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Home equity loans, home equity lines of credit (HELOCs), and cash-out refinances are all borrowing options that allow homeowners to access the equity they’ve built in their home. By tapping into home equity — the difference between a home’s current value and the amount still owed on the mortgage — homeowners can secure funds to meet other financial goals, such as making home improvements.

While these three types of loans do have similarities, there also are key differences in how each one works. Understanding the differences in a home equity loan vs. HELOC vs. cash-out refi can help you better determine which option is right for you.

Defining Home Equity Loans, HELOCs, and Cash-Out Refi

To start, it’s important to know the basic definitions of home equity loans, HELOCs, and cash-out refinances.

Home Equity Loan

A home equity loan allows a homeowner to borrow a lump sum that they’ll then repay over a set period of time in regular installments at a fixed interest rate. Generally, lenders will allow homeowners to borrow up to 85% of their home’s equity.

This loan is in addition to the existing mortgage, making it a second mortgage. As such, a borrower usually will make payments on this loan in addition to their monthly mortgage payments. To better understand what kind of payment might be due each month, it is helpful to use a home equity loan calculator.

HELOC

A HELOC is a line of credit secured by the borrower’s home that they can access on an as-needed basis, up to the borrowing limit. The amount of the line of credit is determined by the mortgage lender and based on the amount of equity a homeowner has built, though it can be up to 90% of the equity amount. Like a home equity loan, this is a second mortgage that a borrower assumes alongside their existing home loan.

How HELOCs work is somewhat like a credit card, in that it’s a revolving loan. For example, if a borrower is approved for a $30,000 home equity line of credit, they can access it when they want, for the amount they choose (though there may be a minimum draw requirement). The borrower is only charged interest on and responsible for repaying the amount they borrowed.

Another point that borrowers should keep in mind is that there is a draw period of 5 to 10 years, during which a borrower can access funds, and a repayment period of 10 to 20 years. During the draw period, the monthly payments can be relatively low because the borrower pays interest only. During the repayment period, on the other hand, the payments can increase significantly because both principal and interest have to be paid.

Cash-Out Refinance

A cash-out refinance is a form of mortgage refinancing that allows a borrower to refinance their current mortgage for more than what they currently owe in order to receive extra funds. With a cash-out refinance, the borrower’s current mortgage is replaced by an entirely new loan.

As an example, let’s say a borrower owns a home worth $200,000 and owes $100,000 on their mortgage at a high interest rate. They could refinance at a lower interest rate, while at the same time taking out a larger mortgage. For instance, they could refinance the mortgage at $130,000. In this case, $100,000 would replace the old mortgage, and the borrower would receive the remaining amount of $30,000 in cash.

Recommended: First-time Homebuyer Guide

Home Equity Loans and HELOCs vs. Cash-Out Refi

Here’s a look at how a home equity loan vs. HELOC vs. cash-out refinance stack up when it comes to everything from borrowing limit to interest rate to fees:

Borrowing Limit

With a home equity loan, lenders generally allow you to borrow up to 85% of a home’s equity. HELOCs allow borrowers to tap a similar amount, sometimes as much as 90%. Cash-out refinances, on the other hand, have a slightly lower borrowing limit — up to 80% of a borrower’s equity. The exception is a VA cash-out refi; here it is possible to borrow up to 100% per VA rules, although some lenders may impose a lower ceiling.

Interest Rate

With a home equity line of credit, the interest rate is usually adjustable. This means the interest rate can rise, and if it does, the monthly payment can increase. Home equity loans, meanwhile, generally have a fixed interest rate, meaning the interest rate remains unchanged for the life of the loan. This allows for more predictable monthly payment amounts.

A cash-out refinance can have either a fixed rate or an adjustable rate. Homeowners who opt for an adjustable rate may be able to access more equity overall.

Type of Credit

Both home equity loans and cash-out refinances are installment loans, where you receive a lump sum that you’ll then pay back in regular installments. A HELOC, on the other hand, is a revolving line of credit. This allows borrowers to take out and pay back as much as they need at any given time during the draw period.

Fees

With a home equity loan, HELOC, or cash-out refinance, borrowers may pay closing costs. HELOC closing costs may be lower compared to a home equity loan, though borrowers may incur other costs periodically as well, such as annual fees, charges for inactivity, and early termination fees.

