Nov
19
2025
A modern, multi-story apartment building with balconies and a mix of white and brick siding, under a blue sky.

What’s the Difference Between a Co-op and a Condo?

By | Home Ownership, mortgage | No Comments

Both co-ops and condos give a resident the right to use certain common areas, such as pools, gyms, roof decks, and courtyards. But there are big differences when it comes to what you actually own when you purchase a condo vs a co-op.

It’s easy to get confused about the difference between the two properties. If you pulled up pictures of co-ops and condos during a home search, they might seem exactly the same. But if you’re in the market for a home — especially in a large city where both housing types are popular — you’ll learn quickly that the terms are not interchangeable.

You might have wondered if you’d prefer a house or a condo. But if you’re moving in the direction of co-op vs. condo, it’s important to understand their many distinct features. You’ve done the work of budgeting for a home. Now, before you spend that budget, let’s get a handle on the difference between a condo and a co-op.

Key Points

•   Condos and co-ops both offer shared amenities and community rules, but differ significantly in ownership structure.

•   With a condo, you own your individual unit, while common areas are collectively owned by all residents.

•   In a co-op, residents own shares in a corporation that holds title to the property, granting them a proprietary lease for their unit.

•   Co-ops often have lower purchase prices but can be harder to finance and involve more stringent approval processes for buyers.

•   Key differences also exist in monthly fees, tax deductibility, privacy levels, and restrictions on renovations or resales.

What Is a Condo?

With a condominium, you own your home, but you don’t solely own anything outside your unit — not even the exterior walls. Common areas of the complex are owned and shared by all the condo owners collectively.

Buying a condo is not all that different from securing any other type of real estate. Typically, the complex will be managed by an association that is responsible for maintaining the property and enforcing any covenants, conditions, and restrictions that govern property usage. The association sets the regular fees owners pay to cover repairs, landscaping, other services, and insurance for the shared parts of the property. Special assessments also might be levied to pay for unexpected repairs and needed improvements that aren’t in the normal operating budget.

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What Is a Co-op?

In the co-op vs. condo debate, it’s key to know that with a housing cooperative, residents don’t own their units. Instead, they hold shares in a nonprofit corporation that has the title to the property and grants proprietary leases to residents. The lease grants you the right to live in your specific unit and use the common elements of the co-op according to its bylaws and regulations. A co-op manager usually collects monthly maintenance fees; enforces covenants, conditions and restrictions; and makes sure the property is well kept.

As a shareholder, you become a voting manager of the building, and as such have a say in how the co-op is run and maintained. Residents generally vote on any decision that affects the building. Should a resident wish to sell their shares, members of the board of directors will have to approve the new buyer. They will be much more involved than would be the case with a condo. That can make it a lengthy process.

Co-ops and condos are both common-interest communities, but their governing documents have different legal mechanisms that determine how they operate and can affect residents’ costs, control over their units, and even the feeling of community. (If you’re curious about another option, there’s always a townhouse, so read up on the difference between a condo and a townhouse as well.)


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Some Pros & Cons of Co-Ops vs. Condos

Financing

It’s important to drill down on the details of buying an apartment. Because you aren’t actually buying any real estate with a co-op, the price per square foot is usually lower than it would be for a condo. Eligibility for a home loan may depend on credit score, down payment, minimum square footage of a unit, and more.

However, it might be somewhat harder to get a mortgage for a co-op than a condo, even if the bottom-line price is less. It might not have all that much to do with you. Some lenders are reluctant to underwrite a loan for shares in a corporation vs. real property. Most condo associations don’t restrict lending or financing in the building. If you can get a mortgage loan, the condo association will usually let you buy a place.

Fees

Because a co-op’s monthly fee can include payments for the building’s underlying mortgage and property taxes as well as amenities, maintenance, security, and utilities, it’s usually higher than the monthly fee for a condo. Either way, though, generally the more perks that come with your unit, the more there is to maintain and in turn, the more you’re likely to pay.

If you’re concerned about an increase in fees, you might want to ask the association or board about any improvements that may lead to an increase in the future — and what the rules are for those who do not pay their assessed dues. All of these factors are important to weigh when you’re making a home-buying checklist, which includes figuring out how much money you’ll need and the best financing strategy.

Taxes

If you itemize on your income tax return, you may be able to deduct the portion of a co-op’s monthly fee that goes to property taxes and mortgage interest. However, none of a condo’s monthly maintenance fee is tax deductible. You might want to consult a tax professional about these nuances before moving forward with a co-op or condo purchase.

Privacy vs. Community

If you’ve ever lived in one of those neighborhoods where the only time you saw your fellow residents was just before they pulled their cars into their garages, it could take you a while to adjust to cooperative or association living. Because you share ownership with your neighbors, you may be more likely to see them at meetings and other events. And you can trust that they’ll know who you are.

Co-op boards often require prospective buyers — who are potential shareholders — to provide substantial personal information before a purchase is approved, including personal tax returns, personal and business references. Many require in-person interviews. You may find that you like the sense of community and that everyone knows and looks out for each other. Or you may not. Again, you might want to ask some questions about socialization and privacy while checking out a particular co-op or an active condo community.

Restrictions

In a co-op, you might run into more rules regarding how you can renovate or even decorate your unit. And don’t forget: You’ll also have to deal with that rigorous application approval process if you ever decide to sell.

Both condos and co-ops frequently have restrictions on renting out extra rooms (or renting the entire unit), as well as on how many people can stay overnight or park in the parking lot, the type of pets you can have and their size, and more. Before you look at a unit, you may want to ask your agent about covenants, conditions, and restrictions that could be difficult to handle.


