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About 10% of Americans moved within the country last year, according to the U.S. Census Bureau. Though that number may seem small, its actual value is not—that amounts to an estimated (and whopping) 32 million people.
Within that group, the impetus for moving varied, from people moving in order to establish their own household, opting for a more affordable home or moving for a new job.

While the prospect of a new home can be exciting, the move itself can require a surprising amount of time and money. Unless you have a family or friend group ready and willing to pack your things, haul your boxes, and load your belongings into your new space, chances are you will hire a professional moving company to assist you with the above tasks.

Just as you make a weekly or monthly budget in order to see your finances clearly, it can be helpful to crunch the numbers on the cost of a move before you get started. One question worth considering before you cross hire movers off your to-do list is, how much do professional movers cost?

The short answer is—it depends. There are a variety of factors that will influence the cost of hiring professional movers. Below is some information that might help you prepare mentally and financially for a big move.

Making a Local Move

While moving across town might seem straightforward, it can be a drawn-out process—though a more affordable one—if you’re doing some of the legwork yourself. Keep in mind that unless you’re taking vacation days to pack and move, you may be filling boxes on nights and weekends for a while.

The upside of packing (and later unpacking) your own stuff is that you’re paying zero dollars to a moving company for those hours. That means you need only need a standard moving service. Once your boxes are taped up and ready, a moving company can come to load boxes and furniture into a truck, transfer them to your new neighborhood and unload them into your new space.

Costs for a standard move like this will depend on a few key factors, including the amount of stuff you have, the distance you are moving, and the number of hours it takes movers to move your things. (Because quantity matters here, it can be a good idea to use a move as the impetus for donating things you no longer want or need.)
To get an idea of how much movers cost for a local move in your area, gather estimates from a few companies. Most offer a free quote, and there are websites like QuoteRunner that aggregate moving quotes for local companies based on a few moving details provided by you.

By comparing the prices of local movers, the Unpackt Blog estimated the average moving price for a standard move in various cities. In each location, the blog shows how the size of your current home impacts the cost.

In New York City, for example, a local standard move for someone in a large one bedroom might cost around $350, while a four-bedroom move could cost more than $1,000. Keep in mind this is simply transporting packed boxes from Point A to Point B. The blog gathered moving data and estimated local costs for cities such as Raleigh , Baltimore , and Minneapolis .

A full-service move includes a good deal more assistance from your moving company, but for a greater price. The higher price is because this service covers just about everything.

You can opt to have your movers pack your things, disassemble (and later reassemble) all your furniture, load and unload everything, then unpack it for you, with your guidance as to where things go. Full-service movers also usually take care of packaging supplies and their disposal.
According toMove.org , the cost of a full-service local move will range between $550 and $12,000. Again, the price range varies so greatly because it depends on the number of belongings the movers will be packing and transporting.

It might help to compare and contrast a few different moving companies, Moving.com suggests reviewing at least three. This can help you make the best pick for your move and budget. Some movers will tell you a cost per hour for moving, but it can be hard to estimate just how many hours a full-service move will take since so many processes are included.

An additional note for your budget: Consumer Affairs says that tipping movers is customary, so maybe plan to tack on an additional $20 to $40 per day, per mover. So if you’ve got three movers helping you across two days, gratuity could range from $120 to $240.

Moving Out of State

The American Moving and Storage Association (AMSA) found that about 650,000 Americans use professional movers for an interstate move—that means they leave one state for another.

Some of those folks—about 39% of them, actually—don’t pay for their own moves, thanks to corporate sponsorship, which sometimes foots the bill if you’re moving for a job. About 44% of interstate moves are paid for by individuals. Military and other government-sponsored moves make up the rest.

If you’re an individual moving to a new state, know that your moving costs will likely depend on three primary factors, similar to a local move: the weight of your shipment, the mileage your belongings will be transported, and labor costs outlined by the moving company you’ve chosen.

Free cost calculator City to City can help you estimate your move. Users enter their Point A and Point B, and can also select premium services to see how that impacts price.

For example, using that calculator, a move from Los Angeles to Denver—about 830 miles—with about 3,500 pounds of belongings and including packing services might cost around $2,500.

A move from Los Angeles to Chicago—about 1,750 miles—with the same specs might cost around $3,300 miles.
Keep in mind that the weight of your belongings may need to be altered. Some say to estimate that each furnished room in your house contains weighs about 1,500 pounds.

