Home equity loans put cash in your hands that you can use for virtually any purpose. Using a home equity loan to renovate could make sense if you’re making improvements that are likely to increase your property’s value.

Getting a home equity loan or home equity line of credit (HELOC) for home improvements offers some advantages over other types of loans, but you’ll need to have sufficient equity to borrow. A good credit score can also make a difference if you hope to qualify for a low interest rate.

How does a home equity loan or HELOC work for home improvements? Here’s what you should know.

Understanding Home Equity Loans

To understand how does a home equity loan work for home improvements, you first need to understand equity. So, what is home equity? In simple terms, it’s the difference between what you owe on your mortgage and your home’s value. A home equity loan allows you to take some of that value out in cash, pulling equity out of your home with your home used as collateral.

A home equity loan is a type of second mortgage, also called a junior lien. This means that in order of repayment, your first mortgage (which is the home loan you used to purchase the property) takes precedence. Should you end up in foreclosure and your home is auctioned off, the proceeds would pay off the first mortgage and anything left would go to the second.

There are different types of home equity loans and credit line arrangements:

•   Fixed-rate home equity loan. A fixed-rate home equity loan offers a lump sum of money that you pay back at a fixed or set interest rate.

•   Fixed-rate HELOC. A home equity line of credit or HELOC is a revolving line of credit you can borrow against as needed. Fixed-rate HELOCs are less common, but some lenders offer them.

•   Variable-rate HELOC. A variable-rate HELOC has an interest rate that’s tied to an index or benchmark rate. If the benchmark rate rises or falls, your HELOC rate moves in tandem.

Having a home equity loan or HELOC means you’ll have two mortgage payments to make each month. If you’re considering a home equity loan to renovate, it’s important to understand what you’ll pay to make sure it’s a good fit for your budget. A home equity loan calculator can help you crunch the numbers.

Benefits of Using a Home Equity Loan for Home Improvements

Using a home equity loan or HELOC for home improvements offers some unique benefits. For one thing, it may allow you to access a large amount of cash. Considering that the average cost to remodel a home can run anywhere from $20,000 to $90,000, that’s a plus. Here are some other good reasons to consider a home equity loan for home renovation.

Lower Interest Rates

Home equity loans can offer lower interest rates than unsecured loans for qualified borrowers. The higher your credit score is, the lower your rate is likely to be.

A fixed rate is another advantage because it offers predictability. Your payments stay the same and you can easily estimate how much you’ll pay in interest. For example, if you get a $100,000 home equity loan at 7.75% with a 30-year term, you’ll always pay $716 a month. (A HELOC is more likely to have a variable interest rate — one that rises or falls at regular intervals in response to market rates.)

Home equity loan rates tend to be higher than purchase loan rates since there’s more risk for the lender. However, they can still be cheaper than personal loans or unsecured home improvement loans.

Potential Tax Deduction

The IRS offers a tax deduction when you use a home equity loan or HELOC to “buy, build, or substantially improve the residence” that secures the loan.

You can claim this deduction in addition to any mortgage interest you deduct for your primary home loan if you itemize on your return. You’ll just need to be sure that you’re only using your equity loan or HELOC to cover eligible expenses related to your renovations. (Save your receipts as part of your tax records.) You’ll want to talk to your tax advisor about this, especially given that, as of early 2025, the current tax rules for deducting home equity loan interest are set to sunset at the end of 2025.

Increased Home Value

Using a home equity loan to remodel could help boost your home’s value, depending on the projects you decide to tackle. That could leave you with more profit in your pocket if you eventually decide to sell the home, or more equity to borrow against later.

Here are some of the home improvement projects offering the highest return on investment:

•   Garage door replacement

•   Entry door replacement

•   Midrange kitchen remodel

•   Deck addition

•   Vinyl siding replacement

•   Window replacement

•   Roof replacement

•   Bathroom remodel

When deciding which projects to fund, consider the ROI as well as the projected time to complete them. Upgrading to your dream kitchen, for instance, could take months, so you have to be patient enough to see the renovations through.

Evaluating Your Home’s Equity

One of the most important factors lenders consider is the amount of equity you have in your home. Specifically, they look at your loan-to-value (LTV) ratio. If you don’t have sufficient equity in the home, you may not qualify for a home equity loan or HELOC.

Impact on Borrowing Capacity

What is loan-to-value ratio? It’s a ratio that measures the amount you want to finance against the value of your property. Here’s how to calculate it.

LTV ratio = (Current loan balance) / (Appraised value) x 100

Typically lenders look for a maximum LTV ratio of 80% to 90% for home equity loans and HELOCs.

How much home equity can you borrow? Let’s say you owe $300,000 on your home and it’s valued at $500,000. Your LTV would be 60%. In terms of how much of your $200,000 equity you could borrow, you might be able to withdraw up to $100,000 with a home equity loan if a lender allowed a max LTV of 80%, or $150,000 if the lender allowed a max LTV of 90%.

