May
09
2023
credit report laptop and tablet

Why Do I Have Different Credit Scores?

By | relay | Comments Off on Why Do I Have Different Credit Scores?

Every consumer has multiple credit scores. Why on earth is that? Because the major credit bureaus — Experian, Equifax, and TransUnion — may have slightly different credit information on any one person, and credit scoring models vary.

Credit scores are an important financial metric to keep track of throughout the year. The three-digit number can help people qualify for everything from mortgages to student loans and apartment rentals.

Here’s why credit scores vary and how to keep track of each.

What Is a Credit Score?

A credit score is a three-digit number assigned to each consumer that businesses use to measure the risk of lending to that person. It’s not the only thing lenders consider, but it is one of the most important metrics, if not the most important.

Your credit score is based on a bunch of factors, including if you typically pay your bills on time, what your debt is relative to your income, how long you’ve carried credit, how many loans or lines of credit you have at once, and if you have ever had a negative financial event, including bankruptcy.

Recommended: What Is Considered a Bad Credit Score?

Check your score with SoFi

Track your credit score for free. Sign up and get $10.*

Credit Scoring Models Vary

Though there are a number of credit scoring models out there, the majority of lenders use either FICO® or VantageScore.® Both determine a person’s credit score using the factors above, including history of borrowing, repayment history, and how much of the consumer’s credit they are currently using (known as a utilization rate).

Though both use the same factors, each one uses its own formula to weigh the worth of each factor. For example, a person’s credit history may be more important in one model than the other.

Based on the information gathered, the scoring models assign each consumer a three-digit number, which denotes that person’s lending risk compared to others.

To complicate matters, there are often multiple versions of each scoring model available from its developer at any given time. And adoption rates for updated versions can be low, meaning some lenders may be using older models that calculate a person’s score differently than an updated version. But for now, the FICO scoring model (known as FICO 8) breaks down as follows:

•   Payment history: 35%

•   Amounts owed: 30%

•   Length of credit history: 15%

•   Credit mix: 10%

•   New credit: 10%

Scoring Ranges Vary, Too

Both FICO and VantageScore calculate credit scores in a range between 300 to 850.

VantageScore 3.0 and FICO 8 are the most used scoring models and frequently mirror each other, so if your FICO number is high then your VantageScore will likely be high as well.

However, it’s important to note that the two pull the same data but weigh that individual data differently, putting greater importance on some aspects of a person’s credit history and usage than others.

While all creditors and lenders have their own standards, here are the FICO and VantageScore credit score categories:

FICO:

•   Exceptional: 800 to 850

•   Very good: 740 to 799

•   Good: 670 to 739

•   Fair: 580 to 669

•   Very poor: 300 to 579

VantageScore:

•   Excellent: 781 to 850

•   Good: 661 to 780

•   Fair: 601 to 660

•   Poor: 500 to 600

•   Very poor: 300 to 499

To put it all into perspective, in 2022, the average FICO credit score hit 714. Minnesotans reigned supreme for the 11th straight year with an average of 742.

Report Data Can Differ From Bureau to Bureau

Each of the credit bureaus collects its own data independently, and some lenders may only report data to one or two of the credit bureaus rather than all three.

To add to the complexity, the bureaus usually do not share information with one another, so none can really promise to show a consumer’s total financial picture.

Say Joanna goes into collection for her car loan, but the lender only reports this information to Experian. That means it will likely only appear on and affect her Experian credit report and may not affect her TransUnion or Equifax report. Thus her Experian report could be lower than her other two credit reports.

Scores Can Change Depending on the Lender

Lenders typically build their own relationships over time with at least one of the credit bureaus. This means they may only report information to the credit agencies they have relationships with.

Before applying for a line of credit, a car, home or student loan, or any other credit, it may be prudent to ask the lender which agencies they share information with and check in with those to see where you stand.

How Often Should You Check Your Credit?

Here’s the good news: Checking your credit won’t hurt your credit score, so go ahead and keep an eye on it. The bad news? The number a person sees when checking their score for free likely won’t match the one any lenders do.

The report a consumer has access to is a simple free report, lacking detail. But again, that’s OK, because it will show any errors or possible identity theft, which can be corrected if caught early enough.

Anyone can order a copy of their credit report from all three reporting agencies once a year for free at AnnualCreditReport.com . The report breaks down a person’s credit history but does not give a score.

However, again, this is the time to look for any mistakes and amend them ASAP. Consumers who do see an error can dispute it with the credit reporting agency and the company that holds the account.

It’s also a good idea for people to periodically check their credit to ensure it’s on the up and up.

Those interested in improving their credit scores to potentially get a better rate on loans should pay all their bills on time, limit their credit utilization ratio, and pay down existing debt.

The Takeaway

An individual’s credit scores differ for a variety of reasons. It might be a good idea to ask lenders which agencies they share information with. It’s always a good idea to periodically check your credit report to make sure everything’s kosher, to pay bills on time, and to keep credit utilization low.