Financing a Move

If you already have a clear picture of your personal budget, it may be simple to tell whether you need to do more of a do-it-yourself move or if you can spring for a full-service move through a professional moving company.

Some people might opt to use a credit card to pay for moving fees. If you go this route, consider keeping your card interest rate in mind. If you can’t pay off your incurred moving costs fairly quickly, remember that interest will rack up, potentially making your move more expensive in the long run.

Another way to pay for a move is with an unsecured personal loan, which may come with a lower interest rate than your credit cards. You can check your interest rate for a personal relocation loan through SoFi online and within minutes.

If you qualify, this loan gives you access to cash (usually in less than a week), which may come in handy if your mover offers a discount for an up-front cash payment. You can also use a personal loan to help pay for other moving-related costs that can come up, such as first and last month’s rent for a rental unit.

Ultimately, a move can be a fresh start and offer a new perspective on life. Paying for that fresh start in a way that best suits your budget can help make this life transition go smoothly.

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.

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

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.

SOPL19062

Earning an MBA (Master of Business Administration) degree is no small feat. Between the work you did in undergrad, the application process, determining how to pay for your MBA education, and completing your studies, internship(s), and other work—you’ve done a lot. You should be proud of yourself!

But what comes next?

After all, you’ve taken a breadth of courses. According to The Princeton Review, core business school
courses (often taken in Year 1 of a two-year program) cover a range of topics: finance, management, accounting, decision science, organizational behavior, and economics. During Year 2, students may specialize their studies.

For example, Berkeley’s Haas School of Business offers courses including technology, health management, and corporate social responsibility. All these subjects are designed to help an MBA grad develop the skills to lead in a business setting.

According to a survey by the Association of International Graduate Admissions Consultants, about 57% of survey respondents reported wanting to acquire new business-related skills and knowledge.

Others hoped the degree would increase their job prospects, help them build a strong professional network, help them make a positive difference in the world and/or lead to an increased salary.

With these skills in hand, there are a number of avenues your post-MBA career can follow. Below, you’ll find some of the paths today’s MBA-holders are considering—and they may not be what you expect. And because MBA students leave school with an average of $70,000 in loans, we’ll dig into possible ways to tackle that debt, too.

Tech

According to the Graduate Management Admissions Council (GMAC), MBA grads are likely to find opportunities in the tech world . Major tech companies include Amazon, Microsoft, and Google—and their lesser known counterparts are hiring MBA grads, too. GMAC polled recruiters, and 89% said they were looking to employee people with a business degree.

MBA grads might be hired for work in strategy, product management, business development, finance, operations, or human resources. Depending on your undergraduate degree (computer science, engineering, etc), your previous work experience, and your specialization in grad school, some roles may be a better fit than others.

Sustainability

If you’re an MBA grad aiming to making a positive environmental or social impact, you may be leaning towards a job at the intersection of business and sustainability. You could work for a company devoted to green energy such as a solar power company, or an automobile brand that makes hybrid and electric cars.

You might also want to consider a company that aims to develop new green products, or that wants to make its current business practices more sustainable.

“Environmental issues like climate change and its impacts are going to profoundly affect businesses across almost every sector in coming decades,” said Katie Kross, managing director at the Center for Energy, Development, and the Global Environment (EDGE) at Duke’s Fuqua School of Business. “Today’s MBA students are launching their careers in a world where natural resource constraints have far-reaching implications for how businesses operate.”

Entrepreneurship

By definition, an entrepreneur is an innovator who launches and operates a business, often taking on most of the financial risk and reaping most of the rewards.

Business schools recruit future business leaders, so plenty of MBA students attend graduate school hoping to gather the skills necessary to create and run a successful company. Some even started companies before attending business school, gaining valuable experience, with specific questions about how to improve their business.

Cameron McCain is one such MBA grad . According to McCain, the biggest advantages to earning an MBA as an entrepreneur, for him, included building a network. One day, those people may be behind the doors you’re knocking on in your quest for capital. He also says that an MBA helps entrepreneurs fill in the gaps of their own business acumen. For McCain, that meant focusing on finance, an area in which he had less experience.

Entertainment

Fashion, entertainment, and sports companies likely need people with a business background. Take film and television companies, for instance. Like other businesses, they require market data analysis. Which products are succeeding? Which are failing? Being able to look at consumer data and then make strategic business moves is an MBA-taught skill set.

Entrepreneur Cara Withers Shaw , who got her MBA from Pepperdine University, worked for multiple entertainment companies (Disney, Twentieth Century Fox) before launching her own company. She says her time in business school helped her develop the quantitative and qualitative analytical skills she needed to study movie-going data.

