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There’s no doubt that most Americans love their plastic.

When used responsibly, credit cards can be one way to build credit.

However, many people run into issues when it comes to paying off their credit card balance each month. Some 48% of credit card holders carry some sort of debt from month to month, according to a 2024 Bankrate survey. And as of February 2025, the typical American owed around $6,455 in credit card debt.

Although carrying the balance isn’t necessarily an issue, not paying it off every month may cause interest to accrue. That in turn could make a balance more challenging to pay off.

But by understanding the effects of carrying a balance, you can start to figure out a strategy to paying off your credit card debt.

The Effects of Carrying a Credit Card Balance

Carrying a balance on a credit card comes with some potential financial consequences. Let’s take a look at them.

Impact on Credit Score

Can your credit score take a hit when you fail to pay off a credit card balance? Possibly. Nearly one-third (30%) of your FICO® Score is based on how much you owe to creditors, which is often referred to as a credit utilization ratio. This ratio is the amount of revolving credit you’re currently using divided by the total amount of revolving credit available to you.

You may notice that when you carry a balance on a credit card, your credit score could dip by a few points. Often, the drop is temporary and your score may start to go up again once you pay off the balance.

Accrued Interest

If you’re carrying a credit card balance, you may also want to be mindful of accrued interest. This is the amount of interest that builds up in between payments. Most credit cards charge compounding interest, and the majority of credit cards compound interest daily. Therefore, if anything is owed after the payment due date, the balance can easily start climbing.

The amount that accrues will depend on the balance and the interest rate. You can use a credit card interest calculator to get an estimate of how much interest has added to your balance.

If the balance is paid off in full, interest won’t accrue (not until the next charge is made, at least).

Strategies to Help Reduce Credit Card Debt

Depending on how much you owe, paying off credit card debt can seem like an uphill battle. But fortunately, with planning, commitment, and tools, it can be achieved. Here are a few strategies you may want to consider.

Budget to Repay Credit Card Debt

When you’re looking to pay down credit card debt, rethinking or creating a budget can be a natural starting point. You can record this information in a spreadsheet or a spending tracker app, whichever is easier for you.

You may also want to incorporate a debt repayment strategy into your budget to accelerate the process. If you’re someone who is motivated by seeing fast results, you may want to consider the snowball method of repayment. This strategy prioritizes paying off credit cards with the smallest balances first. Once you pay down the smallest balance, you move on to the second smallest balance.

The avalanche approach, on the other hand, calls for prioritizing paying down credit card balances with the highest interest rates. Once you pay off the balance with the highest interest rate, you move on to the next highest interest rate, continuing until all debt is repaid (while making at least minimum payments on all other balances, of course).

Both debt repayment strategies have advantages and disadvantages. It’s a good idea to consider which method you’ll be most able to stick with, or use them as inspiration to create a plan that will work for you.

Open a Balance Transfer Credit Card

Another option to consider is to open a balance transfer credit card. The idea is to open a new credit card with an introductory interest rate that is significantly lower than your current credit card interest rate. This can allow you to pay off your credit card balance at a lower rate as long as you pay it off in the introductory time frame.

You can potentially pay off your balance within a shorter time while saving money on interest. It’s important to note that the low-interest rate on balance transfer credit cards is usually only offered for an introductory period, usually between six and 18 months. Once that period expires, the rates typically increase.

If you plan to repay the balance before the introductory period ends, a balance transfer credit card might be worth pursuing. Make sure to account for a balance transfer fee, which is usually 3% to 5%.

As with any other credit card application, your credit history will determine if you qualify and what rate you’ll receive. If your credit isn’t ideal, this might not be an option.

Make Extra Payments

If you don’t want to open a new credit card, you can make extra payments to reduce interest costs. Again, credit card interest is typically calculated on the account’s daily average balance. Therefore, by making one or more extra payments throughout the month, you can lower the total interest accrued by the time your bill is due.

Even if you can only put a few extra dollars toward each payment, it can help minimize the interest cost.

Use a Personal Loan

If you have high-interest credit card debt, a debt consolidation loan could be an option worth considering. Consolidating your debt into a single loan may help streamline finances and include other benefits, but it isn’t a magic cure-all. A loan will not erase your debt. However, it might help you get to a fixed monthly payment and reduced interest rates.

It’s important to compare rates and understand how a new personal loan could pay off in the long run. If your monthly payment is lower because the loan term is longer, for example, it might not be a good strategy, because it means you may be making more interest payments and therefore paying more over the life of the loan.

