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About 28 million Americans made a move in 2021, with about 5 million moving interstate. As you’re probably painfully aware, a move can cost several thousand dollars, whether you’re going across town or cross-country. Amid the chaos of purging and packing, it’s easy to forget some of the moving-related costs you might face.

The key to paying for a move without a load of stress is planning. We’ve drawn up a Moving Expenses Checklist that aims to include every little thing that needs to be accounted for in your budget, from supplies to cleaning to a new driver’s license and car registration.

Your Moving Expenses Checklist

Like a lot of things in life, moving costs aren’t entirely predictable. Much depends on how far you’re going, whether you’re crossing state lines, how much stuff you have, and so on. Our aim is to cover the basics — truck, strong movers — as well as the costs that sneak up on you midway. Keep on reading to find out what they are.

1. Moving Your Stuff

There are at least three different ways to get your stuff from one place to another: Rent a moving truck, pay professional movers, or rent and move a storage container.

Renting your own truck. Yes, this is usually the cheapest route. The downside is that you — and possibly your friends — will be putting in many hours of hard labor.

At first glance, renting a moving truck or van for an across-town move seems like a great deal. You may be familiar with companies advertising van rentals for $19.99. Except that figure doesn’t include gas, tolls, parking, damage protection, and cost per mile. Suddenly, that $20 becomes more like $100.

If you enlist friends and family to help, factor in the price of pizza, beer, or gift cards to lure them to your aid and keep them motivated. Also, long-distance moves may involve shipping some boxes, which adds up quickly.

Hiring pros. Get estimates from a few companies to make sure you’re getting a good deal. A local move is usually considered under 100 miles. A long-distance move is anything more than 100 miles. Expect to pay $800-$2,500 for a basic local move with two movers, and $2,200-$5,700 for a long-distance move.

The price of a local move is often based on an hourly rate; some companies may offer a flat rate. In some states, if you’re moving more than 50 miles, the cost may be based on the weight of the truckload instead of the hourly rate.

A packing service can add a chunk to these costs. You may also want to purchase “full value protection” insurance through your mover to protect your belongings in case of loss or damage.

Hauling a container. Moving a self-storage container, those units popularized by PODS®, is typically less expensive than using full-service movers. Three factors influence your cost: the size of your home, the distance you’re moving, and seasonality. A local container move can range from $1,100 to $1,600, including the container and transport. A 1,000 mile move costs on average $4,430 for the contents of an average-size home. Prices tend to be higher during “moving season,” typically March through August.

If you’re comparing quotes, know that each company handles costs differently. Some itemize the costs for each part of the move; others include everything in one quote.

Recommended: Get Your Personal Loan Approved

2. Transporting Yourself

Short or long move, you’ll have to get yourself there, too. That could mean a road trip, which includes gas, tolls, possibly lodging, and meals along the way. An online fuel cost calculator can help you tally how much you’ll spend on gas. Otherwise, it means the cost of a plane ticket, getting yourself to and from the airport, and possibly the price of shipping your car.

3. Moving Supplies

You probably know that you’ll need boxes. But don’t forget the oodles of tape, bubble wrap, packing peanuts, labels, and protective blankets for furniture. And you’ll need to rent or buy a dolly if you’re planning a DIY move.

You may be able to save by asking for free boxes from local grocery stores and using recycled newspaper as packing material. But the little things can still add up.

4. Costs Upon Arrival

If you’re renting, you might owe a security deposit and first month’s rent to your new landlord. You may also be responsible for a pet deposit or fees for getting utilities hooked up.

If you’re moving into a home of your own, you might need to make repairs before you settle in. Some new homeowners also invest in changing locks, putting in security alarms, or replacing smoke detectors.

You may also want to take care of renovating some areas before all your stuff is in the way, and if you have a lawn for the first time, you might need to buy a mower or hire a service.

Will you need a storage unit? Plan on $100 to $300 a month.

Recommended: Personal Loan vs Credit Card: What’s the Better Option?

5. Cleaning Costs and Supplies

You might be responsible for leaving your old place in tip-top shape. That means paying for stuff like floor cleaner, mops, brushes, and wipes. You may also need to hire a carpet cleaner or house cleaners if you’re short on time or your place needs serious attention.

On the other end, you might need supplies to clean your new apartment or house before you unpack everything.

6. Furniture and Other Items

Even if you’re bringing a lot of things with you, chances are you’ll need to buy some furniture for your new home. You might save by searching online or perusing garage sales and flea markets.

