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When you take out private student loans, your lender works with your school to certify the loan before disbursing funds. But what happens when a school won’t certify private loans for college?

If private student loan certification isn’t granted, there are steps students can take to address the issue.

Here’s an overview of how private student loan certification works, potential reasons for having certification denied, and some options to remedy the situation.

Understanding Private Student Loan Certification

Private student loan certification is often a required step for funds to be disbursed by a lender to your school. This is intended to protect student borrowers by ensuring that they’re informed about their federal financial aid options and the school’s cost of attendance when taking out private student loans.

With school-certified private student loans, borrowers fill out and sign a Private Education Loan Applicant Self-Certification form after receiving loan approval. This form provides lenders with a student’s enrollment information and any financial assistance they’ve received, such as grants or scholarships.

Next, lenders send the private student loan information to the school for certification. Schools are responsible for confirming that students are enrolled and that the loan amount does not exceed the cost of attendance: tuition, fees, books, living expenses, transportation costs, and dependent care (if needed). If this information checks out, the certification moves forward and the loan funds will be disbursed without any further action required by students.

While waiting, you might be wondering “how long do private student loans take to process?” It can take anywhere from two to 10 weeks for a student loan to process, depending in part on any issues in the student loan certification process.

When the student loan certification is complete, borrowers receive a final loan disclosure from their lender. This indicates the loan amount, which could be adjusted by the school if the requested funds exceed the total cost of attendance. Borrowers are then offered a three-day waiting period after receiving the final disclosure, known as the right-to-cancel period, to cancel the loan with no penalty.

Do private loans go directly to the school or student? With school-certified loans, the lender disburses loan funds directly to the school.

Recommended: Student Loan Basics

The Role of Schools

After issuing loan approval, a lender forwards a certification request to your school’s office of financial aid. This involves verifying certain information provided when applying for the loan, including enrollment status, expected graduation date, year in the program, and requested loan amount.

Federal regulation prohibits students from receiving student aid that exceeds the cost of attendance. To determine the maximum amount of loan funds, the school financial aid office deducts all other types of financial aid — scholarships, grants, and federal student aid — from the school’s cost of attendance for that semester or academic year.

A key difference with private student loans compared to federal loans is that schools do not consider the Student Aid Index (SAI) when calculating how much can be borrowed in private student loans. Additionally, maintaining satisfactory academic progress could be required by schools to certify private student loans.

With all this information, schools will either certify, certify with changes, or deny certification. For instance, loans could be certified for a lesser amount than what was initially requested if it surpasses the school’s cost of attendance.

Recommended: Undergraduate Private Student Loan Rates

Reasons for Certification Denial

There are a few possible reasons why a school won’t certify private loans. Resolving any such issues — whether on behalf of the student or school — is necessary for the disbursement of student loan funds to move forward.

Common Scenarios for Student Loan Certification Refusal

Here’s a look at some common scenarios where schools might refuse private student loan certification.

Exceeding Cost of Attendance

As mentioned above, schools are prohibited from certifying a loan amount that’s greater than the cost of attendance, minus any financial aid awarded.

Note that schools may list different dollar amounts for the cost of attendance depending on a variety of factors. For instance, students living on campus may have a different cost of attendance than those living off campus. Whether you’re paying in-state vs. out-of-state tuition and attending undergraduate vs. graduate school can also impact how your school calculates your cost of attendance.

Schools may break out the cost of attendance into separate expenses. This means that student loan certification could be denied for specific expense categories (e.g., housing costs) if they’re higher than what’s allowed by the school.

Satisfactory Academic Progress Issues

Students are required to maintain Satisfactory Academic Progress (SAP) at their school to continue receiving financial aid. Each school sets its own SAP policy, but generally students need to maintain a 2.0 GPA to maintain eligibility.

While private student loans typically don’t have SAP requirements, losing financial aid could impact your ability to pay for college.

Recommended: Comparing Private Student Loans

Enrollment Status Discrepancies

It’s not uncommon for students to adjust their course load, but a change in enrollment or incorrect reporting of enrollment status could lead to certification denial.

Student loan certification often occurs in the weeks preceding the start of the semester, so it’s important to ensure you’ve successfully enrolled before then. Additionally, a discrepancy could occur if dropping or adding classes impacts enrollment as a full-time vs. part-time student.

Steps to Take When Loan Certification Is Denied

If private student loan certification is denied by your school, there are a few options to consider to avoid delayed or halted disbursement.

Recommended: How Are Private Student Loans Disbursed?

Request an Explanation from the School

Your school’s financial aid office is usually the point of contact to understand the rationale for certification denial and the necessary steps to resolve the problem. Errors with enrollment status or personal information can usually be addressed quickly, but it’s important to reach out promptly.

Appeal the Decision

If the denial involves exceeding the cost of attendance, students may need to appeal the decision with their school. Often referred to as a professional judgment, this appeal aims to increase the student’s cost of attendance to be eligible for additional student loan funding.

Financial aid offices typically consider professional judgment on a case-by-case basis, so it’s important to have documentation to support the request for revising the cost of attendance. For example, a student living off-campus could provide their renewed lease to show an increase in rent. Other circumstances that could warrant a professional judgment include childcare, disability-related expenses, and medical costs.

Explore Alternative Funding Sources

Students often use multiple funding sources to pay for college.

Applying for college scholarships and grants could secure financial aid to help cover tuition, room and board, and other school expenses. This type of aid is usually awarded based on academic merit or financial need, and doesn’t need to be paid back.

To apply for most scholarships and grants, you’ll need to fill out the Free Application for Federal Student Aid (FAFSA). After completing the FAFSA, students receive a financial aid package from the schools they’ve been accepted at, outlining eligible financial assistance, including federal student loans, work-study, grants, and scholarships.

Managing Private Student Loan Debt Responsibly

Staying on top of private student loan debt is essential for long-term financial health. Understanding your loan terms, including the interest rate and repayment plan, is key to developing a payback strategy that avoids fees and penalties.

After graduation, students may have a grace period before they need to start repaying their private student loans. Once repayment begins, setting up automatic payments could provide a discount on the loan interest rate and help ensure you’re sticking to your debt payoff goals.

Recommended: Private Student Loan Forgiveness

The Takeaway

Private student loan certification is a required step for funds to be disbursed to your school. If your school doesn’t certify your private student loans, don’t panic. Reach out to your school’s financial aid office to determine if any errors have been made, then take the necessary steps to resolve it.

