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If you’re a fresh arrival to the United States, you’ll be glad to know that even if you’re undocumented, opening a bank account is possible. Which is very good news; after all, taking care of bills and everyday purchases is a lot easier — not to mention safer — when your cash is safely stashed in a checking account.

However, you will have to follow certain steps and perhaps a workaround or two. Probably the most important is that you’ll just need to provide an alternative for the Social Security number you don’t have. You may well find that a Tax Identification Number, or ITIN, along with the other required identification, can get the job done.

Read on for more about how an undocumented immigrant can open a bank account and the benefits of doing so.

What Do Immigrants Need to Open a Bank Account?

Like anyone else who opens a bank account, immigrants will need to provide and verify basic identifying information, such as their name and date of birth, using government-issued identification. This requirement may be met by a driver’s license, passport, birth certificate, or consular ID — and you’ll likely need to provide two different types of identification.

In addition, you’ll need to prove your residence. This can probably be done by presenting a utility bill, lease contract, or other official statement that includes your current address.

Finally, you’ll need either a Social Security number (SSN) or Tax Identification Number (ITIN). As an immigrant, the latter may be easier to obtain.

So, to recap, to open a bank account, you’ll want to check the eligibility requirements of the financial institution to which you’re applying, but you’ll probably need:

•  Official identification documentation

•  Proof of address

•  An SSN or ITIN

•  Anything else the bank might require (such as a minimum opening deposit)

💡 Additional help: What Are All the Requirements to Open a Bank Account?

What Is an ITIN?

As just mentioned, an ITIN may be an option to an SSN at many financial institutions. You may wonder what exactly that is. Here’s the scoop: ITIN is short for Individual Taxpayer Identification Number. It’s an official form of identification that the IRS (Internal Revenue Service) issues to immigrants in order to make it possible to file taxes.

But your ITIN has other perks, too — such as allowing you to open a bank account with financial institutions that accept this form of identification instead of an SSN. These days, there are plenty of banks that fit that category, but you should always contact the bank you’re considering to verify that they’ll process an account application without an SSN.

Keep in mind, too, that you aren’t automatically issued an ITIN once you arrive in the U.S. In order to obtain one, you’ll need to apply for one with the IRS directly. You can do this by mail or in person.

How to Open a Bank Account With an ITIN Instead of a SSN

Here’s the good news: Once you have an ITIN, using it in place of an SSN to open an account should be a fairly straightforward process. At many banks, you’ll simply supply that number instead of your SSN on that part of the application. If you apply online for a bank account, the application process may take only a few minutes.

The rest of the application will involve the bank gathering documentation, accepting your opening deposit, and issuing your bank account number and debit card. The process of establishing the account may take a couple of days. In addition, you may need to wait a week or more to receive your debit card in the mail.

And then, voila: You’re the proud owner of a U.S. bank account!

Benefits of Opening a Bank Account for Undocumented Immigrants

If you’ve been doing most of your financial transactions in cash for a while, you may wonder if going through the steps it takes to open a bank account is even worth it.

For many immigrants, it definitely is. A bank account makes it safer and easier to store and use your money. What’s more, it can also help you establish history and move toward legitimizing yourself as an American resident.

Personal Safety

Carrying cash is always risky. If you accidentally drop some (which can easily happen while you’re lugging bags in one hand and a coffee in the other), it’s gone forever. That’s not to mention the risk of others eyeing your cash. Paper money is liable to theft, and carrying large amounts of cash could even put you at risk of physical violence.

Having a checking account makes it possible to store larger amounts of money with a lower risk level. You’ll still be able to access cash when you need it using an ATM or your debit card. For these reasons, opening a bank account could increase your level of physical safety as an immigrant.

Establishing History

Opening a bank account shows people that you’re here on at least a semi-permanent basis, and may even help you establish state residency. While the process of naturalization is, of course, long and complex, having a bank account can be one small step toward legitimizing your status as a U.S. resident.

Ability to Save Money

Most banks offer both checking and savings accounts—the latter of which is an excellent vehicle for building up a rainy day fund. Having a separate savings account makes it a lot easier to put some money “out of sight, out of mind” so you’re prepared for an emergency. And, of course, it’s a lot more secure than stuffing cash into a coffee can or under the mattress.

Earning Interest

In addition to being physically safer, bank accounts also give you an edge against inflation. Here’s why: Many of them make it possible to earn interest on your balances—even on a checking account. The interest you earn might be pretty low, but it’s still better than no growth at all. Plus, it’s a low-risk investment given that money in a legitimate bank account is FDIC-insured up to $250,000.

The Takeaway

While it may take a few extra steps, it’s totally possible for an undocumented immigrant to open a bank account. You may just have to apply for an ITIN to use in place of your SSN, and find a bank that accepts ITINs. But once you get that taken care of, you’ll have access to a safe, potentially interest-earning place to stash your cash.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

How do undocumented immigrants open a bank account?

