SoFi Review: Student Loan Refinancing
SoFi is a lender that offers student loan refinancing and private student loans for law students and has been rapidly expanding into other financial products, such as mortgages, personal loans and insurance products. Below is our review of SoFi, focusing on the following areas: (1) SoFi’s role as the biggest lender in the student loan refinancing space; (2) how lawyers fit into SoFi’s business plan; (3) SoFi perks and (4) refinancing your Parent PLUS loans.
Leading student loan refinancing lender. SoFi is the largest student loan refinancing lender in the marketplace. They have the most volume, which means many times they will be able to offer you a competitive rate for your student loans. Thanks to their position as a leader in student loan refinancing, they’ve recently been expanding their portfolio of products to generate additional revenue. If you end up refinancing with SoFi, you have an opportunity to have more of a typical banking relationship with them as you may want to purchase additional products from them in the future (e.g. a mortgage). Since working with a single lender makes your life simpler, there is a benefit to consolidating your financial life with one lender.
Lawyers are SoFi’s target market. Since SoFi is the leading player in student loan refinancing, they can afford to apply more scrutiny toward potential borrowers. Lawyers are likely to have the income and credit score needed to pass this scrutiny. When SoFi first entered in the market, they _only_ wanted to lend to high-income professionals, so if you choose to refinance your law school loans with SoFi, you’ll fit right in to their original thesis.
SoFi perks. SoFi is a cool fintech company and they have plenty of perks to back up their image. Member benefits include things like: (1) access to their career services counseling; (2) member experiences (i.e. parties and events they throw in major urban centers; (3) unemployment protection that will suspend payments for three months at a time up to 12 months (interest still accumulates); and (4) access to financial advisors. It’s hard to say that these perks warrant refinancing your student loans with SoFi if you’re not also getting the best interest rate with them but having the perks doesn’t hurt.
Parent PLUS refinancing. Not every lender allows you to refinance your Parent PLUS loans. If you have any of these from being an undergraduate and are looking to refinance out of the high interest rates, SoFi will help you through the refinancing process.
Who are SoFi's competitors?
SoFi is a solid student loan refinancing company with a legitimate chance of giving you a great deal but to get a full sense of the interest rates available to you it's a good idea to check out the competition. The list below includes the other student loan refinancing companies that you may want to consider when searching for the lowest interest rate.
- Earnest. Flexible repayment plans allows you to pick your own term. Financially backed by Navient, giving them some of the lowest interest rates available in the current market.
- First Republic Bank. This is a traditional bank looking to build a long-term customer relationship with you and is willing to refinance your student loans at below-market rates to build the relationship. You'll be required to open up a checking account, initiate direct deposit of your paycheck, and jump through other hoops, but if you're willing to do so they offer the lowest rates available.
- CommonBond. With their Pencils for Promise program, CommonBond offers a social mission to student loan refinancing. They have a dedicated law firm group located in NYC, which means a team is available to specifically help you through the refinancing process.
- Credible. Known as the "Kayak of student loan refinancing", Credible offers you access to a marketplace of lenders. Fill out a form once and Credible will pre-qualify you with a bunch of lenders to get rates (soft credit check). To confirm the actual rates, you'll have to continue the application with the individual lender.
- LendKey. If you're looking to borrow from a local credit union, LendKey is the lender for you. They partner with local banks and credit unions to offer you student loan refinancing in your neighborhood.
- ELFI. A relatively new player, ELFI is backed by SouthEast Bank, a retail bank that recognized the value of getting into the student loan refinancing market. More competition is always better and if you end up with multiple offers, you can use them to play off the various student loan refinancing companies to get the best deal for you.
- Splash Financial. Splash Financial is based in Cleveland and one of the newest players in the refinancing space. Originally they only offered loans to medical residents and fellows but have recently been expanding thanks to a partnership with Pentagon Federal Credit Union (PenFed).
- Laurel Road. Primarily a good option for medical professionals (which seem to be their target audience), Laurel Road is an option for parents that want to refinance Parent PLUS loans in their child's name.
How do I get the $1000 SoFi bonus?
