Almost everyone needs to finance car repairs sooner or later. It might be a breakdown on the highway, a fender bender at the supermarket parking lot, or perhaps (ugh) someone steals your catalytic converter.
Whatever the case, car repair bills can be significant and arrive without warning, stretching your budget to the max. If you’re in this situation, consider these strategies to pay for urgent repairs and get back on the road again.
Strategies to Pay for Car Repairs
If you get hit with a large car repair bill or are thinking ahead and know a big-ticket item is coming up, consider the following ways to pay for the work that needs to be done.
Key Points
• Car repairs can be financed through various means, including emergency funds, insurance, negotiation, credit cards, or personal loans.
• Emergency funds are a viable option for car repairs as they allow you to avoid interest.
• Insurance can cover accident-related repairs, but check policy details and deductibles.
• Negotiating with repair shops can reduce costs and prevent upselling.
• Personal loans can offer lower interest rates and quicker funding compared to credit cards.
1. Dip Into Your Emergency Fund
You may have heard it said that you should keep an emergency fund easily accessible for precisely this situation — an unexpected expense. But should you really use your emergency fund to pay for car repairs?
Dipping into your emergency fund might be a solution if you don’t have other cash available to pay for repairs. And, for many people, having a vehicle up and running is vital to their work and personal lives. In this way, it is a valid reason to tap your emergency fund.
What’s more, using your emergency savings instead of reaching for your credit card could save money on interest and other applicable costs.
Of course, if you dip into your emergency fund, you may need to spend time building it back up so you’re prepared for any other emergencies.
💡 Quick Tip: Some lenders can release funds as quickly as the same day your loan is approved. SoFi personal loans offer same-day funding for qualified borrowers.
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2. Use Your Insurance
Is your car repair related to an accident? If so, your car insurance may help. It’s designed to protect you financially by covering some of the repair costs for vehicle damage and the medical bills related to any injuries.
The type of coverage and circumstances can vary.
• For example, comprehensive insurance may help with some costs even if the accident didn’t involve another car or if the damage was caused by an unexpected event, like a tree falling on your hood.
• Collision insurance doesn’t typically cover damage caused by normal wear and tear. This means that your coverage may not include things like theft, vandalism, or weather damage.
• There is one type of insurance — what’s known as mechanical breakdown insurance (MBI) — that covers some types of repairs. Therefore, if you have damage caused by routine use of the vehicle and you have an MBI policy, you may want to check to see if the repair is covered.
Before going this route, consider whether using your insurance will actually be cheaper than paying out of pocket. Making an insurance claim could cause your insurance rates to rise.
It’s wise to understand how your car insurance works. The specific instances that your insurance will cover should be laid out in your insurance policy. The amount of your policy deductible as well as the repair and type of coverage will likely be some factors you review with your insurance carrier.
3. Try to Negotiate
Whether you have to replace multiple tires after driving over road debris or you have to install new brakes due to normal wear and tear, you may be looking at a hefty repair bill.
The good news is that car dealerships aren’t the only places where you can haggle over your car. Local car repair shops might be willing to cut you a deal to win your business.
• Consider asking the repair shop for a written quote explaining precisely what is wrong with your vehicle, how the mechanic plans to fix it, and what the cost will be.
• Once you have this written estimate in hand, you may want to get a second opinion. Sometimes auto mechanics will offer you a discount on a quote from another shop to get your business.
• You could also ask the mechanic to limit their quote to only the essential repairs to ensure that they don’t try to upsell you on prematurely replacing all your tires when the problem you need addressed is your power steering.
4. Put It on a Credit Card
It can be important to protect yourself against excessive credit card debt, but if you need to shell out hundreds, or even thousands of dollars for a quick car repair, you may find yourself reaching for that plastic lifeline.
You may feel as if you don’t have options, but proceed with caution. Using a credit card may come at a high price. Credit cards can carry high-interest rates that, if not paid off in a timely manner, can drive up the original cost of the car repair. If you can’t pay off your credit card debt right away, you may end up spending much more for your repairs by the time you make your final payment.
5. Consider a Personal Loan
Another option for paying for car repairs when you have no cash on hand may be taking out a personal loan. Personal loans are sometimes overlooked as a way to come up with cash fast, but in the right circumstances, a personal loan can come in handy.
A personal loan can often offer lower interest rates vs. options such as using your credit card. This could help you save money when facing unexpected car repairs.
• A personal loan is typically an unsecured installment loan, which means that you borrow a set amount and pay it back in equal monthly installments over a fixed period. “Unsecured” means that the loan is not tied to any physical piece of property through a lien, but instead offered to borrowers based on factors like creditworthiness.
• Another benefit of using a personal loan to pay for car repairs is the relatively quick application process. While you’ll need to meet certain qualifications set by your chosen lender in order to secure financing on a personal loan, some lenders disburse loan funds within a few days.
Depending on your situation, a personal loan might be the right option when it comes to helping you get back behind the wheel and onto the road.
If you need to pay for car repairs, you have a few options to consider, from tapping your insurance (if appropriate) to using your emergency fund to taking out a personal loan. If the latter seems like the right move for you, shop around to find the offer that’s the right fit for you.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.
SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.
FAQ
What are ways to pay for car repairs?
To pay for car repairs, you might dip into your emergency fund, tap your insurance (if applicable), try to negotiate, use a credit card, or take out a personal loan.
How does a personal loan work?
A personal loan offers a lump sum of cash that is then paid off over time, in installments, with interest.
Can you put car repairs on a credit card?
Yes, you can often put car repairs on a credit card. However, credit cards typically carry high interest rates, so you may want to consider other options, such as using emergency funds or taking out a personal loan.
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.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
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 .
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.
