SoFi

We’re reading a lot about cryptocurrency being here to stay, but for many of us, it’s still not a regular part of our everyday financial lives. Why is that? Could be lack of education among investors, and the general lack of current, regular commercial use of cryptocurrency. However, if acquiring the right financial knowledge is a roadblock, let’s move that out of the way right now and do some schooling on cryptocurrency trading for beginners.

The Basics of Cryptocurrency

Cryptocurrency is digital currency (used exclusively online) that acts as a direct financial exchange between users without the involvement of a bank or other third parties. Think of it as an alternative currency to traditional forms of payment, like cash, checks, and credit cards.

The information used within the system is kept safe through the use of encryption techniques . These methods scramble the info to make the activity secret and difficult for outsiders to access.

When you and others use a cryptocurrency system, everyone and everything remain anonymous. Each exchange that takes place is woven into a group called “blocks” (hence the term blockchain), which again is coded (encrypted) in order to keep it private and secure.

The basic unit of value of cryptocurrency is expressed as a “token,” which is used exclusively by members of the group involved in the blockchain. Every time a transaction happens, a “miner” updates the blockchain (more about this later).

Cryptocurrency is not created by any bank system or government agency, which means it’s in a universe of its own. Also, it isn’t regulated to the same degree as other financial products, like banking and investments. At least not yet.

Many people find this freedom to be a very cool vehicle to ride. Its popularity is growing in an organic way too; this makes it hard to predict where it’s going and where it will end up.

Cryptocurrency can be bought and sold on special exchanges ; the most commonly known cryptocurrency is bitcoin. SoFi also allows users to buy and sell cryptocurrency.

Recommended: A Beginner’s Guide to Cryptocurrency

The Future of Cryptocurrency

Of course, not everybody is on board with cryptocurrency being a given for the future. Although there are have been more than 2,000 cryptocurrencies on the market, more than 800 of them are now no longer operational.

Another fact to note: the U.S. Securities and Exchange Commission (SEC) has denied more than a dozen applications for permission to list bitcoin exchange-traded funds (EFFs). The reason, though, could be to your benefit as an investor: the need to minimize risks of fraud and manipulation, and to increase investor protection.

“We’ve seen some thefts around digital assets that make you scratch your head,” SEC Chairman Jay Clayton said at CoinDesk’s Consensus Invest conference. “We care that the assets underlying that ETF have good custody and that they’re not going to disappear.”

That said, are you a believer? Are you thinking about taking a leap, or at least getting in on the ground floor, before the anticipated mad mainstream rush?

Let’s break down the details of cryptocurrency trading for beginners:

It’s in the Wallet?

Offline, cryptocurrencies are stored in “wallets.” A wallet is a software program that stores both private and public keys that allow you to send and receive digital currencies and keep an eye on your coin.

Hot wallets give you easier access, but they can also more easily be hacked. Cold wallets are harder to open. If you plan on holding on to your investment for a long time, you may want to opt for the cold wallet. If you need to dip into your coin more than occasionally, consider the hot wallet.

There are a number of wallet providers , and you’ll want to do some due diligence before choosing one.

Learn to Chill

Cryptocurrency is still a relatively new technology, which means it can act like a newborn: crying jags, not understanding how things work, crawling and stumbling, and behaving irrationally.

You’ll need to get used to huge price swings, instability when least expected, rollercoaster performance reports, and general anxiety on your part. Be sure you can take it.

Tune Out The Naysayers

Cryptocurrency trading for beginners means getting involved in a new idea. When that happens, get ready for the know-it-alls and Negative Nellies to tell you what’s what. You’re going to hear that cryptocurrency is overhyped, just a fad, or a wicked scam.

Of course, you’re going to do your due diligence and make up your own mind with educated decisions, so let don’t let them rattle you. Also, what may be true and unfortunate for one cryptocurrency may not be the same for another.

Get Professional Insights

Here’s the thing: Maybe cryptocurrency isn’t for you right now. The fact is, cryptocurrencies aren’t endorsed or guaranteed by any government—and they are volatile and involve a high degree of risk.