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

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

Can schools deny private student loan certification for any reason?

No. Schools deny private student loan certification if the amount exceeds the cost of attendance or if there are discrepancies in a student’s enrollment status.

What happens if a private student loan is disbursed without certification?

Private student loans cannot be disbursed until a school completes the certification process. In rare circumstances, students may be eligible for a false certification discharge if a loan was disbursed despite a student being ineligible to receive a loan.

Are there limits on the amount schools can certify for private student loans?

Yes, schools cannot certify private student loans exceeding the cost of attendance, minus any financial aid. Note that students can request a professional judgment to increase their cost of attendance, but these are granted on a case-by-case basis.

Photo credit: iStock/recep-bg

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

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

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

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

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Source: sofi.com

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Creating a serene nursery for your little one can make a world of difference when it comes to optimizing your child’s sleep. With the right elements in place, you can foster an environment that promotes restful nights and happy days. So whether you’re welcoming a new baby to your apartment in Boston, moving to a rental home in Baltimore, or upgrading your toddler’s room at your home in Seattle, here’s how to set up a nursery room to promote sleep, from our sleep and home design experts.

Sleep environment is key

While there are many factors that can impact your child’s quality of sleep, two essential elements to the perfect sleep environment are a calm and peaceful space for them to rest at night and during nap times. Child sleep expert Charmian Mead from The Sleeping Baby Routine shares more information about how to set up a nursery room for sleep below:

“To encourage independent and positive sleep habits, it’s essential to create a calm and peaceful sleep environment for your newborn, baby, or toddler. As your baby grows they require a slightly different approach and adjustment to their environment but regardless of age, light, temperature, and calm are key to indicate sleep. Your baby’s or toddler’s room should be a sanctuary, a safe, comfortable place to settle. While an infant’s overall routine hugely influences their sleep, the sleep environment is the finishing touch that provides the security they need to relax and rest.”

We all want our children to have positive sleep experiences. So when planning out how to set up a nursery room, being mindful of the above advice can aid in ensuring that your child has consistent, restful sleep while in your home!

Be mindful of temperature and darkness

As Charmian noted above, room temperature and lighting (or lack of lighting) play a crucial role in optimizing your child’s sleep. While preferences may vary by individual, our experts have shared some amazing tips to help optimize temperature and lighting to aid in getting a great night’s sleep: “Infants and children thrive on routines and consistency, especially with sleep. The ideal environment is 68-72 degrees, completely dark, with white noise playing. Another key is a consistent routine leading up to bedtime. For more information or help getting your infant or child sleeping better, Lisa at Sleepytime Sleep Consulting has got you covered.” Shared Lisa Rietzke, RN, BSN. 

Maintaining an appropriate temperature in your child’s nursery is important for their comfort and safety, however, it is sometimes easier said than done – especially during colder months. Katie from Slumber & Sprout suggests “the use of sleeping bags / sleepsuits for little ones who aren’t yet in a bed because they are a great way to ensure that you have dressed your little one appropriately for sleeping. A comfortable room temperature is between 19-22 degrees Celsius. In the winter we recommend that you warm the room with a safe heater and keep the heater a safe distance from the sleep space to avoid overheating.”

Xan Coffman, founder and certified infant and toddler sleep expert at My Baby Sleepology also shared some great insights on the effect of proper lighting for your child’s nursery, stating that “Creating the perfect sleep environment for your baby is key to fostering restful nights and naps. Start by keeping the room dark with blackout curtains to block any outside light, helping your baby understand that it’s time for sleep and to elevate their natural levels of melatonin. 

White noise machines or a gentle fan can work wonders by masking household sounds and creating a soothing atmosphere.” 

Consider using white noise machines

As Xan mentioned above, white noise machines can be a game changer for child sleep. They help drown out household noises and create a consistent sound environment that can comfort babies. Katie from Slumber & Sprout also provided great information on the best techniques for noise control:

“We recommend the use of continuous white noise throughout the entire night and for all naps. Babies are used to noise. The womb is as loud as a vacuum cleaner, so to a baby, the sound of white noise is very soothing. We recommend using it at safe volumes of no louder than 50Db and positioned at least 2 meters away from your baby’s sleep space. You can download an app called “dB Meter” to test the dB level. As babies get older, the use of white noise is soothing but it’s also helpful in filtering out any noise disturbances (creaky floorboards, morning work alarms, dogs barking, traffic, etc.).”

Look for machines with adjustable volume settings and various sound options, such as ocean waves or gentle rain. You should also consider soundproofing options to promote a peaceful environment. Rugs and fabric wall hangings can be used to absorb sound, and door sweeps and weather stripping to block outside noise.

Safe bedding and mattress selection

Choosing the right bedding is vital to creating the perfect sleeping environment for your child. The team at Rockabye Rockies shared that “For babies ages 0-12 months old a safe sleep environment is critical for their safety and wellbeing. A crib with a firm mattress and no pillows, bumpers, stuffed animals, or cords nearby will prevent strangulation and suffocation.” With infants being especially vulnerable to safety concerns that arise with certain types of sleeping environments, ensure that you remain mindful and hyper-vigilant when creating their nursery! 

Seemingly small factors can make a significant difference in your baby’s sleep. Dr. Summer Hartman from Newborn Sleep Company expresses that “Designing a newborn’s nursery with the perfect sleep environment is important for healthy development. To create a peaceful atmosphere, opt for soft, neutral colors, and a red night light and invest in a comfortable crib mattress. 

I recommend Newton Mattress, Swaddle (Miracle Blanket), and using brown noise machines to mask external sounds. Consider placing the crib away from windows and doors to minimize disturbances. Using a firm, flat mattress that fits snugly in the crib to prevent any gaps and sticking with fitted sheets made of breathable materials creates a safe environment for your child. We also suggest reading reviews and choosing reputable brands that prioritize the safety of your little one.”

Use night lights to help your child sleep

As several of our stellar experts have mentioned above, investing in noise machines and night lights can make a big difference in figuring out how to set up a nursery room for your child’s sleep. “For older children ages 2+, I recommend adding a low voltage red or orange-hued nightlight to their bedroom. Developmentally, their imagination begins to introduce ideas like ghosts in the corner and monsters in the closet, so allowing them to see around the room after lights out can help alleviate these fears,” shared the team at Rockabye Rockies.

Khadijah from My Night Light elaborated on the use of night lights, adding that “Fear of the dark is one of the main reasons children often feel anxious at bedtime, especially when transitioning to sleeping on their own.