An undocumented immigrant will need an alternative to the Social Security number, or SSN, in order to open a bank account. This number is called an Individual Taxpayer Identification Number, or ITIN, and you can apply for one through the RIS. Many financial institutions will accept an ITIN in place of a SSN.

Can I open a bank account without an SSN or ITIN?

Unfortunately, you’ll likely need one or the other of these official, identifying numbers in order to open a bank account.

Can a U.S. citizen open a bank account abroad?

Yes, but it can be tricky. Many U.S. citizens have offshore bank accounts, though the process of applying for one may vary depending on which country you’re hoping to open an account in. It can involve a lot of paperwork, and starting this kind of account may have tax ramifications in both the U.S. and the foreign country in question.

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Photo credit: iStock/Bilgehan Tuzcu

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. 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.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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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 the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, 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 the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit 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, Wise, 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 Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://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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There may come a time when you end up not using one of your credit cards anymore. This can happen because you’ve amassed multiple cards and now have one that offers better rewards, or maybe you have a retail card for a store you no longer frequent. Whatever the reason, it’s valid to wonder what happens if you don’t use your credit card.

In many cases, nothing will happen. However, there may be some instances where not using a credit card will carry consequences. That’s why it’s important to know what happens if you don’t use a credit card.

Recommended: Can You Buy Crypto With a Credit Card

Is It Bad to Have a Credit Card and Not Use It?

Typically, no, it’s not bad to have a credit card that you don’t use regularly. Not using a credit card for a few months is usually not that big of a deal as long as you keep making any necessary payments on any credit card charges you’ve made. However, there may be some unintended consequences of not using a credit card for a longer period of time.

Recommended: What is a Charge Card

What Happens If You Don’t Use Your Credit Card?

If you’re wondering, ‘Is it bad to not use a credit card?,’ here’s a look at some of the potential consequences.

You Might Overlook Fraudulent Charges and Activities

If you don’t use your credit card, you may end up missing transactions that you otherwise would have noticed on your credit card statement. For instance, if your credit card information were to get stolen and used for unauthorized purchases, you might not spot that activity if you’ve stopped checking your statements. The longer the issue continues, the more damage that can be done, given what a credit card is.

You Might Miss Payments

Another possible consequence of an unused credit card that you’re not checking in on regularly is missed payments. If you need to pay an annual fee for the card, for instance, you could forget that you’ll be charged if you’re not often using the card. Missing a payment can have severe financial consequences, which is why making on-time payments is one of the cardinal credit card rules.

Recommended: When Are Credit Card Payments Due

Your Card Issuer May Close Your Account

If you don’t use a credit card for a long period of time — say, at least a year — your issuer may close your credit card. What’s more, credit card issuers don’t have to give you notice when they’re about to close your credit card, so you may only find out when you go to use it.

Exactly what counts as inactivity and the length of time before an account closes will be up to each credit card issuer. If you’re concerned about your card being closed due to inactivity, contact your issuer to find out when they may close your account.

Your Credit Score May Go Down

If your credit card issuer closes your credit card, your credit score could be negatively affected. This is due to a couple different reasons.

For one, the closure of your account will cause your overall credit limit to go down. This could drive up your credit utilization ratio — the percentage of the overall amount you use across the credit limit of your credit cards — which accounts for 30% of your credit score. The higher this ratio, the lower your score can go because creditors tend to take this as a sign you may have issues with handling debt. If the closed credit card had a high credit limit, it could affect your credit utilization even more.

Secondly, the closure of your credit card could impact the length of your credit history, which accounts for 15% of your credit score. Closing a credit card you’ve had for a while could result in a negative impact on your score, marking another way that not using a credit card can hurt your credit score.

Recommended: What is the Average Credit Card Limit

You May Lose Your Rewards

Depending on your credit card, any unused rewards will expire after a certain period of time. What’s more, if your issuer ends up closing your credit card due to inactivity, any rewards you’ve earned on your card up to that point could be lost.

How Long Can You Go Without Using a Credit Card?

How long you can go without using a credit card will depend on your issuer. Some may close your credit card after six months of inactivity, whereas others may only close the card after a year of inactivity or more.

Again, it’s important to check your credit card’s terms and conditions to learn more about how a credit card works. Or, you can contact your issuer to find out what can happen if you don’t use your credit card for a while.

Closing a Credit Card You Don’t Use: What to Know

If you have a credit card you no longer want to use, it might make sense to close it. While the previously mentioned consequences may happen — such as losing your rewards and facing impacts to your credit score — it is still possible to close a card.

