tend to be higher.

In some instances, personal loans can be secured, meaning you’d have to put up some kind of collateral, like a car or house. Secured personal loans may have lower fees and interest rates, but costs vary by lender.

If you get a secured personal loan for your legal fees, you’ll need to offer some kind of collateral to the lender.

Pros and Cons of Using a Loan to Cover the Cost for Legal Fees

Thinking about using a personal loan to cover legal fees? Here are the pros and cons to consider:

How Legal Fees Are Billed

Legal fees can run the gamut. Your attorney may charge you several types of fees during the course of their representation. Here’s a quick look at some of the fees you might incur when hiring a lawyer:

•   Hourly fees: A lawyer will likely charge you by the hour for their services — and that’s not just the hours you spend consulting with them. Lawyers do a lot of work on your case behind the scenes, and they’ll bill you for it. Hourly rates can range from as little as $100 an hour to as much as several thousand dollars an hour, depending on the lawyer’s experience, the complexity of the case, and geographic location. The average hourly rate for a lawyer in 2024 was $341, according to the Clio 2024 Legal Trends Report.

•   Flat rates: Sometimes, a lawyer might charge you a simple fixed fee for a specific service. This is typically for less involved work (i.e., no court representation). For instance, they may charge a set rate to prepare your will or help you with a real estate transaction, bankruptcy filing, or uncontested divorce.

•   Contingency fees: As the name implies, these fees are contingent. You’ll only pay them if you win your case and are awarded a monetary sum. Often, a lawyer’s contingency fees are a percentage of that sum.

•   Litigation fees: Your lawyer may include this as a line item on your invoice, but really, it’s a catch-all for several fees. These include court filing fees, attorney’s fees, expert witness fees, fees for re-creating an accident or accessing records, copy fees, and others.

Alternatives to Legal Loans

A legal loan is not your only option for covering legal fees. If you don’t want to take out a personal loan or don’t qualify, consider these other options. Just make sure to steer clear of predatory lending.

Credit Cards

Many lawyers accept credit cards as a payment method for their services. If that’s your preferred payment method, ask a lawyer if they accept credit card payments. If they say no, keep looking for a different option.

Just keep in mind that credit cards may have higher interest rates than a personal loan. Check your credit card’s APR to calculate how much you might owe in interest if you don’t pay off your credit card balance quickly.

Legal Payment Plans

Some law offices may offer payment plans to their clients. In this case, you would pay your lawyer in monthly installments rather than in one lump sum.

While not every lawyer offers this option, it never hurts to ask. This is another question you can ask upfront before hiring a lawyer.

Crowdfunding

Asking friends and family for financial help is never easy, but loved ones may chip in if you’re in a bind.

Alternatively, you can seek a wider net of potential benefactors by crowdfunding on social media or using official crowdfund platforms. Just keep in mind that such platforms often keep a percentage of the funds as payment.

The Takeaway

Whether you’re adopting a child, getting a divorce, fighting criminal charges, or suing a person or business as a victim, enlisting the help of a lawyer can give you peace of mind. But it will cost you — the average lawyer charges $341 an hour. The good news is, you have options when it comes to paying for costly legal fees, including paying with a credit card, going on a payment plan with your attorney, or asking loved ones for the money. A personal loan may also be a worthwhile avenue to explore.

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

FAQ

Is it legal to take out a loan for legal fees?

Yes, it is legal to take out a loan for legal fees. Legal funding loans are simply personal loans that you take out with a lender to cover the cost of hiring a lawyer.

Can legal fees be tax deductible?

If you’re a business owner who incurs legal fees for your business, you can deduct the cost on your taxes. This applies to property owners who incur legal fees when renting out their property to tenants. In addition, legal fees related to adopting a child are tax-deductible through the federal adoption tax credit.

Can legal fees be paid in installments?

Many law firms offer payment plans to their clients that allow them to make payments in installments. If your lawyer doesn’t offer this and you can’t pay out of pocket, you can also look for a legal finance loan (a personal loan) to cover the cost. While you’ll pay the lawyer in a lump sum, you’ll pay off the loan in installments.

Photo credit: iStock/Andrii Yalanskyi

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.

SOPL-Q225-011

Curb appeal should always be front of mind when you plan to sell your home and want to attract buyers or boost your resale value. But it can also help make your home a more appealing place to live.

If you’re thinking about upgrading your home’s exterior, consider these smart home remodel projects.

Ideas for Exterior Home Remodel Projects

No matter how beautifully you decorate the inside of your home, the outside offers up the first impression to visitors. These exterior home remodel ideas can be great investments for you as a homeowner, whether or not you’re planning to sell your house right now.