Still, if you need any substantial pieces, like a bed, couch, or table, you could be looking at a few hundred dollars. Beyond furniture, if you’ve moved far away, you might need to stock your new place with all kinds of everyday items, from groceries and pantry staples to toiletries.

7. New License and Vehicle Registration

If you’re moving to a different state and have a car, you’ll need to apply for a new license and register your car with the local department of motor vehicles. This comes with a fee, of course. Vehicle registration can cost up to $225, depending on the state. A new driver’s license can cost around $30 to $60.

Preparing for Moving Costs

When making a moving-cost checklist, the worst budgeting mistake you can make is underestimate your needs because you’re not sure how you’ll pay for them. If anything, you want to pad your budget so that unexpected costs don’t make the experience harder than it has to be.

If you’ve got the cash to cover your move, great. That’s what emergency savings are for. You can also use a 0% interest credit card, crowdsource from friends and family, or consider a personal loan.

Personal loans are a form of installment debt, where you receive a lump sum that you then repay in equal monthly payments. There are different types of personal loans, so you can choose the terms that best fit your budget and circumstances.

Believe it or not, moving expenses are one of the most common uses for personal loans. And because of their relatively low fixed rates compared to high-interest credit cards, you can roll in related new-home expenses like new furniture and painting.

The Takeaway

Moving is a major financial commitment, but it doesn’t have to break the bank. When planning a move, first decide whether you’re going to DIY or hire pros. Then make a list of packing supplies, cleaning supplies and services, and the cost of moving yourself if it’s long-distance. Next, consider your costs upon arrival: security deposit, prepping your new space, replacement furniture, and new household items. If you’re moving interstate, there may be car-related expenses, such as a new license and registration. And it’s always wise to pad your budget — 10%-20% — to accommodate anything unexpected.

Planning a move and need money to help? A SoFi personal loan can be a smart way to cover your costs without adding emotional baggage. Our personal loan calculator can help you choose the terms that are right for you.

^* Same-Day Personal Loan Funding: 86% of typical SoFi Personal Loan applications, excluding Direct Pay Personal Loans and Personal Loan refinance, from January 1, 2021 to December 1, 2021 that were signed before 7pm ET on a business day were funded the same day.
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.

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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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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It’s a common dilemma: Should you pay off credit cards or student loans first? The answer isn’t totally cut and dried. But if your credit card interest rates are higher than your student loan interest rates, paying down credit cards first will probably save you more money in interest.

But don’t stop there. Keep reading to learn how to calculate what’s best for your situation, and why. Along the way, you’ll learn more about how credit cards work, the complexities of student loans, and two very different strategies for paying down debt.

Prioritizing Your Debts

Experts are split over the best debt to pay off first. Some recommend you tackle the smallest balance first because of the psychological boost that comes from erasing a debt entirely.

However, from a purely financial standpoint, you’re better off paying off the debt that carries the highest interest rate first. That’s because the higher the interest rate, and the longer you hold the debt, the more you end up paying overall. This usually means tackling high-interest credit card debt first.

Keep in mind that prioritizing one debt over another does not mean that you stop paying the less urgent bill. It’s important to stay on top of all debts, making at least minimum monthly payment on each.

Failing to make bill payments can hurt your credit score, which can have all sorts of effects down the road. For example, a poor credit score can make it difficult to secure new loans at low rates when you want to buy a new car or home, or to take out a business loan.

You might consider setting up automatic payments on your loans. Automatic payments can make it easier to pay bills on time and juggle multiple payments.

If you’re having trouble making your monthly payments, consider strategies to make your payments more manageable, such as refinancing.

Student Loan vs Credit Card Debt

Before we get into if it’s better to pay off credit cards or student loans first, let’s look at how each debt is structured.

Student Loan Debt

A student loan is a type of installment loan used to pay for tuition and related schooling expenses for undergraduate or postgraduate study. Borrowers receive a lump sum, which they agree to pay back with interest in regular installments, usually monthly, over a predetermined period of time. In this way, student loans are similar to other installment loans such as mortgages, car loans, and personal loans.

At a high level, there are two types of student loans: federal and private. The U.S. government is the single largest source of student loans. Federal student loans have low fixed interest rates: Current rates are 4.99% for undergrad loans, and 7.44% for graduate and professional loans. These loans come with protections like income-driven repayment plans, deferment and forbearance, and loan forgiveness.