Know what’s cooler than keeping track of your credit score? Keeping track of your credit score and finances at once. If you’re on the market for a money tracker tool that will let you do both, SoFi may be just the thing.

SoFi tracks all of your money in one app — at no cost. And SoFi members can work one-on-one with a financial advisor at no charge.

Ready to take control of your finances? SoFi is a great place to start.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

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 .

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.

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, LLC and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.

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.

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.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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May
01
2023

22 Money Moves To Make This Month

By | Budgeting & Goals, Financial Independence, money | Comments Off on 22 Money Moves To Make This Month

Getting more from your money doesn’t have to be a long-term project. Making some simple and strategic money moves over the next 30 days can help you reduce spending and increase savings, and take some of the stress out of dealing with finances.

The methods below can put you on track to achieving your financial goals.

Steps to Manage Your Personal Finances

As you put these personal finance moves into practice, remember that you’re aiming for progress, not perfection. You may want to do a bunch of them at once, or choose just a few to focus on.

1. Set Financial Goals

If you haven’t done so already, set some important long-term goals, like saving for retirement or your child’s child’s education. This can help you figure out how much money you need to dedicate to these milestones.

Setting short-term goals can be helpful, too. Maybe you’re saving for a special vacation next year. Or perhaps you’re planning to buy a new car in five years. Mapping out your game plan could help get you there.

2. Create a Budget

Start by adding up your necessary expenses, such as housing costs, utilities, insurance, car payments, and groceries, and subtract that amount from your monthly take-home income. Put what’s left toward paying down debt, and then make deposits into a high-yield bank account where your money can grow.

3. Set Up Direct Deposit

Are you still trekking to the bank to deposit your paycheck? Sign up for direct deposit so your money can go directly to your bank account.

While you’re at it, set up an automatic transfer so that a portion of your paycheck goes into savings every month.

4. Increase Retirement Contributions

If you’re eligible to participate in your company’s 401(k) plan, make sure your contributions are enough to take advantage of your employer’s matching funds, if they offer a matching contribution.

Each matching contribution varies by company. Many companies match 50 cents for every dollar you contribute, up to 6%.

5. Make $10 or $25 in Spending Cuts

Look for small expenses you can cut, and then direct the extra cash to savings or paying down debt, such as credit card debt. For instance, bring lunch to work a couple of days a week instead of eating out.

6. Look for Helpful Apps

A good app can help you monitor your spending and savings, keep you on budget, and set financial goals. Check out SoFi where you can track all of your money in one place.

7. Negotiate Your Bills

Call your Internet and cell phone providers to ask about lowering your monthly bills. There may be discounts or cheaper plans you can take advantage of.

When you call, be firm but courteous. Check out competitors’ rates, and if they’re lower, use those prices as a bargaining chip in your conversation.

8. Review Insurance Policies

Do you have enough car and home insurance to cover your needs? Do you have too much? Review your policies and add or subtract coverage as necessary. And shop around for providers that offer good coverage for less money.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 3.80% APY on savings balances.

Up to 2-day-early paycheck.

Up to $3M of additional
FDIC insurance.


9. Check Your Credit Score

Your credit score is a number that represents your creditworthiness. Lenders use it to determine whether to let you borrow money and at what interest rate. Check your credit score. If it needs some work, try it by doing such things as reducing debt and paying your bills on time.

10. Review Your Credit Report for Potential Mistakes

You can request a free credit report from the major credit reporting bureaus — Experian, Transunion, and Equifax — at Annual CreditReport.com. Review your report for mistakes that could be negatively affecting your credit score, and contact the credit bureaus about any errors you find.

11. Look for Credit Cards that Offer the Best Rewards

Earn on your spending with credit cards that offer rewards. Look for those that match your interests. For instance, if you love to travel, find a card that offers travel rewards. But watch out for cards with high interest rates. If you’re not someone who pays their card off every month, it may be worth steering clear of these.

12. Use Credit Card Points

Your credit card rewards aren’t doing you any good if you don’t redeem them. So have some fun and plan a trip or a new purchase with the rewards you’ve accumulated.

13. Consider Refinancing Your Loans

If you have outstanding loans, such as a mortgage or student loan debt, explore refinancing at a lower interest rate.

A lower rate could help you save money in the long run. You may even be able to accelerate your repayment, depending on the terms you select when you refinance.

14. Sell Some Stuff to Make Money

If you’ve done some decluttering of the extra items around your house, think about selling the things you no longer need. They’ll go to a new home, and you’ll get some extra cash in your pocket.

15. Consider Cutting Costly Habits

The cost of certain habits can really add up. If you’ve been meaning to quit smoking or stop impulse shopping, for instance, use financial planning as an incentive to do so. You’ll save money and potentially get on the road to a happier, even healthier, you.