Not only that, but consumer protection and securities laws don’t regulate cryptocurrencies in the same way that they regulate traditional investment products. If you instead want to learn more about traditional investment products, now’s the time to check out SoFi Invest®.

With SoFi Invest, you’ll get access to financial planning and personalized advice, all based on how you want to invest and what your future goals are. All you need to do is make an appointment to chat with one of our SoFi Invest Advisors.—there is no obligation and no cost.

We’ll work with you to make sense of an investment strategy and help you map out a plan (and stick with it).

With an automated investing account with SoFi, we’ll invest in thousands of assets, actively managing them, which can help you get a clearer vision of your future path. To avoid veering off the road, we’ll automatically rebalance your investments as needed, so that they stay on track.

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.
Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including
FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments.
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member
FINRA / SIPC .
SOIN19015

Paying off your student loans can feel like a grueling journey, especially if you have a lot of it. And there’s a lot of student loan debt out there—$1.5 trillion to be exact .

It’s becoming clear just how much student debt can have a negative impact on the psyche of the student debt holder. In a survey conducted by SoFi, 83% of respondents felt like they couldn’t relax due to their student loans, and 50% felt that student loan debt has made them feel depressed.

More than a third have reported losing sleep due to student loan debt, and plenty of others say that it’s caused them to miss out on opportunities to travel, practice self-care, and make major life decisions.

If you’re in the throes of student loan debt repayment, you should know that there’s hope: Catie Gould and Veronica Scafe, two SoFi members, show us that it can be done. Not only did they each pay off their nearly $100,000 in respective students loans, but did so in about four years—significantly faster than their original loan terms.

It is important to note that these results may not be typical of every person paying down student loans. Below, these two members share their student debt journeys as well as their tips to help pay off student loans.

Meet Catie Gould and Veronica Scafe, SoFi Members

If you’ve got student loans and are looking for inspiration to get rid of them once and for all, Catie Gould and Veronica Scafe are your people. Both paid down nearly $100,000 in student loan debt.

Catie Gould paid off her student loans in just over four years—an impressive feat considering she graduated with around $91,000 in student debt from her dual degrees in material science and mechanical engineering.

Veronica Scafe found herself in a similar situation after graduating with $99,800 in student loans from obtaining her Doctor of Pharmacy degree. Even though Scafe had only expected to leave graduate school with $80,000 in loans, she was able to pay off the balance in an incredible three years and eleven months.

Their Personal Strategies For Paying Off Student Loans

Right out of school, Gould and Scafe deployed similar strategies for paying off their student loans fast; they both worked hard at keeping their expenses low, even with their new, higher salaries.

When Gould graduated from school, she avoided “lifestyle inflation” even though she was making more money than she ever had before. “Not very much changed for me after graduating. I am a saver by nature. I kept driving my old car, living with roommates, shopping at thrift stores, taking local vacations.”

And Gould didn’t stop there. “I bought a bicycle to get around town, tried gardening, and cooked my own food most of the time. I said no to plenty of things, but most never felt like a sacrifice.”

It helped Gould that she didn’t have expensive tastes to begin with: “Festivals were a big thing I never knew about. I was shocked that people pay $300+ to go to weekend music festivals.”

Scafe recounts an experience similar to Gould’s. She and her husband “never expanded our lifestyle to fit our salary so we never had to make cuts.” Scafe added, “We live pretty frugally. We have a modest home. We cooked most of our meals at home and took leftovers for lunch the next day.”

Just as keeping expenses low was an important tactic for both women, so was making additional payments towards their student loans. Neither wanted the emotional burden of paying back loans for longer than they had to, nor did they like seeing so much of their loan payments go towards interest payments and not the principal.

Simply having a long, hard look at how much you’re spending in interest payments every day, week, or month, may be the motivation you need to pay your loans off faster than the standard ten-year repayment schedule.

“I sometimes calculated how much interest I owed every morning just for waking up,” says Gould. From this exercise, she noticed that the daily interest charges on her student loans cost her “more than eating out every day, which I considered pretty indulgent,” and this motivated her to take action, and fast.