Private student loans are managed by banks, credit unions, and online lenders. They may have a fixed or variable interest rate, which is tied to the borrower’s credit score and income. Average interest rates range from 3.22% to 13.95% for a fixed rate, and from 1.29% to 12.99% for variable.

Private student loans don’t come with the same protections as federal student loans. For instance, they are not eligible for President Biden’s loan forgiveness plan.

Payback timelines vary widely. As with other loans, the longer your repayment timeline, the lower your monthly payment will be — but you’ll pay more in interest over the life of the loan. The shorter your repayment period, the larger your monthly payment, and the less interest you’ll pay.

Recommended: Types of Federal Student Loans

Credit Card Debt

Credit cards offer a type of revolving credit, where account holders can borrow money as needed up to a set maximum. You can either pay off the balance in full or make minimum monthly payments on the account. Any remaining balance accrues interest.

Credit cards usually come with higher interest rates than installment loans. The average credit card interest rate in September 2022 was 21.59%. But an individual credit card holder’s rate depends on their credit score. People with Excellent credit will pay an average of 18.04%, while those with Bad credit will pay closer to 25.14%.

Depending how the account is managed, credit card debt can be either very expensive or essentially free. If you always pay off credit cards in full each month, no interest usually accrues. However, if you make only minimum payments, your debt can spiral upward.

Recommended: Taking Out a Personal Loan to Pay Off Credit Card Debt

Should I Pay Off Credit Card or Student Loan First?

When it comes to student loan vs credit card debt, there’s no universal answer that fits everyone in every situation. A number of factors can tip the scales one way or another, especially the interest rates on your loan and credit card.

We’ll explore two scenarios: one in which paying off credit cards is the best move, and another where student loans get priority.

The Case for Paying Down Credit Cards First

If you are carrying high-interest credit card debt, you’ll likely want to focus on paying off credit cards first. As you saw above, the average credit card interest rate (21.59%) is significantly higher than the maximum student loan interest rate (13.95%). Even if your credit card interest rate is lower than average, it’s unlikely to be much lower than your student loan’s rate.

Credit card debt can add up quickly, and the higher the interest rate, the faster your debt can accumulate. Making minimum payments still means you’re accruing interest on your balance. And as that interest compounds (as you pay interest on your interest), your balance can get more difficult to pay off.

A high balance can also hurt your credit score, which is partially determined by how much outstanding debt you owe.

Paying Off Credit Card Debt

Once you decide to focus on paying off credit cards first, start by finding extra funds to send to the cause. Look for places in your budget where you can cut costs, and direct any savings to paying down your cards. Also consider earmarking bonuses, tax refunds, and gifts of cash for your credit card payment.

Next, make a list of your credit card balances in order of highest interest rate to lowest. The Debt Avalanche method refers to paying off the credit card with the highest interest rate first, then taking on the credit card with the next highest rate.

It bears repeating that focusing on one debt doesn’t mean you put off the others. Don’t forget to make minimum payments on your other cards while you put extra effort into one individual card.

You may also choose to use a Debt Snowball strategy. When using this method, order your credit cards from smallest to largest balance. Pay off the card with the smallest balance first. Once you do, move on to the card with the next smallest balance, adding the payment from the card you paid off to the payment you’re already making on that card.

The idea here is that, like a snowball rolling down a hill gets bigger and faster as it rolls, the momentum of paying off debt in this way can help you stay motivated and pay it off quicker.

Managing Your Student Loans

Meanwhile, it’s important that you continue making regular student loan payments while you’re prioritizing your credit card debt. For one thing, you shouldn’t just stop paying your student loans. If you do, federal student loans go into default after 270 days (about 9 months). From there, your loans can go to a collections agency, which may charge you fees for recouping your debt. The government can also garnish your wages or your tax return.

You can, however, typically adjust your student loan repayment plan to make monthly payments more manageable. If you have federal loans, consider an income-driven repayment plan, which bases your monthly payment on your discretionary income.

While this may reduce your monthly student loan payments, it extends your loan term to 20 to 25 years. That can end up costing you more in interest. So make sure the extra interest payments don’t outweigh the benefits of paying down your credit card debt first.

Refinancing Your Student Loans

It can also be a smart idea to refinance student loans. When you refinance a loan or multiple loans, a lender pays off your current loans and provides you with a new one, ideally at a lower rate.

You can use refinancing to serve a couple of purposes. One option is to lower your monthly payment by lengthening the loan term. This can free up some room in your budget, making it easier to stay on top of your monthly payments and redirect money to credit card payments. Just remember that lengthening the loan term can result in you paying more interest over the course of your loan.

