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Getting a law degree is bound to take a big commitment — in time, energy, and money. And it’s tough from the very first step. Getting into law school isn’t easy, especially for those aiming for the top tier. So the sooner you can attack the application process, the better.

Keep reading for an overview and timeline of how law school applications work.

Applying to Law School

When you’re figuring out how to go to law school, the application process alone can feel like quite a journey. In addition to completing a Bachelor’s degree, the law school application process involves preparing for and taking the LSAT, writing a personal statement, and securing letters of recommendations. With all that on your list, figuring out how to get into law school can feel like a bit of a maze.

After getting into law school, you’ll also need to pay for your education. This can also require some leg work, such as filling out the grad school FAFSA or potentially applying for scholarships or private law school loans. Continue reading for a more detailed explanation on the law school application process.

1. Prep for the LSAT

Because the LSAT, otherwise known as the Law School Admission Test, is the only test accepted for admission purposes by all ABA-accredited law schools, most American Bar Association-approved law schools in the U.S. require students to take the exam. The half-day, standardized test is administered nine times and students can take the test at home or from another preferred location, as the tests are now proctored remotely.

At a minimum, the Law School Admission Council (LSAC) recommends taking a practice test, including a writing sample, under the same time constraints allowed for the actual test. The results could give you some idea of your strengths and what areas need improvement.

Those who plan to take the practice test and/or sign up for classes will probably want to leave enough time before their LSAT test date. The LSAT and your GPA are two important numbers to law schools. LSAT scores range from 120 (lowest possible) to 180 (highest possible).

Though other factors are considered, if you want a good chance at getting into a certain law school, your LSAT score and GPA should be at or above the LSAT and GPA medians of that school. You can generally find this information on the college’s website.

Recommended: How to Study for the LSAT

LSAT Prep Timeline

Many law schools require applicants to take the test by November or December in order to be admitted the following fall. However, organizations like Kaplan, a college admission services company that offers test preparation services and admissions resources, suggest factoring in the law school admissions cycle when selecting your testing date. They note that June, July, and September test dates are generally popular since they allow for plenty of time for students to receive scores.

Be sure to factor in your schedule and workload when deciding when you’ll take the LSAT. Taking the test in June will give you time to retake it if you aren’t happy with your score — but if you’re still in college, you’ll have to prepare while you’re busy with coursework.

If you take the test in October, you’ll have the summer to prepare and you can take the test again in December, if necessary. But your applications may be submitted later than other test takers — and some schools already will have started filling their seats. Some students may choose to take a year off between college and law school to prepare for the LSAT and work on their applications.

Test takers may want to look for some free prep materials online or may decide to sign up for paid online classes, in-person classes, or tutoring sessions.

2. Register for CAS

The Law School Admission Council (LSAC) is a not-for-profit organization that offers services and programs to help students manage the law school application process. Creating an account at the LSAC.org website allows applicants to track their progress and manage deadlines as they connect with their selected schools.

The Credential Assembly Service (CAS), which is provided by the LSAC, is required by most ABA-approved law schools. For a fee (currently $45), the CAS will put together a report containing transcripts, LSAT scores, and letters of recommendation.

3. Submit Your Transcripts and Letters of Recommendation to CAS

Students must contact their college (or colleges) to have transcripts sent to the CAS. And it’s up to the student to find professors they believe will provide positive evaluations of their past and future performance to send recommendation letters to the CAS. It’s a good idea to do this in August or September when college offices and faculty are back in full swing.

You’ll only have to do this once. Then, when you apply to your chosen law schools, they can contact the CAS and request a copy of your report.

4. Search for Law Schools

There are several factors that could go into your school choice. Just as with your undergraduate education, you may want to apply to a mix of “reach” schools, “safety” schools, and a few that land right in the middle.