From adding texture to the exterior of your home to swapping out old windows for more contemporary ones to fixing up your front door, a home exterior makeover can be a smart way to make a lasting impact in a short amount of time.

Replace Your Front Door With an Inviting Style

Psychologists say that it takes just seven seconds to make a first impression. This means your front door is one of the first parts of your house that a guest or potential buyer will see and will help set the tone for how they feel about the home in general. Thus, the front door should be one of the first places you focus your energy when tackling exterior renovations of your property.

For an open, light-filled look, consider doors with glass panels. Want more privacy? Use mirrored glass in the side panels, which allows you to see outside but people walking by can’t see in. Frosted glass also offers privacy while diffusing natural light.

The overall cost of installing an exterior door depends on complexity, materials, and where you live; it could run you as little as $150 or as much as $13,800, according to the home services website Angi. But on average, installing an exterior door will cost between $546 to $2,375. Labor alone accounts for roughly one-third of the total cost of the project. So if you’re handy with tools, this could be where you save money.

Even if you choose not to replace the door itself, a fresh coat of paint, updated knob and hinge hardware, and a new doorbell to match can go far in improving the curb appeal of your home’s exterior.

Mix Textures on Your Home’s Exterior

Mixing textures is one way to breathe new life into the exterior of your home. Alternating visual patterns between wood, metal, concrete, and stucco requires some experimentation, but the results can be dramatic.

For a contemporary look, consider mixing multiple textures, which could range from different widths of siding or choosing different types of siding like combining cedar shingles and shiplap in the same color. You can also mix and match levels of gloss, or shapes and lengths of bricks and stone.

For a baseline cost, installed vinyl siding can range in price from $6,370 and $17,615, with the average cost being $11,676. Your costs will depend on the thickness of the siding, how much added style you want as you mix and match textures, the size of your house, how standard the shape of your house is or isn’t, and any added details like moldings, trim, soffits, corners, or vents. If there’s old siding that needs to be removed first, you’ll also want to factor in the additional cost of labor (or consider doing it yourself).

Recommended: How to Track Home Improvement Costs — and Why You Should

Upgrade the Windows

Changing the style of your windows will not only give your home’s exterior a brand-new look, but potentially be more energy-efficient than your current windows. This could end up helping you save money on electric bills, which may be attractive to buyers down the line.

Material selection will dictate the overall cost of new windows. Vinyl, for example, is on the lower end of the price scale, whereas solid wood windows will cost much more.

The cost of new windows also is dependent on the size of each unit, as there are hundreds of common window sizes available. On average, a single window unit runs $150 to $800 with installation costing an additional $60 to $300 per unit. The complexity of the windows also affects pricing, and if you plan to add shutters or new blinds, factor in those costs, too.

Recommended: How Much Does It Cost to Remodel or Renovate a House?

How Much Could Your Home Exterior Makeover Boost Value?

At a minimum, your home exterior makeover can make your house more appealing to the eye, but it also can help give potential buyers assurance that you have maintained the home’s upkeep.

Projects like fixing up the front door are a great place to start, and while you’re replacing your door, you could consider adding a portico or awning as a design element or to protect visitors from the weather. Also, make sure your doorbell is attractive, dovetails with the house’s overall style, and — most importantly — works.

Similar comparative data shows that an upscale window replacement using vinyl can increase a home’s value by an average of 67.1% of its cost. And vinyl siding replacement, on average, boosts home value by 80.2% of the cost.

Funding Your Exterior Home Remodel

Once you have created a plan for exterior improvements, priced out materials, and mapped out a budget, the next item on your agenda should be figuring out the best way to pay for your improvements. If you’ve got the money in savings, then that isn’t an issue. Or, if you plan to use your credit cards but can pay them off in full when the bills arrive, again, you’re squared away.

But using your credit cards when you can’t pay them off relatively quickly can be problematic, as credit card debt can be tricky to pay off. That’s because most credit card companies charge compound interest, which means you’re paying interest on the accrued interest, with the interest continually calculated and added to your balance. What’s more, the interest may typically be compounded daily.

Even if you make minimum payments, the interest just keeps compounding. In fact, it keeps doing so until the balance is paid off completely. If you miss a payment, the situation gets worse, with late fees and penalties often added on.

If you’d like to calculate what you’d actually pay on your remodeling debt, use our credit card interest calculator.

If you decide that it won’t make sense to use a credit card to pay for your remodeling, then consider comparing and contrasting home equity lines of credit versus home improvement loans, which is a kind of lump-sum personal loan. Under certain circumstances, a home equity line of credit (HELOC) may make sense; for example, if you have significant equity in your home, plan to borrow a large amount of money and/or want the potential tax benefits.