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The Takeaway

Whether you end up buying a co-op or a condo, ownership offers many benefits you won’t find in a rental. When you’re ready to start a serious search, take the time to look for a lender that will work with you on whatever type of loan you might require. In the co-op vs. condo terrain, there are specialists for both sides.

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FAQ

Is a co-op better than a condo?

A co-op isn’t better than a condo. Which is best really depends on your lifestyle and needs. Co-ops can be a little harder to finance, and board approval of a prospective co-op buyer is often needed. But a plus for co-ops is that the portion of your maintenance fee that goes toward property taxes may be tax deductible.

What’s the downside to owning a co-op?

Some co-op owners who are selling their unit find that the screening of a prospective buyer by the co-ops management board can slow down the sale process. Co-ops may also be less flexible when it comes to decorating or renovating the unit.

Is a co-op the same as a condo?

Both co-ops and condos are often apartments, but that’s where the similarity ends. When you purchase a co-op, you technically aren’t buying the apartment itself, but rather shares in the corporation that owns the building. When you buy a condo, you are buying your unit and you share ownership of the common areas of the building with your neighbors. Co-ops usually involve a screening process in which buyers are reviewed and approved by their prospective neighbors. Condos don’t usually require this.

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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.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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Qualifying for the reward requires using a real estate agent that participates in HomeStory’s broker to broker agreement to complete the real estate buy and/or sell transaction. You retain the right to negotiate buyer and or seller representation agreements. Upon successful close of the transaction, the Real Estate Agent pays a fee to HomeStory Real Estate Services. All Agents have been independently vetted by HomeStory to meet performance expectations required to participate in the program. If you are currently working with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®. A reward is not available where prohibited by state law, including Alaska, Iowa, Louisiana and Missouri. A reduced agent commission may be available for sellers in lieu of the reward in Mississippi, New Jersey, Oklahoma, and Oregon and should be discussed with the agent upon enrollment. No reward will be available for buyers in Mississippi, Oklahoma, and Oregon. A commission credit may be available for buyers in lieu of the reward in New Jersey and must be discussed with the agent upon enrollment and included in a Buyer Agency Agreement with Rebate Provision. Rewards in Kansas and Tennessee are required to be delivered by gift card.

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SOHL-Q425-166

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Nov
19
2025
Buy to Open vs Buy to Close

Buy to Open vs Buy to Close

By | Growing Wealth, invest, Investing | Comments Off on Buy to Open vs Buy to Close

Editor's Note: Options are not suitable for all investors. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Please see the Characteristics and Risks of Standardized Options.

Buy to open and buy to close are options orders used by traders in order, as the names suggest, to open new options positions or to close existing ones.

Investors use a “buy to open” order to initiate a long call or put option, anticipating that the option price may move in their favor. On the other hand, traders who want to exit an existing short options contract may use a “buy to close” order.

Key Points

•   Buy to open establishes a long position and may increase open interest depending on the counterparty.

•   High reward potential may accompany a buy to open, especially for calls, but the risk of expiration at zero value is significant.

•   Buy to close is the closing transaction for short option positions, which may benefit from time decay, yet carry the risk of loss if prices move adversely.

•   An example buy-to-open strategy involves buying a put to open, anticipating a stock decline, and later selling to close the put for more than the premium originally paid.

•   Understanding buy to open and buy to close is essential for managing risk and leveraging market movements effectively.

What Is Buy to Open?

“Buy to open” is an order type used in options trading, similar to going long on a stock. In options trading, you can buy to open a call if you expect the price to rise, which is a bullish position, or you may buy to open a put, which is taking a bearish position. Either way, to buy to open is to enter a new options position.

Buying to open is one way to open an options position. (The other is selling to open.) When buying to open, the trader uses either calls or puts and speculates that the option itself will increase in value — that could be a bullish or bearish outlook depending on the option type used. Buying to open sometimes creates a new option contract in the market, so it may increase open interest if the trade is matched with a seller opening a new position.

A trader pays a premium when buying to open. The premium paid, also called a debit, is withdrawn from the trader’s account in a manner that’s similar to buying shares.

Recommended: Popular Options Trading Terminology to Know

Example of Buy to Open

If a trader has a bullish outlook on XYZ stock, they might use a buy to open options strategy. To do that, they’d buy call options. The trader must log in to their brokerage account, and then go to the order screen. When trading options, the trader has the choice of buying to open or selling to open.

Buying to open can use either calls or puts, and it may create a new options contract in the market. As noted earlier, buying to open calls is a bullish position, while buying to open puts is a bearish position.

Let’s assume the trader is bullish and buys 10 call contracts on XYZ stock with an expiration date of January 2025 at a $100 strike price. The order type is “buy to open” and the trader also enters the option’s symbol along with the number of contracts to purchase. Here is what it might look like:

•   Underlying stock: XYZ

•   Action: Buy to Open

•   Contract quantity: 10

•   Expiration date: January 2025

•   Strike: $100

•   Call/Put: Call

•   Order type: Market

A trader may use a buy to open options contract as a stand-alone trade or to hedge existing stock or options positions.

Profits can potentially be substantial with buying to open. Going long calls features unlimited upside potential while buying to open puts has a maximum profit when the underlying stock goes all the way to zero. Buying to open options carries the risk that the options will expire worthless, however.

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What Does Buy to Close Mean?

Buying to close options are used to exit an existing short options position and may reduce the number of contracts in the market. Buying to close is an offsetting trade that covers a short options position. A buy to close order occurs after a trader writes an option.

Writing options involves collecting the option premium — otherwise known as the net credit — while a buy to close order debits an account. The trader is attempting to profit by keeping as much premium as possible between writing the option and buying to close. The process is similar to shorting a stock and then covering.

