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Q: What Accounts Can You Write a Check From?

One of the ways thatchecking accounts vs. savings accountsdiffer is that you usually can’t write checks from a savings account.

Feb

2025

Can You Write a Check From a Savings Account?

Can You Write Checks From a Savings Account?

By Ashley Kilroy | Family Finances, Life & Career, money | Comments Off

Table of Contents

Why You Can’t Write Checks from a Savings Account
What Accounts Can You Write a Check From?
What You Can Do With a Savings Account
Tips for Using a Savings Account to Make Payments
FAQ

Typically, you can’t write checks from a savings account. Instead, you can do so from a checking account, which is designed to provide that specific financial service. Savings accounts are primarily for earning interest on your deposits and only occasionally transferring money.

Checks might seem like an old-fashioned payment method, but they can be vital in specific transactions. For instance, you might need to pay the deposit for an apartment rental by check. In addition, personal checks are more secure for mailing payments than cash. While you may want to draw funds from a savings account by check, that’s really not what it’s designed for.

Key Points

• Writing checks from a savings account is usually not possible; it can typically only be done from a checking account.

• Savings accounts are primarily for earning interest and occasional money transfers, not for check writing.

• Checks are still important for certain transactions, such as apartment rental deposits and secure mailing of payments.

• Savings accounts are designed for saving money, earning interest, and providing security for future needs.

• While payments cannot typically be made directly from a savings account using checks, automatic transfers and mobile banking can be used for certain transactions.

Why You Can’t Write Checks from a Savings Account

You can’t usually write checks from a savings account because these accounts are for earning interest on cash you leave alone. What’s more, you may be restricted as to how often you can transfer money out of a savings account, too.

Part of the way a bank makes money is to lend out your funds on deposit in a savings account for other purposes. You earn an annual percentage yield, or APY, on your deposit for giving the bank the privilege of using your money that’s in a savings account. (You can use an online APY calculator to take a closer look at this figure.) In other words, your financial institution is depending on some savings account money staying put, not being regularly transferred out via checks.

Checking accounts, however, are designed to allow customers to write checks and make purchases. They may not make much or any interest, but you can move your money out of these accounts via checks and electronic transfers. You can even write a check to yourself to access your money.

What Accounts Can You Write a Check From?

One of the ways that checking accounts vs. savings accounts differ is that you usually can’t write checks from a savings account. However, both checking accounts and money market accounts can let you move funds out via checks. You can choose from the following types:

• Standard checking. This account typically provides a checkbook and debit card to make purchases. You might earn meager or no interest, but you can access your cash quickly. And, as with most kinds of checking accounts, you’ll be able to get cashier’s checks and certified checks if needed.

• Premium checking. This is a checking account on steroids, with better interest rates, rewards programs, and customer perks. In addition, these accounts might have monthly fees or steep minimum balance requirements in order to get those enhanced benefits, so check your customer agreement carefully.

• Rewards checking. Think of rewards checking as akin to a premium checking account but focuses on providing cash back for debit card usage. Again, it’s crucial to read the fine print for these accounts, as they usually require specific spending habits to be worthwhile.

• High-interest checking. This kind of account, also known as high-yield checking, blends saving and checking together by providing higher interest rates while allowing you to write checks and use your debit card.

While this account attempts to provide the best of both worlds, you’ll likely receive a lower interest rate than a savings account. You also might have to fulfill strict requirements (such as a monthly high account balance or transaction count), though some banks, especially online banks, may offer them without fees or balance requirements.

• Student checking. High school and college students can access banking through these accounts. Student checking accounts typically provide leniency for overdrafts and promotional rewards for new customers. However, your account will change to a standard checking account when you lose student status, meaning you may lose the advantages of a student account.

• Second chance checking. Customers with less than perfect banking histories can struggle to find a bank that will provide them with an account. Unpaid bank fees and repeated overdrafts can cast a shadow over your banking record, making financial institutions hesitant to work with you. Fortunately, numerous institutions offer second chance checking to give customers another shot at banking. These accounts might restrict spending or charge monthly fees to cover their risk but can help you get back on your feet.

• Money market account. Many money market accounts also combine some of the features of savings and checking accounts. For example, money market accounts can earn higher interest than typical checking accounts (making them more like savings accounts) but allow you to write checks, as with a checking account.

What You Can Do With a Savings Account

While you may not be able to write checks with a savings account, the different types of savings accounts offer these functions and benefits:

• Security. You can safely save for the future, whether that means building an emergency fund or saving for a down payment on a house. If you bank at a Federal Deposit Insurance Corporation (FDIC)- or National Credit Union Administration (NCUA)-insured institution, you will have up to $250,000 per depositor or shareholder, per insured institution for each account ownership category.

• Interest. As noted above, you’ll earn interest. The annual percentage yield (APY) will help your money grow.

• Convenience. You can also use mobile banking with a savings account. This feature allows you to access your account from your phone to deposit checks, transfer money, and view monthly statements.

• Perks. You may be able to snag some perks by opening a savings account, such as some banking fees being waived or a one-time cash bonus.

• Automated savings. You can set up automatic transfers from your checking account to savings to help increase your savings in an effortless way.

• Account linking. You can link your savings account as a backup to your checking to help avoid overdrafting.

