March 3, 2022 | Page 22 of 23

Mar

2022

What Is Time in Force? Definition and Examples

By Dan Miller | Growing Wealth, invest, Investing, Terminology | Comments Off

Time in Force is a stock investing term referring to the length for which a trading order is good. While casual or buy-and-hold investors may not use time-in-force stock limits, they’re an important tool for active traders.

Understanding different time-in-force options can help you close out more successful positions.

What Does Time in Force Mean?

Time-in-Force is a directive, set by a trader, that defines how long a trade will remain open or “in force” before expiring. Options traders and other active traders typically want to set an appropriate end date for trades to avoid unintended trade execution. This is especially true for investors employing day trading strategies and taking advantage of volatile market conditions with rapidly changing prices.

Recommended: Understanding the Risks of Day Trading

Basics of Time In Force

Before you place a Time-in-Force stock order, you’ll want to make sure that you understand exactly how they work. As with options trading terminology, it’s important to understand the language used to describe Time-in-Force orders.

Recommended: A Guide to Trading Options

Types of Time in Force Orders

There is no specific type of stock market order called “Time in Force”. Instead, the phrase refers to the collection of order types that set how long a trade order is valid, or “in force” in order to take advantage of investment opportunities. If you are considering a buy-to-open or buy-to-close order, you can also specify the time in force for either of those types of orders.

Not all brokers or dealers support every different kind of time in force order, but here is a look at several of the most common types of time in force stock market orders.

1. Day Order

This is the most common time-in-force order, and means the trade remains open until the end of the trading day. If your order has not been executed at the close of the day’s markets, it will expire. With many brokers, day orders represent the default option, and as such, this is the time in force order with which most people are likely familiar.

2. On-Open Order

Depending on the types of order that your broker or dealer offers, there can be two different types of time-in-force-on-the-open orders.

A market-on-open (MOO) order is an order filled when the market opens, at the prevailing opening price. With a Limit-on-Open (LOO) order, you can set a limit price for the highest price you’ll pay or the lowest price at which you’ll sell. If the market opens within the constraints of your limit order, it will be executed. Otherwise, your broker will cancel the LOO order.

3. Market on Close Order

A Market-on-Close (MOC) order is one that requests the sale or purchase of a security at the final closing price of the trading day. If your brokerage offers market-on-close orders, they will generally have a cutoff time by which you need to enter in any MOC orders.

Recommended: Buy to Open vs. Buy to Close

4. What Is Good ‘Til Canceled (GTC)?

As its name suggests, a good-til-canceled (GTC) order is a type of time-in-force order that remains in force until you proactively cancel the order or it is filled. Depending on the type of options strategy you’re employing, a good-to-cancel order can make a lot of sense, if you’re waiting for a moment in the underlying stock price. Many brokerages will restrict the number of days a good-to-cancel order will be open, often to 90 days.

Examples of Time in Force

You currently own 100 shares of ABC stock that you purchased at $20 per share. ABC stock announced earnings last night, and you’re considering liquidating your position. You’re not sure how the market will react to the earnings news, so you place a Limit-on-Open (LOO) order for $30 per share. If ABC stock opens at $30 or higher, your trade will execute, otherwise your broker will cancel it.

If ABC stock’s shares have been rising all day, but you expect them to open at a lower price, you might use a market-on-close order in order to try to sell at the high price at the end of the day. If you want to hold onto your ABC stocks until they reach $40 per share, you could set a good-til-canceled order to do so. Your order would automatically execute when shares hit $40, or it would expire after reaching your broker’s time limit for such orders, typically 90 days.

Time in Force Day Order vs On-Close Order

A Day order and an On-Close order are similar, but they have some important differences. A Day order is one that is good for the entire trading day, up to and including close. If you’re placing an order in the middle of the trading day and don’t care when it executes, this is the type of order you’d use.

On the other hand, an On-Close order (either Market on Close or Limit On Close) is only good at the close of the trading day. The intent of an On Close order is to execute at the final trading price of the day. If you place an On Close order in the middle of the trading day, it will not execute until the end of the trading day, regardless of the price throughout the day.