Steps to Obtain a Home Equity Loan for Renovation

How do you get a home equity loan for remodeling? It’s a multi-step process but for the most part, it isn’t that different from getting a mortgage to buy a home. Here’s an overview of how it typically works.

•   Calculate your home equity, then calculate your loan-to-value ratio.

•   Shop around to compare mortgage rates for home equity loans and HELOCs. Consider getting quotes from several lenders to see how they measure up.

•   Consider getting preapproved. Preapproval means that you’re conditionally approved for a home equity loan.

•   Select a lender and finalize your application. Most home equity lenders allow you to apply online and upload your documents digitally.

•   Wait for the lender to schedule an appraisal. Your lender may request an in-person appraisal, offer a desk appraisal, or use a hybrid approach that combines an in-person visit with use of an automated valuation model.

•   Review the loan terms. Assuming you’re approved, you’ll have a chance to review your loan terms before signing off on the final paperwork.

•   Close and sign the documents. You’ll pay any closing costs that are due, sign the loan agreement, and tell the lender where to send the loan proceeds.

The process to get a home equity loan or HELOC can take a few weeks to a few months, depending on your situation and choice of lender.

Alternatives to Home Equity Loans for Renovation

A home equity loan for remodeling is just one way to fund home improvements. If you’re looking for other options, you’ve got choices.

•   Personal loan. The main difference between home equity loans vs. personal loans is that one is secured by your home; the other isn’t. Personal loans can offer generous lending limits, and you can use the money for anything, but interest rates may be higher. And instead of closing costs, you might pay application or origination fees to borrow.

•   Personal line of credit. A personal line of credit is a revolving credit line that you can draw against as needed. A line of credit might be a good fit if you don’t know exactly how much money you’ll need for renovations. The upside is that you only pay interest on the part of your credit line that you use, whereas a home equity loan requires you to pay interest on the entire loan amount.

•   Credit card. A credit card could be a good fit to fund home improvements if you have a low interest rate and earn rewards on your purchases. For example, you might use a card that rewards you with 5% cash back at home improvement stores. Just keep in mind that the interest you pay to a credit card (or personal loan) for home remodeling isn’t tax-deductible.

The Takeaway

Using a home equity loan or HELOC to remodel could be an attractive option if you’re ready for a home makeover but don’t want to pull from your reserves. Checking your credit scores before you can apply can give you an idea of what you might qualify for, as far as rates go. From there, the next step is checking mortgage rates and terms from different lenders to see who has the best offer.

SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.

Unlock your home’s value with a home equity line of credit from SoFi, brokered through Spring EQ.

FAQ

Are there risks associated with using a home equity loan for renovations?

There are risks to using a home equity loan for renovations. If you end up in a situation where you can’t make your home equity loan or mortgage payments, you could end up in foreclosure. That would allow your lenders to take the home from you, since it secures both of your mortgages.

Can I use a home equity loan for any type of home improvement?

You can use a home equity loan for home improvements big and small, whether that means a full kitchen remodel, adding on an extension, or simply replacing some of your fixtures and appliances. Home equity loans offer flexibility since you can use the money for virtually any expenses.

What are the typical interest rates for home equity loans?

Interest rates for home equity loans are typically a percentage point or two higher than rates for first mortgages. So if a lender is charging 6.50% on average for purchase loans, it might charge 7.50% to 8.50% for a home equity loan or HELOC. A good credit score can help you qualify for the lowest rate possible on a home equity loan.

How long does it take to get approved for a home equity loan?

Home equity loan approval may take a few weeks since the lender will need to review your credit and income, and schedule an appraisal to determine the home’s value. The entire underwriting process could take a few months if you hit any snags. For example, if you’re self-employed, you may need to provide additional documentation of your income or assets to the lender.

Are there closing costs associated with home equity loans?

Home equity loans can have closing costs just like other mortgages. Typical closing costs for a home equity loan range from 2% to 5% of the loan amount. Some lenders may allow you to roll the closing costs into your loan so you pay nothing upfront; however, that does add to the amount you’ll pay interest on.

---

About the author

---

Photo credit: iStock/andresr

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

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

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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

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

^²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.
You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.
In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.

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

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

SOHL-Q125-068

Read more

What Is FICO vs TransUnion vs Equifax Credit Scores?

While many people think of their credit score as a singular number, the truth is that most consumers have several different credit scores. This is because different credit bureaus (Equifax®, TransUnion®, and Experian®) use different scoring models, such as FICO® and VantageScore®.

FICO scores are one of the most popular types of credit scores. TransUnion and Equifax are credit reporting agencies and have collaborated with Experian to produce VantageScore. If you compare VantageScore vs. FICO scores, you will find that they share many similarities — and feature a few key differences.

Keep reading to learn more about FICO, TranUnion, and Equifax, including how each works, which credit score bureau is best, and how you can obtain your credit scores and credit reports.

Types of Credit Scores

There are several different types of credit scores, since different companies have different ideas of which information is most predictive of whether a consumer will be a good lending risk. However, the two most common types of credit scores are the FICO Score and the VantageScore.

