MoneyLL Archives

Jul

2025

How Long Do Late Payments Stay On a Credit Report?

By Dan Miller | Credit, Family Finances, money | Comments Off

Table of Contents

What Is Considered a Late Payment?
When Do Late Payments Fall Off a Credit Report?
How Late Payments Affect Your Credit Score
How to Remove Late Payments From a Credit Report
What Can You Do to Minimize the Impact of a Late Payment?
Guide to Avoiding Late Payments
FAQ

Late payments generally only make it onto your credit report if they’re late for more than 30 days. Once a payment is late for 30 days, the creditor will likely report it to the credit bureau, where it will stay for seven years from the date of the first delinquent payment.

Because late payments can have a negative impact on your credit score, it’s best to avoid them when possible. Here’s what you need to know about this important topic.

Key Points

• Late payments are typically reported to credit bureaus after 30 days.

• They usually remain on your credit report for seven years.

• Payment history can significantly affect credit scores.

• Negotiating with creditors or disputing errors can reduce the impact of late payments on credit scores.

• Set up autopay, reminders, or change due dates to avoid late payments.

What Is Considered a Late Payment?

Most accounts have a grace period after the due date where the lender will accept payment without any penalty. The exact length of a grace period will depend on the terms of your credit card or other account, but 21 days is common.

After the grace period, your lender may charge a late fee or make other changes to your account. Once your account is 30 days or more past due, your lender will typically report it to the major credit bureaus.

When Do Late Payments Fall Off a Credit Report?

In most cases, it will take seven years for a late payment to fall off a credit report. Even if you bring your account current after the late payment has already been reported to the credit bureaus, it will still show up on your credit report for seven years after the first late payment. This is why one of the top credit card rules is to make payments on time whenever possible.

One exception to this can be paid medical debt and medical debt under $500, but guidelines are in flux, so it can be worthwhile to do your own research on this topic.

How Different Credit Bureaus Handle Late Payments

Each credit bureau has its own proprietary way of analyzing your information and calculating your credit score. A late payment could have a more significant impact on one score than on another. For example, the VantageScore vs. FICOScore currently gives a bit more weight to payment history. This is one reason why your credit score may vary among the different bureaus, and why your VantageScore could be lower than the digits provided by FICO®.

Recommended: When Are Credit Card Payments Due

How Late Payments Affect Your Credit Score

One of the consequences of a credit card late payment is that it will have a negative impact on your credit score.

Your past payment history is one of the biggest factors in what affects your credit score. As such, if you have a significant amount of late payments on your credit report, it will be tough to have an outstanding credit score.

Short-Term vs Long-Term Credit Score Impact

Late payments can impact your credit score in both the short and long term. Short-term consequences can include late fees and potentially increased interest rates from your lender. Long-term impacts of late payments could be a drop in your credit score, difficulty getting loans or credit, and even having the amount you owe turned over to debt collection.

How to Remove Late Payments From a Credit Report

It’s difficult if not impossible to remove a late payment from your credit report — unless it was reported in error.

However, the only way to find out if a late payment is reported in error is if you regularly review your credit report. If you have documentation that shows that you made the payment on time, you can contact the credit bureau and ask them to update your credit score and credit report.

What Are Acceptable Reasons for Late Payments on Your Credit Report?

To qualify as an acceptable reason for a late payment on a credit report, there usually must be unforeseen circumstances beyond your control, such as medical emergencies, job loss, or natural disasters. Administrative errors by the creditor can also sometimes be a valid excuse. Some creditors may also consider billing disputes or legitimate errors as acceptable reasons. You may be able to manage the impact of these kinds of late payments and fend off a credit score drop.

Goodwill Adjustment Letters

If any of the scenarios above apply to you and your credit report, you might write a goodwill adjustment letter. In this kind of letter, which may also be referred to as a late payment removal letter, you request that a creditor who reported your late payment(s) remove this entry from your credit reports. While not guaranteed to work, it could play a role in helping you get rid of the mark that is negatively affecting your credit.

Requesting a Pay-for-Delete Agreement

Another option if you have a late payment on your credit report is to negotiate with the creditor or collection agency. In this case, you are contacting the party you owe money to (usually in writing) and offering to pay a sum to settle the debt and have the negative mark completely removed from your credit report. Again, this method is not guaranteed to work, and there can be legal facets to it, which can add to the complexity of this undertaking.

Recommended: Ways to Manage Your Money

What Can You Do to Minimize the Impact of a Late Payment?

Say a late payment pops up on your credit report. Maybe you got busy with work and your family or ran short on cash. Whatever the case, if you’re willing to do the legwork, there are a couple steps you can take that could potentially minimize the impacts of a late payment.

Negotiate

One option you have for minimizing the impact of a late payment is to negotiate with your credit card issuer. This will generally be more effective if it’s only been a short time since your payment was due or if you have not had late payments previously.

For example, your lender may be willing to waive any late fees or penalty interest if you enroll in autopay from your checking account and/or pay any past-due balance. Contact customer service, and see what can be worked out.

Dispute Errors on Your Credit Reports

If it’s been more than 30 days and your lender has already reported the late fee to the credit bureaus, it can be difficult to remove it from your credit report. However, if you have documentation that you made the payment on time, you can contact the credit bureaus to have them update and correct your credit report.

This is why it is important to understand how checking your credit score affects your rating — generally when you are reviewing your own credit report, it does not impact your credit score. Regularly reviewing your credit report for errors and discrepancies is a great financial habit to have.

Catch Up on Payments as Soon as Possible

Another smart move is to address late payments ASAP. This should be a priority to protect your credit score. Many people have moments when they miss paying a bill on time, such as when on vacation or waiting for a payment for a gig job. Stay on top of payment due dates (see below) and, if and when one happens, do your best to take care of it immediately.