16. Talk about Money with Your Partner

Set aside some time to discuss finances with your significant other. Discuss goals for your money, spending habits, repaying debts, and so on. Conversations like this help make sure you’re both on the same page, and can help prevent money conflicts in the future.

17. Figure Out Your Market Value

Has it been a while since you’ve had a pay raise? Do some research to determine what you’re worth and how much you should be making. Then, use that information to ask your boss for a salary increase, or to find a job that pays you more.

18. Negotiate Credit Card APR

If your credit cards carry a high-interest rate, ask the credit card company to lower your APR to help you manage your debt. If you have a low credit score, they may say no. But you won’t know unless you ask.

Even if they turn you down, speaking to the credit card company may be helpful. For instance, they should be able to tell you what you can do to make lowering your interest rate more likely.

19. Use Your FSA Funds

If flexible spending accounts (FSAs) are part of your employee benefits package, be sure to use them for doctors appointments or qualified purchases. Money in these accounts may not carry over year to year, so if you don’t use it, you lose it.

20. Cancel Unused Subscriptions and Memberships

Did you subscribe to a music service or for a gym membership you rarely use? A 2022 survey found that 42% of people pay for a subscription they don’t use and have forgotten about. Score extra savings by canceling unused subscriptions.

21. Talk to a Financial Planner

When it comes to making money moves, you don’t have to go it alone. A financial planner can help you develop your goals and suggest strategies to help you reach them. You can look for a qualified planner with an hourly fee you can afford. It may be worth it if it can help you save more overall.

22. Consider a New Bank Account

As you take steps to improve your financial health, it makes sense to evaluate your bank account. There may be options that offer you more, such as a minimum balance or higher interest. Explore what’s out there to see what’s most beneficial for you.

The Takeaway

If you’re ready to switch to a new bank account, a SoFi Checking and Savings account could help you reach your money goals. You’ll earn a competitive APY and pay no account fees.

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.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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

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

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.
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Apr
17
2023
Guide to Negotiating Financial Aid

Can You Negotiate Financial Aid?

By | Family Finances, Student Loans, student_loan | Comments Off on Can You Negotiate Financial Aid?

After you file the Free Application for Federal Student Aid (FAFSA®), you’ll receive a financial aid award from the colleges to which you’ve been granted admission. You may receive scholarships, grants, and loans. When you receive your financial aid awards from institutions, they may not cover every dollar of tuition, room, board, and fees. As a result, you may find that you cannot afford a particular institution.

It may be possible to negotiate your financial aid award with the financial aid office at each institution you’re considering. Continue reading for more information about how to negotiate financial aid awards and how to get more money from colleges.

What Is Financial Aid?

Financial aid is money you receive based on your financial aid award. There are different types of financial aid components that make up a financial aid award. You may want to think of it as a puzzle that could include grants, scholarships, work-study, and federal student loans. You can accept and decline different parts of the “puzzle” to create your own financial aid award. Applying for student loans, grants, certain scholarships, and work-study involves filing the FAFSA.

Grants and scholarships are forms of financial aid that you don’t have to pay back. Grants typically come from the federal government, states or colleges, and the amount you can get in grant money depends on your need and the type of institution you attend.

Scholarships on a financial aid award letter typically come from the institution for various reasons. They may be based on merit (for example, for good grades) or on talents you possess, such as music or athletic talent.

Work-study is a type of financial aid in which students who have financial need qualify for part-time employment on campus.

Federal student loans may also appear on your financial aid award. Federal student loans, which come from the federal government, must be repaid — with interest.

Every college offers a different amount of financial aid to the same student. In other words, if you apply and get accepted to five different schools, you will likely get five different aid awards. It’s worth learning more about how financial aid works at each institution by asking a financial aid professional at each institution you visit.

Recommended: FAFSA Guide

Is Your Financial Aid Amount Negotiable?

Yes, you can negotiate your financial aid amount. However, it’s important to realize that some pieces of the financial aid award are not negotiable. For example, first-year undergraduate dependent students can qualify for no more than $5,500 in subsidized and unsubsidized federal student loans. No more than $3,500 of this amount may be in subsidized loans.

In addition, it’s also important to understand that colleges may be limited in the amount they can offer you for additional financial aid. Even if you ask for all the gaps to be covered between the total cost and the amount you receive in financial aid, colleges may only be able to offer a small amount of additional financial aid.

5 Tips for Negotiating Financial Aid

Let’s take a look at a few tips for negotiating financial aid, from the presentation process to writing a letter for financial aid, as well as providing relevant supporting documentation.

1. Present the Financial Aid Office With a Specific Amount You Need

You can present the financial aid office with a specific amount you need, but before you do that, it’s a good idea to think through a few other factors beyond the numbers you see on your financial aid award. When you review financial aid awards, it’s important to go over each one with a fine-toothed comb.