But What About My Loans?

If you attended a two-year MBA program at a top business school and took out student loans in order to do so, chances are you’re looking at around $80,000 to over $100,000 in student loan debt.

This doesn’t mean your hard-earned degree isn’t worth it, financially speaking. Debt for B-School grads who attended Harvard, Stanford, or the University of Chicago ranges from $86,000 to $116,000; their average salary is about $161,000. That said, even with a hefty salary, grads’ loans may be overwhelming.

There are strategies that may make your monthly payments more manageable. First, once you know your income, you might spend some time making a new budget that factors your loan payments into your expenses. You might consider setting up automatic payments, which could ease your stress—and keep you from missing a payment.

And refinancing your student loans at a lower interest rate may help lessen the amount of interest you pay over time, potentially saving you money in the long haul. (Keep in mind that if you have federal loans, refinancing means losing access to benefits like student loan forgiveness, especially if you choose to work in the public sector.)

Regardless of the path you choose, your MBA likely played a large part in getting you there. And with a better handle on your student loans, you’ll likely have more energy and time to devote to making it count.

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.

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

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

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

SoFi 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.

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The path to homeownership isn’t always a straight line. After all, there are so many factors that could come into play in the rent vs. own debate. Considerations might include how long you plan to stay in a specific home and location, have you saved enough for a down payment, if you are ready for the responsibility that comes with maintaining a house.

However, one of the biggest considerations when thinking about your housing options comes down to the cost of rent vs the cost to own in any town or city. Often referred to as the price to rent ratio, this calculation can be a helpful tool when determining the rent to value ratio in a certain area.

This ratio is a benchmark that can help potential homeowners as they decide whether or not to plunk down their life savings on a home. Here’s exactly what that ratio is and what it looks like in the top five major metro areas in the United States.

What Is the Price to Rent Ratio?

The price-to-rent ratio may sound intimidating, but fear not, it’s easier to break down than you may think. It’s compares cost of rent to mortgage in a ratio format.

Here’s an example for you: Let’s say the average annual rent paid in the city you are considering living in is $3,000 a month and the average property selling price is $1,000,000.

The price to rent ratio would be calculated by taking the $1,000,000 property value and dividing it by 12 months. That equals $8,333.33 a month.

Next, divide that number by the average rent. In this case, that would be $8,333.33 ÷ $3,000. This gives you the price to rent ratio, which in this example is 27.78.

Alternatively, you could divide the median home price by median “yearly” rent, so $1,000,000 / $36,000. This will give you the same price to rent ratio of 27.78.

This rent to price ratio can indicate whether housing may be overpriced in an area. It can also be helpful when estimating whether it is cheaper to buy or rent. Investors who purchase rental properties often look at this ratio before purchasing an investment property to rent out later as well.

The price to rent ratio can sometimes be used as an indicator of an impending housing bubble. Since a substantial increase in this ratio could mean that renting is becoming a more attractive option in that specific housing market.

Understanding what this ratio means and learning how to calculate this ratio for yourself could be useful information as you consider whether to rent or buy.

There are a variety of resources that describe price to rent ratios in different communities that can helpful in determining what areas are best to rent in or to buy across the country. There are even some helpful online calculators that can give you an estimate of the price to rent ratio in specific zip codes.

Price to Rent Ratio: When to Buy and When to Rent?

So, is the theoretical town with a price to rent ratio of 27.78 a better place to buy or to rent?

A price to rent ratio ranging from 1 to 15 typically indicates that it is better to buy than it is to rent in a given community. A price to rent ratio of 16 to 20 indicates it is typically better to rent than buy, and a ratio of rent to home price of 21 or more indicates it is better to rent than buy.

Since the theoretical town falls into 21+ category, it would be a rent friendly community. Of course, like all things in life, there are a few exceptions to this rule, but these are general guidelines to follow when making the all-important housing decision.

Looking for a few real-life ratios? Here are five popular metropolitan areas in the United States and their price-to-rent ratios to help you make a better informed decision on your next move.

New York, NY

According to SmartAsset’s 2019 analysis , New York City’s price to rent ratio is 36.83 based on the equivalent of a $1,000 rental to its $441,987 purchased home counterpart. And, as described above, that makes the city a renter’s market rather than a buyer’s one.