Recommended: How to Deposit a Check

Guide to Avoiding Late Payments

Since it is difficult if not impossible to remove late payments from your credit report once they’re there, the best course of action is to avoid late payments in the first place. Here are a few tips on some of the best ways to avoid late payments.

Set Up Autopay

One great way to avoid late payments is to set up autopay from a checking or savings account. You can customize your autopay payments to cover the minimum amount, the full statement balance, or anywhere in between. You’ll just want to make sure you have enough funds in the attached account to cover the balance.

Set Payment Reminders

If you can’t or don’t want to set up autopay on your accounts, another option is to set up payment reminders. That way, you can get an email or text message a few days before your payment is due. Getting a reminder can help you remember to make the payment on or before its due date.

Change Your Payment Due Date

Sometimes the due date for a particular loan or credit card doesn’t line up conveniently with when you have the money to pay it. You might find that your credit card due date always seems to come a day or two before payday. If that’s the case, many lenders allow you to change your payment due date to one that’s more convenient for you.

Consider a Backup Payment Method

Another way to make sure bills get paid on time is to use a backup payment method. This is typically applicable for bills you pay online or in app, including those you pay on a recurring basis, say with autopay. You can usually go to your account settings or billing management section of a platform you’re using, and add, say, a credit card or bank account to serve as a secondary source of funding should the first one be inadequate.

The Takeaway

Paying your credit card and other debts on time can be one of the best ways to positively impact your credit score. Late payments can be reported to the credit bureaus as soon as 30 days after the due date. Once they’re on your credit report, they will stay there for seven years from the date of the first late payment. Consider your bank’s capabilities when avoiding late payments: The ability to set up autopay, have overdraft protection, and other features can play a role in avoiding this issue as well.

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FAQ

Can I get late payments removed from my credit report?

Typically, once they’ve been reported to the credit bureaus, you can only get late payments removed if you didn’t actually pay late. If you have documentation that shows that you made the payment on time, you can submit that to each credit bureau and ask that they update your credit score. You might be able to negotiate with a creditor to remove a negative mark, but this is not guaranteed to work.

Is it true that after 7 years your credit is clear?

How long missed payments and late payments stay on your credit report is usually seven years. That means that if you have not had any negative marks or late payments for seven years, you’ll be starting with a fresh slate.

Is payment history a big factor in your credit score?

Yes, payment history is a big factor in how your credit score is determined. While each credit bureau calculates your credit score differently, payment history is typically listed as one of the biggest factors in what affects your credit score.

How many points does a late payment affect your credit score?

There is not a single set amount that your credit score will drop if you have a late payment. Factors include your current credit profile and how late you are with your payment. For instance, being a day or two late is likely to ding your score less than being a few weeks late or missing the payment completely.

Can one late payment stop me from getting a loan?

One late payment could have a negative effect on your loan approval in some cases. Your payment history is the single biggest factor for determining your credit score, and if your score were considered borderline, a late payment could push you into a lower category. That lower credit score range might change the lender’s perspective on your creditworthiness. That said, a late payment is more likely to be a red flag than a dealbreaker.

Photo credit: iStock/tommaso79

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SOBNK-Q225-106

Jul

2025

How Much Debt Does the U.S. Have and Who Owns It?

Who Owns the US National Debt?

By Ashley Kilroy | Financial Independence, Growing Wealth, invest, Investing | Comments Off

Table of Contents

How Much Debt Does the US Have?
Who Is the US in Debt to?
What Is the History of the National Debt?
Why the National Debt Matters to Investors
FAQ

As of January 2025, the U.S. national debt had reached $36.1 trillion — the amount the government owes to its creditors. About 80% of U.S. national debt is owned by foreign governments like Japan, China, and the U.K., as well as businesses and individual investors. The rest is intragovernmental debt.

The United States borrows money typically by issuing Treasury securities, such as bills, notes, and bonds to these various entities — who loan the U.S. the funds it needs for various operations.

While there are different viewpoints on the extent to which the national debt may impact individual investors, many investors are aware that the total amount of national debt, and the government’s ability to manage its payments, can impact interest rates, bond yields, and more.

Key Points

• The U.S., like many governments, issues bonds to help fund various government programs, and close the gap between revenues and expenses.

• The national debt stands at about $36.1 trillion, as of July 2025, which is the current amount of the U.S. debt ceiling.

• Some 80% of U.S. debt is held by countries including Japan, China, as well as businesses and individual investors. The remainder are funds the government loans itself.

• U.S. national debt is about 122% of the country’s gross domestic product (GDP), one of the highest in the world.

• The U.S. has yet to default on its debt obligations, and it’s expected that the national debt ceiling will be extended this year.

How Much Debt Does the US Have?

The amount of debt taken on by the U.S. government over time has grown precipitously. In the 100 years between 1924 and 2024, the national debt grew from $365 billion to $35.46 trillion.

Each year that the United States cannot pay the deficit between its revenue and expenses, the national debt grows. As of July 2025, the U.S. had once again reached its debt ceiling — roughly $36.1 trillion — which is the maximum amount the government can legally borrow.

It’s anticipated that Congress will once again raise the debt ceiling later this year, so that the U.S. does not default on its debt obligations, which could have severe market impacts worldwide.

The U.S. national debt comes from Treasury securities issued to foreign governments, as well as intergovernmental loans, in addition to those sold to businesses and individuals. These include Treasury bills, notes, bonds, floating-rate notes, and Treasury Inflation Protected Securities (or TIPS).

Because the U.S. has never defaulted on its debts, many people anticipate that the government’s ability to borrow will be extended at some point in 2025.