Quick Money Tip: If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield savings account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal.

Tips for Using a Savings Account to Make Payments

Here’s how to set up automatic transfers out of your savings account:

• Have your account details handy. Double-check your account and routing numbers to make sure you are transferring funds out of the right account.

• Limit the bills you pay with your savings account. The less information is out there, the less likely it is to fall into a thief’s hands.

• Don’t attempt more than your account’s transaction limit. Some savings accounts may allow no more than six withdrawals per month. Check with your financial institution to find out your exact transaction limits.

• Maintain an adequate balance. Transferring money from your checking account and depositing cash or paychecks into your savings account will help ensure you don’t overdraft the account.

The Takeaway

Savings accounts are excellent tools for earning interest and working towards your financial goals. However, they are less suitable for making payments because you typically can’t write checks from a savings account. However, you can usually make payments from savings accounts by automatic transfers.

Interested in opening an online bank account? 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.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

Why do checks come from checking accounts?

Checks come from checking accounts because banks intend payments to flow frequently from these accounts. In addition, checking accounts are the most convenient way to deposit and withdraw money from a bank because you can withdraw money an unlimited amount of times per month.

Why can I not write checks with a savings account?

In general, you can’t write checks with a savings account because the account is for saving money and earning interest payments. Banks don’t provide checks for a savings account because the intention is for you to save money and leave at least a chunk of it untouched in the account. On the other hand, checking accounts allow you to write checks.

Can I write any check from a savings account?

You typically can’t write a check from a savings account because that is not how they operate according to federal guidelines. You can save money and earn interest with a savings account, while a checking account allows you to write checks.

About the author

Ashley Kilroy

Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.

Photo credit: iStock/AndreyPopov

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).

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 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, 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 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Eligible Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
*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.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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Feb

2025

Average Student Loan Debt in 2025: What Borrowers Should Know

By Kayla McCormack | Fresh Out of School, Student Loans, student_loan | No Comments

The average student loan debt for a graduate with a bachelor’s degree is $29,300, according to the latest data from the College Board.

The specific amount of student loan debt a borrower has depends on factors like the type of school they attended, whether or not they pursued an advanced degree, and any scholarships they may have received.

Read on for more details about the average student loan debt after graduation and information about repaying student loans.

Key Points

• The average student loan debt for a bachelor’s degree graduate is $29,300.

• Graduates of public four-year colleges owe $35,530; those who attend private nonprofit colleges owe $39,510; and grads of private for-profit schools owe $47,730.

• Graduate students borrow more, averaging $17,240 a year in federal loans, compared to undergraduates, who averaged $3,900.

• Average monthly student loan payments range from $200 to $299, but can vary by loan amount, interest rate, and repayment plan.

• Student loan repayment plans include Standard, Graduated, Extended, and Income-Driven Plans, each with different terms and payment structures.

Average Student Loan Debt After College

As noted, the College Board found that the average student debt after four years of college was $29,300 per borrower for those graduating in 2023 (the latest statistics available). Forty-four percent of borrowers with undergraduate and graduate degrees have student loan debt, according to the most recent data from the Education Data Initiative (EDI).

As of February 2025, the total amount of student loan debt in the U.S. was approximately $1.77 trillion. According to EDI, 42.7 million borrowers have student loan debt.

How Student Loan Debt Has Changed Over the Last Decade

It’s no secret that college is expensive and has only gotten more costly in the last decade or so. According to data compiled by U.S. News & World Report, the cost of attending in-state public universities increased by nearly 133% from 2005 to 2025.

Student loan debt statistics are just as eye-opening. From 2014 to 2024, total outstanding student loan debt grew from $1.24 trillion to $1.77 trillion in order to cover those costs. This student loan debt is taking a financial toll on graduating students, potentially affecting their credit and home-buying prospects, among other things.

Student Loan Debt at Public vs. Private Colleges

According to the latest information from the Education Data Initiative, graduates of public four-year institutions had an average college debt of $35,530, compared to private, nonprofit school borrowers, who graduated with an average debt of $39,510.

Those who attended four-year private for-profit colleges had an average debt of $47,730. Students at for-profit schools tend to take out more in student loans.

Undergraduate vs. Graduate Student Loan Debt

There are also some significant differences in the student loan debt of undergraduate and graduate students. The College Board’s annual survey of student aid trends found that, on average, undergraduates took out $3,900 in federal student loans in the 2023-2024 school year. That same year, graduate students took out $17,240 in federal loans.

The Average Student Loan Debt for Borrowers Under 25

There are about 7.1 million people under the age of 24 with student loan debt. As a group, they owe just over $7.5 billion, according to Federal Student Aid, an office of the U.S. Department of Education.

Student Loan Debt by State: How Does It Compare?

Federal student loan debt totals average approximately $29.9 billion per state (including the District of Columbia and Puerto Rico), according to the Education Data Initiative.

The latest data from EDI show that the District of Columbia has the highest student loan debt, and North Dakota has the lowest — as well as the distinction of being the only state in which the average student debt ($29,647 per borrower) is less than $30,000.

