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Home siding replacement costs typically run around $11,400, though that’s just a ballpark figure. The amount you could pay will depend on factors such as home size, materials, location, and project timing.

While house siding replacement isn’t a cheap solution, it can be a transformative one. After all, as a homeowner, you know that the appearance of your home reflects your style, pride, and investment.

Before you dive headfirst into this exciting project, it’s important to understand house siding replacement costs so you can proceed with confidence.

What Impacts House Siding Replacement Costs?

Numerous factors influence the cost of replacing house siding, including the size and shape of your house. Here are some important ones to keep in mind.

Home Size

Your home size impacts the cost of your project because a larger house requires more siding. The following is an estimate of potential siding costs for different square footage. Remember, if you live in a two-story home, you’ll add 15% to 30% of the total cost. The additional floor means more hours and materials are needed to finish the job.

House Shape

A home with a traditional or simple shape tends to incur lower siding costs. For example, a conventional, square house will likely be less expensive than an H-shaped home when installing siding.

Type of Materials

The material you select for your siding is crucial, and each type has its pros and cons. For example, although bricks cost more than vinyl, they are more durable. So, the higher upfront cost means longevity, while vinyl siding means you could face another siding repair job in several years.

Home Design

Whether your home has multiple stories or gables, for example, the overall design could impact how much you pay to replace the siding. That’s because any differences from a conventional home build could require more time and modified cuts of siding.

Removal of Old Siding

Removing old siding is a possibility when installing new siding. For example, your contractor may want to eliminate pests or rotting material underneath the original siding. On the other hand, if the current siding is in decent condition and you want to cut costs, you may decide to install the new material over the old material.

Condition of Old Siding

Your old siding can increase the project cost if it requires more work to remove. On the other hand, uncomplicated siding removal will help streamline the project.

Time of Year

Generally, homeowners hire contractors during warmer weather. However, some contractors might have deals for homeowners who want work done outside the high season. So, timing your project wisely could save you hundreds or thousands of dollars.

Location

As with other exterior home remodeling projects, location plays a role in how expensive it is to replace your house siding. For instance, this list demonstrates the differences across the country:

Siding Installation Cost: Labor

Labor is an unavoidable cost when replacing house siding. The materials, complexity of the job, and your region will affect labor costs. Typically, you’ll pay between $1 and $15 per square foot, with $4 per square foot being the most common rate. So, siding installation costs for labor for a 1,500-square-foot house will likely cost about $6,000.

Permit Costs

Your municipality may also require you to obtain a permit from your county and/or state before you begin work on replacing your house siding. Building permits cost between $150 and $3,000, depending on your location and project scope. However, in some regions, permits aren’t mandatory for minor projects, so ask your county or a contractor before applying for one.

Siding Costs by Type

The type of siding is another major influence on your total project cost. Here’s a breakdown of common materials and their average price:

Vinyl

Replacing house siding with vinyl costs $2 to $13 per square foot. Plus, it isn’t challenging to install, and provides dozens of color options. However, it may dent easily and is more susceptible to weather damage than other types. For example, storms and extreme temperatures can make vinyl deteriorate quickly. You can expect vinyl siding to last between 20 and 40 years.

Wood

Wood costs $1 to $15 per square foot, making it an affordable siding option. While it’s vulnerable to pests, water, and rot, its unique aesthetic can be desirable to homeowners. Plus, certain types of wood, such as cedar, can have a higher resistance to damage. Remember, wood siding requires paint jobs and chemical treatments every five years or so to prevent degradation. Wood siding that’s been well cared for can last 20 to 40 years.

Engineered Wood

Costing between $1 and $6 per square foot, engineered wood can be an attractive choice for those on a budget. As the name implies, the manufacturer pretreats the wood to enhance its durability. Mass production methods drive down the cost, and engineered wood needs paint less frequently than conventional wood.

In addition, DIYers often use this material because of its straightforward installation. However, faulty installation can result in moisture damage, so it may be best to hire a contractor. With the right installation technique and proper care, engineered wood lasts between 20 and 40 years.