Example of Buy to Close

Suppose a trader opened a position by writing puts on XYZ stock with a current share price of $100. The trader expected the underlying stock price would remain flat or rise, so they entered a neutral to bullish strategy by selling one options contract. A trader might also sell options when they expect implied volatility will drop.

The puts, with a strike of $100, expiring in one month, brought in a credit of $5 per share (an options contract typically covers 100 shares).

The day before expiration, XYZ stock trades relatively close to the unchanged mark relative to where it was a month ago; shares are $101. The put contract’s value has dropped sharply since the strike price is below the stock price and because there is so little time left until the expiration date. The trader may realize a profit by buying to close at $1 the day before expiration.

The trader sold to open at $5, then bought to close at $1, resulting in a $4 profit per contract ($400 at 100 shares per contract).

Differences Between Buy to Open vs Buy to Close

There are important differences between a buy to open vs. buy to close order. Having a firm grasp of the concepts and order type characteristics is important before you consider trading.

Buy to Open Buy to Close
Creates a new options position Closes an existing options contract
Establishes a long options position Covers an existing short options position
May offer reward potential Is typically used after selling an option to close a short position that may have benefitted from time decay
Can be used with calls or puts Can be used with calls or puts

Understanding Buy to Open and Buy to Close

Let’s dive deeper into the techniques and trading strategies for options when executing buy to open vs. buy to close orders.

Buy to Open Call

Either calls or puts may be used when constructing a buy to open order. With calls, a trader usually has a bullish outlook on the direction of the underlying stock. Sometimes, however, the trader might speculate based on movements in other variables, such as volatility or time decay.

Buying to open later-dated calls while selling to open near-term calls, also known as a calendar spread, is a strategy that may be used to attempt to benefit from time decay and higher implied volatility. Buying to open can be a stand-alone trade or part of a bigger, more complex strategy.

Buy to Open Put

Buying to open a put options contract is a bearish strategy when done in isolation, since profit potential comes from a decline in the underlying stock’s price. A trader commonly uses a protective put strategy when they are long the underlying stock. In that case, buying to open a put is simply designed to protect gains or limit further losses in the underlying stock. This is also known as a hedge.

A speculative trade using puts is when a trader buys to open puts with no other existing position. The trader executes this trade when they anticipate that the stock price will decline. Increases in implied volatility may also benefit the holder of puts after a buy to open order is executed.

Buy to Close

A buy to close order completes a short options trade. It can reduce open interest in the options market whereas buying to open can increase open interest. The trader may profit when buying back the option at less than the price they sold it for.

Buying to close occurs after writing an option. When writing (or selling) an option, the trader seeks to take advantage of time decay. That can be a high-risk strategy when done in isolation — without some other hedging position, there could be major losses. Writing calls has unlimited risk since the stock could theoretically continue to rise, while writing puts has substantial risk as the underlying stock can fall all the way to zero. So, a writer may use a buy-to-close order to close a position and limit losses when the price of stock is moving against them.

Shorting Against the Box

Shorting against the box is a strategy in which a trader has both a long and a short position on the same asset. This strategy may allow a trader to maintain a position, such as being long a stock.

Tax reasons often drive the desire to layer on a bearish options position with an existing bullish equity position. Selling highly appreciated shares can trigger a large tax bill, so a tax-motivated approach does not involve shorting against the box; that strategy is no longer permitted for tax deferral under the Taxpayer Relief Act of 1997, which classifies such offsets as constructive sales. A more common modern alternative is using buy-to-open puts for downside protection. Not all brokerage firms allow this type of transaction. Also, when done incorrectly or if tax rules change, the IRS could determine that the strategy is effectively a sale of the stock that may require capital gains payments and, under current U.S. tax law, entering an offsetting short position is treated as an immediate constructive.

Recommended: Paying Taxes on Stocks: Important Information for Investing

Using Buy to Open or Buy to Close

A trader must decide if they want to go long or short options using puts or calls. Buying to open may generally be used to seek profits from large changes in the underlying stock while selling to open often involves attempting to take advantage of time decay. Traders often place a buy to close order after a sell to open order executes, but they might also wait with the goal of the options potentially expiring worthless.

Another consideration is the risk of a margin call. After writing options contracts, it’s possible that the trader might have to buy to close at a steep loss or be required to liquidate positions by the broker. The broker could also demand more cash or other assets be deposited to satisfy a margin call.

Test your understanding of what you just read.

The Takeaway

Buy to open is a term that describes when an options trader establishes a long position. Buy to close is when a short options position is closed. Understanding the difference between buy to open vs. buy to close is crucial to options trading. These option orders allow traders to put on positions to fit a number of bullish or bearish viewpoints on a security.

SoFi’s options trading platform offers qualified investors the flexibility to pursue income generation, manage risk, and use advanced trading strategies. Investors may buy put and call options or sell covered calls and cash-secured puts to speculate on the price movements of stocks, all through a simple, intuitive interface.

With SoFi Invest® online options trading, there are no contract fees and no commissions. Plus, SoFi offers educational support — including in-app coaching resources, real-time pricing, and other tools to help you make informed decisions, based on your tolerance for risk.


Explore SoFi’s user-friendly options trading platform.

FAQ

What is the difference between buy to open and buy to close options?

Buy to open means a trader enters a new long options position by purchasing a call or put contract. Buy to close means exiting an existing short options position by purchasing it back.

What is the most successful option strategy?

There is no single “most successful” strategy. An options approach’s effectiveness may depend on the market environment, the trader’s outlook, and risk management practices.

Is it better to buy at open or close?

There is no universal rule on whether it’s better to buy options at the market’s open or close. Traders often consider liquidity, volatility, and bid–ask spreads.

Is it better to buy options that are ITM or OTM?

In-the-money (ITM) and out-of-the-money (OTM) options each have trade-offs. ITM contracts cost more but have intrinsic value, while OTM options are cheaper but riskier because they require larger price moves to be profitable.

