May
24
2022
Is It a Good Idea or Not to Get a Credit Card?

Should I Get a Credit Card? When to Consider Applying for a Credit Card

By | Budgeting & Goals, Credit, Financial Independence | Comments Off on Should I Get a Credit Card? When to Consider Applying for a Credit Card

To be or not to be: Hamlet’s existential question may well be applied to the question of should I get a credit card. While stories of snowballing debt can scare people away, credit cards can be valuable financial tools when used responsibly.

Before you apply, however, you should consider the reasons why to get a credit card and understand the ins and outs of using one. Read on for a rundown of when you should get a credit card, and when you might reconsider.

What Is a Credit Card?

A credit card is a payment mechanism that can substitute for cash or a check. The credit card itself — a thin piece of plastic or metal that may be presented in physical form or saved on your phone — is usually an unsecured line of credit.

Your credit card will have a credit limit, which represents the maximum amount of money you can borrow. The average credit limit is around $30,000, but limits vary depending on credit history and credit score.

Your card will also come with an interest rate, which is the amount of interest you’ll pay on any balance remaining at the end of each billing cycle. Interest rates can range from 0% and up; a good APR for a credit card will depend on your specifics, such as your credit card, but in general, the lower the better.

Credit cards also may have rewards programs, such as travel rewards, cash back, access to events or programs and more. There may also be benefits included with a card like purchase protection and insurance offerings.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

When to Consider Getting a Credit Card

Should I apply for a credit card? The answer to this depends on a few factors. For one, you’ll want to make sure you’re getting a credit card for the right reasons. Potentially valid reasons for why to get a credit card may include:

You want to build credit. A credit card can be a great way to build your credit history. By using a credit card and then paying off the balance on time and in full each month, you practice good credit habits and help improve your credit score. A strong credit score can potentially aid you in getting approved for car loans, mortgages, apartment rentals, and more.

You’re making a large purchase. Whether it’s a laptop for school or furniture for your apartment, putting a purchase on a credit card can provide purchase protection. This includes potentially being able to get your money back if the product isn’t as expected or services aren’t rendered. Additionally, some credit cards may offer promotional deals on APR, which could allow you to spread out your payments on your big purchase without paying interest.

You want more protection for your money. While fraudulent charges can still occur on a credit card, there are more protections in place to help protect your credit and identity with a credit card as opposed to cash or a debit card. Many major credit card companies even offer zero liability protection, which means you aren’t liable for any fraudulent charges made on your card in the event of theft or fraud.

You’re planning a trip. A credit card can be a good “just in case” tool to have in your wallet if you’re traveling. Some people like using a credit card for trip planning and expenses. Credit cards also may offer travel perks, such as checked baggage at no cost, or insurance protection, depending on the card.

Recommended: What is a Charge Card

Things to Know Before Getting Your First Credit Card

A credit card can make you feel like you have financial freedom. But with freedom comes responsibility. Here are some tips to keep in mind before you get your first credit card:

Pay your bills on time. Your payment history is a large part of your overall credit score. Setting up autopay as soon as you get your card can ensure that you never accidentally miss a payment.

Understand your credit utilization ratio. Your credit utilization ratio is the amount of money you owe on your cards compared to how much money is available for you to borrow. The lower your credit utilization ratio, the better. Even if you can’t pay your balance in full, paying as much of the balance as you can is helpful in keeping your credit utilization ratio low.

Check your statement every month. Be aware of how much you’re spending on the card. Check your statements and flag any charge that seems unfamiliar. This could be a sign of fraudulent activity.

Create financial habits that stick. Some people like to use their card for automated payments each month on a standard bill, like a cell phone bill. Others like to use their card for specific purchases, like gas or groceries. There are many “right” ways to do credit cards, so it’s helpful to figure out what works for you before you start swiping.

Stay within your means. Some people are tempted to spend when they have a credit card. Make sure to stick within your means and only purchase what you would have been able to cover with cash. It isn’t easy to get credit card debt forgiveness if you take on more debt than you can handle, so you’ll want to avoid that road if possible.

Recommended: When Are Credit Card Payments Due

When Not To Consider Getting a Credit Card

You know yourself best, and you may have a sense opening a credit card may make it too tempting to go overboard. Here are some reasons to not open a credit card:

A partner or friend is pressuring you to do so. If a partner or friend needs access to money and suggests you open a credit card, this could lead to pressure to spend beyond what you can afford.

You’re still working on money management. If you’re still working on money management, sticking to debit cards or buy now, pay later arrangements may help you build up to being able to confidently use a credit card.

You want to buy something you can’t afford. It may be tempting to put a trip or a big purchase on a credit card, but this can potentially cause your finances to spiral out of control. Even if a credit card offers 0% interest, only putting what you can afford to pay off on a credit card is a good rule of thumb.