Aluminum

Another low-cost option, aluminum siding costs $3 to $6 per square foot. This material helps with temperature control and is resistant to temperature changes, rust, and pests. However, it can produce loud sounds during storms and can develop scrapes and discoloration. As with the previous options, aluminum siding lasts 20 to 40 years.

Fiber Cement

Although you could mistake this material’s appearance for wood, fiber cement tends to stand up better to insects and the elements. It needs less care and painting than wood as well. However, because it is made of cement bound by cellulose fibers, its weight can be a drawback. The siding’s price ranges from $5 to $14 per square foot and will last about 50 years.

Brick

When you change the siding on a house to brick siding, it costs $10 to $20 per square foot and provides a solid, traditional look. While heavier than other materials, brick is touted for its resilience and longevity. Brick siding will last 100 years or more.

Stone

Usually the most expensive option, stone siding costs $7 to $30 per square foot. It provides a dignified, stately aesthetic and ultimate sturdiness. Unlike wood or vinyl, stone is extremely slow to deteriorate and is impervious to rot and pests. Stone siding lasts at least 100 years.

Stone Veneer

If you like stone but not its cost, stone veneer may offer you the happy medium. It costs $5 to $11 per square foot and looks like natural stone, although it’s a mix of cement, aggregates (like gravel or concrete), and iron molecules for coloring. Stone veneer is an excellent insulating material and lasts between 20 and 75 years.

DIY Home Siding Replacement Cost

Installing new siding by yourself may not be the most suitable DIY endeavor. For starters, there’s the safety of you and your home to consider. Plus, the weight and cumbersome nature of siding make it challenging to handle. And improper installation can result in substantial water damage, insulation problems, or pest infestations.

That said, if you have the expertise, installing siding is feasible, with vinyl being the most doable. Having the necessary tools and securing a construction permit without a contractor’s help can reduce labor costs by $1 to $3 per square foot.

Professional House Siding Replacement Cost

A professional house siding replacement job can cost $2 to $50 per square foot, depending on the materials and the other factors listed above. However, a skilled contractor can provide peace of mind through quality work, not to mention saving you hours sweating in the sun while you install material.

How to Reduce the Cost of Home Siding Replacement

Going with a professional for a house siding replacement project doesn’t have to mean burying yourself in debt. Here’s how to decrease the costs of your project without sacrificing quality:

Research and Compare Quotes from Multiple Contractors

A price comparison between contractors can help you get the best deal. When you’re searching for contractors for your project, referrals are an excellent place to begin. Ask neighbors, family, and friends who recently had siding repairs or replacements for their recommendations. There’s a good chance you’ll find plenty of siding installers in your area, and referrals will help you narrow down your choices.

As you research contractors, it’s wise to reach out to at least three different companies to gather price estimates. Then, request a detailed quote to gauge the pricing options available in your area. When comparing prices, remember that not all contractors solely focus on siding. Some general contractors and handypersons offer siding installation as part of their broader range of services.

To ensure a fair comparison, contact at least two companies specializing in siding and one general contractor. Keep in mind that while a general contractor may be versatile, they may not have the same level of expertise and experience as a dedicated siding professional.

Negotiate with Contractors

You can haggle with contractors to get a discount. For example, you might decide to delay your project until late autumn, when contractors have more gaps in their schedules. Likewise, you can ask for lower prices for tearing off the existing siding yourself or getting the required permit on your own. These tactics could help you shave hundreds off your final bill.

Consider Financing Options

If affordability is keeping you from replacing siding, financing the project can help you get started sooner instead of later. For example, a personal loan is a straightforward option that can get the necessary money in your account within a few days.

In addition, you could leverage your home equity to obtain a home equity loan or home equity line of credit (HELOC). These options turn your equity into cash, meaning they’re helpful for homeowners who have paid off a significant amount of their mortgage. Remember, financing means paying the loan plus interest every month, so it’s best to ensure your budget has the space before you borrow.

What to Consider Prior to Replacing House Siding

Because changing the siding on the house is an investment, you must consider a few things before starting your project. Here’s what to keep top of mind before shopping for siding materials or ripping off the old siding.

HOA Rules

Read your HOA covenants, conditions, and restrictions (CC&Rs) to ensure you’re correctly following guidelines on allowed siding materials, colors, and more. In addition, you may need to apply for preapproval from your HOA board before starting the project.

