Sep
06
2023
student writing in notebook

How to Help Your Child with SAT Practice

By | Going to College, Life & Career, Student Loans | Comments Off on How to Help Your Child with SAT Practice

Can you help your child study for the SAT? Yes!

When it comes to gearing up for college, parents can play a major role in supporting their child’s success. Of course, ultimately, it’s the student who’s applying for admission. So, most of the heavy lifting — like practicing for the SAT — will fall to the high schooler. But, as your child goes through the process, you can serve as a couch, cheerleader and time-manager — assisting with test prep, scheduling practice sessions, and maintaining motivation.

Read on for simple guidelines on how you can help your child with SAT practice and help ensure they put their best foot forward on testing day.

Wondering Where to Begin?

You may want to start by familiarizing yourself with the college testing options. The SAT and ACT are the two most widely accepted standardized tests used in U.S. college admissions. Is one a better fit for your child? While similar, there are differences in how each test is structured and scored. For parents and students who want a better feel for the two tests, you can find free online practice assessments for both the SAT and the ACT — including sample questions and scoring.

If you took the SAT back in high school, keep in mind that the test underwent major revisions in 2016. And, in 2021, the College Board (the nonprofit organization that administers the test) dropped the essay and subject tests.

Generally, the College Board advises first-timers to take the SAT in the spring of their high school junior year. This way, they can try again in the fall (if they want or need to improve their score) and still meet most colleges’ application deadlines. Parents can find information about SAT test dates and deadlines, test-center locations, and costs on the College Board site.


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

Creating a Plan for SAT Practice

With the exact test and date chosen, parents and students might next turn their focus to SAT practice. Practice can span activities like taking sample tests, understanding the sorts of questions that are commonly asked, and figuring out how the test is scored.

Setting Baseline and Goal Scores

When starting out, many students choose to take a free practice test. This gives them a baseline score and can help identify tough topics they need to brush up on. Practice tests can also help you and your teen pinpoint the specific types of questions that tend to trip them up over and over.

Knowing the practice-test score can help students set an ambitious-yet-realistic goal score for the official test. Other supportive figures on your child’s “SAT team” (relatives, teachers, guidance counselors, mentors, or tutors) can also help them identify an achievable and motivational target score to work towards.

Recommended: ACT vs. SAT: Which Do Colleges Prefer?

Creating an SAT Prep Schedule

Beginning SAT practice earlier can help alleviate your teen’s anxiety in the buildup to the scheduled test. The nonprofit Khan Academy, which partners with the College Board to help students prepare for the SAT, recommends starting test-prep about three months before taking the official test.

Months of SAT practice might seem a tad extreme, but it’s key to remember that some students need longer than others to get up to speed on the subjects covered in the SAT. Building in a cushion of prep time also gives teens ample time to adapt to the standardized test format — allowing them to sniff out the common types of questions asked and get used to the time constraints required by the SAT.

Some students can cram last-minute for the SAT and still earn a solid score. But many of the best test-taking and SAT study strategies call for repeated practice over multiple weeks. Given months instead of a few weeks to get ready, you can set up practice sessions that mimic test-like conditions, encouraging your child to further hone their time-management and concentration skills.

Leading up to the test date, families may also benefit from a shared calendar that includes important SAT deadlines as well as other school, work, and social events. A shared calendar can help students dedicate regular study windows — when they’ll work alone, with a parent, or with a tutor — that won’t clash with prior commitments.

To Push or Not to Push?

Some teens are disciplined studiers and may already have a test-prep routine that works for them. Others might need occasional encouragement (or more concrete guideposts) from a parent or educator to set aside adequate time for SAT practice.

Some students also respond well to personalized pointers provided by a test-prep service or tutor, whereas others value a more DIY or independent approach to SAT prep — perhaps working off a commercial study guide or online testing site. (Khan Academy, for instance, offers tailored practice plans, videos, test-taking tips, and other official content created in partnership with the College Board.) In either scenario, parents can help their child determine which method of test-prep works best with their study habits.

Recommended: College Planning Guide for Parents

What About Paid SAT Prep Services?