These are the 10 states with the highest average student loan debt per borrower:

• District of Columbia: $54,795

• Maryland: $43,692

• Georgia: $42,026

• Virginia: $40,137

• Florida: $39,262

• Illinois: $39,055

• South Carolina: $38,770

• North Carolina: $38,695

• New York: $38,690

• Delaware: $38,683

The states with the lowest average student loan debt per borrower are:

• Kansas: $33,119

• Wisconsin: $32,628

• Nebraska: $32,377

• West Virginia: $32,358

• Oklahoma: $32,103

• Wyoming: $31,503

• Puerto Rico: $32,022

• South Dakota: $30,928

• Iowa: $30,925

• North Dakota: $29,647

What’s the Average Monthly Student Loan Payment?

Borrowers’ monthly student loan payment can vary depending on the amount of debt they carry and the type of repayment plan they choose. According to the latest data from the Federal Reserve, typical monthly payments for student loans can range from $200 to $299.

How Long It Takes to Pay Off Student Loans

The standard amount of time it takes to pay off federal student loans is 10 years, but repayment terms can range as long as 20 or 25 years, depending on the repayment plan a borrower opts for.

Options for student loan repayment plans include:

• Standard Repayment Plan: This gives you 10 years to pay off your loans, and you pay a fixed amount each month. You may pay less overall under this plan because of the relatively short repayment term.

• Graduated Repayment Plan: Borrowers who choose this plan pay lower monthly payments at the beginning, and the payments gradually increase at two-year intervals. The repayment term is 10 years (30 years for those with a Direct Consolidation Loan).

• Extended Repayment Plan: Borrowers who owe more than $30,000 in federal student loans may be eligible for this plan. If you qualify, you can extend your loan term up to 25 years, which could make your monthly payments smaller. However, you may pay more in interest overall.

• Income-driven Repayment (IDR) Plans: These plans base borrowers’ monthly loan payments on their discretionary income and family size. For many borrowers, this means their payments will be lower. The repayment terms for those on income-driven plans is 20 to 25 years. At the end of that time, any remaining balance you owe on your loans may be forgiven.

In general, the sooner a borrower pays off their student loans, the more they may save in the long run because they won’t be accruing interest for as long.

The interest rate on student loans also affects a borrower’s payments. If your student loan interest rate is higher than you’d like, you might want to consider student loan refinancing to see if you can qualify for a lower interest rate or more favorable terms.

Another option is loan consolidation. If you have federal student loans, a Direct Consolidation Loan allows you to combine them into one single loan. Although this may not save you money, it could simplify your payments since you’ll have just one bill to pay.

You can consider the pros and cons of student loan consolidation vs refinancing to determine if either option is right for you.

Refinancing Student Loans With SoFi

Those looking for options to manage student loan payments might consider student loan refinancing. This process involves replacing your current student loans with a new loan from a private lender. Ideally, you may qualify for a lower interest rate.
Borrowers who refinance may also be able to adjust their repayment term. Extending the term could lower your monthly payments, but you might also end up paying more over the life of the loan.

It’s possible to refinance both private and federal student loans. Just be aware that refinancing federal loans with a private lender means losing access to federal benefits like income-based repayment.

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 $50,000 a lot of student debt?

Yes, $50,000 is a significant amount of student loan debt. According to data from the College Board, the average student loan debt in the U.S. for an undergraduate is $29,300.

How many people have student loan debt in the US?

In the U.S., 42.7 million borrowers have student loan debt, according to the Education Data Initiative.

What is the average someone pays a month for student loans?

The average monthly student loan payment is approximately $200 to $299, according to the latest date from the Federal Reserve. However, the amount a borrower pays per month will vary based on factors like their total loan amount, their interest rate, and the repayment plan they selected.

What is the total student loan debt in the U.S. in 2025?

The total amount of student loan debt in the U.S. is approximately $1.77 trillion, as of February 2025, according to the College Board.

How long does it take most borrowers to pay off student loans in 2025?

The time it takes borrowers to pay off their federal student loans typically ranges from 10 to 25 years, depending on their financial situation and the payment plan they’re on. The repayment terms for private student loans vary.

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 FOREFEIT YOUR EILIGIBILITY 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.

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.

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.

SOSLR-Q125-019

Feb

2025

APR vs Interest Rate

By Dana Webb | Debt Payoff, Student Loans, student_loan, Terminology | No Comments

When the interest rate and annual percentage rate (APR) are calculated for a loan — especially a large one — the two can produce very different numbers, so it’s important to know the difference when evaluating what a loan will cost you.

Basically, the interest rate is the cost of borrowing money, and the APR is the total cost, including lender fees and any other charges.

Let’s look at interest rates vs. APRs for loans, and student loans in particular.

Key Points

• The interest rate is the cost of borrowing the principal amount, expressed as a percentage.

• The annual percentage rate (APR) includes the interest rate plus additional fees, providing a total cost view.

• Higher interest rates result in higher monthly payments and total costs over the loan term.

• Additional fees in the APR include closing costs, origination fees, and mortgage points.

• Considering both interest rate and APR is crucial for making informed loan decisions.

What Is an Interest Rate?

An interest rate is the rate you pay to borrow money, expressed as a percentage of the principal. Generally, an interest rate is determined by market factors, your credit score and financial profile, and the loan’s repayment terms, among other things.