Pros and Cons of Opening a Credit Card

Weighing the pros and cons of a credit card can help you assess whether or not you should get one.

Pros of Getting a Credit Card

 Cons of Getting a Credit Card

Protection against theft and fraud Temptation to spend beyond your means
Opportunity to build credit when used responsibly Interest will accrue if you don’t pay off your balance in full
Access to perks and rewards Potential to harm your credit score
Convenience Fees may apply

Avoiding Credit Card Traps

As evidenced in the history of credit cards, high interest rates and the ease of spending beyond your means with a credit card can land you in debt. However, you can have a credit card and avoid these traps with these tips in mind:

•   Only spend what you can afford. One way to avoid racking up debt on your credit card is to treat your credit card as you would cash. This means only spending as much as you already have in your pocket, with other budgetary concerns still in mind.

•   Always pay your balance in full. Whenever possible, it’s important to pay your balance in full each month. This can help you from incurring interest, which can easily tip you into a debt cycle and make it more difficult to pay off your credit card balance in subsequent months.

•   Set your bill payments to autopay. You can always set the autopay to the minimum, then manually log in and pay the balance in full. This will ensure you’re always on time with your payments — an important factor in determining your credit score.

•   Check your credit card statement each month. Make sure to look over your statements every month to check for any errors or unexpected charges. This can also help you to notice your spending habits and anywhere you can potentially cut back.

•   Don’t get stuck chasing rewards. Rewards can be a helpful part of how credit cards work, but as you’re learning to use credit, simpler is better. Consider sticking to just one card in the first few years of building credit, and be careful about spending just to snag rewards.

Alternatives to Using a Credit Card

There are alternatives to credit cards, which can still give you some of the benefits that a credit card might offer.

Use Buy Now, Pay Later Loans

Loans that offer fixed payment strategies to pay off a purchase are becoming more popular. Called installment loans, these loans offer funds that cover the amount of a purchase. Many do not charge interest, but late fees may apply for missed payments.

Like credit cards, it can be easy to overspend with a buy now, pay later loan. Additionally, your creditworthiness may get checked each time you use one of these loans to cover a purchase, which could negatively impact your credit score if it’s a hard inquiry.

Become an Authorized User

As an authorized user, your name is added to someone else’s credit card account, such as that of a parent. In some cases, you may get your own card and be able to make purchases. But in other cases, the person may add you to the card without giving you access. Either way, this can help build your credit history and credit score without the responsibility of having a credit card account under your own name.

Recommended: Tips for Using a Credit Card Responsibly

Consider a Secured Credit Card

A secured credit card can be helpful for people who don’t have a credit history and may not be able to get approved for a traditional credit card. With a secured credit card, you may pay a deposit, such as $500. This then becomes your credit limit. Over time, and with good credit behavior, you may be able to switch your card to a traditional, unsecured card.

FAQ

Should I get a credit card at age 18?

You can get a credit card at age 18, but you don’t have to do so. If your parents or a relative has a good credit history, consider asking to become an authorized user on their account, which can help build your credit. Keep in mind that if you do decide to apply for a credit card at 18, you must either provide proof of income or get a cosigner.

Are there risks of having a credit card?

Risks of having a credit card include spending beyond your means. This, coupled with high interest rates, could lead to debt that is hard to pay down. By learning to use a card responsibly, you can help mitigate these risks.

How do I choose the right credit card?

The right credit card for you depends on multiple factors, including how you plan to use the card, the interest rate offered, and the perks and rewards of the card. But it’s okay to keep things simple for your first credit card and not get too into the weeds comparing rewards and perks. As you build your credit, you can potentially explore additional cards.

How can I get a credit card with no credit history?

If you have no credit history, you can become an authorized user on a relative or trusted friend’s account. Another option is to apply for a secured credit card. With a secured credit card, you’ll put down a deposit that will become your credit limit. You can then use the card to build credit. Over time, you may be able to switch your credit card from a secured credit card to an unsecured credit card as your credit grows.


1See Rewards Details at SoFi.com/card/rewards.

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.

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 .


Photo credit: iStock/Georgii Boronin
SOCC0322007

Read more
May
23
2022
Guide to Jumbo Certificates of Deposit (CD)

Guide to Jumbo Certificates of Deposit (CD)

By | Growing Wealth, Investing, money | Comments Off on Guide to Jumbo Certificates of Deposit (CD)

A jumbo certificate of deposit (CD) is a type of savings account that has a higher minimum required initial deposit amount than a regular CD. Jumbo CDs generally require a deposit of $100,000, and they pay a higher interest rate to account owners in return for this higher initial deposit.

Certificates of deposit are savings accounts where the account owner gives up access to their funds for a specified period of time, and earns interest in return for locking up their money. The interest rate may be fixed or variable depending on the particular CD. At the end of the term, known as the maturity date, the account owner receives their initial deposit plus the earned interest.

