SoFi 2019 Review
Social Finance, better known as SoFi, has a reputation as an elite online lender that provides loans and additional benefits for individuals with good credit scores and a high income. It was founded in 2011 by a Stanford alum who wanted to offer graduates a way to consolidate federal and private loans, although they now offer extra services such as mortgages and personal loans.
SoFi is unique in the fact that they do not simply look at your credit score or income, but at other factors including a high-income career or potential high-income career in a growing field, degree, education, financial history, and payment history that shows you are a reliable borrower.
Applicants must be a US citizen or permanent resident, over 18 years of age, and live in one of the 48 eligible states. To pre-qualify, you must create a username and password, and then fill out personal information regarding your education and job. SoFi then performs a soft credit check, which does not hurt your credit score.
Once SoFi has processed your information, they show which loans you are eligible for. From there you can pick a fixed or variable rate loan.
After you choose a loan, SoFi performs a hard credit check and once approved, you must also upload documentation like your driver’s license or paystub, and choose a bank account for the funds. If you enroll in automatic payments, you receive a 0.25% discount on your APR. If all terms are agreeable to you, the final step is to sign the loan agreement.
If you are wondering whether you are eligible for SoFi, keep this in mind for comparison:
- The average borrower has an average income of $106,000.
- The minimum required score is 660.
- The average borrower has a score around 730
- Credit scores for borrowers can range from 680 - 850.
You can also check your credit score for free at www.annualcreditreport.com before you apply. With a high score and low risk, you are more likely to qualify for a low-interest loan.
There are no origination fees, closing costs, or prepayment penalties. These competitive rates are highly dependent on your credit score and can either be fixed or variable. Fixed rates are great for those who want assurance that the rates will not change and is the most popular option for SoFi borrowers, while variable rates are generally lower than the fixed rate loans, but could go up over time. A late fee is incurred 15 days after your grace period and is either 4% of your loan or $5, whichever is lower.
SoFi allows you to temporarily stop your payments if you become unemployed. These payments can be stopped for three months at a time, up to 12 months, until you are employed again or have another source of income. Interest still accrues even during the Unemployment Protection period, although you can make payments on your interest during this time. To receive Unemployment Protection, you must work with SoFi’s career strategy services and show that you are receiving unemployment benefits and actively seeking a job.
- Multiple Loan Types: SoFi offers student loan refinancing, mortgages, and personal loans.
- SoFi Looks At The Big Picture For Loan Approvals: They examine the following factors before making their decision: your credit score, income, earning potential, education, and financial history.
- Fixed And Variable Rates: SoFi offers both fixed and variable rates.
- Discounts And Referrals: A discount of 0.25% on interest rates is given to those who sign up for autopay. Individuals can receive a reward for referring friends or family to SoFi.
- Unemployment Grace Period: If you find yourself unemployed, they allow you to stop your payments for three months at a time, up to 12 months, until you are employed again or have another source of income.
- Exclusive Member Benefits: SoFi has added perks for members, such as career counseling, holding exclusive happy hours, social networking for their clients, and access to a Career Services department to look for a new job.
- Multiple Accreditations And Honors: SoFi also holds an AAA bond rating from Moody’s and according to Forbes, SoFi has a nearly $4 billion valuation.
- High Loan Amounts And Debt Consolidation: Their high loan rate amounts are a great option for those who need to consolidate credit card debt.
- No Hidden Fees: Because their personal loans cater towards qualified and low-risk borrowers, many of the extra fees and penalties that other companies have are not present with SoFi.
- Credit Bureau Reporting: SoFi reports to all three credit bureaus, which gives you the opportunity to improve your credit score.
- Payment Date Flexibility: SoFi allows some flexibility when it comes to payments. For example, borrowers can change their payment date or have a late fee waived if they have a history of on-time payments.
- Online Application: Unlike many other lenders, the entire process of signing up can be done solely online. This includes applying for your loan and receiving your funds.
- No Prepayment Penalty: You are not penalized for paying off your loan early.
- Multiple Payment Methods: Loan payments can be made online or through paper check.
- No Collateral Needed: SoFi’s loans are unsecured, meaning you do not have to provide collateral to receive the funds.
- Their services are only available in 48 states. Mississippi and Nevada do not offer these services.
- They do not allow co-signers or joint applicants on loans.
- Before the loan is finalized, SoFi does a hard credit check, which can take a few points off your credit score.
- Current SoFi personal loans cannot be refinanced, although you can apply for an additional loan to pay off the existing one.
The loan amount and the amount you pay is highly dependent on your credit score. The minimum credit score required is 660, but the higher your score is, the lower your interest rate will be.
Loan amounts range from $5,000 to $100,000. Minimum loan amounts are higher in Arizona, Kentucky, Massachusetts, and New Hampshire.
APR ranges from 5.70% to 14.24% with fixed rates and auto-pay or 4.79% to 10.89% variable rates with auto-pay. The rate is capped at 14.95%. The average APR for a three year loan is 8.5%.
Maximum fixed and variable rates are lower in Alaska, Colorado, Connecticut, Hawaii, Illinois, Kansas, Maine, Oklahoma, South Carolina, Texas, Virginia and Wyoming.
Your term length can be either 3, 5, or 7 years.
If you are a resident of California or Michigan, you can check your rate on SoFi’s website by setting up an account and providing basic information like your education and career.
It takes around 3 to 5 business days to receive the funds. The initial payment is due 15 days after the funds are given, and no later than 45 days. You can change the monthly payment date to any day between the 1st and 25th of each month if you have a fixed rate and you are in good standing.
If you make a large payment towards your personal loan that is more than your monthly amount, the first part will go towards interest you have accrued and the rest will go to the principal balance.
SoFi is one of the leading personal loan services with a trusted reputation, entirely online service, and additional perks like Unemployment Protection, exclusive social networking, and career counseling.
Frequently Asked Questions
What is a personal loan?
A personal loan is a large cash fund you can borrow for personal use, like paying off consolidated debt, investing in your home, a vacation, or wedding.
How does SoFi compare to other lenders?
SoFi is unique in the fact that they lend to clients who are recent graduates and have high-income careers and an excellent credit score. They also offer additional benefits such as career counseling, access to exclusive social networking events, and Unemployment Protection.
How do I know if I qualify for SoFi?
Individuals who are eligible for SoFi must be a US citizen or permanent resident, over 18 years of age, and live in one of the 48 eligible states. Those who are interested can create an account with basic financial information to see if they are pre-approved by SoFi.
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- Credit Score Required 660
- Minimum Loan Amount $5000
- Max Loan Amount $100000
- Loan APR 5.7% to 14.24%
- Time in Business Since 2011
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