The Takeaway

Having a balance on a credit card doesn’t pose an issue, but not paying it off every month can have an impact on your finances. Interest can accrue, which in turn could make a balance more challenging to pay off. And depending on your credit utilization ratio, your credit score could temporarily hit if you carry debt from one month to the next.

If you’re looking to reduce a credit card balance, there are strategies that can help. Examples include creating a budget, making extra payments, or opening a balance transfer credit card. If you have high-interest credit card debt, a debt consolidation loan could help streamline finances into a fixed monthly payment.

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 better to pay credit cards in full or carry a balance?

Generally speaking, it’s a good idea to pay off your credit card balance in full each month, if you’re able to. Doing so helps you avoid paying interest charges and accumulating debt.

Is it bad to keep a $0 balance on a credit card?

Having a zero balance on your credit card isn’t a bad thing. In fact, consistently paying off your balance can be a sign to lenders that you are using your credit cards responsibly.

Does carrying a balance affect my credit score?

Short answer: Yes. Carrying a balance can impact your credit score. If you have a large balance, for example, your credit utilization rate may go up, which can negatively impact your credit score.

About the author

Ashley Kilroy

Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.

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-Q225-015

College is a time for students to learn and grow, both academically and in their personal development. As a parent, you want what’s best for your child, and that includes helping them pick the right college. Finding the right school for your child may require some time and research, and you’ll likely want to make sure you leave the final decision up to your child.

As you consider various factors, it’s important to zero in on the ones that matter the most for your student. Keep reading for more on finding the right college for your child, including how to pay for college.

How to Find the Right College for Your Child

Depending on how much time you have to invest in the process, here are some tips that can help you and your child pick the right college for them.

1. Make a List

Start by creating a broad list of colleges for which you and your child might be a good fit. Consider both local and out-of-state colleges, and don’t be afraid to let your student dream big.

Every student is different, so it’s worth curating a diverse list of options to consider. Typically, various rules of thumb suggest students apply to a mix of “target,” “reach,” and “safety” schools. This could be a good way to organize your child’s initial list of schools.

As you work through the other steps in the process and learn more about each school, you can refine the list.

2. Talk About What They Want to Study

Your high schooler may not yet know for sure what they want to do when they’re older, but they may already have an idea of what direction they want to go. It may be worth having an initial conversation with your child about choosing a major.

Once you have an idea of what they’re interested in, you can look at the colleges on your child’s list that excel in those areas of study. If there aren’t many, you could always consider adding more.

Recommended: The Most Rewarding Job in America

3. Consider the Cost

A college education can get expensive, and some universities charge much more than others. If your child already has an idea of which schools they want to apply for or have already received their admissions letters, a key step is to dig into the cost of attendance for each school.

This step is important regardless of whether you’re planning to help your child cover the cost of their education. Finding a college with good value can reduce how much your student may need to borrow in student loans during their stay.

The cost of attendance isn’t the only important cost factor, however. If your child has already received an admission letter, consider whether there’s a financial aid package included, including grants and scholarships. If there is, calculate the total amount you or your child would have to pay after applying that financial aid to get the net price.

4. Talk About Location

Discuss with your child about whether they would prefer a college close to home or far away. Each person is different in this regard, and your teen’s desires on the matter are important.

That said, sending a child off to college, especially out-of-state, can be a stressful experience for parents. It’s normal to feel anxious about this milestone in your child’s life, but avoid allowing your anxiety to dictate your role in the process.

Recommended: Helping Your Child with Homesickness in College

5. Learn About the Environment

Finding the right college for your child isn’t just about the school itself; it’s also about the environment the school provides. This is where it can be worth making a trip to visit college campuses with your child to get a feel of the place — or at least to take virtual tours.

It may also be worthwhile to look into some of the extracurricular activities the schools provide. If your child is athletic, for instance, ask about intramural sports. If they want to study abroad, look into the quality of each school’s international programs.

Another factor to consider that can affect your child’s experience is classroom size. If you think your child may need more attention, a school where every class is in an auditorium with hundreds of other students may not be the right one.

6. Give Your Child Time

Picking a college may be easy for some students, but it can take time for others. If your teen is having a hard time, it can be a fine line between supporting them and annoying them. Finding the right balance can be tricky.