Using Time in Force Orders

How you use the different Time-in-Force orders will depend on your options trading strategy. Most buy-and-hold investors won’t use Time-in-Force orders at all, but if you’re using a more complex strategy, such as buying to cover, you may want to have more control over how and at what price your order is executed.

Start Trading With SoFi

Using time-in-force orders can help day traders execute on specific strategies and minimize potential offers. It determines how long a trade will remain open before being canceled. Most long-term investors do not use time-in-force orders.

If you’re ready to start options trading one way to get started is with SoFi’s options trading platform. This user-friendly platform boasts an intuitive design, and you can make trades from either the mobile app or web platform. Plus, there’s a library of educational content available for reference.

Trade options with low fees through SoFi.

Photo credit: iStock/Tatomm

SoFi Invest®

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

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Characteristics and Risks of Standardized Options . Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes.
SOIN1121490

Jun

2021

5 Steps to Help You Achieve Financial Security

By SoFi Editors | money | Comments Off

Maybe your ultimate financial goal is to pay off your mortgage and live debt-free. Or, perhaps your dream is to retire early and relocate to a remote tropical island.

Whether you’re dreaming big, small, or somewhere in between, achieving financial security can help make your vision of the future a reality.

But what exactly is financial security? Broadly speaking, financial security or wellness refers to a condition in which you are able to meet your current and ongoing financial obligations, have the capacity to absorb a financial shock, feel secure in your financial future, and are able to make choices that allow you to enjoy life.

While that may sound like a far-off concept, achieving financial stability often isn’t as far off as many people think. The key to getting there is to think about your short- and long-term financial goals, and then devise a savings plan that can help you reach them.

Here are five steps that could help you achieve financial security.

1. Setting Goals

Financial goal-setting can be like jumping ahead to the last chapter of a book.

Financial goal-setting can be like jumping ahead to the last chapter of a book. It starts with the endgame, such as paying for kids’ college, traveling, buying or renovating a home, or getting a new car.

From there, “reading” goes backward by breaking those goals into bite-size steps until the arrival at Chapter 1—an overview of the current situation and a plan to meet those long-term goals.

Short-term financial goals could include things like paying off credit card debt, student loans or car loans, saving for a downpayment on a home or a car, or growing an emergency fund (more on that below).

Once those are achieved, money you were setting aside each month for those goals could be shifted into longer-term planning, such as retirement, buying or upgrading a home, paying off a mortgage, or investing.

No matter how long it takes, checking something off a goals list can be a huge feeling of accomplishment, as well as motivation to start the next chapter.

2. Creating a Budget

One of the most important things you can do to achieve financial security is to live on less than you earn, since this enables you to siphon some of your income into saving towards your financial goals each month.

A great first step is to set up, or fine-tune, a monthly budget. To do this, you’ll want to grab the last few months of financial statements and pay stubs, then use them to determine what your average monthly take-home (after tax) income is, and what your average monthly spending looks like.

If you find that your spending is equal to, or exceeding, your income, you may then want to drill down into exactly where your money is going each month. You can start by making a list of essential expenses (rent/mortgage, utilities, insurance, car payments, groceries) and nonessential expenses (clothing, dining out, entertainment).

It’s often easiest to cut back spending in the nonessentials category. You might decide to cook more meals at home instead of eating out, for example. Or, you might cancel a streaming service or quit the gym and work out at home.

The money you free up can then be put into savings every month for your future goals.

3. Attacking Debt

If those monthly high-interest credit card payments didn’t exist, where would that money go instead? Paying off debt could free up a potentially big chunk of money to put toward those big dreams. Creating a debt-payoff strategy can be an essential part of a financial wellness plan.

One popular method for getting out of debt is the debt snowball. This calls for listing debts from smallest to largest amounts owed, then paying any extra money you have each month towards the smallest debt (while paying the minimum on the others). When that debt is paid off, you move on to the next smallest debt, and so on.

Another option is the debt avalanche method. This involves making a list of all your debts in order of interest rate (regardless of balance). You then put extra money towards the debt with the highest interest rate, while paying the minimum on the others.

When that debt is paid off, you start tackling the debt with the next-highest interest rate, and so on. As you continue paying off bills, you will be saving in interest payments and should have more and more money to put toward each debt as you go.