Is a jumbo CD right for you? Here’s what you need to know about how jumbo certificates of deposit work, and the pros and cons of this type of account.

What Is a Jumbo Certificate of Deposit?

You’re probably familiar with the traditional certificate of deposit, or CD. These accounts are similar to savings accounts, but they pay higher interest rates in exchange for certain restrictions. Generally, most CDs have a maturity date between three months and five years. Since CDs require that funds are unavailable to the account owner during the term, they pay higher rates than other types of savings and interest-bearing checking accounts.

Unlike a regular CD, jumbo CDs generally require investors to deposit at least $100,000 when they first open their account. There are some jumbo CDs that have lower entry requirements of, say, $50,000; these are typically offered by credit unions and smaller banks.

Investors looking to open a smaller CD account are generally better off opening a regular CD. The rates can be just as good as a jumbo CD, but without the steep initial deposit requirements.

Regular vs Jumbo CD

Here’s what you need to know about the similarities and differences between investing in ordinary CDs and jumbo CDs.

Similarities

•   What is a certificate of deposit vs. a savings account? Regular and jumbo CDs are savings-like accounts that require investors to lock up their funds for a specified period of time in exchange for a higher rate of interest than a traditional savings account.

•   Both types of accounts can be set up for shorter and longer terms, typically from three months to five years.

•   If an investor needs their money before the CD’s term is complete, they will likely pay a penalty on the early withdrawal.

Differences

•   Jumbo CDs have higher entry requirements than regular CDs. Regular CDs typically have an initial minimum deposit requirement of less than $5,000, and some have no requirement at all. Jumbo CDs typically require a $100,000 deposit.

•   Jumbo CDs typically have somewhat higher interest rates than regular CDs. However, some regular CDs have equal or better rates than jumbo CDs. Usually large banks have some of the best CD interest rates.

•   Ordinary CDs are insured by the FDIC up to $250,000, as are jumbo CDs — but any amount in a jumbo CD above $250,000 is not FDIC-insured and subject to risk of loss.

•   Regular CDs tend to be more attractive to retail investors; jumbo CDs are geared toward large institutional investors.

Ordinary CDs vs Jumbo CDs

Similarities

 Differences
Investors deposit funds for a fixed period in exchange for a higher interest rate than a traditional savings account. Jumbo CDs require a $100,000 minimum deposit vs. $5,000 or less for a CD.
CD terms are typically three months to five years, but can vary. Jumbo CDs generally have somewhat higher interest rates.
Early withdrawals from any CD typically trigger a penalty. Both types of CD are FDIC-insured up to $250,000, but amounts in a jumbo CD above that aren’t covered.
Regular CDs are geared toward retail investors; jumbo CDs to institutional investors.

Advantages of Jumbo CDs

Jumbo CDs offer several advantages for investors looking to buy into a safe savings account with a fixed rate of return.

Steady Rate of Interest

Because jumbo CDs earn a steady interest rate over a fixed period of time and are fairly safe investments (i.e. your money is FDIC-insured up to $250,000), they can be a good way to save up for a longer-term financial goal, such as buying a home or saving for a wedding.

Higher Interest Rate Than Traditional CDs

Jumbo CDs tend to pay higher interest rates than regular CDs and savings accounts. National averages show that annual percentage yields for jumbo CDs tend to be about one-hundredth of a percentage point larger than regular CD yields, which isn’t much — but can add up over time.

Steady Interest Can Partly Offset Market Risk

By holding some funds in a jumbo CD that earns a steady rate, it’s possible to offset the potential volatility in other parts of your investment portfolio. Also, although interest rates may not be super high, the compound interest on the large amounts invested in a jumbo CD can add significantly to investors’ earnings (see example below).

Insured up to $250,000 per Account

The FDIC or the NCUA insure CD accounts for up to $250,000, making jumbo CDs one of the safest types of investments.

Those who want to deposit more than $250,000 might consider opening a joint CD account that allows $250,000 per account owner, or they can open different CD accounts with multiple banks. Jumbo CDs are popular with retirees who don’t want to put all their money into the stock market. On the downside, jumbo CDs tend to earn lower returns over time than stocks.

Disadvantages of Jumbo CDs

Although there are several reasons jumbo CDs can be good investments, they also come with some downsides. The biggest buyers of jumbo CDs are institutional investors looking for safe investments with fixed returns. Sometimes these institutional investors put money into a CD that they plan to invest somewhere else but they want to earn interest on it while they wait for that next investment. Retail investors typically look for CDs with lower entry requirements.

Lower Return Than Many Other Fixed-Rate Investments

Jumbo CDs are safe fixed-rate investments, but they have high minimum balance requirements and pay out lower interest rates than other types of fixed-rate investments like bonds.

Interest Rate Risk

Investors face the potential risk of interest rates going up after they buy a CD. If this happens they may miss out on the opportunity to earn those higher rates.