Likewise, your HOA may require you to hire a licensed and insured contractor to perform the work. Remember, not every contractor has the same licensure, insurance, and certifications, so it’s best to shop around. Plus, you’ll need to communicate your HOA’s rules and standards to the contractor so they understand the project’s parameters. It’s also crucial to obtain permits from your municipality. Your HOA might also require notification when the project is finished.

Siding Quality

Various siding materials have different durability and appearance, so it’s best to ask yourself what kind of siding you want. Siding quality will also affect pricing and maintenance.

Siding Colors

Next, it’s time for the fun part: choosing a color. While you may have an initial preference, it’s beneficial to follow these tips and steps:

•  Determine your siding type. Different types of siding may have limitations on color options. For example, brick and wood sidings offer fewer choices, whereas vinyl sidings offer endless possibilities.

•  Consider your home’s style. Your home’s architectural style can guide you in selecting the most suitable siding colors. For instance, white, gray, and subtle colors complement colonial homes, while bold colors and textures work well with Victorian-style homes.

•  Evaluate the front door, windows, and roof. Choose a siding color that harmonizes with other exterior elements. You can contrast a dark front door or roof with lighter-colored siding. And remember that you can always replace your front door affordably to match your new siding.

•  Explore neighboring homes. Walk around your neighborhood to gather inspiration and ideas from other homes. Look for houses that you admire and share a similar style and construction. Additionally, if homes are for sale nearby, check their values online to see if the siding color has contributed to a higher resale value.

Maintenance

To ensure the longevity of your new siding and prevent potential damage to your home, be sure to provide proper care and maintenance. Regular cleaning and inspections will help you identify any areas that require attention.

Remember, various siding types have specific maintenance and cleaning requirements. Therefore, becoming an expert in the siding type of your choice can add years to its life. Simple tasks like caulking and painting can make a significant difference in high-moisture climates. By addressing these maintenance tasks proactively, you can save hundreds of dollars in costly structural repairs.

Energy Efficiency

Siding guards your home against adverse weather, such as strong winds and extreme heat, can influence your home’s energy usage. In addition, energy-efficient siding offers superior insulation to traditional siding, reducing energy consumption for temperature control. It does so by including insulation (like spray foam or foam board) beneath your chosen siding material. In contrast, traditional siding often lacks this feature.

While uninsulated siding may be more affordable initially, the long-term savings on monthly utility bills through insulation can offset the project cost. Additionally, opting for energy-efficient siding increases your home’s value if you sell it.

To gauge the return on investment (ROI) for energy-efficient siding, consult a siding contractor and inquire about the typical energy bill savings experienced by homeowners in your area after installing insulated siding. Depending on your location, your savings could be 20% off your previous energy bill.

The Takeaway

Several factors influence the cost of house siding replacement, including the size and shape of the house, the type of siding materials chosen, the condition of the old siding, and the house’s location. Other factors, such as the time of year and the need for permits, may also affect the expenses. Researching and comparing quotes from multiple contractors, negotiating with contractors, considering financing options, and planning may help reduce the cost of a siding replacement project without compromising quality.

If you’re ready to roll up your sleeves and get some home repairs or renovations done, see what a SoFi personal loan can offer. With a SoFi Home Improvement Loan, you can borrow between $5k to $100K as an unsecured personal loan, meaning you don’t use your home as collateral and no appraisal is required. Our rates are competitive, and the whole process is easy and speedy.

FAQ

How long does it take to replace the siding on a house?

The time it takes to replace siding on a house usually takes about 10 to 14 days. However, the exact time depends on various factors, such as the home’s size and the siding material.

What are the benefits of replacing siding on a house?

Replacing house siding can improve insulation and temperature control, protect against pests, and beautify the house’s appearance. As a result, replacing siding can often increase a home’s value.

Can I replace the siding on my house myself, or do I need a professional?

A DIY siding replacement project eliminates labor fees ranging from $40 to $90 per hour, which leaves materials as the sole expense. However, DIY can be challenging if you lack experience. Hiring a professional siding contractor ensures the job is done correctly, efficiently, and with access to better material prices, along with their expertise and knowledge of potential risks.