It's a little complicated but nothing you can't handle. Credible is currently offering a $1000 bonus. Recently, Credible added SoFi to its platform of lenders. If you want to refinance with SoFi and collect this great bonus, all you need to do is sign up at Credible and complete the forms to get your initial interest rate quotes from a variety of lenders. Don't worry about hurting your credit as Credible only does a soft credit check. From there, select SoFi as your lender and complete the refinancing process. Credible will pay you the $1000 bonus! Any problems? Contact me.
SoFi is the largest student loan refinancing company and a legitimate way for student loan borrowers to save thousands of dollars in interest payments. SoFi has established itself as a solid choice for student loan borrowers looking to refinance into lower rates.
No. SoFi will perform a soft credit check using just your name, address and date of birth. Soft credit checks do not negatively affect your credit score, no matter how often they take place. If you proceed with a full application after getting pre-qualified, all lenders will perform a hard credit check which will have a minimum impact on your credit score.
SoFi isn't a bank. They are able to offer bank-like services through partner banks where your money is kept. For example, SoFi Money is a brokerage account that works with six partner banks to ensure that your money receives FDIC Insurance protection once the money arrives at the partner banks.
First, you'll get pre-qualified online through a soft credit check before you complete the full application. Once you're pre-qualified, SoFi will present you options for refinancing your student loans, such as interest rates and the repayment terms. Next, you'll select an interest rate and term and then complete a full application. After you've been approved, SoFi will pay off your old student loans and you will make payments to SoFi going forward.
The new SoFi Stadium is in Inglewood, California at the former site of the Hollywood Park Racetrack, approximately three miles from LAX. SoFi reportedly paid $600 million for the 20-year naming rights to the stadium. The stadium is expected to open in 2020.
SoFi stands for Social Finance, Inc. Originally conceived as a program for college alumni to provide loans to existing students, the SoFi founders believed in the concept of peer-to-peer social finance. SoFi was founded in 2011 by Mike Cagney, Dan Macklin, James Finnigan and Ian Brady.
SoFi is a private company. Its biggest investors are SoftBank, the Qatar Investment Authority, Third Point Management, Silver Lake and Discovery Capital Management. SoFi's most recent investment set the pre-money valuation of the company at $4.3 billion.
Yes. SoFi student loans have no prepayment penalty, so you can refinance your existing SoFi student loans with SoFi or with another student loan lender.
SoFi makes money in the student loan refinancing market by bundling and selling student loans in securitization packages. Institutional investors, such as pensions and insurance funds, purchase the securitized package of loans from SoFi at an upfront premium in exchange for the future potential cash flow from the loans as borrowers pay back their student loans. For example, if SoFi is selling a package of student loans worth $100 with a 10% interest rate that are due in one year, an institutional investor might be willing to pay $104 for the package today on the belief that at the end of the year they will receive $110 for a 5.7% return ($110/$104).
- Interest Rates: 2.25%+
- Bonus Cashback: $500
- Loan Types:
- Loan Terms:
- Rating: 8/10
- Important Disclosures: * APR rates include Autopay discount. Additional SoFi Terms, Conditions and Disclosures.
Terms and conditions apply for the $500 Welcome Bonus. Offer is subject to lender approval and not available to residents of Ohio. To receive the offer, you must: (1) register and/or apply through the referral link you were given; (2) complete a loan application with SoFi; (3) have and provide a valid US bank account to receive bonus; (4) and meet SoFi’s underwriting criteria. Once conditions are met and the loan has been disbursed, you will receive your welcome bonus via automated clearing house (ACH) into your checking account within 30 calendar days. Bonuses that are not redeemed within 180 calendar days of the date they were made available to the recipient may be subject to forfeit. Bonus amounts of $600 or greater in a single calendar year may be reported to the Internal Revenue Service (IRS) as miscellaneous income to the recipient on Form 1099-MISC in the year received as required by applicable law. Recipient is responsible for any applicable federal, state or local taxes associated with receiving the bonus offer; consult your tax advisor to determine applicable tax consequences. SoFi reserves the right to change or terminate the offer at any time with or without notice.
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