What Are Round-Up Savings?

Round-ups are a feature offered by some financial services companies in which each time a customer makes a transaction, that amount is rounded up to the nearest dollar, and the change is deposited into a savings or investment account.

Once upon a time, people saved up their spare change in jars, cashing their coins in for a tidy sum once the jar was full.

And while the notion of that old coin jar may seem quaint now, there’s a new cashless version of that old tradition. It’s called round-ups.

The theory behind coin jars is as simple as can be.

Back when cash and coins were the most standard form of payment, savers would accumulate change throughout the day—paying for their morning coffee, buying lunch, or making other small routine purchases.

At the end of the day, they’d empty their pockets of coins and deposit all that loose change into a jar, where it would accumulate over time into a more sizable sum.

Once the jar was full, that money would be deposited into a savings account.

How Does Round-Up Savings Work?

Much like the cash jars of yore, round-up savings are also based on the principle that small amounts of money can add up to big savings over time.

For example, let’s say a round-up user makes a purchase for $28.15. If they were paying with cash, they’d have 85 cents remaining in change. With round-ups, the financial institution rounds up the value of the transaction and transfers those 85 cents into a savings account.

5 Types of Savings You Should Consider Having

Round-Up Savings Can Add Up

While saving 85 cents may not sound like much, any jar saver who ever went to the bank with $100 in change will attest that putting away small amounts can add up fast.

For example, saving just five extra dollars a week in round-ups adds up to $260 over the course of the year. This may not sound like a lot of money to save in total, but it can provide a nice boost to augment a more intentional savings strategy.

And that’s not the full amount someone could gain from participating in a round-up program.

Just like other savings or investments, round-ups deposited into a savings or an investment account have the potential to earn interest.

If the proceeds of round-up purchases are deposited to a savings account on a regular basis, that spare change would grow—and could continue growing—each time interest compounds.

For round-up investing, those small savings can, over time, help in the purchase of additional shares which may also grow in value.

Reasons For Considering Round-up Savings

Many Americans have trouble saving money.

For example, more than a third of U.S. adults would not have the extra funds to cover an unexpected $400 expense , and a quarter of Americans don’t have any retirement savings.

There are lots of reasons people have trouble saving—and for some, setting up round-ups can help them consistently set money away without having to think about it.

This can help to eliminate some of the pain and effort of saving.

Round-ups Make Everyday Transactions More Rewarding

One reason round-ups can be a useful tool to help someone stick save is that round-ups help someone pay themselves with each transaction.

Kind of like tipping oneself, round-ups pay the saver a little something extra on their transactions, making everyday spending a little more rewarding.

Round-ups are Automatic

Part of why saving can feel painful is that it requires the saver to make difficult decisions on a regular basis.

Each time money is put into a savings or investment account, the individual must consciously choose to save over other possible expenditures, decide how much to put away, and actually remember to perform the funds transfer.

But once they’re set up, round-ups happen automatically—without requiring conscious sacrifice.

Automating personal finances can be a helpful tactic to keep everyday funds flowing, avoid late fees and other stresses, and encourage healthy habits.

When it comes to automating savings, round-ups are yet another tool that can assist consumers in putting away small amounts of money.

Round-ups Take Some of the Pain Out of Saving

Saving money can be hard emotionally. In addition to the reasons mentioned above, each time an individual makes the decision to save they’re putting their future goals ahead of immediate pleasure.

That may be rewarding in the long run, but saving also typically requires an individual to make some sacrifices now. But because round-ups transfer such small amounts to savings on each transaction, people may not even feel a pinch.

For those who are already putting money into savings on a regular basis, taking advantage of round-up features can help to grow that money more rapidly, putting the ability to achieve your savings goals within even closer reach.

Round-ups May Help Counter Savings Procrastination

While some people save early and often, others may put it off. There are lots of reasons for procrastinating on starting a savings plan.

For those in their 20s, for example, retirement or even things like starting a family and buying a house can seem a long way off. Meanwhile, there can be lots of temptation to spend now, especially for those earning entry-level salaries.

SoFi Money®, account holders can enroll in the Round-up program, so long as they have at least one Vault set up. Vaults allow users to save for different goals within the same account. With the round-up program, transactions will be rounded up to the nearest dollar and deposited into the Vault selected by the account holder. There are also no fees and it’s possible to earn cashback when you spend.

Learn more about how SoFi Money can help you achieve your savings goals.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.

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 Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a 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.
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Source: sofi.com

Tips for Finding a Lost Bank Account

Losing track of money might seem hard to imagine, but it’s actually not uncommon to forget about an old bank account or other source of money that is rightfully yours.

It could be an account you opened a long time ago that, after one or two moves, became both out of sight and out of mind. Or, it might be lost paycheck, an old 401(k), or an unclaimed pension.

In fact, roughly 1 in 10 people have unclaimed assets waiting for them, according to the National Association of Unclaimed Property Administrators (NAUPA) . They report that billions of dollars in unclaimed property are currently being held by state governments and treasuries within the U.S.

If you’ve lost track of money that belongs to you, however, there’s no reason to panic, or consider the money gone for good.

There are a number of ways to locate lost assets from a bank or other type of financial account, and most of them are completely free.

It might take a bit of (virtual) leg work, but finding the unclaimed money due to you can be worth the effort.

How to Find an Old Bank Account

If you’ve accessed the account within the past year, you might be able to recover the account directly from the bank.

Exactly how to recover a lost bank account will likely vary based on the financial institution. Your account information can be found on checks and often on old account statements.

If it’s been longer than a year, you might have to dig a little deeper to recover a lost bank account.

When a bank or other business loses contact with an account holder, they are legally required to turn any assets over to the state, typically after two to three years of inactivity or returned mail.

That’s why a good place to start a quest for older unclaimed property is often through your state’s unclaimed property office . The unclaimed funds held by the state are typically from bank accounts, insurance policies, or your state government.

When you click on a state, you will be directed to its official website. To search for your unclaimed money, you may want to use both your current and maiden name (if you legally changed your last name).

Another good resource for tracking down unclaimed money is MIssingMoney.com . This is a multi-state directory operated by the NAUPA that allows you to search by name for missing or unclaimed money.