May Not Keep Up With Inflation

Jumbo CDs pay higher interest rates than traditional savings accounts, but the rate of these CDs may not be that high and therefore they may not keep up with the pace of inflation. The cost of living may rise more quickly than the return provided by the CD.

It may help investors to buy into jumbo CDs with longer terms, since those pay out higher interest rates — but the tradeoff there is that your money is locked up for an even longer period.

Recommended: How to Protect Money Against Inflation

Early Withdrawals Will Trigger a Penalty

When an investor puts money into a jumbo CD, they cannot access those funds until the maturity date. If they do want to access the funds they will have to pay an early withdrawal penalty. Each bank has different penalties for early withdrawal, but there are also no-penalty CDs available, so it’s important for investors to consider their individual situation and look into their options to avoid paying fees.

Reinvestment Rate Risk

If interest rates go down during the term of the jumbo CD, then the investor might struggle to find a new investment that provides a similar rate when their jumbo CD reaches its maturity date.

Jumbo CD Example

Interest rates for jumbo CDs are always changing and they can be different in different regions, but below are two examples of how a jumbo CD might be structured:

•   An investor buys a $100,000 jumbo CD from Bank A. It has a nine-month term and pays 1.5% interest. When the investor withdraws the funds at the maturity date, they’ll receive $101,122.90.

•   Another investor buys a $200,000 jumbo CD from Bank B, with an 18-month term and 2.00% interest. At the maturity date, the investor will get $206,029.90.

The Takeaway

Jumbo CDs are savings accounts with high minimum deposit requirements — typically $100,000 — that pay higher interest rates than regular CDs. These are popular with large institutional investors such as banks and corporations. While they are similar to regular CDs in some ways — your money is unavailable until the maturity date; early withdrawals can trigger a penalty — jumbo CDs may come with more risks. For example, only the first $250,000 of your money is insured. And by locking up your money at one fixed rate, you may lose out if interest rates rise.

If you’re ready to open a savings account, one easy way is through SoFi’s mobile banking app. You can sign up for an account right from your phone and pay zero account fees — and if you qualify and use direct deposit, you can earn a competitive APY. Open your Checking and Savings today.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

What is the range of jumbo CD rates?

Jumbo CD rates are between 0.40% and 2.1% as of April 25, 2022. The highest rates often depend on the length of the term.

How much money is in a jumbo CD?

Jumbo CDs typically require a minimum deposit of $100,000.

Are jumbo CDs negotiable?

Jumbo CDs are usually negotiable, meaning they can be sold on a secondary market.

Photo credit: iStock/Andrii Yalanskyi

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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.

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, 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 Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found 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.

SOBK0322032

Read more
May
23
2022
All You Need to Know About a Foreign Currency Certificate of Deposit

All You Need to Know About a Foreign Currency Certificate of Deposit

By | Budgeting & Goals, Growing Wealth, money | Comments Off on All You Need to Know About a Foreign Currency Certificate of Deposit

A foreign currency certificate of deposit (CD) is similar to an ordinary CD in that an investor can lock up funds for a period of time and earn a set interest rate. But with a foreign CD, the money is converted into another currency for the duration of the term; the funds earn interest in that currency, and the money is converted back to dollars at the maturity date.

Foreign currency CDs sometimes offer much higher returns than other types of CDs. However, they do come with some potential downsides and these CDs can be affected by volatility in the currency markets.

Here’s what you need to know about how foreign currency CDs work, their pros and cons, and how to start investing in them.

How Foreign Currency CDs Work

There are a number of ways to invest in foreign currency. How does a foreign currency CD work? An investor deposits their U.S. dollars in the CD account for a specified period of time known as the term (typically three months to five years). The dollars are then exchanged for a foreign currency or basket of currencies, and the money earns interest in that currency.

At the end of the term the total is converted back to U.S. dollars, and the investor receives their principal plus the interest — similar to an ordinary certificate of deposit.

Typically CD interest rates are somewhat higher than traditional interest-bearing savings or checking accounts, to compensate for the fact that the investor’s money is inaccessible for the term — and foreign currency CDs tend to have higher rates owing to the higher risk.

The longer the term of a foreign currency CD, the higher interest rate the investor earns.

Foreign currency CDs can be a way for investors to hedge against the risk of the U.S. dollar depreciating in value.

How You Can Make Money With Foreign Currency CDs

Returns earned on foreign currency CDs depend on the current interest rates in the country of the chosen currency. Every country has different interest rates, some of which are much higher than the U.S. rates. By investing in another country one may be able to earn those higher rates.

If the currency exchange rates work in the investor’s favor, the value of the CD could also increase – and they could see a higher return in addition to the interest gained.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 4.00% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.


How You Can Lose Money With Foreign Currency CDs

Although there is an opportunity to earn high interest rates on foreign currency CDs, this type of CD is risky. Other types of CDs are known to be safe investments, so it’s important to understand the difference.