As a happy medium, consider choosing a night each week to discuss college plans with your teen. Ask about their thought process and offer help if they’re feeling stuck.

It can be frustrating to sit back and watch your child struggle, but allowing them to make the decision for themselves can help them develop the independence they’ll need in the coming months and years.

7. Be Supportive

No matter what your child decides, they need your support more than anything else. Remember that you’re finding the right college for your child, not for you.

And keep in mind that your child may choose to transfer at some point in the future if they decide the school is no longer a good fit.

Regardless of what happens, your support can give them the confidence they need to make their college experience a good one.

Recommended: College Planning Guide to Parents

Financing Your Child’s College

Once your child has picked a college, talk about how they’re going to finance their education. If you’ve managed to set money aside in a 529 plan or can help with your current income and savings, discuss the numbers and whether your teen will need to pick up some of the slack.

Also, talk about student loans and how to use them wisely, as well as how to reduce how much they’ll need to borrow. Ideas include applying for scholarships and grants, working part-time, and borrowing only what they need.

Other options to look into include federal Parent PLUS Loans or parent student loans to help fund their education. If all federal aid options have been exhausted, students can also turn to private student loans.

Recommended: Scholarship Search Tool

The Takeaway

Choosing the right college for your child is a collaborative journey that balances academic aspirations, financial considerations, and personal growth. The ideal college is one where your child feels challenged, supported, and inspired to thrive. By focusing on what matters most to them and maintaining open communication, you can help ensure they embark on a fulfilling college experience.

To finance your child’s college education, you can rely on cash savings, scholarships, grants, federal student loans, and private student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

How can parents and students begin the college search process?

Start by building a broad list of colleges, including public, private, in-state, and out-of-state options. Research academic programs, campus culture, and admissions criteria. Include safety, match, and reach schools to provide flexibility and realistic choices. Narrow the list through visits, conversations, and further research together as a team.

What financial factors should be considered when selecting a college?

Families should compare tuition, fees, housing, and other costs, as well as the availability of financial aid, scholarships, and grants. Understanding each school’s net price — what you actually pay after aid — is key. Consider long-term implications, like student loan debt and affordability over four years, when making decisions.

How does location influence the college decision?

Location affects everything from travel expenses and weather to social life and access to internships. A student may thrive in an urban campus with industry opportunities or prefer a rural, close-knit environment. Being honest about preferences and visiting campuses can help determine the best geographic and cultural fit.

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

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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.

SOISL-Q225-014

Identity theft happens when someone steals your personal information and uses it to take money out of your bank account, open credit accounts in your name, or receive benefits (such as employment, insurance or housing benefits). Identity theft can have a negative impact on your finances, as well as your credit. And it can happen to anyone, regardless of age or income.

Fortunately, there are many things you can do to protect yourself from identity theft and minimize the fallout if your personal or account information ever does get compromised. Read on to learn what steps you can take if you think your identity has been stolen or notice any fraudulent activity on any of your financial accounts.

Contacting Your Creditors

You’ll want to report any potentially fraudulent credit card activity to the creditor involved as quickly as possible. This can help stop any further fraudulent use of your card and also limit your liability for any unauthorized charges. There may be a phone number printed on the back of the card for this purpose.

You may also want to review the last few months of card statements carefully, identify any transactions you believe to be fraudulent, and write a follow-up letter to the credit card issuer with these details and copies of your statements.

There are federal protections provided to consumers in the case of credit card fraud. A consumer’s liability is limited to the lesser of $50 or the amount of the theft if the actual credit card was used fraudulently. If only the credit card number was used fraudulently, there is no consumer liability.

For debit card or ATM card fraud, the quicker you report the card loss, the less they are potentially liable for. If you report a missing debit or ATM card before any unauthorized charges are made, you’ll have zero liability. The amounts increase the longer the missing card goes unreported.

•  Maximum loss is $50 if the card is reported within two business days of the loss or theft.

•  Maximum loss is $500 if the loss or theft is reported more than two business days, but less than 60 calendar days after the account statement is sent to the account holder.

•  If the loss is reported more than 60 calendar days after the statement is sent, you can be responsible for all the money taken from your account. If money from linked accounts was also stolen, the maximum loss can be more than the account balance.

•  If the ATM or debit card number, but not the physical card, was used to make unauthorized charges, the account holder is not liable for those charges if the fraud is reported within 60 days of the account statement being sent.