If you belonged to a credit union in the past, it may be worth checking the unclaimed deposits listing run by the National Credit Union Administration.

Other Sources of Unclaimed Money

Unclaimed money isn’t limited to forgotten bank accounts.

There are a variety of reasons you could be missing money due to you—perhaps you switched jobs and lost track of a pension plan or 401(k). Or, maybe you forgot to update your address and missed a payment or tax refund.

If you previously worked for a company that offered a pension plan, you can search the Pension Benefit Guaranty Corporation’s unclaimed pension database .

For lost or missing retirement plan funds, you could check the National Registry of Unclaimed Retirement Benefits , which is operated by PenChecks Trust, one of the largest providers of retirement plan distribution services.

USA.gov helps you search for assets due from employers, insurance companies, and the government (including tax refunds).

How to Claim Lost Money

If you find unclaimed assets in your name, the next step is to fill out a form or make an online request to make your claim.

Each state will typically have its own rules and regulations for how individuals should go about proving ownership of the unclaimed money held by the government. Generally, states will require substantial evidence that the money rightfully belongs to you.

Claims typically require showing proof of identity (such as information from a driver’s license or passport), any former residential addresses, and documentation showing your right to ownership of the assets.

If the owner is deceased and you inherited the assets, additional documents are typically required. This may include a death certificate, as well as a probate court order.

Are Companies that Help You Reclaim Assets Legit?

As you’re searching for lost bank accounts, you may find businesses that offer to find unclaimed money, generally for a fee.

Sometimes known as “finders,” these are companies that are looking to earn money by reunited people with their lost assets.

While it’s fine to pay someone to help you get lost money returned to you, you may want to keep in mind that you can complete a search and submit a claim for free by yourself.

It’s also a good idea to keep your eyes open to potential fraud. Unsolicited emails or letters offering to return unclaimed property to you for a fee, for example, are often scams.

You may also want to be wary of an organization or individual who claims to be a part of the government and offers to send you unclaimed money for a fee, as these are likely to be scams. Government agencies will not contact individuals about unclaimed money, nor will they charge a fee.

If somebody contacts you regarding missing money, it’s a smart idea to do some research on the business before handing over any personal information, and also to avoid paying any money up front.

The Takeaway

Many people have unclaimed money floating around somewhere.

Often this money comes from funds found in banks, financial institutions, or companies that haven’t been in contact with the owner for over a year and, as a result, the funds have been turned over to the state.

A good place to start looking for unclaimed assets is NAUPA’s database of records from all 50 states . From there, you can find links to each state’s official unclaimed property program.

What to do if you come into some unexpected money? Whether your windfall is large or small, you may want to consider putting it into a cash management account like SoFi Money®.

SoFi Money allows you to earn competitive interest, spend, and save–all in one account. And, SoFi Money doesn’t have any account fees, monthly fees, or many other common fees.

Make the most of the money you have–and any new money you find–with SoFi Money.



SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a 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.
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.

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Source: sofi.com

Finding the Best Cheap Exercise Equipment

There’s no need to spend all your money on a high-performance exercise bike or a gym membership when there are so many inexpensive great home gym equipment options — many of which are available online.

We researched the least expensive treadmills, indoor bikes and rowers on the market, and found some home exercise equipment that won’t cost you a mortgage payment. We all want to be fit, but quite honestly, we can think of way more fun uses of our money. Add a yoga mat and some weights, and possibly a pull up bar and you’ll have a complete home gym. We also have suggestions for buying outside the box. As in cheaper than retail.

Retail Alternatives for Good Deals

Let’s start with the ways you can buy home exercise equipment for lower than retail, even if this way is the most unpredictable. You can’t always get what you want, when you want it.

We penny hoarders understand that shopping retail is usually the most expensive way to make a purchase. So make sure you’re also checking out sites like Craigslist, Marketplace or Nextdoor before you buy home exercise equipment at retail rates.

There are also spots like Global Fitness  and Primo Fitness that specialize in selling refurbished exercise equipment online.

I found my Peloton for $1,800 on Craigslist and the seller gave me the mat, weights, heart monitor and cycling shoes for free. Add in the fact that I tossed the Peloton into my trunk (no shipping fees!) and I didn’t have to pay sales tax. I saved at least $500 on the deal.

You can also get less expensive home exercise equipment on Facebook Marketplace. A search for Horizon T101 treadmills there found them as low as $200. Make sure you try the equipment before buying, as conditions can vary greatly.

Not in the market to buy anything yet? Try using stuff around the house as exercise equipment.

And here’s an easy way to build a cheap home gym.

A Survey of Retail Exercise Equipment

If you’re ready to buy new but still want to save money, you can find some of the better home equipment on the market mostly through Amazon. Keep your eyes on Horizon Fitness, too, for sales.

Basic Treadmill:
Horizon T101

While many inexpensive treadmills may break after a few runs, this one is made to last, according to fitness experts. It comes with a lifetime warranty for the motor and for the frame, and it comes with a one-year warranty for parts and labor. So you can bet it’s built to withstand the toughest, longest workouts from the most dedicated fitness pro. The Horizon T101 folds and has wheels, so your gym can double as your living room. It has a 10 percent incline and nine programming options, so the content is very substantial. Tons of extras are built-in, including Bluetooth speakers, a USB charging port, a tablet holder and a cooling fan. Keep in mind, however, that the cushioning is nothing extraordinary — so if you have bad knees, you may want to get a different tread.

Get it here: $999 (but it’s usually on sale for $699) at HorizonFitness.

Treadmill with Classes:
NordicTrack 6.5 S

NordicTrack offers tons of classes via the iFit training program ($15 per month) and it’s less than ¼ the price of the Peloton Tread. This is the least expensive NordicTrack option, but it still offers live and more than 16,000 on-demand workouts. It comes with a one-month subscription to iFit, which offers fitness classes for any level. This model has a 10 percent incline, and it folds. The iFit membership is optional, so you can use the treadmill without the program, but one of the biggest benefits is the iFit.

Get it here: $668 at Amazon.