Who Is the US in Debt to?

There are generally two categories of debt: intragovernmental holdings and debt from the public. The debt that the government owes itself is known as intragovernmental debt. In general, this debt is owed to other government agencies such as the Social Security Trust Fund and other programs.

Because the Social Security Trust Fund doesn’t use all its capital, for example, it invests the excess funds in U.S. Treasuries — effectively loaning other parts of the government its cash. If the Social Security Trust Fund needs money, it can redeem the Treasuries.

The public debt consists of debt owned by individuals, businesses, governments, and foreign countries. Foreign countries own roughly one-third of U.S. public debt, with Japan owning the largest chunk of American debt hovering around $1.1 trillion. US debt to China ranks second, with that country owning roughly $859 billion of American debt.

What Is the History of the National Debt?

Since the founding of the United States and the American Revolution, debt has been a reality in America.

Creating a System of Lending

When America needed funding for the Revolutionary War in 1776, it appointed a committee, which would later become the Treasury, to borrow capital from other countries such as France and the Netherlands. Thus, after the Revolutionary War in 1783, the United States had already accumulated roughly $43 million in debt.

To cover some of this debt obligation, Alexander Hamilton, the first Secretary of the Treasury, rolled out federal bonds. The bonds were seemingly profitable and helped the government create credit. This bond system established an efficient way to make interest payments when the bonds matured and secure the government’s good faith state-side and internationally.

Using Debt to Fund War

The debt load steadily grew for the next 45 years until President Andrew Jackson took office. He paid off the country’s entire $58 million debt in 1835. After his presidency, however, debt began to accumulate again into the millions once again.

Flash forward to the American Civil War, which ended up costing about $5.2 billion. To manage some of the debt at hand, the government instituted the Legal Tender Act of 1862 and the National Bank Act of 1863. Both initiatives helped lower the debt to $2.1 billion.

The government borrowed money again to fuel World War I, and then substantially more money to pay for public works projects, and to stem deflation during the Great Depression. It borrowed even more to pay for World War II, reaching $258 billion in 1945.

The Debt Ceiling Is Established

Since 1939, the United States has had a debt ceiling, which limits the total amount of debt that the federal government can accumulate. The Treasury can continue to borrow money to fund government operations, but the total debt cannot exceed the prescribed limit.

However, Congress regularly raises the ceiling. The latest change came in June 2023, when President Biden signed a bill that suspended the limit until January 2025, in exchange for imposing some cuts on federal spending.

Since the debt ceiling was first introduced, American debt’s growth continued, with the pace accelerating in the 1980s. U.S. debt tripled between 1980 and 1990. In 2008, quantitative easing during the Great Recession more than doubled the national debt from $2.1 trillion to $4.4 trillion.

More recently, the national debt has increased substantially, with Covid-related stimulus and relief programs adding nearly $2 trillion to the national debt over the next decade.

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Why the National Debt Matters to Investors

As the national debt continues to rise, some policymakers worry about the sustainability of increasing debt, and how it will impact the future of the nation. That’s because the higher the U.S. debt, the more of the country’s overall budget must go toward debt payments, rather than on other expenses, such as infrastructure or social services.

Those worried about the increase in debt also believe that it could lead to lower private investments, since private borrowers may compete with the federal government to borrow funds, leading to potentially higher interest rates that can affect investments and lower confidence.

In addition, research shows that countries confronted with crises while in great debt have fewer options available to them to respond. Thus, the country takes more time to recover. The increased debt could put the United States in a difficult position to handle unexpected problems, such as a recession, and could change the amount of time it moves through business cycles.

Additionally, some worry that continued borrowing by the country could eventually cause lenders to begin to question the country’s credit standing. If investors could lose confidence in the U.S. government’s ability to pay back its debt, interest rates could rise, increasing inflation or other investment risks. While such a shift may not take place in the immediate future, it could impact future generations.

The Takeaway

The national debt is the amount of money that the U.S. government owes to creditors. It’s a number that’s been steadily increasing, which some investors and policymakers worry could have a negative impact on the country’s economic standing going forward.

Some economists believe that the growing national debt could lead to higher interest rates and lower stock returns, so it’s a trend that investors may want to factor into their portfolio-building strategy, especially over the long-term.

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FAQ

Who owns the most U.S. debt?

The largest amount of U.S. debt — about 42% or $15.6 trillion — is held domestically, by private investors and entities such as institutions, corporations, and individual investors.

How serious is the U.S. debt crisis?

Given that the national debt exceeds the U.S. GDP, many investors are concerned that without finding ways to stem the tide of borrowing, the economy could suffer slower growth, higher interest rates — not to mention the risk of a financial crisis, if the U.S. were to default.

Could the U.S. default on its debts?

The United States has never defaulted on any of its debt obligations, and it’s unlikely it will do so now. A more likely scenario is that the government will move to extend the debt ceiling to allow more borrowing.

About the author

Ashley Kilroy

Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.

Photo credit: iStock/Dan Comaniciu

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SOIN-Q225-147

Jul

2025

How Long Does It Take a Mobile Deposit to Clear?

By Jacqueline DeMarco | Budgeting & Goals, Financial Independence, money | Comments Off

Table of Contents

How Long Does a Mobile Check Take to Deposit?
What Factors Might Cause Mobile Deposit Delays?
FAQ

Mobile deposits to your account usually take around one or two business days to clear. This can make it a fast and convenient method to get funds into your bank account simply by using an app on your mobile device.

If you are experiencing delays, there could be an easy explanation for why that’s happening. Read on to learn more about how mobile deposits work and how to avoid delays in their clearing.

Key Points

• Mobile deposits generally take about one or possibly two business days to clear, providing a quick way to access funds in a bank account.