How Interest Rates Work

Most people who take out a home mortgage loan opt for a fixed-rate mortgage. The borrower repays the amount borrowed, plus interest, in equal monthly installment payments over a period of 10, 15, 20, or 30 years. The higher the interest rate, the more they will pay each month and over the life of the loan. To see how interest rates affect payment amounts, try plugging different rate numbers into a mortgage calculator.

Some homebuyers opt for an adjustable-rate mortgage. In this scenario, there is typically an introductory period with an interest rate that might be lower than the available rate on a fixed-rate loan. But after that, the rate can periodically adjust (up or down), following market rates.

What Is APR?

If a loan were to have no other fees, hidden or otherwise, the interest rate and APR could be the same number. But because most loans have fees, the numbers are usually different.

How APRs Work

An APR is the total cost of the loan, including fees and other charges, expressed as an annual percentage. Compared with a basic interest rate, an APR provides borrowers with a more comprehensive picture of the total costs of the loan. The bulk of mortgage fees come in the form of closing costs and origination fees. Generally, closing costs average 3% to 6% of your mortgage loan principal, but each lender is different. Some borrowers also pay for mortgage points, also known as discount points, to lower the interest on their home loan. All of this would factor into the APR. Understanding these costs can help you get a clear picture of the total cost of a loan.

The federal Truth in Lending Act requires lenders to disclose a loan’s APR when they advertise its interest rate. In most circumstances, the APR will be higher than the interest rate. If it’s not, it’s generally because of some sort of rebate offered by the lender. If you notice this type of discrepancy, ask the lender to explain.

APR vs. Interest Rate Calculation

The bottom line: The interest rate percentage and the APR will be different if there are fees (like origination fees) associated with your loan.

How is APR Calculated?

To calculate APR, you first need to add the interest and the total fees for your loan. Then you divide by the principal amount borrowed. Divide the result by the total number of days in your loan term (for a 20-year loan, for example, you would divide by 7,300). Multiply the result by 365 (to get a yearly number) and then again by 100 (to arrive at an APR percentage).

Here’s the APR formula:

APR = ((Interest + Fees / Loan amount) / Number of days in loan term) x 365 x 100

Let’s say you’re comparing loan offers with similar interest rates. By looking at the APR, you should be able to see which loan may be more cost-effective, because typically the loan with the lowest APR will be the loan with the lowest added costs.

So when comparing apples to apples, with the same loan type and term, APR may be helpful. But lenders don’t always make it easy to tell which loan is an apple and which is a pear. To find the best deal, you need to seek out all the costs attached to the loan.

You may find that a low APR comes with high upfront fees, or that you don’t qualify for a super-low advertised APR, reserved for those with stellar credit.

How Are Interest Rates Calculated?

Calculating the total interest you’ll pay on a home loan is pretty simple with online tools. You can see the total interest you’ll pay on a loan quickly by plugging your loan amount, interest rate, and loan term into a mortgage calculator. (If you want to see what your monthly payment will be when you factor in property taxes and home insurance, use a mortgage calculator with taxes and insurance.)

How APR Works on Home Loans

Not all homebuyers understand the true cost of their mortgage loans. If you’re considering multiple loan offers (perhaps you’ve gone through mortgage prequalification with a few lenders), you can look at the APRs on the offers to compare them against one another.

One caveat regarding APR: Because fees associated with a home mortgage are usually paid at the beginning of the loan, the APR won’t reflect the true annual cost of the loan if you sell the property or refinance before the mortgage term is up.

How Interest Rates Work on Home Loans

Most home mortgages are amortizing loans, so although the monthly payment on a fixed-rate loan remains constant, the amount of interest you’ll pay with each payment will differ. Typically, more of a borrower’s monthly payment is made up of interest early in the life of the loan; as the loan ages, the reverse is true and more of the payment chips away at the principal. An amortization table for your loan should be provided in your loan documents.

Benefits of Government-Backed Mortgages

Some would-be homeowners find themselves comparing different types of mortgages (as well as different interest rates and APRs) when considering how to finance their purchase, and government-backed mortgages will have a different profile than conventional loans.

A government-backed mortgage such as an FHA loan or a VA loan may have a low down payment (or no down payment), which is a key benefit, especially for first-time homebuyers, who typically have fewer resources to pull from. It may also have different upfront fees than a conventional mortgage. An FHA loan, for example, usually requires mortgage insurance. If the borrower makes a down payment of 10% or more, after 11 years the lender can remove the mortgage insurance requirement, but many borrowers need to refinance to get rid of the insurance payment. The cost of this mortgage insurance factors into the APR.

The Takeaway

APR vs. interest rate is a key factor you’ll want to consider when deciding on a loan, because the APR reflects the fees involved in the loan. Even when it comes to government-backed home loans, fees are part of the story. So don’t just look at a loan’s interest rate — take the time to compare the APR as well.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

What’s a good APR?

A good APR will depend on your individual profile as a borrower, with your credit score being a key factor. To see how the APR you’re being offered on a home loan compares with the national average, search for “national average XX-year mortgage APR” (with XX being your loan term in years). Then look at the percentages side by side.

What’s a good interest rate?

A good interest rate is one that’s below the posted national average interest rate for your loan type when you search online. Borrowers with less-than-stellar credit scores won’t qualify for the best rates, however, so what’s a good interest rate for you will depend on your personal credit score and financial profile.