But the application process can be pricey, so if you’re on a budget, you may want to narrow the field. When you’re deciding how many law schools to apply to, here are some things to consider:

•   Location: If you’re hoping to go to a top law school, you’re probably prepared to relocate. If not, you may want to start your search by thinking about where you’ll want to practice law someday. After all, you’ll be building a network with your fellow students, professors, and people you meet in the community.

•   Reputation: Starting out, fellow attorneys (and potential employers) won’t know much about your skills. Instead, they’ll likely regard you as a “Duke grad” or a “Harvard man” (or woman), and judge you by what they know about your law school. That doesn’t mean you have to go to a big, prestigious school — but you may want to look for a respected school.

•   Interests: By attending a school that offers classes that focus on the type of law you think you’ll want to practice (sports and entertainment, criminal, business, health care, etc.), you’ll likely be better prepared for your career. And you’ll probably have an opportunity to find mentors who could help you as a student and in the future.

•   Recruitment, tours, and alumni events: If you have the opportunity, you may want to attend a meet-and-greet event in order to touch base with recruiters, former students, and faculty who can fill you in on what law school and a law career have in store. You also may be able to get an idea if the campus and community are a good fit for you.

•   Let the schools find you: The LSAC’s Candidate Referral Service (CRS) allows law schools to search a database and recruit students based on certain characteristics (LSAT score, GPA, age, geographic background, etc.). Registration is free for anyone with an LSAC.org account.

Recommended: A Guide to Transferring Law Schools

5. Apply to Law Schools

After you’ve taken the LSAT, set up your CAS, and squared away your letters of recommendation, you’ll need to start on your personal statement. Stellar LSAT scores and grades are important to a law school application, but a personal statement could also tip the balance in your favor. The goal of a personal statement is to explain to the admissions committee why you would be a valuable addition to their student body.

Start early so you have a chance to show your work to others who might help you fine-tune it — advisors, teachers, parents, friends, and any grammar snobs or professional writers/editors you might know. This is your chance to stand out from the crowd, so use your personal statement to explain what makes you, you. And if you’re applying to multiple schools, you may want to take the time to tailor your piece as needed.

When you have everything ready to go, you’ll have the option to apply to as many U.S. law schools as you like through your LSAC.org account. Make sure all the information on file is accurate and up to date, and keep good records of every step in the process.

And be patient: Many schools practice rolling admissions, which means the earlier you get your application in, the sooner you’ll hear back. But there’s no set timetable, so you may have to wait a while.

How Will You Score?

It can be difficult to predict how you’ll score on the LSAT, but taking practice tests can be an indicator of how well you’ll perform on the day of the exam. The questions on the LSAT are all weighted equally and you won’t be penalized for incorrect answers. What matters is the number of questions you answer correctly.

Paying for Law School

Once you’ve cleared the hurdle of applying to law school, you might want to start considering ways to pay for law school. You may be familiar with the financial aid process from applying for undergraduate loans, but graduate students are also eligible for federal student aid.

The requirements of FAFSA are similar for grad students, and the information provided will be used to determine federal financial aid like scholarships, grants, work-study, and federal student loans. When those sources of funding aren’t enough — graduate private student loans could help fill in the gap. Though, they are generally considered after all other sources of financing have been exhausted because they don’t offer the same borrower protections (like deferment options) as federal student loans.

The Takeaway

Applying to law school requires dedication, time, and preparation. Taking the time to understand the application process can help students get into law school. Plan out your LSAT study schedule so you are prepared for test day, think critically about which law schools are a best fit for your personal and professional goals, and don’t forget to devote enough time to write, edit, and rewrite your personal statement.

Once you’ve gained admission, you’ll need to figure out how to pay for law school. Law students are eligible for federal financial aid like grants, scholarships, and federal student loans.

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

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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.

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A debit memorandum is a notice issued to customers from a bank or a business, informing them of an adjustment being made to their account balance. In all cases, a debit memo means that money will be taken out of an account to cover a fee or an underpayment.

