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Graduating from college and starting a career is exciting. But for many people, graduation also triggers new financial obligations, including paying off student loans.

With the average student loan debt at $37,338, it’s no wonder many people have trouble staying on top of their student loans.

There are a number of repayment options for those with federal student loans, including the Standard Repayment Plan, which gives borrowers up to 10 years to pay off their student debt, and the Extended Repayment Plan, which lengthens the repayment term for eligible borrowers up to 25 years.

Extended Repayment Plans reduce the dollar amount of monthly payments because they spread the cost out over a much longer time period.

For some individuals, these longer-term loans might be a helpful way to balance their financial obligations and their other expenses, such as rent or mortgage, food, and savings.

How Does the Extended Repayment Plan Work?

Under the Extended Repayment Plan, eligible borrowers can spread out the repayment of their federal student loans over a 25-year period, compared to the Standard Repayment Plan’s 10 years.

Because student loans are subject to interest, the borrower will also pay more interest on their loan over a longer period of time. So the monthly payments may be lower, but the borrower will end up paying more over the full term of the student loan.

To see what this looks like in action, compare the costs of two repayment plans for paying back a hypothetical, but typical, federal student loan after receiving a four-year degree from a for-profit private college.

Let’s say you borrowed $34,722 four years ago at an average interest rate of 3.9%.

•   Under the Standard Repayment Plan, monthly payments would total $350 over a 10-year term, for a total cost of $41,988.

•   Under the Extended Repayment Plan, the borrower would only have to repay $181 a month — but over a 25-year term, the total cost would be $54,409.

There is also an Extended Graduated Repayment Plan in which monthly payments start low after the borrower leaves school but then gradually increase every two years over the lifetime of the loan.

Like the Extended Repayment Plan, the loan payments are spread out over up to 25 years instead of 10. Using the above loan example, payments would start at $143 a month in the first two years after graduation and slowly increase to $251 by the end of the loan term. The total amount paid back would add up to $57,026.

Eligibility for Extended Repayment Plans

If the reduced monthly cost of an Extended Repayment Plan sounds appealing, the first step is to assess eligibility. Not all student loans or borrowers qualify for the program.

The federal student loans eligible for the Extended Repayment Plan are:

•   Direct Subsidized Loans

•   Direct Unsubsidized Loans

•   Direct PLUS Loans

•   Direct Consolidation Loans

•   Subsidized Federal Stafford Loans

•   Unsubsidized Federal Stafford Loans

•   FFEL PLUS Loans

•   FFEL Consolidation Loans

Qualifying loans must have been obtained after October 7, 1998, and the outstanding loan balance must be more than $30,000 in either Direct Loans or FFEL program loans to be eligible.

Eligibility can’t be pooled across loan types, so if, for example, a student has $35,000 in Direct Loans and an additional $10,000 in FFEL program loans, the Direct Loan portion would qualify for the Extended Repayment Plan but the FFEL loan would not.

Weighing the Pros and Cons of Extended Repayments

The Extended Repayment Plan might be appealing to some federal student loan borrowers. After all, who wouldn’t want a lower payment each month?

But it’s not actually that simple. There are benefits and drawbacks to longer student loan repayment terms.

Pros of the Extended Repayment Plan

One benefit of the Extended Repayment Plan is an obvious one — lower monthly payments.

Typical monthly student loan payments, which are generally between $200 and $300 on average, can eat up a significant amount of take-home pay for lower earners. The smaller monthly loan payments associated with the Extended Repayment Plan might free up vital funds for other essential expenditures.

This benefit can be even more pronounced with the Extended Graduated Repayment Plan, in which monthly payments slowly increase over the life of the loan. This means borrowers pay the least in the first years after graduating, corresponding with lower entry-level salaries, and more later on when they may be better able to afford it.

Cons of the Extended Repayment Plan

Although monthly payments may be lower, there are some cons to the Extended Repayment Plan.

For starters, the loan term can be more than twice as long as the Standard Repayment Plan, meaning borrowers have to keep making monthly payments for 15 years longer.

Not only does the Extended Repayment Plan mean more years of making student loan payments, those payments will also add up to more money paid over the lifetime of the loan term.

For example, based on the example described above, for a $34,722 student loan at 3.9% annual interest, the borrower would pay an additional $12,421 over the lifetime of the student loan under the 25-year Extended Repayment Plan than they would on the 10-year Standard Repayment Plan.

