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Jun

2023

Daily Simple Interest: What Are Daily Simple Interest Loans?

By Bob Haegele | Financial Independence, personal_loan, Terminology | Comments Off

If you have a daily simple interest (DSI) loan, the word “daily” indicates that interest is calculated every day. Thus, the amount you owe on a DSI loan increases with each passing day.

However, because DSI loans use a simple interest calculation, interest does not compound. It’s important to learn how to calculate daily simple interest so you know how much you will owe on a DSI loan.

Key Points

• Daily Simple Interest (DSI) loans calculate interest daily based on the principal balance, but unlike compound interest, the interest does not accumulate on previously charged interest.

• Paying early on DSI loans can save money on interest, as fewer days of interest accumulate, while late payments increase interest costs, with more of the payment going to interest rather than reducing the principal.

• Common types of DSI loans include auto loans and personal loans, where interest is calculated daily, and early or additional payments can significantly reduce the total interest paid.

• Pros of DSI loans include no compounding interest, potential savings with early payments, and consistent monthly payments, while cons include increased interest with late payments and potentially higher rates compared to variable-rate loans.

Daily Simple Interest (DSI) Explained

When you take out a loan, you likely expect to pay interest in addition to the original amount of the loan. However, the way interest is calculated is not the same for all loans.

With daily simple interest, only the remaining balance (principal) on the loan is used in the calculation. This is different from compound interest, where interest that accrues is added to the principal and thus included in subsequent interest calculations.

Because DSI loans calculate interest daily and only use the principal in the calculation, paying on time will help you pay off the loan more quickly than making late payments. Paying early will be even more beneficial, as will paying more than the minimum.

How to Calculate Daily Simple Interest

If you take out a loan with daily simple interest, it means interest will be calculated every day on the loan. In addition, interest is only calculated using the principal of the loan.

Simple interest is calculated as:

I = P * R * T

And:

P = Principal
R = Daily interest rate
T = Time between payments

The last part of the formula, T, is the time between payments. That refers to the amount of time that interest has been accruing. For example, if you pay interest every month, then 30 days may have passed since your last payment. Thus, we multiply the daily interest by 30 and then multiply that rate by the principal to determine how much interest you owe.

What Happens if I Don’t Pay the Daily Simple Interest on My Personal Loan?

If you pay the daily simple interest on your personal loan late, more of the payment will go toward interest, and less of it will go toward reducing the remaining balance. This is because more time has passed, and the loan has accrued more interest than it would have if you had paid on time.

For example, suppose you have a $3,000 loan with a 5% annual simple interest rate, calculated daily. On this loan, you would have $12.33 of interest after 30 days. If you pay $75 toward that loan, you pay the $12.33 interest and reduce the principal by $62.67. But suppose you wait 60 days to pay instead. Interest is still accruing on the original $3,000 principal, so you now owe $24.66 in interest. Now, your $75 payment only reduces the principal by $50.34.

Comparing Daily Simple Interest vs Fixed Interest

Daily simple interest and fixed interest are not mutually exclusive. In fact, DSI loans are usually fixed-rate loans. In other words, the interest rate does not change for the life of the loan. This is common with auto loans and short-term personal loans.

One difference you might see is with mortgages. These loans are usually calculated monthly instead of daily. As a result, paying a few days early won’t reduce how much interest you owe. That said, paying more than the minimum on the mortgage can reduce how much you owe overall.

Comparing Daily Simple Interest vs Variable Interest

DSI loans are usually fixed-rate loans, so your payments won’t change for the life of the loan. Variable interest loans, however, have a rate that fluctuates according to market rates. Monthly payments fluctuate along with the rate, so it may be hard to predict how much you’ll have to pay every month.

Nevertheless, interest rates can be lower on variable-rate loans, especially at the beginning of the loan term. Variable-rate loans are common with mortgages, which again means interest is often calculated monthly instead of daily.

How Do Daily Simple Interest Loans Work?