Recommended: Different Types of Bank Account Fraud

Reporting Identity Fraud to the FTC

If you think your social security number or other important personal information has been stolen and used fraudulently, you’ll want to report it to the Federal Trade Commission (FTC) online at IdentityTheft.gov.

Once you create an account and file an identity theft report, you’ll receive a personalized recovery plan with tools like form letters to send to credit bureaus. The site also allows you to update your identity theft account and track your progress. If you were affected by a company-specific data breach, you can get advice from the FTC on how to protect yourself.

When you file an identity theft report, you’ll also get an FTC identity theft affidavit that you can print out and retain it for your records. You may need this affidavit if you file a police report. Banks and credit card companies may also request a copy of this FTC report.

Consider Filing a Police Report

If you believe you know who was responsible for the fraudulent activity, or can provide evidence for an investigation, you may want to file a police report. Filing a police report might also be necessary if a creditor requires the report as part of its investigation. Having a police report can also be helpful when requesting an extended fraud alert on your credit reports (more on that below).

Recommended: How Credit Card Frauds Are Investigated and Caught

Notifying Credit Bureaus

You may also want to contact one of the three credit major consumer bureaus — Experian®, TransUnion®, and Equifax® — and ask them to place a fraud alert on your credit report. This notifies lenders that you’ve been a victim of identity theft so they can take extra measures to verify your identity when they get an application for credit in your name. Contacting just one of the credit bureaus is fine. That bureau will contact the other two automatically.

Fraud alerts are free. If you have a police report or a FTC Identity Theft Report, you may be able to get a free extended fraud alert, which lasts seven years.

You can also request a freeze or lock on your credit report by contacting each credit bureau individually. Putting a freeze on a credit report blocks all access to the report, making it more difficult for a bad actor to use information fraudulently. Credit freezes are regulated by state laws, and credit bureaus are required to offer credit freezes at no charge. A credit lock also acts to protect your financial information from potential identity thieves, but is a program offered by an individual company, which may charge a monthly fee for the service. Credit locks are typically not regulated by state laws.

Disputing Errors Caused by Identity Theft

Whether you’ve been a victim of identity theft or not, it’s a good idea to periodically request copies of your credit report and read them carefully, checking for any errors or evidence of fraud.

Having misinformation on your reports can have a negative impact on your credit, making it harder for you to qualify for credit cards, mortgages, and personal loans with favorable terms.

Federal law allows consumers to request a credit report at no charge from each of the three credit bureaus once a week via AnnualCreditReport.com. If you notice an error on a credit report, you can contact that credit bureau to file a dispute. All three major credit bureaus provide information on their websites for filing a dispute. It can take up to 30 days for the results of any investigation to be made available.

The Takeaway

Identity theft can happen to anyone, and it can wreak havoc on your finances. However, if any of your personal or financial account information is stolen and used fraudulently, don’t panic. If you report the fraudulent transaction to the appropriate financial institution quickly, you likely won’t be responsible for the charge or loss. You can also help stop any further fraud by locking or freezing your credit, filing an identity theft report with the FTC, and filing a police report.

If you’re thinking about applying for an online personal loan but are hesitant to share your information, know that SoFi takes the privacy and security of its members’ financial and personal information very seriously. We maintain industry-standard technical and physical safeguards designed to protect your information’s confidentiality and integrity. Also keep in mind that checking your personal rate won’t affect your credit.

FAQ

How do I check if my identity has been stolen?

If you suspect your identity has been stolen, check your credit reports, bank statements, and mail for unfamiliar charges, accounts, or debt collection notices. You may also want to consider requesting a fraud alert or credit freeze with the three main credit bureaus.

What can I do if someone filed a tax return using my Social Security number?

A good first step is to report identity theft to the IRS. This typically involves filling out the identity theft affidavit (Form 14039) and submitting it to the IRS online, by mail, or by fax. You can also call the IRS at 800-908-4490 with questions for help resolving tax account issues that resulted from identity theft.

How common is identity theft in the U.S.?

Unfortunately, identity theft is common. According to Federal Trade Commission data released in 2025, the agency received fraud reports from 2.6 million consumers in 2024. More than $12.5 billion were lost to fraud in 2024, which is a 25% increase over the prior year.

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-Q225-014

There’s almost nothing as ominous as the phrase “finals week.” Cue the thoughts of cramming, sleep deprivation, and high anxiety. The stress the two words can induce is almost universal among college students.