When It Might Make Sense to Borrow

A home equity loan vs. HELOC vs. cash-out refi have varying use cases. With a fixed interest rate, home equity loans can allow for predictable payments. Their lower interest rates can make them an option for borrowers who want to consolidate higher interest debt, such as credit card debt.

HELOCs, meanwhile, provide more flexibility as borrowers can take out only as much as they need, allowing borrowers to continually access funds over a period of time. A cash-out refinance can be a good option for a borrower who wants to receive a large lump sum of money, such as to pay off debt or finance a large home improvement project.

Which Option Is Better?

Like most things in the world of finance, the answer to whether a cash-out refinance vs. HELOC vs. home equity loan is better will depend on a borrower’s financial circumstances and unique needs.

In all cases, borrowers are borrowing against the equity they’ve built in their home, which comes with risks. If a borrower is unable to make payments on their HELOC or cash-out refinance or home equity loan, the consequence could be selling the home or even losing the home to foreclosure.

Scenarios Where Home Equity Loans Are Better

A home equity loan can be the right option in certain scenarios, including when:

•   You want fixed, regular second mortgage payments: A home equity loan generally will have a fixed interest rate, which can be helpful for budgeting as monthly payments will be more predictable. Some may appreciate this regularity for their second monthly mortgage payment.

•   You want to get a lump sum while keeping your existing mortgage intact: Unlike a HELOC, where you draw just as much as you need at any given time, a home equity loan gives you a lump sum all at once. Plus, unlike a cash-out refinance, you aren’t replacing your existing mortgage. That way, if the terms of your current mortgage are favorable, those can remain as is.

Recommended: The Different Types Of Home Equity Loans

Scenarios Where HELOCs Are Better

In the following situations, a HELOC may make sense:

•   You have shorter-term or specific needs: Because HELOCs generally have a variable interest rate, they can be useful for shorter-term needs or for situations where a borrower may want access to funds over a certain period of time, such as when completing a home renovation.

•   You want the option of interest-only payments: During the draw period, HELOC lenders often offer interest-only payment options. This can help keep costs lower until the repayment period, when you’ll need to make interest and principal payments. Plus, you’ll only make payments on the balance used. A HELOC interest-only repayment calculator can help borrowers understand what those monthly payments might be.

Scenarios Where Cash-Out Refi Is Better

Cash-out refinances can make sense in these scenarios:

•   You need a large sum of money: If there’s a need for a large sum of money, or if the funds can be used as a tool to improve your financial situation on the whole, a cash-out refinance can make sense.

•   You can get a lower mortgage rate than you currently have: If refinancing can allow you to secure a lower interest rate than your current mortgage offers, then that could be a better option than taking on a second mortgage, as you would with a home equity loan or HELOC. If interest rates have risen since you first took out your loan, however, a cash-out refi could mean paying more in interest over the life of the loan.

•   You want just one monthly payment: Because a cash-out refinance replaces your existing mortgage, you won’t be adding a second monthly mortgage payment to the mix. This means you’ll have only one monthly payment to stay on top of.

•   You have a lower credit score but still want to tap your home equity: In general, it’s easier to qualify for a cash-out refinance vs. HELOC or home equity loan since it’s replacing your primary mortgage.

The Takeaway

Cash-out refinancing, HELOCs, and home equity loans each have their place in a borrower’s toolbox. All three options give borrowers the ability to turn their home equity into cash, which can make it possible to achieve important goals, consolidate debt, and improve their overall financial situation.

Homeowners interested in tapping into their home equity may consider getting a HELOC or taking a cash-out refinance with SoFi. Qualifying borrowers can secure competitive rates, and Mortgage Loan Officers are available to walk borrowers through the entire process.

FAQ

Can you take out a HELOC and cash-out refi?

If you qualify, it is possible to get both a HELOC and cash-out refinance. Qualified borrowers can use their cash-out refinance to help repay their HELOC.

Is it easier to qualify for a HELOC or cash-out refi?

It is generally easier to qualify for a cash-out refinance. This is because the cash-out refi assumes the place of the primary mortgage, whereas a HELOC is a second mortgage.

Can you borrow more with a HELOC or cash-out refi?

Ultimately, the amount you can borrow with either a cash-out refi or HELOC will depend on how much equity you have in your home. That being said, a HELOC can offer a slightly higher borrowing limit than a cash-out refi, at up to 90% of a home’s equity as opposed to a top limit of 80% for a cash-out refinance.

Are HELOCs or cash-out refi tax deductible?