With DSI loans, you generally make monthly payments. Some of each payment goes toward interest and the rest reduces the principal. The only thing that makes DSI loans somewhat complicated is the fact that their interest is calculated every day. However, this daily calculation also means early payments can help reduce the total amount you pay on a DSI loan.

For example, suppose you take out a $5,000 personal loan with a 36-month term and 12% annual simple interest, calculated daily. We will also assume your monthly payment is $120. If you make your first payment after 30 days, $49.32 goes toward interest, and $70.68 goes toward the principal. However, if you instead make your first payment after 15 days, only $24.66 goes toward interest, and $95.34 goes toward the principal.

Increasing how much you pay also helps you reduce the principal on a DSI loan more quickly. Using the above example, if you paid $240 instead of $120, the interest owed would be the same after both 30 days and 15 days. In other words, all of that extra $120 would go toward reducing the loan’s principal.

Pros and Cons of Daily Simple Interest Loans

Daily simple interest loans can be beneficial for some borrowers, but they aren’t without their downsides.

Pros of Daily Simple Interest Loans

• Interest does not compound — only the principal is used to calculate interest

• Early payments can save you money on interest

• Payments are usually the same amount every month

Cons of Daily Simple Interest Loans

• Interest rates may be lower on variable-rate loans

• Late payments mean interest keeps accruing

Pros	Cons
No compound interest	Late payments lead to more interest
Early payments can reduce interest paid	Rates can be higher than variable-rate loans
Consistent monthly payments

Examples of Daily Simple Interest Loans

Two of the most common daily simple interest loans are auto loans and personal loans.

Auto Loans

When you finance a new vehicle, the interest on that loan is often calculated using daily simple interest. For example, suppose you have a $25,000 auto loan with 6% interest and a six-year term.

On this loan, your interest for the first 30 days would be $123.29. If you paid $500 after 30 days, $376.71 goes toward the principal, bringing it to $24,623.29. After 30 more days then, the interest charge is $121.43, leading to a slightly higher principal reduction of $378.57. With each monthly payment, you reduce the principal more.

Personal Loans

Personal loans can be used for a variety of needs; two personal loan examples are covering unex pected medical bills and paying for urgent home repairs.

While there are different types of personal loan, they often use daily simple interest. For example, if you take out a $5,000 personal loan with daily simple interest and don’t make a payment for 30 days, the loan will accrue interest for each of those 30 days. However, the principal after 30 days will still be $5,000.

On the other hand, if you made a $250 payment after 15 days, your principal would be reduced to $4,750. Then, interest would be calculated using $4,750 as the principal for the remaining 15 days that month. Hence, you would immediately reduce how much interest the loan accrues each day.

Recommended: Getting Approved for a Personal Loan

More Personal Loan Tips From SoFi:

With a daily simple interest (DSI) loan, interest accrues daily but doesn’t compound. Early payments lead to less interest owed, while late payments increase your interest. DSI personal loans can seem expensive, but they’re a better alternative to more expensive forms of borrowing, such as credit cards.

SoFi Personal Loans have a low fixed interest rate, and loans are available from $5K all the way up to $100K. You can use them for whatever you want: home projects, credit card consolidation, even unplanned events.

SoFi Personal Loans are “good debt,” available whenever and wherever the need arises.

FAQ

How do you calculate daily simple interest?

You calculate daily simple interest by multiplying the principal, the daily interest rate, and the number of days since your last payment. This formula is expressed as I = P*R*T.

Is simple interest charged daily?

Simple interest does not have to be charged daily; it can also be charged monthly or annually. However, daily simple interest is always charged daily.

How does a daily interest rate work?

Daily interest is simply a fraction of the annual interest rate. For example, on a non-leap year, the daily interest on a 15% daily simple interest loan would be 15%/365 = 0.041%. Thus, 0.041% is the amount of interest charged per day.

Photo credit: iStock/fizkes

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Jun

2023

Should All Student Loan Debt Be Forgiven?

By Kate Ashford | Fresh Out of School, Student Loans, student_loan | Comments Off

Student loans are a significant issue in the United States, where consumers have more than $1.7 trillion in total student loan debt. In 2021, the average federal student loan debt per borrower was just over $37,000. And 20 years after students enter college, half of borrowers still owe $20,000 in student loans.