However, students can both survive and succeed during finals week as long as they prepare. Here are four tips to help students get ready for finals week.

1. Get Organized

Getting organized is a great way to feel in control before finals begin. College finals week doesn’t have to blindside students, forcing them into all-nighters and sleepovers in the library. There are a couple of things students can do to get set up for finals week.

Memorize Your Finals Schedule

The dates for finals week are usually available from the beginning of the semester. This may vary by school, but students can sometimes find their finals information in their syllabus.

Memorizing the schedule and writing it down will ensure that students don’t forget to study for any exams and can budget enough time for each test.

Make a Study Plan

Once students have their finals schedule memorized, they can start mapping out their study strategy. Students can base their study tips on which finals will require the most studying and the dates they occur.

It is recommended that students avoid long cram sessions. Studying ahead of time in shorter increments helps to retain information. This is why mapping out a study plan ahead of time can be helpful.

When making a plan, there are different strategies students can use. They can create a schedule based on the difficulty level of the tests, choosing to set aside more time to study for the finals that will be the most challenging for them.

They can also plan their schedule based on the order of their finals, saving more time later on to study for the last exams.

Having a plan can help students avoid cramming, spending too much time studying for one final over another, or forgetting to study for one altogether.

Recommended: Do Grades Affect Financial Aid?

2. Keep Your Body Healthy

As tempting as it is to stay in the library 24/7 living on ramen and coffee, staying physically healthy during finals week is important for bringing home those good grades.

Eating a balanced diet — yes, that means fruits and veggies too, before and during finals week — can help students stay focused and avoid getting sick during finals.

Drinking water is also a good idea when plotting to ace those finals. Dehydration can have many negative effects, like tiredness, headaches, reduced alertness, and diminished concentration, which could affect test performance. Even drinking water during an exam can lead to better performance.

Another important piece of staying healthy is getting enough sleep. It’s common to see students pulling all-nighters in the library during finals week, but a lack of sleep can result in a worse memory and therefore, an inability to remember what has been studied. Missing out on a full night’s sleep can be detrimental to students’ ability to pass their exams.

Exercising is also often deprioritized during finals week. Students are so focused on studying that it’s easy to skip that 30-minute workout. Exercise, though, needs to find a place in a hectic schedule because it will benefit a student during this stressful time. Exercise can both lower stress and maintain high-level brain functioning, leading to a better chance of crushing those exams.

3. Keep Your Mind Healthy

Maintaining good mental health during the school year may already be a challenge, but during finals week, it’s especially important to pay attention to and take care of mental health.

Even students who don’t regularly have anxiety may experience it during finals week. There are many calming techniques available to ease anxiety, and each student should see what feels best. Here are a few techniques they can try.

•   Breathing. Breathing techniques can help with anxiety or stress. Students should look up a few simple ones and see what works best for them.

•   Grounding. This is a technique where students focus on their senses, naming five things they can see, four things they can feel, three things they can hear, two things they can smell, and one thing they can taste. Doing this can reduce anxiety or panic and help students stay focused.

•   Meditation. Taking up a daily meditation practice before studying and before exams start could help a person stay calm during stressful events. There are plenty of meditation apps available, as well as guided meditations online.

Another piece of maintaining mental health during finals week is taking breaks. Breaks are beneficial both for studying ability and mental health. Taking a break to do something enjoyable can decrease stress and keep a student’s mind in a good place.

Anyone experiencing high levels of anxiety can reach out to school counselors and see about making an appointment. Students may also benefit from talking about their stress with friends, family members, or professors. Leaning on a social support network during this stressful time may alleviate some of the nervousness that comes with finals week.

Lastly, students should ask for help if they need it. Most colleges have mental health services on campus.

4. Team Up

Students should remember that they’re not going through finals alone. They have a whole class of students struggling right alongside them, which can be a huge asset come finals week.

Instead of studying alone, students can form study groups. Study groups can help students be better prepared for finals. There may be some in the class who understand the material better and can teach it to others.

This helps both the student struggling and the student teaching. The struggling student gets new explanations for tricky material that may be easier to understand. The teaching student solidifies the material in their memory even more by explaining it to others.

Being in a study group can also help with accountability, so students are less likely to slack off and stop studying.

Those who need further support during finals week can visit their professors during office hours or consider getting a tutor. Professors want to see their students succeed, and though they can’t give answers to exam questions, they can help explain parts of the material that someone is struggling with.