It’s no secret that identity theft has been an issue for consumers. In 2024, the Federal Trade Commission (FTC) received 1.1 million identity theft reports. The financial toll of fraud, which includes identity theft, can be substantial. The FTC estimates that it cost Americans more than $12 billion in 2024, with median losses around $497.
One tool that can help detect issues early on is credit monitoring. This service tracks your accounts and alerts you to any changes or suspicious activity, giving you time to start the process of undoing any damage that’s been done.
If you were involved in a data breach, you may receive credit monitoring at no cost. Otherwise, you can pay a nominal fee for the coverage — usually around $10 to $40 a month — or do most of the legwork yourself for free.
Key Points
• Credit monitoring tracks accounts and alerts users to changes or suspicious activity, helping them discover issues like fraud early.
• Monitoring credit is also important since a good credit report can facilitate purchasing a home or buying a car.
• Credit monitoring services can be useful but have drawbacks, such as cost and inability to provide 100% protection.
• Users can monitor credit for free by requesting a free credit report every 12 months from each of the three major credit bureaus.
• You can use a credit freeze to prevent identity theft by limiting access to your credit reports.
Why Is It Important to Monitor Your Credit?
Your credit history can have an impact on your ability to make big financial decisions, like purchasing a home or buying a new (or new-to-you) car.
If you have a spotless report, you could get better interest rates on new loans. On the other hand, if your score is what’s considered poor, you could be denied access to certain financial products altogether.
Even if you’re diligent about abiding by best credit practices, if someone has unauthorized use of your information, they can quickly sink your hard-earned credit score. That’s when credit monitoring comes in handy. If you see an alert corresponding to a change you didn’t make, you’ll know something’s up — and you can move quickly to repair any issues that might impact your creditworthiness.
Generally speaking, it’s a good idea to check your credit reports at least once a year. If you’re making a major purchase, consider monitoring your credit for at least three months beforehand to ensure everything is in order.
💡 Quick Tip: Your credit score updates every 30-45 days. Free credit monitoring can help you learn about your score’s normal ups and downs — and when a dip is cause for concern.
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Pros vs. Cons of Credit Monitoring Services
Credit monitoring can be a useful tool, but there are some drawbacks you’ll want to consider. Here are pros and cons of credit monitoring services.
Pros of Credit Monitoring Services
Many credit monitoring services come with extra features that might help justify their cost. Common examples include:
• Alerts when there are changes to your personal information, significant balance changes, account closures, or hard inquiries
• Access to credit reports and scores from one or more of the three major credit bureaus
• Dark web scans, which check if your personal information has been compromised
• Identity theft insurance, which can cover any costs you may incur if you’re dealing with identity theft
• Identity recovery services, which can be useful as you repair any damage from identity theft
Cons of Credit Monitoring Service
Even the best credit monitoring service has its limits. Here are some potential drawbacks to consider:
• Cost of a subscription
• Can’t provide 100% protection from all fraud or identity theft
• Coverage may not include monitoring from all three major credit bureaus: Experian®, TransUnion®, and Equifax®
• You may not be alerted if someone uses your name to collect a tax refund or claim benefits from Medicare, Medicaid, Social Security, or unemployment insurance
How to Monitor Credit for Free
There are times when paying for a credit monitoring service makes sense. For example, when you want more robust identity monitoring, prefer a program that monitors reports from the credit bureaus, or need help resolving disputes. It may also be a good move if you suspect your information has been exposed.
But it’s possible to do the job yourself (and avoid paying a subscription fee). Here’s how:
Request a Free Credit Report
By law, you’re entitled to a free credit report every 12 months from each of the three credit bureaus. Visit annualcreditreport.com to get started. While you can ask for the reports at any time, spacing out your requests every few months allows you to keep an eye on your accounts throughout the year.
Find Out If You’re Already Getting Coverage
Some accounts include some level of complimentary credit monitoring, so it’s worth a call to your bank or credit card company to find out if you qualify.
Put a Freeze on Your Credit Reports
There are instances when freezing your credit report might be a good move, such as when you believe your data has been breached or if your Social Security number or other sensitive information was stolen or made public.
A credit freeze allows only a limited number of entities to view your credit reports. This means the credit bureaus can’t provide your personal amount to new lenders, credit card companies, landlords, or hiring managers. While this freezes the renting, hiring, and lending process, it also prevents thieves from stealing your identity and opening a new account in your name.
There’s no charge to freeze or unfreeze your credit, and your credit score won’t be affected.
Request a Fraud Alert
If you think you may be the victim of fraud or identity theft, you may want to consider placing a fraud alert on your credit report. Once a fraud alert is placed, you’ll be asked to provide your phone number, which creditors will use to verify your identity whenever an application for credit is made.
There’s no charge to make the request with the credit bureaus, and the alert is active for one year. It has no impact on your credit score.
💡 Quick Tip: What is credit monitoring good for? For one, maintaining a high credit score can translate to lower interest rates on loans and credit card offers with more perks.
The Takeaway
Credit monitoring services can act like a watchdog over your accounts, flagging suspicious activity or changes so you can move quickly to correct inaccuracies or do damage control. You can take a DIY approach to keeping track of your accounts, which can include requesting a free credit report every year from the three credit bureaus. But if you’ve been the victim of identity theft or fraud — or need more robust monitoring — you may want to consider paying for a credit monitoring service.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
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FAQ
What are the cons of credit monitoring services?
Credit monitoring services cost money, and they may not cover all three of the major credit bureaus. They don’t fix the credit report inaccuracies they alert you to, and they can’t absolutely guarantee that you’ll never suffer fraud or identity theft.
Is putting a freeze on your credit a good idea?
A credit freeze prevents credit bureaus from letting many entities access your credit report, which means they will typically deny attempts to open new accounts under your name, so it can be a good idea if you believe that your information has been compromised. If you actually do want to open a new credit account or rent a home, you can have the credit freeze lifted so that your report can be checked.