Broken down by degree levels, the debt increases. Graduate students who receive a degree leave school with an average of nearly $70,000 in debt. Law students are saddled with an average of $180,000; and medical students owe $250,000 on average for total student loan debt.

With so many borrowers and so much debt, it begs the question, “Should all student loan debt be forgiven?”

Key Points

• Support for student loan forgiveness is high, with many blaming rising tuition and stagnant wages for the crisis.

• Forgiveness isn’t straightforward, as forgiven debt can be taxed and may not benefit all borrowers equally.

• Private student loans are excluded from most federal forgiveness plans, leaving many borrowers without relief.

• Alternatives include stimulus checks, repayment reforms, and addressing the rising cost of college.

• Borrowers can explore strategies like income-driven plans, overpayments, lump sums, or refinancing for relief.

Who’s in Favor?

By a 2-to-1 margin, voters do support at least some student loans being forgiven, according to a poll from Politico and Morning Consult. And 53% of voters from the same poll support Biden’s extension of student loan payments through August.

Proponents of canceling student loan debt point out that the government is partially responsible for this debt crisis. Because many states slashed higher education funding after the 2008 recession, tuition at both public and private colleges has gone up steeply, and many students have been forced to take out even more in loans.

Unfortunately, the increase in student loan balances hasn’t gone hand in hand with a bump in post-college salary. The result is a national situation where borrowers owe increasingly more in student loans but don’t have the paycheck to aggressively tackle their balances.

Although the government has created income-driven repayment options that seek to keep monthly student loan payments affordable, signing up isn’t without its downsides.

Since these income-driven plans often lengthen loan terms, borrowers may pay significantly more interest on their loans over time. Also, any forgiven balance at the end of their loan term is typically treated as taxable income.

Why Forgiving Student Loan Debt a Isn’t a Slam-Dunk

There are several reasons why forgiving student loan debt may not be a straightforward positive. The first is that, according to U.S. tax laws, debt that’s forgiven is a taxable event. Under income-driven student loan repayment plans, for instance, if you make consistent, on-time payments for the life of the loan (20 or 25 years, depending on when you borrowed), any balance remaining at the end of your loan term is forgiven — but whatever’s forgiven is considered taxable income.

The second issue pundits raise with this plan is that it’s being sold as a stimulus: If the government forgives people’s student loan debt, they’ll put money back into the economy, the thinking goes. But forgiving debt isn’t the same as handing people a check.

And finally, the federal government so far isn’t planning to forgive student loans that borrowers hold with private lenders, which average over $54,000 per borrower.

Alternative Options to Canceling Student Loan Debt

Instead of targeting only student loan borrowers who qualify for relief, the government could provide a stimulus check to all Americans, and Americans could decide for themselves how to use it.

If someone has $10,000 in outstanding student loans, for example, they might prefer to use a check to put a down payment on a house or pay off high-interest credit card debt.

Then there’s the higher education system itself. Canceling or forgiving student loan debt may provide only temporary relief as long as tuition levels continue to rise. As it stands, future generations will be saddled with just as much, if not more, student debt than Americans currently have today.

Tackling Your Student Loan Debt

There’s no telling when or if some form of more long-term relief might appear for student loan borrowers. If you’re struggling under the weight of your student debt, there are strategies that might help:

• Alternative payment plans: Federal student loans come with a variety of repayment options, one of which might suit your situation.

• Direction of overpayments: If you make extra payments on your student loans, you may instruct your servicer to apply them to your principal, rather than the next month’s payment plus interest. This will help pay off your loans faster.

• “Found” money: If you receive a work bonus or tax refund, applying it to your student loans can help reduce your balance faster.

• Refinancing: Refinancing student loans (private and/or federal) into one new loan with a private lender could lower your monthly payment and interest rate, and make it easier to manage payments. Just know that refinancing federal student loans with a private lender means losing access to federal repayment and forgiveness programs.