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SoFi Invest is a trade name used by SoFi Wealth LLC and SoFi Securities LLC offering investment products and services. Robo investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser. Brokerage and self-directed investing products offered through SoFi Securities LLC, Member FINRA/SIPC.

For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Characteristics and Risks of Standardized Options . Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes.

Utilizing a margin loan is generally considered more appropriate for experienced investors as there are additional costs and risks associated. It is possible to lose more than your initial investment when using margin. Please see SoFi.com/wealth/assets/documents/brokerage-margin-disclosure-statement.pdf for detailed disclosure information.

Disclaimer: The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.

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

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

This article is not intended to be legal advice. Please consult an attorney for advice.

SOIN-Q325-020

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Nov
18
2025

How to Open a Brokerage Account

By | Growing Wealth, invest, Investing | Comments Off on How to Open a Brokerage Account
When you open a brokerage account with a brokerage firm, you transfer money into the account that you can use to start investing. While some brokerage accounts may set an account minimum, there is typically no limit to how much you can deposit or when you can withdraw your money.

With a brokerage account, investors can invest in a variety of securities, including stocks, bonds, ETFs, and more. There are many brokerages, but the steps to open a brokerage account are similar among most of them.

Key Points

  • Select a brokerage provider that aligns with your investment goals, considering services and fees.
  • Complete the online account setup by submitting personal and financial information.
  • Fund the account by transferring money, similar to a bank deposit.
  • Start trading stocks, bonds, and ETFs once the account is funded.
  • SIPC insurance protects up to $500,000 in cash and securities if the brokerage fails.[1] However, if the brokerage firm fails, the account fails, too.

How to Open a Brokerage Account

How to Open a Brokerage Account Step-by-Step

There are a few simple steps to opening your first brokerage account. We’ll dive deep into each one below.

  1. Choose a brokerage provider.
  2. Sign up for an account.
  3. Transfer money.
  4. Start trading.

Step 1: Choose a Brokerage Provider

There are several types of brokerage accounts[2], and the type you choose will depend on what you’re trying to accomplish.

  • Full-service brokerage firms not only allow clients to trade securities, they may also offer financial consulting and other services — though the price may be steep, compared to the other options here.
  • Discount brokerage firms typically charge lower fees than full-service, but as a result clients don’t have access to additional financial consulting or planning services.
  • Online brokerage firms are typically online-only, allowing clients to sign up, transfer money, and make trades through their website. These firms typically offer the lowest fees.

The accounts above are known as cash accounts: You must buy securities with funds you put in your account ahead of time.

You may also encounter other more complicated types of brokerage accounts known as margin accounts, which allow you to borrow money from your brokerage to make investments, using your case account as collateral. These accounts tend to be for sophisticated investors willing to shoulder the risk that investments bought with borrowed funds will lose value.

Before working with an individual investment advisor or a firm and opening a cash or margin account, it can be a good idea to run a check on their background. The Financial Industry Regulatory Authority (FINRA) offers online broker checks where you can enter a broker’s name, or the name of a firm, to learn whether a broker is registered to sell securities, offer investment advice, or both.[3]

And you can learn about a broker’s employment history, regulatory actions, and whether there are past or current arbitrations and complaints.

Step 2: Sign Up for a Brokerage Account

Most brokers of all kinds allow you to open and access your brokerage account online. When you open the account, you will likely be asked to provide your Social Security number or taxpayer identification number, your address, date of birth, driver’s license or passport information, employment status, annual income and net worth. You may also be asked about your investment goals and risk tolerance.

For the most part, they should not charge you a fee for opening an account. While some may require account minimums, others allow you to open an account with no minimum deposit. There is no limit on the number of brokerage accounts you can open, and you may be able to hold multiple accounts with multiple brokerage firms.

Step 3: Transfer Money

You will need to fund your new brokerage account before you can purchase any types of securities. You can deposit money in a brokerage account like you would in a traditional bank account.

Step 4: Start Trading

Many brokerage firms will offer a way for you to earn interest on uninvested funds so that your money continues to work for you even when not invested in the market.

How Do Brokerage Accounts Work?

The brokerage firm with which you hold your account maintains the account and acts as the custodian for the assets you hold. In other words, the custodian provides a space for investors to use their account in the way that it was intended.

However, you own the investments in the account and can buy and sell them as you wish. The brokerage firm acts as a middleman between you and the markets, matching you with buyers and sellers, and executing trades based on your instructions.

For example, if you place an order with your brokerage to buy a certain number of shares of stock, the brokerage will match you with a seller looking to sell those shares and make the trade for you.

What’s the Difference Between Brokerage Accounts and Retirement Accounts?

Brokerage accounts are also known as taxable accounts, because profits on sales of securities inside the account are potentially subject to capital gains taxes. Generally speaking, these accounts offer no tax advantages for investors.

Retirement accounts, on the other hand, offer a number of tax advantages that may make them preferable to taxable accounts if you’re planning to save for retirement. Retirement accounts place limits on how much money you can contribute and when you can withdraw funds.

If retirement planning is your main concern, you may consider saving as much as you can in both a 401(k) if your employer offers one, and a traditional or Roth IRA. If you have funds left over, you may choose to invest those in your taxable brokerage account.

Is My Money Safe in a Brokerage Account?

The money and securities held in a brokerage account are insured by the Securities Investor Protection Corporation (SIPC). The SIPC protects against the loss of cash and securities held at failing brokerage firms. If your brokerage firm goes bankrupt, the SIPC covers $500,000 worth of losses, including $250,000 in cash losses.