Before doing so, determine whether your credit card has a high credit limit and consider how long you’ve had the card. Closing a credit card you’ve had for a while could have a negative impact on your score. Same goes for a credit card with a high limit, since it could significantly raise your credit utilization.

If neither of the above are of concern, then think carefully about whether you’ll likely use the card again in the future. Does this card not help you earn rewards, whereas other ones you own do? Or is this a secured credit card and you can now qualify for an unsecured card?

If there’s no potential major financial impact to closing the card, and you’re sure you won’t use it anymore, then you might consider moving forward with closing it.

Does Not Using a Credit Card Hurt Your Credit Score?

The effect that not using a credit card will have on your credit score depends on whether the issuer closes your account. If the credit card is still open and you’re otherwise responsible for credit that you do use, like making consistent on-time payments, then your credit score most likely won’t be affected.

Keeping Your Cards Active Without Hurting Your Credit Score

Keeping a credit card active is as simple as using the card every few months for regular, small purchases. You might consider using the card to cover a subscription to a streaming service, for example. Or, you could use it to cover another monthly bill.

If you’re worried about checking in frequently enough, you might set up autopay for that credit card. That way, you’ll ensure you’re paying on time.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

The Takeaway

It’s normal to not use a credit card if you have other ones that are a better fit. But before closing the card or letting it get shut down due to inactivity, consider making small purchases on it to keep it active. Otherwise, you’ll want to determine whether your credit score can handle potentially taking a dip.

Looking for a credit card with perks you won’t want to lose? Consider the SoFi credit card, where you can earn cash-back rewards on all qualifying purchases, and pay no foreign transaction fees. See what other benefits the card offers and apply for a credit card today with SoFi.

Learn more today about the SoFi credit card!

FAQ

Will I be charged if I don’t use my credit card?

If your credit card typically charges an annual fee, that fee will still apply even if you don’t use your credit card.

What happens if I don’t use my credit card for a year?

Some credit card issuers may close your credit card, even without your knowledge, due to inactivity. This may occur if you don’t use your card for a year or more, though the exact length of time will vary depending on the issuer.

Should I get rid of my credit card if I don’t use it?

You can get rid of your credit card, but know that it may affect your credit score. It’s a good idea to research the potential consequences of closing a credit card before actually doing so.

Do unused credit cards affect your credit score?

Unused credit cards may affect your credit score if you or your credit card issuer closes the account. The account closure could result in an increased credit utilization ratio since your overall credit limit will go down across all of your cards. Plus, if the close credit card is one of your oldest ones, it could diminish the length of your credit history, therefore affecting your score.

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¹See Rewards Details at SoFi.com/card/rewards.

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 .

SoFi Credit Cards are 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.


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When an insurance company determines that a vehicle is totaled — that is, so badly damaged that repairing it will cost more than it’s worth — the owner may be reimbursed for its actual cash value (ACV) instead of repairs. How much insurance will pay for a totaled car varies. The exact amount depends on the insurance company, where the driver lives, how much coverage they have, and other factors.

Knowing how insurance decisions are made, and how to manage your claim, can help you prepare for this scenario after an accident.

What Makes a Car a Total Loss?

An insurance company may declare a car a “total loss” if the cost of fixing it is more than the market value, or if it wouldn’t be safe to drive the car even if the repairs were made. The insurer also may make its decision based on how your particular state defines a total loss. (You can learn more about the terms discussed here and others in our guide to car insurance terms.)

Some states use a total loss threshold (TLT) to determine if a car is totaled. In these states, the damage must exceed a certain percentage of the car’s value. Missouri, for example, has an 80% TLT — which means if you were in an accident and your car worth $10,000 required more than $8,000 in repairs, your car could be declared a total loss. The repairs wouldn’t exceed the actual cash value of the vehicle, but they would exceed the state’s TLT. (Iowa has the lowest TLT in the U.S. at 50%. Colorado and Texas have the highest, with a TLT of 100%.)

Many states use a total loss formula (TLF) to declare a vehicle totaled. With this method, if the cost of repairs plus the salvage value of the car exceeds its actual cash value, the car is totaled.

If the insurance company thinks the damage could end up being more extensive than the adjuster’s initial estimate, it may use a lower threshold for declaring a total loss than what the state requires.

Recommended: Does Auto Insurance Roadside Assistance Cover Keys Locked in a Car

What Types of Insurance Coverage Pay for a Totaled Car?

Whether your insurance will pay for a total loss (and how much it will pay) depends on your policy. This is when smart personal insurance planning pays off. There are a few types of coverage that might kick in if your car is totaled.

Collision Coverage

This coverage pays for damage to your own vehicle or property. That can include damage caused by crashing into another vehicle or running off the road and into a tree or fence. Even if you’re responsible for the accident, collision coverage will pay for the repairs, minus the deductible amount you’ve chosen. (Learn more about the types of deductibles in insurance.)