Should you pay for a credit monitoring service?
If your finances are relatively simple, it may not be too difficult to monitor your credit on your own. However, if your finances are more complicated, if you don’t have the time to monitor, or if you want to know that professionals are watching your accounts, a credit monitoring service may be a better fit for you.
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.
*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
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.
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 .
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.
Paying student loans on time can have a positive effect on your credit score and help build a good credit history. On the flip side, when you have a late or missed student loan payment, that can be reflected on your credit report as well.
If you’re wondering how to remove student loans from a credit report, the answer is that it’s only an option if there’s inaccurate information on the report. Student loans are eventually removed from a credit report, however, after they’re paid off or seven years after they’ve been in default.
Here’s what to know about student loans on a credit report, what happens when you default on a loan, and how to remove student loans from a credit report if there’s inaccurate information.
Key Points
• Accurate student loan information is crucial for credit reports; incorrect details can be disputed to ensure accuracy.
• Defaulted student loans appear on credit reports for seven years from the original delinquency date.
• Student loans paid in full can remain on credit reports for up to 10 years, potentially boosting credit scores.
• Removing student loans from a credit report is only possible if the reported information is inaccurate.
• Regularly reviewing credit reports allows individuals to verify that student loans are reported correctly.
What Is a Credit Report?
Before considering the impact of student loans on your credit report, it’s helpful to review what a credit report is. A credit report is a statement that includes details about your current and prior credit activity, such as your history of loan payments or the status of your credit card accounts.
These statements are compiled by credit reporting companies who collect financial data about you from a range of sources, such as lenders or credit card companies. Lenders use credit reports to make decisions about whether to offer you a loan or what interest rate they will give you. Other companies use credit reports to make decisions about you as well – for example, when you rent an apartment, secure an insurance policy, or sign up for internet service.
💡 Quick Tip: Ready to refinance your student loan? With SoFi’s no-fees-required loans, you could save thousands.
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Defaulting on Student Loans
It’s also worth reviewing what happens when a student loan goes into default. One in 10 people in the United States has defaulted on a student loan, and 6.24% of total student loan debt is in default at any given time, according to the Education Data Initiative.
The point when a loan is considered to be in default depends on the type of student loan you have. For a loan made under the William D. Ford Federal Direct Loan Program or the Federal Family Education Loan (FFEL) Program, you’re considered to be in default if you don’t make your scheduled student loan payments for a period of at least 270 days (about nine months).
For a loan made under the Federal Perkins Loan Program, the holder of the loan may declare the loan to be in default if you don’t make any scheduled payment by its due date. The consequences of defaulting on student loans can be severe, including:
• The entire unpaid balance of your student loans, including interest, could be due in full immediately.
• The government can garnish your wages by up to 15%, meaning your employer is required to withhold a portion of your pay and send it directly to your loan holder.
• Your tax return and federal benefits payments may be withheld and applied to cover the costs of your defaulted loan.
And you don’t have to default on your student loans to experience the consequences of nonpayment. Even if your payment is only a day late, your loan can be considered delinquent and you can be charged a penalty fee.
How Long Do Student Loans Remain on a Credit Report?
If you are delinquent on your student loans or go into default, that activity is reported to the credit bureaus. It will remain on your credit report for up to seven years from the original delinquency date.
The good news is that the more time that passes since your missed payment, the less impact it has on your credit score.
The exception to this is a Federal Perkins Loan, which is a low-interest federal student loan for undergraduate and graduate students who have exceptional financial need. This type of loan will remain on your credit report until you pay it off in full or consolidate it.
On the other hand, if you made timely payments on your loan and paid it off in full, it may appear on your credit report for up to 10 years as evidence of your positive payment history and can boost your credit score.
How Do I Dispute a Student Loan on My Credit Report?
It’s a good habit to periodically check your credit report. You can request a free report from each of the three major credit reporting agencies — Equifax®, Experian®, and TransUnion® — by visiting AnnualCreditReport.com. The bureaus are required by law to give you a free report every 12 months.
There are three reasons your student loan might have been wrongly placed in default and reported to the credit bureaus by mistake, including:
1. If You Are Still in School
If you believe your loan was wrongly placed in default and you are attending school, contact your school’s registrar and ask for a record of your school attendance. Then call your loan servicer to ask about your record regarding school attendance.
If they have the incorrect information on file, provide your loan servicer with your records and request that your student loans be accurately reported to the credit bureaus.
2. If You Were Approved for Deferment or Forbearance
If you believe your loan was wrongly placed in default, and you were approved for (and were supposed to be in) a deferment or forbearance, there is a chance your loan servicer’s files aren’t up to date. You can contact the loan servicer and ask them to confirm the start and end dates of any deferments or forbearances that were applied to your account.
If the loan servicer doesn’t have the correct dates, provide documentation with the correct information and ask that your student loans be accurately reported to the credit bureaus. Under the Fair Credit Reporting Act, a borrower may appeal the accuracy and validity of the information reported to the credit bureau and reflected on their credit report.
If your loan has been reported as delinquent or in default to the credit bureaus, but you believe your payments are current, you can request a statement from your loan servicer that shows all the payments made on your student loan account, which you can compare against your bank records.
If some of your payments are missing from the statement provided by your loan servicer, you can provide proof of payment and request that your account be accurately reported to the credit reporting agencies.
In all three cases, if you believe there is any type of error related to your student loan on your credit report, it’s best practice to also send a written copy of your dispute to the credit bureaus so they are aware that you have reported an error.
Why Your Student Loans Should Stay on Your Credit Report
You generally can’t have negative but accurate information removed from your credit report. However, you can dispute the student loans on your credit report if they are being reported incorrectly.