4. Building an Emergency Fund

An emergency fund is money tucked away that you can use in times of financial distress. Having this contingency fund can significantly improve financial security by creating a safety net that can be used to meet unanticipated expenses, such as an illness, job loss, or major home repair.

A good rule of thumb is to keep enough money in an emergency fund to cover three- to six-months worth of living expenses, but some people may need a larger emergency fund. You may want to keep this money in an account that earns more interest than a standard savings account, but is still easily accessible. Good options include a high-yield savings account, online savings account, or a checking and savings account.

Having this money available when you need it can reduce the need to tap high-interest debt options, such as credit cards or unsecured loans, or undermine your future security by dipping into retirement funds.

5. Saving for Retirement

Once you are free of high interest debt and have a solid emergency fund, you may want to focus on investing more of your income into a retirement fund.

The earlier you start saving for retirement, the easier it will be to meet your goal, thanks to the benefit of compounding interest (when the money you invest earns interest, that interest then gets reinvested and earns interest of its own).

One of the simplest ways to save for retirement is through a 401(k) program at work, since you can set up automatic pre-tax deductions from your paycheck (and may not even miss the money). If your employer is matching up to a certain percent of your contributions, you’re essentially getting free extra cash to save.

Another option is to open an Individual Retirement Account (IRA). Like a 401(k), an IRA allows you to put away money (before taxes are taken out) for your retirement. However, there are annual contribution limits you’ll need to keep in mind.

The Takeaway

Reaching a state of financial stability means you feel confident and don’t feel stressed about money. You are able to pay your bills each month, have money set aside for any unexpected bills or emergencies, you are saving money each month, and you are also debt-free.

One of the easiest and most important ways to achieve financial security is to spend less than you earn and to put money aside each month towards your goals.

If you’re looking for a good place to start–or build–your savings, you may want to consider opening a SoFi Checking and Savings®️ checking and savings account.

With SoFi’s special “vaults” features, you can separate your savings from your spending while earning competitive interest on all your money. You can also set up recurring deposits to help you reach your financial goals faster.

Get on the path to financial security with the help of SoFi Checking and Savings.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
SoFi Money® is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member
FINRA / SIPC . SoFi Securities LLC is an affiliate of SoFi Bank, N.A. SoFi Money Debit Card issued by The Bancorp Bank.
SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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

SOMN19086

Mar

2020

How to Get Approved for a Personal Loan

By SoFi Editors | Budgeting & Goals, Debt Payoff, personal_loan | No Comments

Sometimes, even careful planning and saving aren’t enough to prepare you for the expenses that lie ahead. Maybe fall is setting in and a chill is starting to set in the air. Perfect time for the furnace to break down. Or maybe summer is just around the corner and you realize the pool liner needs to be repaired.

These unplanned costs could be inconvenient and expensive. While you may not have experienced these exact scenarios, you may have felt the pinch in another way. When that happens, the pressure to make ends meet may be stressful. Taking on additional debt is not ideal, but if you don’t have the cash you need when an emergency strikes, there are options.

Personal loans, a sometimes underrated choice, are one way to pay for an unexpected expense or cover a big-ticket purchase. This type of loan may be taken out for lots of personal reasons. Personal loans are typically funded as one lump sum and could be used for things like consolidating credit card debt, paying medical bills, funding a big move or home remodel, paying for a wedding, or taking a dream vacation.

Broadly, there are two types of personal loans—secured and unsecured. A secured loan is backed by something of value, like a car or house, which is used as collateral. Should the borrower fail to make payments on the loan, the lender can seize the collateral. Usually, the borrower will receive calls and a debt collection letter as a warning before this happens.

An unsecured loan isn’t tied to an asset, which could make them riskier options for lenders. Because they’re not secured by an underlying asset, unsecured personal loans typically have higher interest rates than car or home equity loans, but lower rates than credit cards.

Of course, saving up an “emergency fund” for unexpected expenses is preferable to taking on debt. However, if you find yourself about to charge a massive sum on your credit card, and you know you won’t be able to pay it off within a reasonable period of time, a personal loan with no prepayment penalty could be a viable alternative.

Applying for an unsecured personal loan is typically pretty straightforward. But you’ll want to do your research, and you might want to make sure you have your financial ducks in a row to help your chances of approval and qualifying for the best possible terms and interest rate.