Creating a comforting atmosphere, including a warm light, can foster positive sleep experiences. Sleep specialists recommend using red light at night because it doesn’t disrupt sleep hormones like bright, blue-white lights can. This makes Duski Night Lights an excellent choice for parents who want to create a calm, secure environment that encourages restful sleep  for their little ones.” It’s also helpful to note that night lights can provide a gentle glow, making nighttime feedings and diaper changes easier without fully waking your baby.”

Establish a sleep routine

While the room environment cannot be discounted when exploring how to set up a nursery room to optimize your child’s sleep, consistency is also vital. Establishing a sleep routine that follows the same steps each night is key to signaling to your baby that it’s time to wind down. 

Dr. Aubrie, founder of Sleepfull Baby suggests that you “avoid screens, bright lights, and overstimulation before bed, and try to stick to a regular, early bedtime. Including a consistent bedtime routine is also essential in establishing healthy sleep habits over time. A warm bath, a gentle massage, stories, or lullabies are all you need to help signal that it’s time to sleep. The perfect sleep environment is safe, cozy, and promotes restorative sleep.”

Photo courtesy of @thesleepingbabyroutine

If you are looking for help establishing a consistent routine for your child, Charmian Mead from The Sleeping Baby Routine also recommended a great routine that will help aid consistency as your child grows and their needs evolve: 

“On the 7 pm to 7 am Sleeping Baby Routine, the ideal sleep setup evolves as your child moves from newborn to toddler.

  • 0-3 months: Create a quiet, dark bedroom, and use a sleep position in which you swaddle your infant and tuck them into a Moses basket or crib with a cellular blanket. Ensure that the room temperature is 18-21 degrees Celsius. 
  • 4-8 months: Maintain a quiet and blacked-out bedroom, alter their sleeping position to a sleeping bag in a cot, and keep the room temperature between 18-21 degrees Celsius.
  • 8 months – 2 years: Ensure a quiet room and draw the curtains. Place your child in a sleeping bag and comforter to settle for the night. It’s recommended to introduce a nightlight or wake-up clock at 2 years of age.”

Establishing a good sleep environment helps ensure deep, uninterrupted sleep, making settling easier — and as they say, “sleep breeds sleep.” Consistency in routine is no easy feat, but putting effort into a set sleep routine will set your child up for sleep success as they grow and develop! 

Improve your child’s sleep in a family bedroom

While it may be a dream of yours to create a solo sleep space for your child, sometimes children (through necessity or preference) will find themselves sleeping with you. Below Tiffany Belanger, a safe cosleeping educator from the Cosleepy blog, has great tips to make cosleeping safe and rewarding: 

“If you have a young child who sleeps better when they’re in your bedroom, my advice is to go with it! Move clutter and nonessentials out of the room to create a calm, comfortable “family bedroom” that maximizes sleep for everyone in the family. You’ll want a big, firm mattress to support your little one’s growing body. If you put it directly on the ground, you’ll enjoy cooler air throughout the night and you won’t have to worry about anyone falling off the bed. Enjoy your giant nest, if you can, because this is a temporary season of life! Your little one will be big, and in their own bedroom, in the blink of an eye.”

Regardless of your child’s sleeping situation, safety should always be the top priority. Don’t fret if your child prefers to sleep with you, enjoy the time while it lasts and achieve a safe environment using the simple tips above.

How to set up a nursery room for sleep: in a nutshell

Improving your child’s sleep involves thoughtful attention to various factors, from temperature and lighting to safety and organization. By creating a cozy and calming environment, you can help your little one enjoy the restful nights and peaceful days that both you and your child deserve. 

Source: rent.com

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The Offer

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  • Discover is offering some cardholders an additional 6% on Walmart purchases on up to $1,000 in spend. Valid until 12/31/24

Our Verdict

This is in addition to whatever your card normally earns.

Source: doctorofcredit.com

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November is a great month for bargains. Black Friday happens this month after all, and the supposed single-day sale holiday seems to get stronger and go longer every year. Plus, online retailers like to keep you guessing and may drop a worthy deal on any given day.

Your strategy to save money this month? Review your budget, make a list of what you want and remember to ABC: always be checkin’ (or just set deal alerts) for discounts. Consult this Nerdy list of the best things to buy and skip in November, too.

Buy: Electronics

Black Friday, which falls on Nov. 29 this year, is synonymous with great deals on gadgets, but you may not have to wait until the end of the month to get the goods you’re after. Jane Boyd Thomas, a professor of marketing at Winthrop University, says she’s noticed retailers are getting an early jump on technology deals.

“We know that a lot of spending on Black Friday is self-giving, not gift-giving,” says Thomas. And with consumers still dealing with high prices in non-discretionary categories like food and fuel, retailers can entice shoppers to spend discretionary dollars with deals that come early and often.

Look for markdowns on TVs, tablets, laptops, gaming systems, smartwatches and smartphones at all the usual places — Amazon, Walmart, Best Buy, Target and Costco — between now and Black Friday.

Skip: Bedding and linens

Need a thicker comforter for the cold months? January is just around the corner, and it’s your best bet for a deal on bedding and linens. Stores promote bedding discounts, called white sales, at the beginning of each year as a way to bring shoppers into their home departments.

In past years, bedding basics were slashed by 50% or more at stores like JCPenney, Macy’s and Pottery Barn. We expect similar savings again in 2025.

Before you build a budget

NerdWallet breaks down your spending and shows you ways to save.

Buy: Vacuums

Aside from spring cleaning season, November might be the best time to add a new vacuum cleaner to your closet. We usually see vacuum models from Dyson, Shark, Bissell, Hoover and more on sale during Black Friday events.

At NerdWallet, we tracked prices on a handful of products during major sale days. The iRobot Roomba i5 vacuum had a lower price on Black Friday 2023 than on Amazon’s Prime Day in July of this year. Expect sweeping sales on high-tech sweepers to land at the end of the month.

Skip: Clothes

This is unconventional, but to save money you may want to wait on apparel — especially items like shoes, hats, coats and gloves — says Thomas.

“As we get closer to Christmas, I think the deals on those are going to be better and better,” she says.

November, especially Black Friday, isn’t a bad time to buy clothes, but larger retailers that hold a lot of stock could be eager to offload unsold items as the gift-giving season gets closer. Stores like Gap, Anthropologie and Ann Taylor are likely to have more inventory than one-off boutique clothing stores, “so you have a better chance of getting what you want by playing the ‘wait game’ there,” says Thomas.