The Extended Graduated Repayment Plan costs even more over the life of the loan. Deferring the bulk of repayment to later in the loan term in order to allow for lower payments earlier on means borrowers carry a higher level of educational debt for a longer period of time.

Alternatives to Extended Repayment Plans

While the monthly savings may make the Extended Repayment Plan sound appealing, for some borrowers the added total cost may outweigh this benefit. But there are alternatives that can help meet various financial needs.

Income-Driven Repayment Plans

Monthly payments for income-driven repayment plans are based on a percentage of the federal student loan borrower’s discretionary income, and the amount increases or decreases as their income and family size changes during the lifetime of the student loan. This helps to ensure that payments remain affordable, even as the borrower’s income changes.

Some income-driven repayment plans have slightly shorter terms than the Extended Repayment Plan (20 years vs. 25), which may also reduce the total interest paid over the life of the loan. The SAVE Plan, the newest addition to the income-driven repayment plan lineup, will provide the lowest payments for low-income borrowers, who may see their loan balances forgiven after as little as ten years in the program. Borrowers who plan to apply for the Public Service Loan Forgiveness Program (PSLF) will want to consider income-driven repayment plans, as they are one of the requirements for qualifying for the program.

Student Loan Refinancing

Some borrowers may choose to refinance student loans with a new loan from a private lender. Eligible student loan borrowers may qualify for lower interest rates or more favorable terms.

One benefit of student loan refinancing is that it could reduce monthly payments for some borrowers. However, refinancing means forfeiting benefits and protections that come with federal student loans — like income-driven repayment. And you may pay more interest over the life of the loan if you refinance with an extended term.)

The Takeaway

With potentially lower rates and flexible repayment terms, refinancing your student loan can be an attractive option that could save you money each month — or allow you to pay off your loan faster. SoFi offers loans with low fixed or variable rates, flexible terms, and no fees. And you can find out if you prequalify in just two minutes.

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.

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.

When shopping around for lending options for a major project or immediate financial need, a personal loan might be on your list. And besides the interest rates and terms, the loan amount is a large determining factor in which option you decide to go with.

So how much can you get for a personal loan? Whether you’re looking for a large personal loan or a small one, the lending criteria is the same. Let’s take a look at how much lenders typically offer, what factors play into the size of a personal loan that you can get, and when it makes sense to get a personal loan.

How Much Do Lenders Offer?

How much can you get for a personal loan? Amounts vary by lender, but typically start as low as $600 and go as high as $50,000. Some lenders, including SoFi, offer personal loans up to $100,000.

The amount you actually get approved for depends on a handful of criteria, which we’ll dig into below.

Recommended: Can I Increase My Personal Loan Amount?

What Determines How Big of a Personal Loan You Can Get?

The amount a lender offers and the amount you qualify for aren’t always one and the same. There’s a handful of financial and credit criteria that can impact the loan amount, rates, and terms. Let’s look at the main factors:

Credit Score

In general, the higher your credit score, the larger the loan amount, the more favorable the terms and interest rates. On the flip side, the lower your credit score, the smaller the loan amount, and the less favorable your terms and interest rates.

Lenders usually have credit score requirements. The minimum required credit score for a personal loan varies but can start at 580. To get the best terms and rates, you usually need a credit score of at least 640.

Recommended: Can a Personal Loan Hurt Your Credit?

Debt-to-Income Ratio

Your debt-to-income ratio (DTI) is your monthly debt payments divided by your gross monthly income. It’s expressed as a percentage. For example, let’s say your monthly income (before taxes, withdrawals, and other deductions are taken out) is $5,000, and your total debt obligations are $2,000. In that case, your DTI is 40%.

For the most part, lenders would like to see a DTI no higher than 35% to 40%. But if you have a high credit score, you might get approved with a slightly higher DTI.

Lender Amount Limits

The amount you can borrow may be limited by how much funding you can receive from your lender. Let’s say your credit is stellar, you have low DTI, steady employment, and a good income. But if the lender’s max personal loan amount is $50,000, then the most you can potentially borrow is $50,000.

Applying as An Individual or Jointly

If you’re applying for a personal loan with another applicant and their credit is strong, you might be eligible to borrow more money. However, not all lenders let you apply jointly, so you’ll want to check beforehand.

Income and Employment History

How much you can borrow also depends on your income and employment history. If you bring in a certain amount of money and have steady work for the last few years, that could boost the approval amount.

