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A personal loan origination fee is a one-time, upfront charge that a lender collects to cover the costs of processing and setting up a loan. They typically range from 1% to 10% of the loan amount, but you may see ads for zero origination fees. The specific amount depends on factors relating to both the lender and the borrower.

Personal loans can be a good way to receive a lump sum of cash to be used for almost any purpose, but it’s worth noting that there are usually fees beyond the interest you pay. Learn more about origination fees here.

Personal Loan Origination Fees Defined

Personal loan origination fees are an upfront, one-time charge by the lender that covers the costs of processing the loan, including the application, underwriting, and funding.

Typically, lenders charge origination fees as a percentage of the total loan amount. It’s usually 1% to 6% of the principal, but origination fees may go as high as 8%, 10%, or even 12% of the loan amount. In some instances, a lender may charge a flat fee instead.

Not every personal loan has an origination fee, and lenders may differ in how they require consumers to pay it, if it’s included.

Recommended: Should I Get a $5,000 Personal Loan?

How Do Personal Loan Origination Fees Work?

If a lender charges an origination fee for a personal installment loan, it’s usually a percentage of the loan amount, somewhere between 1% on the low end and 10% on the high end. For example, if you take out a personal loan for $15,000 and there’s a 5% origination fee, you’ll pay $750 in fees.

Lenders typically subtract this fee from the total loan amount. In our example, that means they’d offer you a loan for $15,000, subtract $750 from the amount, and give you $14,250. But you’d still have to repay $15,000, plus interest. If you truly need the full $15,000, it’s a good idea to request more than $15K to ensure that you have enough funds after the origination fee is deducted.

In other cases, a lender may require that origination fees be paid out-of-pocket by the borrower, or the fees are added to the loan total. Ask your lender to be sure of their policy.

In this case, the personal loan origination fee would be reflected in the APR, or annual percentage rate, calculation. That’s why experts often suggest comparing loans by their APRs. The APR, which includes the interest rate plus fees, represents the annual cost of a loan and will give you a true picture of what you’ll pay over the life of the loan.

How Much Are Personal Loan Origination Fees Usually?

Personal loan origination fees typically vary between 1% and 10% of the total loan amount. Depending on how much you’re borrowing, this fee can get extraordinarily high.

For example, if you borrow $100,000 with an 8% origination fee, that’s an extra $8K you’re paying on top of the loan amount and interest.

Recommended: What to Know Before You Borrow Money Online

How Are Origination Fees Calculated?

Lenders may advertise a set origination fee or a percentage range. If it’s the latter, how exactly do they determine the percentage you’ll pay?

1. Credit Score and Financial History

Unsurprisingly, lenders primarily consider your credit score and debt-to-income (DTI) ratio. The stronger your credit score and the lower your DTI ratio, the lower origination fees you might be offered. Lenders that don’t charge origination fees at all may have strict requirements that only borrowers with good or excellent credit can meet.

2. Loan Amount and Term Length

Lenders may also consider the length and size of how the personal loan works. Having a cosigner with good credit can help reduce your fees. In addition, lenders may ask your reason for borrowing or use other information from your application when setting your fees.

3. Lender Policies and Market Conditions

The lender’s policies may impact how much you’ll pay in origination fees. Some may feature a 0% offer to attract new clients; others may earn money by charging a double-digit fee.

Market conditions can also impact rates. When lenders need to compete aggressively to win customers, they may drop their fees. Conversely, when rates are high and it may seem riskier to lend, financial institutions may raise the origination fees they charge.

Recommended: Personal Loan Calculator

When Is an Origination Fee a Dealbreaker?

It’s wise to compare the loan APRs, which represent your total annual costs. A loan with no origination fee but a higher interest rate may wind up costing you more in the long run; comparing APRs can help you figure it out.

So when is a personal loan origination fee a dealbreaker? If the fee makes your total cost of borrowing higher than another offer, you should consider the better loan offer.