Currency markets have high volatility and are unpredictable, so the exchange rate between the U.S. dollar and the chosen currency may fluctuate a lot between the beginning and end of the CD term. If a foreign currency loses value compared to the U.S. dollar, an investor will lose money at the end of the term, and the interest gained may not be more than the loss. However, if a foreign currency rises in value compared to the U.S. dollar, investors will earn an even higher return than the interest alone.

The intricacies of currency markets are one reason why foreign currency CDs aren’t recommended for retail investors who don’t have the tools or experience to anticipate what might happen to any particular currency.

One catch to be aware of is that the countries that have the highest interest rates tend to have the most volatile currencies. So it can be tempting to invest to earn those higher rates, but there is a higher risk of loss as well.

How Risky Are Foreign Currency CDs?

Foreign currency CDs are fairly risky investments because currency markets can be quite volatile. For this reason, these CDs tend to be used by institutional investors more so than retail investors.

Investing in currencies requires an in-depth understanding of many different factors that can affect their values. Institutional investors often buy into foreign currency CDs if they know they have an upcoming payment to make in that currency. They can exchange the money and earn interest on it until it becomes time to make the payment.

How to Protect Your Investment

There are a few key ways to protect investments in foreign currency CDs.

Temper Currency Risk

One of the greatest risks in investing in foreign currency CDs is that global currencies can fluctuate a lot in a short amount of time. It can be tempting to buy into currencies that have the highest interest rates, but those are the most volatile and risky.

Instead, it’s better to choose stable currencies with lower interest rates, or invest in a basket of foreign currencies. It’s also recommended to only put a small amount of money into foreign currency CDs for portfolio diversification and exposure to foreign markets.

Look for FDIC Protection

The FDIC insures CDs up to $250,000, but this only applies to CDs opened with U.S. banks. Although an investor can buy into a CD from a foreign bank, it won’t be insured and will come with higher risk, so it’s best to look for foreign currency CDs backed by U.S. banks.

Another important fact to keep in mind is that FDIC won’t protect against currency fluctuations for foreign currency CDs.

Be Aware of Fees and Charges

All types of CDs tend to have early withdrawal fees, although there are some no penalty CDs. Foreign currency CDs also have conversion fees that are sometimes included in the price of the CD. Be sure to inquire about the cost of any foreign currency CD.

How to Open a Foreign Currency CD

Most U.S. banks don’t offer foreign currency CDs, so investors interested in buying into them will need to do some research to find them. Banks that do offer foreign currency CDs tend to offer multiple foreign currency choices. Some also offer CDs that have a group of foreign currencies in them to provide investors with broader exposure.

Investors can open foreign currency CDs with overseas banks, but they are not FDIC insured so they come with greater risks.

Banks offering foreign currency CDs sometimes require a certain minimum deposit amount, and there may be fees associated with currency exchange.

Other Ways to Invest in Foreign Currency

In additional foreign currency CDs, there are other ways investors can gain exposure to foreign currencies:

•   Mutual funds

•   Exchange-traded funds (ETFs) and leveraged ETFs

Investing in mutual funds and ETFs is just as easy as investing in stocks, and more CDs are becoming available to retail investors, so these are simple ways to buy into foreign currency markets. Forex trading is more complicated.

The Takeaway

Foreign currency certificates of deposit are one way investors can gain exposure to foreign markets. Although this type of CD can earn a higher interest rate than traditional CDs, they also come with a higher degree of risk. Global currency markets are complex and difficult to predict — often volatile — with the potential for higher returns but also steep losses for foreign currency CD holders. This type of savings option is recommended only for more experienced investors.

If you’re looking to open a checking or savings account, you might want to consider SoFi’s mobile banking app: an easy all-in-one account. You can open a Checking and Savings on your laptop or phone. There are no account fees, and if you use direct deposit you can earn a competitive APY. The online platform lets you set personal savings goals, and you can see all your financial information in one simple dashboard.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

Are foreign CDs FDIC insured?

If a foreign CD is purchased through a U.S. bank it will be FDIC insured, but if it is purchased through a foreign bank it is not.

Which US banks offer foreign currency accounts?

The most well known bank offering foreign currency CDs is TIAA bank, formerly known as Everbank.

Can US banks hold foreign currency?

Yes, U.S. banks can hold foreign currency.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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.

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, 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 Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found 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.

Photo credit: iStock/Drazen_
SOBK0322033

Read more
May
20
2022
FAFSA form on desk

Understanding How Direct Stafford Loans Can Help Fund Your Education

By | Debt Payoff, Fresh Out of School, Student Loans, student_loan | No Comments

Direct Stafford Loans (or simply Stafford Loans or Direct Loans) are the most common federal student loans available for students seeking financial aid for college. While there are Stafford Loan limits, most students who fill out the Free Application for Student Aid (FAFSA®) can receive some amount of financial aid, whether those Stafford Loans are subsidized or unsubsidized.