While everyone’s needs and financial picture are different, and this article is in no way a guarantee of qualifying for a personal loan, the application process can look very similar. So here’s what getting approved for a personal loan can look like:

Steps of the Personal Loan Application Process

The application process for a personal loan might seem more daunting than it actually is. Yes, you need to know a few things about your current financial situation (and your financial history).

But it really shouldn’t take long to get your facts straight. You might find it helpful to follow these steps when you start the process for a personal loan:

1. Figuring Out How Much You Would like to Borrow

First, you might want to make sure you’re realistically estimating the amount you’ll need. Borrowing more than you need might not be a great idea, since you’ll be paying interest on the lump sum you take out.

On the other hand, you wouldn’t want to borrow less than you need, only to end up resorting to using a credit card to make up for the difference. Be honest with yourself and your lender, and work with them to find the amount, interest rate, and term that works for you.

Awarded Best Online Personal Loan by NerdWallet.
Apply Online, Same Day Funding

2. Checking Your Credit

Although different lenders can use various scoring models, you might want to pull your current credit score and assess how strong it is (generally, a FICO® Score above 740 is considered very good—and above 800 is “exceptional”—but broadly, many lenders consider a score of 670 or above to indicate solid creditworthiness). This might be one of the main factors lenders consider when considering you for a personal loan, so it’s good to know your score.

3. Getting Pre-Qualified

Many lenders these days allow you to quickly see if you pre-qualify for a loan. This process could show you how much the loan would potentially be approved for, what your repayment terms and your interest rate could possibly be.

You’ll often provide basic information such as your address, income, and Social Security number. Often, lenders may do a soft credit check at that time that doesn’t affect your credit score1.

Once you see a pre-qualified quote from a couple of different lenders, you could compare the interest rates and monthly payments you’re offered before choosing the best option for your needs.

These fees could add up quickly. Factoring them in now might help you avoid any surprises down the line. Understanding the true cost of the loan, beyond just the interest rate, might help you make a decision about which loan is the best fit for you.

4. Submitting Your Application

The final step is to apply for the loan. Each lender has their own requirements for documentation and qualifying.

For many lenders, you’ll need to submit things like a photo ID, proof of address, and proof of employment or income. At this stage, the lender will do a hard credit check, which involves collecting information from all three major credit bureaus and could affect your credit score.

Ways to Help Improve Loan Approval Chances

You likely want to be approved for the best loan terms and interest rate possible. And that probably means putting your best foot forward on your application. Here are some ideas you might want to consider when applying for a personal loan:

1. Checking Your Credit History

If your credit score is shaky, the time to take action is ideally before you apply for any loan.

As a first step, you might consider requesting your credit report , which you can do for free annually . You could check for any errors or problem areas you want to work on. If you find any issues, you might want to report them to the credit bureau.

There are steps you could take to help with any misinformation reported around late payments or delinquencies. Filing a credit dispute is one idea, but keep in mind that fixing issues on your credit report could take time. It may be a good idea to do your research and understand the process.

2. Keeping a Stable Job

Before issuing a personal loan, lenders consider factors like your employment and income. Essentially, a lender is taking a risk by letting you borrow money, so they want to be confident you have the resources to pay it back.

Lenders might also be looking at how much you make and how stable your job is. So if you plan to apply for a loan, this might not be the time to change careers. Normally, changing (improving) jobs or income at the same company is not an issue. So if it’s the right time at work, you could ask for a raise.

3.Adding a Co-Borrower

If you don’t have great credit or don’t make very much, adding a co-borrower to your loan might increase your chances of approval. They might also help you get a better interest rate and repayment terms.

A co-borrower is someone who agrees to pay the loan if you default, and will be responsible for any missed payments.

That’s because a co-borrower is someone who takes the loan out with you—their name is on the loan, and you both have an obligation to repay it. Adding a strong co-borrower may improve your chances of qualifying for the personal loan that fits your needs.

Ready to Apply for a Personal Loan?

If you’re on the hunt for the right personal loan, consider SoFi. Qualifying borrowers may be eligible for up to $100,000, depending on their needs. The application process can be completed entirely online, and you’ll have access to customer support seven days a week.