Pro Tip

Pair your treadmill or bike with the Peloton app ($15 per month), and you’ll get that high-end instructor experience.

Budget Indoor Bike:
Sunny Health & Fitness Pro Indoor Cycling Bike

This is your basic indoor exercise bike so don’t expect it to come with classes, a fan, a tablet or even a tablet holder. But at less than $300, you can be guaranteed a solid indoor bike that is durable and smooth. Plus, many people have added a cadence sensor, a tablet, a tablet stand and an app to turn it into a Peloton dupe.

Get it here: $298 at Amazon.

Bike with Accessories:
Yosuda Indoor Cycling Bike

This quiet bike is easy to assemble (it takes most people about an hour). Plus it’s quiet and comes with accessories including a tablet stand, an LCD monitor and a water bottle holder (these are all accessories that most people add to their indoor bikes). This is a sturdy bike that has two rolling wheels, so you can move it easily throughout your home gym.

Get it here: $450 at Amazon.

Rower with Classes:
Women’s Health Men’s Health Bluetooth Rower

This smooth rower has 14 levels of resistance, and it will measure your watts, calories, time and distance. For an extra $15, you can access trainer-led workouts and personalized programs through the MyCloudFit app, which should increase your strength training and your cardio. The rower itself is practically silent, and the seat is comfortable. You’ll have to assemble it, but it should take less than an hour to do so.

Get it here: $399 at Amazon.

Low Frills Rower:
Stamina ATS Air Rower

This is a quality rower that comes with an LCD monitor, a three-year frame warranty and a one-year parts warranty. This doesn’t have too many extras, but it’s sturdy, durable and gets the job done. Plus, it will fold so it’s great for tight spaces.

Get it here: $329 at Amazon.

Basic Elliptical:
Ancheer Elliptical Machine

The sturdy elliptical has 10 levels of resistance, along with a back-lit touchscreen that tracks your calories, time, speed and distance. Assembly for this piece of equipment is simple, and this is a great machine to use while watching TV or reading.
Get it here: $380 at Amazon.

All-Around Elliptical:
Sunny Health & Fitness Magnetic Elliptical Trainer

With 16 levels of resistance, seven workout modes and 24 exercise presets, this will feel like you’ve got a gym in your home. It’s totally silent and has a 16-inch stride, which is a decent length for a person of average height (if you’re tall, you may want to choose an elliptical with 20-inch strides). This elliptical doesn’t fold, but it has wheels so it’s easily movable.

Get it here: $530 at Amazon.

Danielle Braff is a contributor to The Penny Hoarder.

Source: thepennyhoarder.com

The 7 Most Common Questions About IRAs

An individual retirement account (IRA) can be an important part of retirement investing. But before investors save money in this type of plan, it makes sense to know the basics about who it’s for, how it can help, and which type of IRA is right for you.

This article will cover the seven most common questions people have about IRAs to help you decide whether it’s a good retirement investment vehicle for you.

1. How is an IRA different from a 401(k)?

Both IRAs and 401(k)s are tax-advantaged ways to grow money for retirement, but whereas a 401(k) is an employer-sponsored plan that is offered through a person’s job, an IRA is an account you can open on your own.

Benefits of 401(k)

On the one hand, a 401(k) can be beneficial to people who want to “set it and forget it”—and have money deducted automatically from their paycheck into their retirement account, without worrying about making payments.

Additionally, the maximum allowed yearly contributions to a 401(k) are larger than that of an IRA. For 2021, employees can contribute up to $19,500 to their 401(k), with an additional $6,500 in catch-up contributions if they’re over age 50. Employers can also contribute “matching” funds to your account, for a total of $58,000 (or $64,500 including catch-up contributions) per year.

Benefits of an IRA

For people who may have money that’s currently sitting in a checking, savings, or investment account, an IRA might be a good place for it to grow and help prepare you for your future.

An IRA can also be good for people who are not offered a 401(k) plan through their employer. IRA contribution limits are less—$6,000 per year as of 2021, with an additional $1000 in catch-up contributions for people over age 50.

The bottom line, however, is that you don’t need to choose between these two different retirement plans. If you have access to an employer-sponsored 401(k), it’s often a good idea to contribute as much as possible, then supplement with an IRA if desired.

Recommended: How to save for retirement if you don’t have an employer-sponsored 401(k)

2. Traditional vs. Roth: How do they work?

The two most common types of IRAs are traditional and Roth. (There are other kinds, like SEP and SIMPLE IRAs, but those are geared toward people who are self-employed or running small businesses. If that applies to you, read more about SEP IRAs.)

The biggest difference in a traditional vs. Roth IRA is when your money is taxed. With a traditional IRA, you get a tax deduction when you contribute money—so the money going into your account is tax free, and when you withdraw it in retirement, it will be taxed.

With a Roth IRA, you don’t get a tax deduction when you contribute but your money grows tax-free—meaning that when you withdraw it in retirement, you won’t pay taxes on the withdrawals. While that may be appealing to some people, it’s worth noting that Roth IRAs have restrictions around income when it comes to opening an account. In 2021 individuals must make below $125,000 (people earning more than $125,000 but less than $140,000 can contribute a reduced amount); for married people who file taxes jointly, the limit is $198,000 (or up to $208,000 to contribute a reduced amount).

Recommended: Rolling over your 401(k) is a pain—here’s why it’s still worth doing

3. Which IRA type is best for me?

While everyone’s situation is different, and only you can determine which kind of IRA is best for you, there are a few things to consider. If you have money sitting in a 401(k) from an old job, you might choose to roll that money over into an IRA (some employers will also let you roll over an old 401(k) into your current plan). Even if your employer previously paid the 401(k) fees, many stop doing that and pass them on to you when you leave. Plus, companies can merge or go out of business, and if that happens it may be more difficult to roll over your money.

Since the contribution limits are the same for both a traditional and Roth IRA, neither offers an advantage in that regard. So if you do qualify for both, one way to figure out whether a traditional or a Roth IRA is best for you is to think about your current tax bracket and what tax bracket you’re likely to be in when you retire.