The Takeaway

There is no quick fix for student loan debt, which will take further discussion from stakeholders on all sides.

If you are struggling with your own student loan debt, there are options to consider. You can apply for an income-driven repayment plan, apply for student loan deferment or forbearance on your federal student loans, or refinance your loans with a private lender. Keep in mind, though, that refinancing disqualifies you from federal benefits you may otherwise be eligible for.

If you do decide to refinance, consider SoFi. SoFi has a quick online application process, competitive rates, and no origination fees or prepayment penalties.

See if you prequalify with SoFi in just two minutes.

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).

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.

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Jun

2023

How to Pay Off College Loans

By David Wolinsky | Debt Payoff, Fresh Out of School, Student Loans, student_loan | Comments Off

If advice for paying off student loans were as simple as “Just keep paying those monthly payments,” over 43 million borrowers would have no concerns about wiping away more than $1.7 trillion in student loan debt.

But of course, many do stress about it and wonder how they can pay off their college loans. It’s best to first figure out exactly what you owe and what your interest rates are. From there, you can come up with a game plan to get your student loan debt under control.

Tips to Pay off College Loans

1. Set a Budget

Rather than feeling helpless, it’s better to remember that the path to paying off college loans is, at its core, about making a budget and sticking with it.

It’s best to resist the urge to momentarily feel better through retail therapy. If you do happen to slip up with spending or are caught unprepared for a bill, though, realize that living within your means is a challenge for many adults and learning from your mistakes is better than fixating on them.

The important thing is to create a budget you can actually follow. Give yourself enough flexibility that you’ll be able to stick to your goals and spend your money on what you really want to spend it on.

2. Pay More than the Minimum

There’s more to paying off college loans than paying the lowest amount required every month. A big reason to pay more than the minimum each month is that student loan repayment is structured around amortization, which is where a portion of your fixed monthly payment goes to the costs associated with interest and another portion goes to reducing your loan balance.

With amortization loans, you typically pay more in interest than principal at the beginning and the ratio gradually reverses as you keep paying your loan. Paying more than the minimum monthly payment means you can accelerate the reduction of the total amount you owe rather than covering the interest.

One plan of attack is to consider signing up for automatic payments. You can customize the payment amount to be withdrawn on its own, and there can be a discount for doing so. If you have a Direct Loan, you can get an interest rate reduction for participating in automatic debits. (As a side note, many federal and private student loan servicers offer a discount for enrolling in autopay, so it can’t hurt to ask and get that discount, if it’s available to you.)

One final tip: Try to get in touch with your lender before you make additional payments so you can verify that your extra cash is going toward paying down the loan principal.

3. Refinance Your Student Loans

If it ever reaches a point where making real progress on repaying your loans feels nearly impossible, and income-driven repayment and forgiveness options either don’t apply or aren’t the right fit, then refinancing with a private lender might be a good option.

When you refinance federal and/or private student loans, you’re given a new — ideally, better — interest rate on a single new private loan. A lower rate translates to total interest savings over the life of the loan. Further, you may be able to lower your monthly payments with a longer term or pay your loan off faster (with higher monthly payments) if you decide to shorten your repayment term.

Recommended: Student Loan Refinancing Calculator

Don’t forget: Refinancing federal student loans with a private lender means you’re no longer eligible for federal repayment programs, forbearance, loan forgiveness programs, and other protections and benefits extended to federal student loan borrowers.

4. Apply for Forbearance or Deferment

If you’re struggling with your loan payments, it might be time to grit down, pick up the phone, and call the loan servicer. Quite a few banks and lenders have forbearance and deferment programs, although they are mostly dependent on the customer reaching out and asking for help.

Federal student loans also offer student loan forbearance and deferment options. Forbearance can allow for decreased or delayed payments for a specific period of time, often up to 12 months.

Some lenders may offer to reduce the interest rate being charged on the debt, but there are no federal guidelines for terms for forbearance agreements across all industries (with the exception of federal student loans).

On the surface, this sounds positive, but be forewarned that these options can significantly affect credit history and credit scores. The effects on credit depend on the type of loan and the lender, and whether forbearance or other payment or rate adjustments are available or chosen.