Buy: Air fryers and coffee makers

Air fryers burst onto the scene around 2017, and the versatile cookers are still hot. Black Friday is a good time to go after these hot products, or you could score a deal on any given day in November.

I found an Instant Vortex Plus air fryer for half off list price on Nov. 5 last year. The shiny stainless steel model caught my eye while at a friend’s house for dinner one evening. I checked Amazon when I got home and couldn’t pass up the $69.95 price. At the time of this writing, it retails for $139.95. I got a Black Friday price on a random Sunday in November.

What else is hot in November? Coffee makers. Look for great deals on Nespresso, Keurig and other popular coffee maker brands in November, especially on Black Friday. On the other hand, you may want to roll the dice and wait for Cyber Monday — which falls on Dec. 2 this year — for other kitchen gadgets. We’ve seen items like the KitchenAid Classic Series stand mixer reach a lower price on Cyber Monday than on Black Friday at Amazon and Target.

Skip: Specialty food items

You know that meat and cheese board or tin filled with peppermint bark you send to family when you run out of time and gift ideas? According to Thomas’ advice, you can keep specialty treats as your backup plan.

Retailers may not be motivated to move items quickly because seasonal treats tend to have a long shelf life and people often send them as last-minute gifts, she says.

Bonus: Veterans Day

Veterans Day doesn’t pack the shopping punch of Black Friday. Still, here are some bonus ways to save a buck on Nov. 11.

If you serve or have served in the military, ask about special discounts at stores, restaurants and even barbershops. For example, Rack Room Shoes will offer a 20% discount (normally 10%) to current and former U.S. military members and their dependents. Sport Clips is doing free haircuts for vets and active duty military at participating locations on Veterans Day.

Whether you’ve served in the military or not, you can visit one of the U.S. National Parks that typically charges an entrance fee for free on Veterans Day.

Plan ahead and protect yourself on pre-Black Friday purchases

Mobile shopping and dynamic pricing (e.g., the random air fryer deal I found on Nov. 5) make it all too easy to spend on a whim. Go into November knowing what you want to buy and how much you’re willing to spend on a given item.

If you know what you want, you can monitor and compare prices throughout the month, says Thomas. You can use a site like Slickdeals.net to set deal alerts for price drops all over the internet or use a price tracker like CamelCamelCamel for alerts on products sold on Amazon.

And if you buy something in November, but before Black Friday, you’ll want to check the retailer’s price-matching, price-protection and return policies first. For example, Amazon’s site specifically states that because the retailer strives to maintain competitive prices, it does not offer price matching.

Be sure to dig into the details, too. Best Buy’s price match guarantee, for example, excludes items for sale Nov. 21 through Dec. 2 this year.

Thomas’ advice: Let the store’s policy help you decide whether to take the deal now or risk it and wait for a better one on Black Friday.

Before you build a budget

NerdWallet breaks down your spending and shows you ways to save.

Source: nerdwallet.com

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Applying for scholarships can be overwhelming, especially if you’re required to submit multiple forms and write in-depth essays. However, there are scholarships out there that do not require you to write any essays. Some just ask for basic info, while others might let you submit a video instead.

Keep reading to learn more about the top no-essay scholarships for 2024 and how you can apply.

Key Points

•   No-essay scholarships typically require minimal effort, often needing only basic personal information, making them quick and easy to apply for.

•   These scholarships are available for various education levels and fields, offering opportunities for high school, college, and graduate students.

•   Many no-essay scholarships have monthly or recurring deadlines, allowing students to apply throughout the year.

•   Most no-essay scholarships have broad eligibility criteria, making them accessible to a wide range of applicants.

•   In addition to no-essay scholarships, students can apply for traditional scholarships and grants. Other ways to pay for college include savings, federal student loans, and private student loans.

What Are No Essay Scholarships?

As the name suggests, no-essay scholarships do not require you to write an essay. You typically just need to fill out some basic information about yourself to enter. However, some no-essay scholarships might ask for a video, photo, or other creative entry instead.

Standard scholarships usually come with more hoops to jump through. For example, some may require you to have a specific GPA, provide letters of recommendation, and/or write an essay. No-essay scholarships can give you a break from all that while providing an alternative way to receive extra money for school.

It’s important to note that since this type of scholarship is usually more straightforward to apply for, no-essay scholarships often attract more applicants. Therefore, you may have more competition for the scholarship money.

Recommended: SoFi’s Scholarship Search Finder

How Can I Increase My Chances of Winning a No Essay Scholarship?

No-essay scholarships can be an easy way to get free money for school, but it’s important not to rely on them completely. Since they’re so simple to apply for, they attract a lot of applicants, which means more competition.

To improve your chances, try applying every time a no-essay scholarship opens up, whether it’s monthly or quarterly. Some even let you submit a video, which can help you stand out with a little extra effort and creativity.

It’s also smart to apply for a mix of scholarships and other financial aid options, not just no-essay ones. You can think of no-essay scholarships as a quick and easy break from the more time-consuming applications.

Recommended: How to Pay for College

Is There a Good Time to Apply for a No Essay Scholarship?

No-essay scholarship application deadlines vary — there’s no set “season” like there is for college and FAFSA deadlines. Each scholarship has its own timeline, so it’s important to keep an eye out throughout the year.

Whether or not a scholarship requires an essay, it’s a good idea to start applying as early as possible. For high school students, the summer between junior and senior year is a great time to begin. Remember, the more applications you send out, the better your chances of winning scholarship money.

If I Win a No Essay Scholarship, What Can the Funds Be Used For?

No-essay scholarships may have set rules for how you can spend your scholarship award, similar to how colleges and scholarship programs have specific application requirements.

Generally speaking, scholarship funds are meant for college expenses like tuition, fees, textbooks, and school supplies. However, some independent scholarships are more flexible and might let you use the money for things like housing, meal plans, or even technology.

Keep in mind that your scholarship might not cover expenses like transportation, groceries, off-campus dining, and clothing. And if you have any money left over, it’s a good idea not to spend it on unrelated expenses.

Sometimes, you may need to repay your award money if you use it on unrelated costs. Make sure to review the scholarship rules and guidelines before deciding how to use your scholarship money.

Types of No Essay Scholarships

There are usually two types of no-essay scholarships available for students: sweepstakes and video scholarships.