Benefits of choosing a home improvement loan include:

•   You won’t tie up any equity in your home.

•   Fees are likely to be less, and maybe you won’t have to pay any fees at all

•   Application and approval processes are typically faster than with a HELOC

Recommended: How Much Does It Cost to Remodel or Renovate a House?

What Bedroom Style Is Right For You Quiz

The Takeaway

Exterior home remodel projects can be a way to increase your house’s curb appeal while also adding value. They also are often the quickest way to turn a real estate investment into long-term value. Exterior home projects can be as simple as adding a fresh coat of paint to your existing front door or as complex as replacing all the windows in your house to be both contemporary and more energy efficient. At the very least, tackling these smart exterior home remodel ideas should help you down the line when you decide to sell your house.

Of course, the more involved a project is, the more expensive it can be. If you need help financing an exterior home remodeling project, you have options, including using cash, using a credit card and paying off the balance quickly, or taking out 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. See your rate in minutes.

FAQ

Which exterior renovation adds the most value to a house?

In general, one upgrade that provides the best ROI is replacing your roof. It’s a pricey project — homeowners can expect to pay an average of $9,513. But according to the home services website Angi, you could see an ROI of 20% to 50%. Other renovations that often add the most value to a house include adding a new garage door, adding new vinyl siding, or replacing older windows with new ones made of vinyl.

Which home improvements are least likely to increase the value of your home?

Planning to make some changes before you sell your home? According to Zillow, certain projects might not be worth the investment. Examples include adding a walk-in closet, adding a deck, turning a garage into a bedroom, and installing an in-ground swimming pool.

Which room is the most expensive to renovate?

In many cases, the kitchen is the most expensive room in the house to renovate. The average kitchen remodel costs between $14,567 and $41,962 or higher, according to HomeAdvisor. Plumbing, electrical, and choice of appliances and materials are all factors that can impact your overall cost.

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.

SOPL-Q225-025

A personal loan is a type of loan offered by many banks, credit unions, and online lenders, and there are an array of options to suit different needs. Personal loans typically don’t specify how you can use the lump sum of cash you receive, which means the money could go toward anything from medical debt to wedding costs to home renovation expenses.

Deciding which kind of personal loan best suits your needs can depend on such factors as how much money you plan to borrow, how soon you plan to pay it back, and your creditworthiness and income. To make the best selection, learn more about the different types of personal loans available.

1. Unsecured Personal Loan

A common type of personal loan is an unsecured personal loan. This means there’s no collateral required to back up the loan, which can make them riskier for lenders. Approval and interest rates for unsecured personal loans are generally based on a person’s income and credit score, but other factors may apply. In terms of how your credit score impacts a loan, you can expect higher credit scores to snag more favorable (or lower) interest rates.

2. Secured Personal Loan

Unlike an unsecured loan, there is some sort of collateral backing up a secured personal loan. For example, think of it working in the same way a home mortgage does — if the borrower does not make payments, the bank or lender can seize the asset (in this case, the home) that was used to secure the loan.

In terms of accessing this kind of personal loan, collateral could include such assets as:

•   Cash in the bank

•   Real estate

•   Jewelry, art, antiques

•   A car or boat

•   Stocks, bonds, insurance policies

Since secured loans involve collateral, lenders often view them as less risky than their unsecured counterparts. This can mean that secured personal loans might offer a lower interest rate than a comparable unsecured loan.

Here’s a comparison of some of the features of unsecured and secured personal loans:

Recommended: Choosing Between a Secured and Unsecured Personal Loan

3. Fixed Rate Loan

A personal loan with a fixed interest rate will have the same interest rate for the life of the loan. This means you’ll have the same fixed payment each month and, based on your scheduled payments, can know upfront how much interest you’ll pay over the life of the loan. This can help people budget appropriately as they put funds towards the common uses for personal loans, such as a major dental bill or travel plans.

4. Variable Rate Loan

On the other hand, the interest rate on a variable-rate loan may change over the life of the loan, fluctuating based on the prevailing short-term interest rates. Typically, the starting interest rate on a variable-rate loan will be lower than on a fixed-rate loan, but the interest rate is likely to change as time passes. Variable-rate loans are generally tied to well-known indexes.

If you’re trying to decide on a variable- or fixed-rate personal loan, this summary might be helpful (you might also consider crunching the numbers using a personal loan calculator):

5. Debt Consolidation Loan

This type of personal loan refinances existing debts into one new loan. Ideally, the interest rate on this new debt consolidation loan would be lower than the interest rate on the outstanding debt. This would allow you to spend less in interest over the life of the loan.