If you don’t expect to earn any passive income in retirement (for example, from investments or rental income) and will thus be in a low tax bracket, you may want to take the tax deduction today and open a traditional IRA. If, on the other hand, you’re currently in a low tax bracket and expect to make more during retirement, you might opt for a Roth IRA.

Recommended: Traditional IRA or Roth IRA: Which one works for you?

4. How much should I put into an IRA?

Your goal generally should be to try to hit that maximum of $6,000 per year—or as close to that as your budget will allow. The important part is to make contributing a habit, and let the power of compound interest take over.

5. When should I make IRA contributions?

One simple way to fund your IRA is to set up an automatic contribution once a month that takes money from your checking or savings account and puts it directly into your IRA. Then, you never have to worry about forgetting to contribute, and you won’t miss (or spend) money that you never see. Use our IRA calculator to help determine which contributions you can make.

You don’t have to contribute monthly—the frequency is totally up to you, and many people contribute once annually, after they receive a year-end bonus, for example, or before the annual deadline of when taxes are due in April of the following year. (For tax year 2020, however, the deadline for contributions and filing has been extended to May 17, 2021.)

But consider this: the sooner you put money into the IRA, the more time it has in the market. Of course, investing isn’t without risk, but more time in the market means more time to (hopefully) grow.

6. Does everyone benefit from an IRA?

There are some potential drawbacks of an IRA for high earners. Here’s what to consider for each type of plan.

Traditional IRAs

Anyone earning an income can open a traditional IRA and contribute to it, but in some cases, traditional IRA contributions may not be considered tax-deductible. For instance, if you’re single and you’re covered by a workplace retirement plan like a 401(k), your traditional IRA tax deduction starts to become reduced when your modified adjusted gross income (MAGI)—your gross income minus what you put into your 401(k) and medical premiums—is $66,000 for 2021.

For married couples filing jointly, where the spouse who makes the traditional IRA contribution is covered by a workplace retirement plan, the deduction starts to go away when that person’s MAGI is $105,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction starts to phase out if the couple’s MAGI is $198,000.

Roth IRAs

As mentioned above, you can open a Roth IRA and contribute the maximum to it only if your income is below a certain level. For individuals who make more than $140,000 and married people who file taxes jointly and make more than $208,000, the Roth IRA is not an option.

If you fall into one of these categories, what should you do? If you or your spouse has a 401(k), one option is to start by maxing out that contribution each year.

7. How do I open an IRA?

An IRA can be an important part of an individual’s retirement investment strategy. Between traditional IRAs and Roth IRAs, it’s likely that you will find a plan that works with your timeline and goals.

Like so much else these days, opening an IRA can be done online. Though all the IRA rules are complicated, the process of opening one up with SoFi Invest® takes just a few minutes.

Find out how to get started with your retirement planning, with SoFi Invest.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.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. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
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.
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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Source: sofi.com

What Is A Conventional Home Loan?

Nothing compares to scrolling through listings until you find the home with the perfect garden, garage, and floors. Then comes the less fun part: figuring out how to finance your home purchase.

For the vast majority of people, acquiring a new home means taking out a mortgage, a loan for the part of the house cost that isn’t covered by the down payment.

U.S. homeownership hovers near 66%, and millennials continue to be the biggest share of buyers. What kind of loan do most go for? The 30-year fixed-rate mortgage. But conventional loan requirements vary, and some may find that a government-sponsored loan is a better fit.

Let’s take a closer look at conventional loan requirements and the difference between FHA and conventional loans.

Conventional Mortgages Explained

Conventional mortgages are insured by private lenders, not a government agency, and are the most common type of home loan.

Then there are government-guaranteed home loans. FHA loans are more commonly used than VA loans (for service members, veterans, and eligible surviving spouses) and USDA loans (rural housing). Government loans are often easier to qualify for.

Taking out a conventional home loan means that you are making an agreement with a lender to pay back what you borrowed, with interest.

And unlike with an FHA loan, the government does not offer any assurances to the lender that you will pay back that loan. That’s why lenders look at things like your credit score and down payment when deciding whether to offer you a conventional mortgage and at what rate.

See how SoFi can help make your
dream home a reality.

Two Main Types of Conventional Loans

Fixed Rate

A conventional loan with a fixed interest rate is one in which the rate won’t change over the life of the loan. If you have a “fully amortized conventional loan,” your monthly principal and interest payment will stay the same each month.

Although fixed-rate loans can provide predictability when it comes to payments, they may initially have higher interest rates than adjustable-rate mortgages.

Fixed-rate conventional loans can be a great option for homebuyers during periods of low rates because they can lock in a rate and it won’t rise, even decades from now.

Adjustable Rate

Adjustable-rate mortgages have the same interest rate for a set period of time, and then the rate will adjust for the rest of the loan term.

The major upside to choosing an ARM is that the initial rate is usually set below prevailing interest rates and remains constant for six months to 10 years.

A 7/6 ARM of 30 years will have a fixed rate for the first seven years, and then the rate will adjust once every six months over the remaining 23 years. A 5/1 ARM will have a fixed rate for five years, followed by a variable rate that adjusts every year.

An ARM may be a good option if you’re not planning on staying in the home long term. The downside, of course, is that if you are, your interest rate could end up higher than you want it to be.

Most adjustable-rate conventional mortgages have limits on how much the interest rate can increase over time. These caps protect a borrower from facing an unexpectedly steep rate hike.

Conventional Home Loan Requirements

Conventional mortgage requirements vary by lender, but almost all private lenders will require you to have a cash down payment, a good credit score, and sufficient income to make the monthly payments.

Many lenders that offer conventional loans require that you have enough cash to make a decent down payment. Even if you can manage it, is 20% down always best? It might be more beneficial to put down less than 20% on your dream house.

You’ll also need to demonstrate a good credit history. For example, you’ll want to show that you make loan payments on time every month.

Each conventional loan lender sets its own requirements when it comes to credit scores, but generally, the higher your credit score, the easier it will be to secure a conventional mortgage at a competitive interest rate.

Most lenders will require you to show that you have a sufficient monthly income to meet the mortgage payments. They will also require information about your employment and bank accounts.

How Do FHA and Conventional Loans Differ?

One of the main differences between FHA loans and conventional loans is that the latter are not insured by a federal agency.