There are absolutely no fees required when you borrow a personal loan with SoFi—no prepayment penalty fees.

If you unexpectedly lose your job, you could qualify to pause your payments with SoFi’s Unemployment Protection Program for up to 12 months, though interest will continue to accrue.

SoFi could even help you in your job search with benefits like career services. To get an idea of what your rate and terms could look like, you can pre-qualify and see your rate in just a couple minutes.

Check your rates for a SoFi personal loan today. SoFi offers loans with zero fees and various repayment options.

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

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.

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

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

SoFi 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.

Mar

2020

How a Parent Plus Loan Can Lower the Cost of College

By SoFi Editors | Budgeting & Goals, Family Finances, Life & Career, Student Loans, student_loan | No Comments

When children first learn to walk, their parents usually hold their hand until they get the hang of it.

When children learn to ride a bike, their parents often run alongside them holding on until they get control.

In the same way, when children go off to college, parents typically want to help with the costs. College is expensive, after all, and they don’t want their kids to be buried in student debt before they ever really get on their own two feet.

So many parents offer all the support they can—even if they have to borrow the money. Which is why the government created Parent PLUS Loans—federal student loans that are extended directly to biological or adoptive parents (and, in some cases, stepparents) of undergraduate students.

The loans, which allow parents to borrow up to the cost of attendance at their student’s school, minus any other forms of financial aid received by the student, are relatively easy to get. They do require a credit check, but many private lenders have stricter eligibility criteria.

Direct PLUS Loans for parents, commonly called Parent PLUS Loans, are popular. According to the National Student Loan Data System, as of the second quarter of 2019, at least 3.5 million borrowers currently owe a collective $93.9 billion in Parent PLUS Loans.

Unfortunately, that’s becoming a problem. The Brookings Institute reported at the end of 2018 (the most recent report from them on the topic) that repayment outcomes for parent borrowers appear to be getting worse as balances continue to increase.

“Many parents supporting college students are saddled with large debt burdens,” the report states, “ultimately repaying just enough to avoid default and sometimes owing significantly more than their initial balance.”

Well-intentioned borrowing can end up backfiring on parents, who could be making loan payments for years or even decades, depending on the student loan repayment plan they choose.

That might not seem like a big deal when the loan is new—especially if the parents are nowhere near retirement age. But as the payments drag on, long after those children are settled and doing fine—perhaps with families of their own—it might make sense to rethink the debt and how it should be repaid.

For some parents, that could mean refinancing the student loans with a private lender, with the goal of getting lower monthly payment or a lower interest rate.

Some private lenders, like SoFi, allow the child to take out a refinanced loan to pay off the Parent PLUS loan. Or parents could set up an arrangement to have the child pay the Parent PLUS loan once they graduate from college.

Either way, Parent PLUS Loan refinancing is an option for getting that debt load under control. Here’s a guide to some key pros and cons and some steps to getting started:

1. So What Exactly Is Parent PLUS Loan Refinancing?

Parent PLUS Loans are federal loans offered to parents of undergraduate students. Refinancing these loans means consolidating them into one new loan from a private lender, ideally with a lower interest rate and/or better loan terms.

2. What Are the Benefits of Parent PLUS Loan Refinancing?

There are few reasons Parent PLUS Loan refinancing can make sense for a family. Moving to one manageable payment with a potentially lower interest rate might make it possible to pay off the loan faster and for less money overall.

Direct PLUS Loans typically have a higher interest rate than other federal student loans, and competitive private lenders (including SoFi) can potentially offer lower rates to qualifying borrowers.

3. Is There a Downside to Refinancing?

Yes. Federal Parent PLUS Loans come with certain borrower protections that private loans don’t offer. Payments can be deferred, and some or all of the debt may be discharged in the event of parental disability or bankruptcy or if the school closed.

(To make Parent PLUS Loans eligible for income-contingent repayment forgiveness—the only income-driven repayment plan Parent PLUS Loans are eligible for—the loans must be consolidated with a Direct Consolidation Loan—see the next topic.)

These federal benefits will be lost when refinancing to a private loan. However, some lenders offer their own benefits.

4. What’s the Difference Between a Federal Consolidation Loan and Private Loan Refinancing?

A federal Direct Consolidation Loan allows borrowers to combine multiple federal education loans into one more manageable payment.