Does 0% APR mean no interest?

Zero percent APR means that no interest is charged for a set period of time. This is a term commonly seen on credit card offers and car loans. If you go this route, make sure you note the length of the no-interest promotional period and that you make your payments on time during the period, as missing payments can trigger interest to build on the debt.

Does refinancing your mortgage help lower rates?

Refinancing your mortgage may help lower your interest rate if rates have dropped since you initially purchased your home, or if your credit score and other aspects of your financial profile have improved significantly. It’s important to consider closing costs associated with a refinance, however, before deciding that it makes sense to chase a lower rate.

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

*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.

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.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

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.

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.

SOHL-Q125-064

Feb

2025

Using Student Loans for Living Expenses and Housing

By Jody McMaster | Student Loans, student_loan | No Comments

Student loans can be used to cover more than tuition and fees. They can pay for lodging, food, commuting, a computer, and study abroad (but not spring break!).

Most qualified education loans can be used to cover the entire cost of attendance — an estimate of total costs for an academic year at a college, as determined by each campus financial aid office — minus any aid you receive.

Let’s take a closer look at what student loans can cover, what they should not, and alternative ways to pay for living expenses.

Key Points

• Student loans can be utilized for essential expenses like tuition, room and board, transportation, books, and personal supplies, as long as the student is enrolled at least half-time.

• Nonessential expenses, such as vacations, car purchases, or entertainment, should not be covered by student loans, as these could lead to financial consequences.

• Utilizing student loan funds for nonqualified expenses may not be actively monitored, but it’s important to remember that this money must be repaid with interest.

• Alternative ways to cover living expenses include part-time jobs, work-study programs, scholarships, summer employment, and selling unwanted items for extra cash.

• Borrowers should exhaust federal student aid options before considering private loans, as they generally lack the borrower protections provided by federal loans.

Can You Take Out a Student Loan for Living Expenses?

Yes, you can take out a student loan to cover living expenses while in school. Federal and private student loans typically include funds for not only tuition and fees, but also necessities like housing, food, transportation, and personal expenses.

When applying for federal student loans, schools determine your cost of attendance (COA), which includes these expenses, and financial aid is disbursed accordingly. However, borrowing should be done wisely, as any money used for living expenses will need to be repaid with interest.

Private student loans can also cover living expenses, but eligibility and terms vary by lender. These loans often require a credit check or cosigner, and interest rates may be higher than federal options.

How to Use Student Loans for Living Expenses Off-Campus

Using student loans for off-campus living expenses requires careful budgeting and adherence to loan guidelines. Once your school disburses the loan funds, any remaining balance after tuition and fees is typically refunded to you. These funds can cover rent, utilities, groceries, and other essential costs. However, it’s important to prioritize necessary expenses and avoid using loan money for noneducational purchases, as this debt must be repaid with interest.

Federal Student Loans vs. Private Student Loans for Housing Expenses

When covering housing expenses with student loans, federal student loans are often the better option due to their lower interest rates, flexible repayment plans, and borrower protections. Federal loans do not require a credit check (except for PLUS loans), making them more accessible to students. Additionally, repayment options like income-driven plans and deferment help borrowers manage their financial obligations after graduation.

Private student loans, on the other hand, may offer higher borrowing limits but typically come with stricter credit requirements and fewer repayment protections. Interest rates vary based on creditworthiness, and repayment terms are often less flexible than federal loans. While private loans can help bridge financial gaps, they should be considered after maximizing federal aid and other funding sources like scholarships and grants.

Living Off Student Loans: Do’s and Don’ts

As long as a student is enrolled at least half-time, student loans can cover a range of expenses at a qualified institution of higher education or at a hospital or health care facility that provides postgraduate internship and residency training programs.

Do

• Tuition and mandatory fees. The first thing student loans should be used to cover is tuition and fees, as these are necessary expenses for getting a degree.

• Room and board. Whether it’s a dorm or an apartment off-campus, the expense can be covered. Board means a campus meal plan or groceries.

• Transportation. Loan money can pay for maintaining, insuring, and fueling your car or for public transportation fares.

• Books and supplies. New, used, or rented textbooks are covered, as are supplies ranging from software to notebooks.

• A personal computer. You can buy or rent a computer with student loan money.

• Dependent care. Child care expenses are covered.

• Study-abroad costs. The Federal Student Aid office lists international schools that participate in the federal student loan program and describes the process.

• Personal expenses. These include cell phone bills, laundry costs, bed linens, towels, a microwave oven, and anything else you normally spend money on.

Other qualified expenses may include utilities and furnishings.

Don’t

• Nonessential travel. This includes vacations, leisure trips, and nonacademic travel expenses.

• Luxury items. Expensive electronics, designer clothing, or nonessential purchases should not be paid for with student loans.

• Entertainment costs. This includes concerts, streaming services, dining out frequently, and nightlife.

• Car purchases. Buying a vehicle or making monthly car payments should not be used with student loan money.

• Business investments. Student loans should not be used for starting a business or investing in stocks and cryptocurrency.

• Credit card debt. Paying off personal credit card balances is not the goal of student loans.

• Noneducational expenses. These may include costs unrelated to education, such as gym memberships or hobbies.