All lenders are required to disclose their fees as part of the Truth in Lending Act. If a lender advertises no origination fees, it’s a good idea to check the fine print to see if they’ve disguised the fee with a look-alike fee, like an “administrative” or “application” fee. If a lender does this and it gives you bad vibes, go with your gut — you should always feel good about the lender you choose.

Ways to Minimize or Avoid Origination Fees

If you, like most people, want to pay as little in terms of origination fees as possible while still getting a good overall deal, consider the following.

1. Comparing Lenders and Shopping Around

Don’t sign on with the first quote you get, nor assume that a “no origination fees” offer is the best. Shop around, and see the total cost of a loan: what you will pay in terms of interest and fees. That way, you can feel confident that you are getting the best deal.

2. Negotiating Loan Terms

You can ask a lender to work with you on loan costs. They may be willing to make reductions in fees in order to snag your business. This can be especially true if you have a solid credit profile.

3. Considering No-Fee Loan Options

As noted above, some lenders offer no-fee loan options, which can help with affordability. But do your research: Take a close look to make sure that the overall cost of the loan suits your needs. You don’t want to sign on to a no-fee loan with a higher interest rate that makes the loan more expensive overall. Also read to fine print to see if origination fees are actually being charged but appear under a different name, such as application fees.

The Takeaway

When you are thinking about getting a personal loan, origination fees may be charged; these are typically between 1% and 10% of the loan amount, though some no-fee loans may be offered (and flat fees as well). The origination fee you are assessed may vary with the lender’s policies, your credit profile, and market conditions. It’s important to consider how origination fees can impact the overall cost of your 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.

FAQ

How much are personal loan origination fees typically?

Personal loan origination fees typically range between 1% and 10% of the loan amount. Factors that impact rates include the lender’s policies, your credit score, and market conditions.

Do private loans always have origination fees?

Many private lenders charge origination fees, but that is not always the case. Before taking out any loan with a private lender, it’s a good idea to compare origination fees and APRs.

Can origination fees be negotiated?

You can often negotiate origination fees for certain types of loans, such as mortgages and personal loans. Just be sure that lower origination fees don’t mean higher interest rates and negate any savings. You’ll be in the best position to negotiate fees with a solid credit profile.

Are origination fees refundable if I pay off my loan early?

Generally, origination fees are not refundable if you pay off a loan early, according to Experian. However, you may be able to get a partial refund from some lenders.

What are other personal loan fees to consider?

In addition to interest and origination fees, personal loans may collect application fees, late fees, and returned payment fees.

Photo credit: iStock/lechatnoir

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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.

SOPL-Q225-034

In the fall of 2024, more than 19 million students attended American colleges and universities.

As exciting as this phase of life can be, experiencing some level of homesickness during the home-to-college transition is common. As a parent, you may feel a sense of responsibility when it comes to helping your now-adult child get over their homesickness. And there could be a reason for concern, since studies have shown that emotional or mental distress in college students can impact academic performance.

Fortunately, there are a number of ways parents can help their child adjust to being away from home (perhaps for the first time) and get the most out of their college experience. Read on to learn some simple ways you can help your child feel less homesick at college.

Strategies to Help Your Child Cope with Homesickness

Watching your child experience homesickness from afar can be challenging. It may be tempting to rush to the rescue, but it is also important that your child find their footing on campus. These tips and ideas may be helpful as you support your child as they navigate homesickness and life on-campus.

Acknowledging the Situation

It can be comforting to know that you’re not the only one struggling with a given situation. As a parent, it might be helpful to share with your child how common homesickness is among first-year students. Providing comfort and reassurance that they are not alone and that in time, their feelings of homesickness will pass, can go a long way.

Keeping In Touch

As you and your child adjust to your new dynamic, you may need to find new ways to keep in touch. Keep in mind that while your child is adjusting to on-campus life, you don’t want to be overbearing. Try setting up a weekly video chat or sending over fun updates from home in a text message. Remember to give your child the space they need to find their footing at school.