Gould and Scafe also refinanced their student loans, which provided them both the extra boost they needed to pay their loans back on such short timelines. By refinancing and qualifying for lower rates, more of each payment could be applied to the loan’s principal and not just interest.

What pushed them to pull the trigger on refinancing?

When Gould started her first corporate engineering job, the company was in the midst of layoffs. Luckily, she kept her job, but she says that “the layoff had a huge impact on me.” This experience at work pushed her to explore even more options for lowering her student loan bill.

The concern of how she’d make payments if something were to happen to her job, along with interest rates that she felt were far too high—some of them at 8.75%—inspired her to tackle her debt through extra payments and refinancing.

Gould refinanced around $36,000 of her debt through SoFi. She said, “Getting out of a higher interest rate was really helpful to pay down my remaining student loan balance. I feel a lot more in control of my future and how I chose to spend my time. It’s steered my life in a direction I never anticipated.”

Scafe also knew the feeling of wanting her loans long gone, and fast. “I obsessed over them and I think that’s what motivated me to get rid of them ASAP.” Having multiple loan payments scattered throughout her month was a nuisance.

“I refinanced to lower my interest rate,” she says, but also desperately wanted to have only one monthly payment. Paying down multiple loans faster than their scheduled repayment terms was a logistical hassle, and required significant manual maneuvering. “It got really frustrating.”

Both women refinanced their loans with SoFi, lowering their interest rates and saving them money on interest while consolidating their multiple loans—both federal and private—into one loan with one easy payment.

Tips to Help Pay Off Student Loans Early

“Tracking your spending is a must,” says Gould. She used Mint to track her spending, though there are many methods of doing so. The important thing, says Gould, is to do it. “The difference between months I looked at my budget frequently and months I didn’t was about $300 to $500 of savings, just from being more aware.” And putting those savings towards a student loan payment seriously expedited her loan payoff journey.

When it comes to spending money, try to cut whatever doesn’t bring you true joy. “There is always something forgettable that you are spending money on every month that you can cut.” For Gould, one of these things was dining out. For you, it could be something different, but the lesson here is to identify what really doesn’t produce joy for you, and ruthlessly eliminate it. Spend on only what you love.

“There is no way you can cut out all your expenses, and you need to let yourself have a little leeway to feel like you are living a great life. Some treats I got myself were evening classes in things I found interesting.

I took calligraphy, pottery, Arabic, essay writing. I also have some nice camping gear. I always equated these extra things to lunches—a $10 expense that I wouldn’t miss.”

Scafe, on the other hand, extols the virtues of paying yourself first. Whether you’re paying off loans on an expedited schedule or saving up an emergency fund, it’s wise to spend what is left over after saving and not vice versa.

While you should always keep a buffer in your checking account, too much cash lying around could be just asking to be spent. You can move it towards your loans or a savings account as soon as payday hits instead.

For both women, seeing the light at the end of the tunnel was crucial to their perseverance. They stuck with it, even when it felt like student debt freedom would never become a reality.

For Scafe, having her debt eliminated has been a big stress relief. Gould says that she feels in control of her future and how she chooses to spend her time, and that nothing compares to the feeling of paying off her student debt. And while neither claim that the process was easy, or entirely possible for many on their relatively short timelines, both believe that it was totally worth it.

If you have student loans like Scafe and Gould, keep pushing to reach your goal of being debt free. You can use our student loan payoff calculator to get an idea of when your loan payoff date could be, and it’s never too late to start putting strategies in place to help accelerate your loan payoff—even if it’s just a little at a time.

Also, you can consider refinancing your student loans with SoFi to potentially lower your interest rate and get a shorter term, and therefore help to expedite your own loan payoff journey.

Disclaimer: The savings and experiences of members herein may not be representative of the experiences of all members. Savings and experiences are not guaranteed and will vary based on your unique situation and other factors.
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.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

SOSL18113

Graduating from college can feel like the end of an era. You’re leaving behind the safety of school, and in theory, you now have all of the tools you need to make it in the real world.

While you may be ready to job search, kill it at an interview, or even start a business, many new grads aren’t sure of the best ways to manage their financial health. Here are five financial tips for new graduates.