Each financial aid award will list the financial aid you’ve received, but it’s a good idea to get an idea of the full costs, including tuition, room, board, and fees, before you choose a college. Some fees may not pop up until later, such as lab fees, club organization dues, athletic fees, parking fees, and more. Ask the financial aid office for a comprehensive list of fees that might crop up.

It’s also important to factor in tuition increases. You can ask the financial aid office for the average increase amount.

Note that scholarships usually don’t increase as tuition increases occur, which means that if scholarships don’t change and tuition increases, you’ll be responsible for making a larger tuition payment. Some schools do freeze tuition, so find out more about how that works at the institutions you’re considering attending.

After you’ve done all your homework, you can then decide on a specific amount of money you’d like to see from each financial aid office.

2. Put Everything in Writing

Ask the financial aid department about their financial aid appeal process or consult the website of the financial aid office to find out about the supportive documentation you need to provide to qualify for more financial aid. Following directions may help increase your chances of success.

Write a high-quality financial aid appeal letter to the director of financial aid, using a business letter format, and a formal tone — skip the fancy fonts! Your letter should be as businesslike and respectful as possible, but very direct. Explain how interested in the school you are and identify the forms you’ve submitted.

3. Explain Why You Should Get More Money

It’s important to shore up your desire to obtain more financial aid by demonstrating a need for more financial aid. In other words, you have to have a good reason to need more financial aid — in most cases, you can’t just say you simply want more financial aid. Financial aid offices also will likely not award you more aid just because a parent is unwilling to contribute to education costs or file the FAFSA or if a parent does not claim the student as a dependent.

The institutions you’d like more money from could require you to fill out a special circumstances form, which is a form that shares situations that affect your family’s ability to pay for college. A special circumstances form shares your family’s unique financial circumstances with the institution when you appeal.

The following situations may qualify as special circumstances and could allow you to receive more financial aidIf your family is:

•   supporting multiple households,

•   has experienced a one-time jump in income,

•   has secondary or elementary school expenses,

•   had to make a retirement fund withdrawal for emergency purposes,

•   has funeral expenses or unreimbursed medical and dental expenses, educational debt, a job loss, or has had a significant reduction in income.

Read the instructions carefully to learn how to successfully submit the special circumstances form for your institution.

4. Provide Any Relevant Supporting Documents

When writing your letter and filling out your special circumstances form, you’ll likely need to provide evidence of your family’s situation, which could include:

•   Divorce documentation or decree

•   Court documentation to substantiate a separation

•   Copy of parent marriage certificate

•   Copy of family member death certificate

•   Letter from employer documenting the last date of employment if no longer employed

•   Documentation of year-to-date earnings, unemployment, and/or disability benefits

•   Copies of three most recent paycheck stubs

•   Documentation of termination of child support payments

•   Documentation one-time income or benefits

•   Documentation of medical expenses not covered by insurance for family members

•   Documentation of elementary or secondary school tuition paid

Follow the instructions your school’s financial aid office includes.

5. Follow Up

You may need to allow several weeks for the financial aid appeal to be processed (sometimes four to six weeks), but if you don’t hear back from the financial aid office about a change in your award letter, you may want to reach back out to make sure you’ve submitted all the required documentation. You may have forgotten a critical component of the financial aid appeal, which could hold up a final decision.

Alternatives to Financial Aid

While financial aid can help you get through school, it’s not the only way to pay for college. There are alternatives to relying completely on financial aid to get through school. Consider working while in school, asking relatives for help, and accessing private student loans. Let’s take a look.

Working While in School

Working while in school or on breaks during the summer can help alleviate some of the costs of college. You may not be able to rely on the work-study award to pay for the full cost of college because work-study is limited to a specific number of hours, as determined by your financial aid award.

Finding a part-time job can help pay for a wide variety of college expenses and can offer valuable professional experiences.

Asking Relatives for Help

Relatives may be willing to help you pay for college. When parents, aunts, uncles, grandparents or other relatives chip in, it can alleviate a chunk of college costs, particularly when combined with a part-time job while in school.

It’s a good idea to make sure both you and your relative(s) agree that these types of payments are gifts, not loans. You don’t want to be surprised by a relative that expects repayment as soon as you’re done with school. You may even want to write down the amount of money, terms, and conditions involved, and have both parties agree and sign before you accept any money for college.

Private Student Loans

Private student loans are loans that, unlike federal student loans, do not come from the federal government. Private student loans typically come from private organizations, such as banks, credit unions, and other organizations. You can also check with the college or university you plan to attend for information about private student loans.

Like federal student loans, however, private student loans must be repaid along with interest payments. Repayment terms and benefits vary depending on the lender, and interest rates could be fixed or variable. (All types of federal student loans offer fixed interest rates only.)

Unlike federal student loans, private student loans may not offer the borrower protections afforded to their federal counter parts, so they are generally considered as a last-resort option. Take the time to shop around among several private student lenders before you land on the right one for you. Learn more about private student loans in our private student loans guide.