Debit memos occur both in personal banking — like for a bounced check or insufficient funds fees — but are also common in business-to-business (B2B) transactions. They are often to correct an erroneous invoice or respond to changing market prices. Understanding how debit memos work can help you stay on top of your money.

What Is a Debit Memo?

A debit memo is a notice from a financial institution or a business to a customer that there is a forthcoming adjustment (a debit or withdrawal of funds) to their account. You may also hear it referred to as a debit memorandum or debit note.

A debit memo might show up on your bank statement for an atypical fee, like for ordering checks or for overdrafting. Normal checking account debits, like from a swiped debit card or a cashed check, are not classified as debit memos and will not appear on a bank statement as such.

In B2B transactions, a company may issue a debit memo after invoicing if there was something incorrect on the original invoice. Typically, this happens if the customer was undercharged.

💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.

How Does a Debit Memorandum Work?

In banking, if you have incurred a fee, such as an overdraft fee, the bank will add a debit memorandum to your monthly bank statement. If you use a digital banking app, you can often see this debit note in real time — no need to wait for a paper statement in the mail.

Just make sure you’ve turned on account alerts to track deposits, withdrawals, and other important account changes.

Banks cannot just assess fees at random. Federal law requires banks to disclose any fees they might charge for a bank account; before opening a bank account online or in person, ask to see a detailed fee structure. If you don’t think a debit memo on your bank statement is correct, contact customer service to address the issue.

In business, debit memos work a little differently. The company acting as the seller might issue a debit memo after sending an incorrect invoice. Doing so notifies the buying company that their accounts payable will increase to rectify the unpaid amount.

Recommended: How Long Does It Take to Open a Bank Account?

Real-Life Examples of a Debit Memorandum

Here are two real-life examples of bank memos, one for regular consumer checking accounts and one for a B2B transaction.

Banking Scenario

If you write a check to a friend but don’t have enough money in your checking account to cover it, the check will bounce when your friend goes to deposit or cash it. Every time you bounce a check, your bank will likely charge you a fee. Rather than sending you an invoice, they will directly debit the amount from your bank account.

Even if you have no money in your account, you can go into a negative balance. This debit will show up on your bank statement as a debit memo.

Business Scenario

In this example, your company has done construction work for a local business. However, when sending the invoice to the business, you accidentally left off the labor cost and additional materials required for one portion of the project, equivalent to $5,000.

To resolve this problem, you can issue a debit memo to the local business. This signals that you will be recording an increase in your accounts receivable of $5,000. In turn, the local business will then need to increase the amount in its accounts payable by $5,000 to cover the additional fee. To avoid delays or disputes, the debit note should include adequate information to explain the adjustment in the final cost.

Recommended: How to Transfer Money From One Bank to Another

Types of Debit Memos?

Three situations commonly call for debit memos: bank transactions, incremental billing, and internal offset. Here, learn about all three types of debit memos to understand their key differences.

Bank Transactions

As an individual consumer, you will most likely encounter a debit memo as a bank transaction. If you incur a fee through your bank, like for printing checks or an overdraft, the bank will debit your account directly to cover that fee. This will show up on your bank statement as a transaction, labeled as a debit memo or debit note.

Incremental Billing

If you are involved in billing for B2B transactions, you may encounter debit memos. A seller might issue a debit memo to a buyer for several reasons:

•   If there were errors on the original invoice.

•   If the buyer paid upfront, but project costs were higher than expected.

•   If the cost of materials or labor increased during the course of the project.

•   If the scope of the work changed and resulted in higher costs.

Internal Offset

If a customer’s account has a credit balance of insubstantial value, a company can issue a debit memo to clear out the balance. If the balance is large enough to be considered material (i.e., a significant amount of money), the company would typically refund the customer rather than issue a debit memo.

Debit vs. Credit Memorandum: What’s the Difference?

Credit memos are essentially the opposite of debit memos. In banking, credit memos alert customers of an increase in their account balance. In business, a seller might issue a credit balance to alert the buyer that the original invoice was too high, thus reducing the amount the buyer owes.