And it may give borrowers access to additional federal loan repayment plans (including the income-contingent repayment plan). But it’s generally aimed at lowering payments by lengthening the amount of time agreed upon to pay the loan—not by lowering the interest rate.

The new fixed interest rate on a Direct Consolidation Loan is the weighted average of the interest rates on the loans that are being consolidated, rounded up to the nearest eighth of a percent. Also, parents can’t put a federal consolidation loan in their child’s name or transfer their debt to their child. So it is not the same as refinancing a Parent PLUS Loan through a private lender.

5. What Should Families Consider Before Moving Forward With Parent PLUS Loan Refinancing?

When refinancing, the new interest rate and overall eligibility for the loan may be determined by a number of factors. A bumpy credit history can affect a person’s ability to refinance.

Refinancing can be an especially attractive option for those with a steady income and strong credit histories. A borrower’s debt-to-income ratio and ability to pay when making lending decisions are typically also factors, but every lender has different criteria—so shopping around to compare offers is wise.

6. How Can Parents Get a Refinanced Loan in Their Name?

Parents can research the best refinancing interest rates, loan terms, and other benefits online, then apply for a new loan.

If the application is accepted, parents can use it to pay off the Parent PLUS Loan, then begin making scheduled payments to the new lender. The child can make payments on it if they choose as well, but the loan will still be in the parents’ names.

7. Can Parents Use Parent PLUS Loan Refinancing to Transfer That Debt Into the Child’s Name?

The short answer is “no.” The longer answer is, “but there’s another option.”

There’s no federal repayment program that will allow you to transfer your Parent PLUS Loan to your child. If the child is offering (or, at least, willing) to take over the debt, however—and if they have the means to make the payments—refinancing with a private lender can make that possible. In this case, it’s the child, not the parent, who applies for the loan.

With a few private lenders (SoFi included), your child can take out a refinanced loan and use it to pay off their parents’ Parent PLUS Loan. Your child still has to qualify and provide additional documentation (check with each lender to understand what’s required). And just like any would-be borrower, a solid credit history and a secure income (among other factors) help determine the interest rate offered.

If the child’s refinanced loan application is accepted, they can take over their parent’s PLUS loan and start paying it off. If there are any bumps in the road for the child, such as limited work history or adverse credit, parents could agree to co-sign for the new refinanced loan.

It’s important to remember, though, that a co-signer is promising to pay off the debt if the borrower stops making payments. So, parents who co-sign are still on the hook if their child can’t come up with the money every month.

If that scenario has your head spinning, it’s understandable. Refinancing might not be right for every family. But if you’re one of the many Parent PLUS borrowers who ends up with more debt than expected, refinancing to a private loan could be an option worth considering.

Interested in refinancing your Parent PLUS Loan? SoFi offers competitive interest rates, member benefits, no fees, and a quick and easy online application process.

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.

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.

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

SoFi 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.

SLR17108

Jun

2019

turquoise toothbrushes on blue background

A Guide to Buying a Dental Practice

By SoFi Editors | Building Your Career, Life & Career, Student Loans, student_loan | No Comments

You’ve worked very hard to become an exceptional dentist. Through your intense focus in dental school and a relentless dedication to expertise, you now feel ready to take the next giant step toward building your future—striking out on your own and buying a dental practice.

There are a lot of big questions you need to ask yourself to ensure you are creating the best possible circumstances for success in your new endeavor. Each decision can bear tremendous influence on your future success, your earning potential, and, probably most important, the impact on your overall job satisfaction and quality of life. Are you ready for the challenge? Let’s dig in to the details to help make sure you know what you want to know.

Buying a Dental Practice

When considering how to buy a dental practice, there could be a number of scenarios that would characterize your circumstances. Have you just graduated or are you about to graduate from dental school? Have you worked as an associate for a time and now feel ready to make the big move? Maybe you’re looking to add to your existing practice by buying a second business. Each situation requires a somewhat different approach.

The first decision is usually whether to start a new practice from scratch or to purchase an existing business from another dentist, possibly one nearing retirement. A brand new office with shiny new equipment, just as you’ve always imagined, might sound very appealing, but there could be disadvantages.