• Delays in the mobile deposit process can occur due to factors such as improper endorsement, unclear images, or entering incorrect amounts.

• Ensuring that all required signatures and details are correctly filled out on the check is crucial for a successful mobile deposit.

• Large checks, duplicate submissions, and deposits made after cutoff times can also extend the clearing process for mobile deposits.

• It is important to retain the physical check until confirmation of clearance has been received from the bank to avoid issues with bad checks.

🛈 SoFi members interested in mobile deposit availability can review these details.

How Long Does a Mobile Check Take to Deposit?

Mobile deposit involves snapping a photo of a check and depositing it via your financial institution’s app. That means no visit to a bank branch or ATM is required to deposit a check. Once the account holder uploads their check to the mobile app, the funds usually do not become immediately available (as is the case with depositing cash). It typically takes one or possibly two business days for the funds to clear and become available for use.

In some cases, it can take a few days for the bank to verify the check. The amount of the check can impact this timeline, as can the rules and processes each bank has surrounding mobile deposits.

Typical Processing Times by Bank

How long does mobile deposit take? It varies. Here is the processing time for mobile deposit for several banks:

• Bank of America: For those in Eastern and Central time zones, deposits by 5pm ET on a business day should be available the next business day; for those in Mountain and Pacific time zones, deposits by 8pm PT on a business day should be available by the next business day.

• Chase Bank: Chase Bank’s cutoff time for processing mobile deposits is 11pm ET on business days, with funds generally available the next business day. Deposits submitted after 11pm ET or on a non-business day are processed the following business day.

• Citi: For Citi Mobile deposits, the cut-off time is 6pm ET on a business day. Deposits made before this time are typically processed the same day, while those made after 6pm ET or on a non-business day (weekends or holidays) will be processed the next business day.

• PNC Bank: Deposits made before 10pm ET on a business day are typically available the next business day. There’s also a PNC Express Funds option for immediate access, but it involves a fee of 2.50% of the check amount, with a minimum of $2 each for checks under $100.

• SoFi: For mobile deposits of checks deposited by 5pm ET, a portion will be available the next business day and the remainder no later than the third business day. For large checks, a portion will be available on the next business day; the remainder will be available no later than the fifth business day.

• Wells Fargo: For mobile deposit, Wells Fargo has a 9pm PT cutoff time. Deposits made before that should be available on the next day after the deposit; otherwise, expect the day after the deposit credit date or possibly longer.

What Factors Might Cause Mobile Deposit Delays?

As briefly noted, certain factors can slow down the mobile deposit process. Knowing how to avoid these delays with future deposits can help speed up the timeline.

Here are a few factors that can slow down deposits (or stop them all together if not fixed):

Deposit Limits and Bank Policies

Checks for large denominations, whether deposited to checking or savings accounts, often take longer to clear than a check that is for a smaller amount. It can require more time to verify that the check is good. You may find that checks in amounts over $5,000 or $5,500 take more time to become available. Exactly how long it takes for a large check to clear typically varies from bank to bank.

In addition, banks may only accept mobile deposits up to a certain limit per day or month. For instance, some banks cap mobile deposits at $7,500 per month for some types of accounts, while others may have up to $20,000 deposited via app in a given month.

Time of Deposit and Business Days

Your banking app and/or website will likely tell you what the cutoff time is for mobile deposits to be processed. For example, if you are making a mobile deposit at 10:15pm ET on a Monday night and the app says the processing cutoff time is 10pm ET, your deposit probably won’t be available on Tuesday. Rather, it will probably be available on Wednesday, one full business day later.

Recommended: How to Manage Your Money

Check Amount and Source

As noted above, checks in excess of $5,000 can take longer to process than smaller checks. You may also find that international and third-party checks take longer to be verified and be processed than standard domestic checks.

Also, delays may occur if your account is new or not in good standing.

The Takeaway

Mobile deposits typically clear in one or two business days if deposited before a bank’s cutoff time. Every institution is different, so it might be smart to confirm with your bank’s customer service. And by following a couple of quick checkpoints, you can likely avoid any hitches that could cause a delay. Because in today’s impatient world, there’s usually no need to wait very long to get access to your money.

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🛈 SoFi members interested in mobile deposit availability can review these details.

FAQ

Are mobile check deposits available immediately?

It usually takes around one or two business days for deposits to go through. Following instructions from the bank carefully and noting deadlines regarding uploads can help you avoid delays.

How long does it take for a mobile deposit to go in?

How long it takes for a check to clear by mobile deposit is usually one or two business days via mobile deposit. However, this can be delayed if the check is for a large amount, is deposited after a bank’s cutoff time, or has issues with the way in which it was submitted.

Why is my mobile deposit taking so long?

Mobile deposit delays can be caused by a variety of factors such as using a blurry photo of the check, entering information incorrectly, or not endorsing the check properly. Double-check all key details before submitting the deposit to speed up the timeline. Also, international and third-party checks usually take longer to clear.

Are there limits to how much money can be deposited using mobile?

Some banks do have limits on how much money can be deposited via mobile in a given time period. In some cases, this will vary with the specific type of account you hold or it might be specific to your own banking profile. For instance, some banks allow for up to between $7,500 and $20,000 in mobile deposits monthly depending on a client’s particulars. Check with your financial institution for details.

What should I do if my mobile deposit doesn’t clear?