When deciding whether to pay for a test-prep service, families may want to ponder a few factors. You might begin by comparing a child’s baseline score (on a practice test) with the goal score they’re hoping for on the actual test day. This might help you decide if investing in a professional SAT prep course would be worth the cost (some services cost hundreds or even thousands of dollars). Another factor to consider is the average SAT scores of applicants at your child’s target schools (compared to their current scoring range).

You might also want to investigate whether any test-prep services are already offered at your child’s school or any local educational organizations, which may be free or low cost.

When looking at paid prep services, you may want to consider the best study conditions for your student’s personality and academic strengths — some approaches offer more guidance, while others stress independent practice.

Also consider: Would your child benefit from a structured schedule and in-person classes? Or, would they prefer a more independent study approach? You might want to consult with a guidance counselor or teacher for input before signing up and paying for a private SAT prep service. Family friends with children already in college might also offer an opinion based on their previous experience. (But, be sure to double-check this advice with any recent changes to the SAT.)

Recommended: Ultimate College Application Checklist

What Else Can Parents Do for SAT Practice?

Perhaps the most important role parents can have in helping their children prepare for the SAT is to do what they’ve always done — and that’s to support and encourage their child’s growth. Here are some ways parents might motivate students, helping them to stay on track toward that college-admission goal.

Avoid Adding to the Stress

Students can feel a great deal of pressure when preparing for the SAT. They may fret about disappointing their parents’ or teachers’ expectations. Some might dread feeling embarrassed if they score lower than a sibling or classmates. And, if a student has dreamed about attending a specific college or pursuing a precise career path, they may worry that the “wrong score” will sabotage their future plans.

Given the potential for SAT practice to turn into a psychological pressure-cooker, you may want to remind yourself that your words and deeds can lessen or intensify a child’s stress. Raising “concerns” about your teen’s current scores and/or pushing your child to excel or “do better” could increase your child’s test anxiety (and potentially make it harder for them to learn new material).

To minimize the at-home testing drama, you may want to avoid showing disappointment or frustration about practice test scores. It may be more helpful to celebrate incremental successes during weekly or daily practice sessions — honoring the progress being made towards the goal, not the distance still left to run. Gentle reminders that it’s possible to retake the SAT might also reduce a child’s overall testing anxiety.

Encouraging Healthy Habits

Studying late into the night or having a jam-packed schedule can leave high schoolers feeling burnt out. To avoid SAT practice burnout, consider instituting a regular “timeout” from test prep — whether it’s a quick snack break or carving out down time for a walk around the block. Parents can help kids stay healthy by providing nourishing meals, scheduling time for exercise and other social activities, providing plenty of water and nutritious snacks, and helping their teens get ample rest each day.

Recommended: 10 Ways to Prepare for College

Providing a Good Study Space

To help your child set up a focused study environment, you’ll want to first identify a quiet space for studying and practice sessions. Next, you can help your child gather all the study guides, calculators, pencils, paper or computers they’ll need to prep.

In addition, you may want to encourage your child to download an SAT prep app — this will allow them to practice during free time or when they’re riding the bus. Many apps offer practice problems or a “question of the day.” If time is tight, a student can still squeeze in some studying in down moments.

Recommended: How Much Does GPA Matter When Applying to College?

Keeping Things in Perspective

Parental pep talks can help test-engrossed students to keep things in perspective. Although an SAT score is a significant factor in many college admissions decisions, it’s not the only (or primary) factor universities take into consideration when evaluating applicants. Most admissions committees review a student’s academic record, school and community involvement, personal statement, and letters of support.

Some schools have even moved to a “test optional” admissions policy in recent years. This means students are not required to submit an SAT or ACT score with their application. Open communication about the college admissions process can help students to focus on the short-term tasks at hand.


💡 Quick Tip: Would-be borrowers will want to understand the different types of student loans that are available: private student loans, federal Direct Subsidized and Unsubsidized loans, Direct PLUS loans, and more.

Getting Started

The SAT isn’t the only aspect of college planning students might want or need help with. You may be enlisted to lend a hand with researching schools to apply to, choosing a major, making college visits, and proof-reading essays and applications.
Your child will also likely need your financial help to cover the cost of attendance at their selected college. Fortunately, both students and parents have a number of resources that help make college more affordable, including financial aid.