Recommended: College Planning Guide for Parents

Sending a Care Package

When packing for college, adding a few items that bring the comfort of home could be helpful if your child starts feeling tinges of homesickness. Things like a favorite book, a blanket, or a stuffed animal could be just the thing when homesickness creeps in.

Sending over a care package with some of their favorite cookies, candies, or snacks and a photo of a fun memory can provide a touch of home, too.

Encouraging Your Child to Get Help if They Need It

If your homesick college student seems like they may benefit from professional help, you might encourage them to visit their campus counseling center. Many colleges also offer mental health services and counseling on campus, often at little to no cost.

If there are fees involved, they may be covered (at least partially) by health insurance. If your child is no longer on a family medical plan, it’s likely you’ve enrolled them in a college health insurance plan, which is often rolled into costs of tuition, room, and board.


💡 Quick Tip: You can fund your education with a low-rate, no-fee private student loan that covers all school-certified costs.

Helping Your Child Find a New Familiar

It’s probably not the best idea for parents to visit their child every weekend — though it may be hard to control yourself if your child’s university is easily accessible. As lovely as it is that you’re a familiar face, it might be more helpful for your child to find a new familiar.

Instead, you might encourage your child to find ways to make their not-yet-so-familiar home feel more known. If your college student loves coffee, they might want to find a local shop they can visit frequently — turning it into their own personal hang-out spot.

If they’re into museums, discovering the best ones nearby could help them feel more grounded in their new environment.

Getting Involved on Campus

When someone is feeling down, it can be tempting to stay indoors and wallow in those feelings. Getting involved on campus can help students build community and connect with their peers. Colleges often have many clubs and extracurriculars that can help students find like-minded individuals.

If committing to a club feels like too much, your child might connect with peers in a more casual way, from making friends in class or meeting new people during a dorm hall function.

Developing Healthy Routines

Physical health and mental health go hand in hand, so if your homesick college student is making less-than-healthy choices during this tough transition period, you might encourage them to make some changes in their routine.

This might look like starting their day with a walk to the campus coffee shop or finding a weekly exercise class. Creating a schedule and finding new, healthy routines can give your student something to look forward to.

Recommended: What Percentage of Parents Pay for College?

Developing a Plan to Pay for College

In addition to homesickness, paying for college can be an added layer of stress for both parents and students. If your child is worried about money or constantly working at a job to help cover costs (rather than acclimating to college), you might want to look into additional sources of funding, such as scholarships and grants and/or student loans.

It’s important to fill out the Free Application for Federal Student Aid (FAFSA) every year, since this is required for a student or parent to qualify for federal funding.

For some students, federal student loans and other sources of aid may be enough to fund their college education. If it’s not, parents also have the option of taking out loans, such as the Direct PLUS Loan or a private student loan.

When comparing federal vs. private student loans, keep in mind that private student loans aren’t required to offer the same borrower protections, like deferment options or income-driven repayment plans, as federal student loans. For this reason, you generally want to look at private student loans only after you’ve exhausted federal loan and aid options.


💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.

The Takeaway

The transition to college life can be stressful for both students and their parents. Being in an unfamiliar environment, while trying to balance classes and making new friends can lead to feelings of apprehension, anxiety, and homesickness. As a parent, providing support from a distance can include things like sending a care package, checking in with a video call once a week, and encouraging your child to get involved in extracurricular activities.

Hopefully, in time, your child will settle into their life on campus — finding a new normal. If money worries are adding to your child’s (or your own) college stress, it can also be a good idea to explore funding options you or they might qualify for. Once the financial side of college is taken care of, your child will be free to focus solely on assimilating into campus life and fully embracing this exciting time in their life.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

How common is homesickness during college?

Homesickness is incredibly common in college students, with 94% experiencing it in the first 10 weeks. Homesickness is an emotional response to being in a new environment and can affect a student’s academic performance and overall well-being.