With a debt consolidation loan, you may only have to manage one single monthly payment versus, say, paying multiple credit card bills. This streamlining of monthly debt payments can be another major perk of this type of loan.

6. Cosigned Loan

If you’re struggling to get approved for a personal loan on your own, there are circumstances in which you can apply for a loan with a cosigner. A cosigner is someone who helps you qualify for the loan but does not have ownership over the loan. In the event that you are unable to make payments on the loan, your cosigner would, however, be responsible.

Co-borrowers and co-applicants are other terms you might hear if you’re interested in borrowing a personal loan with the assistance of a friend or family member.

•   A co-borrower essentially takes out the loan with you. Unlike a cosigner, your co-borrower’s name will also be on the loan, so they’d be equally responsible for making sure payments are made on time.

•   A co-applicant is the person applying for a loan with you. When the loan application is approved, the co-applicant becomes the co-borrower.

Recommended: Typical Personal Loan Requirements

7. Credit Card Cash Advance

Some credit cards offer the option to borrow cash against the card’s total cash advance limit. Doing so is called taking a credit card cash advance. The available cash advance amount may be different than the total available credit for purchases — that information is typically included on each credit card statement.

Depending on the credit card company’s policy, there are a few ways to secure a cash advance: You could use your credit card at an ATM to withdraw money, borrow a cash advance from a credit union or bank, or request a cash advance from the credit card company directly.

Cash advances typically have some of the highest interest rates around, higher still than your regular annual percentage rate (APR). There are often additional credit card fees associated with a cash advance transaction. Check your credit card disclosure terms for full details before taking a cash advance.

8. Medical Loan

A medical loan is usually an unsecured loan that can be applied to medical expenses, such as out-of-pocket costs, copays, hospital bills, and the fees for emergency and elective procedures, among others. You can often find them through banks and online lenders, and they may offer features that make them appropriate for those recovering from health issues, such a period of 0% interest. Check the terms carefully, though, to make sure you understand what interest rate will be charged after the introductory period.

You may also see family planning loans, which help cover the cost of fertility and IVF expenses.

9. Vacation Loan

Hoping to take a big trip with your partner to Paris? Or dreaming of going to Disney with your toddler and your parents? A vacation loan is a kind of personal loan that is designed to fill that need. When you want to travel, have an adventure, or get away from it all but don’t have the cash, this sort of loan provides financing.

As with other personal loans, you’ll need to qualify based on your credit history, income, and other factors.

10. Wedding Loan

Wedding loans are a kind of personal loan designed to finance the big day. These are typically unsecured installment loans that can help a couple pay for their venue, catering, music, photography and videography, flowers, decor, and the wedding dress and rings.

You receive the lump sum of cash, and then pay it back over time, with interest.

The Takeaway

Personal loans can offer a source of cash to be used in a variety of ways. There are various kinds of loans available, such as secured and unsecured, variable and fixed interest rate, and more. Doing research on these different sources of funding can help you make an educated decision about whether a personal loan is right for you and, if so, which type suits your needs best.

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

FAQ

How many types of personal loans are there?

There are many different types of personal loans. Some popular options include secured vs. unsecured (meaning no collateral is needed) loans; fixed- vs. variable-rate loans; and personal loans designed for specific purposes, such as a debt consolidation, medical, or credit builder loan.

How much is a $20,000 loan for 5 years?

The cost of a $20,000 loan for five years will depend on a variety of factors, such as the interest rate and whether it’s fixed or variable. As an example, a personal loan of $20,000 for 5 years at a fixed rate of 8% would have a monthly payment of $472 for a total repayment of $23,584, meaning you’d pay $3,584 in interest over the life of the loan.

What is the largest personal loan I can get?

How large a personal loan you can get will usually depend on your credit score, income, and debt-to-income (DTI) ratio. Many lenders offer personal loans at up to $40,000–$50,000, but some may approve loans for up to $100,000 or even higher if a prospective borrower qualifies.

Is a personal line of credit the same as a personal loan?

A personal line of credit is different from a personal loan. With a personal loan, you receive a lump sum of cash and then make installment payments to repay it over time. With a personal line of credit, you are approved up to a certain credit limit, and you can then borrow against and pay back the debt with interest over time, much like a credit card.

Are certain types of personal loans easier to get than others?

Some personal loans may be easier to get than others. For instance, a secured loan can be easier to obtain since it requires collateral, which the lender knows they can claim if the borrower defaults. Also, personal loans for small amounts (say, $1,000) can be easier to obtain than larger sums. It’s also worth noting that personal loans can be easier to get when you have a strong vs. a poor credit score.

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