Here’s to Stability

You’ve paid down whatever you’ve managed so far on your college loans, so what are your plans now? Are you happy with your current interest rates? Do you like your lender and/or servicer?

As you get more established with a financial track record and the start of a career, know that refinancing or consolidating can help either pay things down more quickly or help secure terms that fit where you are in life right now — and where you’d like to be in the near future.

If you’re thinking about refinancing, consider SoFi. SoFi offers a fast, easy online application, competitive rates, and no origination fees.

Prequalify for a refinance loan with SoFi today.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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

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May

2023

How Many College Students Are in Debt?

By Sarah Brooks | Debt Payoff, Fresh Out of School, Student Loans, student_loan | Comments Off

American students and their parents continue to take out student loans to pay for their undergraduate and graduate degrees.

People who are attending college are paying for tuition, room and board, books, and other necessities by taking out student loans or using credit cards.

Paying for college has become more expensive as tuition costs have continued to rise each year. For the 2022-2023 academic year, the tuition for full-time in-state students attending public colleges and universities was $10,950, according to the College Board. Tuition at private colleges and universities for the 2022-2023 academic year was $39,400.

The average federal student loan debt per person in 2023 is $37,338. Private student loan debt is almost $55,000 per borrower.

Americans now owe over $1.6 trillion in student loans. More than 43 million people, both graduates and their parents, have amassed a large amount of debt to pay for higher education.

Paying Down Student Debt Faster

Borrowers can maximize their financial resources and accelerate their repayment schedule in a few different ways.

Some options might include making extra payments by creating a budget, cutting expenses, getting a part-time gig, paying down other debt, and refinancing student loans.

Budgeting Effectively

Creating a budget can help borrowers see and understand all their expenses. A budget could make someone more aware of how much they are spending on eating out or entertainment each month.

Being able to refer to a budget can come in handy when you’re paying bills each month. There are plenty of options to choose from when it comes to budgeting and tracking spending.

After you have created a budget, examine your monthly expenses. One way to do this is to look at your expenses by different categories, such as bills, daily expenses such as parking, necessities such as groceries, and non-essential items such as entertainment.

Going through each category can help a consumer decide what is a priority. It can also help remind you of expenses you’re paying each month, but not using often such as a streaming movie or TV service.

Consider negotiating with the service provider, such as an internet or cable company, to see if there are less expensive options or if they are offering special deals currently.

Making Extra Payments

Making extra payments whenever borrowers can afford can help speed up the repayment process.

Neither federal or private student loans have prepayment penalties, which means borrowers won’t be penalized for making extra payments or paying their loan off ahead of schedule.

When making over payments, check in with the loan servicer to confirm how it will be applied to the loan or loans. For example, a borrower with multiple loans may choose to spread the extra payments evenly among each loan. Others may choose to concentrate on the loan with the highest balance or the highest interest rate.

Another note, lenders may first apply overpayments to the interest accrued on the loan. Borrowers may have to request the extra payment be applied to the principal balance of the loan. The important thing is to be sure you understand exactly where the payment is going.

Focusing on High Interest Debt

When it comes to students and debt, sometimes it’s more than just student loans. Paying down other debt, such as credit cards with higher interest rates or personal loans, can also lower your overall debt.

While some people prefer to pay off their debt with the lowest balance, other people prefer to start tackling the one with the highest interest rate.

Here are some ideas that could help someone pay off their credit cards or personal loans sooner.

• Making more than the minimum payment. Even an extra $25 or $50 a month adds up.

• Contacting the credit card company and asking for a lower interest rate.

• Using automatic payments to avoid missing a payment and incurring a late fee.

• Stopping using the credit card for additional purchases.

• Obtaining another credit card with a lower interest rate and transferring all or a portion of the balance.

Some lenders may charge a prepayment penalty for some types of loans or credit, so double check the terms to be sure.

Getting a Second Job or Side Hustle

One way to help pay down student loans faster is to obtain a second part-time job. The additional income from the second job could go towards extra payments on the loan.