1. Making (and Sticking to) a Budget

Make a budget. Hear us out. The b-word might make you cringe, but setting a budget is one of the most important things you can do to help set yourself up for financial success.

That doesn’t mean, however, that you need to hire CPA and create a complicated spreadsheet you’ll never look at again. Think of a budget as a tool that helps you get what you want instead of something that limits you.

For example, whether you want to start saving for retirement ASAP, or just want to save enough money to buy a couch, the first step to getting there is usually setting a budget. A key to creating a budget you’ll actually follow?

Make sure that it not only accounts for necessities like housing and student loan payments, but also includes the things you actually like to spend money on, whether it’s weekly cocktails at your favorite neighborhood bar or online auctions for rare action figures.

If you try to go cold turkey on the things you normally spend your money on, you might not have the motivation needed to set aside some of that cash for your larger goals.

One other important thing to remember is that if you accidentally spend more than your budget at first, don’t give up. Financial health is typically a process, and no one is perfect. The most important thing is that you keep trying.

If you keep struggling to stick with a budget, it may be time to take a look to see where most of your money is going and adjust your budget to make it more realistic to your individual circumstances. For better insight into your spending, get started with SoFi Relay. You’ll be able to keep tabs on your cash flow and spending habits, plus find ways to save.

2. Planning For Emergencies

Many of the financial tips for college graduates focus on saving but can leave out what, exactly, you ought to be saving for. This brings us to our second money tip for college graduates: Creating an emergency fund.

By now, almost everyone knows that most Americans don’t have enough cash saved to navigate a $500 emergency . Scary, right? $500 could be one major car repair, hospitalization, or even just an unexpected security deposit on a new apartment.

When you don’t have cash on hand to pay for emergencies, it may be tempting to put it on a credit card, which, if not paid off right away, can spiral into increasing debt.

One easy way to start is to make an initial goal, say $500. As part of your budget (See? Budgets are important!), you could set aside a certain amount monthly towards your emergency fund. Once you reach $500, take a minute to celebrate, but don’t stop saving.

Your emergency fund should ideally be able to cover about six months of expenses so that you can protect yourself if you ever face extended unemployment or serious illness.

Those numbers can certainly sound daunting, so some savers might find it is easier to set incremental goals, like aiming to first save $500, then $1,000, then $1,500, and so on.

3. Putting Down that Credit Card

We know that not everyone has a job lined up right after graduation. Post-college life can be pretty rough. We see you, recent grads crashing with friends and surviving on instant noodles while you job search. It can be tempting to rely on a credit card during times of financial uncertainty, but overusing your credit card can have serious consequences.

Unless you pay off your credit card debt right away (that is, in full every billing cycle), it continues to accrue interest, which in turn increases the amount you owe. That means that, for example, a $900 couch you charged could balloon in cost the longer you take to pay it off. On top of the extra costs of fees and interest, carrying a large balance on your credit card(s) can impact your credit score.

Instead of relying on your credit card, you may opt to save up for big purchases like new furniture, and keep spending in check by following your budget. If you must put expenses on your credit card, you can help keep added interest at bay by prioritizing paying off your balance in full every month.

4. Learning About Investing

Okay, so you’re on board with a budget and have even started to save for an emergency fund. What’s next? Financial tips for recent graduates often focus only on how to manage your money for right now, but a huge part of financial health is putting your money to work for your future.

Right after graduation can be a great time to consider dipping your toes into investing. Investing is not just for super rich old guys in suits. In fact, getting started on investing while you’re younger can allow you to grow your portfolio over time.

One other common misconception about investing is that you need a ton of spare money available to get started.

The truth is that you may be able to start investing with small amounts of money—SoFi lets you start with as little as $100 a month—and grow your portfolio over time. Intimidated by the process? Talk with an advisor who can help guide you toward the right mix of investments for your goals.

5. Making a Plan For Loan Repayment

Finally, perhaps the most timely tip for new graduates: Make a plan for repaying your student loans. You may have a grace period after you graduate. If you do, you can use that time to figure out exactly how you plan on making those monthly loan payments.

Planning for your loan payments in your budget is a great place to start, but if the monthly payment seems too high to manage, there are a couple things to do that may help keep things in check.