San Francisco, CA

It’s no secret that San Francisco’s housing market is one of the most competitive in the country . So, perhaps unsurprisingly, its price-to-rent ratio is a whopping 50.11 based on a $1,000 rental that is equivalent to a $601,362 purchased home, according to SmartAsset.

Boston, MA

In Boston, SmartAsset found that would-be residents will find a price-to-rent ratio of 29.23 based on that $1,000 rental equivalent to a $350,811 home. While that’s lower than New York and San Francisco, but the price to rent ratio indicates that it may still be a renter’s market.

Denver, CO

Compared to SF and NY, Denver may have a more buyer friendly market, with an estimated price to rent ratio of 25.60 based on a $1,000 rental and a $307,232 home. That still puts it above the threshold for those wavering between renting and buying.

Chicago, IL

One major city to make the list of places where it’s better to buy than rent is Chicago, which scored a 19.99 based on a $1,000 rental and a $239,831 home price.

But not all cities have price to rent ratios as high as these five hot markets. For example, Detroit has one of the lowest price to rent ratios at just 5.35 when comparing a $1,000 rental price and a $64,194 home.

Deciding You’re Ready to Buy

If you decide you’re ready to buy there are ways to make it more financially feasible, no matter your chosen city’s price-to-rent ratio. And that includes looking into mortgage options so you can find the best option. As you embark on your search, consider SoFi.

SoFi Mortgages offer qualifying borrowers competitive rates and no hidden fees. Plus some people can qualify for a loan with as little as a 10% down payment. You can find out if you pre-qualify for a mortgage in just a few minutes. That way, when the right home comes along—at the right price—you’ll be ready.

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.

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

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

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

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

SOMG19037

If you get a job with a governmental agency or not-for-profit organization and you have federal student loan debt, you may be able to receive loan forgiveness under the Public Service Loan Forgiveness (PSLF) program.

Currently, if you qualify for this program, and make 120 payments under a qualifying repayment plan while working full time for an employer that falls within PSLF parameters, then the government will forgive the remaining balance of your Direct Loans.

List of Public Service Jobs

You may be asking: What is a public service job? What type of job would qualify me for PSLF?
According to the office of Federal Student Aid, the answer to those questions is that qualifying public service employment is not about your specific role, it’s about who employs you. Their list of public service organizations includes:

•  government organizations at any level (federal, state, local, or tribal)

•  not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code

•  other types of not-for-profit organizations that are not tax-exempt under Section

•  501(c)(3) of the Internal Revenue Code, if their primary purpose is to provide certain types of qualifying public services

•  serving as a full-time AmeriCorps or Peace Corps volunteer

Bullet point three mentions jobs that have a primary purpose of providing “certain types of qualifying public services.” To have the potential to qualify for the PSLF program under this option, you’d need to work for an employer that has at least one of the following as a primary purpose:

•  Emergency management

•  Military service

•  Public safety

•  Law enforcement (this includes “organizations that are publicly funded and whose principal purposes include crime prevention, control or reduction of crime, or the enforcement of criminal law”)

•  Public interest law services (this refers to “legal services provided by an organization that is funded in whole or in part by a local, state, federal, or tribal government”)

•  Early childhood education (this includes “licensed or regulated child care, Head Start, and state funded pre-kindergarten”)

•  Public service for individuals with disabilities

•  Public service for the elderly

•  Public health (this includes “organizations that employ nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health support occupations, as such terms are defined by the Bureau of Labor Statistics”)

•  Public education (this includes “services that provide educational enrichment or support directly to students or their families in a school or a school-like setting”)

•  Public library services

•  Other school-based services

There are a few types of employers whose employees do not qualify for PSLF. They are:

•  Labor unions

•  Partisan political organizations

•  For-profit organizations, including for-profit government contractors

•  Not-for-profit organizations that:

◦  Are not tax-exempt under Section 501(c)(3) of the Internal Revenue Code

◦  Do not provide a qualifying public service as their primary function

You can also use a tool provided by StudentLoans.gov to see if you potentially qualify for forgiveness under the PSLF program.

Why You Might Choose the Public Service Path

Working in public service can feel wonderful, knowing that you’re helping to make your community a better place.

Although you can accomplish that by working a for-profit job and also volunteering for a cause that matters, when you work in one of the public service jobs, this is what you’re doing as your vocation, full time—and you can still choose to volunteer for causes you care about on the side.

Pros and Cons of the PSLF Program

While there are advantages to going the public service route and potentially qualifying for PSLF, it is not a guarantee that you will qualify and that it will be worth it in the long run.