On the bright side, if you’re paying your student loans on time each month, that looks good on your credit report. It shows lenders that you are responsible and likely to pay loans back diligently.
💡 Quick Tip: When refinancing a student loan, you may shorten or extend the loan term. Shortening your loan term may result in higher monthly payments but significantly less total interest paid. A longer loan term typically results in lower monthly payments but more total interest paid.
When You’re Having Problems Paying Your Student Loans
If you’re having difficulty making regular payments on your federal or private student loans, there are things you can do before the consequences of defaulting kick in.
As mentioned above, you can apply for student loan deferment or forbearance. It’s also a good idea to contact your loan servicer to discuss adjusting your repayment plans. Other options include:
Income-Driven Repayment
If you’re having trouble paying your federal student loans on time, you may be able to make your loans more affordable through a federal income-driven repayment plan. These plans cap your payments at a small percentage of your discretionary income and extend the repayment term to 20-25 years. Once the repayment period is up, any remaining balance is forgiven (though you may be subject to income taxes on the canceled amount).
Due to Trump’s One Big Beautiful Bill, many income-driven repayment plans are closing. Currently, you may still enroll in the Income-Based Repayment (IBR). And a new plan — the Repayment Assistance Plan (RAP) — will become the main option for new borrowers in mid 2026. RAP payments will be based on a percentage of your adjusted gross income (AGI).
Student Loan Refinancing
Refinancing your student loans may also be an option — if you extend your term length, you may qualify for a lower monthly payment. Note that while these options provide short-term relief, they generally will result in paying more over the life of the loan.
When you start making your payments by the due date each month, you may see that your student loans can become a more positive part of your credit report. Again, while these options provide short-term relief, they generally will result in paying more over the life of the loan.
The Takeaway
While you generally can’t remove student loans from a credit report unless there are errors, it isn’t a bad thing if you make payments on time, as that can help build your credit profile. If a loan is delinquent, it will be removed from your credit report after seven years, though you will still be responsible for paying back the loan.
If you’re having trouble making loan payments, there are ways to make repayment easier. Borrowers with federal student loans can look into forgiveness, an income-driven repayment plan, or a change to the loan’s terms.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
FAQ
Is it illegal to remove student loans from a credit report?
There’s no legal way to remove student loans from a credit report unless the information is incorrect. If you think there’s an error on your credit report, you can contact your loan servicer with documentation and ask them to provide accurate information to the credit reporting agencies. It’s also a good idea to send a copy of the dispute to the credit bureaus as well.
How do I get a student loan removed from my credit report?
If you paid your student loan off in full, it may still appear on your credit report for up to 10 years as evidence of your positive payment history. It takes seven years to have a defaulted student loan removed from a credit report. Keep in mind you are still responsible for paying off the defaulted loan, and you won’t be able to secure another type of federal loan until you do.
How can I get rid of student loans legally?
If you have federal student loans, options such as federal forgiveness programs or income-driven repayment plans can help decrease the amount of your student loan that you need to pay back. If you have private or federal student loans, refinancing can help lower monthly payments by securing a lower interest rate and/or extending your loan term. If you refinance a federal loan, however, you will no longer have access to federal protections and benefits. And you may pay more interest over the life of the loan if you refinance with an extended term.
SoFi Student Loan Refinance Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
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.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
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.
Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®
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.
Creating a beautifully landscaped home can improve your day-to-day life and also increase the resale value of your home, making it well worth the investment. The question is, how much will it cost?
Landscaping costs range widely depending on the size, design, and scope of the project, and whether you plan to do it yourself or hire a professional. On average, however, a landscaping project can run between $1,248 and $6,280, according to the home improvement site Angi.
Whether you’re thinking about sprucing up your front yard, back yard, or both, here’s a look at what’s involved, how much it can cost, plus tips for how to budget for and finance a landscaping project.
• The average U.S. landscaping project currently costs $3,648, ranging from $1,248 to $6,280.
• Full backyard renovations typically cost between $15,000 and $50,000.
• Climate-conscious landscaping, such as re-wilding with native species, is a growing trend in 2025.
• Colorful gardens and outdoor living spaces are popular landscaping trends.
• Landscaping can increase home value, reduce energy costs, and support the environment.
What Are Some Benefits of Landscaping?
If you’re like many homeowners, you may prioritize interior upgrades over outdoor improvements. But improving your landscaping can actually be the gift that keeps on giving — it can beautify your space, increase your home value, and even decrease your heating and cooling expenses.
According to a recent report from the National Association of REALTORS®, an overall landscape upgrade (and even smaller projects like keeping up with yard maintenance), can pay for itself when you sell your home.
Investing in landscaping can also make your home more efficient. Planting leafy trees strategically around your property, for example, can keep your home cooler during the summer and warmer during the winter, reducing your energy bills.
Landscaping can also have environmental benefits beyond your property. The trees, bushes and flowers that make up your landscaping are natural air purifiers — they remove air pollutants from the atmosphere and store carbon dioxide, improving air quality, according to the U.S. Environmental Protection Agency (EPA). Landscaping can also improve local water quality by absorbing and filtering rainwater.
What Are Some Current Landscaping Trends?
Some of the top landscaping trends for 2025 include:
• Climate-conscious landscaping Many homeowners are seeking out sustainable landscaping revamps, such as replacing lawns with alternative species (like clover) or re-wilding their yards with native species that require far less maintenance, water, and fertilizer.
• Colorful gardens After years of soft greens, pastels, and neutrals, landscape designers are favoring brighter, more joyful designs. Plants that provide color and as support local pollinators (like birds, butterflies, and bees) are particularly popular. Examples include native sunflowers, coneflowers, garden phlox, and asters.