If you are found to be at-fault, however, you can expect your car insurance premiums to go up after an accident.

Recommended: How to Get Car Insurance

Comprehensive Coverage

Comprehensive insurance covers losses caused by something other than a collision, such as a weather event, hitting an animal, theft, or vandalism.

Property Damage Liability Coverage

This coverage pays for damage to your vehicle (or other property) if you’re in an accident and the other driver is found to be at fault.

Uninsured/Underinsured Motorist Coverage

If you’re in an accident and the other driver is at fault but isn’t insured or doesn’t have sufficient insurance, this coverage can cover your repairs.

New Car Replacement Coverage

With new car replacement coverage, if your car is totaled, your insurer will pay to replace your damaged car with a brand-new car of the same make and model (minus your deductible). Drivers looking for lower car insurance premiums tend to go with this extra, but it can save you big money in the event of an accident.

Recommended: How to Lower Car Insurance

GAP Coverage

If you owe more on your car loan or lease than what your insurance says your totaled car is worth, you could end up having to pay the difference. GAP coverage, short for Guaranteed Auto Protection, can help “bridge the gap” between your insurance settlement and what you still owe.

Recommended: Insurance Tips for First-Time Drivers

How Does an Insurance Company Decide How Much to Pay Out?

After an accident, you can expect your insurance company to assign an adjuster to handle your case. The adjuster will check out your damaged car and, as part of the assessment, determine the cost of repairs and if the car is worth repairing.

If it’s totaled, the adjuster will assign the car a value based on its pre-crash condition and what similar models are selling for. The “actual cash value” you receive will factor in the car’s age, wear and tear (inside and out), the car’s mileage, equipment you may have added, etc.

The payment you receive will help you buy a new car, but it probably won’t be enough for a new model of the same car (unless you have new car replacement coverage). And it may not be enough to pay off your loan or lease (unless you have GAP coverage).

Recommended: How To Find Savings on Car Maintenance Costs

What Steps Should a Car Owner Take If a Car Is Totaled?

There are a few things that need to happen to get you back on the road ASAP after a serious accident:

Contact Your Insurance Company

No matter who’s at fault for your car’s damage, you should notify your insurance company immediately. Most insurance companies are available 24/7 to take your claim by phone, online, or app.

Assess the Damage

The insurance company will send an adjuster to inspect your car and estimate the cost of repairs.

Calculate Your Car’s Fair Market Value

The insurance adjuster will do some research to determine your car’s fair market value — and you can do some homework, too. You can use the Kelley Blue Book to get an idea of what your car was worth before the accident (using the make, model, mileage, and when you bought your car). Or you can check online to see what similar cars in your area are selling for.

Contact Your Lender

If you’re still paying off your car loan, or you’re in a lease, you should inform the financing company that the car was damaged. It’s also important to keep making payments until you settle your insurance claim, so you don’t hurt your credit.

Negotiate Your Insurance Company’s Payout

If you can convince the insurance company that your car was more valuable than the amount they’re offering, they may adjust the payment you receive. The insurer may ask you to provide paperwork that shows the car was worth more, so it’s a good idea to keep your receipts and maintenance documentation. Or you may decide to hire a private appraiser to see if you can get a higher estimate. (You’ll have to pay for this service yourself.)

Get Your Payment — And a New Car

If you own the car outright, the insurance company will send you the money — often within a few days. You can use it to shop for a replacement.

When you have a car loan, your insurer will send the appropriate payoff amount to your lender and the rest (if applicable) to you. If you have a lease, the insurer will send the payment to the leasing company.

What Happens to a Totaled Vehicle After Filing a Claim?

Generally, after an insurance company decides a car is a total loss, it will take possession of the vehicle and, when the claim is settled, sell it as salvage. But the car’s final destination may depend on state regulations and whether the owner wants the car back.

Can You Keep a Totaled Vehicle?

You can talk to your insurer about the possibility of buying back the totaled vehicle if you want to keep it for sentimental reasons, or because you think you can fix it or use it for parts. This is allowed in some states, but you may have to work with the local DMV to complete the purchase.

If you hope to get the car back on the road, you can expect to go through several more steps. It will have to be fixed and pass an inspection, and you’ll have to get a new title. You’ll also have to register the car and insure it.

If that turns out to be a few too many hoops to jump through, you may end up selling it to a junkyard yourself. Or you can sell the parts to interested individuals. You also may be able to donate the car to a local charity.

Before you negotiate with your insurer to get your car back, you might want to check on whether it’s legal in your state and — if you plan to drive it again — what kind of insurance you can get on a car that’s been declared a total loss.

Can I Decide If My Car Is Totaled?

No. The insurance company must decide if the damaged vehicle is a total loss based on its value and the cost of repairs.