How can parents support their homesick college student from afar?

Parents can support their child by acknowledging that homesickness is normal, maintaining regular but nonintrusive communication, sending care packages with familiar items, and encouraging their child to seek campus resources if needed.

What strategies can help students adjust to college life and alleviate homesickness?

Encouraging students to get involved in campus activities, establish healthy routines, and find local spots that bring comfort can help them build a sense of belonging and reduce feelings of homesickness.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private 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.

SOISL-Q225-012

It’s easy to put off writing a will. The process can seem complicated, not to mention expensive. And, if you’re single and don’t own a house, you may also feel like a will is unnecessary.

But writing a will actually doesn’t have to take a lot of time, or money. And even if you don’t have a lot of assets, having a will can give you peace of mind that your preferences will be followed.

Here’s what you need to know to write your own will.

What Is a Will?

Simply defined, a will (also known as a last will and testament) is a legal document that details what you want to be done with your possessions after your death. Your will may also identify a guardian if you have young children, as well as an executor, the person who will carry out the terms of your will.

What a will doesn’t cover is any asset in which you’ve designated beneficiaries. Named beneficiaries override a will. For example, if you designate all your property to go to your parents but you have bank accounts in which your brother is listed as a beneficiary, your brother will get the funds in those accounts while your parents would get the rest of your assets.

There are other important documents people may create at the same time as they create a will, and are all a part of an estate plan. These include:

•   Living will: If you were to become incapacitated, what are your preferences as far as medical treatments? This document legally outlines your wishes.

•   Power of attorney: If you are unable to make decisions for yourself, who has the authority to make those decisions on your behalf? Power of attorney may be divided into medical power of attorney — the person who has power to make medical decisions for you — and financial power of attorney. Both can be the same person.

•   Do Not Resuscitate (DNR) order: This document communicates that, in the event of your heart no longer beating or you no longer being able to breathe independently, that you do not want doctors to perform any life-saving action.

•   Organ and tissue donation: If you were to die, would you want your organs and tissue to be donated? Having a form explicitly stating your wishes can make it easier for loved ones to fulfill your desires, instead of guessing what they think you would have wanted.

Not all documents need to be filled out at once. For example, some people may only fill out a DNR order if they have a terminal illness or are unlikely to recover.

Recommended: Important Estate Planning Documents to Know

Dying Without a Will

Even if you think you own nothing of great value and you’re still working on money management, chances are you do own things that matter to your family. And if you die without a will, your loved ones may become involved in a complicated court process that will freeze your assets until state inheritance laws are followed.

If you’re single and die without a will, your assets will likely go to your closest blood relatives, which may be your parents or siblings. While this may be the preferred choice for some people, having a will allows you to earmark certain assets (or pets) for a charity or close friends.

It’s also a final chance to communicate your wishes to your loved ones and allows your loved ones to avoid a potentially drawn-out court process.

Dying without a will can become even more problematic if you have children. If you die without a will, the court will appoint a guardian. And while the court attempts to choose a guardian with the best interest of children in mind, that choice may not be the same choice you would make.

How To Create a Will

Below are simple steps that can help you make a will.

1. Choosing How You’ll Create Your Will

For people who own a lot of property or assets, and may want to set up trusts as a way to minimize taxes and ensure their heirs follow their wishes, it can be well worth the investment to hire an attorney who can walk them through the basics of estate planning.

However, online templates and will-creating platforms can be sufficient for many people. These DIY options can be much less expensive than working directly with an attorney and are legal and binding provided they are signed appropriately. Some of these online options are even free.

Recommended: How to Write a Will Online in 8 Steps

2. Making a List of Your Assets

In order to leave property to your loved ones, you need to know exactly what you have. So it can be a good idea to start by making a list of all your significant assets, including jewelry, artwork, real estate/land, cars, and bank accounts that don’t name a beneficiary.

If you have retirement funds and/or life insurance, you don’t need to write out who is going to receive the proceeds, as these require naming beneficiaries within the account or policy.