Explore SoFi’s Private Student Loan Options

If you think you may need to cover some of your college costs with a private student loan, SoFi offers private loans that could help you pay for your education. Explore and compare federal and private loan options, terms, and interest rates to determine the best option for your educational needs.

Worried about rising interest rates? SoFi offers competitive interest rates for qualifying private student loan borrowers.

FAQ

Can you negotiate your financial aid offer?

Yes, you can negotiate your financial aid offer. Check with the college, university, or other postsecondary institution(s) you receive a financial aid award about the process before you attempt to negotiate. The institution may have very specific requirements in order to negotiate your award.

How can I negotiate more money for college?

Requesting more financial aid can be done by following the financial aid appeals process at the college(s) you’re considering. Typically, you can present a letter to the financial aid office, fill out the special circumstances document provided by the institution, and provide supporting documentation. Follow up if you haven’t heard back from the institution between four and six weeks.

How do I ask a college to match the financial aid another school offered me?

If you received two financial aid awards from two colleges, you can use a negotiating college tuition technique by showing the school that offers you less the better aid award from the other school. Doing this may make the most sense if they are similar institutions, such as if they are both private liberal arts colleges or if they are both large state universities. You’re most likely going to get a better response if you compare apples to apples instead of apples to oranges.

Photo credit: iStock/jacoblund

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


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).


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.

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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Mar
23
2023
Simple IRA vs. Traditional IRA

Is a SIMPLE IRA the Same as a Traditional IRA?

By | Growing Wealth, invest, Investing, Preparing for Retirement | Comments Off on Is a SIMPLE IRA the Same as a Traditional IRA?

One of the most popular retirement accounts is an IRA, or Individual Retirement Account. IRAs allow individuals to put money aside over time to save up for retirement, with tax benefits similar to those of other retirement plans.

Two common IRAs are the SIMPLE IRA and the Traditional IRA, both of which have their own benefits, downsides, and rules around who can open an account. For investors trying to decide which IRA to open, it helps to know the differences between SIMPLE IRAs and Traditional IRAs.

SIMPLE IRA vs Traditional IRA: Side-by-Side Comparison

Although there are many similarities between the two accounts, there are some key differences. This chart details the key attributes of each plan:

SIMPLE IRA Traditional IRA
Offered by employers Yes No
Who it’s for Small-business owners and their employees Individuals
Eligibility Earn at least $5,000 per year Under 70 ½ years old and earned income in the past year
Tax deferred Yes Yes
Tax deductible contributions Yes, for employers and sole proprietors only Yes
Employer contribution Required No
Fee for early withdrawal 10% plus income tax, or 25% if money is withdrawn within two years of an employer making a deposit 10% plus income tax
Contribution limits $15,500 in 2023
$16,000 in 2024		 $6,500 in 2023
$7,000 in 2024
Catch-up contribution $3,500 additional per year for people 50 and over $1,000 additional per year for people 50 and over

SIMPLE IRAs Explained

The SIMPLE IRA, which stands for Savings Incentive Match Plan for Employees, is set up to help small-business owners help both themselves and their employees save for retirement. It’s a retirement plan that small businesses with fewer than 100 employees can offer employees who earn at least $5,000 per year.

A SIMPLE IRA is similar to a Traditional IRA, in that a plan participant can make tax-deferred contributions to their account, so that it grows over time with compound interest. When the individual retires and begins withdrawing money, then they must pay income taxes on the funds.

With a SIMPLE IRA, both the employer and the employee contribute to the employee’s account. Employers are required to contribute in one of two ways: either by matching employee contributions up to 3% of their salary, or by contributing a flat rate of 2% of the employee’s salary, even if the employee doesn’t contribute. With the matching option, the employee must contribute money first.

There are yearly employee contribution limits to a SIMPLE IRA: in 2023, the annual limit is $15,500, with an additional $3,500 in catch-up contributions permitted for people over age 50. In 2024, the annual limit is $16,000, with an additional $3,500 in catch-up contributions permitted for people over age 50.

Benefits and Drawbacks of SIMPLE IRAs

It’s important to understand both the benefits and downsides of the SIMPLE IRA to make an informed decision about retirement plans.

SIMPLE IRA Benefits

There are several benefits — for both employers and employees — to choosing a SIMPLE IRA:

•   For employers, it’s easy to set up and manage, with online set-up available through most banks.

•   For employers, management costs are low compared to other retirement plans.

•   For employees, taxes on contributions are deferred until the money is withdrawn.

•   Employers can take tax deductions on contributions. Sole proprietors can deduct both salary and matching contributions.

•   For employees, there is an allowable catch-up contribution for those over 50.

•   For employers, the IRA plan providers send tax information to the IRS, so there is no need to do any reporting.

•   Employers and employees can choose how the money in the account gets invested based on what the plan offers. Options may include mutual funds aimed toward growth or income, international mutual funds, or other assets.