Students interested in getting federal aid—including grants, federal student loans, and federal work-study—must submit the FAFSA annually. Here are some other important facts, deadlines, and tips to get you ready to apply for federal financial aid.

Key Points

•   Direct Stafford Loans are federal student loans available to eligible students, offering subsidized and unsubsidized options for financial aid to cover college expenses.

•   Subsidized loans do not accrue interest while the borrower is enrolled at least half-time, whereas unsubsidized loans start accruing interest immediately after disbursement.

•   Loan limits for Direct Stafford Loans vary based on a student’s year in school and dependency status, with maximum amounts set annually by Congress.

•   Repayment begins after a six-month grace period following school enrollment changes, and various repayment plans are available to help manage monthly payments.

•   Borrowers can consolidate federal loans or refinance with private lenders, but refinancing may result in the loss of federal benefits and protections.

What Is a Direct Stafford Loan?

A Stafford Loan is a common name for the federal student loans available to eligible students directly from the US Department of Education. These subsidized or unsubsidized federal loans are often referred to as Stafford Loans or Direct Stafford Loans, which are offered under the William D. Ford Federal Direct Loan (Direct Loan) Program.

In 1988, Congress changed the name of the Federal Guaranteed Student Loan program to the Robert T. Stafford Student Loan program in honor of higher education champion, Senator Robert Stafford. This is one reason why Stafford Loans are sometimes referred to by different names.

Direct Stafford Loans are taken out in the student’s (not a parent’s) name. Before one accepts any loans as part of a financial aid package, it’s important to understand the fundamental differences between the two types of Stafford Loans you can apply for: subsidized or unsubsidized.

Subsidized vs Unsubsidized Loans

There are two different types of Direct Stafford Loans: subsidized and unsubsidized. With a subsidized Stafford Loan, the government will pay the interest that adds up while the borrower is in school at least half-time, during the loan’s grace period (the first six months after graduating or dropping below half-time enrollment), and during a deferment—an official postponement of payments. In contrast, borrowers with unsubsidized student loans are responsible for all of the interest that accrues on the loan at all times.

To be eligible for a subsidized loan, borrowers must meet the income requirements for need-based aid. The school determines the amount a student is able to borrow. As of 2012, subsidized Stafford Loans were no longer available for graduate or professional students.

Related: Explaining Federal Direct Unsubsidized Loans

Unsubsidized Stafford Loans start to accrue interest as soon as the loan is disbursed. These loans are available to undergraduate, graduate, and professional students, and there is no requirement to demonstrate financial need.

Students are not required to start paying back unsubsidized Direct Stafford loans while they are in school, but they are responsible for the interest at all times—including before graduation and during the loan’s grace period.

Students can estimate their federal student aid eligibility before filling out the FAFSA. If students have the flexibility to only accept some of the financial aid package, it may be worth accepting subsidized loans before unsubsidized (if eligible) in order to take advantage of the potential interest savings.

Stafford Loan Limits and Rates

It is up to a student’s school to determine which loan type and loan amounts they receive every year. There are Direct Stafford Loan limits, which are determined by a student’s year in school and whether they are considered a dependent or independent student.

What Is the Direct Stafford Loan Interest Rate?

Interest rates for federal student loans are fixed for the life of the loan and are set annually.

For the 2024-2025 school year, the federal student loan interest rate is 6.53% for undergraduates, 8.08% for graduate and professional students, and 9.08% for parents. The interest rates, which are fixed for the life of the loan, are set annually by Congress.

What Are Direct Stafford Loan Limits For Undergraduates?

First-year undergraduate dependent students are eligible for Direct loans of up to $5,500, but only $3,500 of that amount can be subsidized. (Note: this excludes students whose parents are ineligible for Direct PLUS Loans.)

This amount can increase with each year you’re in school at least half-time, with even higher limits for eligible graduate students.

For undergraduate dependent students, the current annual loan limits are as follows :

•  First Year: $5,500 maximum, no more than $3,500 subsidized

•  Second Year: $6,500 maximum, no more than $4,500 subsidized

•  Third Year and Beyond: $7,500 maximum, no more than $5,500 subsidized

•  Total Direct Stafford Loan Limits: $31,000 max, $23,000 subsidized

The loan limit amounts vary based on a student’s year in school. Additionally, loan limits differ for dependent and independent students. Independent students are generally considered to be financially independent by meeting certain eligibility requirements. Graduate or professional students can take out a maximum of $20,500 annually, but only in unsubsidized loans.

Dependent students whose parents are not eligible for a Direct Parent PLUS Loan, might be able to take out additional Direct Unsubsidized Loans.

Additionally, students can’t receive Direct Subsidized Loans for more than 150% of the published length of their degree program. For instance, if you are in a four-year bachelor’s degree program, the maximum amount of time you can receive Direct Subsidized Loans is six years.