Understanding Your Coverage

Being in a serious collision can be stressful, whether you’re responsible or someone else is determined to be at fault. You may be hurt or hospitalized. Understanding how car insurance works, and what it will and won’t cover, can help you prepare. And it might take your stress down a notch in the aftermath of an accident.

An accident may prompt you to reassess how much auto insurance you really need. After all, more coverage means higher premiums, and vice versa.

An online insurance marketplace can help you decide what types of coverage you want, and whether getting GAP coverage or a policy with rental car reimbursement coverage is a good strategy. Your lender or leasing company, as well as your state, also may have specific requirements for how much insurance you must carry.

Recommended: How Much Does Insurance Go Up After an Accident?

The Takeaway

If your car is so badly damaged in an accident that the cost to repair it will be more than it’s worth, your insurer may decide to declare the vehicle a total loss. This means the insurer will give you the car’s actual cash value (based on its condition just before the accident) instead of paying to have it fixed.

Of course, you’ll only receive payment if you have the right kind of insurance coverage. Even then, the settlement likely won’t be enough for you to replace your wrecked car with a new car of the same make and model. Also, if you owe more on your car loan or lease than your insurance says your totaled vehicle is worth, you can end up having to pay the difference.

If you want to be proactive about your insurance coverage, SoFi can help you compare your current auto insurance policy to what other top insurers are offering. SoFi will walk you through the process of getting the right coverage for your needs.

Check out SoFi Protect today to get real rates in real time for coverage you really need.

FAQ

How do insurance adjusters determine the value of a car?

An insurance adjuster will assign the car a value based on its pre-crash condition and what similar models are selling for. The “actual cash value” will factor in the car’s age, wear and tear, mileage, and other equipment you may have added, including the condition of the tires.

What happens if insurance doesn’t pay enough?

You can try to negotiate with the insurer to get a higher payout, but you should expect to back up your request with documentation. Or you may decide to hire a private appraiser to give you a second opinion of the car’s value.

What happens when your car is totaled and you still owe money?

If you’re still making payments on your car when it’s totaled, the insurance company will send the appropriate payoff amount to your lender and the rest of your settlement to you. If the insurance payment isn’t enough to cover what you owe, you may have to pay the difference.

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Photo credit: iStock/Jorge Villalba

Auto Insurance: Must have a valid driver’s license. Not available in all states.
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SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.

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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If you plan to take out a $300,000 mortgage, the costs of the loan can vary considerably based on your rate, term, property tax and insurance costs, and whether you need mortgage insurance.

Read on to learn how much a $300,000 mortgage could cost over the life of the loan.

What Are the Monthly Payments on a $300k Mortgage?

In April 2022, Redfin found that the monthly mortgage payment on the median asking price home had risen 39% from a year earlier, thanks to rising mortgage rates.

Ouch. But calculating the average monthly payment on $300,000 mortgages is not straightforward.

The lower the interest rate, the lower the monthly mortgage payment, holding other loan terms constant. The interest rate can be calculated differently for different types of mortgages. For instance, fixed-rate mortgages maintain a steady interest rate, whereas an adjustable-rate mortgage fluctuates over time based on market conditions.

The mortgage term also affects mortgage costs. The 30-year fixed-rate mortgage is by far the most popular choice, but a 15-year loan translates to a higher monthly cost for a $300,000 mortgage yet much less total interest paid.

Owning a home comes with annual property taxes based on the local tax rate and the home’s assessed value, which can change over time. Generally, this expense is divided across your monthly mortgage payments.

Your down payment also matters. Borrowers putting less than 20% down on a conventional mortgage usually need to pay for private mortgage insurance, often 0.5% to 1.5% of the original loan amount per year, until the mortgage balance reaches 80% (homeowner requests cancellation) or 78% of the home’s value, or the mortgage hits the halfway point of the loan term.

FHA loans require mortgage insurance premiums, which will last for the whole loan term if your down payment is less than 10%. MIP ranges from 0.45% to 1.05% of the loan balance, divided by 12 and added to your monthly payments.

Homeowners insurance is typically required by mortgage lenders regardless of the down payment amount.

How Much Income Is Needed to Qualify?

When taking out a home loan, lenders often ask for proof of consistent income, such as W-2s. But income is just one aspect of your personal finances a lender will evaluate to determine if you qualify for a mortgage on a $300,000 house.

Lenders use borrowers’ debt-to-income ratio to get a more holistic assessment of their ability to make monthly payments. DTI is calculated by dividing your monthly debt payments by your gross monthly income, then coming up with a percentage.

For example, if you gross $5,000 a month and have a $400 car payment and a $600 student loan bill, your DTI ratio is 20%.