How FICO Works

FICO scores are produced by the Fair Isaac Corporation and are one of the most popular types of credit scores. The Fair Isaac Corporation lists five factors that affect your FICO score:

•   Payment history (35%)

•   Amounts owed (30%)

•   Length of credit history (15%)

•   Credit mix (10%)

•   New credit (10%)

Based on these factors, you receive a FICO credit score, which is a three-digit number between 300 and 850. Those with high credit scores will typically receive the best rates and terms from lenders.

How VantageScore Works

VantageScore is a credit scoring model developed by the three major credit bureaus — Experian, Equifax, and TransUnion. It evaluates creditworthiness using factors like payment history, credit utilization, account age, total debt, and recent inquiries. Unlike FICO, VantageScore can generate a score with a shorter credit history, making it more accessible for new borrowers.

Similar to FICO, the scoring model ranges from 300 to 850, with different categories to indicate credit health:

•   781–850: Excellent

•   661–780: Good

•   601–660: Fair

•   500–600: Poor

•   300–499: Very Poor

Recommended: Differences Between VantageScore and FICO Credit Scores

TransUnion vs. Equifax

TransUnion and Equifax are two major credit reporting agencies, along with Experian. Each plays a key role in determining creditworthiness, but understanding their differences can help you better manage your financial health and navigate credit decisions.

How TransUnion Works

TransUnion does not actually produce its own credit score — instead, it is one of the three major credit reporting agencies, along with Equifax and Experian. TransUnion collects payment and other information about consumers to build a consumer credit report.

However, TransUnion, along with Equifax and Experian, did create the VantageScore credit score model in 2006. VantageScore is a company that produces credit scores. So if you hear someone talking about a TransUnion credit score, they may be referring to a VantageScore credit score.

How Equifax Works

Like TransUnion, Equifax is most often thought of as a credit reporting agency rather than as a company that produces credit scores. However, Equifax is another partner in the VantageScore credit score model. So like TransUnion, if you hear someone talking about an Equifax credit score, they may be talking about a VantageScore credit score.

Which Credit Score Bureau Is Best?

When choosing the best credit score bureau, it’s important to recognize that no single bureau is definitively superior. TransUnion, Equifax, and Experian all provide valuable insights into your credit report. The key difference lies in the information they collect and how they calculate scores, which varies slightly.

How Can You Obtain Your Credit Score?

You can check your credit score through several sources, each offering different levels of access and detail. Here are some common ways to obtain your credit score:

•   Credit card issuers and banks – Many provide free credit score access to customers.

•   Credit bureaus – You can purchase your credit score directly from Equifax, TransUnion, or Experian.

•   Online credit monitoring services – You can sign up for credit score monitoring. SoFi’s credit monitoring service allows you to track your credit score and receive weekly updates at no cost.

•   Loan applications– Some lenders disclose your credit score when you apply for a loan.

•   FICO and VantageScore websites – You can purchase official credit scores from these scoring model providers.

Recommended: How Often Does Your Credit Score Update?

How Can You Obtain Your Credit Reports?

To obtain your credit reports, you can access them through several channels. The Fair Credit Reporting Act (FCRA) grants consumers the right to a free credit report from each of the three major credit bureaus — Equifax, Experian, and TransUnion — once a year. Regularly reviewing your credit report helps identify errors and detect potential identity theft.

To obtain your credit reports, you can:

•   Visit AnnualCreditReport.com, the only federally authorized website for free reports.

•   Request your reports by calling 1-877-322-8228.

•   Submit a request via mail by completing the Annual Credit Report Request Form.

•   Access additional reports through credit monitoring services or directly from the credit bureaus.

It can be a good idea to use a money tracker app to review your payment and spending history, as well as regularly review your credit report. If you find any errors or inconsistencies, you can report or dispute them to the agency in question to get any incorrect information removed. Incorrect information on your credit report can cost you points on your credit score.

What Is a Good Credit Score Range?

A good credit score range typically falls between 670 to 739 on the FICO Score scale, which ranges from 300 to 850. Lenders generally view scores in this range as favorable, meaning borrowers are more likely to qualify for loans and credit cards with competitive interest rates.

Credit scoring models like VantageScore also use a 300 to 850 range, with a good score typically between 661 and 780. Maintaining a good credit score involves making timely payments, keeping credit utilization low, and managing different types of credit responsibly.

Recommended: How Long Does It Take to Build Credit?

The Takeaway

There are different companies that issue credit scores, so while you might think that you have a singular credit score, you actually have several different credit scores.

FICO credit scores are one of the more popular credit scores used by lenders. TransUnion and Equifax are two of the three most popular credit reporting bureaus. Along with Experian, they have partnered to create VantageScore, another common credit scoring model. Different credit score models may use different information, and it’s normal for scores from different models to vary by a few points.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

Which is more accurate: TransUnion, Equifax, or FICO?