Recommended: The Ultimate Guide to Studying in College

No Pay, No Gain

Wait, so college students are paying to suffer through finals week? Technically, yes, because college costs money, of course, and even if the nightmare of finals week is still far off, it’s never too soon for students to start sorting out how they’re going to finance their entire college education.

There’s more than one resource available to students when it comes to funding college expenses. Here are a few, broken down in an easy-to-understand way.

Federal Aid

Students already in college might be familiar with the Free Application for Federal Student Aid, commonly known as the FAFSA®. Eligibility for undergraduates is usually based on parents’ income. Federal aid can come in the form of grants or loans. Grants usually don’t need to be repaid, but loans do.

Federal loans usually come with benefits that private loans don’t, such as income-driven repayments and lower fixed rates. It’s recommended that if students need to take out loans, they use federal loans before turning to private loans.

Is the FAFSA® one and done? Not at all. You must complete the application every year that you attend school if you hope to gain federal aid, and on time.

Free Money

The world of scholarships is vast, though it can take some digging to find scholarships that students are eligible for. Scholarships provide money that usually doesn’t need to be repaid.

Scholarships can be need-based or merit-based, with the eligibility requirements different for each one. Scholarships come from colleges, corporations, local community organizations, religious organizations, and more.

Students might want to check if their college has any information available on scholarships. Usually, schools have a scholarship office or information about scholarships at their financial aid office.

Another Option

Private student loans are another way to help fund the college experience when federal aid doesn’t cover all the bases, a student doesn’t qualify for federal aid, or someone has reached a limit on federal direct loans.

The eligibility for private student loans is usually based on a student’s income and credit history, or that of a student loan cosigner. Each lender will have its own terms, including the interest rate and repayment methods, which merit research.

The Takeaway

​Finals week can be daunting, but with the right strategies, students can navigate it successfully. By staying organized, maintaining physical and mental well-being, collaborating with peers, and seeking academic support, students can enhance their performance and reduce stress during this critical period.

It’s also essential to consider the financial aspects of college. While scholarships, grants, and federal aid are primary resources, they may not cover all expenses.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

Why is organizing your finals schedule important?

Creating a finals schedule helps you manage time effectively and reduces last-minute stress. By mapping out exam dates and study times, you can prioritize more challenging subjects and ensure balanced, thorough preparation for each test.

How does physical health impact academic performance during finals?

Maintaining physical health supports focus, memory, and overall performance. Getting enough sleep, eating nutritious meals, staying hydrated, and exercising can help your brain function optimally—avoiding burnout and boosting energy during study sessions and exams.

What are some ways students can manage stress during finals week?

To manage stress, students can practice mindfulness techniques such as deep breathing or meditation, take regular breaks, and reach out to friends or campus counselors for support. These actions help prevent overwhelm and maintain emotional balance.

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SOISL-Q225-015

That’s a good question. And the short answer, for now, is that a 2024 legal settlement created sweeping change to the real estate industry, putting the protocol for paying agents in flux. Planning to buy or sell a home in the near future? You’ll want to read up so you don’t overpay.

How Do Real Estate Agents Get Paid?

For agents — on the seller’s or buyer’s side — it’s long been business as usual to receive compensation via commission, as opposed to a set fee. Sellers typically paid commissions of 5% to 6% of a house’s price after what is known as the “closing” of a home they sold, and that money was split between the seller’s and buyer’s agents, plus other pros involved in the transaction. The higher the sales price, the more agents got paid.

But in 2024, the National Association of Realtors® (NAR), a trade association, and a number of real estate brokerages, settled a group of lawsuits. The settlements totaled nearly $2 billion. NAR paid $418 million in damages. The payout resulted from a legal filing contending that the real estate commission structure violated antitrust laws. NAR agents, it claimed, were receiving inflated commissions.

The lawsuits brought changes to the way homebuyers and sellers work with real estate agents on home purchases — and the way those agents are compensated.

Agents and Buyers or Sellers

In the lawsuit, homesellers from Missouri alleged that commission rates had been shared secretly and inappropriately among those who stood to profit. The sellers stated that the exchange of information had resulted in a lack of transparency about who homesellers were responsible for paying, and how much. They also said that this led to agents’ fees being inflated.

The lawsuits sparked NAR to revise protocols for the way homebuyers and -sellers work with real estate agents when a home goes up for sale. NAR Realtors® handle a huge percentage of U.S. home sales, so the reboot may significantly impact their transactions, and agent commissions, going forward. The changes could even save buyers and sellers money — but the details are still shaking out.

