diff --git a/components/pages/SettingsScreen.tsx b/components/pages/SettingsScreen.tsx
index de2966e..3f37255 100644
--- a/components/pages/SettingsScreen.tsx
+++ b/components/pages/SettingsScreen.tsx
@@ -1,7 +1,8 @@
-import React, { useState, useRef, useEffect } from 'react';
+import React, { useRef, useEffect } from 'react';
 import { View, Text, TouchableOpacity, ScrollView, Animated } from 'react-native';
 import { useSafeAreaInsets } from 'react-native-safe-area-context';
 import { Ionicons } from '@expo/vector-icons';
+import { useSettingsScreen, PrefsState } from '../../hooks/settings/use-settings-screen';
 // Centralized color palette shared with Tailwind
 const colors = require('../../theme/colors.json');
 
@@ -96,13 +97,6 @@ interface SettingsSection {
   rows: SettingsRow[];
 }
 
-interface PrefsState {
-  darkMode: boolean;
-  notifications: boolean;
-  biometric: boolean;
-  autoPay: boolean;
-}
-
 const SECTIONS: SettingsSection[] = [
   {
     title: 'ACCOUNT',
@@ -138,16 +132,7 @@ const SECTIONS: SettingsSection[] = [
 
 const SettingsScreen: React.FC<SettingsScreenProps> = ({ onBack }) => {
   const insets = useSafeAreaInsets();
-  const [prefs, setPrefs] = useState<PrefsState>({
-    darkMode: false,
-    notifications: true,
-    biometric: false,
-    autoPay: true,
-  });
-
-  const togglePref = (key: keyof PrefsState) => {
-    setPrefs((prev) => ({ ...prev, [key]: !prev[key] }));
-  };
+  const { prefs, togglePref } = useSettingsScreen();
 
   return (
     <View style={{ flex: 1, backgroundColor: colors.settingsBg }}>
diff --git a/hooks/settings/use-settings-screen.test.ts b/hooks/settings/use-settings-screen.test.ts
new file mode 100644
index 0000000..118b5e1
--- /dev/null
+++ b/hooks/settings/use-settings-screen.test.ts
@@ -0,0 +1,95 @@
+import { renderHook, act } from '@testing-library/react-hooks';
+import { useSettingsScreen } from './use-settings-screen';
+
+declare var describe: any;
+declare var it: any;
+declare var expect: any;
+
+describe('useSettingsScreen', () => {
+  it('initializes with default preferences', () => {
+    const { result } = renderHook(() => useSettingsScreen());
+
+    expect(result.current.prefs).toEqual({
+      darkMode: false,
+      notifications: true,
+      biometric: false,
+      autoPay: true,
+    });
+  });
+
+  it('toggles darkMode preference', () => {
+    const { result } = renderHook(() => useSettingsScreen());
+
+    act(() => {
+      result.current.togglePref('darkMode');
+    });
+
+    expect(result.current.prefs.darkMode).toBe(true);
+
+    act(() => {
+      result.current.togglePref('darkMode');
+    });
+
+    expect(result.current.prefs.darkMode).toBe(false);
+  });
+
+  it('toggles notifications preference', () => {
+    const { result } = renderHook(() => useSettingsScreen());
+
+    expect(result.current.prefs.notifications).toBe(true);
+
+    act(() => {
+      result.current.togglePref('notifications');
+    });
+
+    expect(result.current.prefs.notifications).toBe(false);
+  });
+
+  it('toggles biometric preference', () => {
+    const { result } = renderHook(() => useSettingsScreen());
+
+    expect(result.current.prefs.biometric).toBe(false);
+
+    act(() => {
+      result.current.togglePref('biometric');
+    });
+
+    expect(result.current.prefs.biometric).toBe(true);
+  });
+
+  it('toggles autoPay preference', () => {
+    const { result } = renderHook(() => useSettingsScreen());
+
+    expect(result.current.prefs.autoPay).toBe(true);
+
+    act(() => {
+      result.current.togglePref('autoPay');
+    });
+
+    expect(result.current.prefs.autoPay).toBe(false);
+  });
+
+  it('toggles multiple preferences independently', () => {
+    const { result } = renderHook(() => useSettingsScreen());
+
+    act(() => {
+      result.current.togglePref('darkMode');
+      result.current.togglePref('biometric');
+    });
+
+    expect(result.current.prefs.darkMode).toBe(true);
+    expect(result.current.prefs.biometric).toBe(true);
+    expect(result.current.prefs.notifications).toBe(true); // unchanged
+    expect(result.current.prefs.autoPay).toBe(true); // unchanged
+  });
+
+  it('creates toggle animation with correct initial value', () => {
+    const { result } = renderHook(() => useSettingsScreen());
+
+    const animationOn = result.current.createToggleAnimation(true);
+    const animationOff = result.current.createToggleAnimation(false);
+
+    expect(animationOn.anim).toBeDefined();
+    expect(animationOff.anim).toBeDefined();
+  });
+});
diff --git a/hooks/settings/use-settings-screen.ts b/hooks/settings/use-settings-screen.ts
new file mode 100644
index 0000000..cc7b208
--- /dev/null
+++ b/hooks/settings/use-settings-screen.ts
@@ -0,0 +1,69 @@
+import { useState, useCallback, useRef } from 'react';
+import { Animated } from 'react-native';
+
+/**
+ * Preferences state for settings toggles
+ */
+export interface PrefsState {
+  darkMode: boolean;
+  notifications: boolean;
+  biometric: boolean;
+  autoPay: boolean;
+}
+
+/**
+ * Animation state for a single toggle
+ */
+export interface ToggleAnimationState {
+  anim: Animated.Value;
+}
+
+/**
+ * Return type for the useSettingsScreen hook
+ */
+export interface UseSettingsScreenReturn {
+  // Preferences state
+  prefs: PrefsState;
+
+  // Handlers
+  togglePref: (key: keyof PrefsState) => void;
+
+  // Animation factory for CustomToggle components
+  createToggleAnimation: (initialValue: boolean) => ToggleAnimationState;
+}
+
+/**
+ * Initial preferences state
+ */
+const initialPrefsState: PrefsState = {
+  darkMode: false,
+  notifications: true,
+  biometric: false,
+  autoPay: true,
+};
+
+/**
+ * Custom hook for Settings Screen logic
+ * Handles preferences state, toggle handlers, and animation setup
+ */
+export const useSettingsScreen = (): UseSettingsScreenReturn => {
+  const [prefs, setPrefs] = useState<PrefsState>(initialPrefsState);
+
+  // Toggle preference handler
+  const togglePref = useCallback((key: keyof PrefsState) => {
+    setPrefs((prev: PrefsState) => ({ ...prev, [key]: !prev[key] }));
+  }, []);
+
+  // Factory function to create animation state for toggles
+  const createToggleAnimation = useCallback((initialValue: boolean): ToggleAnimationState => {
+    return {
+      anim: new Animated.Value(initialValue ? 1 : 0),
+    };
+  }, []);
+
+  return {
+    prefs,
+    togglePref,
+    createToggleAnimation,
+  };
+};