Sweepstake Scholarships

A scholarship sweepstakes is a type of no-essay scholarship where winners are chosen randomly, much like a lottery. As long as you meet the basic requirements and apply on time, you have a chance to win money to put toward your higher education costs.

Most of these scholarships don’t require extra materials, like transcripts or letters of recommendation, and many are awarded monthly or several times a year.

Keep in mind, though, that you often need to enter each month to stay eligible. So don’t just submit once and forget about it. Setting a reminder in your calendar can help you stay on track and improve your chances.

Recommended: Enter SoFi’s Monthly $2,500 Sweepstakes

Video Scholarships

Not all no-essay scholarships are entirely hassle-free. Instead of writing an essay, you might need to create and edit a five-minute video, which can take just as much time.

Choose the type of scholarship that plays to your strengths. If making videos is your thing, go for it. If writing is more your style, stick with that. Many scholarships offer flexibility in how you choose to express yourself.

Top No Essay Scholarships 2024

Here are a few top no-essay scholarships you can apply for in 2024.

“Be Bold” No Essay Scholarship

The “Be Bold” No-Essay Scholarship is a $25,000 award for students of any education level, field of study, state, or GPA. It’s an easy scholarship to apply for and the winner is the one who creates the “boldest” profile — one that is earnest, determined, and moving.

Project Yellow Light Hunter Garner Scholarship

The Project Yellow Light Hunter Garner Scholarship is an $8,000 award open to high school and college students who create a winning video that discourages distracted driving, especially phone use while driving. Project Yellow Light also offers a $2,000 scholarship for a radio competition and another $2,000 scholarship for a billboard competition.

Elks National Foundation Legacy Awards

The Elks National Foundation Legacy Awards is a $4,000 scholarship for high school seniors who are children or grandchildren of living Elks members or Lodge charter members (including stepchildren and legal wards).

Edvisors Scholarship

Edvisors Scholarship is a monthly, $1,000 scholarship open to students who are at least 17 years old and planning to attend or currently attending college in the U.S. Bookmark the page so you can come back each month and enter.

Niche No Essay Scholarship

The Niche No-Essay Scholarship allows high school and college students to apply for a chance to win $25,000 toward college expenses. Niche offers many additional scholarships you can look into, as well.

CampusReel Scholarship

To sign up for the CampusReel $2,000 no-essay scholarship, students must watch one student-led virtual tour, and then simply provide their name and email address.

SoFi Scholarship Giveaway

Enter SoFi’s monthly scholarship for a chance to win $2,500. This sweepstakes scholarship is for students over 17 enrolled or accepted in a college or university.

Sallie Mae College Scholarship

Sallie Mae also offers a $2,000 sweepstakes scholarship that’s awarded monthly and is open to high school juniors, seniors, and all college students.

Smart Owl No Essay Scholarship

The Smart Owl No-Essay Scholarship is a $1,000 award given out each month to four students. It is open to U.S. residents who are high school or college students aged 16 and older.

The “No Sweat” Scholarship

The Cirkled In “No Sweat” Scholarship is a $2,500 cash scholarship that’s open to students aged 13 and older. The application is quick and easy, taking just two steps to enter and complete your portfolio.

Who Can Apply for No Essay Scholarships?

Almost anyone in school can usually apply for no-essay scholarships. Whether you’re in high school, working on your undergrad, or even pursuing a graduate degree, there are options available for you.

For example, the Sallie Mae Scholarship is open to students at all levels. Plus, Sofi offers $2,500 no-essay scholarships to students every month.

Are Video Scholarships Easier to Apply for Than No Essay Scholarships?

With the rise of platforms like Instagram, YouTube, and TikTok, creating videos might feel more natural than writing essays. However, they may require more effort in planning, filming, and editing compared to no-essay scholarships.

But keep in mind, some video submissions may require a script, so a little writing could still be a part of the process. Writing a script can be similar to writing an essay — it might take a few tries to get it just right. That said, it can be a fun and creative alternative.

Do I Have to Be in College to Apply for a No Essay Scholarship?

You don’t have to be in college to apply for no-essay scholarships. In fact, starting your search early can improve your chances of winning. Some scholarships are even open to middle school students, so it’s never too soon to begin. Ideally, you should start exploring your options as early as freshman year of high school.

If you’re already in college, don’t worry. There are still plenty of scholarships you can apply for as long as you haven’t graduated.

The Takeaway

If you’re running low on financial aid for the school year, applying for no-essay scholarships can help cover some of your college costs. Some are like sweepstakes and pop up every month, so the more you apply, the better your chances. Others might need a bit more effort, like a video entry. Even though the award amounts might be small, the applications can be quick and give you a break from writing essays.

In addition to no-essay scholarships, you can apply for regular scholarships, grants, federal student loans, and private student loans. A combination of these, in addition to cash savings, can be used to cover the cost of college.

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

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

Can current college students apply for no essay scholarships?

Yes, no-essay scholarships are usually open to all students, from high school students up to graduate students. Whether you’re an undergrad or working toward a graduate degree, there are plenty of no-essay scholarship opportunities available to you.

Can you get scholarships without essays?

Yes, you can get scholarships without writing essays. No-essay scholarships typically require you to share some basic personal information, and sometimes you might have the choice to submit a video instead of an essay.

Has anyone actually won a no essay scholarship?

Students win no-essay scholarships all the time. However, keep in mind that some require exceptional talent, while others act more like sweepstakes contests with fewer requirements but more competition.

Photo credit: iStock/yasindmrblk

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

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

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

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

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.

SOISL-Q324-090

Source: sofi.com

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While Palm Springs, CA is known for its iconic mid-century architecture and glamorous lifestyle, there’s a side to this desert paradise that often goes unnoticed. Beyond the bustling streets and unique neighborhoods lie hidden gems in Palm Springs that offer a glimpse into the area’s lesser-known spots.

Whether you’re seeking a mid-century home in the area, exploring available apartments, or looking at houses for rent in Palm Springs, CA, you’re in for an extraordinary experience. Join us as we uncover the treasures that make this destination truly special, revealing experiences that go beyond the ordinary and showcase the magic of the desert.

Photo courtesy of Dana Gaydon

1. Sip the day away with Palm Springs Wine Tasting

Wine tasting is a fun and exciting way to dive into the world of flavors and delicious aromas. Situated in the Coachella Valley, the area boasts vineyards that showcase California’s finest varietals. 