No single credit score is more “accurate.” TransUnion and Equifax are credit bureaus that collect data, while FICO is a scoring model that uses that data to generate scores. Lenders may use different scores depending on the situation, so accuracy depends on which score a lender relies on.

Is the FICO score higher than Equifax?

Sometimes FICO scores are higher than VantageScores (the scores that are affiliated with Equifax). Other times, your VantageScore may be higher than your FICO score. It depends on your individual situation, but it is common for your scores to be similar.

Do banks look at TransUnion or Equifax?

Different banks, credit unions, and other lenders may look at different credit reports (such as TransUnion, Experian, or Equifax) depending on their preferences. Generally, companies do not disclose what credit reports or credit scores they use.

Which credit score is most accurate?

No single credit score is the most accurate, as different lenders use different models. FICO scores are the most widely used for lending decisions, but Equifax, TransUnion, and Experian each generate their own scores based on available data. Accuracy depends on which score a lender considers most relevant.

What is a good FICO score?

A good FICO score typically falls between 670 and 739. Scores in this range indicate a lower risk to lenders, making it easier to qualify for loans and credit cards with favorable terms. Higher scores (740+) offer even better rates, while lower scores may lead to higher interest rates or denials.

Why is my FICO score higher than my credit score?

When considering FICO scores vs. credit scores, it is important to understand that while your FICO score is a type of credit score, it is only one type of credit score. Your FICO score may be higher than other credit scores you may have, or it could be lower. Generally, your FICO score should be within a few points of your other credit scores.

---

photo credit: iStock/tolgart
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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

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

SORL-Q125-025

Read more

Most physicians can expect to earn a good living once they complete their education and training. But by the time they graduate and start their first job, many new doctors are also likely to find themselves deep in student loan debt.

That debt may make it difficult for physicians to qualify for a conventional home mortgage — even though they have a promising financial future. That’s where home loans for doctors come in. Some lenders offer special mortgages called physician loans or doctor mortgage loans. These loans have terms designed to meet the unique needs of newcomers to this profession. Note: SoFi does not offer physician mortgages, but it does offer home mortgage loans with a low down payment for first-time homebuyers.

Read on for a look at how physician mortgages work, some pros and cons, and what it can take to qualify.

What Are Physician Mortgage Loans?

Physician mortgage loans are private mortgages designed specifically to meet the needs of doctors, dentists, medical residents, and fellows. The terms and benefits of these home loans for medical doctors can vary from one lender to the next. But they generally offer more generous terms and/or looser qualifying requirements than conventional home loans. This can make borrowing easier for physicians who have a high income potential but may be struggling with student loan debt or haven’t been able to set aside enough for a down payment.

How Physician Mortgage Loans Differ from Traditional Loans

Doctor loans are a type of nonconforming loan, which means they aren’t backed by the federal government like FHA loans, and they aren’t bound by the same Fannie Mae and Freddie Mac standards as conventional loans. Here are a few important differences you can expect to find with this type of mortgage vs. a conventional loan:

Recommended: Different Types of Mortgage Loans

Low or No Down Payment

Most lenders require at least a 3% to 5% down payment for a conventional mortgage, with the lowest rates typically available to first-time homebuyers. Lenders who offer physician mortgages may not require any money down. (Or the down payment amount required may be very low.)

No Private Mortgage Insurance (PMI)

With a conventional loan, private mortgage insurance, which is meant to protect the lender in case of a default, is usually added to borrowers’ monthly payments until they reach 20% equity in their home. Though PMI rates vary, they typically range from 0.50% to 2% of the loan amount. But doctor loans don’t require PMI, even though the borrower may not make any down payment.

Flexible Debt-to-Income (DTI) Ratio Requirements

As part of their underwriting, lenders typically calculate a borrower’s DTI ratio (all monthly debt payments ÷ gross monthly income = DTI). For conventional mortgages, they usually require a DTI ratio below 45%, although some require the DTI to be below 36%. But lenders who provide physician loans may look at a borrower’s student loans (which they expect to be high) as separate from other debt and not include them in the DTI, or they may include the student loans but set a higher DTI limit.

You may want to keep in mind, though, that just because you can get a loan with a higher DTI ratio doesn’t mean you should. A home affordability calculator can help you see what might fit into your budget and a mortgage calculator can show you what your monthly payments would look like at different interest rates.

It might also be helpful to talk to a financial advisor about how much house you can really afford, and what the costs of homeownership could mean for your overall financial well-being.

Looser Employment and Salary Requirements

Proving that you have stable employment as well as an adequate income is usually part of qualifying for a conventional loan. (Lenders generally like to see at least two years of work history.) Employment requirements may vary with a doctor loan, but lenders who offer these types of mortgages typically understand that a new doctor could be working as an intern, resident, or fellow, and may not be earning as much starting out as they will take home even just a few years into their career. (Borrowers still can expect to provide paperwork that documents their salary and employment, however, along with their medical license.)