Contact your bank’s customer service and ask about the situation. This is why it’s always important to keep the paper check until you are sure it has cleared via mobile deposit. The bank can let you know whether there was an issue (say, with the upload of the image, the signature, or the check’s funding) and recommend next steps.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

Photo credit: iStock/RyanJLane

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

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SOBNK-Q225-104

Jun

2025

Private Mortgage Insurance (PMI) vs. Mortgage Insurance Premium (MIP)

By Ashley Kilroy | Home Ownership, mortgage | No Comments

If you’re buying a home and have a down payment of less than 20% of the purchase price, you may need to pay for private mortgage insurance (PMI) or a mortgage insurance premium (MIP). This insurance protects your lender in the event that you default on your loan. It also presents an additional cost for you — a charge you’ll have to keep paying for part or all of the life of the loan. But it can be worthwhile since, for many aspiring homeowners, it can unlock a chance at homeownership.

Private mortgage insurance may be required for conventional home loans — those not backed by a government program. A mortgage insurance premium is a little different and is always a part of an FHA-insured loan, at least for a number of years. Both are intended to protect lenders against losses if borrowers default on their home loans. Here’s a guide to how they work, how they differ, how much they cost, and when you can possibly escape their hold on you.

Key Points

• PMI is for conventional loans, while MIP is for FHA loans.

• PMI typically costs 0.5% to 1% of the loan amount annually, MIP ranges from 0.15% to 0.75% of the outstanding loan balance.

• PMI can be canceled with 20% equity, MIP lasts 11 years or for the loan term, depending on when you got your loan and the size of the down payment.

• MIP includes an upfront premium of 1.75% of the loan amount, which can be financed.

• PMI cancellation is possible through home reappraisal, refinancing, or meeting lender criteria.

What Is Private Mortgage Insurance?

PMI is a type of coverage typically required by lenders on conventional conforming loans. A lender might stipulate PMI when you make a down payment that is less than 20% of an accepted offer or asking price.

Most conventional mortgages are “conforming,” which means they meet the requirements to be sold to Fannie Mae or Freddie Mac. It’s best to consult the lender when you apply for a loan about whether you will have to pay for PMI.

Although PMI adds a cost, it can allow you to qualify for a loan that you otherwise might not get. And it can help you to buy a house without putting 20% down.

How Much Does PMI Cost?

The price of PMI varies, but often is 0.5% to 1% of the total loan amount annually. The cost depends on the type of mortgage you get, your credit score, the loan-to-value (LTV) ratio, and more. It also depends on the amount of PMI that your loan program or lender requires. PMI could run as high as 6% of the amount you borrow.

Usually, homeowners required to pay PMI do so monthly, rather than annually, and it’s included in their mortgage payments. A few may opt for lender-paid mortgage insurance (LMPI), an option where the lender for the home loan pays the cost of mortgage insurance. For that convenience, however, a homebuyer will usually pay a slightly higher interest rate, and more over the life of the loan.

Despite the cost, PMI may be more economical than an FHA loan if you’re a borrower with a FICO® score of around 740 or above who can put 3.5% down.

When Can You Stop Paying PMI?

Buying a home may require you to pay PMI, but there are ways to get to the point where you can stop paying it.

First, there is a legal end to PMI. Under the Homeowners Protection Act, also known as the PMI Cancellation Act, your lender is required to cancel PMI automatically once your mortgage balance is at 78% of the home’s original value. That generally means either the contract sales price or the appraised value of your home at the time you purchased it, whichever is lower (or, if you have refinanced, the appraised value at the time you did so). Which figure is used for the original value can vary by state.

Second, you can have your home reappraised, which will likely result in a new value, and ask your servicer to cancel PMI if you have built equity of 20% or more of the current value. Owners of homes that have appreciated, either over time or thanks to home improvements, may benefit from this. You may need to be proactive with your lender and meet specific eligibility requirements to help make that happen.

Third, you may be able to refinance your mortgage. If you have at least 20% equity, you can possibly qualify for a conventional loan that won’t require PMI.
Finally, the Consumer Financial Protection Bureau notes that if you have stayed current on your payments and reached the halfway point of the loan’s schedule, PMI can be canceled, even if your mortgage balance hasn’t yet reached 78% of the home’s original value.

💡Quick Tip: A major home purchase may mean a jumbo loan, but it doesn’t have to mean a jumbo down payment. Apply for a jumbo mortgage with SoFi, and you could put as little as 10% down.

What Is a Mortgage Insurance Premium?

If they’re securing a home loan backed by the Federal Housing Administration, borrowers pay for a different type of coverage, known as a Mortgage Insurance Premium or MIP. When it comes to FHA loans, MIP applies no matter what your loan term or down payment amount.

A key reason people choose FHA loans is the ability to buy a home even with a low down payment — these loans allow you to put down as little as 3.5%. But keep in mind that even with that affordable down payment, this type of loan bears costs and, as a borrower, you’ll want to understand them.

MIP runs for 11 years or the loan’s full term, depending on the borrower’s down payment, the balance owed, and LTV. As the homebuyer, you also pay a one-time upfront MIP premium of 1.75% of the base loan amount, which can be rolled into the loan. On top of that, you’ll have an annual premium that is divided by 12 to determine your payment, which is added to your monthly mortgage payment.

Recommended: Different Types of Mortgage Loans, Explained

How Much MIP Will You Pay on an FHA Loan?

Like a mortgage interest rate, MIP fluctuates. The ongoing annual MIP is calculated with a rate that’s currently around 0.15% to 0.75%. It is divided by 12 and added to your monthly mortgage payment. What you’ll pay in the end depends on your loan-to-value (LTV) ratio — also known as the price minus your down payment — and the length of the loan.

If you take out an FHA loan for the common term of 30 years, or any length of time greater than 15 years, your monthly MIP costs will be determined by calculating the loan’s annual average outstanding balance, based on what banks refer to as its amortization schedule. This figure is then multiplied by the annual MIP rate and divided by 12 to determine a monthly payment.

