SoFi is one of the few private lenders that provide their own refinancing protections. SoFi Student Loan Refinancing provides borrowers with unemployment protection, Covid forbearance, and loan deferment, among other options. Additionally, it will honor any existing grace period on the loans that you refinance. While federal student loan borrowers are not advised to refinance at this time, private loan borrowers should carefully consider their options.
List of Contents
SoFi: Website
Best for: Extra members benefits
Variable Rates: 1.20% – 11.23% APR
Fixed Rates: 4.23% – 10.66% APR
Loan Amounts: $5,000 – 100% of the school-certified cost of attendance
Overview
SoFi is an online personal finance startup that prioritizes mobile access. It is headquartered in San Francisco, California. It became the first firm in 2012 to refinance federal and private student loans, pushing it to the industry’s forefront. Because of this, it has grown into almost every market for consumer lending, and it has backed loans totaling over $50 billion.
Moreover, the variety of member advantages offered by SoFi is among the most attractive aspects of borrowing from this company. These advantages may be divided into financial, social, and professional.
The financial advantages include financial guidance from certified advisers, referral incentives, and member rate savings. Social advantages, networking events, dinners, and happy hours are community perks. Besides, the professional perks include tools to help you achieve a raise, individualized career guidance, and a program to shield you against unemployment.
Why We Selected It
SoFi is likely most known for refinancing student loans. However, it also offers loans to undergraduates, graduate students, law and business students, and parents. Its undergraduate student loan program includes most industry-standard features like no late fees. Moreover, a 0.125 percent interest rate can be reduced if your cosigner currently uses another SoFi product and job search assistance from its career team.
Details of SoFi Private Student Loan
Costs and Fees
The only additional expense associated with a SoFi undergraduate student loan is interest, which runs from 3.99% to 13.50%. Significantly, SoFi does not impose any costs for its loans, including late fees, application fees, or origination fees. There are both fixed and variable interest rates available. However, a fixed rate is usually the safer option since it will not vary during the loan duration.
Moreover, the interest rate for which you qualify will rely on your and your co-creditworthiness, the signer’s income, and length of employment. Like other lenders, SoFi offers a 0.25 percent interest rate savings to consumers who participate in monthly autopay.
Repayment Options
SoFi provides four repayment options for student loans. Paying more while in school will reduce the total amount you owe, and if you choose a plan that involves in-school payments, you will have access to reduced interest rates.
- Deferred Repayment: No payments during enrollment, six months after graduation, or quitting school.
- Interest-only repayment: Pay interest while in school and complete payments after graduation, including principal and interest.
- Partial repayment: Pay $25 monthly while in school and make full principal and interest payments after graduation.
- Immediate repayment: Make full payments, including interest and principal, throughout and after your time in school.
Amounts and Terms
SoFi student loans begin at $5,000, although the minimum may be greater based on the borrower’s place of residency. The loan will cover the complete cost of attendance, as assessed by the financial aid office, which includes tuition, fees, lodging, and board. Importantly, your loan can be repaid over five, seven, ten, or fifteen years.
Features and Perks
SoFi provides various benefits to its borrowers, including free financial planning, career coaching, and rate discounts on other SoFi products. Here are some other student loan benefits:
- Unemployment Protection Program: Involuntary job loss users receive SoFi advantages. The Unemployment Protection Program forbears your student loan for three months, up to 12 months. This counts toward the loan’s 12-month forbearance maximum. Thus, it is similar to other lenders’ programs. SoFi is unusual in offering job counseling and resume support to unemployed borrowers.
- Cosigner Release: After 24 consecutive monthly payments made in whole and on time, the borrower may seek to have the cosigner released from the loan. The cosigner will subsequently be released from any debt-related duties.
Refinance Loan Details of SoFi
Costs and Fees
SoFi does not charge application costs, origination, or prepayment fees on its refinance loans. However, it does charge late fees. Refinance borrowers can pick fixed and variable interest rates ranging from 3.99% to 8.99%, including the 0.25 basis point interest rate rebate for automatic monthly payments.
Repayment Options
In contrast to SoFi’s private student loans, refinancing loans do not include various repayment alternatives. Your monthly principal and interest payments will be required in full from the beginning. However, SoFi will honor any existing student loan grace period on your debt. Choosing a shorter repayment term, such as five years as opposed to ten, will assist you in optimizing any interest rate reduction obtained by refinancing. Extending your repayment term following a refinancing could result in lost interest savings.