Some lenders may give more weight to your income and employment history. In turn, you might be able to get a higher loan amount with a lower credit score and a higher debt-to-income ratio.

Collateral

Not all personal loans require you to provide a valuable asset, such as your home or car, to back up the loan. But if you’re looking into a secured loan, you might be able to get a higher max amount on your personal loan than if you went the unsecured loan route.

Offering collateral and getting a secured loan means you could get a bump in your personal loan amount. Remember, not all lenders offer secured personal loans. If a lender does offer both secured and unsecured loans, you can compare quotes from the same lender for either option.

Loan Purpose

A lender might only allow you to use the loan for certain purposes. For instance, some lenders specialize in credit card debt consolidation loans. Lenders that offer greater flexibility might have limits on how much you can borrow depending on the loan purpose.

For example, the limit on using the loan proceeds for childcare expenses and large purchases might be different than if you’re planning to use the funds toward a major home improvement project.


💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. SoFi Personal Loans come with no-fee options, and no surprises.

Calculating How Much You Can Borrow

Determining how much you can borrow requires you to know your financial situation, how much you’d like to borrow, and what you can reasonably afford to pay off on a regular basis.

To start, jot down the repayment term and rate you anticipate receiving. If you get prequalified, that can give you a fair estimate on your loan amount.

Next, you’ll want to figure out the following numbers:

•   Income before taxes.

•   Additional income you get on a regular basis (i.e., rental property income, alimony, disability benefits).

•   If you’re filing jointly, you’ll also need to include the other applicant’s income.

•   Tally up your existing debt. This might include credit card debt, other personal loans, a car loan, or student loan debt.

That can help you figure out how much you can afford for your monthly payment.

How to calculate your borrowing power

If you’re mulling over the possibility of debt consolidation, you can use a handy personal loan calculator to gauge how much you’d save on interest or how much your monthly payment will be lowered by rolling over your existing debt to a new one.

Otherwise, you can punch in basic numbers, such as the loan amount, interest rate, and repayment term, to figure out what your monthly payment shakes out to.

Recommended: Pros and Cons of Personal Loans

Does a Personal Loan Make Sense?

Personal loans do have the word “personal” in them. So whether it makes sense for you to take out a personal loan depends on your unique situation and circumstances.

Here are some scenarios where getting a personal loan might be a good idea:

•   You need a large sum upfront. If you need a chunk of cash for a big-ticket purchase or to fund a home improvement project, a large personal loan can provide you with the money to cover a purchase.

•   You have a good credit score. The higher your score, the higher the loan amounts, and the better your rates and terms will most likely be.

•   You’re using the funds for something you really need. If you need the money to cover a financial shortfall, unexpected emergency, or much-needed home remodeling project, it could be a sound move to take out a personal loan.

•   You need the money quickly. The processing and funding times for a personal loan can be a lot faster than other funding choices, such as a home equity loan or HELOC.

•   You want to consolidate high-interest debt. If you qualify for a lower interest rate, lower monthly payments, and more flexible repayment terms, it could make financial sense to take out a debt consolidation loan.

Now, let’s walk through instances when a personal loan may not make sound financial sense:

•   You can’t keep up with monthly payments. If you’ve looked at your situation, do the math, and realize that you’ll have a hard time staying on top of your monthly payments, then a personal loan might not be the right choice for you at the time.

•   You have time to save for your major purchases and goals. If you aren’t in a financial pinch and don’t need the money right away, you might be better off saving instead.

•   You don’t need to take out a large amount of money. Unless you have good reason to take out a sizable amount of cash, then it probably doesn’t make financial sense to get a personal loan. Other options, such as a personal line of credit, might be a better move.

Alternatives to Personal Loans

If you’re on the fence about taking out a certain type of personal loan, know that other options exist. Here are other routes to take:

Credit card. If you’re already shouldering a lot of credit card debt and are paying a lot in interest fees, this might not be the best choice for you. But if you need to borrow a small amount — and can reasonably pay off your balance in a short amount of time — then a credit card provides easy access to funding.

Personal line of credit. Don’t need a lump sum upfront and anticipate needing to tap into funds for different purposes? Then a personal line of credit, which is similar to a credit card, might be a better fit.

Peer–to-peer loan. If you’re struggling to qualify for a personal loan with a traditional lender, you might have better odds of getting approved for a peer-to-peer (P2P) loan. Instead of being funded by a financial institution, P2P loans are funded by individuals who serve as investors and are loaning the money. The lending criteria for P2P loans tend to be less stringent than traditional loans.