That is the amount that will be added to your principal payment on your home loan, along with charges like escrow amounts for property taxes and the monthly cost of your homeowner’s insurance.

Here’s an example: Let’s say you borrow less than or equal to $726,200 to buy your home, and make a down payment of 5% or less. You’ll pay an annual MIP of 0.50% on your loan. On a home loan of $300,000, you’ll pay MIP of about $1,500 per year, or $125 per month.

The following chart details approximate monthly payments based on different loan and down payment amounts. Remember, LTV is the total home price, or 100%, minus the percentage you take care of in your down payment.

Base Loan Amount	LTV	Annual MIP Rate	Yearly Cost	Monthly Cost
$500,000 (≤ $726,200)	95%	0.50%	$2,375	$198
$500,000 (≤ $726,200)	96.5%	0.55%	$2,654	$221
$800,000 (> $726,200)	95%	0.70%	$5,320	$443
$800,000 (> $726,200)	96.5%	0.75%	$4,500	$375

Some homeowners can pay off their loans more quickly. By choosing a shorter term, such as 15 years, you could take advantage of a lower MIP.

Take the 15-year option, which gives you a better deal with a lower rate. If you were to borrow less than or equal to $726,200 and put down 10% or less as a down payment, you’d pay an annual MIP of just 0.15%. On a $300,000 home loan, that’s more like $450 a year, or $37.50 a month.

This all may seem complicated, but many people find that the flexibility of an FHA loan, if you can secure one, makes it worth paying the MIP.

Thinking about buying a fixer-upper and making it beautiful and functional again? FHA offers the FHA 203(k) home loan for that — something that few lenders do, especially if the home isn’t in good enough shape to be lived in, but it may be worth investigating.

Recommended: FHA Mortgage Loan Calculator

Can You Get Rid of MIP?

Possibly. If you took out an FHA loan before June of 2013, you may be able to cancel your MIP. You would need to now have 22% equity in your home — meaning your loan balance has reached 78% of the purchase price noted on your mortgage paperwork — and have made all payments on time. (FHA lenders do not automatically cancel your MIP once you reach that threshold. You’ll need to ask for it to be stopped.)

If your FHA loan originated more recently than June 2013, however, different rules govern it. If your down payment totals less than 10%, you must pay the MIP for the life of the loan. Made a down payment of 10% or more? MIP expires in 11 years.
Other ways to unburden yourself of MIP include paying off the FHA loan or refinancing it into a conventional loan with a private lender, which will give MIP the heave-ho.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Questions? Call (888)-541-0398.

What About Refinancing?

If you have a mortgage that includes PMI or MIP and your property value has increased significantly, the option of refinancing is one to think about.

Some borrowers may find that at a certain point they can qualify for a conventional home loan without mortgage insurance.

Refinancing holds appeal because of the possibility of locking in a better rate and reducing your monthly payment. Equity-rich homeowners sometimes like the option of a cash-out refinance.

But as with your original mortgage, you’ll face closing costs if you refinance.

What about a “no-closing-cost refinance” you might see advertised? You’ll either add the closing costs to the principal or get an increased interest rate.

The Takeaway

Glass half-full: Private mortgage insurance and mortgage insurance premium open the door to homeownership to many who otherwise could not buy a property. Glass half-empty: PMI and MIP can really add up.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Is it a better option to put down 20% or to pay PMI?

It’s great to make a down payment of 20% and avoid private mortgage insurance (PMI), but not everyone can afford to do it. It can be particularly hard for first-time homebuyers, who often don’t have income from the sale of another residence to fund their next home purchase. Use a home affordability calculator to look carefully at monthly mortgage payment amounts for various home prices and interest rates. Put down what you can afford and try not to compromise your ability to cover other bills, including the mortgage payment itself.

How long will I pay PMI?

If you’re paying private mortgage insurance, you’ll need to continue until you’ve built up 20% equity in your home (based on the original sale price). At this point, you can request in writing that your loan servicer cancel PMI as long as you’re current on your payments.

How are FHA MIP rates determined?

The FHA reevaluates and updates MIP rates periodically. Changes are based on the condition of its Mutual Mortgage Insurance Fund, and current housing and economic conditions.

Can I cancel my FHA MIP once I’ve reached a certain equity level?

No. Unlike the private mortgage insurance on a conventional loan, which goes away after a homeowner reaches 20% equity, FHA MIPs cannot be canceled.

Are MIP payments tax-deductible?

Unfortunately, no. The Further Consolidated Appropriations Act of 2020 allowed qualified taxpayers to take a tax deduction for MIP and PMI costs for the tax years 2018 through 2021, but the deduction has expired and is no longer available.

About the author

Ashley Kilroy

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

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

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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

SOHL-Q225-186

Jun

2025

A Guide to Personal Loans for Single Mothers

Personal Loan Need to Knows for Single Mothers

By Anna Davies | Budgeting & Goals, Family Finances, personal_loan | Comments Off

Table of Contents

Why Might a Single Mom Need a Personal Loan?
Are Personal Loans for Single Mothers Special?
Benefits and Risks of Personal Loans for a Single Mother
Is Getting a Personal Loan With No Income Possible?
Alternatives to Personal Loans for Single Mothers
Other Financial Help For Single Mothers
FAQ

Whether you’ve been a single mom from the get-go or are in the process of becoming a solo parent, raising a child on your own can be expensive. Housing, other essentials, fun purchases (toys!), and extracurriculars add up. Add in childcare, major expenses like braces, and legal bills during a separation, and you may find yourself with your finances stretched thin.

One option to consider is a personal loan. Read on for a closer look at personal loans for single moms, including their pros and cons, how to qualify, plus other funding options you may want to explore.

Key Points

• Single mothers can use personal loans for diverse needs, including debt consolidation and major purchases.