Notification to Customers

When a bank issues a debit memo, it typically notifies the customer of the debit on the bank statement. Similarly, a credit memo will show up on a customer’s bank statement.

As a customer, you may receive paper or electronic statements. If you bank online, you can typically check your transactions at any time on the app or website. When you receive notification of a debit, you’ll want to take it into account when balancing your bank account.

Invoicing

As a seller issuing a debit memo, you are notifying the buyer that you are increasing the final invoice amount. A credit memo does the opposite: It notifies the buyer that you are reducing the final invoice amount.

Recording the Reduction

In the event of a debit memo, the seller will record an increase in the accounts receivable amount; the buyer must record the larger debit in their accounts payable ledger. For a credit memo, the seller records a decrease in the accounts receivable amount while the buyer records a smaller debit from accounts payable.

Debit: Remit Payment vs. Credit: Future Purchases

To clarify a bit more, debits are amounts owed that must be remitted to settle and account. Credits are money that an individual or business is owed, perhaps reflecting an overpayment, which may be applied to future purchases.

Here’s a summary:

💡 Recommended: Credit vs Debit Memo

Managing a Bank Account

When you open a checking account or savings account, it’s important to understand the fee structure so that you aren’t surprised by a debit memo on your monthly account statement. Ask for a fee structure upon opening a new account, and monitor your statements closely to understand what fees are being assessed.

As best as you can, check your checking account for low balances, and set up alerts for all transactions. It can also be wise to activate fraud alerts to help manage your banking security and protection.

The Takeaway

Debit memorandums alert banking customers that funds will be withdrawn from their account, often to cover fees incurred. This will lower an account balance, so it’s important to be aware of these changes and make sure your account doesn’t go into overdraft.

Looking for the right banking partner? See what SoFi offers.

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

FAQ

Do you pay a debit memo?

A debit memo serves as a notification of a debit from your account. The bank will automatically debit your account. In a B2B scenario, a debit memo is a form or document that notifies the buyer that the seller has increased the accounts receivable amount.

Who issues a debit memo?

A bank or credit union may issue a debit memo to a personal or company account for specific fees, including bounced checks, insufficient funds, or printing checks. A business may issue a debit memo to another business to correct an invoice that results in underpayment. A business can also use a debit memorandum internally, to offset a credit balance in a customer account.

Is a debit memo the same as an invoice?

A debit memo is not the same as an invoice. Rather, businesses often issue debit memos as a correction to an initial invoice, typically when they have mistakenly undercharged a customer.

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

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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

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SOBK-Q224-1929370-V1

The maturity date for an installment loan like a personal loan is the date on which you’ll be finished paying off your loan. It’s important to mark this day on your calendar, not only to celebrate successfully paying back your debt, but also because it can tell you important information like how much you’ll ultimately end up paying in interest.

Here’s a look at how to figure out the maturity date for your personal loan, and other important loan terms you should know.

What Is the Loan Maturity Date?

The term “maturity date” can refer to loans or investments. In investing, it refers to the day on which you’ll receive the money you invested, for example, in a savings bond or certificate of deposit (CD). You’ll get your investment back, plus any remaining interest that’s due to you.

If you’re a borrower, the maturity date of a loan is the day your lender has scheduled for your loaned funds and any interest to be paid off in full. Provided you’ve made regular and timely payments throughout the term of the loan, you’ll have no further obligation to the lender after the maturity date.

If, for whatever reason, you still have a balance after your loan maturity date, you’ll want to talk to your lender and work out a plan to pay off the remainder of your loan.

Recommended: What Is a Personal Loan?

How Does the Loan Maturity Date Work?

Your loan’s maturity date is a part of your initial loan agreement. You can find it on your loan contract. For example, say you take out a $10,000 personal loan on June 1, 2024 with a 36-month term. The loan maturity date will be 36 months later, on June 1, 2027.