Home equity loan or home equity line of credit (HELOC). If you’re a homeowner who has built equity in your home, you could qualify for a home equity loan or home equity line of credit (HELOC). Because you are offering your home as collateral, you typically can qualify for higher loan amounts. Plus, home equity loans or HELOCs tend to have less stringent lending criteria.

If possible, consider waiting to take out a personal loan until you’ve worked on building your credit, reduced your debt loan, are earning a higher income, or have a more stable employment history.


💡 Quick Tip: Just as there are no free lunches, there are no guaranteed loans. So beware lenders who advertise them. If they are legitimate, they need to know your creditworthiness before offering you a loan.

The Takeaway

How much of a personal loan you can get depends on a handful of factors, such as what’s available from the lender, your credit score, debt-to-income ratio, and employment history. Plus, it’s important to get your head around what you can reasonably afford to pay each month.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

FAQ

What is considered a large personal loan?

Most lenders offer a maximum personal loan amount of $40,000 to $50,000, and some lenders, including SoFi, offer lending amounts of up to $100,000. But just because a lender offers that doesn’t mean you’ll get approved for it. You’ll also want to be mindful about not taking on more than you need.

How much is too much to ask for a personal loan?

There’s no specific number that constitutes “too much” for a personal loan. That said, an amount might be considered too high if you don’t have a good reason to take out that much money and if you aren’t able to afford the monthly payments.

Does the size of a personal loan affect a credit score?

As your personal loan payments are reported to the three major credit bureau agencies, the size of your personal loan can impact your credit. Your payment history is the largest contributing factor, but loan size can also influence your score.

Photo credit: iStock/Ridofranz

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

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

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By now, you’ve probably already calculated how much of a personal loan you can get. And you likely have a solid understanding of the personal loan requirements to get approved. You may be wondering about the next step in the process: how to get a personal loan.

Applying for a loan can be relatively simple, as long as you understand the options available to you, meet the lender’s requirements, and have the necessary paperwork in order ahead of time. Here’s what you need to know.

1. Prequalify for a Personal Loan Through Multiple Lenders

The first step in applying for a personal loan is to get prequalified. You can get a personal loan from a few different sources, including a bank, credit union, or an online lender. Each has its pros and cons.

Personal Loan from a Traditional Bank

One drawback of getting any type of personal loan from a bank is that it can take longer to be approved compared to an online lender. However, banks have greater lending power, so you might be able to get a larger loan. Plus, many banks will not charge an origination fee.

Personal Loan from a Credit Union

Credit unions are likely to offer the lowest APRs and have low fees to boot — two advantages if you’re already a member of one. However, there are potential tradeoffs. Smaller credit unions tend to have limited digital offerings compared to national banks, and it may take borrowers longer to get approved for a personal loan.

Personal Loan from an Online Lender

With an online lender, your personal loan application is approved and managed entirely online — there is no opportunity to sit down with a loan officer. Depending on whether you’d prefer to apply for a loan online vs. in person, this could be either an advantage or a disadvantage.

If you visit an online loan aggregator site, you can apply for preapproval and receive multiple loan options. From there, you can easily compare the rates and terms, but be sure to confirm the fees and charges.

Does Preapproval Hurt My Credit Score?

In order to be preapproved for a personal loan, a lender will check your credit history. Typically, the lender will only perform a “soft” credit inquiry, which will not affect your credit score. A preapproval determines if you’re eligible for a loan before you formally apply.

Applying for a loan triggers a “hard” credit inquiry, which could pull down your credit score because you have applied for additional credit.

You can check with a lender to find out what type of check they will do to preapprove you for a personal loan.

Recommended: Personal Loan Glossary: Loan Terms to Know Before Applying

What Do I Need to Prequalify for a Personal Loan?

To qualify for a personal loan, you will need to first determine how much you want to borrow and how much you can afford to pay each month to pay off the loan. How much you can pay each month will determine the term (length) of the loan.

How much you want to borrow will depend on what you want to use the money for. While there are few limitations on how you spend the personal loan funds, it’s wise to borrow as little as possible because you will be paying interest on what you owe.