The main advantage to PSLF is that after a set time, the balance of your Direct Loans could be forgiven. And the forgiven amounts in this program aren’t typically considered income, which would mean you wouldn’t be taxed on the forgiven amount—that isn’t true of all of the loan forgiveness programs.

You may also pay less on your federal loans each month because you must use an income-driven repayment plan to be eligible to receive PSLF, and that can help with cash flow.

However, as we mentioned above, you may qualify only if you work for certain types of employers. And to take advantage of PSLF, you’ll need to work full-time for a qualifying employer for 10 years and make 120 qualifying payments—and make sure, every year (or if you switch employers), you submit an Employment Certification Form. You also may need to jump through additional hoops to qualify; PSLF is not awarded automatically.

It’s also worth considering that if you work for a for-profit employer, you might make more money than you would at a public service job, which could allow you to pay off your student loan debt more quickly. If you aggressively paid off your student loans in fewer than 10 years, it’s possible that you could pay less in interest than if you made 120 payments under this forgiveness program.

And, if you enroll in the program but then stop working for a qualifying employer, you could end up with a larger outstanding balance because of accumulated interest from the income-driven repayment plan (more loan payments means more interest payments).

A New York Times article, published in May 2018 (“Public Servants Do Get Student Loan Forgiveness. Meet One of the First.”) includes stories from people who struggled to first qualify for the program, and then to get “coherent status updates.”

One doctor mentioned in the article handed her paperwork off to her mother, an attorney, and neither of them could navigate the process successfully. Another person who is struggling to glean the benefits of the program is an attorney who actually works for the Department of Education, which administers the program.

Another challenge is that the PSLF program focuses only on federal student loans so, if you also have private ones, they aren’t eligible for PSLF, even if you work in one of the qualifying public service jobs. Getting loan forgiveness for private loans is highly unlikely, although you may be able to talk to your private lender to obtain more temporary relief measures, such as loan deferment or forbearance if necessary.

In fact, the only times when loan forgiveness seems to happen with private loans is typically under exceptionally dire circumstances, such as if the borrower becomes completely disabled or dies. Even then, there isn’t a formal process for forgiveness.

What to Do If PSLF Isn’t Right for You

So, what do you do if you don’t qualify for PSLF or if you have private loans? One option is to refinance your student loan debt. If you have a good credit history and solid income potential (among other important financial factors), then you might qualify for a lower interest rate, which can reduce the amount of money you’d pay over the life of the loan.

Some lenders, like SoFi, will consolidate federal and private student loans, and then refinance them into one loan. This means that your new lender would pay off all of your old loans, and then, based on terms you agree to, issue a brand new loan to you.

If you refinance your federal loans with a private lender, you would then lose the potential for any federal benefits, including PSLF and income-driven repayment plans, so it’s important to do your homework first: consider your short-term and long-term needs; make sure you’re getting the lowest rate possible; ensure that the lender has the loan programs (fixed/variable) and terms you need; check to see if you’ll have to pay any fees; see what benefits you can gain with your new lender; and find out if the lender you’re considering will first do a soft credit pull before you apply (so you can see what rates you qualify for) that won’t have the potential to affect your credit rating.

Student Loan Refinancing with SoFi

It’s important to remember that you should review all federal repayment options first before refinancing with a private lender. If you do choose to refinance with a private lender, consider SoFi.

At SoFi, you can consolidate federal student loans with private ones, refinancing them into one convenient loan. Plus, there are no hidden fees. And SoFi offers member discounts and career counseling, among other potential benefits. You can use SoFi’s student loan refinancing calculator for an estimate of how much you might save.

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.

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

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

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

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

SoFi 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.

SOSL19086

Debt happens. Sometimes you need to rely on a credit card or loan to meet the demands of life’s expenses. But if you hold a sizable amount of credit card debt, have defaulted on a loan, or have failed to pay an unexpected emergency room bill, it’s important to know what could come next.

To help provide a broad understanding of what might happen if your debt goes into collections, we’re going to take a look at the Fair Debt Collection Practices Act (FDCPA). Look, maybe it’s not the most compelling-sounding document, but a general understanding of the FDCPA could help over the course of your financial life.

It’s important to remember that if you have specific questions about debt collection laws or the FDCPA, it would be best to consult your tax attorney and financial advisor. This article is merely an overview of the debt collection process and should not be taken as advice. We want the following intel to serve as background info—nothing more. With that in mind, here is a closer look at the world of debt collection.