A DTI ratio of 43% is usually the highest a borrower can have to obtain a qualified mortgage, according to the Consumer Financial Protection Bureau. However, lenders may prefer a lower DTI ratio — usually below 36% — for greater certainty that borrowers can afford their mortgage payments.

Programs like the FHA loan and Fannie Mae HomeReady® loan allow a DTI of up to 50% when compensating factors like a higher credit score exist.

Your credit history is another important factor to qualify for a mortgage on a $300k house, and will determine the rate you’ll pay.

How Much of a Down Payment Is Needed?

So how much do you have to put down for a $300k mortgage? The traditional ideal of a 20% down payment is not always necessary or doable. In fact, the latest median down payment is 13%.

How much you need for a down payment depends on the mortgage type, the lender, and if you’re planning to occupy or rent the property.

This is how much you’ll need to put down for different loan types.

•   Conventional loan: As little as 3% down for a primary residence. Buying a second home or investment property typically calls for at least 10% down and 25% down, respectively.

•   FHA loan: As little as 3.5% down if your credit score is 580 or higher. Borrowers with lower credit scores will need to put down at least 10%.

•   VA loan: Usually available with no down payment. This option is only available for active and veteran service members and some surviving spouses.

•   USDA loan: No down payment required. Eligibility is based on income and buying a home in a designated rural area.

But do down payment requirements change for different types of houses?

If you’re planning on buying a duplex or up to four units, you’d still qualify for residential financing, with the same parameters, if you plan to live in one of the units.

Recommended: A Guide to Buying a Single-Family Home

What Are the Parts of a Mortgage Payment?

What you pay to your lender each month includes more than just what you owe on the loan. The mortgage payment consists of the principal, interest, and potentially, escrow costs.

Principal

The principal portion of the mortgage payment goes toward gradually paying the amount initially loaned to you.

When you start making mortgage payments, the amount paid toward the principal is somewhat low. Over time, greater proportions of each monthly payment will chip away at the principal balance.

Interest

The interest rate — how much you’re being charged to borrow the money — is determined by the type of loan, your personal finances, and market factors outside your control.

Borrowers with high credit scores are usually able to snag the best rates. Just a 1% increase in mortgage rate can add tens of thousands of dollars over the life of a 30-year loan.

The bulk of the mortgage payment goes toward interest at the beginning of an amortized loan.

You may be able to recoup some of the interest cost through the mortgage interest deduction.

Escrow

Most lenders require an escrow account to roll tax and insurance bills into monthly mortgage payments. This includes property taxes, homeowners insurance, and, if applicable, mortgage insurance.

How Much Interest Will Be Paid on a $300k Mortgage?

If you have a fixed-rate loan, the total interest can be easily calculated for the life of the loan. Borrowers with a 30-year fixed-rate mortgage at 5.6% APR would pay about $320,000 in interest on a $300,000 home loan.

Shortening the loan term to 15 years and getting a rate of 4.8% APR would reduce the total interest paid to $121,302.

With an adjustable-rate mortgage, the interest rate can change over time with market conditions.

Try out this mortgage payment calculator to see how much you might pay in interest with different rates and down payments. You can also toggle the amortization chart on a desktop.

How Much Is the Mortgage on a $300k House?

Using the previous example of a 30-year fixed-rate loan with a 5.6% annual percentage rate, the principal and interest would be $1,720 per month, and would total about $620,000 over the 30 years. To capture the full mortgage cost, you also need to estimate the tax and insurance costs.

•   PMI (if applicable): often 0.5% to 1.5% of the original loan amount but up to 2.25%. Assuming a 1% rate, monthly PMI would be $250, with $21,303 the total amount of PMI you’d pay until you reach 20% equity.

•   Homeowners insurance: $2,305 on average annually, or $192 per month.

•   Property taxes: 0.28% to 2.49% of assessed value on average, depending on U.S. state. Most states have a homestead exemption that gives homeowners a tax break.

Recommended: A Guide to Mortgage Relief Programs

How to Get a $300k Mortgage

Prospective homebuyers can take steps to help qualify for a $300k mortgage and obtain more favorable terms.

•   Budget: First, it’s important to estimate how much you can afford.

•   Check your credit: Assess your credit history and take care of any late payments to improve your FICO® scores.

•   Get pre-approved: Starting the mortgage pre-approval process with one or more lenders gives you tentative approval for a loan amount and type, making you a more competitive buyer.

   Consider the interest rate, fees, and closing costs among lenders when shopping for a mortgage.

•   Make an offer: When you find a home that meets your needs and budget, consult with a real estate agent to submit an offer with your pre-approval letter.

•   Apply for the mortgage and get loan estimates: Now that you have a property address, you might want to request loan estimates from a number of lenders. A loan estimate is a three-page standard form that details the loan after you apply for a mortgage. Applying with more than one lender within 14 to 45 days counts as a single credit inquiry.