Or you can shorten your loan term instead. This can be a good way to kick your student loan repayment into overdrive. Your payments will increase, but you’ll reduce the cost of interest over the life of the loan. In other words, you’re giving equal weight to paying off your student loans and your credit card debt.

When you refinance with SoFi, there are no origination or application fees.

To see how refinancing with SoFi can help you tackle your student loan debt, take advantage of our student loan refinancing calculator.

Take control of your debt by refinancing your student loans. You can get a quote from SoFi in as little as two minutes.

FAQ

Should you pay off your student loans or your credit cards first?

The answer depends on a number of factors, especially the interest rates on your loans and credit cards. But if your credit cards carry high interest rates, you’ll likely save more money in interest by paying off your credit cards before your student loans.

What is the best debt to pay off first?

From a purely financial perspective, it’s best to pay off your highest interest-rate debt first. This is called the Debt Avalanche method. Paying off the most expensive debt (usually credit cards) first will save you the most money in interest.

Is it smart to pay off credit card debt with student loans?

This is probably not a good idea. First of all, paying off credit cards with student loans may violate your student loan agreement, which limits the use of funds to tuition and related expenses. If you use a credit card exclusively for educational expenses like textbooks and computers, you might be able to use loan funds to pay it off. However, you should check your loan agreement carefully to make sure this is allowed.

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 Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

Editor's Note: For the latest developments regarding federal student loan debt repayment, check out our student debt guide.

Your marriage status can affect your financial life in unexpected ways, and student loans are no exception. If you have an income-driven repayment plan, your spouse’s income might change your monthly payment calculation. But such challenges also present opportunities. For instance, you may be able to rejigger your student loan payments to save money on interest, lower your monthly payment, or shorten your repayment term so you can become debt-free faster.

Here we’ll show you how getting married affects student loans. Learn strategies for restructuring your debts, and tips for saving money that you can put toward other goals.

Marriage and Student Loan Repayments

Your marital status can affect everything from loan payments to tax breaks. Understanding how marriage impacts student loans (yours or your partner’s) can help you craft a new repayment plan and get ahead of your other financial goals. That way, you can focus on more urgent matters, like who’s making dinner tonight.

How Marriage and Student Loans Can Affect Your Taxes

If you paid student loan interest in the previous tax year, you may qualify for a student loan deduction. But your eligibility can change depending on if you are filing jointly or separately.

According to the IRS, as of the 2021 tax year, a single person (or head of household) with a modified adjusted gross income (MAGI) under $85,000 may be able to deduct up to $2,500 of qualified student loan interest paid in a given year. (Eligible MAGI for married filing jointly for this deduction is under $170,000.)

However, if you’re married but filing separately, that student loan interest deduction goes away. You can only take advantage if you file jointly. (See below for other deductions you may not qualify for if filing separately.)

Helping Each Other with Repayments

If you want to help your spouse with their student loan repayment, whether they have private or federal loans, you can. When one spouse takes out a loan before the marriage, typically that loan still belongs to the original borrower. However, you can choose to put both your names on the loan, and be equally responsible for the debt, by refinancing together.

Refinancing student loans gets you a brand-new loan in both your names. At the same time, you may be able to qualify for a lower interest rate or better terms. However, you will forfeit your federal student loan benefits if you refinance federal loans with a private lender.

Marriage Could Complicate Your Income-Driven Repayment Plan

When you’re married and filing separately (vs. jointly), student loan servicers count only your individual income. But if you file jointly and you or your spouse is enrolled in the Revised Pay As You Earn (REPAYE) plan — one of four income-driven repayment plans — you could see your monthly payments increase. When filing your taxes jointly, your combined AGI replaces your individual income in REPAYE’s calculations.

For the three other income-driven repayment plans — Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR) — you can potentially avoid higher payments by filing separately. However, when you do this you lose the ability to use the student loan interest deduction.

Filing separately also means you’ll no longer be able to qualify for the Earned Income Tax Credit, the American Opportunity Credit, and Lifetime Learning Credit. There is no one blanket answer for every married couple. Given the complexity of tax law, you’ll want to consult a tax professional to determine which option is best for you both.

Tips for Tackling Student Loan Debt Together

So what’s the best strategy for paying down student loans without letting them come between you and your spouse? Here are five tips to a debt-free happily ever after.