How do I choose the right type of siding for my home?

It’s best to choose siding for your home according to your priorities. For example, your budget, preferred materials, and insulation concerns will influence the type of siding for your project.

Are there any tax credits or incentives for replacing house siding?

Installing energy-efficient insulation with your siding can make you eligible for the Energy Efficient Home Improvement Credit. The credit is up to 30% of the project cost.

Photo credit: iStock/patty_c
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.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Loan modifications change the terms of your loan with the goal of making the payment more manageable. Unlike refinancing a loan, having a loan modified means the loan remains with the same lender — just under revised terms.

Loan modifications can be challenging to obtain and typically decrease your credit score. But for some borrowers, they may be the only option, if the lender agrees to the terms.

So what is a loan modification and how does it work? Let’s explore the details below.

Loan Modification Defined

A loan modification is a revision to the terms and conditions of an existing loan. The lender and borrower agree to new terms that make the monthly payments more manageable for the borrower and prevent the lender from having to take more expensive, drastic actions, like foreclosing on a property.

While loan modifications are most common for secured loans, like home mortgages, it’s also possible to get student loan modifications and even personal loan modifications.

How Do Loan Modifications Work?

The goal of a loan modification is to make a borrower’s monthly payments more manageable. Typically, borrowers will consider this option if they’re at risk of defaulting on their loan (or if they already have). In the case of mortgages, loan modifications can help prevent foreclosure.

Borrowers may also look for loan modifications in times of hardship, like a serious illness or injury. In this case, borrowers might also request a loan deferment.

So how do loan modifications work? They’re a two-way street: The lender and the borrower must come together and agree to a change of the loan terms. The approach can vary, but strategies may include:

•  Adjusting the interest rate: If interest rates were high when you first took out your loan, your lender may agree to lowering the interest rate on your loan. Doing so typically reduces your monthly payment. SoFi’s personal loan calculator is one tool that might be helpful in determining how a new interest rate can affect your monthly payments.

•  Extending the length of the loan: Extending the loan could reduce your monthly payment, though adding more years to a loan may mean you’ll spend more on interest in the long run. Still the immediate relief it offers might be worth it.

•  Changing the structure of the loan: If your loan has an adjustable interest rate structure, you might benefit from modifying it to a fixed rate. This can make your monthly payments more predictable.

•  Reducing the principal balance: In some cases, a lender may agree to temporarily reduce the amount owed on your principal to make it easier to manage your monthly payments. Note, however, that you’ll have to make up for those reduced payments later. In the case of mortgages, this is a rare strategy that is typically only considered to avoid foreclosure. Student loan forbearance is also possible.

When Should You Use Loan Modification?

Loan modifications are often a last resort. Here are some scenarios when it might be time to consider loan modification:

•  Risk of foreclosure: If you’ve missed multiple payments on your mortgage or cannot afford to make future payments at the current amount, a lender may be open to modifying. This can prevent you from losing your home to foreclosure and may save the lender money in the long term.

•  Underwater on a mortgage: An underwater mortgage (also called an upside-down mortgage) occurs when you owe more on your home than it’s worth. This can happen if your home’s property value plummets or if you miss payments early on and are playing catchup on accumulated interest. Loan modification may be the right solution for you and your lender.

•  Defaulting on a personal loan: If you cannot afford your upcoming monthly personal loan payment or have already missed one or more payments, it may be worth seeing if you can have your loan modified, likely by extending the life of the loan to reduce your monthly payments. This may be more agreeable to a lender than having to take expensive legal action against you.

•  Financial hardship: If you are undergoing some kind of hardship, such as a debilitating medical condition or loss of job, you may want to work with your lender to see if you can modify your loan before you miss a payment.

Does Loan Modification Hurt Your Credit Score?

A loan modification will show up as a negative entry on your credit report and thus could drive down your credit score.

That said, if you’re missing payments on your loan because you can’t afford them — or worse, verging on home foreclosure in the case of a mortgage loan — that can have an even more dramatic impact on your credit.

Recommended: What Credit Score Is Needed For a Personal Loan?