Interest on your cash-out refinance or HELOC can be tax deductible so long as you use the funds for capital home improvements. This includes projects like remodeling and renovating.

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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.

*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.

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All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.
You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.
In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.

SOHL-Q424-144

If you have high-interest credit card debt and are ready to put together a plan to pay it back, you might be considering one of two popular methods: credit card refinancing vs. debt consolidation.

Both involve paying off your debt with another credit card or loan, ideally at a lower interest rate. Still, the two methods are not the same, and both options require careful consideration. Below, we’ll discuss the pros and cons of each debt payback method, so you can make an informed decision.

What Is Credit Card Refinancing?

Credit card refinancing is the process of moving your credit card balance(s) from one card or lender to another with a lower interest rate. The main purpose of refinancing is to reduce the amount of interest you’re paying with a lower rate while you pay off the balance.

A common way to accomplish this is to pay off your existing credit cards with a brand-new balance transfer credit card. This type of card offers a low or 0% interest rate for a promotional period that may last from a few months to 18 months or more.

Recommended: The Risks of Payday Loans

Benefits of Credit Card Refinancing

We’ve discussed the goal of credit card refinancing — to lower your interest rate — and how to accomplish it. Now let’s explore some of the benefits (and drawbacks) of refinancing.

Pros of Refinancing

•  You may qualify for a promotional 0% APR during your card’s introductory period. If you can pay down your debt during this time, you could potentially get out of debt faster.

•  Depending on the interest rate you’re offered, you could save money in interest charges.

•  Bill paying may be easier if you decide to refinance multiple credit cards into one new credit card.

•  If monthly payments are reasonable, it may be easier to consistently pay them on time. This can help build your credit score.

Cons of Refinancing

•  The introductory 0% interest period is short-term, and after it ends, the interest rate can skyrocket to as high as 25%.

•  There may be a balance transfer fee of 3%-5%, which can add to your debt.

•  0% interest balance transfer cards often require a good or excellent credit score to qualify.

•  Your credit score may temporarily dip a few points when you apply for a new credit card or loan. That’s because the lender will likely run a hard credit check.

Recommended: Loans With No Credit Check

Who Should Consider Credit Card Refinancing?

Credit card refinancing isn’t right for everyone. That said, a balance transfer to a 0% APR card could be a good move if you have a smaller debt to manage or are carrying multiple high-interest debts. Plus, transferring multiple balances into one card can streamline bills.
Refinancing may make sense if you’re looking for better terms on your credit card debt, qualify for a 0% APR, and can pay off the balance before the promotional period ends.
So, as you’re weighing your options, you’ll want to consider a number of factors, including:

•  Your credit score and credit history

•  How much debt you have

•  Your personal finances

What Is Credit Card Debt Consolidation?

Credit card consolidation refers to the process of paying off multiple credit cards or other types of debt with a single loan, referred to as a debt consolidation loan. The main purpose of consolidation is to simplify bills by combining multiple credit card payments into one fixed loan payment.

A borrower may also pay less in interest, but the difference may not be as great as with refinancing. An applicant’s credit score and other financial data points will determine their personal loan interest rate.

There are pros and cons to paying off multiple credit cards with a single short-term loan. Let’s take a look:

Pros of Debt Consolidation

•  You can pay off multiple debts with one loan, which can take the guesswork out of bill paying.

•  The structured nature of a personal loan means you can make equal payments toward the debt at a fixed rate until it is completely eliminated.

•  With most personal loans, you can opt for a fixed interest rate, which ensures payments won’t change over time. (Variable interest rate loans are available, but their lower initial rate can go up as market rates rise.)

Cons of Debt Consolidation

•  The terms of a loan will almost always be based on your credit history and holistic financial picture. That means that not every borrower will qualify for a low interest rate or get approved for a personal loan at all.

•  You may need to pay fees, including personal loan origination fees.

•  You’ll likely need to have good credit in order to qualify for the best interest rate.

Credit Card Refinancing vs Debt Consolidation

To recap, the difference between debt consolidation and credit card refinance is first a matter of goals.

With credit card refinancing — as with other forms of debt refinancing — the aim is to save money by lowering your interest rate. Debt consolidation may or may not save you money on interest, but will certainly simplify bills by replacing multiple credit card obligations with a single monthly payment and a structured payback schedule.