• Recommended: Graduate Student Loans

Can I Get in Trouble for Misusing Student Funds?

The use of student loans for nonqualified expenses could be reported to the Office of Inspector General as fraud, or a lender could call the loan balance due immediately. But in general, no one is tracking how you spend loan money.

Both federal and private student loans are disbursed to your school, which takes out tuition and fees, and if you live on campus, room and board. Any remaining money goes to you, so it would be hard for lenders to tell if you’re using the remainder as intended.

It can be tempting to go on a spending spree with your student loan refund, but remember that you will pay, or are paying, interest on that borrowed money.

Federal student loans have annual and aggregate limits that may seem generous, especially for graduate and professional students.

Private student loans can help fill gaps in need. These loans are not backed by the federal government and therefore not subject to its qualification rules. They may also lack the borrower protections available to federal loans, such as deferment. It’s a good idea to obtain a private student loan only after maxing out federal student aid. A cosigner can often help a student qualify.

Recommended: A Guide to Private Student Loans

Other Ways to Cover Living Expenses

Aside from using student loans, there are several ways to pay for living expenses while in school. Here are some ideas.

Part-Time Job

Getting a part-time job can help students make extra money to cover costs. Generally, these side hustles offer flexible hours so students can more easily juggle work and class. Some students may also be able to find a job that’s related to their major or career of choice.

Recommended: Jobs That Pay for Your College Degree

Work-Study

Federal work-study may be offered as part of a student’s federal aid package and is based on financial need. Work-study programs are available to undergraduate, graduate, and professional students, regardless of whether you are a full-time or part-time student.

Becoming a Resident Assistant

A resident assistant (RA) is usually assigned to a particular floor or wing of a dormitory to oversee dorm residents. RAs might lead mandatory floor meetings, organize monthly social gatherings, and referee the occasional roommate disagreement. Not only do you typically get a better room than others on your dorm floor, you also get free housing.

Scholarships

Merit scholarships are often awarded to a student based on their skill or ability for a certain speciality. They’re offered through private companies, nonprofit organizations, colleges and universities, and professional and social organizations. As you’re researching scholarships that you might be eligible for, pay attention to any requirements. Some awards have certain conditions, such as requiring that the money be used only for tuition, while others allow you to use the funds for whatever you want.

Tuition bills are due.
Prequalify for a no-fee student loan.

Summer Job

As an alternative (or addition) to a part-time job, you might want to consider a summer job or paid internship. During the summer, students may have more free time to work more hours and rack up cash to help cover their housing and living expenses for the following year.

Selling Unwanted Items

Cleaning out your closet? Selling castoffs on buy-and-sell apps and websites can be a quick way to earn money.

The Takeaway

Student loans can be used to cover housing, food, transportation, supplies, and other college essentials. Funds shouldn’t be used for “nonessential” expenses, like vacations, new clothes, pricey meals, or other debt. In general, no one tracks how you spend loan money. But remember, this is borrowed money that will have to be repaid, with interest. A part-time job, work-study program, and scholarships are different ways to earn extra money for expenses.

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.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

Which living expenses are most often paid for with student loans?

Student loans commonly cover essential living expenses such as housing (rent or dorm fees), utilities, groceries, transportation, and personal expenses. They may also help pay for school-related costs like books, supplies, and technology. Federal and private loans can be used for these necessities but should be borrowed responsibly.

Do you have to tell the lender if you change housing?

Yes, you should inform your lender if you change housing, especially if it affects your residency status or financial situation. Keeping your contact information updated ensures you receive important loan-related communications, including billing statements and repayment details, helping you avoid missed payments or potential issues with your loan.

Can you take out more funds if your living expenses increase?

If your living expenses increase, you may be able to request additional student loan funds by appealing to your school’s financial aid office. They may adjust your cost of attendance, allowing you to borrow more. However, federal and private loan limits still apply, so additional funding isn’t always guaranteed.

Can you use student loan money on monthly car payments?

No, student loans are meant for education-related expenses, including tuition, housing, and supplies. While transportation costs like gas or public transit may be covered, using student loan money for monthly car payments is generally not allowed.

Can you use student loans to pay for a gym membership?

Student loans shouldn’t be used to cover membership to a gym. Many schools have a gym or fitness center on campus that’s available to students and included in the cost of tuition.

What should you do with leftover student loan money?

It’s a good idea to return the excess money to the lender — it lowers the total cost of the loan. You could also use the funds to pay for qualified educational expenses, like tuition, housing, child care, or transportation.

Can you use a student loan to pay a tuition bill that is past due?

In some cases, you can use a student loan to pay a past-due tuition bill, but it depends on the lender and school policies. Federal and private loans typically apply to current or future expenses. Some schools may offer emergency loans or payment plans for overdue tuition balances.

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., 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 04/24/2024 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).

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.

SOISL-Q125-018

Feb

2025

Can You Get a Student Loan for Summer Classes?

By Bonnie Gibbs Vengrow | Fresh Out of School, Student Loans, student_loan | No Comments

Want to squeeze in a couple of classes this summer but not sure how to pay for them? You have several options, including federal and private student loans. The summer loan application process is generally the same as it is for the regular academic year. But the federal government limits how much you can borrow, so it’s important to consider your choice carefully.

