SoFi

SoFi

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Founded in 2011 by four former Stanford University college students, SoFi started out by focusing on refinancing student loans. But now it’s one of the largest online fintech lenders in the United States.

The San Francisco-based digital financial company originally utilized an alumnus-funded lending model that connected students and recent graduates with alumni and investors. With this model, the investors received financial returns and borrowers obtained rates lower than the federal government offered.

Fast forward to 2018, and SoFi is a powerhouse in several financial sectors, including student loans, personal loans and, more recently, mortgages. The company has even started to offer wealth management and life insurance.

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Lender snapshot

Because SoFi is an entirely online, virtual platform, it doesn’t have as many underwriting costs as traditional brick-and-mortar lenders. That means the company can offer lower interest rates and faster turnaround times for funding.

It has a different perspective on how applicants qualify for loans. Instead of looking solely at credit score and income, the lender also considers other factors like education and career outlook.

Borrowers can apply for a variety of secured and unsecured loans that can take care of a range of expenses, including:

  • Student loan refinancing
  • Medical resident refinancing
  • Mortgages
  • Mortgage refinancing
  • Personal loans
  • Parent PLUS refinancing
  • Other expenses

SoFi at a glance

APR rangeTermsLoan amounts Origination feeLate payment feeAverage credit score needed
6.2% — 15.24%36, 48, 60, 72, and 84 month$5,000 — $100,000NoneNone744

Full SoFi personal loan review

SoFi is an innovator in the lending world, not only for their total online approach, but also for its products and services.

Those who take out a loan with this lender gain entrance into a club that offers its members special benefits like career support, networking happy hours and unemployment protection.

The company has funded more than $30 billion in loans and has more than 500,000 members across the country

The biggest benefits

One thing that makes it standout from other lenders is its unemployment protection. It allows members to suspend loan payments for up to three months initially and up to 12 months total over the life of the loan. Members must be eligible, apply for unemployment benefits and actively work with the SoFi Career Strategy group during their loan forbearance.

It also holds industry-specific networking events and happy hours so that members and alumni can connect both professionally and personally. According to their website, a typical social event — like a dinner or happy hour — is led by a member of the community team, lasts two to three hours and includes hosted food and drinks, with swag included.

Here’s a photo from a SoFi community event in Denver:

But in addition to its perks, it also offers a different model of evaluating borrowers. Instead of solely relying on credit score to determine borrower eligibility, it takes a look at three main areas:

  1. Ability to pay
  2. Credit history
  3. Stability of income

The drawbacks

This lender tends to target a specific type of borrower ­— those with excellent credit scores, high salaries and an education or career path that suggests financial stability.

Individuals who don’t meet that criteria may not qualify for a loan.

How it works

Personal loans can be used for a variety of reasons from this lender. That includes consolidating expensive credit card debt, doing remodels or home improvement projects, paying for a wedding or other special event, taking a vacation or paying medical bills.

Check out our full article on how SoFi works for more information.

Fast facts about SoFi personal loans

How it stacks up

SoFi beats its competitors in a variety of areas. Along with extremely competitive interest rates, it offers membership perks that many other lenders simply don’t. But loans from this lender are less accessible to those with lower incomes or poor credit.

Should you apply? 

If you can meet the criteria (you have excellent credit and financial stability), and you’re looking for perks in addition to a loan, this lender could be a good fit for you.

How to apply

Applying at SoFi is straightforward and can be done on the lender’s website. You’ll start out by setting up an account and answering some basic information about your total debt, your education and your employment. The online approval is the first step before you complete a full application.

Here’s a breakdown of the process:

  1. Get a rate estimate. Fill out the online application and get pre-qualified. It will do a “soft pull” on your credit, provide an estimated interest rate and present payment options.
  2. Pick a loan option. Select a rate and payment term that fits your budget and apply through the website.
  3. Provide documentation and sign. Use the lender’s website to sign documents and submit the full application. If approved, the lender will wire funds to your account.

See Personal Loan Offers From SoFi

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