Bring that excitement right to your Palm Springs home with a private tasting class from Palm Springs Wine Tasting. With options like Old World Classics and Vive la France, you’ll find an array of exciting selections. Perfect for both beginners and seasoned enthusiasts, this hands-on experience is sure to elevate your palate and make for a memorable evening.

2. Indulge in the local foodie scene

Exploring the food scene is a true culinary adventure for foodies searching for hidden gems in Palm Springs. The city features a lively array of dining choices, from upscale restaurants crafting innovative dishes to cozy cafes serving fresh, farm-to-table delights. 

Vietnamese cuisine

“Rooster and the Pig is a stylish, industrial-chic restaurant in Palm Springs, offering creative and modern takes on Vietnamese cuisine,” shares Mike Arnone, artist at Big Mike Art. 

Vietnamese food is a vibrant celebration of flavors and textures, known for its fresh ingredients and aromatic herbs. From crispy rolls to red curry duck, Rooster and the Pig is a hotspot for all admirers of Vietnamese cuisine and rich culture. 

“Their inventive dishes, paired with expertly crafted cocktails, make it a must-visit for food lovers seeking a unique dining experience,” Arnone recommends.

Vegan cafe

For those seeking food without meat or animal byproducts, Nature’s Health Food and Cafe is the ideal stop to indulge in tasty treats. Serving everything from breakfast omelets to smoothies and shakes, this cafe has something for everyone in the desert. 

Dining at a health food restaurant like this one is a refreshing experience, offering nutritious dishes that make you feel good from the inside out.

3. Venture beyond the city to Murray Canyon

Murray Canyon in Palm Springs is a picturesque destination located within the Agua Caliente Indian Reservation. It’s known for its stunning desert scenery, palm oasis, and diverse wildlife, making it a popular spot for adventurers in Coachella Valley.  

“If you’re looking for hidden gems in Palm Springs, I recommend checking out Murray Canyon Trail. Located just a 10-minute drive from downtown, this beautiful trail is lined with lush palm trees and features stunning waterfalls from fresh snowmelt in the spring,” states Raizah Flores, Palm Springs Wedding Photographer at Rise in Love Photography. “You’ll even find serene swimming holes along the way, making it the perfect peaceful retreat to escape into nature.” 

To dive deeper into experiencing the canyon up close, take a tour with 500 Experiences, an online platform that shares the top 500 experiences in the country. One of their standout options is the award-winning Murray Canyon Trail to Seven Falls hike, a stunning journey through an oasis of palm trees, a creek, and a beautiful waterfall. 

For a truly immersive adventure, try the Murray Canyon Horseback Riding Tour—a fantastic way to take in the canyon’s stunning beauty from the back of a horse.

4. Work up a sweat at Desert Chrome

Taking a dance class at Desert Chrome is a fun and empowering way to get fit while expressing your creativity. These classes cater to all skill levels, offering a supportive environment where you can learn new moves and build strength. With classes from pole dancing to Lyra to bachelor and bachelorette parties, visiting this studio is a great way to meet new people and enjoy a unique workout in a vibrant setting.

Empower yourself, explore your wild side, and break a sweat at this hot desert hidden gem.

5. Take in the views on horseback

Exploring Joshua Tree National Park on horseback with Knob Hill Ranch is the perfect way to take in the enchanting desert landscapes. As the only guest ranch permitted to showcase the spectacular vistas, winding slot canyons, and vast desert traverses, Knob Hill Ranch offers rides on their loyal string of horses.

So, grab your boots and get ready for an afternoon of horseback adventures while taking in the hidden gems in Palm Springs.

6. See the city via coffee walk

One of the best ways to dive into a city is by taking it in with a walk around town—especially one with a yummy drink. A hotspot for locals is Palm Greens Cafe, where you can order a coffee or lavender lemonade before heading out for your afternoon of meandering through the shops. As you stroll, you’ll discover charming boutiques and art galleries that showcase the local culture, making each step a new adventure. 

7. Make photo-based memorabilia

The desert landscapes of Palm Springs offer an unrivaled backdrop, from the sweeping mountain views to unique resorts. The true charm happens when you create memorabilia via a photo session with Monocle Project. It’s more than some pictures, it’s a cherished experience designed to make you feel and shine your best while having memories to last long after your trip. 

The team combines artistic vision with high-end, personalized service to create a session that perfectly captures the beauty of the desert. Monocle Project ensures every detail is tailored to you, delivering not just lasting photos, but unforgettable memories to take home framed in the stunning desert light.

8. Bike through town

To take in the city from a different viewpoint, rent a bike and ride through the charming Old Las Palmas neighborhood. It’s a budget-friendly way to explore downtown while enjoying the beautiful places and unique architecture.

To refresh after your day of biking, take a pitstop for tasty drinks at Las Palmas Brewing, a family-owned and operated brewery and wine bar.

9. Listen to the local live music

Listening to live music in Palm Springs offers a glimpse into the city’s personality and artistic spirit. From cozy lounges to outdoor festivals, the music scene showcases everything from jazz and rock to soulful indie performances. Each venue has its own unique vibe and truly captures the heart and soul of Palm Springs.

Husband and wife duo

Leanna and Miguel are at the heart of the nostalgic Greater Palm Springs’ entertainment scene, where infectious energy and soulful melodies come together for an unforgettable night. This energetic experience showcases talented musicians and captivating performances that invite you to sing along and dance the night away. 

Whether the show is nestled in a chic setting, popular clubhouse, or other secret locals hangout, it’s the perfect spot for both locals and visitors to soak in the magic of their live music while savoring delicious drinks and dining. 

Step back in time

“If you’re looking for something to fit the mid-century vibes of Palm Springs, I highly recommend The Purple Room for a uniquely fun experience,” states Dana Gaydon, a brand and lifestyle photographer at Modern Joy Studio. “It’s a delicious dinner with a show featuring a special singer or band. It truly feels like you’re visiting the cocktail lounges of 1960s Palm Springs with good vibes and great food.”

After dinner, Gaydon recommends hitting up Bootlegger Tiki for an authentic tiki experience to complete the evening. 

Photo courtesy of Dana Gaydon

10. Slip into a speakeasy

Visiting a speakeasy feels like uncovering one of the many hidden gems in Palm Springs, transporting you to a bygone era of glamour and intrigue. Tucked away from the loud streets of the city, these hidden bars often feature creative cocktails, dim lighting, and a cozy, intimate atmosphere.