Recommended: Understanding Mortgage Basics

Benefits of Physician Mortgage Loans

If you’re eager to get into your own home once you wrap up medical school, a physician home loan may make that possible — and less expensive. Avoiding PMI on a new home could save you hundreds or even thousands of dollars a year, for example. And if you don’t have to make a down payment, you can use that money for other expenses.

Lenders also may offer higher loan amounts with a physician loan than with other loan types. And though some lenders offer doctor loans with fixed rates, most come with variable interest rates, so you can expect to start out with a lower, more affordable interest rate when you begin making payments. (That means you’ll have an adjustable rate after a fixed introductory period, so your monthly payments could change. But if the rate becomes unmanageable down the road, you can look at refinancing to a conventional loan with a more competitive mortgage rate.)

How to Qualify for a Physician Mortgage Loan

Though the underwriting requirements may be more relaxed for doctor loans, you should be prepared to provide the following:

•   Proof of identity (this might include your driver’s license, Social Security number, or other documentation)

•   Proof of employment and income (you may be able to use an employment contract if you don’t yet have a W-2, pay stubs, or similar documents)

•   Documentation of assets and debts

•   A contract for your home purchase, including the purchase price

•   Information about the type of home you’re purchasing (condo, single-family home, etc.)

•   Proof of a medical degree (M.D., D.O., D.D.S., etc.) that meets the lender’s requirements

Other parts of the mortgage process — from determining what you can afford to choosing mortgage terms to closing on the deal — will likely be similar to what you’d expect if you were applying for just about any type of loan.

The Takeaway

If you’re finally starting your career as a doctor and you’re wondering if student debt or minimal savings could keep you from reaching the goal of home ownership — despite your income potential — a physician home loan may be an option worth researching.

Because these special loans typically don’t require a down payment or private mortgage insurance payments, and the eligibility requirements are often less strict than for conventional loans, doctors may not have to wait until they’re on firmer financial footing to purchase a home.

Of course, you’ll want to compare all the pros and cons of a physician mortgage — or any home loan. Buying a home is a big decision, and you’ll likely want to balance your eagerness to reach this milestone with your ability to keep pace with your mortgage payments and your debt payments, as well as other expenses.

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

SoFi Mortgages: simple, smart, and so affordable.

FAQ

What credit score do I need to get a physician mortgage loan?

A credit score of at least 700 or 720 may be required to get a physician loan, although some lenders may accept a lower credit score. Each lender has its own criteria.

Are physician mortgage loans available for residents and fellows?

Employment requirements may vary, but lenders who offer these types of loans typically understand that a new doctor could be working as an intern, resident, or fellow.

How do interest rates compare for physician mortgage loans vs. conventional loans?

Doctor’s mortgage loans generally come with a variable interest rate. After a fixed introductory period, your payments could go up or down, depending on several factors. With conventional mortgages, you may have a wider range of interest rate types to choose from.

---

Photo credit: iStock/nortonrsx

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

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

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.

SOHL-Q125-061

Read more

If you own a home, a home equity line of credit (HELOC) lets you tap into your home equity to finance renovations or other expenses. Before borrowing against your home equity, it’s worth asking, how does a HELOC affect credit scores?

Taking out a new credit account has an impact on your credit score. But how a home equity line of credit affects credit scores depends on multiple factors, including your payment history and existing credit.

Here’s a look at how a HELOC could affect your credit score across the entire lifespan of the line of credit, from filing your application to closing a HELOC account — plus tips to maintain your credit score.

Understanding HELOCs and Credit Scores

First, let’s start with a HELOC definition. A HELOC, or home equity line of credit, is a revolving line of credit that typically allows homeowners to borrow up to 90% of their home’s value, minus the outstanding mortgage principal. Borrowers can draw against their approved credit line as needed until the end of the draw period, which is usually 5 or 10 years, before having to repay the balance over another 10 to 25 years. That’s HELOCs explained, in a nutshell.

Meanwhile, your credit score is calculated based on how you manage debt payments, also known as credit. A variety of factors affect your credit score, including payment history, credit utilization, length of credit history, credit mix, and applications for new credit. Your credit score appears as a three-digit number. Credit score ranges run from 300 to 850, with scores of 670 or higher being considered good to excellent.

Impact of Applying for a HELOC on Your Credit

So how does a HELOC impact credit scores? Similar to other types of credit, applying for a HELOC involves a credit check, which is added to your credit report.

Hard Inquiries

When you apply for a HELOC, lenders will run a credit check to assess your creditworthiness. This involves requesting to review your credit report, which is known as a hard inquiry.

A record of any hard inquiry, sometimes referred to as a hard pull, is registered on the credit report. Having one hard inquiry could lower your FICO® Score by up to five points, but only for one year.

To avoid multiple hard credit pulls, you can check to see if lenders offer HELOC prequalification with a soft credit pull instead.

New Credit Accounts

Applying for a HELOC means opening a new credit account. This could decrease the average age of your credit accounts and ding your credit score by a few points.