When you fill out the application, the lender will ask you for personal information. Typically, this includes:

•   How much you want to borrow and for what purpose

•   Proof of your net income and assets

•   Your contact information and social security number

2. Compare Your Options

Getting preapproved from various lenders is critical if you want to try to get the best rates and terms. The preapproval will show you the amount of the loan you qualify for, the APR, term, and any origination fees. By comparing multiple lenders, you can find the loan that will cost you the least. Be sure to check all the fees that may apply.

If you’re trying to get better loan terms, you may want to explore adding a cosigner who has a good credit score. Doing so may help the lender view you as less of a risk, and they may be inclined to offer you a lower interest rate. However, keep in mind that if you make late payments or default on the loan, the cosigner’s credit will suffer, as will your own.

3. Gather Required Documents

Before you sit down to fill out an online application or visit a bank or credit union, gather all the documents you will need. These will likely include:

•   ID, such as your driver’s license or passport

•   proof of address, such as a recent utility bill

•   proof of employment and earnings (paystub)

•   your social security number

•   your education history

4. Apply for a Personal Loan

Once you have all your documents on hand, you are ready to fill out either an online or in-person loan application. If you are applying online, you will be required to scan the documents and upload them with the application.

Recommended: Exploring the Pros and Cons of Personal Loans

How Long Does It Take to Get a Personal Loan?

The amount of time it takes for your loan application to be approved and processed depends on the lender. Online lenders tend to be the fastest. Submitting the application online only takes a few minutes, provided you have all your documents on hand, and approval can take one or two business days. You can expect to see the funds deposited into your bank account within one to three business days of approval.

Banks and credit unions, on the other hand, tend to be slower. You may need to apply for a loan in person and, depending on your relationship with the institution and your financial history, getting approved could take one to three business days. You might need to wait three business days or more to receive the funds.

Does Everyone Get Approved for a Personal Loan?

Not everyone is approved for a personal loan. Lenders consider your credit score, payment history, income, and debt-to-income ratio when deciding whether to approve someone for a personal loan.

Credit Score

The higher your credit score, the lower your interest rate will be. This is because if your credit history is good, the lender considers you low risk. A high interest rate is what protects a lender from the risk of lending to someone who might default on the loan. A score of 640 or more is generally considered enough for a borrower to potentially qualify for a loan from some lenders. If your credit score is low, consider bringing on a willing cosigner with a better credit score.

Payment History

How you’ve managed loan payments in the past is something that a lender will consider. If you have paid off loans on time and made timely credit card payments, the lender may not consider you high risk and could be more likely to approve your application. If you have a history of late payments, however, you might find it more difficult to get approved for a loan.

Income

Lenders want to make sure you can pay back what you borrow. They’ll look at your income to make sure it is steady and that you can afford to make the payments each month. Some lenders might request your W-2 tax forms, bank statements, or recent pay stubs. Others could require verification from your employer of stated income and to confirm current employment.

Debt-to-Income Ratio

Your debt-to income (DTI) ratio shows how much you are already paying toward debt each month and is an indicator of how well your current income can cover an additional monthly loan payment. If you have no spare cash left over after paying existing debts, such as credit cards and mortgage, you likely cannot make the payments on a personal loan. A DTI ratio of 35% or lower is considered favorable for a personal loan.

What Do You Do If You Are Denied a Personal Loan?

There could be many reasons your loan was declined. Your credit score might not be high enough, your DTI ratio could be too high, or perhaps you failed to provide the right paperwork. Find out why your loan was denied so that you can fix the problem.

If your loan application is declined,you can receive a free copy of your credit report. Check that the information on the report is accurate. See if you can boost your credit score by opening new accounts that report to the credit bureaus (if you’re trying to establish your credit), maintaining low balances, and making on-time payments.

Note that applying too often for new loans or accounts triggers hard credit checks, which can lower your credit score. Another option is to find a cosigner. A cosigner with a good credit rating might help you to secure a personal loan with a favorable rate.

If you have a high DTI ratio, you might have to pay down some of your existing debt in order to receive a loan with good rates. Alternatively, you might consider taking out a smaller personal loan and supplementing the rest from other sources.

💡 Quick Tip: Generally, the larger the personal loan, the bigger the risk for the lender — and the higher the interest rate. So one way to lower your interest rate is to try downsizing your loan amount.

The Takeaway

When it comes to applying for a personal loan, you have a few different sources to explore: banks, credit unions, and online lenders. Each has advantages and disadvantages.