The other difference is that credit card refinancing typically utilizes a balance transfer credit card that has a 0% or low interest rate for a short time. This limits the amount you can transfer to what you can comfortably pay off in a year or so. Debt consolidation utilizes a personal loan, which allows for higher balances to be paid off over a longer payback period.

Which strategy is right for you? That depends on a number of factors, including the amount of debt you have, your current interest rates, and whether you’re able to stick to a structured repayment schedule.

The Takeaway

Credit card refinancing is when a borrower pays off their credit card(s) by moving the balance to another card with a lower interest rate. A popular way to do this is with 0% interest balance transfer credit cards. However, borrowers typically need a high credit score to qualify for these cards. Debt consolidation, on the other hand, is when a borrower simplifies multiple debts by paying them off with a personal loan. Personal loans with a fixed low interest rate and a structured payback schedule are a smart option for consolidating debts.

If you have a relatively small balance that can be paid off in a year or so, refinancing with a balance transfer credit card may be right for you. If you have a larger balance or need more time to fully pay it off, personal loans are available.

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

FAQ

Which is better: credit card refinancing or debt consolidation?

There are advantages and drawbacks to both strategies. Credit card refinancing can help you lower your interest rate, which can save you money. Debt consolidation might save you money on interest, but it will definitely simplify bill paying by replacing multiple cards with one monthly bill.

Is refinancing a credit card worth it?

Refinancing a credit card may be worth the effort because it can lower your interest rate, potentially save you money, and make payments more manageable.

Is refinancing the same as consolidation?

Though refinancing and consolidation can both help you manage your debt, they serve different purposes. Refinancing involves moving credit card debt from one card or lender to another, ideally with a lower interest rate. Paying less in interest while you pay off your debt is the main goal of refinancing. When you consolidate, you settle multiple debts with one loan. Simplifying bills into one fixed loan payment is the main reason to consider this strategy.

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

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

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.

SOPL-Q424-056

An advanced financial degree isn’t a requirement for taking control of your finances. In fact, you can learn much (or all) of what you need to know about finance without a financial education background at all — if you’re willing to put in the work (and, possibly, spend a little money).

Learning about how the realm of money works can boost your financial literacy and may improve how well you spend, save, and invest your hard-earned cash.

So let’s take a look at some of the easiest ways to learn finance on your own time.

Why Being Sound in Finance Is Important

Even if you don’t want to become an accountant or manage clients’ investment portfolios, learning about finance is an important practice for everyone. Knowing financial basics like how to build a budget, how to pay off debt, how ,a href=”https://www.sofi.com/banking/”>bank accounts work, and even how to do basic investing in stocks and bonds can be key to your financial stability. You’ll likely become a smarter consumer and savvier money manager, not turning a blind eye to your bank and IRA statements.

With more understanding of your finances, you’ll have more control over them. Financial literacy can help you avoid (or get out of) debt, save for important goals like a wedding or vacation, and increase your net worth through investments and home ownership. This can benefit the financial health and well-being of your family, too.

8 Ways to Learn About Finance

Wondering how to learn finance without enrolling in a four-year degree? Here are some of the easiest ways to teach yourself about finance. Dive in, and you may be rewarded with knowing how to manage your own money confidently and find your way to financial freedom.

1. Taking an Online Course

Taking an online course is one of the best ways to learn finance — and you can even do it in sweatpants. LinkedIn offers several finance and accounting courses that are ideal if you are working toward becoming a practicing financial professional, but you can also find free or affordable financial literacy classes for the average person.

Popular options for online financial courses include Coursera, edX, and Udemy. Just be sure to find courses aimed at non-finance pros. Many universities, including Massachusetts Institute of Technology (MIT) and the University of Michigan, offer some courses for free; you generally just have to pay if you want the certificate of completion.

2. Reading Books

Another way to learn about finance at a deeper level is through books. Your local library probably offers shelves of books on finance (maybe even digital versions for your e-reader), but you can also order books online or shop at second-hand bookstores.

Goodreads can be a great place to research personal finance books. Popular books for learning about finance, especially for beginners, include:

•   Get a Financial Life by Beth Kobliner

•   I Will Teach You to Be Rich by Ramit Sethi

•   Your Money or Your Life by Vicki Robin and Joe Dominguez

•   The Simple Path to Wealth by JL Collins.

3. Listening to Podcasts

If reading isn’t your thing, you can instead try learning finance basics via podcasts (or audiobooks). Listening to the top money podcasts means you can use your time efficiently: Stream the podcast during your commute to and from work, while exercising or walking the dog, or even while cooking dinner.