SIMPLE IRA Drawbacks

Although there are multiple benefits to a SIMPLE IRA, there are some downsides as well:

•   Employers must follow strict rules set by the IRS.

•   Other employer-sponsored retirement accounts have higher limits, such as the 401(k), which allows for $22,500 per year in 2023 and $23,000 in 2024. (Check out our IRA calculator to see what you can contribute to each type of IRA.)

•   If account holders withdraw money before they reach age 59 ½, they must pay a 10% fee and income taxes on the withdrawal. That penalty jumps to 25% if money is withdrawn within two years of an employer making a deposit.

•   There is no option for a Roth contribution to a SIMPLE IRA, which would allow account holders to contribute post-tax money and avoid paying taxes later.

Get a 1% IRA match on rollovers and contributions.

Double down on your retirement goals with a 1% match on every dollar you roll over and contribute to a SoFi IRA.1

1Terms and conditions apply. Roll over a minimum of $20K to receive the 1% match offer. Matches on contributions are made up to the annual limits.

What Is a Traditional IRA?

The Traditional IRA is set up by an individual to contribute to their own retirement. Employers are not involved in Traditional IRAs in any way. The main requirements to open an IRA are that the account holder must have earned some income within the past year, and they must be younger than 70 ½ years old at the end of the year.

Pros and Cons of Traditional IRAs

When it comes to benefits and downsides, there’s not too much of a difference between Traditional vs. SIMPLE IRAs, given what an IRA is. That being said, there are a few that are unique to this type of plan.

Traditional IRA Pros

Some of the upsides of a Traditional IRA include:

•   It allows for catch-up contributions for those over age 50.

•   One can choose how the money in the account gets invested based on what the plan offers. Options may include mutual funds aimed toward growth or income, international mutual funds, or other assets.

•   Contributions are tax-deferred, so taxes aren’t paid until funds are withdrawn. If you’re hoping to pay taxes now instead of later, you might weigh a Traditional vs. Roth IRA.

Traditional IRA Cons

Meanwhile, downsides to a Traditional IRA include:

•   They have much lower contribution limits than a 401(k) or a SIMPLE IRA, at $6,500 in 2023 and $7,000 in 2024.

•   Penalties for early withdrawal are also the same: if you withdraw money before age 59 ½, you’ll pay a 10% fee plus income taxes on the withdrawal.

Is a SIMPLE IRA or Traditional IRA Right for You?

The SIMPLE IRA and Traditional IRA are both individual retirement accounts, but the SIMPLE is set up through one’s employer — typically a small business of 100 people or less. The Traditional IRA is set up by an individual. In other words, whether a SIMPLE IRA is an option for you will depend on if you have an employer that offers it.

There are many similarities in the attributes of the plans, if you’re choosing between a SIMPLE IRA vs. Traditional IRA. However, two major distinctions are that the SIMPLE IRA requires employer contributions (though not necessarily employee contributions) and allows for a higher amount of employee contributions per year.

Can I Have Both a SIMPLE IRA and a Traditional IRA?

Yes, it is possible for an individual to have both a SIMPLE IRA through their employer and also a Traditional IRA on their own — though they may not be able to deduct all of their Traditional IRA contributions. The IRS sets a cap on deductions per calendar year.

In 2023, single people with an AGI (adjusted gross income) of more than $73,000 are restricted to a partial deduction; those with AGI above $83,000 may not take a deduction at all. Married couples filing jointly with an AGI of $116,000 to $136,000 may take a partial deduction; those with AGI above $136,000 may not take a deduction at all.

In 2024, single people with an AGI (adjusted gross income) of more than $77,000 are restricted to a partial deduction; those with AGI above $87,000 may not take a deduction at all. Married couples filing jointly with an AGI of $123,000 to $143,000 may take a partial deduction; those with AGI above $143,000 may not take a deduction at all.

Can You Convert a SIMPLE IRA to a Traditional IRA?

If you’re hoping to convert a SIMPLE IRA to a Traditional IRA, you’re in luck — you can roll over a SIMPLE IRA into a Traditional IRA. However, you can’t roll over the funds from a SIMPLE IRA to a Traditional IRA within the first two years of opening a SIMPLE IRA. Otherwise, you’ll get hit with a 25% penalty in addition to the regular income tax you must pay on your withdrawal.

Once that two-year period is up, however, you can roll over the money from your SIMPLE IRA — even if you’re still working for that employer. Just note that you can only roll over money from a SIMPLE IRA one time within a 12-month period.

Can You Max Out a Traditional and SIMPLE IRA the Same Year?

While you cannot max out a SIMPLE IRA and another employer-sponsored retirement plan like a 401(k), you can max out both a Traditional IRA and a SIMPLE IRA.

The maximum contribution for a SIMPLE IRA in 2023 is $15,500 (plus $3,500 in catch-up contributions), while the maximum for a Traditional IRA is $6,500 (plus $1,000 in catch-up contributions). This means that you could contribute a total of $22,000 across both plans in a year — or $26,500 if you’re 50 or older.