Effects of Using a HELOC on Your Credit

Once you’ve been approved for a HELOC, how you begin using funds and managing payments can affect your credit. Let’s explore what goes into these HELOC credit score impacts.

Credit Utilization Ratio

Your credit utilization ratio is a calculation of how much of your credit you’re using. In other words, it’s the percentage of your credit limit you’re using on all your revolving credit accounts, such as credit cards, combined.

So does a HELOC affect your credit score and credit utilization ratio? While HELOCs operate like a revolving line of credit, they’re secured by a property. This means that it isn’t included in your credit utilization ratio as part of your FICO score.

Using funding from a HELOC to pay off high-interest debt like credit cards could lower your credit utilization ratio and boost your credit score. Maintaining a credit utilization ratio below 30% is recommended to qualify for financing or get mortgage preapproval.

Payment History

Payment history is the largest component of a credit score. Making consistent, on-time payments each month on a HELOC could help build your credit score over time. On the flip side, failing to stay current on payments could hurt your credit score and ultimately put your property at risk.

HELOCs are typically structured to have higher monthly payments after the draw period ends. Once the repayment period begins, you won’t have the ability to continue drawing funds. You can use a HELOC repayment calculator to see what your monthly payment would be based on how much you owe on a HELOC, your repayment term, and interest rate.

Credit Mix

Your credit mix refers to the number and types of credit accounts you have, including student loans, home loans, credit cards, and car loans. Demonstrating your ability to manage different types of debts can benefit your credit score.

Taking out a HELOC could improve your credit mix (and credit score) if you don’t have other types of revolving credit, especially for borrowers without much credit history.

Bottom line: The HELOC–credit score connection can be significant.

Recommended: FHA Loans

Closing a HELOC and Its Credit Implications

Paying off and closing a HELOC can have impacts on your credit. (Paying the balance off on a HELOC removes the lender’s lien on your home.) Here are some potential credit implications to consider when closing a HELOC.

Account Age

If you’ve been making payments on a HELOC for several years, closing the account could potentially lower the average age of your accounts. How much this impacts your credit score will depend on the age of your other accounts.

But if the account is in good standing with no late payments, it can still factor into your credit history for several years after closure.

Credit Availability

Closing a HELOC won’t affect your credit utilization for your FICO score. But if you don’t have other revolving lines of credit, it could reduce your credit mix, potentially putting a small dent in your credit score.

Strategies to Minimize Negative Credit Impact

Applying for a HELOC — or opening any new credit account — can initially lower your credit score by a few points. But there are several ways to reduce further damage to your credit score.

Timely Payments

As a reminder, your payment history is the largest component that goes into calculating your credit score. Continually making on-time payments each month can build up your credit. Conversely, paying less than the minimum or missing a monthly payment could harm your credit score.

Note that the interest on monthly payments could be eligible for a tax deduction, like mortgage interest, if used to make substantial improvements on your home. You’ll want to discuss this with your tax advisor.

Managing Credit Utilization

As you manage monthly HELOC payments, keep an eye on the balances for other revolving lines of credit, such as credit cards. Again, keeping a credit utilization ratio below 30% is considered beneficial for your credit score.

Monitoring Credit Reports

Periodically checking your credit report can help detect any instances of fraud or payment errors and inform strategies to improve your credit score. Requesting a credit report is free, and it’s a good idea to do so before applying for a new loan or credit card to understand how lenders will evaluate you as a borrower.

Recommended: Mortgage Rates

The Takeaway

How does a home equity line of credit affect credit scores? Applying for a HELOC involves a hard credit check, which can have some impact on your credit. However, making timely payments, keeping a strong credit mix, and maintaining a low credit utilization ratio can mitigate these effects and strengthen your credit over time.

SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.

Unlock your home’s value with a home equity line of credit from SoFi, brokered through Spring EQ.

FAQ

Does opening a HELOC significantly lower my credit score?

Opening a HELOC typically involves a hard credit check which can lower your credit score by several points. Whether this is significant will depend on what score you start with — if your credit score is teetering near an important benchmark, such as the 669-670 dividing line between “fair” and “good” credit, it may be an important effect. The hard credit check can stay on your credit report for 12 to 24 months.

How does a HELOC affect my credit utilization ratio?

A HELOC typically does not affect your credit utilization ratio, as it’s secured with a property as collateral versus other revolving lines of credit, such as credit cards, which are unsecured.

Will closing a HELOC improve my credit score?

Closing a HELOC can have a negative effect on your credit score by reducing your credit mix and age of accounts. However, if you made on-time payments over the life of the loan, that will be reflected on your credit history for several years.

Can a HELOC help diversify my credit mix?

Yes, a HELOC can help diversify your credit mix and show lenders that you’re a responsible borrower. If you have installment credit like a mortgage, student loans, or personal loans, taking out a HELOC would provide a form of revolving credit to your credit mix.

How can I use a HELOC responsibly to maintain a good credit score?