FHA loans are insured by the Federal Housing Administration, so lenders take on less risk. If a borrower defaults, the FHA will help the lender recoup some of the lost costs.

FHA loans are easier to qualify for, and are geared toward lower- and middle-income homebuyers. They require at least 3.5% down.

Additionally, the loans are limited to a certain amount of money, depending on the geographic location of the house you’re buying. The lender administering the FHA loan can impose its own requirements as well.

An FHA loan can be a good option for a buyer with a lower credit score, but it also will require a more rigorous home appraisal and possibly a longer approval process than a conventional loan.

Conventional loans require private mortgage insurance if the down payment is less than 20%, but PMI will automatically terminate when the loan balance reaches 78% of the original value of the mortgaged property, unless the borrower asked to stop paying PMI once the balance reached 80% of the original property value.

FHA loans require mortgage insurance, no matter the down payment amount, and it cannot be canceled unless you refinance into a conventional loan.

The Takeaway

A conventional home loan and FHA loan differ in key ways, such as credit score requirements. If you’re ready to make your dream house a reality, you’ll want to size up your eligibility and your mortgage options.

SoFi offers fixed-rate home loans with as little as 5% down and terms of 10, 15, 20, and 30 years.

It takes just two minutes to get prequalified online.



SoFi Home Loans
Terms, conditions, and state restrictions apply. SoFi Home Loans are not available in all states. See SoFi.com/eligibility for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . 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.
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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Source: sofi.com

What is Debt Consolidation and How Does it Work?

If you’re repaying a variety of different debts to different lenders, keeping track of them and making payments on-time each month can be a hassle. It isn’t just tough to keep track of these various debts, it’s also difficult to know which debts to prioritize in order to fast track your debt repayment. After all, each of your cards or loans have different interest rates, minimum payments, payment due dates, and loan terms.

credit card debt.

It consolidates all of those existing loans into one loan, which means you go from having several monthly payments and various interest rates to just one. This is not the same as debt or credit relief, where a credit counselor helps you reduce interest rates or eliminate debt altogether. Credit relief programs can help you consolidate your debt, but they aren’t getting you a new loan—it’s only consolidation.

While you are able to consolidate many different types of loans, the process for consolidating student loans is different. Keep reading to understand how they are different.

Applying For a Debt Consolidation Loan

When choosing a debt consolidation loan, look for one that has an interest rate and terms that fit into your overall financial picture. The overall goal when consolidating debt is to save you money, either on interest in the long term, or on monthly payments in the short term (which may end up making it more costly over the life of the loan).

Once you apply and are approved for a debt consolidation loan, it may take anywhere from a few days to a week to get your money. Sometimes the lenders will pay your debts off directly, other times they will send you the loan money, and you’ll pay the debts off yourself.

The Benefits Of Debt Consolidation

The most significant benefit of consolidating debt is that it is possible to qualify for a more competitive interest rate, which could help save money over the life of the loan. Debt consolidation loans tend to come with lower interest rates than credit cards.

A debt consolidation loan may be an option to consider if your monthly payments are feeling way too high. When you take out a new loan, you can extend the term length to reduce how much you pay every month.

It’s important to note that the longer the term length of your loan, the more you’re likely to pay in interest over the life of your loan. Still, if you’re struggling with your monthly payments, it might be worth it to consolidate your debt and extend your repayment timeline. This way, you won’t be struggling to stay afloat every month, and you’re less likely to miss payments.

Alternately, you could shorten your term length if you’re trying to aggressively pay off your debt and get rid of it more quickly. This could help reduce the cost of interest over the life of the loan.

Consolidating could potentially help improve your credit score. That’s because if you carry debt on credit cards or lines of credit, your score might suffer if you’re using more than 20% to 30% of your available credit. By taking out a consolidation loan and depending on how much you qualify for, you could be creating more available credit, instead of racking up a credit card tab.

Finally, if some of your current debts are secured loans, debt consolidation might be worth considering because they are typically unsecured loans. With secured loans, you use an asset like a home or car to guarantee the loan. If something happens and you cannot repay the loan, then the bank can seize the asset that is acting as collateral. An unsecured debt consolidation loan can help you avoid putting other assets on the line.

Consolidating Credit Card Debt

Tired of dealing with mounting credit card debt? Consolidating credit card debt is the most obvious form of debt consolidation. This is because people can save a considerable amount by consolidating their high interest credit card debt with a new lower-interest loan.

The first step is generally applying for a credit card consolidation loan. There are many banks, credit unions, and online lenders who offer loans for consolidating debt. In some cases, the application process can be completed online.

Credit Card Interest Calculator.

For example, say a borrower has $10,000 on a credit card, paying 20% in interest, and the minimum payment is 4%. If they pay the minimum statement balance each month, it would take 171 months, or 14 years and three months, to pay it back. It would cost a total of $6,989.36 in interest.

But if you consolidate that debt with a new loan that has an 8% interest rate and a 10-year term, you will pay $4,559.31 in interest. Not only would you save money in interest by consolidating your credit card debt, but you could potentially improve your credit score by paying back your consolidated loan on time.

Who is Eligible for a Personal Loan for Debt Consolidation?

Borrowers who have one or more sources of debt where the interest rate is higher than 10%, it may be worth exploring a personal loan. While there’s no guarantee that you’ll find a lower interest rate, you can’t know unless you get quotes from a few lenders. (And these days, it’s a pretty painless process because lenders often offer quotes online. If it proves difficult, find yourself a different lender.)

Those with the best credit scores will typically qualify for the best rates on their new personal loans, but don’t let an average or even low score keep you from requesting quotes. This is especially true if you have more than $10,000 in credit card debt and those cards charge exorbitant interest rates.

Also know that credit score isn’t the only data point that’ll be considered in determining whether someone qualifies for a loan and at what rate. Potential lenders typically also consider employment history and salary, and other financial information they deem important in determining loan-worthiness.

A personal loan isn’t for everyone. If you’re doing it only for convenience and there isn’t a legitimate financial motive, it’s probably not worth it. Instead, focus that energy on paying back the money you owe as efficiently as possible.