First, make sure that you’re on the right loan repayment plan for your personal circumstances. Federal loans offer several different options for repayment , whether you want to pay your loans off as soon as possible or keep your monthly rate as low as possible. Just remember: If you aren’t making payments to at least cover your monthly interest, your loan might actually end up getting bigger!

If the federal repayment plans aren’t doing it for you, refinancing your student loans may be another option. Refinancing your student loans is a process by which you apply for a brand new refinancing loan to pay off all your existing student loans at once. Why trade in one type of debt for another?

Student loan refinancing may help you secure a lower interest rate or better repayment terms—and that can add up to major savings over the life of your loan. Loan refinancing may be especially beneficial to new grads who have secured a well-paying job or have a better financial situation and credit score than they did when they originally took out their loans.

Recommended: 46 Tips for Recent College Grads

Whether you’re ready to take on the real world or are still trying to get your feet underneath you, taking steps to protect your financial health during this time is crucial.

Congrats, grad: You’ve got this!

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 on credit.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
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.
The information provided is not meant to provide investment, tax or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. Advisory and automated services offered through SoFi Wealth LLC. An SEC registered investment advisor. SoFi Securities LLC, member FINRA / SIPC .
SOSL18137

Dreaming of climbing the ladder at a prestigious finance institution? Or maybe you’re committed to starting a socially-responsible environmental consulting firm. The chances are that if you’re interested in the business world, you’ve considered getting an MBA.

An MBA, or Master’s in Business Administration, is a graduate level degree that confers grads with flexible and expansive knowledge about the business world, from business development to accounting. Internationally recognized, an MBA can set you up for a career in the United States or abroad, in the private sector or even in the NGO and non-profit sector.

Designed to help you hone critical business skills, MBA programs cover a wide variety of topics, from the basics of economic theory to practical seminars on topics like sustainable development. The flexibility of an MBA means that you will be able to tailor your graduate degree to your specific interests, whether that is learning how to rise to C-suite executive or learning how to manage an international non-profit staff.

If you’re wondering “what jobs can you get with an MBA?”—know that each MBA program has different specialties and electives that allow you to hone your business leadership skills in a context that will help push your career forward.

An MBA is one of the most lucrative master’s degrees . But as more and more students pursue graduate degrees, many students may wonder: is an MBA really worth it?

How Much Does an MBA Cost?

The biggest downside to getting an MBA? The cost. The cost of an MBA degree can vary widely by school and program, but many MBA programs will cost you a pretty penny out of pocket , even if you earn some scholarships.

MBA programs can be some of the most expensive master’s degrees out there, landing grads with more than $70,000 of debt, on average. Top schools, like the University of Pennsylvania and Columbia, can cost upwards of $100,000 in tuition alone. Add in the cost of living, and you’re looking at an even higher number.

Of course, there are more affordable MBA programs. For example, the highly ranked University of Wisconsin-Madison has an annual in-state tuition of $19,162. But regardless of which program you choose, you may be looking at taking out hefty student loans to cover the cost of attendance. If you’re going to invest that much money in your degree, you want to make sure that it will pay off.

Is Getting an MBA Worth the Cost?

Even though getting your MBA is expensive at the outset, it is essential to think about how much actual value having that MBA can add to your life and finances.

Your MBA degree sends an automatic signal that you are a professional and an expert. While many business leaders rise through the ranks without an MBA, having the degree is a bonus for employers showing them you are competent and ready for the business world.

Getting your MBA can come with a serious cost, but it can also have a beneficial impact on your earning potential. In fact, the average MBA salary for 2017 graduates was $105,146 .

It’s important to calculate the return on your investment because some MBA degrees might actually cost way more than you can expect to recover in the boost to your salary. Luckily, we’ve helped take some of the work out of it for you with our annual “No BS” MBA rankings, where we surveyed SoFi members to help break down the return on investment for top MBA programs. Picking an MBA program that could give you the most bang for your buck can help make an MBA worth it.

Of course, not all business professionals need or want an MBA. MBA programs typically take two years of full-time study, which can make them impractical for many people who don’t want to (or can’t) stop working for such a long time, especially if they are already moving up the ladder in the business world.