Paying off higher-interest debt, such as personal loans or credit cards, and funding home improvements that may make it possible for you to deduct the interest paid on a HELOC, are examples of how to responsibly use a HELOC. Making monthly payments on time and in full is essential to safeguarding your credit score when taking out a HELOC.

---

Photo credit: iStock/kate_sept2004

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

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

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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

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.

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

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
^²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.
You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.
In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.

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

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

SOHL-Q125-057

Read more

If someone has a lot of money, you might say they’re rich or even wealthy. But there’s actually a difference between wealthy and rich, both in terms of how much money you’re talking about and how someone uses their financial resources.

A rich person can have a lot of money or earn a high income, but their money may only go so far if their lifestyle is extravagant or they take on significant debt. They may live in the moment or spend freely. A wealthy person, by contrast, is generally more focused on securing their long-term financial picture.

Is it better to be rich vs. wealthy? Here’s a closer look. Understanding the difference between them can help you to shape your personal financial plan.

What Does “Rich” Mean?

If you ask friends, family members, or coworkers whether they’d like to be rich, quite a few of them might say yes. After all, if everyone was satisfied with their financial situation, then get-rich-quick schemes wouldn’t exist. But what is the difference between rich and wealthy, and does it matter?

If you look up “rich” in a dictionary, the most common definition centers on what a person has. Someone who’s rich has a lot of possessions and material wealth. So a rich celebrity or social media influencer, for example, might own multiple homes, cars, or jewelry that’s worth millions. They may spend their time jet-setting around the world or partying with other rich people.

That’s what it means to be rich in a financial sense, but someone could also be rich in other ways. For example, someone who has an extensive personal network may be said to be rich in friends. And someone who’s well-educated or well-traveled may be described as being rich in knowledge or experience.

Recommended: What Is the Average Pay in the United States Per Year? 

What Does “Wealthy” Mean?

When discussing what it means to be wealthy vs. rich, it’s easy to assume they’re similar. Both rich people and wealthy people may maintain a lifestyle that’s posh and out of reach for the average person. The distinction between wealthy and rich, however, is that wealth is more sustainable and lasting than simple riches.

There are different ways to measure wealth. The Census Bureau, for instance, uses net worth to estimate the wealth of American households. Net worth is the difference between your assets (what you own) and your liabilities (what you owe). Someone who is wealthy may prioritize accumulating assets that produce income or appreciate in value over time, while limiting their exposure to debt.

Wealthy people may enjoy much higher incomes than everyday people, and, importantly, they may spend less than they earn. Some wealthy people are born into money; others build their fortunes through a combination of career, entrepreneurship, and careful investment.

When talking about wealth, some make the distinction between new money vs. old money. New money is earned while old money is passed down from generation to generation. In the U.S., many of the wealthiest individuals are well-known business owners or investors, like Jeff Bezos, Bill Gates, and Mark Zuckerberg to name a few. Some of these billionaires were born into wealthy families while others were not.

Recommended: Is $160,000 a Good Salary for a Single Person in 2024? 

Key Differences Between Rich and Wealthy

When comparing rich vs. wealthy people, the way they approach money matters. Rich people may see money as a means to buy things and maintain a certain lifestyle. Wealthy people, on the other hand, may view money as a means of creating more money, either through investments or business ventures.

Here’s a closer look at the difference between wealthy and rich.

Amount of Money

There’s no set dollar amount at which someone goes from being rich to wealthy. Instead, it’s largely about perception. For example, you might feel rich if you normally keep $500 in your bank account and you decide to use a tax refund to bump that up to $5,000. Meanwhile, someone who wins $100 million in the lottery after working a minimum-wage job for years might think of themselves as rich rather than wealthy.

Generally, the higher your net worth, the closer you get to the wealthy vs. rich divide. Someone who has $10 million in assets and no debt, for example, may be in a better position to invest and fund philanthropic efforts than someone who’s making $200,000 a year but has a negative net worth because of debt. The person with the $10 million in assets is wealthy, while the other person’s earning power could put them in the “rich” bucket, though their debt actually erases that upon a closer look.

Investments

People who are rich may put spending and funding their lifestyle ahead of investing. So even though they might pull in a six- or even seven-figure income each year, a lot of that money goes right back out of their bank accounts. They might have some retirement savings if they’re participating in, say, their 401(k) at work, but investing may get pushed to the back burner.

Wealth investing can look very different. Wealthy people tend to invest their money so they can grow it and turn it into more money. They may have money in real estate, the stock market, and other investments that provide them with passive income or aids in building additional wealth for themselves and future generations.

How They Live Their Lives

Money can be a tool for improving your quality of life, but what that life looks like can be very different if you’re rich vs. wealthy. A rich person might think nothing of dropping $10,000 on a shopping trip or last-minute travel. They tend to live in the moment and may not consider how spending that money today might affect them tomorrow.