The SIPC only provides protection for the custody function of a brokerage firm. In other words, they work to restore the cash and securities that were in a customer’s account when the brokerage started its liquidation proceedings. The organization does not protect against declines in value of the securities you hold, nor does it protect against receiving and acting upon bad investment advice.

It is important that any investor realizes and accepts that investment comes with a certain amount of risk. While security prices may gain in value, it is also possible that you could lose some or all of your investment.

The Takeaway

Opening a brokerage account is a simple process that allows you to invest in securities. Effectively, you’re depositing money at a brokerage, which will allow you to buy investments such as stocks, bonds, or ETFs. There are numerous brokerages out there, and different types of brokerage accounts.

Invest in what matters most to you with SoFi Active Invest. In a self-directed account provided by SoFi Securities, you can trade stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, options, and more — all while paying $0 commission on every trade. Other fees may apply. Whether you want to trade after-hours or manage your portfolio using real-time stock insights and analyst ratings, you can invest your way in SoFi's easy-to-use mobile app.

Opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.¹

FAQ

How do I open a brokerage account?

Broadly speaking, you can open a brokerage account by choosing a broker or brokerage account provider, signing up, transferring money into the account, and then starting to trade or invest.

What are the different types of brokers?

There are several different types of brokerages, and those include full-service brokerage firms, discount brokerage firms, and online brokerage firms. Each type may offer different products and services, or levels of service.

Is money in a brokerage account safe?

While nothing is ever truly safe, money and securities that are held in brokerage accounts are insured by the Securities Investor Protection Corporation, or SIPC, for up to $500,000 in losses.

Article Sources
  1. SIPC. What SIPC Protects.
  2. FINRA. Investment Accounts: Brokerage Accounts.
  3. FINRA. BrokerCheck.

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

SoFi Invest is a trade name used by SoFi Wealth LLC and SoFi Securities LLC offering investment products and services. Robo investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser. Brokerage and self-directed investing products offered through SoFi Securities LLC, Member FINRA/SIPC.

For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with Sofi Invest please view our fee schedule.

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

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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.


¹Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 45 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Probability percentage is subject to decrease. See full terms and conditions.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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Nov
18
2025
Four students are studying together in a college library, with laptops, books, and calculators on the table.

What Is a Pell Grant?

By | Student Loans | No Comments

The Pell Grant, the largest federal grant program, offers funding for undergraduate students with exceptional financial need. Eligibility is determined annually based on the Free Application for Federal Student Aid (FAFSA®), and students can receive the grant for up to six years of full-time study. The maximum award amount changes every year. For the 2025-26 school year, the maximum Pell Grant is $7,395.

The amount you can receive depends on several factors, including your family’s income and assets, the cost of attendance at your school, and your enrollment status. Here’s a closer look at how the Pell Grant works and how it compares other forms of financial aid.

Key Points

•   The Pell Grant is a type of financial aid for undergraduate students that doesn’t require repayment.

•   Eligibility criteria includes having exceptional financial need and enrollment in an eligible program.

•   You apply for the Pell Grant by filling out the FAFSA annually.

•   Pell Grant funds can be used to cover tuition, books, and living expenses.

•   Other forms of financial aid include state and institutional grants, scholarships, federal student loans, and work-study.

Applying for a Pell Grant

To apply for a Pell Grant, you must complete the FAFSA at studentaid.gov. This is the primary form used by colleges to determine a student’s eligibility for federal aid programs, including the Pell Grant.

Pell Grant Eligibility Requirements

The Pell Grant has strict eligibility requirements. These include:

Financial Need

Pell Grants are awarded to individuals who demonstrate exceptional financial need. There are no official income limits, but award amounts are determined by several factors, including your Student Aid Index (SAI), the cost of attendance at your chosen school, and whether you’re enrolled full- or part-time.

Undergraduate Status

Pell Grants are generally only awarded to undergraduate students. However, there may be some exceptions for students enrolled in post-baccalaureate teacher certification programs.

Meeting General Eligibility Requirements

To qualify for a Pell Grant, students must also meet the general eligibility requirements for all federal financial aid programs, which include:

•   Being a U.S. citizen or eligible noncitizen

•   Having a valid Social Security number

•   Having a high school diploma or equivalent (like a GED)

•   Being accepted for or enrolled in an eligible degree or certificate program

💡 Quick Tip: You’ll make no payments on some private student loans for six months after graduation.

How Do Pell Grants Work?

After submitting your FAFSA, the Department of Education determines your Student Aid Index (SAI), a number that measures your financial need, and sends this information to your school. If you are an undergraduate student with exceptional financial need, you may qualify for this grant funding.

Each school that participates in the federal Pell Grant program receives enough funding annually to fully cover Pell Grant awards to all eligible students. That means that if you qualify, you’ll receive your full eligible amount.

Students typically receive 100% of their annual Pell Grant split evenly between the fall and spring semesters. However, you can also receive a “year-round Pell,” which allows students who have already received their full award for the fall and spring to receive up to an additional 50% for an extra semester (e.g.,summer).

Understanding the Student Aid Index (SAI)

The Student Aid Index (SAI) is a measure that determines your eligibility for need-based federal financial aid, including the Pell Grant. Your SAI is not the amount you will have to pay, but simply a number used by schools to allocate aid.

Your SAI is calculated based on the financial information you (and any other contributors) reported on your FAFSA, including your family’s income and assets. The SAI ranges from –1,500 to 999,999, with a negative SAI indicating higher financial need. For example, if you have an SAI of –1,500, you’ll generally qualify for a maximum Pell Grant award, according to the Department of Education.

Pell Grant Funding for Military Service in Afghanistan or Iraq

You can qualify for a maximum Pell Grant award regardless of your calculated SAI if:

•   You are the child of a parent or guardian who died in the line of duty while either serving on active duty as a member of the U.S. Armed Forces on or after Sept. 11, 2001, or actively serving as and performing the duties of a public safety officer; and

•   You are younger than age 33 as of January 1 prior to the award year you’re applying for.