•   Choose a lender, and wait for the lender to verify your finances and appraise the property to underwrite the loan.

•   Close the deal: Get your cash to close and homeowners insurance ready and finalize the paperwork to close on your $300,000 mortgage.

Recommended: SoFi’s 2022 Home Loan Help Center

Where to Get a $300k Mortgage

The Consumer Financial Protection Bureau and others recommend getting quotes from multiple lenders. Buyers can choose from banks, credit unions, online lenders, and mortgage brokers to finance a home purchase.

While we’ve identified the interest rate and loan term as key information to compare, keep an eye out for fees paid directly to the lender, like origination fees and mortgage points.

The Takeaway

How much will a $300,000 mortgage cost you? The interest rate, loan term, insurance costs, and taxes will determine the amount you pay each month and over the life of the loan.

As you begin comparing lenders, give SoFi a look. SoFi fixed rate mortgage loans require as little as 3% down for qualifying first-time homebuyers.

Check your rate in just minutes

FAQ

How much is a $300,000 mortgage per month?

The monthly payment on a $300,000 mortgage depends on the loan length, interest rate, whether mortgage insurance is required, and more.

How much do I need to earn to get a mortgage of $300,000?

The required annual income to get a $300,000 mortgage is affected by your other debts and the down payment amount.

Can I get a $300,000 mortgage with a bad credit history?

You might be able to obtain a $300,000 mortgage with subpar credit, but the terms may be less competitive. For instance, borrowers with credit scores from 500 to 579 could be eligible for FHA loans, but they’ll have to make a down payment of at least 10% instead of 3.5%.

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Photo credit: iStock/Vertigo3d

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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.

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.

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.

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 .

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Cash management is a term often used by businesses to determine how much revenue coming in is available for day-to-day operations, and how much is available for investing in the future of the business.

But cash management is important for individuals, too. Your own personal balance sheet is not unlike that of a business. You want to determine how much of your income is available for covering expenses, discretionary spending, and investing for your future.

When you take control of your spending and saving in proportion to your income, you’re engaging in cash management. Here, we’ll explain the process in more depth, highlight the benefits you’ll reap, and guide you through this process, step by step.

What Is Cash Management?

You may wonder about the meaning of cash management; it can sound like a complicated term. But here’s the simple truth: Cash management is all about managing the money that’s coming in and the money that goes out in the best way possible for your day-to-day living. You can also think of it as cash planning, as it helps you stay in good financial shape today and tomorrow. Let’s look at this through a somewhat different lens: Solid money management strategies like the ones we’ll explore help you maintain healthy cash balances, stay on budget, earn a return on your savings, and reduce expensive debt.

💡 Recommended: Business Cash Management, Explained

Why Is Cash Management Important?

Good cash management is essential for a business’s financial stability. By the same token, borrowing cash management techniques that businesses use can help individuals enhance their overall financial wellness.

Cash Management Strategies

The concept of cash management is straightforward, but implementing it can become a bit more complex as individuals deal with financial ups and downs. These five strategies can help you adopt an efficient cash management process worthy of any corporate Chief Financial Officer.

1. Create a Realistic Budget

Think of your budget like a personal cash flow statement, which is a financial statement businesses often use to monitor income and expenses each month. Your personal budget can work the same way, becoming your personal cash flow statement.

If you’re often wondering at the end of the month where all your money went, that’s likely a sign it’s time to create a realistic budget. This can give you a clear picture of your monthly cash flow (money you earn) and your monthly cash outflow (money you spend).

From there, you can take the necessary steps to manage your cash flow to help you avoid too much debt, set financial goals, and save for the future. Once you accomplish that, you’ll be enjoying a good example of cash management. And it’s easier than you might think! Creating a budget isn’t difficult. You’ll simply need to gather some of your financial information and do some calculating. Let’s explore what financial info you’ll need below.

Income

Income includes your salary, bonuses, self-employed income, rental income, and all investment income including interest, dividends, and returns.

For the purposes of cash flow budgeting, you want to work with after-tax income, or the money that’s actually available to you instead of pretax gross numbers. So, this means take-home pay, not your gross salary.

Any extra money — such as bonuses, tax returns, or money from side gigs — should be factored in, as they are earned and with taxes owed in mind.

Expenses

Essential expenses should include things like the following:

•   Housing and utilities

•   Food

•   Childcare

•   Medical expenses

•   Insurance premiums

•   Car payments and maintenance

•   Public transportation costs

•   Clothing

Expenses can also include discretionary spending. This includes the things you want but don’t necessarily need, such as entertainment, travel, and other non-essential items.

Then there’s debt. Do you have student loans, credit card debt, or any other debt? If so, this is the liability side of your cash flow statement. You’ll need to take a close look at that.