How Often Do Loan Modifications Get Approved?

While getting a personal loan can be a simple process, approval for loan modifications vary by lender, loan type, and the borrower, but they’re typically more challenging to get than refinancing. Lenders are not obligated to approve your loan modification, but it may be in their best interest to avoid an expensive foreclosure process.

You might be able to improve your chances of approval by working with a debt settlement company. These companies advocate on your behalf with the lender and have more time and experience to negotiate.

However, debt settlement companies aren’t free, and there’s no guarantee that they’ll be successful in getting your loan modified.

What Does It Mean to Refinance Your Personal Loan?

Personal loan modification is possible, but for many borrowers, it may make more sense to refinance a personal loan. You might consider refinancing a personal loan to achieve one of several goals. Here’s a look at a few of them:

Shortening Your Term

If you initially took out a personal loan with a particularly long term, you could try to refinance for a shorter term and pay it off sooner. While your monthly payment would go up, you might pay less in interest over the life of the loan.

Lowering Your Monthly Payment

On the flip side, you could extend the length of your loan when refinancing to lower your monthly payment. While you might pay more in the long term, this strategy could be helpful if you’re struggling to pay your bills each month.

Lower the Interest Rate

If you took out a personal loan when interest rates were higher — either because of your credit score or the state of the market — it could be worth refinancing to get a better personal loan rate. Depending on the difference in the interest rate and the size and length of the loan, refinancing could save you a considerable amount of money.

Recommended: Loan Modification vs. Refinancing

How to Get a Loan Modified

Lenders are under no obligation to modify your loan, but it’s worth a shot if you don’t see any other options.

Qualifying for modification usually requires missed payments and a demonstration of personal hardship. In some cases, borrowers may qualify for a government loan modification program.

Thinking about applying for loan modification from your lender? You’ll need to assemble a wide range of documents for your application, including:

Proof of Income

Or rather, proof of lack of income. Demonstrating to the lender that you do not currently earn enough income to afford your loan payment is crucial to making your case.

Self-employed individuals may need to supply a profit and loss balance, while salaried and hourly workers can supply an employment contract demonstrating their pay.

Your most recent tax return can also offer insight into your income and overall financial standing.

Bank Statements

Lenders typically want to see your bank statements as well. This will verify how much money you have but will also show them your spending habits.

Hardship Statement

A hardship statement is your chance to make your case. You can use this formal letter to explain your hardship — medical issues, divorce, unemployment, etc. — and how it has affected your finances.

You may be more successful if you include documentation to support your argument. This might include medical bills, divorce paperwork, or a termination letter.

The Takeaway

A loan modification can help make monthly payments more manageable for borrowers and can be a useful strategy for those who are at risk of defaulting on their personal loan or having their house foreclosed. The lender and the borrower must agree to a change of the loan terms. Strategies may include adjusting the interest rate, extending the length of the loan, changing the structure of the loan, and reducing the principal balance.

Are you looking for a personal loan with no hidden fees at competitive interest rates that makes it much easier to manage your monthly payments? Consider a personal loan from SoFi. Check your personal loan rate with SoFi in as little as 60 seconds.

FAQ

Does a loan modification hurt your credit?

A loan modification results in a negative mark on your credit report, which can lower your credit score.

However, the alternative for many borrowers is missed payments and, in the case of a mortgage or car loan, eventual foreclosure or vehicle repossession. These can have an even worse impact on your credit score.

What qualifies as a loan modification?

Loan modification is a revision to the terms of an existing loan. The borrower and the lender must both agree to those terms. Modifications can take many forms, but often the lender will reduce the borrower’s interest rate, increase the length of the loan, or change the rate structure from adjustable to fixed.

What are the types of loan modifications?

Borrowers can seek out loan modifications for various types of loans, but mortgage modifications are the most common. Borrowers with unsecured loans, like personal loans and student loans, may also be able to get modifications. Modification types include changes to the interest rate, rate structure, and length of the loan. In some cases, lenders may temporarily adjust the principal balance as a type of loan modification.

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

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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For many people, personal loans can be the difference between affording something they need — like major home repairs — and having to forego the purchase. But personal loans aren’t without fees. Lenders always charge interest on loans, and in many cases, something called an origination fee.