Finding a second job could be accomplished by asking your friends or co-workers for referrals. They might know of a small business or person who needs a helping hand or temporary work on a short-term project.

Depending on the gig, some of the work could be completed online or during weekends.

Checking job boards, social media, and with your current network could net you some temporary gigs such as babysitting, pet sitting dogs or cats, or running errands for a professional.

Another strategy is to sell any unused items that are sitting around in your home. Cleaning out your closet or garage could help people come up with some extra income that can be used to make an extra payment or two.

Selling musical instruments, electronics, clothing, or shoes online or at a resale shop is one way to sell the items quickly. Social media is another way to sell your unwanted guitar or electronic tablet that is just collecting dust.

Recommended: 23 Ways to Make Extra Income From Home

Making Lump Sum Payments

Sometimes, making consistent extra payments on a loan isn’t an option. In that case, consider making a lump sum payment whenever you get a larger amount of money from a tax refund, birthday gift, or bonus at work.

Apply all or a portion of the extra money to a payment. Making extra payments applied to the principal can help reduce the amount of interest paid in the long term.

Refinancing Student Loans

Making changes to your budget, slashing your expenses, and getting another gig could help you pay down your student loans faster. Focus on the improvements you have made and create both short-term and longer term financial goals. Refinancing is another option that could potentially help a borrower speed up their repayment.

Student loan refinancing could help qualified borrowers secure a lower interest rate, which also means that more of the money paid each month will go towards the amount that was originally borrowed — the principal value.

This could help students and their parents finish paying off their student loans sooner. A lower interest rate could also reduce the amount of money spent in interest over the life of the loan.

Refinancing can also help make monthly payments more affordable, which could be helpful to people with a tight budget.

However, getting a lower monthly payment when refinancing could be a result of extending the repayment term, which would ultimately mean the loan costs more in the long run.

Refinancing also allows borrowers with multiple loans to combine them into a single loan. This can help streamline the repayment process, since the borrower will be repaying a single loan with a single lender, instead of making multiple payments each month, sometimes to different lenders.

A student loan refinancing calculator can help give you an idea of the amount of your new monthly payments. Any extra money saved each month could be used to pay for other debt such as credit cards or towards your savings for an emergency, a down payment for a car or house, or other goals such as a vacation.

SoFi gives people the option to refinance both federal and private loans. Before you refinance your federal student loans, consider whether keeping the repayment benefits that they offer, such as forgiveness programs or income-driven repayment plans, could be useful to you in the future. When you refinance with a private lender like SoFi, those benefits are no longer available.

The application process at SoFi can be completed easily online and there are absolutely no hidden fees.

Find out if you prequalify to refinance with SoFi, and at what rate, in just a few minutes.

May

2023

Top 10 Fun Things to Do When Visiting Memphis

By Lauren Ward | Budgeting & Goals, credit card, Family Finances | Comments Off

Known as the Home of the Blues, Memphis is a music lover’s paradise, but there are plenty of other reasons to visit this incredible city. You’ll be able to explore its deep history, both in terms of music and the heart of the Civil Rights Movement of the mid-20th century. Plus, there are museums, parks, and more waiting.

Here, you’ll learn more about the best things to do in Memphis, Tennessee, as well as discover ideal times of year to visit. In addition, you’ll get a good idea of the average trip costs so you can budget accordingly.

Best Times to Go to Memphis

Memphis is at its most comfortable during the spring and fall months, typically from late April through the beginning of June and again from late August to the middle of October. For instance, in April, you’ll find temperatures in the 70s during the day, and in October, you’ll experience similarly warm temperatures.

For music lovers, also consider visiting for the annual Beale Street Music Festival, which takes place each May. Some of music’s biggest names perform at this three-day event. 2022’s headliners included Megan Thee Stallion and Van Morrisson, so you know there’s something for everyone.