• Outdoor living Landscape design is continuing to incorporate outdoor living spaces, such as seating areas, outdoor kitchens, and cozy fire pits.
A good first step for coming up with your landscaping budget is to actually ignore numbers and give yourself permission to dream — what does your ideal landscaping look like? What does it feel like?
Next, walk around your property and create a list of both needs and wants. In your “needs” column, list repairs that must be done for safety’s sake, ranging from drainage challenges, broken fences, toxic plants that need to be removed, tree removal, and so forth.
Also imagine what the property could look like with the stunning new landscaping you’re envisioning. Perhaps some of the ideas listed above have inspired you in an unexpected direction. Have fun and add these ideas to your “wants” column.
Now, prioritize your list and be clear about which items are optional (perhaps a special trellis for climbing roses) and which are not (trip hazards where you plan to add outdoor seating).
Next, determine your budget, focusing on how much you can realistically spend on landscaping, keeping in mind how quality landscaping can add significant value to your home. Then, it might make sense to talk to several professional landscapers to get estimates.
Professionals will also be able to let you know if your plans are realistic for your property. Even if you intend to do some of the work yourself, these professionals will likely share information you have not yet considered. (Hiring them in the off-season might save you money, too.)
Once you determine the scope and cost of your project, it’s a good idea to add a cushion of 10% to 20% for the unexpected. When you have a final number to work with, you’ll need to determine if you can fund the project out of savings, or if you’ll need to finance any part of your landscaping plan (more on that below).
The average landscaping project in the U.S. costs $3,648, but ranges between $1,248 and $6,280. Of course, you can spend a lot less than the average if you’re just sprucing up your front garden beds. You can also spend considerably more if your plan is to build a backyard oasis with a pool and outdoor kitchen.
How much your landscaping revamp will ultimately cost will depend on your yard size, the type of landscaping you want to do, and the landscaper’s labor costs.
Generally speaking, backyard landscaping projects cost more than front yard projects. The cost of the average front-yard spruce-up runs between $1,500 to $5,000, whereas a full backyard renovation can range between $15,000 to $50,000.
If you plan to use a designer for your project, it can run $50 to $150 per hour for a professional landscape designer to come up with an artistic direction for your space, choose the plants, and manage the project. The average cost to hire a landscape designer is $4,600. If you’re planning to do a major structural renovation, you may want to hire a landscape architect, which can run $70 to $150 per hour.
Landscaping costs are influenced by a variety of factors, including geography, type of project, and the materials used. Figuring out the dimensions of the project area, however, can help you come up with ballpark cost estimates.
According to Angi, the cost of landscaping runs between $4.50 and $12 per square foot for basic services and intermediate projects, such as aerating, flower planting, and installing garden beds. However, if you’re planning a major tear-out and remodel, you can expect to spend as much as $40 per square foot.
How Much Does New Landscaping Installation Cost?
Starting from scratch can be challenging, but having a blank slate also opens up possibilities for curating your outdoor spaces.
To fully landscape a new home, you’ll want to budget around 10% of your property value. So if you purchased the home for $350,000, you can anticipate spending around $35,000 to both hardscape (add hard surfaces like brick, concrete, and stone) and softscape (add living things) across your front and backyards.
What Will It Cost to Maintain Landscaping?
In addition to the initial outlay, you’ll also need to set aside an annual budget to help with upkeep. The amount of maintenance you’ll need will depend on landscape design, local climate, and how much of a DIY approach you’re comfortable with.
Lawn-mowing can run anywhere from $40 to $150 per service, while getting your trees trimmed averages $1,800 per job. For all-around yard maintenance, like weeding and mulching, you might find a landscaper who charges an hourly rate (often $50 to $100 per hour) or charges a flat rate per job.
Keep in mind that mowing, trimming back shrubs, weeding, and mulching are also jobs you can likely do yourself, which will cut down on your landscape maintenance costs.
What Are Some Options to Finance a Landscaping Project?
If you want to invest in your home through landscaping but the price point is above what you have in savings, you may want to look into financing. Here are two common types of loans for landscaping.
Financing a Landscaping Project With a Home Equity Loan
A home equity loan gives you access to cash by tapping into the equity you have in your home. Your home equity is the difference between your home’s current market value and what you owe on your mortgage. Depending on the lender and your credit profile, you may be able to borrow up to 80% of your home’s current equity.
You can use a home equity loan for various purposes, including home upgrades like new landscaping. Because your home serves as collateral for the loan, you may qualify for a lower interest rate than on some other financial products, like personal loans and credit cards. If you have trouble repaying the loan, however, your lender could foreclose on your home. You’ll also pay closing costs with a home equity loan.
Financing a Landscaping Project With a Personal Loan
You can also use a personal loan to fund any type of home improvement project, including upgrading the outside of your home.
Personal loans for home improvement generally have fixed interest rates and a fixed repayment timeline. You’ll receive all the funds upfront, generally soon after you’re approved, and your monthly payments will be fixed for the duration of your loan.
Personal loans are typically unsecured loans, making them less risky than home equity loans, and don’t come with closing costs. They also tend to be faster to fund than home equity loans, which means you can get your landscape project going sooner. However, because personal loans are unsecured (which poses more risk to the lender), rates are typically higher than rates for home equity loans.
The Takeaway
Landscaping projects can add curb appeal and value to your home, with the current average cost of a landscaping project nationwide is $3,648. Of course you could spend a lot less if you are looking at a small project, like swapping out plants in your front garden, or significantly more for a full overhaul.
If you don’t have enough cash in the bank to cover your landscaping project, you may want to consider getting a loan, such as a home equity loan or a 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. See your rate in minutes.
SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.
FAQ
What is a good budget for landscaping?