But what is an origination fee on a personal loan, and how does it work? We’ll dive in below.

What Are Personal Loan Origination Fees?

Personal loan origination fees are an upfront, one-time charge by the lender that covers the costs of processing the loan, including the application, underwriting, and funding.

Typically, lenders charge origination fees as a percentage of the total loan amount. It’s usually 1% to 6%, but origination fees may go as high as 8% or even 10% of the loan amount. In some instances, a lender may charge a flat fee instead.

Not every personal loan has an origination fee, and lenders may differ in how they require consumers to pay it, if it’s included.

Recommended: Should I Get a $5,000 Personal Loan?

How Do Personal Loan Origination Fees Work?

If a lender charges an origination fee for a personal installment loan, it’s usually a percentage of the loan amount, somewhere between 1% on the low end and 10% on the high end. For example, if you take out a personal loan for $15,000 and there’s a 5% origination fee, you’ll pay $750 in fees.

Lenders typically subtract this fee from the total loan amount. In our example, that means they’d offer you a loan for $15,000, subtract $750 from the amount, and give you $14,250. But you’d still have to repay $15,000, plus interest. If you truly need the full $15,000, it’s a good idea to request more than $15K to ensure that you have enough funds after the origination fee is deducted.

In this case, the personal loan origination fee would be reflected in the APR calculation. That’s why experts often suggest comparing loans by their APRs. The APR, which represents the annual cost of a loan (not just the interest rate) will give you a true picture of what you’ll pay over the life of the loan.

Learn more about interest vs. APRs before comparing loans.

Note: While subtracting the fee from your loan amount is common, some lenders may require an out-of-pocket payment or add it to your loan total. Asking a lender how they charge the origination fee is a good idea when shopping for loans.

How Much Are Personal Loan Origination Fees Usually?

Personal loan origination fees typically vary between 1% and 10% of the total loan amount. Depending on how much you’re borrowing, this fee can get extraordinarily high.

For example, if you borrow $100,000 with an 8% origination fee, that’s an extra $8K you’re paying on top of the loan amount and interest.

Recommended: What to Know Before You Borrow Money Online

How Are Origination Fees Calculated?

Lenders may advertise a set origination fee or a percentage range. If it’s the latter, how exactly do they determine the percentage you’ll pay?

Unsurprisingly, lenders primarily consider your credit score and debt-to-income (DTI) ratio. The stronger your credit score and the lower your DTI ratio, the lower origination fees you might be offered. Lenders that don’t charge origination fees at all may have strict requirements that only borrowers with good or excellent credit can meet.

Lenders may also consider the length and size of the loan. Having a cosigner with good credit can help reduce your fees. In addition, lenders may ask your reason for borrowing or use other information from your application when setting your fees.

Recommended: Guide to Large Personal Loans

When Is an Origination Fee a Dealbreaker?

It’s wise to compare the loan APRs, which represent your total annual costs. A loan with no origination fee but a higher interest rate may wind up costing you more in the long run; comparing APRs can help you figure it out.

If you qualify for a handful of personal loans with varying fees, you may not necessarily want to go with the lowest fee. Compare APRs to discover the true cost of each loan.

At SoFi, we offer competitive personal loan interest rates and the option to pay an origination fee to secure a lower interest rate. An origination fee is not required, but it may cost you less in the long run, depending on your loan amount and term. We encourage everyone to do their due diligence and research multiple loans, but we’re proud of what we offer: same-day funding, flexible loan terms and amounts. You can even check your personal loan rate in as little as 60 seconds.

So when is a personal loan origination fee a dealbreaker? If the fee makes your total cost of borrowing higher than another offer, you should consider the better loan offer.

All lenders are required to disclose their fees as part of the Truth in Lending Act. If a lender advertises no origination fees, it’s a good idea to check the fine print to see if they’ve disguised the fee with a look-alike fee, like an “administrative” or “application” fee. If a lender does this and it gives you bad vibes, go with your gut — you should always feel good about the lender you choose.