To find the best loan rates and terms available to you, consider getting preapproved from multiple lenders and seeing which loan will cost you the least. You’ll also want to gather essential documents before you fill out the application. This may include your ID, proof of address, proof of employment and earnings, social security number, and education history. If your loan application is declined, find out what the issue was so you can fix it. The solution may involve boosting your credit, lowering your debt-to-income ratio, or taking out a smaller personal loan.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

FAQ

Does everyone get approved for a personal loan?

Individuals may be denied a loan from a lender because they do not meet the requirements. A lender will consider your credit score, payment history, income, and debt-to-income ratio when deciding whether to qualify you for a loan. You also are required to submit documentation, such as proof of identity, residency, income, and your social security number.

What do you do if you are denied a personal loan?

If you are denied a personal loan, find out the reason why. Lenders are required to issue an adverse action notice informing you why you were denied. The most common reasons are a low credit score, a poor payment history, a high debt-to-income ratio, insufficient income, or failure to provide the right documents. If your credit score is too low, check your credit report for inaccuracies. Then, you might have to take steps to improve your score.

If your debt-to-income ratio is too high, try to pay down some of your debt. Other options are to apply for a smaller loan, find a cosigner with a good credit score, request a cash advance from an employer, or ask family or friends.

How long does it take for a personal loan to be processed?

A bank or credit union might take up to a week to deliver funds to your account. However, online lenders deliver funds within one to five days once you are approved.

Photo credit: iStock/PeopleImages

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.

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 .

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.

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Congrats, you got into college. That’s a shining achievement in its own right. Now you’re ready for some secrets to help you excel once you pass through the gates — be they ivy-covered, steelbound, or on a virtual campus you. It turns out that rising to the top of your class academically, like cream in a farm milk bottle, can have important benefits for Gen Z.

With the cost of college still rising (counting room and board, a private college can run up to $80,000 per year, and a public college, up to $30,000 or more), getting straight A’s can help you in key financial ways. It can put you on track for a lucrative career or give you an edge in a competitive internship field.

Our mini crash course has info on:

•   Getting into a college major that can lead to a high-paying career

•   Good study habits for nailing A’s

•   Whether colleges care about your GPA

•   Whether employers look for straight A’s in college.

What Is a 4.0 GPA in College?

Your GPA (grade point average) is a number that shows your academic standing, based on the grades you get in all classes. The scale starts at the top with 4 (for an A), 3 (B), 2 (C), 1 (D), and O (for F, or failing). A 4.0 GPA means you aced every class and got straight A’s in college.

Do Colleges Care About Straight A’s?

To get in the college door, the answer is often yes. Many college admissions teams do notice straight A’s in a quest to enroll the best and brightest high school students.

Once you are on campus, your college may not expect all A’s, but some colleges and universities may require a minimum GPA in introductory courses before allowing students to declare a popular major that typically brings lucrative returns later. The list includes mechanical engineering, computer science, nursing, finance, and economics. These universities want students of the highest academic caliber for the highest-earning majors.

Another reason colleges care about your grades: You need to maintain a certain GPA as a sophomore, junior, and senior to continue to qualify for federal student aid. In order to maintain eligibility for federal student aid, including federal loans and grants, students need to meet their school’s standards for Satisfactory Academic Progress (SAP). Each college is allowed to set its own minimum GPA. (Look into a private student loans guide for other lending options.)

Recommended: What Are Merit Scholarships?

Merit scholarships may also have minimum GPA requirements, so maintaining a high academic standard may be important for maintaining eligibility for merit awards as well.

Do Employers Look at Your GPA?

GPA, a benchmark once widely used by employers, is now considered by fewer than half, according to the Job Outlook 2022 survey by the National Association of Colleges and Employers (NACE). That’s a dip from five years ago, when, according to NACE, 67.5% of respondents said they used GPA to identify promising candidates. The survey found that among businesses that use GPA as a screening tool, 3.0 is the most common cutoff.

According to NACE, the trend away from using GPA appears to reflect awareness that GPA screening may not build an inclusive workforce and can be a disadvantage to students who balance school with work and other responsibilities. Also, as employers compete for talent, they are reevaluating long-used screening tools.

How Hard Is It to Get a 4.0 in College?

Whether you’re getting all A’s often depends on your major, the courses you take (organic chemistry, anyone?), and even the college you attend. But chasing a 4.0 can be hard on your life balance. If all you do is study, with no sleep, social life, or campus activities, your health and mental well-being may suffer.

Instead of overemphasizing your GPA, it may help to also focus on how you’re challenging yourself. A GPA is just one measure of your coursework.