Tip #1: Create Your Big Financial Picture

Preparing to take on a big financial goal usually requires some conversation and preparation upfront. Before making any decisions, sit down and talk about your short- and long-term financial objectives, and make sure you’re both on the same page (or as close to it as possible). This can be an overwhelming topic, so see if you can break it down into chunks.

Have you established a household budget? How do student loans — and paying them off — fit into your long-term and short-term goals? Should you start aggressively paying off debt, or might it be better for you to ramp up over time? What other factors (e.g., buying a home, changing careers, having children) might influence your decisions?

Not only can this exercise give you more clarity to create an action plan, it can also be kind of fun. After all, planning a life together is part of the reason you got married in the first place. The key is to listen to each other.

Tip #2: Take Advantage of Technology

Once you’re clear on the big picture, it’s time to get into the weeds. Many people have more than one student loan, often with multiple lenders, so a good place to start is to gather all of your loan information together. You can use an online student loan management tool (try https://studentaid.gov/loan-simulator/) to compare repayment options and analyze prepayment strategies.

After crunching the numbers, your debt payoff strategy may include putting extra money toward your loans each month, which means creating and sticking to a budget that supports that goal.

Using a debt payoff planner can help you keep track of your debt payments, maintain spending within a budget, and show how close you are to paying off your debt in full. Tracking your spending may not feel good at first, but over time, this kind of discipline can help you see where your money goes and make conscious choices about your spending. Once you have your budget in place, these apps can be set up to alert you both when spending is getting off track.

Tip #3: Define the Who, What, When

Whether your finances are separate or combined, you’ll probably want to come to an agreement on how to collectively pay all of your financial obligations. Many couples address this based on each person’s share of the total household income.

For example, if one person contributes 40% of the household income, and the other 60%, the former might pay 40% of the shared bills and the latter 60%. Others find it simpler and more cohesive to have one household checking account and pay all bills from there. Or you can combine the two tactics, and have each spouse contribute a prorated amount to the joint bank account.

However you decide to split things up, consider setting up automatic payments for all household bills, because missed student loan payments can potentially impact both spouses’ credit. And a weak credit rating can make your future financial objectives tougher to achieve.

Tip #4: Look For Opportunities to Optimize

So now you’ve established a plan and a budget, and you know who’s on point for each bill. You’re on the path to getting student loan debt off your plate. Is there anything else you can do to speed up the process?

Short of winning the lottery, the most common ways to accelerate student loan payoff are prepayment (meaning, paying more than the minimum) or lowering the interest rate, the latter of which is most commonly accomplished through refinancing.

If you qualify to refinance your student loans, you’ll have to decide on your primary goal:

•   Lower your monthly payment by choosing a longer term. This frees up money in your budget, but you’ll potentially pay more in interest over the long term.

•   Lower your interest rate. This saves you money in interest over the long term. (It can also lower your monthly payment, but don’t count on it.)

•   Shorten the repayment period. This can save you money on interest over the life of the loan, and get you debt-free faster.

Tip #5: Be on the Same Team

Living with debt is stressful for any couple. But being in a committed relationship has its advantages. There’s a reason that weight loss experts often recommend finding a “buddy” to help cheer you on and keep you honest on your diet and exercise journey. The same applies to achieving a big financial goal like paying off student loan debt.

Keep it positive and the lines of communication open, and you may find that the journey to being debt-free makes your marriage stronger.

Refinancing Student Loans Separately vs. Jointly

If you and your new spouse decide you want to do more things with your money — have a child, buy a home, or invest more in retirement savings — it may be time to refinance student loans. Once again, you’ll need to run some numbers and decide whether to refinance your student loans together or separately.

When you apply to refinance your student loans, lenders typically evaluate your credit score and financial fitness. This determines your new interest rate and loan terms. The goal is for the new loan to be a better deal than your existing loans.

With a lower interest rate, you can reduce the amount of money you spend over the life of the loan. And with only one monthly student loan payment to worry about, your finances can be easier to manage.

But are you better off going it alone or together?

Refinancing Student Loans Separately

When you’re married, refinancing your student loans separately has pros and cons.

Even if you’re married, refinancing student loans separately may be right for you if any of the following statements are true:

•   Your credit score and history are much stronger than your spouse’s, and you want to qualify for the lowest interest rate possible.

•   You and your spouse have different goals for refinancing — for instance, a lower monthly payment vs. saving money in interest.

•   Your spouse hopes to qualify for Public Service Loan Forgiveness (PSLF).

•   Your spouse is enrolled in an income-based repayment plan or is taking advantage of other federal repayment protections.