Explore SoFi Personal Loan Rates

Looking for a personal loan with no required origination fee? Try a personal loan from SoFi. You can get same-day funding, and our loan terms and amounts are flexible (two to seven years and $5K to $100K in loans). Check your rate online in as little as 60 seconds!

Get a personal loan without the high fees from SoFi.

FAQ

How much are personal loan origination fees typically?

Personal loan origination fees typically range between 1% and 6% of the loan amount. But depending on the lender, your credit score, and other factors, you may pay as much as 8% or 10% in personal loan origination fees.

Do private loans always have origination fees?

Many private lenders charge origination fees, but that is not always the case. Before taking out any loan with a private lender, it’s a good idea to compare origination fees and APRs.

Can origination fees be negotiated?

You can often negotiate origination fees for certain types of loans, such as mortgages and personal loans. SoFi Personal Loans allow you to negotiate a fee in exchange for a lower interest rate.. However, with a high enough credit score, you may be able to qualify for a personal loan without an origination fee — or at least a lower one.

Photo credit: iStock/lechatnoir

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

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Figuring out how to double your money with investments often hinges on striking the right balance between risk and reward. Your personal risk tolerance and goals can influence how you invest and the returns your portfolio generates.

However, doubling your money is a reasonable goal, especially if you’re willing to wait for your money to grow. And that’s a big variable to keep in mind: Time. If you’re interested in doubling your money and growing wealth for the long-term, there are several investing strategies to consider.

Investing Strategies to Double Your Money

1. Get to Know the Rule of 72

The rule of 72 can be a helpful guideline for answering this question: How long to double your money?

If you’re not familiar with this investing rule, it’s not complicated. It uses a simple formula to estimate how long doubling your money might take, based on your annual rate of return. You divide 72 by your annual return to get the number of years you’ll need to wait for your investment to double.

So, for example, if you have an investment that generates a 5% annual return, it would take around 14.5 years to double it. On the other hand, an investment that’s generating a 12% annual return would double in about six years.

The rule of 72 doesn’t predict how an investment will perform. But it can give you an idea of how quickly (or slowly) you can double your money, based on the returns you’re getting each year. Just keep in mind that the rule’s accuracy tends to decrease as the rate of return increases, so it’s more of a guideline than a hard-and-fast rule.

💡 Quick Tip: How do you decide if a certain trading platform or app is right for you? Ideally, the investment platform you choose offers the features that you need for your investment goals or strategy, e.g., an easy-to-use interface, data analysis, educational tools.

2. Leverage Your Employer’s Retirement Plan

One way to attempt to double your money through investing may be through your workplace retirement plan. If your employer offers a matching contribution to the money you’re deferring from your paychecks, that’s essentially free money for you.

Employer matching contributions are low-hanging fruit, in that you don’t need to change your investment strategy to take advantage of them. All that’s required is contributing enough of your salary to your employer’s retirement plan to qualify for the match.

The matching formula that companies use varies, but some companies offer a dollar-for-dollar match, meaning that the money you put into a 401(k) would automatically double when you receive your match. Keep in mind that some companies use a vesting schedule, meaning that you have to work at the company for a certain period of time before you get to keep all the employer contributions.

Aside from potentially helping to double your money, investing your 401(k) or a similar qualified retirement plan can also yield tax benefits. Contributions made with pre-tax dollars are deducted from your taxable income, which could lower your annual tax bill.

3. Diversify Strategically

Diversification means spreading your money across different investments to create a portfolio that will meet your needs for both risk and return.

As a general rule of thumb, riskier investments like stocks have the potential to generate higher returns. More conservative investments, such as bonds, tend to generate lower returns but there’s less risk that you’ll lose money on the investment.

If you want to double your money, then it’s important to pay attention to diversification and what that means for your return on investment. For instance, if you’re investing heavily in stocks then you could see greater returns but you might experience deeper losses if the market takes a hit. Playing it too safe, on the other hand, could cause your portfolio to underperform.

Also, keep in mind that there are many types of investments besides stocks, mutual funds and bonds. Real estate, stock options, futures, precious metals and hedge funds are just some stock and bond alternatives you could use to build a portfolio. Understanding their risk/reward profiles can help you decide what to invest in if you’re focused on doubling your money.