What Sorts of Expenses Can the Pell Grant Be Used For?

The Pell Grant can be used to cover qualified education-related expenses, including:

Tuition

Pell Grant funds can be used to pay for the cost of tuition.

Educational Expenses

You can use your Pell Grant to pay for other education-related expenses, such as the cost of books, lab fees, or other supplies like a graphic calculator or other expenses related to your course of study.

Living Expenses

It’s also possible to use the Pell Grant to pay for living expenses. This could cover room and board at your college or university. Or, if you live off-campus, this could cover the cost of rent and groceries.

Maintaining Eligibility for a Pell Grant

To continue receiving the Pell Grant throughout your college career:

•   You must fill out the FAFSA every year.

•   You must stay enrolled in your undergraduate program.

•   You need to maintain satisfactory academic progress as defined by your school This typically involves maintaining a minimum grade point average (GPA) and completing a certain percentage of the courses attempted.

•   You need to stay within the 12-semester lifetime limit – you are no longer eligible to receive a Pell Grant once you have used all 12 terms.

💡 Quick Tip: Even if you don’t think you qualify for financial aid, you should fill out the FAFSA form. Many schools require it for merit-based scholarships, too.

Pell Grant vs Other Types of Financial Aid

The Pell Grant is one of many different types of financial aid. Here’s a look at some other options available to undergraduates.

Other Federal Grants

In addition to the Pell Grant, the federal government offers several other nonrepayable aid options for students who qualify. These include:

•  Federal Supplemental Educational Opportunity Grant (FSEOG): A grant for undergraduate students who demonstrate exceptional financial need, FSEOG offers awards between $100 to $4,000 per year.

•  Teacher Education Assistance for College and Higher Education (TEACH) Grant: This grant provides up to $4,000 per year to students who agree to teach in high-need fields in low-income areas for at least four years after graduation.

State Grants and Institutional Aid

Many states and individual colleges offer their own grant and scholarship programs.

•  State Grants: A number of states have grant programs for residents attending in-state colleges. Eligibility may be based on financial need, academic merit, or a combination of both. You may automatically be considered for state grants when you complete the FAFSA, but some states require a separate application.

•  Institutional Aid: Colleges and universities award their own grants and scholarships, often referred to as institutional aid. This aid may be merit- or need-based. Some schools require a separate financial aid form, like the CSS Profile, in addition to the FAFSA to determine eligibility for institutional aid.

Federal Student Loans

Federal student loans are loans provided by the U.S. government to help students pay for college and must be repaid with interest. They are a key component of financial aid and typically offer more favorable terms compared to private student loans, such as lower fixed interest rates, income-driven repayment, and potential loan forgiveness programs.

Federal student loans can be subsidized or unsubsidized:

•  Subsidized Loans: These are available to eligible students who demonstrate financial need. With this type of federal loan, the government pays the interest while the student is in school at least half-time and for six months after graduation.

•  Unsubsidized Loans: These are available to eligible students regardless of financial need. Here, the borrower is responsible for paying all the interest, which accrues from the time the loan is first disbursed.

With either type of federal loan, you don’t need to start making payments until six months after you graduate or your enrollment drops below half-time.

Work-Study Jobs

The Federal Work-Study Program provides part-time jobs to students with financial need to help them earn money for education costs. Students typically work on-campus in jobs that often encourage community service or relate to their course of study. The program also emphasizes flexibility to help students balance work with academics. To be eligible, you must file the FAFSA and meet your school’s satisfactory academic progress (SAP) requirements.

When Financial Aid Is Not Enough

If your financial aid package, which may include grants, scholarships, and federal student loans, isn’t sufficient to cover your funding needs, here are some other options to explore.

Private Scholarships

There are thousands of scholarships available to help students pay for college. They may be awarded based on financial need, merit, or a combination of both. Like grants, scholarships usually don’t need to be repaid.

It can take some time to find — and apply — for the right scholarships, so it’s a good idea to start early. To find opportunities, reach out to your high school guidance office or college’s financial aid office. You can also use an online scholarship database to find programs that could be a good fit.

Private Student Loans

Private student loans are offered by banks, credit unions, and online lenders to help students pay for college expenses. Because they are not government-backed, the terms, interest rates, and repayment options are determined by the individual lender and are often based on the borrower’s (or their cosigner’s) credit score and history.

Private lenders typically allow you to borrow up to a college’s full cost of attendance, which gives you more borrowing power than with the federal government. However, these loans may have higher interest rates and don’t offer the same borrower protections that come with federal loans, such as income-driven repayment and forgiveness programs.

The Takeaway

A Pell Grant is an important form of federal financial aid for undergraduates with significant financial need. Pell Grants do not typically have to be repaid and the funds can be used for a wide variety of college expenses. The maximum award for the 2025-26 school year is $7,395.

Other funding options that can help you pay for college include other federal grants, state and institutional grants, federal student loans, scholarships, work-study programs, and private 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.

FAQ

What disqualifies you from getting a Pell Grant?

You may be disqualified from receiving a Pell Grant if you don’t demonstrate sufficient financial need, fail to maintain satisfactory academic progress, or already hold a bachelor’s, graduate, or professional degree. Other disqualifiers include defaulting on a federal student loan, owing a refund on a previous federal grant, or not being a U.S. citizen or eligible noncitizen.

Will you ever need to pay back a Pell Grant?

A Pell Grant generally does not need to be repaid. However, there are certain circumstances in which you may need to repay a portion of the grant. This could happen if you withdraw from school before completing the semester or term, you change your enrollment status from full-time to part-time, or your family’s household income increases.