Many experts advise allocating 10% of your property value toward landscaping costs if you are ready to fully landscape a home. Otherwise, between $1,200 and $6,000 is a typical landscaping cost.
How much is the typical landscaping project now?
The typical landscaping project is currently $3,648.
Is paying for landscaping worth it?
Typically, paying for landscaping is worthwhile as it can improve property value and reduce the need for major work in the future.
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.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
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 .
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.
If you’re looking for a tool you can use to borrow money when you need it, you may be wondering which is the best choice: a personal line of credit, a personal loan, or a home equity line of credit (HELOC).
In this guide we’ll compare these three types of loans. The two credit lines both function similarly to a credit card but typically have a lower interest rate and a higher credit limit, while a personal loan can provide you with a lump sum of cash that you pay back over a set term. We’ll also cover some of the pros and cons of using a HELOC vs. a personal line of credit vs. a personal loan.
• A personal line of credit and a HELOC are both flexible borrowing options that allow you to access cash when you want it up to a set amount.
• When it comes to a HELOC vs. a personal line of credit or personal loan, the HELOC will generally have a lower interest rate due to being secured.
• Personal loans typically have fixed interest rates, while HELOCs and personal lines of credit usually have adjustable rates.
• If you have enough home equity, a HELOC could potentially offer you access to more money than a personal loan or line of credit.
• Defaulting on a HELOC puts you at risk for losing your home.
What Is a Personal Loan?
A personal loan is a highly flexible way to borrow a lump sum of money for virtually any reason – from paying medical bills to financing a wedding. You may be able to borrow anywhere from $1,000 to potentially as much as $100,000, typically at a fixed rate, and pay it back in regular monthly installments over a preset period of two to seven or even 10 years. These loans are usually unsecured debt, which means you don’t have to use collateral to qualify. The rate and other terms are determined by the borrower’s credit score, income, debt level, and other factors.
You’ll owe interest from day one on the full amount that you borrow. But if you’re using the loan to make a large purchase, consolidate debt, or pay off one big bill, it may make sense to borrow a specific amount and budget around the predictable monthly payments.
Personal loan rates and fees can vary significantly by lender and borrower. You can use a loan comparison site to check multiple lenders’ rates and terms, or you can go to individual websites to find a match for your goals.
What Is a Personal Line of Credit?
A personal line of credit, sometimes shortened to PLOC, is a revolving credit account that allows you to borrow money as you need it, up to a preset limit.
Instead of borrowing a lump sum and making fixed monthly payments on that amount, as you would with a traditional installment loan, a personal line of credit allows you to draw funds as needed during a predetermined draw period. You’re required to make payments based only on your outstanding balance during the draw period.
In that way, a PLOC works like a credit card. Generally, you can pay as much as you want each month toward your balance, as long as you make at least the minimum payment due. The money you repay is added back to your credit limit, so it’s available for you to use again.
You can use a personal line of credit for just about anything you like as long you stay within your limit, which could range up to $50,000, and possibly more.
Like a personal loan, a PLOC is typically unsecured, so you don’t need collateral. The lender will base decisions about the amount you can borrow and the interest rate you’ll pay on your personal creditworthiness. The interest rates are generally variable.
Can a Personal Loan or a Personal Line of Credit Be Used to Buy a House?
If you could qualify for a high enough credit limit — or if the property you want to buy is being sold at an extremely low price — you might be able to purchase a house with a personal line of credit or a personal loan. But it may not be the best tool available.
A traditional mortgage, secured by the home that’s being purchased, may have lower overall costs than a personal loan or personal line of credit. There are several different types of mortgage loans to choose from.
If you’re looking at a personal loan vs. a personal line of credit or mortgage, it’s also important to realize that a personal loan is usually for a much shorter term than a mortgage, which is typically 30 years, or most PLOCs. And since personal loans, like PLOCs, are unsecured, they typically carry much higher interest rates than traditional mortgages.
A variable rate, which is typical of personal lines of credit, might not be the best option for a large purchase that could take a long time to pay off. Your payments could go lower, but they also could go higher. If interest rates increase, your loan could become unaffordable. With a traditional mortgage, you would have the option of a fixed rate or a variable one.
Another consideration: If you use all or most of your PLOC to make a major purchase like a home, it could have a negative impact on your credit score and future borrowing ability. The amount of revolving credit you’re using vs. how much you have available — your credit utilization ratio — is an important factor that affects your credit score. The rule of thumb is typically to aim for less than 30%.
What Is a HELOC?
A HELOC is a revolving line of credit that is secured by the borrower’s home. It, too, usually has a variable interest rate.
Lenders typically will allow you to use a HELOC to borrow a large percentage of your home’s current value minus the amount you owe. That’s your home equity.
A lender also may review your credit score, credit history, employment history, and debt-to-income ratio (monthly debts / gross monthly income = DTI) when determining your borrowing limit and interest rate.
Turn your home equity into cash with a HELOC from SoFi.
Access up to 90% or $500k of your home’s equity to finance almost anything.
Personal Line of Credit vs HELOC Compared
If you’re comparing a personal line of credit with a HELOC, you’ll find many similarities. But there are important differences to keep in mind as well.
Personal Loan vs HELOC Compared
If you’re looking at a HELOC vs. a personal loan, you’ll find many ways in which the two are different, but also some ways they’re alike.
Similarities
Here are some shared aspects of a personal loan vs. a home equity line of credit.
• The money that you borrow can be used for virtually any purpose you choose.
• Easy access to your money. A personal loan gives you the money in a lump sum and a HELOC allows you to draw funds at will (up to a set limit) during the draw period.
• You must pay interest on your loan, and rates are typically lower than they would be for credit cards, for instance.
• There are defined periods during which your loan and interest must be repaid in regular installments.