3. Being Specific About Who Gets What

Once you have a list of all your assets, you can decide who you would like to get what. Here, it’s helpful to be as specific as possible, such as using full names and being detailed in describing the assets.

4. Considering Guardianship

For many parents, including pet parents, guardianship can be the most fraught element of their will. This can be a decision that takes time.

For example, some parents love the bond their children have with their grandparents but worry about how aging parents would handle the physical stressors of raising young kids. Other parents may wish to appoint a sister or brother who already has children, so their own kids can be brought up alongside other children. There is no wrong answer, but thinking through contingencies and what-ifs can be helpful in making the most informed decision.

It can also be a good idea to discuss the idea of guardianship with the intended recipient. Maybe a single uncle loves your kids but is uncomfortable taking on the role of parent, or maybe grandparents have similar reservations as to their fitness for taking on the role.

Recommended: What Happens to a Bank Account After a Death?

5. Choosing an Executor

Naming an executor for your will is an important choice. This is the person who will make sure that the wishes laid out in your will are followed. The duties of an executor include paying any remaining bills and debts using your checking account, distributing your assets, and handling probate (transferring the titling of assets).

If you wish, you can name more than one person as an executor of your will.

6. Signing Your Will and Storing it in a Safe Place

A will is only legal when it is made legal — that is, printed and signed according to instructions. You generally need to sign a will in the presence of at least two witnesses. In some cases (such as if you’re using a document called a “self-proving affidavit” to simplify the process of going through probate court), your signature must be notarized as well.

You’ll also want to make sure you keep copies as directed. Many people keep a physical copy in a safe place, as well as a digital copy. Some might also share their will with their executor, or tell them where it is so it can be easily and quickly accessed if you were to die unexpectedly.

7. Updating Your Will as Appropriate

As your life changes, you may need to return to your will and update it. This could be due to:

•   Asset changes. Buying a house, opening an investment portfolio, and other financial moves may lead you to revisit your will.

•   Relationship changes. If you get married or have a serious partner, you may want to change your will to reflect that.

•   The addition of children or pets to your family.

•   The death or incapacitation of an appointed guardian.

It can also be good practice to assess your will after every life change, or every year or so. To update a will, you can either write what’s called a codicil (essentially a document stating any updates, written and signed by witnesses) or create a new will, depending on the extent of the changes.

The Takeaway

While the topic of death and end-of-life wishes can seem overwhelming, creating a will can be relatively straightforward. And thanks to the many online templates now available, you can often make your own will for a relatively low flat fee, or even for free.

The process of writing a will typically includes coming up with a list of assets, choosing where you’d like each asset to go, as well as choosing a guardian (if you have children) and an executor of your will.

While you may not think you need a will, having one (and updating it as appropriate) can be a gift to your loved ones when they may need it most.

As you get your affairs in order, you may also want to get your financial life organized. If you’re looking for a new banking partner, see what SoFi has to offer. When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What Is the Easiest Way to Make a Will?

The easiest way to make a will is to use an online will-making service. These tools generally guide you through the process with clear instructions and templates and run anywhere from free to around $200. For complex assets and estates, however, consulting a lawyer is recommended to ensure the will is legally sound and comprehensive.

What Is the Biggest Mistake in a Will?

One of the biggest mistakes in a will is failing to update it regularly. Life changes, such as marriage, divorce, or the birth of children, can render an old will ineffective. Other common mistakes include unclear language, not accounting for all your assets, not signing it properly, and not having witnesses. Working with a lawyer can help ensure you avoid these errors.

How Much Do Most Lawyers Charge for a Will?

Most lawyers charge between $300 and $1,000 for a basic will, depending on the complexity and location. More complex estates or additional services like trusts can increase the cost. Shop around and ask for a quote to find a lawyer that fits your budget and needs.