Such an investment could cost you a lot more across the board, including hefty loan payments and business expenses right from the start, few patients, limited cash flow, and slower progress growing the business.

An ongoing practice will likely already have equipment and a business infrastructure, a base of paying customers, and a foundation to build upon. To that end, we’ve compiled some essential questions you can ask before buying an ongoing practice.

Questions to Ask When Buying a Dental Practice

When considering buying a dental practice, you might feel compelled to draw upon your best entrepreneurial instincts. And it can also help if you align yourself with experienced professionals who know the ins and outs of purchasing an ongoing practice. They can guide you through the labyrinth of questions and decisions you’ll be facing. You may want to interview several dental practice transition agents to get an understanding of how their methodologies compare.

On a personal level, you’ll want to define the fundamentals of what your vision for a practice should be. What areas of dentistry do you want to focus on? What locations would be best suited to your customer base?

What overall philosophy embodies the values and standards that you aspire to? It could be helpful to write down these principles as a guide to refer back to throughout this process. You might prepare to pace yourself and to take a thorough and patient approach rather than rushing into decisions.

Once you’ve refined a mission as a guide and determined ideal target areas where you would want to be located, you could develop a personal budget for your living expenses, plus any student loans or other major obligations, to help gauge how much income you’ll need to generate from your new situation. Once you’ve identified a practice that you are interested in buying, you’ll also probably want to work out the costs required to maintain that particular business.

Buying a Dental Practice Checklist

Working with a buying agent can help you prioritize the due diligence necessary to make an informed decision. Here is a checklist of some questions to consider asking when buying a dental practice, and some potential issues you might want to understand in order to make an informed decision.

• Start with getting some insight into the history of the practice and why the dentist is really selling it. Are they simply retiring or are there other driving factors?

• Determine how many active patients the selling dentist actually has and what are the demographics (age and ZIP code) for the patients, how many of them are new, and how many of them are insurance patients.

• Review the practice’s fee schedule and consider how the fees compare to industry standards, the competition, and insurance reimbursements.

• Obtain a practice valuation prepared by a qualified professional (certified valuation analyst).

• Ascertain the age and condition of the equipment, the software systems, and premises.

• Review any and all leases and/or real estate valuations and determine benefits or obstacles for renewals, as well as the possibility to expand the space at some point in the future.

• Review the performance of the staff and the staffing model and identify what team members will be the strongest practitioners to join your new venture.

• Conduct a thorough review of the hygiene appointments per month and average monthly revenue, as well as the doctor’s and hygienists’ schedules.

• Develop a thoughtful and comprehensive plan for transitioning. Keep the patient experience front of mind as you introduce changes. How involved will the selling dentist be in helping ensure a smooth and optimum changeover with staff and patients?

• Consider what opportunities there will be to improve the efficiency of the practice—staff productivity, billing, processing, etc.

• Evaluate what ongoing marketing efforts exist and develop a plan and a budget for going forward.

• Connect with dental supply companies, healthcare-focused accounts, and a small business banking specialist to gain additional insights for your practice.

You may also want to enlist an experienced accountant and attorney to help you sift through the layers of financial information related to the business you are hoping to purchase.

Among other things, the accountant will likely want to review several years of business tax returns, the cash flow model, and aged accounts receivables for gauging the competence of the collection policies, collection reports, and procedures. The lawyer can help with evaluating associate agreements, equipment and building lease agreements, or real estate appraisals and the potential for purchase.

It could also be a good idea to take note if a selling dentist pushes you to use a particular professional resource—that could be a potential red flag.

While this is a fairly extensive tips list, things are likely to come into focus once you’ve found a selling dentist with whom you connect.

Your membership in professional organizations such as the American Dental Association or the Academy of General Dentistry can provide extensive additional information regarding specifics related to buying a dental practice.

Getting Your Finances in Order

Finally, you’ll likely want to make sure that you have a reasonable handle on your finances going forward. That may include reviewing your dental school loans and making sure that they are as manageable as possible as you enter this new chapter of your career. Refinancing student loans through SoFi could lower your interest rate or potentially save you thousands of dollars.

Consider SoFi student loan refinancing to help you be proactive about advancing your career and realizing your ambition.

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.

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.

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.

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.

SOSL19046