It is possible to pay off your loan early before the loan maturity. This can save you money in interest payments. However, be mindful of whether your lender charges prepayment penalties. These penalties can outweigh the advantages of paying off your loan early.

Length of a Personal Loan Maturity Date

A loan term is the amount of time you’ll have to pay it off before you reach the maturity date, usually calculated in months. You can often find personal loans with terms from 12 to 60 months, and some lenders will offer loans with terms of up to seven years or longer.

The longer your term, the longer you’ll be paying interest, which generally makes these longer-term loans more expensive for borrowers. When choosing a loan, you may want to consider one with the shortest term (and closest maturity date) possible, as long as you can comfortably afford the monthly payments.

Calculating Your Loan Maturity Value

A loan’s maturity value is the sum of the principal plus all of the interest you’ve paid on the loan. The maturity value (MV) formula is:

MV = P + I

Where “P” is the principal amount of the loan and “I” is the loan’s annual percentage rate (APR).

For example, say you take out a $10,000 personal loan with a 36-month term and 12% APR. In this case P = 10,000 and I = 12%. You can use a personal loan calculator to determine how much interest you will pay on the loan over the 36-month term, then add that to the principal loan amount. Here, the equation would look like:

MV = $10,000 + $1,957.15
In this case, MV = $11,957.15

What Happens at the Personal Loan Maturity Date?

At the personal loan maturity date, you will make your final loan payment. Provided you have stayed up-to-date with all of your payments, you will have fully paid off all of your loan principal and whatever interest you owe and have no further obligation to your lender.

However, this may not be possible if you’ve fallen on hard financial times. If you think you’ll have trouble making any of your loan payments on time, it’s a good idea to reach out to your lender immediately and see if there’s anything they can do to help. They may allow you to pay at a later date.

Recommended: What Happens If You Default on a Personal Loan?

Other Important Information on the Personal Loan Agreement

In addition to maturity, you’ll find other useful information on your personal loan agreement.

Loan Principal

Your loan principal is the initial amount of money that you borrow, and it is the amount you agree to pay back with interest. So if you take out a $30,000 personal loan, the loan principal is $30,000.

The total amount of interest that you pay will be determined by the principal, as well as the interest rate. When you make a payment each month, part of the total is applied to your interest while the remainder goes to your principal. Typically, as you make more monthly payments, a larger portion of your payment each month will go toward the principal, until your loan is repaid in full on the maturity date.

Recommended: What Is an Installment Loan and How Does It Work?

Loan Interest Rates

The interest rate is the amount that your lender charges you to borrow, and it’s the main way that lenders make money. Most personal loans rates are fixed interest rates, meaning the rate will not change over the life of the loan. The average personal loan interest rate is currently 12.21%. But rates will vary depending on your credit score.

Variable rate loans, on the other hand, carry interest rates that are usually pegged to a market interest rate. As a result, they can change over the life of the loan.

There may also be hybrid situations in which a loan starts with a fixed interest rate for a period of time, after which it switches to a variable rate. If market rates have gone down, this can be a good thing for borrowers. But if they’ve gone up, a variable-rate loan could be more expensive than its fixed-rate counterpart.

Monthly Loan Payments

You’ll be able to find the amount you owe each month on your personal loan agreement. Your loan payment should be the same over the course of your loan unless you have a variable interest rate.

The Takeaway

For an installment loan like a personal loan, the maturity date is the day of the final loan payment. This date is set based on the loan’s repayment period — how long you have to repay the loan, including both principal and interest. A personal loan is typically considered to have short- to medium-term maturity, since terms generally run from a few months to seven years.

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.

FAQ

What happens if the loan is not paid by the maturity date?

If your loan is not paid by the maturity date, you’ll need to work with your lender to come up with an extended repayment plan. If your last loan payment is late or your loan is in default, you may face penalties and your credit score may be negatively affected.

What is the maturity date on a loan?

The maturity date on a loan is the date by which a borrower has agreed to pay off the loan principal and interest in full. You generally make your final loan payment on the maturity date.