Here’s what you need to know about paying for summer classes.

Key Points

• Students can utilize federal loans like Direct Subsidized, Direct Unsubsidized, and Direct PLUS Loans to finance summer courses.

• Completing the Free Application for Federal Student Aid (FAFSA) is essential, as it determines eligibility for federal aid applicable to summer sessions.

• If federal aid doesn’t cover all expenses, private loans are an option, typically allowing borrowing up to the school’s certified cost of attendance.

• Private student loans usually cover only one academic year, so a separate application may be necessary for summer term funding.

• Student loans can be used not only for tuition and fees but also for living expenses during the summer term.

Costs of Going to School in the Summer

Tuition is one of the biggest costs associated with going to school in the summer. That said, some colleges offer summer courses at a reduced cost, or you may be able to take classes at a community college for a lower price and transfer the credits to your school. If you don’t plan on living at home, you’ll also need to budget for housing, food, transportation, and other personal expenses.

The short-term cost of going to school during the summer may be worth it in the long run, though. Taking extra classes can help you finish your degree — and start drawing income from a full-time job — faster.

Recommended: What Is the Average Cost of College Tuition?

Ways You Can Find and Get Money for Summer Classes

Just like during the fall or spring terms, financial aid is available during the summer. Let’s take a look at some common types of assistance.

Grants

Grants can help offset the cost of summer courses and typically don’t need to be repaid. One popular type of grant is the Pell Grant, which is awarded by the federal government and based on financial need. Qualifying students can receive Pell Grants for 12 semesters, and in certain circumstances, they may be eligible to receive additional funds for the summer term.

Some schools offer grants to students who are enrolling in summer classes. Contact the financial aid office to see if your school offers this option. Your state may also provide grants to help students cover the cost of summer classes. Visit the website of your state’s department of education to find out if this option is available to you.

Scholarships

Like grants, scholarships usually do not need to be repaid, and in general, you’re free to use the funds for a summer term. There are thousands of available scholarships based on financial need or merit offered by a variety of sources. Searching scholarship databases can help you narrow your options.

Work-Study

Federal Work-Study gives students with financial need part-time employment to help them earn extra money to pay for education expenses. Check with your college’s financial aid office to find out if the school participates in the program.

Student Loans

The loans you apply for to pay for the regular school year can also be used to cover summer courses. There are different types of federal student loans to explore: Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans.

Once you’ve exhausted federal aid options, you may consider private loans to pay for summer classes. Generally, lenders allow you to borrow up to the school-certified cost of attendance.

Federal vs Private Student Loans: How They Compare

Federal student loans are funded by the federal government and offer borrowers protections such as deferment, forbearance, and the option to pursue Public Service Loan Forgiveness. Most federal student loans do not require a credit check, and interest rates are fixed for the life of the loan. Students must fill out the FAFSA annually and be enrolled at least part-time to qualify for aid.

The federal government limits the amount of money students can borrow per academic year and in total, and this includes any aid you receive for summer classes. The limit is based on your dependency status and how long you’ve been in school. For example, in the 2024-25 academic year, a first-year dependent undergraduate may qualify for up to $5,500 in student loans, with a limit of $3,500 on what can be subsidized. An independent first-year undergraduate student may qualify for up to $9,500 in student loans, with a limit of $3,500 on what can be subsidized.

Private Loans

Private loans are offered by private lenders, such as banks, credit unions, and online lenders. Interest rates may be fixed or variable and are determined by the lender based on criteria including an applicant’s financial history and credit score. Many lenders require students to be enrolled in school at least part time.

Depending on the loan terms, borrowers may be required to make payments while they are enrolled in school, and they may or may not provide a grace period. Private student loans also lack the borrower protections afforded to federal student loans.

Students who take out the maximum amount of federal aid may consider private loans as an option to pay for summer classes. Generally, private lenders allow you to borrow up to the school-certified cost of attendance.

Recommended: A Complete Guide to Private Student Loans

When Applications Are Due

FAFSA applications for the following academic year are typically due around the end of June. The application requires borrowers to check the school year in which the funds will be used. If you’re submitting a FAFSA for the summer term, ask your school which year to check on the form and if any other forms are required. The sooner you submit the application, the more likely you are to receive funding, since many sources of aid are offered on a first-come, first-served basis.

What You’ll Need to Apply

To help the FAFSA application process go smoothly, it helps to have some information and a few documents on hand. This includes your Social Security number (or Alien Registration number if you’re an eligible noncitizen); your federal income tax returns, W-2s, and other records of income; bank statements and any record of investments; records of untaxed income, if applicable; and your FSA ID. Dependent students will need most of that information for their parents.

If you’re applying for a private student loan, you’ll apply directly with the lender. Applicants typically need to have a solid credit history, proof of income, be at least 18, and be a U.S. resident. Adding a cosigner to the loan may be an option that can help potential borrowers strengthen their application.

Recommended: Do I Need a Student Loan Cosigner?

When we say no fees we mean it.
No origination fees, late fees, &
insufficient fund fees when you take
out a student loan with SoFi.

Understand Your Loan Options

When considering student loans for summer classes, it’s important to explore all available options. Federal student loans, such as Direct Subsidized and Unsubsidized Loans, may be available if you meet eligibility requirements and have remaining aid from the academic year.