Bad Times to Go to Memphis

Summer and winter will be less crowded in Memphis, but the weather is less than ideal for many. Summer travel in Memphis can be hot and humid. The average high temperature in July is in the 80s to low 90s Fahrenheit, making that one of the worst times to visit Memphis. Late fall and early winter tend to be cloudy in Memphis, but there’s not a high chance of snow. Rainfall tends to peak in early December and mid-April.

Average Cost of a Memphis Vacation

Before you start making a list of the top things to do in Memphis, get an idea of how much a trip there will cost you once you arrive. According to Budget Your Trip, an individual spends an average of $34 on dining every day. Local transportation is actually more expensive at $47 per day, so you might want to look into renting a car to get around.

Hotels, however, can be reasonably priced at around $134 per night in Memphis, and perhaps even less if you try some hacks to save money on hotels.

Here’s how the costs break down if you plan to spend a week in the city; there will be some incidentals as well:

• One Person Total: $1,172

• Two Person Total: $2,343

One note: You may want to also budget for travel insurance in case the unexpected were to happen, or look into what kind of credit card travel insurance your issuer provides.

Recommended: Credit Card Miles vs. Cash Back

10 Fun Must-Dos in Memphis

As you plan a trip to this Tennessee city, you’ll likely want to map out an itinerary, even if just loosely, to make sure you hit the highlights. Here, culled from top online reviews and seasoned travelers, is advice on the 10 best things to do in Memphis.

1. Pay Homage to the King

We would be remiss to start off a list of best things to do in Memphis without mentioning Graceland, the home of iconic singer Elvis Presley. Open for tours on a daily basis, your ticket gives you access to 120 acres. Explore Elvis’s mansion (including the Jungle Room), his most iconic outfits, and the exterior grounds.

There are also on-site museums dedicated to the King of Rock ‘n Roll’s career and cars. If you really want to make the most out of your time at Graceland, you can also stay at a hotel on the grounds. If staying in the city, consider a rental car or shuttle for the 20-minute drive. Ticket prices range from $28 to $215 for the Ultimate VIP Tour. (If you’re buying the top of the line tickets, you may want to swipe with plastic when paying to earn credit card rewards.) graceland.com/

2. Visit the National Civil Rights Museum

Memphis is also known for another King — civil rights legend Dr. Martin Luther King, Jr., was assassinated at the city’s Lorraine Motel in 1968. Now the location has been transformed into the National Civil Rights Museum with interactive exhibits, films, and oral histories cataloging centuries of the quest for freedom and equality in America.

Exhibit material starts with the struggle against slavery in the early 1600s and moves forward through today’s continuing Civil Rights Movement. Walk through a recreation of the Montgomery Bus Boycotts of the 1950s, the Memphis Sanitation Strikes, and more. The museum is closed on Tuesdays so plan your visit in advance. civilrightsmuseum.org/

3. Stroll Down Beale Street

This nearly two-mile stretch of road in downtown Memphis is a celebration of all things music. Considered the official Home of the Blues, you’ll find clubs and restaurants to satisfy any music lover’s thirst for live entertainment.

There’s always something going on at Beale Street. Just show up to explore on your own, or download the official app to create a plan. Note that a security checkpoint goes up on Friday and Saturday nights. Those under 21 must be accompanied by an adult after 9 p.m., and the street is strictly 21+ after 11 p.m. In other words, weekend nights on Beale Street are on the list for fun things to do in Memphis for adults but not kids. bealestreet.com/

4. March with the Peabody Ducks

One of the best things to do in Memphis with kids is to head to the downtown Peabody Hotel for the daily Duck March. Occurring at 11 a.m. and 5 p.m. each day, this decades-long tradition involves five North American mallards who live at the hotel. Each group of ducks lives at the hotel for three months before returning to farm life outside the city.

They’re brought down from their Royal Duck Palace on the rooftop to swim in the lobby fountain. Participants must be at least five years old, and the hotel recommends arriving 30 minutes early to get a seat. Seeing the Peabody Ducks is definitely an affordable family travel option. peabodymemphis.com/peabody-ducks

5. Tour the Belz Museum

What started out as a private art collection has turned into five permanent exhibits displaying Asian and Judaic art, as well as the Holocaust Memorial Gallery. The Belz Museum also brings in special exhibits twice a year.