Some podcasts are aimed at beginners while others have more targeted audiences, usually those interested in investing.

If you’re a beginner, consider checking out:

•   So Money

•   AffordAnything

•   Freakonomics

Students may benefit from The College Investor; The Dave Ramsey Show is popular with people working to get out of debt; and investors who want to learn more about the market may want to queue up What’s News, Jill on Money, or Planet Money.

Recommended: 7 Tips to Managing Your Money Better

4. Utilizing YouTube and Other Visual Media

Podcasts are great for on-the-go learning, but if you want to sit and watch financial content so you can take notes, YouTube can be a great place to start. Here are some of channels with financial literacy video content you may want to check out:

•   The Financial Diet or Two Cents for general personal finance content

•   Wealth Hacker for investing and passive income advice

•   Bigger Pockets for real estate investing.

5. Hiring a Financial Professional

While learning about how to use a checking and savings account is important, more complex topics like debt consolidation or investing in the stock market may be too intimidating for some.

If you find yourself too busy to learn or just struggling with the concepts, consider hiring a financial professional. Some financial professionals offer specific services like tax preparation and wealth management; you can also hire a financial consultant who can offer advice on all areas of your finances, from paying down student loan debt to building an emergency savings to refinancing a mortgage. This process, beyond providing guidance, can also help you build knowledge about the areas of finance about which you are most curious.

Recommended: What Is Financial Therapy?

6. Taking an In-Person Class or Seminar

How to learn about finance if you find yourself easily distracted? In-person classes at a local college or even seminars and workshops in your area could be a good option.

You can check out nearby universities and community colleges to see what classes they offer. If you have hired a financial advisor, they might be able to recommend upcoming seminars in your area. Finally, your local library may also host workshops.

7. Subscribing to Business and Investing Publications

Beginners can likely get by on podcasts and YouTube content, but once you advance to more complex investing concepts, you might want to subscribe to one or two business and investing publications, whether in print or digitally. Popular financial magazines include Barron’s, The Economist, Kiplinger’s, Forbes, and Money. The Wall Street Journal is a popular resource for monitoring investments.

Many investment apps now offer access to news about the market. If you are using an app rather than a traditional investment firm, see what information they offer access to before signing up for any subscriptions.

Recommended: 5 Ways to Achieve Financial Security

8. Follow a Finance Blog

If a newspaper delivered on your doorstep feels too archaic, you can instead use finance blogs to learn basic topics and stay on top of the latest news. One good place to start: See what your bank or investment management firm offers. Many have top-notch blogs covering an array of topics.

You may also find blogs that suit your particular needs, whether that’s understanding annuities, managing finances for a single-paycheck family, or estate planning. If you read a book on money that you like or listen to a podcast that you find valuable in one of your key areas of interest, search for more intel on the expert involved. They may well have a finance blog that can deepen your knowledge.

The Takeaway

Learning about finance when you don’t have any background in the subject can feel intimidating. Fortunately, there are numerous resources you can tap, including online courses, podcasts, books, blogs, publications, and apps. What’s more, many of these options are free, and a fair number are tailored to complete beginners.
Taking some time to learn the basics of personal finance — from budgeting to getting the best rate on your savings to building wealth through investing — can yield rewards, both right away and many years from now.

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.

FAQ

Is finance easy to learn?

Finance can be easy to learn if you are willing to seek out informative content from books, podcasts, videos, blogs, and even professionals and then invest some time soaking up knowledge. Learning about finance requires dedication and sometimes a little investment — but knowing how to manage your money can pay off in the long run.

What should I learn first about finance?

Some of the most fundamental personal finance concepts include building a budget, opening a bank account, and understanding your credit score. Once you have mastered those more basic concepts, you can then focus on things like retirement planning, debt consolidation, and real-estate and stock-market investing.

Can I make finance a career without a degree?

Having a degree of some kind (ideally in finance but even in mathematics or other allied areas) is very helpful for building a career in finance. Completing internships and/or industry courses outside of a college setting can put you on the right path, though you may still need a certification for a specific job in finance. For example, Certified Public Accountants and Certified Financial Advisors have completed specific programs to earn their credentials. That said, self-taught individuals might be able to build careers by creating financial educational content, like podcasts and blogs.

Photo credit: iStock/fizkes

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As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% 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 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 a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% 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 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 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 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 Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

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