If federal aid isn’t enough, private student loans can help fill the gap, offering flexible borrowing limits based on your school’s cost of attendance. However, private loans typically require a credit check and may have higher interest rates than federal options.

Comparing loan terms, interest rates, and repayment options will help you choose the best financial solution for your summer coursework.

How to Pay for Summer Classes

There are several ways to finance your summer coursework, depending on your financial situation and eligibility. Consider the following options to cover tuition and related expenses:

• Federal student aid: Use remaining federal loans or apply for a Pell Grant if eligible.

• Private student loans: Borrow from private lenders if federal aid isn’t sufficient.

• Scholarships and grants: Search for summer-specific funding opportunities that don’t require repayment.

• Work-study programs: Earn money through on-campus or part-time jobs while taking classes.

• Personal savings or payment plans: Use savings or set up a tuition payment plan with your school.

Evaluating these options carefully can help you find the most cost-effective way to pay for your summer courses.

The Takeaway

If you’re considering enrolling in summer classes, financial aid can help you cover the bill. Grants, scholarships, work-study, internships, and part-time jobs are all options to explore, as are federal and private student loans.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

Can federal student loans be used to pay for summer classes?

Yes, federal student loans, including Direct Subsidized, Direct Unsubsidized, and Direct PLUS Loans, can be applied toward summer courses. To determine eligibility, students should complete the Free Application for Federal Student Aid (FAFSA).

What should students do if federal aid isn’t sufficient to cover summer class expenses?

If federal aid doesn’t fully cover summer class costs, students might consider private student loans. Private lenders typically allow borrowing up to the school’s certified cost of attendance. It’s important to note that private loans usually cover only one academic year at a time, so a separate application may be necessary for summer term funding.

Are student loans applicable to expenses beyond tuition during the summer term?

Yes, student loans can be used to cover not only tuition and fees but also living expenses during the summer term. This includes costs such as housing, food, transportation, and other related expenses.

Photo credit: iStock/Prostock-Studio

SOISL-Q125-017

Can You Write Checks From a Savings Account?

Why You Can’t Write Checks from a Savings Account

Get up to $300 when you bank with SoFi.

What Accounts Can You Write a Check From?

What You Can Do With a Savings Account

Tips for Using a Savings Account to Make Payments

The Takeaway

FAQ

Why do checks come from checking accounts?

Why can I not write checks with a savings account?

Can I write any check from a savings account?

Average Student Loan Debt in 2025: What Borrowers Should Know

Average Student Loan Debt After College

How Student Loan Debt Has Changed Over the Last Decade

Student Loan Debt at Public vs. Private Colleges

Undergraduate vs. Graduate Student Loan Debt

The Average Student Loan Debt for Borrowers Under 25

Student Loan Debt by State: How Does It Compare?

What’s the Average Monthly Student Loan Payment?

How Long It Takes to Pay Off Student Loans

Refinancing Student Loans With SoFi

FAQ

Is $50,000 a lot of student debt?

How many people have student loan debt in the US?

What is the average someone pays a month for student loans?

What is the total student loan debt in the U.S. in 2025?

How long does it take most borrowers to pay off student loans in 2025?

APR vs Interest Rate

What Is an Interest Rate?

How Interest Rates Work

What Is APR?

How APRs Work

APR vs. Interest Rate Calculation

How is APR Calculated?

APR = ((Interest + Fees / Loan amount) / Number of days in loan term) x 365 x 100

How Are Interest Rates Calculated?

How APR Works on Home Loans

How Interest Rates Work on Home Loans

Benefits of Government-Backed Mortgages

The Takeaway

FAQ

What’s a good APR?

What’s a good interest rate?

Does 0% APR mean no interest?

Does refinancing your mortgage help lower rates?

Using Student Loans for Living Expenses and Housing

Can You Take Out a Student Loan for Living Expenses?

How to Use Student Loans for Living Expenses Off-Campus

Federal Student Loans vs. Private Student Loans for Housing Expenses

Living Off Student Loans: Do’s and Don’ts

Do

Don’t

Can I Get in Trouble for Misusing Student Funds?

Other Ways to Cover Living Expenses

Part-Time Job

Work-Study

Becoming a Resident Assistant

Scholarships

Tuition bills are due. Prequalify for a no-fee student loan.

Summer Job

Selling Unwanted Items

The Takeaway

FAQ

Which living expenses are most often paid for with student loans?

Do you have to tell the lender if you change housing?

Can you take out more funds if your living expenses increase?

Can you use student loan money on monthly car payments?

Can you use student loans to pay for a gym membership?

What should you do with leftover student loan money?

Can you use a student loan to pay a tuition bill that is past due?

Can You Get a Student Loan for Summer Classes?

Costs of Going to School in the Summer

Ways You Can Find and Get Money for Summer Classes

Grants

Scholarships

Work-Study

Student Loans

Federal vs Private Student Loans: How They Compare

Private Loans

When Applications Are Due

Tuition bills are due.
Prequalify for a no-fee student loan.

When we say no fees we mean it.
No origination fees, late fees, &
insufficient fund fees when you take
out a student loan with SoFi.

Student Loan
Refinancing

Personal
Loans

Online
Investments