When is the maturity date on a loan?

The maturity date on a loan is the date when your final payment is due. It is based on the term of your loan. If you take out a personal loan on June 1, 2024 and the loan has a 36- month term, for example, the maturity date will be June 1, 2028.

Photo credit: iStock/Pekic

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If you’re strapped for cash and have a hard time qualifying for traditional loans, or you live in an underbanked area, you may be considering a pawnshop loan. They appear to be a convenient option for fast cash, but they can also come with significant disadvantages, including high fees.

Before putting your valuables down in pawn, learn more about what pawnshop loans are and how they work.

What Is a Pawnshop Loan?

A pawnshop loan is a secured, or collateralized, loan. To borrow the money, you must produce an item of value as collateral – such as a piece of jewelry, a musical instrument, electronics, or an antique – that provides backing for the loan. You and the seller agree to a loan amount and a term. If you don’t pay back the loan (plus fees) within the agreed amount of time, the pawnshop can sell the item to recoup their losses.

Pawnshops will typically offer you 25% to 60% of the resale value of an item. The average size of a pawnshop loan is $150 with a term of around 30 days.

Aside from the need for collateral, there are few other requirements to qualify for a pawnshop loan. You typically don’t need to prove your income or submit to a credit check.

Recommended: No Credit Check Loans Guide

How Do Pawnshop Loans Work?

Pawnshops don’t charge interest on the loans they offer. However, the borrower is responsible for paying financing fees that can make the cost of borrowing higher than other loan options.

Regulations around what pawnshops can charge vary by state, but you could end up paying the equivalent of many times the interest charged by conventional loans.

Say you bring in a $600 guitar to a pawnshop, and they offer you 25% of the resale value, or $150. On top of that, let’s say the pawnshop charges a financing fee of 25% of the loan. That means you’ll owe $37.50 in financing fees, or $187.50 in total.

If you agree to the loan, the pawnbroker will typically give you cash immediately. They’ll also give you a pawn ticket, which acts as a receipt for the item you’ve pawned. Keep that ticket in a safe place. If you lose it, you may not be able to retrieve your item.

You’ll usually have 30 to 60 days to repay your loan and claim your item. According to the National Pawnbrokers Association, 85% of people manage to do this successfully. When a borrower pays off a pawnshop loan, they can retrieve the item they put in pawn. For those who don’t, the pawnshop will keep the item and put it up for sale. There is no other penalty for failing to pay off your loan, but you do lose your item permanently.

Recommended: Can You Get a Loan Without a Bank Account?

The Pros and Cons of Pawnshop Loans

In general, it’s best to seek traditional forms of lending, such as a personal loan from a bank, credit union, or online lender, if you can. These loans tend to be cheaper and can help you build credit. However, if you need cash the same day and you don’t qualify for other loans, you might consider a pawnshop loan. Carefully weigh the pros and cons to help you make your decision.

Pros of a Pawnshop Loan

•   Access to cash quickly. When you agree to a pawnshop loan, you can typically walk out with cash in hand immediately.

•   No qualifications. The ability to provide an object of value is often the only qualification for a pawnshop loan.

•   Failure to pay doesn’t hurt credit. While you will certainly lose the item that you put in pawn if you don’t pay back your loan, there are no other ramifications. Your credit score will not take a hit.

•   Loans aren’t sent to collections. If you don’t pay back your loan, no collections agency will hound you until you pay.

Recommended: How Do Collection Agencies Work?

Cons of a Pawnshop Loan

•   High fees. The financing fees associated with pawnshop loans can be much more expensive than traditional methods of obtaining credit, including credit cards and personal loans. Consider that the average annual percentage rate (APR) on a personal loan is currently 12.21%, whereas pawnshop financing fees, when converted into an APR, can be 200% or more.

•   Loans are relatively small. The average size of a pawnshop loan is just $150. If you need money to cover a more costly expense, you may end up scrambling for cash elsewhere.