• Personal loans provide flexible, quick funds with fixed repayment terms.

• Overborrowing and credit score damage are significant risks associated with personal loans.

• Qualifying for a loan without income is difficult but may be achieved with alternative income sources and/or a cosigner.

• Home equity, government assistance, and educational grants can be viable alternatives to personal loans.

Why Might a Single Mom Need a Personal Loan?

First, consider what a personal loan is. This type of loan provides a lump sum of money up front you then pay back (plus interest) in monthly installments over time. You can use the funds from a personal loan for virtually any purpose, whether it’s making a large purchase, covering living expenses, or paying down other, higher-interest debt.

There are many reasons why a single mother — or any parent — might consider applying for a personal loan. These include:

1. Debt consolidation

2. Covering the cost of a move

3. Paying tuition or extracurricular expenses for children

4. Stopgap funds during times of unemployment

5. Covering housing costs, such as rent or a mortgage

6. Paying for a home remodeling project

7. Buying a car

8. Purchasing major appliances

Are Personal Loans for Single Mothers Special?

In a word, no. The process of applying for a personal loan is the same for everyone. However, there may be particular approval hurdles to overcome as a single parent.

One is income. If you’re newly single, you may not have a steady income, which can make it more difficult to get approved for a personal loan. Another is your credit. If you’ve had to rely on credit cards to cover the cost of divorce or the transition to single parenting, your credit may not be what it used to be. The amount of debt you owe on your credit cards is one of the biggest factors affecting your credit score.

However, these obstacles aren’t insurmountable (more on that below).

Benefits and Risks of Personal Loans for a Single Mother

A personal loan can offer a single mom a valuable lifeline to meet immediate needs, such as unexpected expenses, education costs, or debt consolidation. However, taking on any type of debt generally comes with costs, as well as risks. Here’s a look at the pros and cons of getting a loan as a single mom.

Pros	Cons
Flexibility in usage of funds	Interest and fees add to your costs
Quick access to funds	Risk of overborrowing
Fixed repayment schedule	Missed or late payments can negatively impact your credit
Interest rates are typically lower than credit cards	Can add to your debt burden

Pros of Personal Loans for Single Mothers

• Flexibility Personal loans provide flexibility in how you can use the borrowed funds. Whether it’s covering medical bills, home repairs, or summer camp tuition, the uses of personal loans are numerous and varied.

• Quick access to funds Personal loans often come with a streamlined application process and relatively quick approval. You may be able to access the funds quickly, enabling you to address urgent financial needs promptly.

• Fixed repayment schedule Personal loans usually come with fixed monthly payments over a specified term. This predictability can make it easier for you to budget and plan your finances effectively.

• Potential for lower interest rates Depending on the borrower’s creditworthiness, personal loans can offer competitive interest rates compared to other types of borrowing, such as credit cards or payday loans. Single mothers with a good credit history may benefit from more favorable repayment terms.

Cons of Personal Loans for Single Mothers

• Interest and fees On top of interest, some lenders charge fees for personal loans, which increase the overall cost of borrowing. It’s important to carefully evaluate the terms and conditions to make sure you can comfortably manage the repayments without straining your budget.

• Risk of overborrowing As a single mom, you likely want to avoid overborrowing or taking on more debt than they can reasonably repay. Overcommitting to loan payments may lead to a cycle of financial stress and difficulty in meeting other essential expenses.

• Impact on credit score Taking out a personal loan creates a new line of credit, and if not managed properly, it could negatively affect your credit profile. Late or missed payments can damage creditworthiness, potentially impacting future borrowing opportunities.

• Debt burden A personal loan will add to your existing financial obligations as a single mother. Before opting for a loan, you’ll want to be certain to assess the long-term implications and consider whether the loan repayments align with your income and financial goals.

Is Getting a Personal Loan With No Income Possible?

If you’re a single mother with no job or you’ve been a stay-at-home-mother with little or no income of your own, it may be difficult, though not impossible, to qualify for a personal loan.

Lenders typically want to see proof of a regular income. However, that does not necessarily have to be job-related income. You may be able to count these other sources of income:

• Unemployment

• Alimony

• Child support

• Investment income

• Rental income

• Pension or annuity income

• Freelance work

• Gig work

If you don’t have much income to speak of, then you might consider a cosigner or co-applicant for your loan. This a person who agrees to make the loan payments if the main borrower cannot or does not. For some borrowers, family members have the financial flexibility to cosign on a loan, but it can be a good idea to have a conversation about expectations and potential hypotheticals if you were no longer able to pay back the loan.

Another option is to secure a personal loan with collateral. This is an asset of value, such as a vehicle or money in a savings account, you use to back the loan in case you default. Should you become unable to repay the loan, the lender can seize your collateral to recover their losses. This lowers risk for the lender, making steady income (or less-than-stellar credit) less critical.

Also keep in mind that if you have no income but excellent credit, you may still find a lender who is willing to offer you an unsecured personal loan.

You’ll also want to be wary, however, of lenders who advertise “no-income loans,” as these loans may come with sky-high interest rates, short repayment terms, and low loan amounts.

Alternatives to Personal Loans for Single Mothers

There are other alternatives to personal loans, depending on your financial circumstances and your needs. Here are some you might consider.

Home Loans for Single Mothers

If you own your home, using your home as a financial asset may be one way to borrow funds at a reasonable cost. If you have built up equity in your home, you may be able to tap that equity by getting a home equity loan or a home equity line of credit (HELOC). Just keep in mind that the loan is backed by your home. Should you have difficulty repaying the loan or credit line, you could potentially lose your home.