•   One of you has a much higher student loan balance, while the other has almost paid off their loans.

Refinancing Student Loans Jointly

On the other hand, there are compelling arguments for being married and refinancing student loans jointly.

Refinancing student loans jointly may be right for you given one of these scenarios:

•   Your credit score and history are much weaker than your spouse’s, and you can’t afford the interest rate and loan terms you qualify for alone.

•   You’re a stay-at-home parent with no earned income, making it difficult to qualify separately.

•   It’s important to both of you to be on the same team financially.

Refinance Student Loans With SoFi

For some couples, a lower interest rate can mean more flexibility and a more manageable repayment plan. After all, the average graduate holds 8-12 student loans. That gives married couples 16-24 different loan payments to make each month. Refinancing together can transform a student loan mess into a single, affordable payment.

To see how refinancing might impact your student loans and your partner’s, take a look at SoFi’s student loan refinance calculator. With SoFi, there are no application or origination fees, and no prepayment penalties.

FAQ

Does getting married affect student loan payments for you and your spouse?

If you or your spouse is enrolled in an income-driven repayment plan, you may see your payments increase after marriage. You can potentially avoid higher payments by filing your taxes separately. However, you’ll forfeit the ability to use the student loan interest deduction.

Is my spouse responsible for my student loans?

Loans taken out before the marriage still belong to the original borrower. Your spouse is not responsible for them unless they cosigned the loans with you. You can choose to put both your names on your loans, and be equally responsible for the debt, by refinancing together.

Does marriage affect financial aid?

Marriage typically has a positive effect on qualifying for financial aid. If you are under 24 and married, your parents’ income will no longer be considered in financial aid calculations, but your spouse’s will — this usually means your household income drops. However, if your spouse has significant income or assets, that can negatively affect your eligibility for financial aid.

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 Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

As a student (or parent) it can be easy to focus solely on the college application process, and completely forget about financial aid. You spend so much time studying for the SATs (or ACTs) and tweaking your college essay so it perfectly represents you, that after you’ve been accepted and the reality of tuition payments set in, you might feel momentary panic.

It’s no secret that college tuition is expensive. Students and parents save for years to pay for higher education, but sometimes that’s just not enough. According to a Sallie Mae® study, “How America Pays for
College 2021 ,” parent income and savings covered 45% of college costs while student income and savings covered 8% of the costs.

Many of us rely on financial aid to bridge the payment gap. Financial aid may come from multiple sources, including scholarships, grants, work-study, federal student loans, and private student loans.

Scholarships and grants are extremely useful forms of financial aid, since students are not typically required to pay back the money they receive. An online survey of students and parents found 72% of college families in 2021 relied on scholarships and grants to cover a portion of college expenses, according to Sallie Mae’s study.

Scholarships, grants, and savings often aren’t enough to cover the cost of attending college. Sallie Mae says 47% of college families borrowed money to help pay for college in 2021. Some families used home equity loans and credit cards, but federal student loans represented the most frequently used source of borrowed money followed by private student loans.

To top it all off, the financial aid application process can be confusing. Between federal aid and other scholarships, it can be difficult to keep everything straight.

Most often, the first step in applying for financial aid is filling out the Free Application for Federal
Student Aid (FAFSA®). You can begin filling out the FAFSA on October 1 for the following academic year. The federal FAFSA deadline for the 2023–24 academic year is June 30, 2024, but you’ll likely want to file well before the school year starts – colleges and states may have their own FAFSA deadlines.

Some schools use an additional form to determine scholarship aid — the College Scholarship
Service Profile .

Taking the effort to apply for financial aid early can have a positive impact on your tuition bill. Below we highlight seven financial aid secrets you should know.

1. Decision Day vs Summer Melt

May 1 is usually decision day, the deadline when prospective college students must decide which college they plan to attend in the fall. But even after this deadline, students can change their minds. This phenomenon is known to industry professionals as “summer melt,” and sometimes it’s triggered by FAFSA verification setbacks.

Students who receive insufficient need-based financial aid, for example, might be compelled to reconsider their college enrollment decisions. Summer melt can give you an opportunity to select a more affordable school for you if you’ve encountered a FAFSA verification roadblock.

Summer melt is a common problem that causes schools to lose students during the summer. Because of this, schools may have a bit of secret wiggle room in their acceptance policy to admit new students over the summer for the fall semester.

2. Writing a Letter

You might be able to take advantage of summer melt with this secret: write a letter. After you get your financial aid offer, you could write a letter to your school’s financial aid office to open the lines of communication.