Tips for Getting All A’s in College

If you are after all A’s, this action plan could help you achieve your goal.

Select a Major That You Are Passionate About

College is the time to immerse yourself in subjects that enthrall, inspire, and move us, whether that means microbiology or British literature. But if your mind is in the art world and your nose is in a sociology book, your interest can wane, and you may be far less likely to excel. Choose a major that ignites your brain power and A’s will be more attainable.

Time Your Classes Well

When are you most alert? Are you wide awake in the morning and dragging by 5? Schedule classes accordingly. Can you focus on a weekly 3-hour seminar or would you do better with a shorter class that meets more often? Know thyself, and how you learn and work most productively.

Take Advantage of Professors’ Office Hours

If a calculus formula is not crystal-clear or you want to talk a little more about that short story structure, stop by your professor’s office during posted hours or pop in virtually if that’s an option. Professors post hours so students can get the help they need.

Practice Good Time Management

Make an organized schedule. Use Google Calendar on your phone or get an actual planner with paper pages. (Relieve stress with stickers and doodles. Get pretty markers at the campus bookstore.) Don’t double-book time slots, whether for a study/coffee date with a classmate or your shift at the campus newspaper.

Closely Track Grades

Don’t wait until the end of the semester to see what your average is in Italian class. Keep up to date on every grade and pump up your study efforts if necessary.

Set Study Time Blocks

Build them in wherever and whenever possible. Several short sessions can be as productive as one long one. Review and study notes from day one, to start building a bank of knowledge. When studying, turn off your phone and leave it in your backpack. Avoid looking at emails or other digital distractions. Take notes on relevant readings and review and organize class notes each week so you don’t have to cram come exam time.

Plan your study location based on the lowest possible risk of distractions, such as a roommate who might want to order wings and binge watch the latest Netflix original. Adjust times and places as needed; be flexible. Maybe 30 minutes at Starbucks between classes is all you have one day. But if you block out two hours to study, stick to it. Consider enlisting a study buddy.

Benefits of Getting Straight A’s in College

Excelling in your classes can bring perks like these.

Dean’s List Recognition

The dean’s list, a term dating to the early 14th century, comes from the Latin decanus (“head of a group of 10 monks in a monastery”). You, of course, are at college, not a monastery, but you are at the head of the class when you make the dean’s list.

The distinction is usually reserved for full-time students at a specific GPA. Being on the dean’s list could help you stand out in a field of applicants for plum internships and summer jobs. Consecutive semesters on the list show you can achieve and maintain high standards.

Scholarships and Grants

Straight A’s can potentially translate into money to help pay college bills. Some scholarships have GPA requirements; read the fine print.

Merit-based college grants are awarded to students who demonstrate high levels of academic achievement, a commitment to community service, or excellent leadership skills. While you may not need straight A’s to qualify, it won’t hurt to strive for the gold and set a high bar for yourself.

Recommended: Merit Aid for College

The Takeaway

Getting all A’s in college can bring big benefits, from helping you secure a place in a crowded major with lucrative career returns (such as engineering or computer science) to earning you a place on the dean’s list, a marker that helps you stand out in a competitive internship field. With the right study skills, you can seriously up the odds of acing your classes.

3 Student Loan Tips

1.    Can’t cover your school bills? If you’ve exhausted all federal aid options, private student loans can fill gaps in need, up to the school’s cost of attendance, which includes tuition, books, housing, meals, transportation, and personal expenses.

2.    Even if you don’t think you qualify for financial aid, you should fill out the FAFSA form. Many schools require it for merit-based scholarships, too. You can submit it as early as Oct. 1.

3.    Would-be borrowers will want to understand the different types of student loans peppering the landscape: private student loans, federal Direct subsidized and unsubsidized loans, Direct PLUS loans, and more.

FAQ

What is a 4.0 GPA in college?

A 4.0 GPA (grade point average) means you have an A in all of your classes.

How do you become a straight-A student?

Getting straight A’s takes diligence, good study skills, and some planning. It also depends on the courses you take. It generally helps to pursue a major that taps into your passions and strengths. Are you more comfortable with a paintbrush or camera than in a science lab? Then fine arts classes will be easier for you to ace.

Do colleges care about straight A’s?