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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

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SOBNK-Q225-053

Federal student loans offer a specific selection of repayment plans that borrowers can choose from. Federal student loan borrowers may be assigned a repayment plan when they begin loan repayment, but they can change their repayment plan at any time without fees.

Choosing the right repayment plan may feel overwhelming, but understanding the repayment plans available to federal student loan borrowers can help.

Student Loan Repayment Options

The student loan repayment options for federal loans covered in this article are:

•   Standard Repayment Plan

•   Extended Repayment Plan

•   Graduated Repayment Plan

•   Income-Driven Repayment Plans

The Standard Repayment Plan is 10 years (10 to 30 years for those with consolidation loans) and usually has the highest monthly payments, but it allows borrowers to repay their loans in the shortest period of time. That may help a borrower pay less in accrued interest over the life of the loan.

The Extended Repayment Plan stretches out the repayment period so that you’re putting money toward student loans for up to 25 years. Payments can be fixed or they may increase gradually over time. This repayment plan may be worth considering for borrowers who have more than $30,000 in federal Direct Loans and cannot meet the monthly payments on the Standard Repayment Plan.

On the Graduated Repayment Plan, the repayment period is typically 10 years (10 to 30 years for those with consolidation loans). The monthly payments start out low and then increase every two years. This plan may be worth considering for borrowers who have a relatively low income now, but anticipate that their salary may increase substantially over time.

Income-driven repayment plans tie a borrower’s income to their monthly payments. These options may be worth considering for borrowers who are struggling to make payments under the other payment plans or who are pursuing Public Service Loan Forgiveness.

Choosing a repayment plan is one of the basics of student loans. For help determining which plan may be a good choice for your situation, you can take this quiz. Or, you can go directly to the overviews of the different repayment plans below to get a better understanding of them.

Quiz: What Student Loan Repayment Plan is Right for You?

Student Loan Repayment Plan Options for Federal Student Loans

Standard Repayment Plan

The Standard Repayment Plan ​is essentially the default repayment plan for federal student loans. This plan extends repayment up to 10 years (10 to 30 years for those with consolidation loans) and monthly payments are set at a fixed amount. The interest on the loan remains the same as when it was originally disbursed.

One of the benefits of the Standard Repayment Plan is that it may save you money in interest over the life of your loan because, generally, you’ll pay back your loan in the shortest amount of time (10 years) compared to the other federal repayment plans (20 to 30 years).

A common challenge associated with the Standard Repayment Plan is that payments can be too high for some borrowers to manage. Remember that this is the default option when it comes time to set up a repayment plan, so if you would prefer another option, you’ll need to choose one when the time comes to start repaying your loans.

Student Loans Eligible for the Standard Repayment Plan

The following federal loans are eligible for the Standard Repayment Plan:

•   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

Extended Repayment Plan

If you have over $30,000 in Direct Loan debt and the payments are too high for you to manage on the Standard (10-year) Repayment Plan, you can choose the Extended Repayment Plan for your federal loans. Under this plan, the term is up to 25 years and payments are generally lower than with the Standard and Graduated Repayment Plans. You can also choose between fixed or graduated payments.

If you’re eligible, an Extended Repayment Plan can provide significant relief if you’re struggling to pay your monthly loan payments by lengthening your term and potentially lowering your monthly payments.

This can help keep you out of default (which is important!). But it is critical to be aware that lengthening your loan term usually means you will be paying significantly more interest over the life of the loan — because it will take you longer to pay off your loan — and it may not give you the lowest monthly payments, depending on your circumstances.

Student Loans Eligible for the Extended Repayment Plan

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

•   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

Graduated Repayment Plan

With this plan, you would pay your federal student loans back over a 10-year period (10 to 30 years for consolidation loans), with lower payments at the beginning of the term that gradually increase every two years.

The idea behind the Graduated Repayment Plan is that a borrower’s income will likely increase over time, but may not be much at the start of their career.