Amounts and Terms
A minimum of $5,000 in private and federal student loans can be refinanced. However, the minimum may vary depending on your state. The maximum amount you can refinance is the sum of your current loan balances. You may return your loan over five, seven, 10, 15, or twenty years. Additionally, there is no cosigner release program for SoFi refinance loans. Therefore, cosigners must remain on loan for the duration of their term. After a specific number of months or years, you may refinance your SoFi loan into a new loan as an individual borrower if you qualify.
Features and Perks
- Unemployment Protection Program
In addition to offering their forbearance program to refinance customers, SoFi offers free job search and budgeting assistance from career and financial advisors.
- Associate’s degree holders can refinance.
SoFi permits holders of an associate’s degree to refinance their loans. However, some refinance lenders require applicants to hold a bachelor’s degree.
Qualification Requirements
Cosigner Options
SoFi indicates that borrowers who apply for private student loans with a solid cosigner are seven times more likely to be approved. Cosigners assume a significant obligation, as they are liable to make loan payments if you cannot. However, SoFi provides cosigners an incentive. They may be eligible for an interest rate decrease of 0.125% on other SoFi loan products. If your cosigner is already a SoFi client, you may also receive a 0.125% interest rate reduction. If you have a private student loan, the cosigner can be released from the loan. However, there is no cosigner release option for SoFi refinance loans.
Eligibility Requirements
Borrowers must meet the following requirements to qualify for a SoFi undergraduate student loan or refinance loan:
- Be a citizen or permanent resident of the United States, or possess a valid visa. International students and holders of Deferred Action for Childhood Arrivals (DACA) may apply with a cosigner who is a U.S. citizen.
- Be enrolled at least half-time at a qualifying four-year institution or hold an associate’s degree from a qualifying university for refinance loans.
- Meet standards for financial history and credit score. Generally, an outstanding credit score, defined as a score of 670 or higher on a scale of 850, will provide you with the highest odds of approval and a cheap interest rate.
- Meet income and employment requirements. The cosigner must have sufficient income if the borrower does not have adequate income.
Pros & Cons
Pros
✔ Options for unemployment benefits and forbearance
✔ Up to the total cost of attendance loans
✔ No fees
Cons
✘ Options for limited repayment terms
✘ Minimum loan limit
Pros Clarified
- Options for unemployment benefits and forbearance
You may be able to put off your payments until you regain your financial footing if you experience financial hardships, such as a job loss or a medical emergency, during the repayment period.
- Up to the total cost of attendance loans
Some private student loan lenders impose limits on how much you may borrow, while SoFi allows you to borrow up to the complete cost of attendance, allowing you to borrow the exact amount you need to pay for your degree.
- No fees
SoFi does not impose origination, application, or late fees, unlike other lenders. By selecting SoFi, you can save money on expensive fees.
Cons Clarified
- Options for limited repayment terms
SoFi exclusively provides five-, seven-, ten-, and fifteen-year payback maturities. Other lenders offer more flexible repayment terms, up to 20 years, which could make your monthly payments more manageable.
- Minimum loan limit
SoFi has a significantly high minimum loan amount. For loan eligibility, you must borrow at least $5,000. If you require less, you may need to find a different lender.
Customer Service
SoFi doesn’t manage its student loans itself. As its loan servicer, it employs the Higher Education Loan Authority of the State of Missouri (MOHELA). If you obtain a loan from SoFi, you will make payments to MOHELA and should contact them if you have any problems with your account. SoFi is not included in the Annual Report of the Private Education Loan Ombudsman of the Consumer Financial Protection Bureau. SoFi has more than 2,522 ratings and a 2.9-star rating on Trustpilot. You can contact customer care via email at [email protected], live chat, Twitter, or by calling 855-456-7634.
Is SoFi a Worth Private Student Loan to Apply?
SoFi is a financial institution that provides student loan refinancing, private student loans, mortgages, personal loans, insurance, and additional financial goods. SoFi’s private student loans for undergraduates and refinance loans provide an online prequalification option and access to client benefits such as complimentary career and financial coaching. However, interest rates can rise significantly for debtors with poor credit, and forbearance is limited to 12 months.
In conclusion, SoFi may be an excellent match for students who need to borrow substantial money for their education, such as MBA or medical school students. However, SoFi does not impose origination, application, or late fees. You can borrow up to the complete cost of attendance.
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Source: Forbes, Investopedia