“For a truly unique and clandestine experience, I recommend Evening Citizen, a Prohibition-era style speakeasy that will add an air of mystery and adventure to your evening,” states Maggie Miles at the Palm Springs Post, an independent news outlet covering Palm Springs. “With no signage and a hidden entrance, the journey there is just as exciting as the destination.”

Miles continues, “Once you’re inside, enjoy a bespoke cocktail in their dimly lit parlor. They really live up to their slogan ‘We keep you in the dark.’ Oh, and when you’re there, don’t miss the striking painting of Udo Kier, one of our local celebrities, that sits prominently behind the bar.”

Whether you’re sipping a classic drink or discovering a new favorite, a night at a Palm Springs speakeasy offers a memorable escape from the ordinary.

11. Dust off your boots and go dancing

Heading out to a night of country dancing is a lively way to immerse yourself in the local scene. With the hottest country music playing, the atmosphere at Dance Ranch Palm Springs is filled with energy and excitement, inviting everyone to hit the dance floor. From a two-step and waltz, to swing and line dancing, the friendly crowd and instructors create a welcoming environment to dust off those boots and learn some new moves.

12. Discover an art gallery

The Backstreet Art District is a vibrant hub of creativity, showcasing the talents of local artists and artisans. This unique area in Palm Springs features an eclectic mix of galleries, studios, and murals, making it a feast for the eyes as you explore the colorful streets. Visitors can often find captivating exhibitions, art walks, and pop-up events that highlight the community’s artistic spirit. 

Kee Gallery

Kee Gallery, one of the newest additions to the Backstreet Art District, is a delightful hidden gem. Featuring three resident artists, Kathleen Strukoff, a modern impressionist painter, Ernesto Ramirez, a surrealist painter, and Erich Meager, a ratiolaminartist, the gallery blends their artistic differences seamlessly.

Attending the art walk at Kee Gallery on the first Wednesday of each month is a great opportunity to immerse yourself in the local art scene. The monthly event draws art lovers together, offering a lively atmosphere filled with engaging conversations and the chance to discover new talent.

Big Mike Art

Visiting Big Mike Art Gallery and Studio is a charming experience that immerses you in the world of contemporary art. The gallery features a diverse collection of bold, colorful pieces that reflect the artist, Michael Arnone’s, unique style and vision. With an inviting atmosphere, it’s a perfect place to explore and discover art that sparks your imagination.

Jones & Terwilliger Galleries

Visitors at Jones & Terwilliger Galleries in Palm Desert, CA are often captivated by the stunning artwork adorning the walls. Situated on El Paseo, this gallery offers a distinctive blend of classical paintings and contemporary art, creating a rich visual experience. 

Whether you’re searching for a unique treasure to add to your collection or seeking assistance in curating art for your entire home, the gallery’s knowledgeable consultants are on hand to help bring your vision to life.

13. Spend an afternoon at a botanical garden

Strolling through a botanical garden is a fun and relaxing way to admire the diverse array of plants and flowers that call the desert home. The serene atmosphere offers a perfect backdrop for reflection, photography, or simply enjoying the sights and scents of nature.

“I recommend stopping by the Moorten Botanical Garden, it’s truly one of the amazing hidden gems in Palm Springs,” shares Art Davis at Palm Desert, a travel site for Palm Springs. “The garden showcases a stunning collection of desert plants from around the world. With the tranquil paths and diverse cacti and succulents, it’s a perfect spot for nature lovers and photographers.”

Look no further for hidden gems in Palm Springs

As you venture off the beaten path and consider some pros and cons of living in Palm Springs, you’ll discover that the city’s charm extends far beyond its well-known activities. From serene hiking trails to unique local eateries and captivating art installations, these hidden gems in Palm Springs offer a fresh perspective on this beloved desert oasis. So, the next time you find yourself in paradise, take a moment to explore the treasures waiting to be uncovered—you just might find your new favorite place.

Source: rent.com

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The Offer

Direct link to offer

  • Chase IHG Traveler is offering a sign up bonus of 100,000 points after $2,000 in spend within the first three months

Card Details

  • No annual fee
  • Card earns at the following rates:
    • 5x points per $1 spent on IHG properties
    • 2x points per $1 spent on gas stations, grocery stores and restaurants
    • 1x points per $1 spent on all other purchases
  • Gold elite status when you spend $10,000 on your card each calendar year
  • Fourth Reward Night Free on any stay of 4 or more nights
  • 20% discount when purchasing points

Our Verdict

This has been as high as 120,000 points in the past. Not really worth considering the IHG Premier card always has a better bonus (e.g we recently saw five free nights of up to 60,000 points per night).

Source: doctorofcredit.com

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For a limited time, the $0-annual-fee IHG One Rewards Traveler Credit Card has boosted its sign-up bonus for new cardholders, offering plenty of points to use toward future travel goals.

Those who apply by Nov. 20, 2024, can earn 100,000 bonus points after spending $2,000 on purchases on the card in the first three months from account opening. That can amount to up to two nights at over 5,700 IHG Hotel and Resort properties.

It’s a 20,000-point increase over the card’s previous bonus, and it maintains the same spending requirement. It’s a solid introductory offer for a $0-annual-fee credit card. The ongoing value of the card’s perks and rewards can also help you earn more free nights.

The card’s features include:

  • Up to 17 points total per $1 spent at IHG (5 from card, 10 from loyalty program, 2 from automatic elite status).

  • 3 points per $1 spent on monthly bills, gas stations and restaurants.

  • 2 points per $1 spent on all other purchases.

  • Perks that come with automatic silver status (20% bonus points, free internet, no blackout dates for rewards nights and more) 

When you redeem points for a consecutive four-night IHG hotel stay, you’ll get a fourth Reward Night free that’s redeemable at the same hotel during the same stay. There’s also an opportunity to earn 10,000 bonus points after spending $10,000 every calendar year.

Overall, it’s a valuable pick if IHG or its properties are your preference for travel and you can pay off the card’s balance in full every month to avoid interest charges.

Source: nerdwallet.com

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A non-purpose loan is an alternative type of loan that allows individuals to use investment securities they own as collateral to borrow money. With a non-purpose loan, borrowers can get access to the funds they need and continue to earn potential returns on their investments. However, non-purpose loans come with some financial risks to be aware of.

Read on to learn how non-purpose loans work and their benefits and drawbacks.

Key Points

•   Non-purpose loans are unconventional loans that use investment securities as collateral.