Is there a minimum GPA required for a Pell Grant? Does it have to be maintained for your whole degree?

There is no minimum grade point average (GPA) for initial Pell Grant eligibility, which is determined by financial need through the FAFSA®. However, in order to maintain eligibility for a Pell Grant, you’ll need to make satisfactory academic progress (SAP) toward your degree. The specific requirements will be outlined by your school, but may include a minimum GPA.

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., Puerto Rico, U.S. Virgin Islands, or American Samoa, 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 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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Nov
17
2025
A man sitting on his couch and working on his computer, tracking the funds in his online investment account.

Target Funds vs Index Funds: Key Differences

By | Growing Wealth, invest, Investing | Comments Off on Target Funds vs Index Funds: Key Differences

Target-date funds and index funds are two common investment vehicles for individuals investing for retirement. Investors may see one or both of these types of investments as options in their 401(k) or other workplace retirement fund. Target-date funds offer a sort of set-it-and-forget-it approach to investing typically tied to an investor’s timeline, while index funds include a basket of investments corresponding to an underlying market index.

Understanding the key differences between target date funds and index funds can help investors understand which option may be a fit for their portfolio.

Key Points

•   Target-date funds provide a set-it-and-forget-it investment strategy, ideal for investors looking for a more hands-off approach.

•   These funds automatically reallocate assets to become more conservative as the investor’s retirement date nears.

•   Index funds offer broad market exposure and are generally passively managed, resulting in lower fees.

•   Investors in index funds may benefit from simplicity and cost-effectiveness, which may make them suitable for beginners.

•   Key considerations when choosing between a target-date fund and an index fund include personal financial goals, risk tolerance, and the trade-off between control and convenience.

Target-Date Funds vs Index Funds: A Comparison

Target-date funds and index funds are both common ways for investors to save for future goals, especially retirement. Target-date funds offer what can feel like a hands-off approach to saving for retirement. Investors choose a target fund with a date that’s closest to the year they plan to retire.

Over time, these funds automatically adjust their asset allocation, typically becoming more conservative as the investor gets closer to retirement. Investors do not have to choose the assets held by target date funds or reallocate the fund as it nears its target date.

Target-date funds may include index funds. Index funds track specific market indices and typically perform in line with the broader market.

Here’s a quick look at the main differences between these two types of funds.

Target Date Funds

 Index Funds

•   A fund that provides investors with a set-it-and-forget-it option to retirement savings.

•   Reallocates automatically. Portfolios typically become more conservative as a target date approaches.

•   May have higher fees if they are actively managed.

•   Designed to track an index, such as the S&P 500, and seek to achieve returns similar to the movements of the index.

•   Allows investors more flexibility in choosing the funds in their portfolios.

•   Passive management typically translates into lower fees.

Target-Date Funds

A target date fund is a type of investment that holds a mix of different funds, which may include mutual funds, such as stock and bond funds. When choosing a target date fund, investors must decide on a target date, often offered in five-year intervals and included in the name of the fund and corresponding with the year in which they want to retire. For example, someone in their early 30s might choose a target date of 2055 with a goal of retiring around age 65.

You could, in theory, use target date funds to save for any point in the future. However, they’re a popular type of vehicle for saving for retirement and often appear on the menu of investments available to employees through their 401(k)s.

As an individual nears their target date, the fund automatically rebalances from higher-risk, higher-reward investments into lower-risk, lower-reward investments. For example, the rebalancing might include shifting a greater proportion of its holdings into bonds to help preserve accrued increases in a portfolio’s value.

Pros of Target-Date Funds

There are several reasons investors might choose a target date fund.

First, they essentially provide a ready-made portfolio of diversified stock and bond funds, making it easy to save for retirement. This may appeal to beginner investors, those who don’t want to design their own portfolios, or those who find a hands-on approach to researching and choosing investments difficult.

Additionally, target-date funds provide automatic rebalancing. As the market shifts up and down, different investments may move off track from their initial allocations. When that happens, the fund will rebalance itself so that the allocation remains in line with its original allocation plan. The target date fund also automatically shifts its allocation to more conservative investments as the target date approaches.

Recommended: When Can I Retire?

Cons of Target-Date Funds

Investors who want more control over their portfolios may not like target-date funds, which don’t allow investors any control over their mix of investments or when and how rebalancing takes place.

Target-date funds build portfolios using a variety of investments. Some may use index mutual funds that come with relatively low fees. Others might use managed mutual funds, which may come with higher fees. It’s important to look closely at target-date fund holdings to understand what types of fees they might charge.

Here are the pros and cons of target date funds at a glance.

Pros

 Cons

•   Ready-made portfolio.

•   A basket of mutual funds may help provide some diversification.

•   Automatic rebalancing, including a shift to more conservative assets over time.

•   Lack of control over investments and when portfolio is rebalanced.

•   Potentially higher fees for funds that hold managed mutual funds.

💡 Quick Tip: How do you decide if a certain online trading platform or app is right for you? Ideally, the online investment platform you choose offers the features that can support your investment goals or strategy, e.g., an easy-to-use interface, data analysis, educational tools.

Index Funds

An index fund is a type of mutual fund or exchange-traded fund (ETF). It’s built to follow the returns of a market index, of which there are many.

These indexes track a basket of securities meant to represent the market as a whole or certain sectors. For example, the S&P 500 is a market capitalization weighted index that tracks the top 500 U.S. stocks.

An index fund may follow a market index using several strategies. Some index funds may hold all of the securities included in the index. Others may include only a portion of the securities held by an index, and they may have the leeway to include some investments not tracked by the index.

Because index funds are attempting to follow an index rather than beat it, they don’t require as much active management as fully managed funds. As a result, they may charge lower fees, making them a low-cost option for investors.