2. Accurately Estimate Costs

Just like a business, the more accurate your budget is, the more efficient your finances will be.This is where tracking expenses comes in. You may find it makes sense to track your expenses for one to three months so you can determine exactly where your money is going. You can do this using your own spreadsheet or budgeting apps such as SoFi Relay.

Here are a few common living expenses that can help you create your own list. Once you have a finalized list, you can then use it to determine how much you’re spending on living expenses.

•  Housing

◦  Rent

◦  Mortgage

◦  Utilities

◦  Maintenance

◦  Insurance

•  Transportation

◦  Car payments

◦  Maintenance

◦  Gas and tolls

◦  Parking

◦  Public transportation costs

◦  Taxis and ride shares

◦  Auto insurance

•  Childcare

◦  Day care

◦  After-school programs

◦  Summer camp

◦  Tuition

◦  Babysitting

◦  College tuition

•  Insurance

◦  Health insurance premiums (if not deducted from your paycheck)

◦  Auto and home insurance premiums

◦  Life insurance premiums

◦  Disability income insurance premiums

•  Food

◦  Groceries

◦  Takeout and restaurants

•  Health

◦  Deductibles, copays, and coinsurance

◦  Prescription drug costs

◦  Over-the-counter (OTC) drugs

◦  Eyeglasses and contacts

•  Entertainment

◦  Concert, theater, and movie tickets

◦  Paid streaming and podcast services

◦  Books

◦  Travel

•  Pets

◦  Food

◦  Flea and tick prevention/other medications

◦  Vet bills

◦  Pet insurance

•  Personal

◦  Clothing/shoes/accessories

◦  Haircare and other grooming

◦  Toiletries/cosmetics

◦  Gym membership

3. Be Mindful of Cash Flow

You can use your income and spending data to better manage your cash flow. One approach to consider: Separating your income into different “buckets” using a percentage system.

With the 70-20-10 rule, you aim to put 70% of your income into essential and discretionary spending, 20% toward savings or paying off debt, and 10% toward investing and charitable giving.

These “buckets” can help you prioritize and achieve your financial goals. If your spending exceeds 70% of your income, you can find ways to reduce discretionary spending. How, exactly? Cutting back on takeout and restaurant meals, streaming services, and clothing purchases can all add up to more savings.

You may also find you need to make more drastic cost-cutting moves, such as finding less expensive housing or transportation. This can be especially important if you are paying off debt. If you are carrying heavy student loans and/or credit card debt, you may find you need to devote even more than 20% of your income to paying that down so you can avoid the high-interest payments and make way for other savings. This could include an emergency fund or health savings account (HSA).

The 10% investing allocation is where you focus on long-term financial goals, such as saving for retirement or future education expenses. It also offers a place to give back with charitable contributions.

4. Invest Extra Cash

Successful companies invest extra cash back into the business so it can grow. The same notion works for personal finances. Where you invest your extra cash that’s destined for short- and long-term savings is an important aspect of cash management.

For short-term savings, high-yield savings accounts, money market funds, certificates of deposit (CDs), and cash management accounts may all pay more interest than a traditional savings account.

Funds earmarked for long-term savings are usually best made as contributions to the following kinds of accounts:

•   IRAs

•   401(k)s

•   403(b)s

•   Self-employed retirement savings plans

•   Other long-term tax-advantaged accounts

This isn’t money you need soon, so it can be invested more aggressively than your short-term savings.

5. Avoid Bookkeeping Inaccuracies

With any cash management or budgeting process, being fluid and staying on top of your finances is key. There are times when you may need to allocate more toward debt payment and other expenditures, as well as times when you can focus on saving.

Regularly tracking expenses and adjusting your buckets accordingly will help ensure no inaccuracies creep in and keep you on track for your financial goals. Also, regularly checking your account balances and reviewing statements (online, in an app, or on a hard copy) is vital too. Accurate bookkeeping enables you to stay on top of cash management while balancing short-term needs with long-term financial planning.

The Takeaway

As you’ve seen from these examples of cash management, it’s a process that need not be complicated. By adopting these cash management concepts, you’ll be able to manage your cash flow, create a budget, and stay on top of your finances. What’s more, they’ll also guide you towards meeting your long-term goals as well by helping you manage debt and save for tomorrow.

Bank Better With SoFi

Cash management strategies work as well for individuals as they do for businesses. But it can help a person along to have a partner in growing your money. A SoFi Checking and Savings bank account can be just that. We offer eligible accounts a super-competitive APY, plus we don’t charge you minimum balance or monthly fees. What’s more, you’ll have access to a network of 55,000 fee-free ATMs. All of this means you’ll have more money to manage!

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

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Photo credit: iStock/ptasha

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. 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.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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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 the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, 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 the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit 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, Wise, 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 Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
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.

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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