•   Borrowers get access to loan funds and can still continue to earn returns on their investments.

•   These loans can be used for almost any purpose except purchasing securities.

•   A borrower may need investment assets with a market value of at least $100,000 to qualify for a non-purpose loan.

•   If the value of the collateral investments drops, you may have to add more funds to your account or partially repay the loan.

What Is a Non-Purpose Loan?

A non-purpose loan — also known as a securities-backed line of credit (SBLOC) — is a type of secured loan offered by some financial institutions and brokerage firms. Instead of using collateral such as a home or car to back the loan, a borrower uses securities in their investment portfolio.

Interest rates on non-purpose loans tend to be variable, and they may be slightly higher than the rates on personal loans. (A personal loan calculator can help you determine the personal loan rate you might qualify for.) The borrower must make interest-only monthly payments on a non-purpose loan until you decide to pay it off. The loan’s principal can be repaid in increments or all at once.

The Way a Non-Purpose Loan Works

With a non-purpose loan, you borrow money using your investments to back the loan, and you continue to earn any interest, dividends, and capital appreciation on those investments.

The amount you can borrow with a non-purpose loan varies, although you can typically borrow between 50% to 95% of your portfolio. The exact percentage depends on two main factors: the types of assets in your accounts and the value of your portfolio. Lender requirements may also be a determining factor. To qualify for a non-purpose loan, a lender may require you to have assets with a market value of at least $100,000.

Unlike traditional lending products such as personal loans, non-purpose loans are subject to maintenance calls. That means if the value of your investment accounts falls below a certain level, the brokerage or financial institution will ask you to boost the equity in your investments to meet the margin requirements.

In the case of a maintenance call, you’ll need to increase your accounts’ value by either depositing more money in them or partially repaying the loan.

Non-Purpose Loan vs Margin Loan

A margin loan is another type of lending product that’s backed by a borrower’s investment securities. Like a non-purpose loan, a margin loan allows you to borrow against the investments in your portfolio while continuing to earn any dividends and interest. Margin loans are subject to maintenance calls just as non-purpose loans are.

However, there are differences between the two. A margin loan is typically used for the sole purpose of purchasing more securities. A non-purpose loan, on the other hand, can be used for virtually anything other than purchasing securities. To obtain a margin loan you can only use the investments in one account as collateral, whereas you can get a non-purpose loan by using investments in several accounts.

Pros and Cons of a Non-Purpose Loan

Non-purpose loans have distinct benefits and drawbacks. For example, these loans are flexible and can be used for many purposes, but they often require borrowers to have investment accounts with a high value.

This chart gives an at-a-glance comparison of the advantages and disadvantages of non-purpose loans.

Pros of a Non-Purpose Loan Cons of a Non-Purpose Loan
May not involve a credit check High asset value may be required
Allows borrowers to earn returns on investments Typically has variable interest rates
You don’t have to sell investments to secure the loan so you avoid capital gains tax. Subject to maintenance calls
Can be used to finance almost anything Can’t be used for purchasing investments

Pros of a Non-Purpose Loan

Non-purpose loans have several features that can make them attractive to borrowers.

May not require a credit check. Unlike traditional loans such as unsecured personal loans, a non-purpose loan might not involve a credit check. Instead, the lender may base the amount of the loan on the value of your portfolio.

Allows investment returns. Borrowers don’t have to sell their securities to obtain a non-purpose loan. They can continue to get possible returns on investments.

May avoid capital gains tax. Because you don’t have to sell securities to get a non-purpose loan, you won’t have to pay capital gains tax.

Provides flexibility. With a non-purpose loan, you can use the proceeds in almost any way you wish. For instance, you can use the money to pay off medical expenses, tide you over during a job loss, or for home improvement funds.

Recommended: Using a Personal Loan for Taxes

Cons of a Non-Purpose Loan

Along with possible benefits, there are some significant drawbacks of non-purpose loans to consider.

High asset value requirements. To qualify for a non-purpose loan, a lender typically requires you to have assets with a high minimum value of at least $100,000.

Variable interest rates. Non-purpose loans generally have variable interest rates, which means the rates can go up and down throughout the life of the loan. You may want to check personal loan rates to compare the interest rates of other lending options.

Subject to maintenance calls. The investments that serve as your collateral for a non-purpose loan are prone to market volatility, so you could be impacted financially. For instance, should the value of your securities go down, the value of your portfolio may no longer meet the collateral requirements for the loan, prompting a maintenance call. In that case, you might have to deposit money in your accounts or partially repay the loan.

Loan funds cannot be used for investing. Unlike margin loans, you can’t use the money from a non-purpose loan to purchase investment securities.

Recommended: How to Pay Tax on Personal Loans

The Takeaway

A non-purpose loan may be attractive to certain borrowers because it gives them the ability to use their investment securities as collateral while continuing to earn money on their investments. However, these loans tend to have high minimum balance requirements and variable interest rates, and they’re subject to maintenance calls, which could be financially challenging. Consider the potential pros and cons of a non-purpose loan to make sure it’s a good option for you.

You can also look into other lending products. While SoFi doesn’t offer non-purpose loans, we do offer personal loans with amounts ranging from $5,000 all the way up to large personal loans of $100,000. You can explore the different types of loans available, and shop around for the best rates, to decide which option is right fit for your borrowing needs.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

FAQ

What is the meaning of a non-purpose loan?

A non-purpose loan is an unconventional loan that allows you to use securities from different investment accounts as collateral for the loan. For some borrowers, the main advantage to this type of loan is that their investments stay intact, and they can potentially earn money from interest and dividends.

However, there are disadvantages to non-purpose loans. For instance, if the value of your investments drop, you may be required to add money to your accounts or repay part of the loan.

What is the difference between a purpose and a non-purpose loan?

A purpose loan uses investment securities as collateral and is typically used to buy more securities. A non-purpose loan is also backed by investment securities, but it can be used for almost any purpose, except for purchasing securities.

Is a non-purpose loan better than a purpose loan?

Non-purpose loans and purpose loans have different uses and requirements, and one isn’t necessarily better than the other. It mainly depends on what you’re using the loan for. A purpose loan is generally used for one specific purpose, typically to purchase securities. A non-purpose loan can be used for almost anything except purchasing securities. Only you can decide which type of loan is best for your intended use of the funds.

Photo credit: iStock/RgStudio

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.

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

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.

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.

SOPL-Q324-013

Source: sofi.com