Colleges may not care if you get straight A’s, but some schools may require students to have a minimum GPA in introductory courses before allowing them to declare a popular major that typically brings lucrative returns in the work world. The list includes mechanical engineering, computer science, nursing, finance, and economics. Another reason to watch your GPA: Federal student loans and many scholarships and grants have a minimum GPA requirement.

Photo credit: iStock/Luis Echeverri Urrea

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Your personal cash flow — or, how much money is coming and going through your personal budget on a regular basis — always has room for improvement. You can improve your cash flow, too, through various means, such as asking for a raise, starting a side hustle, and more. That, of course, paired with cutting excess spending, can help improve your financial standing.

In a sense, you’re your own chief financial officer, or CFO, and in charge of doing what you can to stay on top of your finances. With that, there are a multitude of things you can do to improve your personal cash flow. But if you want to pare that to-do list down, you can start with six key actions.

1. Ask for a Raise

A salary increase is perhaps the easiest and quickest way to improve your personal cash flow — and it requires the least amount of effort. But you must first muster the confidence to ask for one, and prepare yourself for a meeting with your boss to make sure you end up getting a raise.

Unfortunately, most employees may be reluctant to ask for a raise — in many cases, because they believe it’s awkward to talk about money with a manager. Managers, however, are not necessarily looking for ways to increase their expenses. So, if you want a raise, you’ll likely need to take action rather than waiting for one to fall out of the sky. That will require having an idea of what your market value is, and what your employer can realistically afford.

You can always look for another job, too.

2. Start a Side Hustle

A side hustle is simply a second or secondary job, and many people employ them to bolster their earnings. There can be many benefits to having a side hustle, with the extra cash, of course, likely being the most obvious.

For instance, by taking on additional projects, you’ll gain experience that will pad your resume and uncover opportunities to make new connections. You might even find yourself entertaining an offer for a new — and better paying — position. If you don’t know where to start, either, some low-cost side hustles include tutoring, flipping furniture, or even digital marketing.


💡 Quick Tip: Look for an online brokerage with low trading commissions as well as no account minimum. Higher fees can cut into investment returns over time.

3. Track Your Spending

Increasing your income is part of the equation, but slowing your cash outflows is also critical. That means tracking your spending, and finding ways to slow that spending in order to save more.

There are also services out there that can help you not only track your spending, but analyze that spending, too, and find opportunities to cancel services you barely or never use. An internet search will reveal several of them. Reviewing your bank statements, too, should help you find other areas where spending could potentially be cut.

You can also try measures such as only using cash to keep your spending under control, along with other strategies.

4. Simplify Your Life

Selling everything and moving to a tiny house may sound nice, but if you were to actually do it, you may find yourself missing some of the modern world’s creature comforts. With that in mind, if you want to simplify your life (and financial situation), it may sound like a good idea — but you should take some time to think about what you really need, and what you can do without.

For instance, many people could probably cut their clothing budget without too much trouble. But is it possible to also downsize and relocate to a new apartment in a less trendy but more affordable area? What about clearing out that storage unit that you’re spending money to rent? Simplifying your life could result in savings, but there’s a lot of thought that should go into any big life changes before they’re made.

5. Review Your Debt

Being your own CFO means that your finances — including your debt — are under your control. As such, you’ll need to know what debts you have racked up, including credit card debt, student loan debt, auto loans, personal loans, and more. It can be difficult to face your debts head-on, but if you’re serious about improving your financial standing, it’s a critical step to take.

Also, take a look at your debt to income ratio — your monthly debt payments divided by your gross monthly income. Let’s say your gross monthly income is $7,000, but each month you pay out $1,500 for rent, $600 for credit card bills, $500 for student loan payments, and $600 for other debt. Your debt to income ratio is 46% ( $3,200 divided by $7,000). A high debt to income ratio — typically over 43% — makes you riskier to potential lenders, and can cost you a new loan with a good rate.

Imagine bringing your rent down to $1200, knocking $200 off that credit card payment each month, and bringing your student loans down to $300; your debt to income ratio would decrease to just 36%.

Investing With SoFi

Improving your personal cash flow — a critical step to take if you want to be your own personal CFO — is important for just about everyone. Finding ways to increase your earnings or income, while also finding ways to pare down expenditures, should help you reach your financial goals in the long term. There will be hiccups along the way, of course, but with some discipline and know-how, it’s doable.

And don’t forget to share what you’ve learned; you probably know someone who could use the advice. Support and encourage your friends, and then help each other stick to individual goals. As always, if you want more guidance, you can get in touch with a financial professional.

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

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