To apply for financial aid, you’ll need to fill out the Free Application for Federal Student Aid (FAFSA). This will let you know if you are eligible for aid, which comes in the form of grants, scholarships, work-study, and federal student loans (which may be subsidized or unsubsidized). If those do not cover your costs, you may be able to fill in the gaps with a private student loan.

Private student loans are available through private lenders, including banks, credit unions, and online lenders. Rates and terms vary, depending on the lender. Generally, borrowers (or parent cosigners) who have strong credit qualify for the lowest rates.

Keep in mind, though, that private loans may not offer the borrower protections — like income-based repayment plans and deferment — that automatically come with federal student loans.

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

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


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 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).


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.

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


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

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Sep
05
2023

Averaging Down Stocks: Meaning, Example, Pros & Cons

By | Growing Wealth, invest, Investing | Comments Off on Averaging Down Stocks: Meaning, Example, Pros & Cons

Averaging down stocks refers to a strategy of buying more shares of a stock you already own after that stock has lost value — effectively buying the same stock, but at a discount. In other words, it’s a way of lowering the average cost of a stock you already own.

It’s similar to dollar-cost averaging, where you invest the same amount of money in the same securities at steady intervals, regardless of whether the prices are rising or falling.

While this strategy has a potential upside — if the stock price then rises again — it does expose investors to greater risk.

What Is Averaging Down?

By using the strategy of averaging down and purchasing more of the same stock at a lower price, the investor lowers the average price (or cost basis) for all the shares of that stock in their portfolio.

So if you buy 100 shares at one price, and the price drops 10%, for example, and you decide to buy 100 more shares at the lower price, the average cost of all 200 shares is now lower.

💡 Quick Tip: Look for an online brokerage with low trading commissions as well as no account minimum. Higher fees can cut into investment returns over time.

Example of Averaging Down

Consider this example: Imagine you’ve purchased 100 shares of stock for $70 per share ($7,000 total). Then, the value of the stock falls to $35 per share, a 50% drop.

To average down, you’d purchase 100 shares of the same stock at $35 per share ($3,500). Now, you’d own 200 shares for a total investment of $10,500. This creates an average purchase price of $52.50 per share.

Potential of Gain Averaging Down

If the stock price jumps to $80 per share, your position would be worth $16,000, a $5,500 gain on your initial investment of $10,500. In this case, averaging down helped boost your average return. If you’d simply bought 200 shares at the initial price of $70 ($14,000), you’d only see a gain of $2,000.

Potential Risk of Averaging Down

As with any strategy, there’s risk in averaging down. If, after averaging down, the price of the stock goes up, then your decision to buy more of that stock at a lower price would have been a good one. But the stock continues its downward price trajectory, it would mean you just doubled down on a losing investment.

While averaging down can be successful for long-term investors as part of a buy-and-hold strategy, it can be hard for inexperienced investors to discern the difference between a dip and a warning sign.

Why Average Down on Stock

Some investors may use averaging down stocks as part of other strategies.

1. Value Investing

Value investing is a style of investing that focuses on finding stocks that are trading at a “good value” — in other words, value stocks are typically underpriced. By averaging down, an investor buys more of a stock that they like, at a discount.

But in some cases, a stock may appear undervalued when it’s not. This can lead investors who may not understand how to value stocks into something called a value trap. A value trap is when a company has been trading at low valuation metrics (e.g. the P/E ratio or price-to-book value) for some time.

While it may seem like a bargain, if it’s not a true value proposition the price is likely to decline further.

2. Dollar-Cost Averaging

For some investors, averaging down can be a way to get more money into the market. This is a similar philosophy to the strategy known as dollar-cost averaging, as noted above, where the idea is to invest steadily regardless of whether the market is down or up, to reap the long-term average gains.

3. Loss Mitigation

Some investors turn to this strategy to help dig out of the very hole that the lower price has put them into. That’s because a stock that has lost value has to grow proportionally more than it fell in order to get back to where it started. Again, an example will help:

Let’s say you purchase 100 shares at $75 per share, and the stock drops to $50, that’s a 33% loss. In order to regain that lost value, however, the stock needs to increase by 50% (from $50 to $75) before you can see a profit.