• Lenders may charge a variety of fees, including late or prepayment fees on either. Be sure you know about potential fees before closing.
Differences
There are also many points of difference to take into account when you’re considering a HELOC vs. a personal loan.
• HELOCs are secured by your house, which serves as collateral. Personal pans are typically unsecured. This means that your interest rate is likely to be higher with a personal loan.
• HELOCs are revolving lines of credit and work like credit cards – you use what you need when you need it. A personal loan generally comes as a lump sum.
• Personal loans typically have fixed interest rates, meaning that your monthly payments will always be the same for the length of the loan. HELOCs typically have adjustable rates, meaning that your payments can change with the market as well as with how much you withdraw.
• Personal loans generally have terms of 10 years at most. HELOCs often have a 10-year draw period followed by a 20-year repayment period, for a total of 30 years.
• Lender requirements vary, but you’ll generally need a FICO® score of at least 610 for a personal loan, while for a HELOC, it may be 680. Higher scores are likely to result in better interest rates and possibly higher loan limits.
• Since your home is collateral for a HELOC, you may need to pay for an appraisal to establish how much your home is worth. Depending on your lender, you may also need to pay other closing costs.
Personal Loan vs. Home Equity Line of Credit
Personal Loan
HELOC
Flexible borrowing and repayment
✓
✓
Convenient access to funds
✓
✓
Annual or monthly maintenance fee
Not typically
Varies by lender
Typically a variable interest rate
✓
Secured with collateral
✓
Approval based on creditworthiness
✓
✓
Favorable interest rates
✓*
✓*
*Rates for secured loans are usually lower than for unsecured loans. Rates for personal loans are generally lower than credit card rates.
Personal Line of Credit vs HELOC Compared
If you’re comparing a personal line of credit with a HELOC, you’ll find many similarities. But there are important differences to keep in mind as well.
Similarities
Here are some ways in which a personal line of credit and a HELOC are alike:
• Both are revolving credit accounts. Money can be borrowed, repaid, and borrowed again, up to the credit limit.
• Both have a draw period and a repayment period. The draw period is typically 10 years, with monthly minimum payments required. The repayment period may be up to 20 years after the draw period ends.
• Access to funds is convenient. Withdrawals can be made by check or debit card, depending on how the lender sets up the loan.
• Lenders may charge monthly fees, transaction fees, or late or prepayment fees on either. It’s important to understand potential fees before closing.
• Both typically have variable interest rates, which can affect the overall cost of the line of credit over time. (Each occasionally comes with a fixed rate. The starting rate of a fixed-rate HELOC is usually higher. The draw period of a fixed-rate personal line of credit could be relatively short.)
• For both, you’ll usually need a FICO® score of 680. Your credit score also affects the interest rate you’re offered and credit limit.
Differences
The biggest difference when you’re looking at a personal line of credit vs. a home equity line of credit is that a HELOC is secured. That can affect the borrower in a few ways, including:
• In exchange for the risk that HELOC borrowers take (they could lose their home if they were to default on payments), they generally qualify for lower interest rates. HELOC borrowers also may qualify for a higher credit limit.
• With a HELOC, the lender may require a home appraisal, which might slow down the approval process and be an added expense. HELOCs also typically come with other closing costs, but some lenders will reduce or waive them if you keep the loan open for a certain period — usually three years.
• A borrower assumes the risk of losing their home if they default on a HELOC. A personal line of credit does not come with a risk of that significance.
Personal Line of Credit vs. Home Equity Line of Credit
Personal LOC
HELOC
Flexible borrowing and repayment
✓
✓
Convenient access to funds
✓
✓
Annual or monthly maintenance fee
Varies by lender
Varies by lender
Typically a variable interest rate
✓
✓
Secured with collateral
✓
Approval based on creditworthiness
✓
✓
Favorable interest rates
✓*
✓*
*Rates for secured loans are usually lower than for unsecured loans. Rates for personal loans are generally lower than credit card rates.
A HELOC and personal line of credit share many of the same pros and cons. An advantage of borrowing with a HELOC, however, is that because it’s secured, the interest rate may be more favorable than that of a personal line of credit or a personal loan.
A HELOC may offer a tax benefit if you itemize, spend the funds on buying, building or significantly improving your home, and can take the mortgage interest deduction. But there are potential downsides, too.
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Pros:
• Flexibility in how much you can borrow and when.
• Interest is charged only on the amount borrowed during the draw period.
• Generally, interest rates are lower than those on credit cards or unsecured borrowing.
• Interest paid may be tax deductible if HELOC money is spent to “buy, build, or substantially improve” the property on which the line of credit is based.
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Cons:
• Your home is at risk if you default.
• Variable interest rates can make repayment unpredictable and potentially expensive.
• Lenders may require a current home appraisal for approval.
• A decline in property value could affect the credit limit or result in termination of the HELOC.
Pros and Cons of Personal Loans
A personal loan can be a good choice when you need a lump sum of money – say, for a major purchase or bathroom remodel – especially if it’s not an extremely large amount. You’re likely to get a better interest rate than you would on a credit card, and a shorter repayment term than you’d have for a PLOC or HELOC. But there’s a lot to consider.
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Pros:
• You borrow what you need and can spend it as you wish.
• Interest charges are typically fixed, meaning you always know what your payments will be.
• Interest rates are typically lower than credit cards.
• You aren’t putting your home or another asset at risk if you default.
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Cons:
• Interest rate may be higher than for a secured loan.
• A relatively short repayment term may mean that your monthly payments are higher than you’d like.
• Qualification can be more difficult than for secured credit.
• The debt can have a negative impact on your DTI ratio.
Pros and Cons of Personal Lines of Credit
Because you draw just the amount of money you need at any one time, a personal line of credit can be a good way to pay for home renovations, ongoing medical or dental treatments, or other expenses that might be spread out over time.