Applying for a Direct Stafford Loan

In order to qualify for Direct Loans, students must be a US citizen, permanent resident, or eligible non-citizen; enrolled at least part-time in an accredited college; and not in default on any other education loan.

Students can apply for all federal financial aid online via the FAFSA website. According to the Department of Education, almost every FAFSA applicant is eligible for some kind of student aid package that may include federal student loans. Unlike most private student loans, however, most federal student loans do not require a credit check or a cosigner.

Typically, a student’s school will apply their student loan funds to pay for tuition, fees, room and board, and other school charges. (They also factor in any scholarships, federal grants and work-study.) If any additional funds remain, the money will be returned to you, which is why it’s important to carefully consider the amount of loan funding you need.

While a loan refund may be nice in the moment, that money will still need to be repaid (with interest)—though some students might find the funds useful for other school-related items like books and technology. (All Direct Stafford Loan funds must be used for education expenses.)

When Do You Have to Pay Back Your Direct Stafford Loan?

The simple answer is: after the grace period. The grace period for Direct Stafford Loan repayment begins the day the borrower officially leaves school, and lasts for six months. Also, if you change your student status to less than half-time enrollment, that starts the clock on the grace period, too.

Take note: educational institutions define “half-time enrollment” in different ways. The status is usually, but not always, based on the number of hours and credits in which a student is enrolled. When in doubt, check with the school’s student aid office to confirm their official definition.

The total timeframe of the Direct Stafford Loan repayment grace period: six months, and not a day more (with a handful of exceptions ). Another thing to keep in mind about that grace period: students may want to start making payments on the loan during the grace period.

Even though grace periods are meant to give borrowers time to adjust to their post-school life, the interest on an unsubsidized loan is still accruing during the grace period. At the end of the grace period, the accrued interest is capitalized, or added to the principal amount of the loan.

One quick tip while on the subject of grace periods: Find out who the student loan servicer is so you know who to contact with any questions. Borrowers don’t get to choose their own federal student loan servicer. They’re assigned by the Department of Education to handle billing and other services.

Repaying Direct Stafford Loans

The default payment plan is the Standard Repayment Plan, which sets the monthly payment to the amount that will pay off the loan in 120 payments, or 10 years. However, there are alternative federal repayment plans to consider that can help lower monthly payments. (Note that lowering the monthly payments is generally the result of extending the repayment term, which will usually make the loan more expensive in the long run).

Direct Consolidation Loans

There are also Direct Consolidation Loans that allow borrowers to consolidate their federal student loans into one new loan, at an interest rate that’s the weighted average of all the existing interest rates (rounded up to the nearest eighth of a percent). That typically doesn’t help save money on interest but does streamline repayment (one loan, one lender, one payment to make each month).

Student Loan Refinancing

Another option is to refinance student loans with a private lender, which may be appealing to borrowers who are in a financially stable place and have federal and/or private student loans.

Refinancing lets you pay off the loans you already have with a brand-new loan from a private lender. This can be done with both federal and private loans. The new loan from a private lender may allow borrowers to breathe easier with interest rates and repayment terms that work better for them.

But refinancing isn’t without its downsides. Federal student loans that are refinanced with a private lender, will lose all the federal benefits and protections—like income-driven repayment options and loan forgiveness for public service work. Borrowers who want to keep their federal student loans as federal student loans could consider consolidation instead.

The Takeaway

Direct Stafford Loans are federal student loans offered to students to help them pay for college. There are two major types of direct loans, subsidized and unsubsidized. Students with subsidized student loans are not responsible for any accrued interest while they are enrolled at least half-time and during the loan’s grace period. Unsubsidized student loans begin accruing interest as soon as they are disbursed, and borrowers are responsible for repaying all of the accrued interest at all times.

The size of a Stafford Loan depends on such factors as education costs and financial aid eligibility. If your costs are higher than your awarded federal student loans and other financial aid, one way to cover the gap is with a private student loan.

SoFi offers in-school loans at competitive rates and with no origination fees.


We’ve Got You Covered

Need to pay
for school?

Learn more →

Already have
student loans?

Learn more →



SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.


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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SLR18182

Read more
May
20
2022
hand shadow with 10 dollar bill

What Is a Federal Perkins Loan?

By | Debt Payoff, Fresh Out of School, Student Loans, student_loan | No Comments

Perkins Loans were designed for undergraduate and graduate students who demonstrated exceptional financial need. Although the program has ended, 1.6 million borrowers still owe $4.7 billion in Perkins Loans as of mid-2021.

The loans were meant to make going to school and repaying student loans easier for students whose financial situation may have prevented them from going to school at all.

The program expired on Sept. 30, 2017. If you were awarded a Perkins Loan before then, you still have to pay your loan back, in almost all cases.