Averaging down can change the math here. If the stock drops to $50 and you buy another 100 shares, the price only needs to increase by 25% to $62.50 for the position to be profitable.

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Pros and Cons of Averaging Down

As you can see, averaging down stocks is not a black-and-white strategy; it requires some skill and the ability to weigh the advantages and disadvantages of each situation.

Pros of Averaging Down

The primary benefit to averaging down is that an investor can buy more of a stock that they want to own anyway, at a better price than they paid previously — with the potential for gains.

Whether to average down should as much be a decision about the desire to own a stock over the long-term as it is about the recent price movement. After all, recent price changes are only one part of a stock’s analysis.

If the investor feels committed to the company’s growth and believes that its stock will continue to do well over longer periods, that could justify the purchase. And, if the stock in question ultimately turns positive and enjoys solid growth over time, then the strategy will have been a success.

Cons of Averaging Down

The averaging down strategy requires an investor to buy a stock that is, at the moment, losing value. And it is always possible that this fall is not temporary — and is actually the beginning of a larger decline in the company and/or its stock price. In this scenario, an investor who averages down may have just increased their holding in a losing investment.

Price change alone should not be an investor’s only indication to buy more of any stock. An investor with plans to average down should research the cause of the decline before buying — and even with careful research, projecting the trajectory of a stock can be difficult.

Another potential downside is that the averaging down strategy adds to one particular position, and therefore can affect your asset allocation. It’s always wise to consider the implications of any shift in your portfolio’s allocation, as being overweight in a certain asset class could expose you to greater risk of loss.

💡 Quick Tip: It’s smart to invest in a range of assets so that you’re not overly reliant on any one company or market to do well. For example, by investing in different sectors you can add diversification to your portfolio, which may help mitigate some risk factors over time.

Tips for Averaging Down on Stock

If you are going to average down on a stock you own, be sure to take a few preparatory steps.

•   Have an exit strategy. While it may be to your benefit to buy the dip, you want to set a limit should the price continue to fall.

•   Do your research. In order to understand whether a stock’s price drop is really an opportunity, you may need to understand more about the company’s fundamentals.

•   Keep an eye on the market. Market conditions can impact stock price as well, so it’s wise to know what factors are at play here.

The Takeaway

To recap: What is averaging down in stocks? Simply put, averaging down is a strategy where an investor buys more of a stock they already own after the stock has lost value.

The idea is that by buying a stock you own (and like) at a discount, you lower the average purchase price of your position as a whole, and set yourself up for gains if the price should increase. Of course, the fly in the ointment here is that it can be quite tricky to predict whether a stock price has simply taken a dip or is on a downward trajectory — so there are risks to the averaging down strategy for this reason.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).


Invest with as little as $5 with a SoFi Active Investing account.

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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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Sep
03
2023
man studying in library

Importance of Joining a High School Club

By | Student Loans, student_loan | Comments Off on Importance of Joining a High School Club

If you are gearing up to go to college, you are likely focused on maintaining a good GPA and prepping for the SAT or ACT. However, those aren’t the only factors that will get you into your dream school. Getting involved in extracurriculars in high school is often just as important as academics.

One type of extracurricular that you may want to consider is joining a club. High schools usually have a variety of clubs available for students to join. Joining a club comes with many benefits and can also make your high school experience more fun and memorable. Read on to learn more about why clubs are important and how to get involved.

Benefits of Joining a Club

The list of things-to-do while in high school can seem pretty overwhelming at times, especially when you add college preparation to the mix. There are classes to stay on top of, events and parties to attend, and soon enough college applications roll around. Balancing coursework and a social life can be a struggle, but one way to combine social life with college preparation is by joining a club.

There are a lot of benefits to joining a high school club. Many colleges like to see that applicants are well-rounded, so academic success isn’t the only way to stand out among other applicants. Clubs provide colleges with insight into what a student’s interests and passions are. In addition, they help students develop time management skills and responsibility.

Learning to balance work and fun while in high school can help make it easier to maintain that balance after entering college.

Joining a club in high school can also provide an opportunity for students to relax and have some fun. Having fun is a vital piece of creating a memorable high school experience and it can help students perform better in class.