How will a Realtor you hire get paid in this new world? If you plan to buy or sell a home, it’s important to ask them, and to understand the details of compensation before entering into an agreement. Most likely, sellers will continue to pay their agents a commission for selling their house. Buyers who want to work with a buyer’s agent may have to pay for that expert’s assistance themselves, but only if the agent won’t receive any other commission.

Let’s take a closer look at how the changes affect costs for both homebuyers and sellers, beginning with examples of Realtors getting paid.

Real Estate Commission: Before the Settlement

We’ll start with how it used to work. Say a home sold for $500,000, with the commission being the formerly typical 6%:

Total commission fee: $500,000 X 6% = $30,000

The commission was generally split evenly between the two sides:

•   Listing agent side = $15,000

•   Buyer’s agent side = $15,000

Real estate agents also shared commissions with brokers who represented them. (A broker is an agent who has an additional license to supervise other agents.) The broker’s fee might have been 1% of the sales price, or $5,000, subtracted from the total to leave the seller’s agent with a commission of $10,000.

•   Listing agent = $10,000 (2% of sales price)

•   Listing agent broker = $5,000 (1% of sales price)

•   Buyer agent = $10,000 (2% of sales price)

•   Buyer agent broker = $5,000 (1% of sales price)

Real Estate Commission: A Changing Approach

For a long time, agent commissions were more or less built into a home’s asking price. The seller’s agent would offer a percentage of the total commission amount to the buyer’s agent, normally mentioning it in the home listing’s fine print on the multiple listing systems (MLS). After closing, the seller’s agent would disperse the fee. That changed a little in 2024, when the court prohibited sellers’ agents from stating the buyers’ agent’s percentage share on the MLS.

The MLS comprises databases of homes for sale that only Realtors, agents, brokers, and other real estate industry people can access — and that is what caused concerns about transparency.

Now, conversations about commissions must take place outside the MLS. Sellers may offer to pay commissions to buyer’s agents, but an agent for the homebuyer may also request a percentage of the home price or a flat fee from their own client. A buyer using an agent is required to have a representation agreement with the agent, defining compensation, before touring homes.

Listing agreements now must specify the amount the seller will pay to the listing agent, as well as what the seller will pay to a buyer’s agent. With these revisions, sellers have some newfound control. They can offer equal commissions to both sides, or different amounts. A seller may decide not to offer a buyer’s agent a commission, leaving the buyer responsible for paying for their services.

An Agent’s Responsibilities

To earn a commission, real estate agents often take on a lot of tasks and responsibilities. Their duties include:

•   Providing market data and helping to set a listing price

•   Placing ads and putting up yard signs

•   Photographing the property

•   Listing the property in the MLS listings database

•   Scheduling showings

•   Placing lock boxes

•   Guiding first-time homebuyers

•   Smoothing over difficult relationships

•   Navigating offers and counter offers

•   Negotiating home contracts

Recommended: How to Find a Real Estate Agent

The State of Agent Commissions

Making a living through commissions can be challenging for real estate agents. But it can also be unmistakably rewarding.

With the changes, average rates of commission among Realtors and agents decreased somewhat, dropping from 5.64 percent to 4.96 percent in early 2025. This might mean a decrease in commission of a few thousand dollars for a median-priced home, according to a RISMedia survey of 1,300 agents.

Sellers’ agents may continue to receive their commissions, negotiated with the seller, who pays the real estate agent commission fee out of the payment they receive when the home sale closes. Since buyers’ agents are no longer entitled to payment from this money, homebuyers may need to negotiate with and pay their agents. This could in some cases make buying a home even more costly.

How Does It All Affect the Bottom Line?

If the sales price of a home is $500,000 and the sellers owe $250,000 on their mortgage, then the commission and other fees would be subtracted from the $250,000 that remains after the sellers pay off their mortgage.

To keep it simple, let’s say the total commission negotiated is 5%:

Total commission fee: $500,000 X 5% = $25,000

•   Listing agent side = $25,000

•   Buyer’s agent side = $?

Buyer’s agent commissions are simply in flux — both how much they should be and where they will come from. This agent’s commission might need to come out of the buyer’s pocket — although word on the street is that some brokers on the seller side have found workarounds.