Index funds are popular choices for retirement savings accounts. They are designed to offer diversification through exposure to a wide range of securities, they’re easy to manage, and they offer the potential for steady long-term growth.

Pros of Index Funds

Low fees and full transparency are among the benefits of holding index funds. Investors can review all of the securities held by the fund, which can help them identify and weigh risk.

Historically, index funds have also potentially offered better returns over the long term than their actively managed counterparts, especially after factoring in fees.

Recommended: Actively Managed Funds vs. Index Funds: Differences and Similarities

Cons of Index Funds

Some of the drawbacks to index funds include the fact that they are often fairly inflexible. If they follow an index that requires them to hold a certain mix of stocks, they decline in value when the market does.

In addition, because many index funds use market capitalization weighting, the funds can be concentrated in a few large companies with a higher market capitalization. If those few companies don’t perform well, it can affect the entire fund’s performance.

Here’s a look at the pros and cons of index funds at a glance.

Pros

 Cons

•   Designed to offer broad exposure through a basket of securities that tracks an index.

•   Transparency. Investors can review the holdings in the fund.

•   Lower fees. Passive management typically makes it cheaper to operate funds, which results in lower management fees passed on to investors.

•   Potentially better returns than actively managed funds.

•   Lack of flexibility. There may be strict mandates about what can and can’t be included in the fund.

•   A few companies with a higher market capitalization may have a significant impact on a fund’s performance.

Index Funds for Retirement

You can use index funds to build a retirement portfolio as well as to save for other goals. If you’re using them for retirement, you may want to consider a mix of index funds covering a range of asset classes that can provide some diversity within your overall portfolio. Unlike a target-date fund, if that allocation strays from your goals, you’ll need to handle the rebalancing on your own.

The Takeaway

Index funds and target-date funds are funds used by retail investors for different purposes. Investors choosing between the two will need to consider their personal financial circumstances and needs. Index funds may be an option for investors looking for passive, long-term investments that they can choose based on their own goals, risk tolerance, and time horizon. They may also be a choice for beginners who are looking for simple, low-cost investment options.

Target date funds, on the other hand, may be another option for long-term investors who do not want to have to rethink their portfolio allocations on a regular basis.

Invest in what matters most to you with SoFi Active Invest. In a self-directed account provided by SoFi Securities, you can trade stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, options, and more — all while paying $0 commission on every trade. Other fees may apply. Whether you want to trade after-hours or manage your portfolio using real-time stock insights and analyst ratings, you can invest your way in SoFi's easy-to-use mobile app.


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FAQ

Are target-date funds or index funds better?

Whether index funds or target-date funds are better depends on an investor’s circumstances and goals. Index funds track a market index, offer broad market exposure, and are generally simple, low-cost investments. Target-date funds, frequently used for retirement savings, offer a hands-off investment approach tied to an investor’s timeline, automatically adjusting the asset allocation. An investor can weigh the pros and cons of both options to determine which is right for them.

What is the downside to target-date funds?

A downside to target-date funds is that investors don’t have control over the mix of investments in the funds or when rebalancing takes place. These funds may also come with higher fees.

Are index funds good for beginners?

Index funds can be a good option for beginners because they are a simple, low-cost way to hold a mix of securities that track a particular market index, such as the S&P 500.

Photo credit: iStock/Ridofranz

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

SoFi Invest is a trade name used by SoFi Wealth LLC and SoFi Securities LLC offering investment products and services. Robo investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser. Brokerage and self-directed investing products offered through SoFi Securities LLC, Member FINRA/SIPC.

For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by emailing customer service at [email protected]. Please read the prospectus carefully prior to investing.

Mutual Funds (MFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or clicking the prospectus link on the fund's respective page at sofi.com. You may also contact customer service at: 1.855.456.7634. Please read the prospectus carefully prior to investing.Mutual Funds must be bought and sold at NAV (Net Asset Value); unless otherwise noted in the prospectus, trades are only done once per day after the markets close. Investment returns are subject to risk, include the risk of loss. Shares may be worth more or less their original value when redeemed. The diversification of a mutual fund will not protect against loss. A mutual fund may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.

Dollar Cost Averaging (DCA): Dollar cost averaging is an investment strategy that involves regularly investing a fixed amount of money, regardless of market conditions. This approach can help reduce the impact of market volatility and lower the average cost per share over time. However, it does not guarantee a profit or protect against losses in declining markets. Investors should consider their financial goals, risk tolerance, and market conditions when deciding whether to use dollar cost averaging. Past performance is not indicative of future results. You should consult with a financial advisor to determine if this strategy is appropriate for your individual circumstances.

S&P 500 Index: The S&P 500 Index is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S. It is not an investment product, but a measure of U.S. equity performance. Historical performance of the S&P 500 Index does not guarantee similar results in the future. The historical return of the S&P 500 Index shown does not include the reinvestment of dividends or account for investment fees, expenses, or taxes, which would reduce actual returns.
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 Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or other eligible status, be residing in the U.S., and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates reserved for the most creditworthy borrowers. If approved, your actual rate will be within the range of rates at the time of application and will depend on a variety of factors, including term of loan, evaluation of your creditworthiness, income, and other factors. If SoFi is unable to offer you a loan but matches you for a loan with a participating bank, then your rate may be outside the range of rates listed above. Rates and Terms are subject to change at any time without notice. SoFi Personal Loans can be used for any lawful personal, family, or household purposes and may not be used for post-secondary education expenses. Minimum loan amount is $5,000. The average of SoFi Personal Loans funded in 2023 was around $33K. Information current as of 2/26/24. SoFi Personal Loans originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org). See SoFi.com/legal for state-specific license details. See SoFi.com/eligibility for details and state restrictions.

✝ To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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