Not only is the social time enjoyable for some students, but participation in clubs can also help students develop their “soft” skills, such as effective communication and learning to work with others.

In addition to making friends, being in a club gives students the opportunity to bond with their faculty advisor, who is usually a teacher. Building a relationship with teachers during high school is important for getting quality letters of recommendation to add to those college applications.



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

Common High School Clubs

The list of high school clubs that are available at each school will differ. Generally, a school will have a variety of clubs available. These can range from clubs that are academic, like a foreign language club, to clubs that are artistic, like a creative writing club, or something that’s related to a student’s hobbies, like a video games club.

Usually, high schools will also have clubs that participate in some kind of volunteer work or community service. These can be clubs that do work in the community hospitals, in meal programs for the homeless or elderly, and much more.

Some clubs are high tech, like the robotics club, and some are more old-school, like the chess club. Schools will usually have a lot of variety in the types of clubs that exist, and there may be some clubs that are unique to just your school. Since students can often start their own clubs, there isn’t one set list of clubs that will exist at every school.

Recommended: How to Get Involved on Campus in College

Starting a Club

If students don’t like the selection of clubs available at their school (why doesn’t every school have a waffle club?) then they are generally able to start their own. Starting a new club has a lot of benefits for the students who choose to put in the work to get one up and running.

There is no list of “correct” clubs to start in high school, most colleges value students who show commitment to something they care about. It’s about the quality of the activities they spend time in, not the quantity.

Seeing that a student has started a new club will show college admissions that the student has developed leadership and organizational abilities. Starting a club shows initiative, and sometimes, students who start clubs will end up in one of the leadership positions, like President, Vice President, Secretary, or Treasurer.

Each school will have its own process for starting a club, but there are a few steps that will be the same everywhere. The first step is, of course, figuring out what the club is about. Is it going to focus on community service, something academic? Will it be focused more on fun and entertainment?

After a topic for the club is chosen, students should figure out what the purpose and goals of the club are. If the club is about chess, will students be learning how to play? Will club members be entering tournaments together? Figuring out the purpose of the club and what its goals are before members join will help limit confusion and manage everyone’s expectations.

At most schools, the club will have to get registered after its name and purpose are defined by founding members. Registering the club makes it official and once this step is complete students can actually begin enjoying their club.

What’s next? Gaining new members and planning the first club meeting. Once the club is official and ready to start, it’s time to focus on recruitment and preparing for the first meeting.

Students should choose a date, time, and location for the first meeting before recruiting, that way they have information to give interested students on when activities will be beginning.

Before the meeting, club members should know what they plan on discussing with the new recruits and how long they want the meeting to last. Usually, the first meeting is a good time to go over the club’s purpose and goals and to get contact information from the new members.

Sometime in the first few meetings, it may be a good idea to assign leadership roles for the club. These usually include President, Vice President, Secretary, and Treasurer. The way these roles function can differ from club to club, but their usual responsibilities are as follows:

•   The President will lead the club and supervise meetings and activities.
•   The Vice President assists the President and takes over their roles whenever the Present isn’t available.
•   The Secretary takes notes during meetings and helps keep all members up to date on the club’s plans.
•   The Treasurer will manage the club’s budget and keep track of expenses.

Assigning leadership roles will help keep the club running smoothly and make it easier for the club to meet its goals.



💡 Quick Tip: It’s a good idea to understand the pros and cons of private student loans and federal student loans before committing to them.

Planning Ahead for College

It’s really never too soon to start planning, as well as saving, for college. The process of researching schools and then applying can be time-consuming, so the earlier students begin their research, the less last-minute cramming they’ll have to do.

A vital piece of planning for college is figuring out how to finance college. Most schools come with a pretty large price tag, but there are a variety of ways that students can help fund their college tuition.

To apply for federal financial aid, students will need to fill out the Free Application for Federal Student Aid (FAFSA). This will allow you to find out if you are eligible for different forms of financial aid, including grants, scholarship, federal student loans, and work-study. Grants and scholarships usually do not need to be repaid, whereas loans do need to be repaid.

It’s recommended that students exhaust their federal aid options before looking into private student loans. Federal loans come with certain benefits that private loans do not.