Can a buyer come out ahead in this changed compensation structure? Maybe. A buyer’s extra costs could be compensated by lower listing prices on homes for sale. But that remains to be seen.

Can You Negotiate Who Pays the Real Estate Agent?

Yes. Realtor fees on both sides are negotiable. These ideas may help you reduce your fee if you are selling your home:

•   Barter. Do you have a photographer friend who can take photos of your home? Offer up skills in exchange for a lower commission.

•   Hire a newer agent. A newer agent may accept a lower commission to gain experience.

•   Pay attention to market conditions. If homes aren’t moving in your market, you may be able to negotiate a lower commission.

Take time to interview potential Realtors using these suggested questions. Be sure the commission stated in the listing agreement matches what you’ve agreed on before you sign.

How Should a Buyer Agent’s Commission Be Set?

If you are in the market for a new home, you may still decide to seek a buyer’s agent to guide you through the process and represent you in closing. Their efforts may be well worth their fee.

Look for an agent with a strong network — they may hear about quiet “whisper listings” before anyone else. Once you’ve chosen someone, be sure to discuss a fee structure and payment process with them before you sign on.

Whether these real estate agents will charge for their time by the hour or bill customers a flat rate — or if some will keep working on commission that is perhaps paid by the buyer — is a developing story under the new rules. But they are quite likely to want to be paid.

In lieu of a commission, buyers’ real estate agents might charge fees for showing homes, shepherding clients through making offers, signing contracts, negotiating inspections, and more. For buyers, this would add to a home’s cost.

Of course, if agent commission fees have all along been a component of a property’s price, then buyers were already paying them. But in that scenario, buyers could cover those baked-in costs with their home mortgage loan. New fees paid by a buyer to the agent would come from the buyer’s pocket.

This switcheroo may lead some homebuyers to think about shopping for a home without an agent’s help. If you go this route, be aware that you’ll need to spend significant time researching potential properties, scheduling viewings, and self-advocating, especially if you are attempting to buy in a seller’s market.

When Do Sellers’ Agents Receive Their Commission?

Sellers’ agents usually receive their commission after the home mortgage loan has been funded and the sale closes. Their brokerage receives a wire with the funds, and the agent’s portion of the commission is released to them shortly thereafter.

What Is Dual Agency?

Dual agency is when a real estate agent represents both the seller and the buyer in a transaction. It must be disclosed to both parties because real estate agents are bound by a fiduciary duty to serve their clients. An agent who represents both seller and buyer will earn more commission.

Buyers faced with having to pay a buyer’s agent out of pocket might choose to look at properties on their own. When they find a home they would like to buy, they may decide to make an offer directly with the listing agent. In this scenario, the listing agent becomes a dual agent. They may accept a lower fee, since they are also getting a commission paid by the seller. It might appear to everyone to streamline the process. It also creates a possible conflict of interest.

Many experts discourage buyers and sellers from entering a dual-agency sale with an agent. It’s also worth noting that the practice is illegal in several states.

Is Paying a Real Estate Commission Worth It for the Seller?

Hiring an agent is not required. And for many sellers, it’s painful to look at the closing documents and see how much of the sales price goes to different agents, title insurance companies, concessions, and so forth. But a lot of sellers find it worthwhile having someone to guide them through the complexities of real estate law, and sensitive issues that the sale of a home creates.

Recommended: How to Buy a House Without a Realtor

Alternatives to a Percentage-Based Commission

There are real estate brokerages that advertise services for a flat fee. Usually, the flat fee is very low and may only include a listing on the MLS with photos. They usually don’t offer to schedule showings or manage the listing in any other way.

The Takeaway

Working with a real estate agent when you’re a buyer requires asking a lot of questions and understanding the terms of compensation before you sign on for representation. You might be tempted to go it alone, and it can be done. But having an agent on your side to help you negotiate can give you peace of mind and, in many cases, help you land a better deal.

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.

FAQ

Do sellers pay Realtor fees?

Yes, sellers pay Realtor fees to the seller’s agent.

How long have the new rules been in place?

The post-settlement NAR rule change became official in August 2024. While aspects of it were immediately implemented, it also left some room for interpretation. New agent practices are slowly rolling out.

How much does a new Realtor make in Illinois?

According to ZipRecruiter.com, the average pay for a real estate agent in Illinois is $83,135. Salaries can range from as low as $58,100 up to $124,519 per year.

Photo credit: iStock/RyanJLane

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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.

SOHL-Q225-018