•   You won’t build credit. Pawnshop loans are not reported to the credit reporting bureaus, so paying them off on time doesn’t benefit your credit.

•   You may lose your item. If you can’t come up with the money by the due date, you’ll lose the item you put in pawn. (Same if you lose your pawn ticket.)

Pros and Cons at a Glance

What Is a Pawnshop Title Loan?

A pawnshop title loan is a loan in which you use the title of your car as collateral for your loan. You can typically continue driving your vehicle over the course of the loan agreement. However, as with other pawnshop loans, if you fail to repay your loan on time, the pawnbroker can seize your car.

Typical Requirements to Get a Loan Through a Pawnshop

There are typically few requirements to get a pawnshop loan, since the loan is collateralized by the item you put in pawn and the pawnbroker holds on to that item over the course of the loan. However, pawnbrokers do want to avoid dealing in stolen goods, so they may require that you show some proof of ownership, such as a receipt.

Alternative Loan Options

There are a number of benefits of personal loans that make them a good alternative to pawnshop loans. Personal loans are usually unsecured, meaning there is usually no collateral required for a personal loan. Lenders will typically run a credit check, and borrowers with good credit scores usually qualify for the best terms and interest rates. That said, some lenders offer personal loans for people with bad credit.

If you qualify for a personal loan, the loan amount will be given to you in a lump sum, which you then typically repay (plus interest) in monthly installments over the term of the loan, often two to seven years. The money can be used for virtually any purpose.

Personal loans payments are reported to the credit reporting bureaus, and on-time payments can help you build a positive credit profile.

The Takeaway

If you only need a small amount of money, you don’t qualify for other credit, or if you’re looking for a loan without a bank account, you may consider a pawnshop loan. Just beware that they are potentially costly alternatives to other forms of credit.

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.

FAQ

How is a loan obtained through a pawnshop?

To borrow money from a pawnshop you must present an item of value that can act as collateral for the loan. The pawnbroker may then provide a loan based on the value of that item.

What happens if you don’t pay back your pawnshop loan?

If you fail to pay back your pawnshop loan on time, you won’t be able to reclaim the item you put up as collateral for the loan. The pawnshop will sell it to recoup their losses.

What’s the most a pawnshop loan will pay?

On average, a pawnshop will loan you about 25% to 60% of an item’s resale value. The average pawnshop loan is $150 and is repaid in about 30 days.

Photo credit: iStock/miriam-doerr

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.

SOPL-Q224-1910540-V1

Getting married can be a pricey proposition, with the average wedding in the U.S. now running $35,000. If you don’t have access to a large stockpile of cash, you may think you’ll never be able to afford the kind of wedding you envision. But that’s not necessarily the case. The key is to start budgeting and saving well ahead of the big day.

Whether you long for a fairy tale wedding or you prefer something more scaled back, there are ways to save for your dream day that will ensure you have the magical moment you’ve always wanted without having to start off your marriage mired in debt.

Set a Budget

Do you want a big lavish wedding worthy of the royals? A destination wedding? Or maybe you want something more intimate with just a few friends and family? There are different levels of spending when it comes to weddings, and deciding what is most important to you can help you determine just how much you’ll need to save.

Is the venue a priority? The number of people? The food? The DJ (or band)? It’s smart to start by making a list and getting a solid estimate of the costs for each of your need-to-haves and your want-to-haves. It’s also wise to leave a little wiggle room for unexpected wedding costs. Little things like the marriage license, dress or suit alterations, and even insurance costs, can start to eat into your budget pretty quickly.

Start a Savings Plan

Before you’ve locked in the date, you and your partner can start a savings plan. Some couples open a separate bank account and set up automatic monthly transfers to that account to build their wedding fund. When savings are automated, you often don’t notice the missing funds. And by picking an account with a competitive interest rate, your money can make money while you continue to plan and save.