Benefits of Federal Perkins Loans

Perkins Loans Are Subsidized Loans

With federal subsidized student loans like Perkins Loans, the government pays the interest on the loan while you’re in school, during your grace period, and if you need to defer your loan payments for an eligible reason.

That creates significant savings compared with federal unsubsidized student loans, when interest may continue to grow even if you are not currently required to make payments on the loan.

The benefit still exists for students who took out Perkins Loans.

Additionally, Federal Perkins Loans had no origination fee. In contrast, Direct Loans currently have an origination fee of 1.057%, and Direct PLUS Loans for parents and grad students have a fee of 4.228% until Oct. 1, 2021. (The percentages change on Oct. 1 every year.)

Perkins Loan Interest Rate

While other federal student loan rates are tied to the 10-year Treasury note, the Perkins Loan rate was fixed at 5%—which used to be lower than some other loan types.

For the 2024-2025 school year, the federal student loan interest rate is 6.53% for undergraduates, 8.08% for graduate and professional students, and 9.08% for parents. The interest rates, which are fixed for the life of the loan, are set annually by Congress.

Extended Grace Period

Another benefit of Perkins student loans is their extended grace period.

Most federal student loans have a grace period of six months after graduation to begin payments. Perkins Loans give an extra three months, so borrowers don’t have to start repaying a Perkins Loan for nine months after they graduate, leave school, or drop below half-time enrollment.

That said, any borrower who is eager to start repaying student loans doesn’t have to wait until a grace period is over to begin.

Perkins Loan Forgiveness Programs

If you have Perkins Loans, you may also qualify for certain forgiveness programs, depending on your employment or volunteer status.

If you work as a Peace Corps volunteer, firefighter, law enforcement officer, nurse, librarian with a master’s degree at a Title I school, public defender, teacher who meets specific criteria, among several other jobs, you could be eligible to have all or part of your Perkins Loan forgiven.

How Much Could You Borrow?

If you were eligible for a Perkins Loan, you most likely were only able to take a portion of your federal loans out as Perkins Loans. The amount you were able to borrow in Perkins Loans was determined by your personal financial situation.

For dependent undergraduate students whose parents are eligible for Direct PLUS Loans, the aggregate federal student loan limit is $31,000, with no more than $23,000 of that for subsidized loans. Undergrads deemed independent can have an aggregate of $57,500 in federal student loans, with no more than $23,000 in subsidized loans.

The aggregate federal loan limit for graduate or professional students is $138,500, which includes federal loans received for undergraduate studies.

Refinancing Your Student Loans

You may now be seeking a lower interest rate for your outstanding student loan balance.

Since graduating from college and getting a job, you may be making significantly more money and have established good credit. If that’s the case, refinancing your federal and/or private loans may be a good choice.

Even though Perkins Loans have good repayment options and a steady, reasonably low-interest rate, not all student loans enjoy the same perks.

Before you refinance, which means paying off any or all current loans with a new, private loan, preferably with a lower interest rate, it is important to review the benefits of your current loans. Refinancing would eliminate federal benefits like deferment and income-driven repayment plans.

Depending on your credit history and earning potential, you may be able to qualify for lower monthly payments or a lower interest rate, which could potentially reduce the amount of money you pay in interest over the life of the loan.

The Takeaway

Federal Perkins Loans, for students of exceptional need, came with benefits and a fixed interest rate that was relatively low at the time. Billions are still owed on Perkins Loans, and a borrower may want to weigh the merits of seeking a lower rate.

SoFi is a leader in the student loan space, offering refinancing of both federal and private student loans with a fixed or variable rate and no application or origination fees.

See your student loan refinancing interest rate in just a few minutes. No strings attached.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.


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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SLR18190

Read more

CATEGORIES

  • All
  • No categories
Close modal

See what SoFi can do for you and your finances.

Select a product below and get your rate in just minutes.

Student Loan
Refinancing

Personal
Loans

Online
Investments

Other

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or other eligible status, be residing in the U.S., and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates reserved for the most creditworthy borrowers. If approved, your actual rate will be within the range of rates at the time of application and will depend on a variety of factors, including term of loan, evaluation of your creditworthiness, income, and other factors. If SoFi is unable to offer you a loan but matches you for a loan with a participating bank, then your rate may be outside the range of rates listed above. Rates and Terms are subject to change at any time without notice. SoFi Personal Loans can be used for any lawful personal, family, or household purposes and may not be used for post-secondary education expenses. Minimum loan amount is $5,000. The average of SoFi Personal Loans funded in 2023 was around $33K. Information current as of 2/26/24. SoFi Personal Loans originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org). See SoFi.com/legal for state-specific license details. See SoFi.com/eligibility for details and state restrictions.

✝ 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.

©2024 Social Finance, LLC All rights reserved.
TLS 1.2 Encrypted
Equal Housing Lender