What the FDCPA Doesn’t Cover

If you’re facing serious debt and are being contacted by debt collectors, it’s important to understand your rights. The FDCPA is essentially the Federal Trade Commission’s (FTC) rule book on how debt collectors can interact with consumers. Typically, debt collectors are thoroughly schooled in the ways of FDCPA, because they have to comply with it when collecting on consumer debts. However, the FDCPA does not apply to the following:

•  Creditors (i.e., the lenders you originally took the debt from)

•  Corporate or commercial debts (this means the FDCPA doesn’t apply when a large company defaults on their debt)

•  Business-related debts (even for consumers, the FDCPA does not extend to debts incurred for business expenses)

P.S.: More exceptions might apply here, and for more information, you can consult your tax attorney and review the FDCPA in full.

Now that we’ve got a handle on where the FDCPA doesn’t come into play, let’s look at rules the FDCPA lays out for debt collector-consumer interaction:

Debt Collectors Cannot Harass the Consumer

In accordance with the FDCPA , debt collectors can’t “harass, oppress, or abuse” the consumer in attempts to collect their payment.

Debt Collectors Can Contact You Multiple Ways

Debt collectors can contact you to collect a debt using multiple methods of communication including by phone, mail, email, or even text messages.

They Can Collect for a Number of Outstanding Debts

Consumer debt collectors aren’t limited to collecting for credit card debt. They can also collect for auto loans, medical bills, student loans, mortgages, and other household debts. However, as noted above, they cannot collect for business debts.

They Can Ask Your Friends and Family How to Reach You

While debt collectors cannot discuss your debt with anyone else (with the potential exception of your spouse and your attorney), they can ask others for your address, your home phone number, and where you work. However, collectors can typically only contact them once.

Collectors Must Provide Information in Writing

Once a debt collector has contacted you, they have five days to send you a written notice stating how much money you owe, the name of the creditor you owe it to, and what you can do if you don’t think this debt is yours.

Collectors Must Verify Your Debt

If you are being contacted about debt you don’t believe is yours, the FDCPA notes that you must send the debt collector a letter within 30 days of receiving their letter, clearly communicating that you’re not liable for that money.

The collector then needs to send you written verification of the debt, for example, a copy of a bill for the amount you owe, before the agency can start contacting you to collect the money again.

They Can Take Money from Your Paycheck

A debt collector can obtain a court order for garnishment, directing that your wages or benefits be seized to repay your debt.

They can also seek a court order allowing them to take money from your bank account. It’s important not to ignore any lawsuit filed by a debt collector against you.

They Can’t Call You at All Hours

There are restrictions in place that limit when and where debt collectors can contact you. For instance, they can’t call before 8 a.m. or after 9 p.m. (consumer’s local time), unless you specifically give them permission.

They also can’t call you at work, if you tell them you aren’t allowed to get calls at work.

They Must Stop Contacting You if You Ask

If you send a debt collector a letter by mail, asking them to stop contacting you, then they can only contact you to tell you about a specific action they are taking, such as filing a lawsuit.

If you send a letter stating you’ve hired an attorney to represent you, the collector must communicate with your attorney. However, the FTC recommends you talk with the debt collector at least once to confirm whether they are talking about debt that you actually owe.

They Can’t Lie

Debt collectors can’t lie just to get your attention. Any information a debt collector shares with you must be accurate.

They cannot embellish the amount of money you owe or misrepresent themselves by saying they’re attorneys or government representatives. They also can’t threaten you with a false arrest or legal action.

They Must Abide by Laws

Collectors cannot engage in unfair practices such as trying to collect extra interest or fees beyond what you owe. They cannot deposit a post-dated check early, and they cannot threaten to take your property without obtaining a court order.

If you believe a debt collector has broken a law, you can sue them in state or federal court for damages such as lost wages and medical bills. You can report violations to your state attorney general’s office , the Federal Trade Commission , or the Consumer Financial Protection Bureau .

About SoFi

If you’re reading this, it might be because you’re worried about keeping up with debt payments—whether that’s payments on credit card debt, student loan debt, or another loan. The ideal scenario, of course, is getting that debt under control before it goes into collections. And one way to do that is by tracking your spending and effectively organizing your finances so that you can stay on top of your debt payments.

SoFi Relay is a complimentary product that can help you track your spending, view all of your accounts on one dashboard, and set debt payoff goals. You can leverage SoFi Relay to keep your debt payoff plan on track, such that you’re spending more time crushing your debt and less time worrying about default.

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 .

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.

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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. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, LLC and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.

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