If students are not eligible for federal aid, or the financial aid they receive is not enough to meet their needs, there are other options, such as private scholarships and private student loans.

Scholarships are widely available and the eligibility criteria varies for each one. Some scholarships are need-based, while others are merit-based. Scholarships are available through schools, local communities, and corporations.

Taking out private student loans is another option for helping to fund a college education. These loans are available through private lenders, including banks, credit unions, and online lenders. Rates and terms vary, depending on the lender. Generally, borrowers (or cosigners) who have strong credit qualify for the lowest rates.

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

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


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

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 04/24/2024 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).

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

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Sep
03
2023
How to Sell a Car You Still Have a Loan On

How to Sell a Car You Still Have a Loan On

By | Budgeting & Goals, Financial Independence, money | Comments Off on How to Sell a Car You Still Have a Loan On

If you want to sell your car but still owe money towards the purchase price, the process will be different from selling a vehicle that you own free and clear. And the process will change depending on whether you are selling the car privately, to a dealer, or are doing a trade-in.

Here, you’ll learn the step-by-steps for selling a car that you still have a loan on, as well as learn smart advice for buying your next set of wheels.

How to Sell a Car You Still Owe Money On

At a high level, selling a vehicle with a loan has three main steps:

1.    Gather important info

2.    Determine if you have positive or negative equity

3.    Pick a selling option.

You’ll explore each of these steps in more depth next.

Gather Important Info

First, get a sense of what the car is worth. This will depend upon its condition, so objectively look at your vehicle. How clean is it? How well has it been maintained? What does the body and interior look like? Examine other used cars like yours for sale and see how they’re priced.

Look at used car valuation guides, as well. They will have different values for trade-ins (when working with a dealership) than for private-party sales (when selling to an individual), and will also list retail values. Look at the one that will fit the situation.

Also, verify the payoff amount on the vehicle’s loan. This will include the principal balance plus any accrued interest and is often available online or can be obtained by calling the lender. During the conversation about selling a vehicle with a loan, you can also find out how to send the payoff amount to the lender and when the lender wants to receive it (before or after the sale of the car).

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Determine If You Have Positive or Negative Equity

The vehicle’s equity is the difference between the resale value and the amount owed on it, and this number can be positive or negative.

Let’s say that a vehicle is valued at $20,000 with a loan amount of $10,000; that car has a positive equity amount of $10,000. If, though, the vehicle is valued at $20,000 and the outstanding loan amount is $25,000, then it has negative equity of $5,000. Loans on cars with negative equity are referred to as “upside-down” or “underwater.”

So, when figuring out how to sell a car with a loan, the processes will differ based on whether the vehicle has positive or negative equity as well as the selling option you select.

Pick a Selling Option

If you have a car with an outstanding loan balance — and it isn’t practical or even possible to pay it off — then selling a car with a loan can typically be handled in one of three ways:

•   Selling it to a used car dealership

•   Selling it privately to another person

•   Trading it in.

Get up to $300 when you bank with SoFi.

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Selling a Car to a Used Car Dealership

If a car dealership will buy used cars without requiring that you buy one from them during the transaction, then the process will probably be pretty straightforward. The dealer will offer you a certain dollar amount. If you agree, they will pay off the lender in exchange for getting the vehicle’s title.

If there is positive equity on the vehicle, then you’ll get the money that remains after the loan balance is paid off. If it’s a negative equity situation, then you’d need to pay the difference between what the used car dealer is willing to pay and what it takes to pay off the loan.

For example, if a dealer offers $15,000 on a vehicle that has a $10,000 loan, then the dealer would take care of the loan payoff and provide the person selling the car the remaining money ($5,000), minus any fees involved.

In a negative equity situation, for example, if the vehicle’s value is $10,000 and the outstanding loan is $13,000, then the seller would need to chip in the difference (in this case, $3,000 plus any fees) to complete the sale and transfer the title to the buyer.

Recommended: Smarter Ways to Get a Car Loan

Selling a Car Privately

With a private sale, you might get more money than you would from a used car dealer (who needs to resell the vehicle at a profit), but you’d also need to take on more responsibility for managing the sale. This includes the transfer of title and payment of fees among other duties.