The maximum contribution for a SIMPLE IRA in 2024 is $16,000 (plus $3,500 in catch-up contributions), while the maximum for a Traditional IRA is $7,000 (plus $1,000 in catch-up contributions). This means that you could contribute a total of $23,000 across both plans in a year — or $27,500 if you’re 50 or older.

Are SIMPLE IRAs Most Similar to 401(k) Plans?

There are a lot of similarities between SIMPLE IRAs and 401(k) plans given that they are both employer-sponsored retirement plans. However, while any employer with one or more employees can offer a 401(k), SIMPLE IRAs are reserved for employers with 100 or fewer employees. Additionally, contribution limits are lower with SIMPLE IRAs than with 401(k) plans.

Another key difference between the two is that while employers can opt whether or not to make contributions to employee 401(k), employer contributions are mandatory with SIMPLE IRAs. On the employer side, SIMPLE IRAs generally have fewer account fees and annual tax filing requirements.

Opening an IRA With SoFi

Understanding the differences between retirement accounts like the SIMPLE and Traditional IRA is one more step in creating a personalized retirement plan that works for you and your goals. While a SIMPLE IRA is only an option if your employer offers it, you’ll want to weigh the pros and cons of a SIMPLE IRA vs. Traditional IRA if both are on the table for you. As we’ve covered, the two types of IRAs share many similarities, but a SIMPLE IRA is not the same as a Traditional IRA.

If you’re looking to start saving for retirement now, or add to your investments for the future, SoFi Invest® online retirement accounts offer both Traditional and Roth IRAs that are simple to set up and manage. By opening an IRA with SoFi, you’ll gain access to a broad range of investment options, member services, and a robust suite of planning and investment tools.

Find out how to further your retirement savings goals with SoFi Invest.

FAQ

Do you pay taxes on SIMPLE IRA?

Yes, you will pay taxes on a SIMPLE IRA, but not until you withdraw your funds in retirement. You’ll generally have to pay income tax on any amount you withdraw from your SIMPLE IRA in retirement. However, if you make a withdrawal prior to age 59 ½, or if money is withdrawn within two years of an employer making a deposit, you’ll have to pay income taxes then, alongside an additional tax penalty.

Is a SIMPLE IRA better than a Traditional IRA?

When comparing a SIMPLE IRA vs. traditional IRA, it’s important to understand that each has its pros and cons. If your employer offers a SIMPLE IRA, they require employer contributions, and they have higher contributions. At the end of the day, though, both allow you to save for retirement through tax-deferred contributions.

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.

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.


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.

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Dec
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2022
Using a Credit Union to Refinance Student Loans

Credit Union Student Loan Refinancing: All You Need To Know

By | Fresh Out of School, Student Loans, student_loan | Comments Off on Credit Union Student Loan Refinancing: All You Need To Know

In addition to typical banking and lending services, some credit unions also offer student loan refinancing opportunities. Refinancing student loans means that you pool all or some of your existing federal or private student loans into a new loan with a new, private lender. The goal is to achieve some sort of advantage when you refinance: for example, a lower interest rate or a lower monthly payment by extending your loan term.

It’s important to note that if you refinance federal student loans, you will forfeit access to federal repayment plans, such as the Standard, Graduated, and Extended Repayment plans.

Keep reading to learn more about how credit unions differ from traditional banks and why you may want to consider a credit union for student loan refinance.

How Credit Unions Differ from Traditional Banks

A credit union is a financial services cooperative that exists to serve its members. Products and services of a credit union typically include member education, financial planning help, mobile and online banking, checking and savings accounts, and the usual menu of loans.

Banks deliver many of the same types of services as credit unions. Their main goals are to benefit stakeholders and customers. But credit unions differ from traditional banks in one main way — they are nonprofit, whereas traditional banks are for-profit. Take a look at the comparison table below to learn more about the differences between credit unions vs. banks.

Credit Unions

 Banks
Nonprofit organizations For-profit institutions
Must be a member; they are member-owned Anyone can be a customer; they are owned by shareholders
Dividends issued to members and also to benefit capital development for the overall benefit of members Stockholders receive dividends
More-limited product offerings Wide variety of product offerings
Deposit insurance, which helps provide insurance in case of institution failure, is provided by the National Credit Union Administration (NCUA) Deposit insurance in case of bank failure is provided by the FDIC
May offer lower rates and better fees Rates and fees may be higher due to for-profit status
Fewer locations and ATMs More branches and ATMs

Pros and Cons of Refinancing Student Loans With a Credit Union

Credit unions can offer benefits that other lenders might not give you, but there are some downsides to watch out for as well. It’s a good idea to take a look at both the pros and cons before refinancing student loans with a credit union.