Of course, the income boost may not happen. With this plan, because interest keeps accruing on the outstanding principal balance over a longer period of time, even though you’re making payments, the longer you take to repay your loan(s), the more interest you’ll wind up paying in the end. (Remember, more payments with interest = more interest paid total.)

Student Loans Eligible for the Graduated Repayment Plan

The following federal loans are eligible for the Graduated Repayment Plan:

•   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

💡 Quick Tip: Ready to refinance your student loan? You could save thousands.

Income-Driven Repayment Plans

Each of the three plans listed above (Standard, Extended, and Graduated) are considered traditional repayment plans. Income-Driven Repayment Plans, though, are different because the student loan payment amount is based upon the borrower’s income and family size.

To be eligible for an income-driven repayment plan, you’ll need to go through a recertification process each year, and your monthly payment could change (increase or decrease) annually based upon your current income and family size.

Maximum payments are set at 10% or 15% of what’s considered your discretionary income (the difference between 150% of the poverty guideline and your adjusted gross income), depending on the loan and the plan.

A significant advantage of using income-driven repayment plans is that your payment can be adjusted to accommodate a lower income. And in some cases, if you choose one of these plans, any remaining balance after 20 or 25 years may be forgiven if repayment has been satisfactorily made.

Note that in March 2025, the DOE instructed student loan servicers to stop accepting and processing all student loan forgiveness applications for three months while the administration reviews the program.

Another Option to Consider: Student Loan Refinancing

Refinancing student loans with a private lender allows borrowers to consolidate (that is, combine) their student loans. This could help make repayment convenient because there will be just one monthly payment.

One of the other possible advantages of refinancing student loans is that borrowers who qualify for a lower interest rate may be able to reduce the amount of money they spend in interest over the life of the loan.

You typically need a certain credit score to qualify for student loan refinancing, along with other fairly standard lending qualifications (like income and employment verification, among other factors).

And know this: Once federal student loans are refinanced with a private lender, they will become ineligible for federal repayment plans, programs like Public Service Loan Forgiveness, and other borrower protections like deferment or forbearance.


💡 Quick Tip: When rates are low, refinancing student loans could make a lot of sense. How much could you save? Find out using our student loan refi calculator.

Repayment Plans for Private Student Loans

The repayment plans for private student loans are set by the lender. If you have private student loans, you can review the loan terms or contact the lender directly to review the payment options available to you. This private student loans guide may also help you learn more about how these loans work.

The Takeaway

Borrowers repaying federal student loans have three traditional repayment plans to choose from (Standard, Extended, and Graduated) and income-driven repayment plans. When selecting a repayment plan, consider factors like your current income and expenses, potential future income, and career goals. For example, borrowers pursuing Public Service Loan Forgiveness will need to be in an income-driven repayment plan.

Those who choose a longer term to lower their payments should keep in mind that this may mean paying more in interest over the life of the loan. If the goal is to pay off debt more quickly and pay less back in interest overall, potential borrowers may pick a shorter term.

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.

FAQ

What is the Standard Repayment Plan, and who should consider it?

The Standard Repayment Plan involves fixed monthly payments over 10 years, leading to less interest paid over time. It’s ideal for borrowers who can afford consistent payments and aim to pay off their loans quickly. This plan is also suitable for those pursuing Public Service Loan Forgiveness (PSLF), as it qualifies for the program.

What is the Graduated Repayment Plan, and when is it appropriate?

The Graduated Repayment Plan starts with lower payments that increase every two years, with the loan paid off in 10 years. It’s suitable for borrowers who expect their income to rise steadily over time. However, this plan may result in paying more interest compared to the Standard Plan.

What should I consider if I have private student loans?

Private student loans don’t qualify for federal programs like income-driven repayment or Public Service Loan Forgiveness. If you’re struggling with private loans, contact your lender to explore options such as extended repayment terms or temporary payment reductions. Refinancing may also be an option if you have a good credit score, but be aware that refinancing federal loans into private ones forfeits federal protections.

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).

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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.