Steps to take include the following:

•   Get the current loan payoff from the lender (there will likely be interest owed beyond the principal amount).

•   Find out what paperwork they’ll need and how they want the process to work.

•   Have the buyer follow the lender’s procedures when paying for the car.

From the lender’s perspective, they want to ensure that they get paid. So, as just one possibility, they may have a buyer pay them the agreed-upon price for the vehicle. If it’s more than what’s owed, then the lender could give you the overage. If it’s less than what’s owed, you could give the bank the difference between the price and loan amount.

When selling a car with a loan privately, you’ll also need to handle any fees and forms with the motor vehicle department of your state. Then you’ll be ready to move ahead, and, if another vehicle is in your plans, decide whether to buy or lease a car.

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

Trading In a Car You Still Owe Money On

As a third possibility, you could trade in the car with a loan balance to a dealer as part of purchasing either a new or used car. The dealer will offer a certain amount of credit for the trade-in vehicle and if its value is more than the loan amount, that difference would go towards the purchase of the replacement vehicle.

If you’ve been saving for a car, here’s how this might work: The dealer will offer a certain amount of credit for the trade-in vehicle. If its value is more than the loan amount, that difference would go towards the purchase of the replacement vehicle.

If the loan amount is higher than the value, then the dealer may agree to combine the vehicle’s negative equity with the loan for the replacement vehicle. If this is the chosen route, the term may need to be extended to create affordable payments and this will potentially lead to more interest being paid on the new loan.

Recommended: 31 Ways to Save Money on Car Maintenance

The Takeaway

Selling a car with a loan is a little different from selling one that’s paid in full. When thinking about how to sell a financed car, it’s easier to do so if you have positive equity in your car but still can be doable with negative equity. Some options include selling to a dealer or to an individual or trading in the vehicle towards another one.

Then you can, if necessary, start a savings account so you’ll be ready to buy your next car.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

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

Photo credit: iStock/Sakkawokkie

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.
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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03
2023
When Should You Pay In Cash?

When Should You Pay in Cash?

By | Budgeting & Goals, Financial Independence, money | Comments Off on When Should You Pay in Cash?

Many people don’t carry cash these days, preferring to make a purchase by tapping or swiping a debit card or credit card. However, there are times it can actually pay to dip into your wallet and break out the bills.

Using cash can be more secure and less costly, among other benefits.

Here, you’ll learn when it can be better to buy with cash and when plastic is preferable.

The Benefits of Cash

Here are some of the pros of using cash:

You May Get a Discount

You may be rewarded for paying cash, like paying a lower price at the gas station or when you get take-out at a restaurant.

Many businesses pay a fee for accepting credit and debit cards, so they may be willing to charge you less if you’ll pay in cash. If you frequently fill up your tank, saving even 10 to 20 cents per gallon can add up to significant savings over time.

It Can Help You Avoid Overspending

When you tap or swipe your credit or debit card, you don’t physically see your money leaving your account. Since there’s no sense of immediacy or consequence, it can be easy to spend more than you originally intended. That can lead to debt and overdraft or NSF charges.

If, on the other hand, you leave home with only the amount of money you need for the day in cash, your spending is likely to be more mindful. That could mean you may have a better chance of sticking to your budget and avoiding overspending.

💡 Quick Tip: Banish bank fees. Open a new bank account with SoFi and you’ll pay no overdraft, minimum balance, or any monthly fees.

There Are Fewer Security Risks

Yes, someone could rob you when you are carrying cash. However, there is less risk of identity theft or your information getting stolen when you pay with cash vs. a debit or credit card.

You Can Avoid Fees

Cash is a one-shot deal — the purchase you made won’t end up costing you a penny more. With credit and debit, however, you can end up paying additional charges down the line, from late fees to interest payments on debt.

Recommended: How to Avoid Overdraft Fees

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.


Times When You Should Pay in Cash

Your Tab is $10 or Less

It can be a good idea to carry cash for small purchases. Many retailers have a minimum amount of money you must spend in order to use debit or credit. If your purchase is under, you’ll have to throw in extra things (you probably don’t need) to meet the minimum.

When Shopping at a Small or Local Business

Small businesses often offer discounts for cash payments, since it helps them save on bank fees. This can be an easy way to support your local businesses and save a few dollars at the same time.