Pros of Credit Union Refinancing

 Cons of Credit Union Refinancing
May charge lower interest rates and fees May encounter limits on how much you can refinance
Credit unions have a greater understanding of member needs (such as alumni, military, or community credit unions) May offer less flexible repayment options
May earn discounts if you’re already a member or if you make your loan payments on time Interest rates and fees may cost more than with other types of financial institutions
Potentially better customer service due to dedication to members compared to large banks or online lenders Must apply to become a credit union member

If you’re looking for more in-depth information, SoFi offers a comprehensive student loan refinancing guide.

Finding a Credit Union That Refinances Student Loans

Which credit unions refinance student loans? It’s a good idea to consider a wide variety of lenders before you land on a credit union, including national credit unions, local credit unions, alumni credit unions, and even church credit unions. Not every credit union offers student loan refinancing, so you’ll have to do a little homework based on where you’re likely to be able to tap into membership opportunities.

By the time you finish comparing and contrasting all of your options (including interest rates), you’ll have a better idea of what type of lender you should choose. In addition to searching around for the right lender, you can do a few other things to strengthen your overall profile.

Review your FICO® credit score, the three-digit number that tells lenders how well you handle debt. Your credit score can reveal the rate and terms you will likely receive. It’s a good idea to try for the highest credit score you can get. The higher your credit score, the more favorable your terms will be, which can help you save a significant amount of money over time.

Consider paying down other debts you have, such as personal loans or credit card debt. Lenders take a look at your debt-to-income (DTI) ratio, which compares your monthly debt to the income you bring in. The lower your DTI, the better your opportunities may be.

You can also assemble the types of documents that you know your lender may need, including government-issued identification (such as your driver’s license), pay stubs from your employer, and recent tax returns. It may speed up the process of loan approval once you apply for a student loan refinance with the credit union.

Recommended: What Is a Bad Credit Score?

Comparing Credit Union Loan Terms

Loan terms refer to all the conditions and options available to you when borrowing money. The key elements you should look for in a refinance lender are:

•   Interest rate: What interest rate will you receive from the lender? You want to be able to get a lower interest rate than what you have on your current loan(s). The lower the interest rate, the more money you’ll be able to save on your loan over time.

•   Payoff amount: Know the total “payoff amount” for each loan offer. Getting a round figure from each lender will let you determine the interest amount you’ll pay over your entire loan period. A student loan refinancing calculator can also help you calculate your final costs. You can also find out whether a 20-year student loan refinance or 30-year student loan refinance makes sense for your needs.

•   Fees. Some lenders charge fees to help cover the cost of servicing a loan. These may include origination fees, prepayment penalties, and late fees.

Besides loan terms, consider asking about flexible repayment options and customer service:

•   Flexible repayment options: What happens if you have trouble making your payments? Will your lender work with you? It’s a good idea to ask questions about the types of repayment options they offer in the case of a job loss or a demotion, for example.

•   Customer service: Will you get good customer service from the credit union you’re considering? Ask for references from current customers. You may also know of student loan refinance customers in your community who already use a particular credit union and who can talk to you about their experiences.

Recommended: When Should I Refinance My Student Loans?

Alternatives to Credit Unions for Student Loan Refinancing

What alternatives to credit unions do you have, and should you refinance student loans in the first place? You can refinance with banks, online lenders, and other financial institutions.

Some online banks and lenders differ in that they cannot accept cash deposits (to savings or checking accounts) from customers. Or they may only offer loans, lines of credit, and credit cards. Because they don’t accept cash deposits, online lenders face less stringent government requirements than traditional banks and credit unions.

Before you make a final decision about a credit union student loan refinance or alternative banking solution, take a look at the interest rates, overall payoff amounts, repayment options, and customer service reviews.

The Takeaway

You can refinance private student loans with a credit union (as well as federal student loans), but it isn’t your only option. Credit unions differ from traditional banks due to their nonprofit status, membership requirements, dividends offered to members, limited product offerings, and backing by the NCUA rather than the FDIC. Shop around to find the best loan terms (interest rate, repayment period, and fees) before you settle on a lender.

If you think refinancing might make sense for your situation, consider refinancing your student loans with SoFi. You can refinance online and pay zero fees.

Check out student loan refinance rates offered by SoFi.


Student Loan Refinancing Tips

1.   Refinancing student loans is a way to lower your monthly payments by either getting a lower interest rate and/or extending the loan term. Please note: If you refinance a federal loan, you will no longer have access to federal protections and benefits.

2.   When refinancing a student loan, you may shorten or extend the loan term. Shortening your loan term may result in higher monthly payments but significantly less total interest paid. A longer loan term typically results in lower monthly payments but more total interest paid.

3.   It might be beneficial to look for a refinancing lender that offers extras. SoFi members, for instance, can qualify for rate discounts and have access to career services, financial advisors, networking events, and more — at no extra cost.

Photo credit: iStock/SDI Productions

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.


Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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

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

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