Let them know how excited you are to attend school in the fall. That’s where you could include a thoughtfully worded inquiry for any additional aid that you might qualify for as a result of summer melt.

When students decide to switch schools or not attend at the last minute, it means that they also won’t be using their financial aid award — which could now be available to other students.

3. Calling the Financial Aid Office

Another way to potentially take advantage of summer melt is to call your school’s financial aid office. Instead of calling immediately after you receive your financial aid award, think about calling in June or July. This allows financial aid offices time to account for students who have declined their financial aid packages.

An appropriately timed call to the financial aid office at your school could mean additional financial aid is allocated to your package — no guarantees, of course, but it never hurts to ask.

4. Submitting Paperwork and Applications On Time

Every school’s financial aid office has to follow a budget. Some financial aid is offered on a first-come, first-served basis, so it helps to submit forms, like the FAFSA, and other applications, on time or even ahead of schedule.

You may be out of luck if you apply for assistance after your university’s financial aid office has met their budget for the year. Some states have early winter deadlines for awarding scholarships and grants. Tennessee residents, for example, must complete their FAFSA by February 1 to be considered for a state-funded Tennessee Student Assistance Award grant.

You can check the deadlines for financial aid in your state through the U.S. Department of Education’s Federal Student Aid website .

5. Being Prepared

Have the basics ready to go before you sit down to fill out the FAFSA. If you have all of the information you need before you begin filling out the FAFSA, you’ll likely have an easier time filling out the information.

Usually, each parent and the student will need to create a username and password, which is called the Federal Student Aid ID (FSA ID). You’ll also need:

•   Social Security numbers (for you and your parents)

•   Bank statements and records of untaxed income (possibly)

•   You and your parents’ tax returns (aid awards are based on income from two years ago)

•   Any W2 forms

•   Net worth calculations of your investments (for students and parents)

6. Being Wary of Services that Charge You for Help

If you need assistance filling out the FAFSA, avoid any services that charge you. The first F of FAFSA stands for “Free,” so there is no need to pay for a service to fill the form out for you.

If you need assistance filling out the FAFSA, there are plentiful online resources through the U.S. Department of Education .

7. Filing the FAFSA Every Year

For every year you are a student and want to receive federal aid, you’ll have to file the FAFSA. Get in the habit of filing it every fall, so you’re closer to the top of the financial aid pile.

The Takeaway

Scholarships and grants can be super helpful additions to a federal financial aid package. The money can reduce your tuition bill and doesn’t usually need to be repaid. Work-study can also be beneficial in helping college students make ends meet.

If you need additional help financing your college experience, SoFi offers private student loans with an entirely digital application process and no fees whatsoever. Potential borrowers can choose between a variable or fixed interest rate and have the option to add a cosigner to the loan.

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.

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.

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.

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

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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Millennials continue to make up the biggest share of homebuyers, at 43%, according to a 2022 National Association of Realtors® report.

And Gen Y is the most educated group of buyers, so if you’re a millennial, you’re smart; you already know a few things about home buying.

But if you’re part of the generation of people born between 1981 and 1996, you may still have questions. Here are eight tips to buy a house.

Smart Homebuying Tips for Millennials

1. Pay Down Debt First

The average millennial had about $28,300 in nonmortgage debt in 2021, according to Experian’s latest State of Credit Report. The average balance on retail credit cards was over $1,800.

Gen Y’s credit utilization rate — the percentage of available credit you’re using on your revolving credit accounts — was 30.2% on average. That’s the top end that’s generally advised, but lower is considered better.

As many millennials know, savvy credit card users maximize the rewards they earn or take advantage of interest-free offers. But carrying a revolving credit card balance can add up.

Clearing out at least some debts may be a great place to start on a millennial homeownership journey. You’ll likely need to take out a mortgage to purchase a new house, which will account for an even larger portion of personal debt.

There are several strategies to pay off debt, including the snowball and avalanche methods.

Those methods are part of six ways to become debt free.

Recommended: How Many Credit Cards Should I Have?

2. Start Saving for a Down Payment

After whittling down at least some debt, it’s time to think about how to afford a down payment.

Though a 20% down payment may allow you to avoid paying private mortgage insurance on a conventional (nongovernment) loan and get a better rate, borrowers often are able to put down as little as 3%.

The down payment on a house can be as low as 3.5% for an FHA loan if you have a FICO® score of at least 580 (but mortgage insurance always comes along for the ride with an FHA loan and will not drop off unless you’re putting at least 10% down).