One of the most comprehensive collections at the museum is the Chinese art exhibit, which is known as the largest such collection in the southeast United States. You’ll see many pieces from the Qing dynasty, which lasted from the mid-1600s through the early 1900s. The Belz Museum is closed Monday and Tuesday.

6. Take in Some Thrilling Basketball

Love basketball? Check out an NBA game at FedExForum, which is home to the Memphis Grizzlies (nba.com/grizzlies/tickets). The season runs from October to April. The stadium also hosts University of Memphis men’s basketball, which is a NCAA Division I. You can also check out the Division I women’s team on campus at the Elma Roane Fieldhouse.

7. Marvel at the Mighty Lights

Put this on your list of free things to do in Memphis: the nightly Mighty Lights on the downtown waterfront. Every evening, the city’s two iconic bridges (the Hernando de Soto and Harahan) are lit up in a huge display of LED lights. You’ll see the show at the hourly and 30-minute marks starting at sundown, followed by a grand final at 10:30 p.m.

Scout out a spot to watch along the Mississippi riverfront parks, or scope out an aerial view in the city. The Fourth Bluff and Mud Island are both good options to check out. mightylights.com/

8. Snap Selfies at Mud Island River Park

Tap into your inner river rat at Mud Island River Park. It takes just a few minutes to walk to it from downtown Memphis, and you’ll enjoy lounging on this Mississippi River island. It’s also a perfect spot for some social media selfies thanks to the huge Memphis sign, which spans 50 feet.

This 52-acre park also features a scale model of the Mississippi River to give you a sense of the true breadth of the world’s third largest river basin. Traveling with pets? Mud Island is also a great location for a long walk with your dog. memphisparks.com/park/mud-island-park/

9. Drop into the Stax Museum of American Soul Music

Not only is Memphis home to the blues and rock ‘n roll, it has also played a pivotal role in America’s soul music scene. The Stax Museum is the original home of the legendary Stax recording studio, which was the recording label of iconic artists like Otis Redding, Isaac Hayes, Shirley Brown, and many others.

Explore the rich history of the studio through exhibits and artifacts. You’ll even get the chance to see Isaac Hayes’ custom Cadillac Eldorado, decked out in 24-karat gold trim with a mini-fridge and television on the inside. The Stax Museum is closed on Mondays; tickets are $13 for adults and $10 for kids 9-12; children 8 and under are free. staxmuseum.com/

10. Wander Through Meeman-Shelby Forest

Needa dose of nature? Memphis has that, too! Head 20 minutes outside of downtown Memphis for the enchanting Meeman-Shelby Forest. You can explore 13,000 acres of wilderness that is home to a diverse range of ecosystems. Discover sandy beaches and swamplands (home to the Bald Cypress tree).

There are plenty of recreational activities to enjoy, including trails, a nature center, and a disc golf course. tnstateparks.com/parks/meeman-shelby

The Takeaway

From a huge music scene to pivotal moments in history, from parks to nightly light shows, Memphis has attractions worth exploring for all ages. It doesn’t matter if you have a few days or a full week — it’s easy to fill your schedule with tons of fun things to do in Memphis on any budget.

FAQ

Is Beale Street worth a visit?

Beale Street is considered a must-visit if you’re visiting Memphis, whether it’s your first time or you’ve vacationed there before. Home of blues music, you’ll get a truly unique flavor of entertainment any time of day or night.

What is the best month to visit Memphis?

If you have a completely open calendar and are ready to head to Memphis at the perfect time of year, consider going either in mid-spring or mid-fall. You’ll miss the heat of summer and clouds of winter, so you can explore the top things to do in Memphis, Tennessee, in the best possible weather.

What is Memphis most popular for?

Memphis is best known for its music scene, both historically and today. It’s considered the home of the blues as well as the hometown of rock ‘n roll (Elvis Presley’s Graceland is there), so you’re sure to find something to enjoy.

Photo credit: iStock/benedek
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1. Pay Homage to the King

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