If you’re thinking about financing part of your wedding, you’ll want to start investigating your options, which can range from credit cards to personal loans (which typically have lower rates than credit cards), early on and weigh the pros and cons of taking on debt.

Put the Wedding First

Sure, you may want to go on vacation, eat at fancy restaurants, and buy those new clothes, but that will put you further from your goal. Instead of spending on those luxuries now, cutting back and putting that money into your shared dream wedding account can help you get to your savings goal quicker.

There are also some simple ways to cut back that won’t make you feel deprived. For example, you can take local day trips or regional vacations instead of traveling afar. Eating out just once a month and cooking at home more can cut costs. You could even get swanky and hold cocktail hour with friends at your house instead of going to happy hour. Your new bank account will thank you.

Recommended: The Cost of Being in Someone’s Wedding

Do It Yourself

One way to keep wedding costs down is to plan the majority of the wedding yourself. If you already have experience managing projects, then this should be within the realm of your abilities. Researching the typical steps and fees associated with weddings before making any concrete decisions can be helpful. If that feels daunting, you may want to keep in mind that wedding planners cost an average of $2,100. And while there are advantages to using a planner (they already have a contact list of professionals and know their rates, saving you a lot of time and energy), the downside is you could be getting a one-size-fits-all experience instead of the personalized ceremony and party you may want.

Recommended: 8 Tips for a Budget Dream Wedding with Budget Breakdown

Comparison Shop

Just like other big expenses, getting more than one quote for each service you need can help you find the best price point to fit your needs and wants. Does your preferred venue charge a premium for a wedding, but a lower price for a party? You may want to consider negotiating the price. Calling multiple DJs and catering services can help you ensure you are not overpaying. New York City is going to have very different rates than, say, Asheville, North Carolina. This might even be a factor in deciding when to have your wedding, too. For a better idea of how much costs can vary, you can check out this comparison of costs by state .

You can wind up saving a ton of money by doing away with an expensive venue altogether and looking for a free or really inexpensive location, like parks, gardens and even beaches.

And if you’re able to hold your celebration on a weekday or during off-season, you’re likely to find some additional savings. For example, you can pick Friday instead of Saturday; or you can have a fall or winter event to help lower your costs.

Reassess the Dress

Maybe your dream wedding includes a Vera Wang gown, but your bank account can’t swing that. Consider shopping for a vintage dress and having it altered. Or if you want a more modern look, you don’t necessarily have to buy brand new — wedding dresses are usually only worn once and then either sit in the back of a closet or get sold or donated. Resellers often offer beautiful dresses at a fraction of the initial cost.

Consider this: Dresses less than three years old are usually sold for half their original price. And that Vera Wang might not be out of reach after all if you buy it used. Designer brands can sell for 60% to 70% of their original cost.

Recommended: What is the Ideal Wedding Budget?

Where not to Cut Costs

While you might not have much of an appetite on your big day, your guests likely will, so it’s a good idea not to scrimp on the food. It doesn’t have to be a five-star, multi-course meal, but if you want to create a memorable experience for all, it’s smart to offer quality food that doesn’t leave anyone grumbling about “wedding food.”

And what good is a dream wedding if you have bad or no photos to remember it? A good photographer can capture all of the moments of both you and your guests. These are photos that you will cherish when you are older and wiser, that will adorn your dresser and be sent out to family, so skimping here is best avoided if you can. The average cost of a wedding photographer is about $2,900, but It could end up being the best you put toward your special day.

Recommended: 2024 Wedding Cost Calculator with Examples

The Takeaway

Saving for your dream wedding might seem impossible, but it’s within your grasp if you’re willing to put in the time and effort. By cutting a few everyday costs and making automatic transfers into a high-yield savings account every month, you and your soon-to-be spouse will be able to slowly but surely build your wedding fund.

You can also find ways to trim wedding costs while still staying true to your vision for the day. If you find you’ll still need to rely on some type of financing to pay for your big day, be sure to look at all your options to find one with the least cost.

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.

Photo credit: iStock/standret

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.