USDA and VA loans usually do not require any down payment, but the eligibility for those loans is pretty narrow.

Many lenders give first-time homebuyers a break, and income-qualifying first-time buyers may be able to get down payment assistance from state or city programs.

Younger millennials use a gift or loan from friends and family to help fund the purchase more than any other generation, the National Association of Realtors has found. A gift will need to be documented in a gift letter for the mortgage.

Recommended: 31 Ways to Save for a House

3. Determine Your Must-Haves

Here’s one of the most fun parts about purchasing a home: plotting a dream space.

Before starting your home search, it’s helpful to take some time and think about what you really want. Do you want an open-concept home, or need a minimum number of bedrooms and bathrooms?

Are you considering a condo or townhouse? The maintenance will be minimized, but regular fees are usually part of the deal.

Or is your heart set on buying a single-family home? You’ll usually be responsible for maintaining everything from the roof to the yard (hope you don’t mind mowing, blowing, and edging or paying to have that done).

Maybe you’re open to a frumpy house because you know you can easily upgrade your home with a smart front door, outdoor lighting, paint, and more.

Or maybe new construction — everything shiny and new — is calling your name.

To narrow the search, think about everything on your must-have vs. like-to-have list.

Recommended: How Do Home Improvement Loans Work?

4. Find a Real Estate Agent

Though you don’t have to use a real estate agent to purchase a home, a buyer’s agent can be your guide from the first viewing to the closing.

Real estate agents have access to a multiple listing service (MLS), which allows them to sift through every home in your area at once. They may also have pocket listings, or whisper listings, few others know about.

A real estate agent is also well versed in what needs to take place before a buyer can take ownership of a home, including making an offer, scheduling a home inspection, and obtaining homeowners insurance.

They know how to handle counteroffers, contingencies, and putting an offer on a house that’s contingent.

They may also have a list of trusted inspectors, lawyers, contractors, and insurance agents a buyer may need along the way.

Recommended: Guide to Buying, Selling, and Updating Your Home

5. Set Up Real Estate Alerts

Millennials are digital natives, so this part is cake.

Once your list of must-haves is complete and you’ve picked a real estate agent to assist you, it could be a good idea to set up alerts across listing sites such as the MLS, Zillow, and Redfin. You’ll be notified whenever a home in your chosen area, price range, and desires comes onto the market.

These websites also typically allow users to save favorites and gather intel on a specific home, such as its tax and sales history. They also allow users to book viewing appointments.

6. Think About Long-Term Value

While viewing homes, it may be easy to fall in love with fresh subway tiles, staged furniture, and the simple shine of a brand-new spot. However, it helps to take a beat and a breath and think about the long-term value of the home.

Are you buying this home as a spot to raise a family? Then make sure the schools are a good fit and it’s a walkable neighborhood. Looking at purchasing a home to rent out short term? Check local laws to ensure you’re zoned properly.

Are you buying a house from a family member? A gift of equity is a lovely thing for a buyer indeed.

Recommended: Local Housing Market Trends by City

7. Consider a ‘Love Letter’ and Incentives

Once you’ve found a home in your price range that comes with all your must-haves, it’s time to put in an offer. There is something you can add to your offer to stand out from the crowd: a personal real estate offer letter, or so-called love letter.

If you choose this route, write a letter to the current homeowner expressing how much you love the space and why you feel you’d make the next great owner. You may also want to point out all the things you love about the home design.

To make your offer stand out, you could also provide a quick closing date, suggest paying for things like a termite inspection, and offer a leaseback to the owners until they are ready to move out.

8. Shop for a Mortgage

With any luck, you’ve gotten prequalified or preapproved and know how much of a mortgage you can afford.
Now it’s time to look for a home loan.

When shopping for a mortgage, realize that advertised rates may differ from what you’re offered. Multiple factors determine your rate.

You can apply for a mortgage online with any number of direct lenders and mortgage brokers. Just try to do so within 14 days to protect your credit score.

Then you can compare all the details of the mortgage offers in the loan estimates you’ll receive after applying with each.

The Takeaway

As multitudes of millennials suit up to take the homebuying plunge, they will benefit by getting their finances in order, hiring an agent, setting up real estate alerts, and shopping for a mortgage.

SoFi is there for Gen Y with competitive rates, a variety of terms, and low down payments.

Look into the advantages of SoFi mortgage loans and get a quick rate quote.

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.

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

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

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