While personal loans can be a great tool to reduce interest payments, it doesn’t reduce the actual debt you owe. If you’re looking to get out of debt so you can focus on other financial goals, but the interest rates on your debt are making it nearly impossible, a personal loan could be helpful.

When Consolidating Debt Makes Sense

Which types of debt make the most sense to consolidate? Any debt that has high interest rates or unappealing terms. If the loan term is longer than you want it to be, if the interest rate is variable and you’d prefer fixed, if your loan is secured and you’d rather it not be attached to collateral—these are all reasons that might merit debt consolidation.

There are many loans to consolidate debt, but some may have their drawbacks. Make sure you shop around when looking for consolidation lenders, and only choose a reputable lender that you know you can trust.

Some people considering a personal loan feel overwhelmed by having multiple debt payments every month. A personal loan could lighten this load for two reasons. For one, it may be possible to lower the interest paid on the debt, which means it’s potentially possible to save money in interest over time.

Secondly, it can also make it possible to opt for a shorter term, which could mean paying off credit card debt years ahead of schedule. If it’s possible to get lower interest than you have on your current debt, or a shorter term on your debt to pay it off faster, a personal loan could be worth looking into.

On the other hand, you’ll also want to be careful about fees that might come with your new loan, separate from the interest rate you’ll pay. For example, some online lenders charge a fee just to take out a personal loan, and some don’t, so you’ll want to do your research.

Debt Consolidation for Student Loans

It’s possible to consolidate student loans like other forms of debt. Consolidating student loans with a private lender is often referred to as “refinancing.”

If you have only federal student loans, you can consolidate them with a Direct Consolidation Loan. This program allows borrowers to combine all their federal loan into a single, consolidated loan. The new interest rate is the weighted average of the existing loans, so it won’t result in a decreased interest rate. Direct Consolidation loans still qualify for many federal loan protections and programs.

Borrowers with both private and federal loans are able to roll them all into one refinanced loan with a private lender. Student loan refinancing could potentially allow you to qualify for a lower interest rate than the federal loan consolidation program.

The major drawback is that refinancing your federal loans with a private lender means you give up your federal student loan protections, including access to the income-driven repayment programs, deferment, and forbearance.

The Takeaway

Debt consolidation allows borrowers to combine a variety of debts, like credit cards, into a new loan. Ideally, this new loan has a lower interest rate or more preferable terms to help streamline the repayment process.

In the long term, debt consolidation could potentially help people spend less money over the life of the loan, if they are able to secure a lower interest rate on the consolidation loan.

One type of debt consolidation is student loan refinancing. This could help borrowers streamline their student loan repayment by consolidating debt into one loan. Depending on the terms and interest rates, borrowers could also spend less money in interest long-term.

Thinking about consolidating your debt or refinancing your student loans? SoFi loans can help you get there—and may save you money along the way.



SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

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’swebsite .
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.
SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF SEPTEMBER DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

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. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF SEPTEMBER DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
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 on credit.
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Source: sofi.com

What Are Altcoins? Guide to Bitcoin Alternatives

There are many alternative investments available for people who hope to grow their money—from age-old collectibles like baseball cards, to new and somewhat confusing assets, like NFTs. Another alternative investment is cryptocurrency—and within that category falls another “alt”: alt coins, better known as altcoins.

Altcoins are crypto coins that are an alternative to Bitcoin, the original cryptocurrency and reigning crypto leader. There are many different altcoins—different types, and within those categories, different specific products.

This article covers everything you need to know about altcoins, including what they are, where to buy them, and examples of the more popular coins on the market. Familiarize yourself with altcoins here, then check out the top things you should know before investing in any cryptocurrency.

What Are Altcoins?

Bitcoin is just one of the myriad coins and tokens that comprise the cryptocurrency space. You’ve likely heard some of their names—such as Ethereum, Ripple, and Litecoin. These coins and cryptos are, in effect, alternatives to bitcoin.

“Altcoin” is a catch-all term for alternative cryptocurrencies to bitcoin. They’re altcoins. It’s that simple. Currently, there are more than 9,000 cryptocurrencies in existence. That’s a lot of altcoins.

How do Altcoins Work?

Like Bitcoin, altcoins rely on blockchain technology, which allows for secure, peer-to-peer transactions. But each altcoin operates independently from the rest, and each has its own sets of rules and uses. For example, cryptocurrencies like Bitcoin and Ethereum are mineable, whereas Ripple and Stellar are not.

That said, in general, most altcoins operate in much the same way: They’re traded among investors, with transactions recorded via blockchain in a distributed ledger.

Different Types of Altcoins

Most altcoins can be slotted into a few different categories, which can help potential crypto investors get a better grasp of the field. This is not an exhaustive list, as categories and subtypes are always changing. But here are some of the most prevalent types of altcoins:

Digital currencies

The digital currency category comprises most of the cryptocurrencies that investors are familiar with, including Bitcoin. They’re exactly what they sound like: currency in digital form. They can be acquired as a form of payment, through trading on an exchange, or through mining (when applicable), and are generally used to conduct transactions.

Tokens

Unlike crypto like Bitcoin or Ethereum, which can be used on any platform, tokens are tied to their parent platform. For example, Tether and Golem are tokens used only on the Ethereum platform.

A utility token provides holders with some sort of service. BAT (Basic Attention Token) is an example of a utility token, meant to be used specifically as a method of payment on the Brave open-source browser.

Stablecoins

Stablecoins are built to be stable—they are pegged to an existing asset like the Euro or the U.S. dollar. The logic is that by pegging the asset to an existing one, it should help stabilize value and reduce volatility.

In contrast, consider Bitcoin: while its value has risen substantially in recent years, its price is highly volatile. Values have dropped to less than $6,000 per coin to more than $60,000—all within a couple of years. Stablecoins are designed to reduce those wild fluctuations, and allow holders to sleep at night.

An example of a stablecoin is Libra (aka Diem), which is being developed by Facebook, and pegged to the dollar.

Common Altcoins

There are seemingly more and more altcoins hitting the market every day. Here are a few of the more common altcoins:

Ripple: Also known as “XRP,” this altcoin is used primarily on its namesake, the Ripple currency exchange system. It was designed for use by businesses and organizations, rather than individuals, as it’s most often used to move large amounts of money around the world.