You Want to Keep Advertisers at Bay

You may have noticed that after you buy something with a credit or debit card, you often get hit with ads and offers for similar products. That’s because retailers can track their customers’ spending and share their information with a third party, who can then target them with ads.

This can be annoying, and also lead to more spending if you’re enticed by an offer. Using cash makes it much harder for businesses to collect and share your information.

💡 Quick Tip: Want a simple way to save more everyday? When you turn on Roundups, all of your debit card purchases are automatically rounded up to the next dollar and deposited into your online savings account.

Times When You Shouldn’t Pay With Cash

Next, learn about the times when you should keep your wallet shut and find another, non-cash way to pay.

Buying a House

If real estate is hot where you live, you may be tempted (if you can) to plunk down cash to ensure you get that dream house before someone else does.

While buying a home with cash vs. getting a mortgage may get you the house, it may not be the most prudent move in the long run, especially if it wipes out all of your savings.

A mortgage has tax benefits and timely payments can help you build good credit. Also, there could be better uses for all that cash, like investing in the stock market or elsewhere.

Business Expenses

If you own your own business, have a side gig, or do freelance work, it can be better to use credit (or even a check) to pay for business-related purchases. You’ll likely want a paper trail so you can deduct these expenses on your tax return.

Another potential perk of using credit is that it may offer some purchase protection in event something you buy for your business that breaks or gets stolen soon after you purchase it.

Paying Service Providers

You may think a service provider, whether it’s an electrician or an auto mechanic did a good job, but only time will tell. Using credit can offer you some protection in the event that you experience problems with a service after you’ve already paid for it.

Renting a Car

Often your credit card will provide insurance on car rentals (which can help you save on renting a car), but only if you use that form of payment, as opposed to debit or cash. Using credit for the car rental can help you avoid paying for something you don’t need to purchase.

You’re Looking to Build Credit

If you need to build your credit score, one way to accomplish that is to use your credit card on a regular basis and show that you’re responsible by paying what you owe each month, consistently and on time.

When Buying Electronics

Using your credit card instead of cash for electronics can be a big advantage if your credit card offers extended warranties as a cardmember benefit. This allows you to get peace of mind without having to pony up for the store’s warranty. And, you can simply pay off the balance as soon as the bill comes.

You’re Looking to Track Your Spending

If you’re looking to see where your money is going so you can track your spending and set up a monthly budget, it can be easier if you pay with credit or debit.

Your financial institution may even offer you a pie chart of your spending, broken down into categories. Seeing everything in black and white can help you become better at budgeting.

Alternatives to Using Cash

Paying in cash has its pros and cons. If you decide that you want to pay with something other than cash, here are some alternatives.

Cash vs Credit Cards

A credit card can be a good alternative to cash if you are able to pay it off in full every month, and you do. If managed well, credit cards (even secured credit cards) can help you build credit to buy a home or another large purchase in the future.

Cash vs Debit Cards

A debit card can be a good substitute for cash, as long as you know there’s money in the bank. By using a debit card, you’re not incurring any new high-interest debt. As long as you are not incurring any overdraft fees, or withdrawing money from ATMs that charge high fees, debit cards can be a simple way to make purchases.

Cash vs Financing or Loans

It can sometimes be better to pay for a major purchase, like a car or a home, with a loan rather than cash if the interest rate is lower than what you could likely earn by investing that money.

However, you’ll also want to keep in mind that there is risk involved in investing in the stock market, so there is always a chance that you could lose money.

Recommended: Leasing vs. Buying a Car: What’s Right for You?

The Takeaway

Even as we move towards a more cashless society, it can be important to keep cash in your wallet and use it for certain everyday expenses.

Paying in cash can help you garner discounts at local businesses, stick to your budget, avoid paying overdraft and interest fees, protect against identity theft, and keep advertisers from targeting you.

There are times, however, when it can make more sense to pay with credit rather than cash. These can include: when you’re making business purchases and buying electronics and/or you’re looking to build credit or closely track your spending.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

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

Photo credit: iStock/towfiqu ahamed

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.
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.

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 .


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.

SOBK0823011

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