SoFi, or Social Finance, is an online lender that offers a variety of loans and debt solutions to individuals and organizations. Aside from personal loans they also offer student loans, refinancing loans, mortgages and a variety of benefits to its borrowers. The popularity of their loans isn't just because of the quality of the product but in their superior customer service.
Their goal is to help create possible social impacts and individuals be lending to professionals and organizations. Because of this, they offer excellent loan products… to those who qualify.
SoFi gravitates toward "professionals," which means they look for people they think will thrive and be able to pay off one of their loans. According to their FAQ page they are looking for individuals who, "are employed with a responsible financial history and have a strong monthly cash flow."
If you are interested in a SoFi personal loan, this review looks at all of the details you should know about this company before applying. This includes specifics like interest rates, term lengths, eligibility requirements and helpful extras.
Personal Loan Details
A personal loan from SoFi can get you between $5,000 and $100,000 if you qualify. They have three available term lengths of 3, 5 or 7 years. These midrange loans are ideal because they strike the balance between costs accrued in interest and monthly payments. Monthly payments will be higher than loans with longer terms but you will pay less in interest and you'll be out of debt more quickly if you can keep up with payments. However, it's important that you do the math to make sure you can afford the loan before you accept it.
With fixed rates starting at 5.50% and variable APR between 4.04% and 9.99% (including their auto-pay discount), SoFi has fairly competitive rates for a non-bank lender. Online lenders often offer rates slightly higher interest rates. This is partly due to their midrange term limit. Because you have longer to pay off the loan, SoFi offers lower rates. This means you may end up paying the same in interest with SoFi as you would with a shorter term loan with higher interest.
However, the difference comes with the fees, or lack thereof.
They don't charge any prepayment penalties or closing costs. That means if you can repay your loan completely before your term is up, you'll be able to save on interest without incurring a penalty. This allows you to take full advantage of SoFi's lower rates.
Unlike some lenders, SoFi is very transparent and requires no payments up front. They do not charge hidden costs like origination fees. Transparency like this is essential when taking out a loan and planning your repayment budget.
The application process is comprehensive but it is fairly straight forward. It is a five step process that takes about 15 minutes. First you go through a three minute pre-approval process that automatically tells you if you qualify, so you know if you should bother completing the full application. Next, you can look at the different loan options and select the plan that you want. Then, you need to upload documents via screenshots or scanned files to verify your identity, current loans and employment. Then, you must read and electronically sign the loan agreement. Finally, you are encouraged to set up an auto-pay feature, which will knock .25% off of your interest rate.
In terms of basic qualifications, SoFi has fairly basic standards that you must meet to be considered for a loan. Basic qualifications include:
- You need to be a US citizen or permanent resident.
- You need to be 18 years old (or the age of majority in your state).
- You must be currently employed.
- You have to live in one of the 47 states (plus Washington D.C.) that SoFi services.
However, SoFi has a number of other qualifications, based on your financial history, that are a little more uncompromising. They perform that they call a cash flow analysis which is an in depth look at your income and expenses, which gives them an accurate picture of your ability to pay. They will also look at your education and employment.
SoFi is not considered to be a FICO-driven lender, which means they look at more than just your credit score to decide if your loan is approved. However, you score doe pay a big role in their decision. Your ability to pay is only appealing to them as a lender if you have a history of making payments. This is why they will also analyze your credit history. By looking at your credit score, they can determine if you have a strong history of paying your dues. SoFi, in particular, looks for excellent credit scores above 700. While other online lenders may accept lower scores and offer higher interest rates, you will most likely be rejected by SoFi with a score less than 700.
However, the reason your score is what it is also matters. If you have less than 700 because of rapid debt growth or a history of defaults and missed payments, then your loan will be rejected. If your score is that low because of a lack of debt, you still have a chance to get approved.
Because of their tenacity to weed out anyone who is not financially prepared for their loans, SoFi is more selective with who they lend money than other lenders in the industry, requiring employment and an excellent credit score to qualify.
SoFi also has an impressive Unemployment Protection plan that acts as a safety net if you lose your job through no fault of your own. If you qualify, they will not only pause payments on your loan, they will also help you find a new job.
Customer reviews and company reputation are two great ways to determine whether or not you might want a SoFi personal loan. On the Better Business Bureau, SoFi is not an Accredited Business with an A+ score. Trustpilot, a website that ranks companies purely from customer reviews, rates SoFi a 9.7/10. Keep in mind that the experiences of one customer are not representative of the company as a whole, but it is important to spot potential issues you may have with the company early nonetheless.
SoFi is a great option with transparent business practices, and some interesting benefits. However, they are selective with their application process but if you have a degree, excellent credit and decent cash flow, this is a great place to begin a personal loan search.