Ethereum: Ethereum is a programmable internet platform used to build decentralized programs and applications, and its native currency, Ether (ETH), is the altcoin in question that can be traded by investors.

Litecoin: Litecoin is another popular altcoin, which is often referred to as “Bitcoin lite,” hence the moniker. It’s one of the largest and most popular cryptocurrencies on the market, and operates in a very similar way to Bitcoin.

Dogecoin: There are a bunch of “joke” altcoins that are on the market, and Dogecoin is perhaps the most recognizable right now. Dogecoin started as a joke (its genesis is actually an internet meme), although it has gained value in recent months.

Cardano: Cardano (ADA) allows developers to use the Cardano blockchain to write smart contracts and decentralized applications (dApps). ADA crypto is required to run programs like dApps. Cardano is also used as a medium of exchange.

Where to Buy Altcoins?

Looking to buy altcoins? They’re available on most any cryptocurrency exchange, like Coinbase or Binance. You can even trade cryptocurrencies with SoFi Invest® (if you live in an eligible state). Not all altcoins may be available on every platform, so interested investors should do their research before choosing an exchange.

In terms of actually trading for coins, the process can be as simple as depositing money into an account on your preferred exchange, and then trading either dollars or crypto for a targeted altcoin.

The Takeaway

Altcoin is a catchall term for cryptocurrency other than Bitcoin, the original crypto. There are a variety of different altcoins—from tokens to stablecoins—but many are available for interested investors.

If you want to get your feet wet, you can get started trading certain cryptocurrencies and altcoins using SoFi Invest. You can get started with just $10, manage your transactions in the SoFi app, and rest assured that your holdings are securely protected against fraud and theft.

Find out how to get started with SoFi Invest.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.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. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments.
Third Party Brand Mentions: No brands or products 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.
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Source: sofi.com

Understanding How Income Based Repayment Works

If you graduated recently, you’re gearing up to launch your career and start a new chapter of your life. But graduating may also mean it’s time to start paying back your student loans, which is less exciting.

If you have unconsolidated federal student loans, you are likely signed up for the standard 10-year repayment plan. Upon graduation or once your grace period ends, you begin making payments in order to pay back your loans in 10 years.

Many grads will not make tons of money right out of the gate, of course, and that can make paying off student loans at the beginning of a career challenging. If your loan payments with the standard plan are high in proportion to your income, an income-based repayment plan might be an option.

apply and submit information to have your income certified. Your monthly payment will then be calculated.

If you qualify, you’ll simply make your monthly payments to your loan servicer under your new income-based repayment plan.

You’ll have to recertify your income and family size yearly. Your calculated payment may change as your income changes.

What Might My Payment Be?

Qualifying for income-driven repayment depends on your income—specifically how much of your discretionary income goes toward student loan payments.

For the IBR, PAYE, and REPAYE plans, the required monthly payment is generally a percentage of your discretionary income. (Discretionary income is the difference between your adjusted gross income and 150% of the poverty guideline for your family size and state of residence.)

For the IBR plan, the monthly payment is 10% of discretionary income for someone who borrowed on or after July 1, 2014. If a student took out loans before that date, the monthly payment is 15% of discretionary income.

Under the PAYE and REPAYE plans, the monthly payment is 10% of discretionary income.

An example:

•   You are single and your family size is one. You live in one of the 48 contiguous states or the District of Columbia. Your adjusted gross income is $40,000.
•   You have $45,000 in eligible federal student loan debt.
•   The 2021 HHS Poverty Guideline amount for a family of one in the 48 contiguous states and the District of Columbia is $12,880, and 150% of that is $19,320. The difference between $40,000 and $19,320 is $20,680. This is your discretionary income.
•   If you’re repaying under the PAYE or REPAYE plan or if you’re a newer borrower with the IBR plan, 10% of your discretionary income is $2,068. Dividing that amount by 12 results in a monthly payment of $172.33.

Under the ICR plan, the monthly payment will be the lesser of 20% of discretionary income or the amount a borrower would pay under a standard repayment plan with a 12-year repayment period, adjusted using a formula that takes income into account.

For the ICR plan, discretionary income is the difference between adjusted gross income and 100% of the federal poverty guideline amount for your family size and state.

The Federal Student Aid office recommends using its loan simulator to compare estimated monthly payment amounts for all the repayment plans.

Which Loans Pertain to Which Plan?

Most federal student loans are eligible for at least one of the plans. For the details, see this Federal Student Aid chart .

Private loans are not eligible for any federal income-driven repayment plans—though some private loan lenders will negotiate new payment schedules if needed.

Potential Drawbacks of Income-Driven Repayment

Income-based repayment usually lowers your monthly payment, but stretching payments over a longer period means probably paying more in interest over time. In some cases, your minimum payment might not even cover all the interest on your loan.

Even if income-based repayment makes sense for you, you’ll need to recertify your income and family size every year.

consider refinancing instead. With refinancing, a private lender pays off loans with a new one, hopefully with a lower interest rate.

You can calculate how much you might save by refinancing your student loans with SoFi’s student loan calculator.

Maybe your income doesn’t qualify you for an income-driven repayment plan. If not, consider refinancing with SoFi.

You can refinance both private and federal student loans. Just realize that refinancing federal student loans with a private lender renders them ineligible for federal repayment plans, but if you don’t plan to use those benefits, refinancing might be a good option.

Check your rate in a snap.



IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF SEPTEMBER DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
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.

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Source: sofi.com

Which Credit Card Suits You Best?

With so many credit card options out there, it may be hard to choose a new one.

Are you loyal to a particular airline or hotel chain? Do you want to redeem points as statement credits? Are you a big grocery or gasoline spender? Interested in an innovative use like paying down loan debt or investing? Is the interest rate important, an annual fee a dealbreaker?

If you can responsibly manage more than one credit card—and if you’re like most Americans, you have more than one—you can use different cards to optimize rewards (cash back, points, or miles), annual statement credits, and 0% and low introductory APR offers.