You pay interest only on the funds you’ve drawn, not the entire line of credit that’s available, which can keep monthly costs down. As you make payments, the line of credit is replenished, so you can borrow repeatedly during the draw period. And you don’t have to come up with collateral.
But there are other factors to be wary of. Here’s a summary.
thumb_up
Pros:
• You have flexibility in how much you borrow and when
• Interest charges are based only on what you’ve borrowed.
• Interest rates are typically lower than those on credit cards.
• You aren’t putting your home or another asset at risk if you default.
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Cons:
• Variable interest rates can make repayment unpredictable and potentially expensive.
• Interest rate may be higher than for a secured loan.
• Qualification can be more difficult than for secured credit.
• Convenience and minimum monthly payments could lead to overspending.
Alternatives to Lines of Credit
As you consider the pros and cons of a HELOC vs. a personal LOC or personal loan, you may also wish to evaluate some alternative borrowing strategies, including:
Personal Loan
As you’re thinking about a personal loan vs. a personal line of credit, the big difference is that, with a personal loan, a borrower receives a lump sum and makes fixed monthly payments, with interest, until the loan is repaid.
Most personal loans are unsecured, and most come with a fixed interest rate. The rate and other terms are determined by the borrower’s credit score, income, debt level, and other factors.
You’ll owe interest from day one on the full amount that you borrow. But if you’re using the loan to make a large purchase, consolidate debt, or pay off one big bill, it may make sense to borrow a specific amount and budget around the predictable monthly payments.
Personal loan rates and fees can vary significantly by lender and borrower. You can use a loan comparison site to check multiple lenders’ rates and terms, or you can go to individual websites to find a match for your goals.
Auto Loan
If you’re thinking about buying a car with a personal loan, you may want to consider an auto loan, an installment loan that’s secured by the car being purchased. Qualification may be easier than for an unsecured personal loan or personal line of credit.
Most auto loans have a fixed interest rate that’s based on the applicant’s creditworthiness, the loan amount, and the type of vehicle that’s being purchased.
Down the road, if you think you can get a better interest rate, you can look into car refinancing.
Beware no credit check loans. Car title loans have very short repayment periods and sky-high interest rates.
Mortgage
A mortgage is an installment loan that is secured by the real estate you’re purchasing or refinancing. You’ll likely need a down payment, and borrowers typically pay closing costs of 2% to 5% of the loan amount.
A mortgage may have a fixed or adjustable interest rate. An adjustable-rate mortgage typically starts with a lower interest rate than its fixed-rate counterpart. The most common repayment period, or mortgage term, is 30 years.
Your ability to qualify for the mortgage you want may depend on your creditworthiness, the down payment, and the value of the home.
Credit Cards
A credit card is a revolving line of credit that may be used for day-to-day purchases like groceries, gas, or online shopping. You likely have more than one already. Gen X and baby boomers have an average of about four credit cards per person, Experian® has found, and even Gen Z, the youngest generation, averages two cards per person.
Convenience can be one of the best and worst things about using credit cards. You can use them almost anywhere to pay for almost anything. But it can be easy to accrue debt you can’t repay.
Because most credit cards are unsecured, interest rates can be higher than for other types of borrowing. Making late payments or using a high percentage of your credit limit can hurt your credit score. And making just the minimum payment can cost you in interest and credit score.
If you manage your cards wisely, however, credit card rewards can add up. And you may be able to qualify for a low- or no-interest introductory offer.
Credit card issuers typically base a consumer’s interest rate and credit limit on their credit score, income, and other financial factors.
Student Loans
Federal student loans typically offer lower interest rates and more borrower protections than private student loans or other lending options.
But if your federal financial aid package doesn’t cover all of your education costs, it could be worth comparing what private lenders offer.
Home Equity Loans
If you’re a homeowner with equity in your house and you’re not comfortable with the adjustable payments of a HELOC, you might want to consider a home equity loan. These lump sum loans typically have fixed interest rates, meaning that you’ll know in advance what your payments will be every month and can plan accordingly. And since they’re secured with your home, interest rates are typically lower than they’d be for unsecured loans. Just remember that, as with a HELOC, your home is at risk if you can’t make your payments.
The Takeaway
A HELOC, a personal loan, or a personal line of credit can be useful for a borrower in need of funds. Each kind of loan has different advantages and drawbacks, so it’s important to consider each carefully in light of your financial situation so you can assess what would work best for your needs.
SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.
Unlock your home’s value with a home equity line of credit from SoFi, brokered through Spring EQ.
FAQ
What is better, a home equity line of credit or a personal line of credit?
If you qualify for both, a HELOC will almost always come with a lower interest rate. However, it does put your home at risk if you can’t make your payments.
Can I use a HELOC for personal use?
Yes. HELOC withdrawals can be used for almost anything, but the line of credit is best suited for ongoing expenses like home renovations, medical bills, or college expenses. Some people secure a HELOC as a safety net during uncertain times.
How many years do you have to pay off a HELOC?
Most HELOCs have a “draw period” of 10 years, followed by a repayment period, which may be up to 20 years.
What happens if you don’t use your home equity line of credit?
Having a HELOC you don’t use could help your credit score by improving your credit utilization ratio.
How high of a credit score is needed for a line of credit?
Personal lines of credit are usually reserved for borrowers with a credit score of 680 or higher. A credit score of at least 680 is typically needed for HELOC approval, but requirements can vary among lenders. Some may be more lenient if an applicant has a good debt-to-income ratio or accepts a lower loan limit.
Does a HELOC increase your mortgage payments?
The HELOC is a separate loan from your mortgage. The two payments are not made together.
Photo credit: iStock/KTStock
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945. All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
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.
Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®
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.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
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.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