💡 Quick Tip: Distributing your money across a range of assets — also known as diversification — can be beneficial for long-term investors. When you put your eggs in many baskets, it may be beneficial if a single asset class goes down.

4. Consider Buying When Others Are Selling

The stock market is cyclical and you’re guaranteed to experience ups and downs during your investing career. How you approach the down periods can impact your ability to double your money when the market goes up again.

When the market drops, some investors start selling off stocks or other investments to avoid losses. But if you’re comfortable taking risks, the sell-off could present an opportunity to buy the dip.

If you can purchase stocks at a discount during periods of volatility when other investors are selling, you could double your money when those same stocks increase in value again. But again, making this strategy work for you comes down to knowing how much risk is acceptable to you.

5. Commit for the Long Term

There are different investment philosophies you can adopt. For example, traders regularly buy and sell investments to try and get quick wins from the market. A buy-and-hold strategy takes a different approach, but it could pay off if you’re trying to double your money.

Buy-and-hold investing involves buying an investment and holding onto it for the long-term. The idea is that during that holding period, the investment will grow in value so you can sell it at a sizable profit later.

This is a passive investment strategy that relies on patience and time to increase your portfolio’s value. The longer you have to invest, the more you can capitalize on the power of compounding gains, or gains you earn on your gains.

If you’re using a buy-and-hold strategy with a value investing strategy, you could potentially double your money or more if your investments meet your expectations. Value investing means investing in companies that you believe the market has undervalued.

This strategy takes a little work since you have to learn how to understand the difference between a stock’s market value and its intrinsic value. But if you can find one of these bargain hidden gems and hold onto it, you could reap major return rewards later when you’re ready to sell.

6. Step Up Your Investment Contributions

Another simple strategy to double your money is to invest more. Assuming your portfolio is performing the way you want and need it to to reach your goals, doubling your investment contributions could be a relatively easy way to boost your returns.

If you can’t afford to put big chunks of money into the market all at once, there are ways to increase your investments gradually. For instance, you could start building a portfolio with fractional shares and increase your contributions by a few dollars each month.

If you’re investing your 401(k) at work, you could ask your plan administrator about raising your contribution rate annually. For example, you might be able to automatically bump up salary deferrals by one or two percent each year. And if that coincides with a pay raise you may not even miss the extra money you’re contributing.

7. Focus on Tax Efficiency

Minimizing tax liability is another opportunity to stretch your investment dollars. There are different ways to do that inside your portfolio.

Investing in your retirement plan at work is an obvious one, so if you aren’t doing that yet you may want to consider getting started. Remember, the longer you have to invest, the more time your money has to grow.

If you don’t have a 401(k) or a similar plan at work, you could open a traditional or Roth Individual Retirement Account (IRA) instead. A traditional IRA allows for tax-deductible contributions, meaning you get an upfront tax break. Then, you pay ordinary income tax on that money when you withdraw it in retirement.

Roth IRAs aren’t tax-deductible, since you fund them with after-tax dollars. The upside of that, however, is that qualified withdrawals in retirement are 100% tax-free.

A taxable brokerage account is another way to invest, without being subject to annual contribution limits the way you would with a 401(k) or IRA. The difference is that you’ll pay capital gains tax on your investment growth.

Paying attention to asset location can help with maximizing tax efficiency across different investment accounts. For example, exchange-traded funds can sometimes be more tax-efficient than other types of mutual funds because they have lower turnover. That means the assets in the fund aren’t bought or sold as frequently, so there are fewer taxable events.

Keeping ETFs in a taxable account while putting less tax-efficient investments into a tax-advantaged account, such as a 401(k) or IRA, could help with doubling your money if it means reducing the taxes you pay on investment gains.

The Takeaway

Learning how to double your money can mean taking a slow route or a quicker one, but it all comes down to how much risk you’re comfortable with and how much time you have to invest. One of the keys to growing your investments is being consistent and that’s where automated investing can help.

There are numerous strategies and tactics that you can try to leverage to your advantage. But ultimately, whether you’re able to double your money will likely come down to how much you’re willing to risk, how much time you have on your side, and probably a little bit of luck.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

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