Government Resources for Single Parents

If your income is low, you may be eligible for one or more government assistance programs. Some options you may want to explore include:

• Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)

• National School Lunch Program

• Temporary Assistance for Needy Families (TANF)

• Low Income Home Energy Assistance Program (LIHEAP)

• The Emergency Food Assistance Program

You can find more resources at benefits.gov.

Educational Aid for Single Mothers

If you’re considering going back to school, below are some programs that can help make it more affordable (or even free):

• Pell Grants

• Teach Grants

• Women’s Independence Scholarship Program (WISP)

There also may be private scholarships and grants for single parents available from the institutions you’re interested in attending. Speaking with the financial aid office may help you see the breadth of options available to you.

Other Financial Help For Single Mothers

Becoming a single mother, either by choice or circumstance, can feel overwhelming. But there is support out there. It can help to talk to other single parents in your community — you may be surprised by all the resources that are available. Other opportunities may include:

• Financial aid or tuition assistance If your children are in private school or extracurricular programs, there may be financial aid available to help lower the cost. Even if there’s not a formal program, it can’t hurt to explain your situation and ask what may be available.

• Employer-based programs Your human resources department may have certain programs, such as childcare coverage, free legal consultations, and access to financial planning and debt counseling, for eligible workers. Talk to your HR representative or look through their materials to assess what’s available.

• Family and friends People close to you may be willing to provide support, or there may be creative ways to trade services, such as babysitting, to get more financial help. If a friend or family member offers to loan you money, it can be helpful to put an agreement in writing, including any interest you will pay and the terms of repayment, so there is no confusion that could cause a rift in your relationship.

Recommended: A Guide to Unsecured Personal Loans

The Takeaway

As a single mother, there are avenues that can help you manage your finances and achieve your financial goals. One option is taking out a personal loan. This type of financing can provide financial relief and flexibility, but it is important to weigh the pros and cons, compare options from different lenders, and assess your ability to manage repayments responsibly.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.

FAQ

Can you get a loan for being a single mother?

There can be loans that are a good fit for single mothers, such as certain home loans that suit those with financial challenges or less strong credit scores. There may be other programs that have special products or accommodations for single mothers for other types of loans as well. It can be wise to research options.

Can stay-at-home moms get a personal loan?

Yes, a stay-at-home mom may be able to get a personal loan, but they may have to take additional steps to qualify. For instance, a co-applicant could be required or proof of other sources of income vs. a salary.

What is a hardship grant for single mothers?

Hardship grants offer quick sources of cash for families or individuals facing urgent financial need. A good place to start searching for this kind of financing can be local credit unions.

Photo credit: iStock/RyanJLane

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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

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

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.

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

SOPL-Q225-089

How Long Do Late Payments Stay On a Credit Report?

What Is Considered a Late Payment?

When Do Late Payments Fall Off a Credit Report?

How Different Credit Bureaus Handle Late Payments

How Late Payments Affect Your Credit Score

Short-Term vs Long-Term Credit Score Impact

How to Remove Late Payments From a Credit Report

What Are Acceptable Reasons for Late Payments on Your Credit Report?

Goodwill Adjustment Letters

Requesting a Pay-for-Delete Agreement

What Can You Do to Minimize the Impact of a Late Payment?

Negotiate

Dispute Errors on Your Credit Reports

Catch Up on Payments as Soon as Possible

Guide to Avoiding Late Payments

Set Up Autopay

Set Payment Reminders

Change Your Payment Due Date

Consider a Backup Payment Method

The Takeaway

FAQ

Can I get late payments removed from my credit report?

Is it true that after 7 years your credit is clear?

Is payment history a big factor in your credit score?

How many points does a late payment affect your credit score?

Can one late payment stop me from getting a loan?

Who Owns the US National Debt?

How Much Debt Does the US Have?

Who Is the US in Debt to?

What Is the History of the National Debt?

Creating a System of Lending

Using Debt to Fund War

The Debt Ceiling Is Established

Why the National Debt Matters to Investors

The Takeaway

FAQ

Who owns the most U.S. debt?

How serious is the U.S. debt crisis?

Could the U.S. default on its debts?

How Long Does It Take a Mobile Deposit to Clear?

How Long Does a Mobile Check Take to Deposit?

Typical Processing Times by Bank

What Factors Might Cause Mobile Deposit Delays?

Deposit Limits and Bank Policies

Time of Deposit and Business Days

Check Amount and Source

Increase your savings with a limited-time APY boost.*

The Takeaway

FAQ

Are mobile check deposits available immediately?

How long does it take for a mobile deposit to go in?

Why is my mobile deposit taking so long?

Are there limits to how much money can be deposited using mobile?

What should I do if my mobile deposit doesn’t clear?

Private Mortgage Insurance (PMI) vs. Mortgage Insurance Premium (MIP)

What Is Private Mortgage Insurance?

How Much Does PMI Cost?

When Can You Stop Paying PMI?

What Is a Mortgage Insurance Premium?

How Much MIP Will You Pay on an FHA Loan?

Can You Get Rid of MIP?

First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.

What About Refinancing?

The Takeaway

FAQ

Is it a better option to put down 20% or to pay PMI?

How long will I pay PMI?

How are FHA MIP rates determined?

Can I cancel my FHA MIP once I’ve reached a certain equity level?

Are MIP payments tax-deductible?

Personal Loan Need to Knows for Single Mothers

Why Might a Single Mom Need a Personal Loan?

Are Personal Loans for Single Mothers Special?

Benefits and Risks of Personal Loans for a Single Mother

Pros of Personal Loans for Single Mothers

Cons of Personal Loans for Single Mothers

Is Getting a Personal Loan With No Income Possible?

Alternatives to Personal Loans for Single Mothers

Home Loans for Single Mothers

Government Resources for Single Parents

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