There are some alternatives to full-time MBA programs, some offer online-only classes, while others offer part-time programs that are designed to work with your schedule while you are still working full-time.

Can You Increase the Value of Your MBA?

The bottom line? Look for a program that fits your interests and offers a great debt-to-value ratio. In addition to choosing the right MBA program, you can help increase the value of your MBA degree by thinking smart when it comes to student loans.

One significant benefit of an MBA is that it can seriously boost your salary and your finances. If your financial picture has improved with things like a solid income and consistent credit history, you may be a good candidate for refinancing. Refinancing your student loans after obtaining an MBA can help you lower interest rates, which means that you could pay less interest on your student loans and voilà—that MBA becomes even more valuable.

When you refinance your student loans, you’re taking out a new loan with a private lender which will in effect pay off your existing loans. Refinancing gives you a new, hopefully lower, interest rate, a new term length, and new monthly payments.

Instead of paying multiple student loans, you end up with a straightforward loan payment, ideally with more favorable student loan repayment terms based on your current financial situation. That means that refinancing offers take into account your new degree, your new salary, and your new financial reality.

You can maximize the value of your MBA program by minimizing the amount of debt you take on through finding a high-value program and considering refinancing your loans after graduation. In the end, getting an MBA can help advance your career if you’re dedicated to pursuing a career in business.

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.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
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.
SOSL18191

Geography matters. Where you live can have an impact on your income, expenses, and overall household budget. By extension, this can affect how much you have to put toward your student loans every month—and how quickly you’re able to pay them off.

Many Americans move around a lot, with the average person changing homes more than 11 times over his or her lifetime. Perhaps you’re contemplating a move to find a new job, be closer to family, pursue graduate school, or find a more affordable locale. When doing your research, it’s worth exploring which states boast conditions that may help you pay off your loans.

A state that lets you keep more of what you make is also likely to leave you with more funds to put toward your student loans.

A state that lets you keep more of what you make (e.g., low income or sales taxes) is also likely to leave you with more funds to put toward your student loans.

If you use extra disposable income to accelerate your student loan payments, as opposed to extra shopping or travel, your loans have a better chance of disappearing more quickly.

Other factors can also speed up loan repayment— increasing your payments, or shortening your term by refinancing your student loans—but living in a state that offers opportunities to increase your income or reduce your bills can be a boon.

Here are some of the top states to live in that may make it easier to pay off student loans quickly, based on the perks they offer. Even if you’re not moving anytime soon, it’s worth knowing how your state stacks up.

No or Low-Income Taxes

Every working American has to pay federal income taxes. But not having to pay anything, or much, in state income taxes can go a long way toward leaving you with more cash to pay your loans off with.

Seven states don’t make you pay any income tax at all. As of 2019, these states are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. New Hampshire and Tennessee come close: You only pay state income taxes on income from dividends and investments—not wages. In contrast, the highest personal income tax state is California, which charges 12.3%.

No Sales Tax

Even if you save on income taxes in certain states, you could end up paying more at the register through sales taxes . Five states don’t charge any sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. (Alaska and Montana do allow local—rather than state-level—sales taxes).

You may have noticed that Alaska also doesn’t charge income tax, so that’s double the savings in one state. In Colorado, the sales tax is just 2.9% .

Some states charge sales taxes no higher than 5%, which in 2018 included Alabama, Georgia, Hawaii, Louisiana, Missouri, New York, North Carolina, North Dakota, Oklahoma, South Dakota, Wisconsin, and Wyoming. The cash you save on sales tax can add up and help you pay off your student loans.

Lowest Cost of Living

Paying less for daily expenses, such as housing, transportation, food, and utilities, would potentially leave you with more cash for your student loans. According to a CNBC study from 2018 , the 10 states with the lowest cost of living are (starting with the most affordable): Mississippi, Arkansas, Oklahoma, Michigan, Tennessee, Missouri, Kansas, Alabama, Georgia, and Indiana.