A wealthy person may still enjoy the finer things, but their approach might be more balanced. For example, billionaire Warren Buffett is one of the wealthiest people in the U.S., but he notably lived in a relatively modest home that he purchased in 1958 for over seven decades. Other wealthy millionaires and billionaires may similarly adopt a frugal mindset or focus on giving away large amounts of their wealth to good causes.

Hobbies

Certain hobbies and pastimes are the domain of the rich or wealthy, simply because of how much they cost. Yachting, big game hunting, and polo are just a few examples of activities that are associated with wealthier people who can afford the associated costs.

Rich people may also indulge in those kinds of pastimes but on a smaller scale than those who are wealthy. Instead of buying their own private yacht or plane, for example, they might lease one when they want to plan a getaway. Or instead of going to their private island for the summer, they may splurge on a couple of weeks’ vacation in Bora Bora or St. Kitts.

Expenses

Rich and wealthy people can have very different expenses, depending on their lifestyle. A rich person may have a mortgage payment, car payments, private school tuition payments for their kids, and all the regular day-to-day living expenses like utilities and food. They may also have credit card bills or student loans to pay each month.

Wealthy people may not have debt-related expenses, such as a mortgage or car payment, since they might own those assets outright. If they use credit cards, those bills might get paid in full each month rather than accruing interest.

Ultra wealthy people may have unique expenses that the rich don’t, such as maintenance for one or more vacation homes, insurance for a private jet or yacht, and staff payroll if they employ housekeepers, landscapers, and other individuals to work in their home. They may also pay out expenses to financial advisors or investment advisors for wealth management services.

Streams of Income

A rich person may rely on their paychecks from working a regular job as their main source of income. They might also earn money from side hustles or businesses they own, but generally, they’re working for a living in some way. If they don’t keep up their pace at work, they could lose that status of being rich.

An oft-cited IRS study suggests that the average millionaire has seven different streams. They may have a job, but a large part of their income may come from different types of investments or business ventures. Wealthy people can also generate income from pensions or annuities. It this way, they are less beholden to what you might call the daily grind.

Recommended: Aiming to Become a Millionaire? These Steps Could Help 

Budgeting and Financial Planning

Rich people might make a six-figure or even seven-figure income or more, but they may not save or invest much of that income. (Think about those actors and singers you may have read about who have frittered away their fortunes on luxury real estate, travel, fashion, food, and wine.) They might have a budget, but not always stick to it. Perhaps they’re spending more than they make as they attempt to cover their lifestyle. Some rich people may not be very forward-thinking in terms of planning for retirement or other long-term goals.

Wealthy people may not have to live by a strict budget either if their assets substantially outpace their spending. But they may take financial planning more seriously and be proactive about things like investing and retirement planning. They may also focus on estate planning and the best ways to pass on as much of their wealth as possible while minimizing taxes for their heirs.

Is It Plausible to Become Wealthy?

Can a regular person become wealthy? The answer is that it depends on where you’re starting, where you want to go, and your strategy for getting there. Building wealth in your 30s, for example, could be easier if you have a solid income, no debt, and you’re committed to living well below your means. The odds of starting a billion-dollar company and becoming wealthy overnight are, on the other hand, much slimmer.

Having a clear plan and getting an early start are two of the keys to building wealth. The longer you have to save and invest money, the more room that money has to grow through the power of compounding interest. It’s also important to choose investments wisely to maximize their growth potential. Understanding your individual time horizon for investing and your risk tolerance can help you to decide which investment types to include in your portfolio.

Talking to a financial advisor can help you get some clarity on what you might need to do to begin building sustainable wealth. An advisor can review your situation, offer advice, or suggest tactics for creating a realistic budget, paying down debt, saving, and investing for the long-term.

---

---

Banking With SoFi

Whether you consider yourself rich, wealthy, or neither of the above, where you keep your money matters. Finding a bank that offers you a competitive rate on your savings and charges few, or no fees can help you make the most of the money you have.

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

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

Is a millionaire wealthy?

Whether a millionaire is wealthy or not depends on their financial situation and lifestyle. Being a millionaire means having assets worth at least one million dollars, but true wealth involves more than just a high net worth. It also includes financial stability, freedom from debt, and the ability to sustain one’s lifestyle without relying heavily on active income. A millionaire can be wealthy if their assets provide long-term financial security and passive income.

Is six-figures rich?

Someone with a six-figure income might consider themselves to be rich if they’re able to enjoy an upgraded lifestyle. For example, traveling frequently or buying luxury items are often associated with people who are rich. However, if that person lives in an expensive city and is supporting a family, they might not feel rich at all, despite their income. In other words, it depends on personal circumstances.

Is it better to be rich or wealthy?

Being rich vs. wealthy isn’t necessarily a matter of one being better than another. It all comes down to what you do with your money. If you think of yourself as rich, can live the lifestyle you want, and are avoiding debt while investing wisely, then you may be both rich and wealthy. And remember that being wealthier might ensure that you’re financially secure, but it doesn’t guarantee greater happiness.

---

About the author

---

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
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.

SOBNK-Q324-070

Read more