When deciding on a new credit card that is best for you, it boils down to two basic questions: What do you want from a card? And how strong is your financial history?

Here’s a glance at the credit card options available and provisos to consider.

Rewards Credit Cards

If you are good about paying off your card every month and never incur interest, you might consider a rewards card. They may offer sign-up bonuses and give consumers rewards in the form of miles, cash back, or loyalty points.

There are variations on a theme, such as:

•  Bonus offer + 0% period for purchases
•  A set dollar amount in travel or bonus miles if you meet the initial spending requirements
•  Flat-rate cash back
•  Customizable rewards

A few cards offer an eye-opening 5% cash back in rotating categories, up to a limit (such as 5% back on $1,500 spent quarterly, after which all other purchases earn 1% cash back), and you’ll usually have to manually activate the offer each quarter.

But you can often lessen the work involved and earn more in total cashback rewards with a flat-rate cashback credit card, when all purchases earn the same amount.

Frequent travelers lured by premium travel rewards cards will want to weigh the perks against an annual fee of $450 to $550.

New reward offerings have bubbled up, such as allowing cardholders to put cash back toward loan payments, and are brewing, like increasing card acceptance for rent payments and offering cryptocurrency-related rewards.

When choosing a rewards card, think about your spending habits and redemption preferences, be aware of your credit score (these cards usually require a good score), and pay off your balance each month—rewards cards typically have higher APRs than balance transfer cards.

If you fall behind on payments or carry over balances, all the perks and rewards are unlikely to be worth it.

Cards for Those With Limited or Damaged Credit

For college students with little or no credit history, there are student credit cards.

If you don’t have great credit, there are also secured credit cards. Generally, they require a deposit from the user. A secured credit card functions like a normal credit card except that it has a backstop: The user puts up an amount of money that the issuer will then use if the cardholder defaults.

The lender offers a certain amount of credit based on the promise that the user will pay off the balance in full every month.

If your account is upgraded to an unsecured account, thanks to good habits, or is closed in good standing, your deposit is returned.

Both of these options can help someone build credit and could lead to a card with more perks if the holder is diligent about paying off the balance every month.

Then there’s at least one brand of card that considers an applicant’s banking history in lieu of their credit score, has no annual fee, and comes with rewards.

Prepaid Debit Cards

A secured credit card is primarily intended for building credit, whereas a prepaid debit card is good for budgeting and convenience but does not affect your credit.

A prepaid debit card is preloaded with your own money, typically though direct deposit, cash or check deposits, or online transfers from a checking account.

The card is used for transactions until the money runs out. Since there is no line of credit, you cannot run up debt on the card.

This is a great option for a young person who needs to learn how money works or for adults with a bad credit history, though it will not improve their credit scores.

Credit Cards That Save You Money on Interest

If you’re prone to carry a balance month to month, you might want to consider a low-interest card. While these types of credit cards don’t come with bells and whistles like airport lounge access, it is the financially prudent option if you have an irregular income or you carry a balance each month.

It might be best to look for a card that offers an initial APR of 0% and then an ongoing low interest rate.

Keep in mind that low-interest credit cards usually require a good credit score to qualify. Generally, the better your credit score, the lower your interest rate. The lowest advertised APR isn’t always what an applicant gets.

Balance Transfer Credit Cards

If you are in credit card debt, a balance transfer credit card could help you pay off your debt at a lower interest rate.

Interest rates and terms vary widely with balance transfer credit cards. A balance transfer card will often come with a 0% APR introductory period, but once that ends, the interest rate shoots up.

It’s important to pay attention to the fine print if this is an option you’re considering.

The Takeaway

Choosing the most rewarding and suitable new credit card can become a research project. It’s best to think about your spending habits, needs, credit history, APR, any annual fee, and perks.

SoFi credit card holders earn 2% unlimited cash back when redeemed to save, invest, or pay down eligible SoFi debt and 1% cash back when redeemed for a statement credit.

There is no annual fee*. And speaking of perks, SoFi members have access to an abundance of them.

Looking for cashback rewards? Look into a SoFi credit card.



*See Pricing, Terms & Conditions at SoFi.com/card/terms
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The SoFi Credit Card is issued by The Bank of Missouri (TBOM) (“Issuer”) pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
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Source: sofi.com

OhmConnect Will Pay Californians to Skip Laundry Day

As if you needed another excuse to not do the laundry today, here’s a totally valid one — Californians can actually make money for skipping a load.

How? Well, just by wearing your jeans a third (or fourth) time, you’d be giving the energy grid a break. And one company wants to say thanks — in cold hard cash.

If you have a utility account with PG&E, SDG&E or Southern California Edison (which cover nearly every county in California), a company called OhmConnect will pay you to hold off on doing laundry.

OhmConnect is a free service that will text you when a lot of people in your area are using power. Your job is to simply use less electricity for about an hour a week. You could turn off your A/C, grill chicken outside for dinner or — you guessed it — wait to do your laundry until tomorrow, during odd hours.

Here’s How to Get Cash from OhmConnect

  1. Sign up for a free OhmConnect account here.
  2. Sync it with your online utility account through PG&E, SDG&E or Southern California Edison. You must have an online account with one of these electric companies to qualify for OhmConnect.
  3. Wait for OhmConnect to text you during high-energy-consumption hours
  4. Head outside, or at least turn the TV off until the hour is up. Heck, you can even play games on your phone during this hour — just resist plugging in any electronics.
  5. Profit! OhmConnect rewards you with cash, prizes, gift cards and more.

This all works because the California electricity market (or California ISO) pays OhmConnect to help them avoid turning on an expensive, dirty power plant. The company then passes the savings on to you.

If you want to automate the process, you can even connect a smart thermostat or plug and let OhmConnect do this automatically. Even connecting some of your biggest energy-hogging devices to a smart plug can help you save $350 a year — effortlessly.

But you don’t need a smart device to save: The more you do, the more money you can make.

Enter your ZIP code here to open a free OhmConnect account, then sync it with your online utility account to start earning cash. Your whites can wait until tomorrow.

Kari Faber is a staff writer at The Penny Hoarder.

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Source: thepennyhoarder.com