The study took into account prices of housing, food, energy, and other goods. In the cheapest state, Mississippi, the average home costs $214,217 and the average doctor’s visit will set you back $87.58. With prices like those, you could have more room in your budget for paying down your student loans.

Highest Incomes

Earning more money is the obvious way to have more funds for student loans. Although incomes obviously vary by profession, level of education, and other factors, some states have higher-than-average salaries.

These states had median household incomes that were far higher than the 2016 national median of $58,552: Washington ($67,106), California ($67,739), Virginia ($68,114), New Hampshire ($70,936), Connecticut ($73,433), Hawaii ($74,511), Massachusetts ($75,297), New Jersey ($76,126), Alaska ($76,440), and Maryland ($78,945). Of course, high incomes can come with a high cost of living, as well.

Best Job Prospects

High median incomes don’t matter much to you if you’re having trouble finding a job in the first place. According to U.S. News & World Report , these are the 10 best states for employment based on a combination of having a low unemployment rate, high labor-force participation, and high job growth: Hawaii, North Dakota, Colorado, Utah, New Hampshire, Nebraska, Minnesota, Iowa, Massachusetts, and Wisconsin. You may notice that a few of those states overlap with with the highest-income rankings, so you could be more likely to find a job there that also pays well.

Best Cost-of-Living-to-Income Ratio

A high income can disappear quickly in a place with high living costs; conversely, a cheap state becomes less affordable if you can only earn a low income there. One way to gauge true affordability is to compare the “real income” in each state by taking the median household income and accounting for cost of living.

When Money Magazine did this, it found that the states with the highest real incomes were: Alaska ($69,465), Maryland ($69,203), New Hampshire ($66,955), Massachusetts ($66,069), Connecticut, ($65,636), North Dakota ($65,609), Minnesota ($65,183), Utah ($64,858), Virginia ($64,646), and the District of Columbia ($64,639). Some of these overlap with the highest-income states, but in others the cost of living makes a big difference in making incomes stretch further.

Another study revealed the cities that offer the best combination of high wages and affordable expenses. The highest-ranking city was Oklahoma City, where the average annual income is $72,385, while the median monthly rent is $1,070, and annual necessities cost an average of $18,701.

The other cities on the list, starting from the highest ranked, are: Kansas City, Missouri; Lexington, Kentucky; Phoenix, Arizona; Durham, North Carolina; Omaha, Nebraska; Bakersfield, California; Tampa, Florida; Dallas, Texas; and Charlotte, North Carolina. Living in states with the best cost-of-living-to-income ratio can help make your dollars go further.

Other Perks

Besides high incomes, affordability, and low taxes, some states offer other perks that can help you pay off your loans more quickly. Alaska pays each eligible resident a fixed amount of cash every year through the Permanent Fund Dividend, created to share revenues from the state’s oil reserves.

The amount was $1,600 per man, woman, or child in 2018 and could be used for anything, including paying off loans. Colorado and Kansas pay up to 4% of your first mortgage if you meet income and credit requirements.

Other states may help you pay off student loans if you enter certain fields. For example, the Washington Student Achievement Council repays up to $75,000 in student loans for health professionals in rural or disadvantaged areas, and New York repays up to $20,400 in loans for eligible residents working as public interest lawyers. The American Bar Association maintains a full list of state-level loan repayment assistance programs (LRAPs) for attorneys.

How Student Loan Refinancing Can Help

If you’re looking to pay off student loans more quickly, you don’t have to move across the country. Refinancing your student loans can also be a great way to potentially reduce your interest rate. When you refinance, you take out a new loan from a private lender, like SoFi, and use it to repay your existing federal or private loans.

The new loan may offer a lower monthly payment or lower interest rate, especially if you have a solid credit and employment history (among other factors). A lower interest rate can help you pay less in interest over the life of the loan.

If you qualify to refinance, you may also have the option to shorten the length of your loan term. This would likely mean higher monthly payments, but if you’re in a financial position to take on a higher monthly payment, that’s another way you could pay off your student loan debt more quickly.

At SoFi, you can apply for pre-qualification online and find out whether you qualify in two minutes. And keep in mind that if you pay off your refinanced student loan early, SoFi has no prepayment penalties.

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.
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.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
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