Exploring student loan options can be challenging, but selecting the right lender is crucial. SoFi emerges as a strong candidate in the student loan space, known for its customized lending approach.
Whether you’re in the market for new private loans or thinking about refinancing, SoFi stands out with its combination of flexible options, competitive rates, and extra benefits, making it an attractive choice for many borrowers.
What sets SoFi apart? To begin with, their straightforward prequalification process is a major plus, sparing your credit score from unnecessary impacts. Beyond just providing loans, SoFi acts as a financial ally, offering services like job application help and career support, invaluable for both students and graduates.
Although they have a reputation for serving high-income earners, SoFi does not enforce a strict minimum income requirement, opening doors for a diverse range of applicants. Read on to find out how SoFi could potentially transform your approach to educational financing.
Eligibility Criteria for SoFi Student Loans
Here is an overview of the requirements you’ll need to meet to take out a SoFi student loan:
- You must be a U.S. citizen, resident, or visa holder.
- You have earned at least an associate’s degree from an eligible, accredited Title IV school.
- SoFi doesn’t disclose any minimum income requirements, but the average SoFi borrower earns an annual income of over $100,000.
- Your credit score needs to be at least 650, but the average SoFi borrower has a credit score of 700 or higher.
- Must be able to show proof of employment or that you’re starting a job within the next 90 days.
- The minimum loan amount is $5,000 which can be a combination of both federal and private student loans.
- If you’ve previously filed for bankruptcy, you’ll need to wait until it drops off your report to apply. For a Chapter 13 bankruptcy, this will take at least seven years; for a Chapter 7 bankruptcy, you’ll need to wait at least ten years.
Exploring Different SoFi Student Loan Options
SoFi offers a diverse range of student loan solutions, catering to various borrowing needs, whether you’re seeking fresh financing or aiming to refinance existing loans. Here, we examine each option in detail, providing a clear snapshot to help you identify the best fit for your educational financing needs.
Private and Refinancing Loan Options at SoFi
SoFi stands as a versatile lending partner, offering both private student loans and refinancing options. Understanding the features and benefits of each can help you make an informed decision that aligns with your financial goals. Here’s a concise comparison:
SoFi Private Student Loans
- Target audience: Students needing additional funds beyond federal loans.
- Credit impact: Pre-approval with a soft credit pull, safeguarding your credit score.
- Loan terms: 5, 10, or 15 years.
- Loan amounts: Minimum of $5,000 up to the total cost of attendance.
- Fees: No application, origination, or prepayment fees.
- Cosigner option: Available for applicants with limited credit history.
- Special features: Flexible repayment options, including deferment and forbearance.
SoFi Student Loan Refinancing
- Target audience: Borrowers with existing student loans seeking lower interest rates.
- Loan consolidation: Combine multiple student loans into one.
- Rate options: Choose between fixed or variable rates.
- Federal loan consideration: Refinancing federal loans means losing federal protections.
- Minimum Requirements: Credit score of at least 650; higher incomes preferred.
- Fees: No application or origination fees; no prepayment penalties.
- Special features: Potential for significant savings over the loan’s life.
Both options are designed to cater to different needs, with private loans primarily assisting in initial funding and refinancing helping manage existing debt more efficiently. SoFi’s commitment to flexible and borrower-friendly terms is evident in both categories, making it a viable option for a wide range of financial scenarios.
Parent PLUS Refinancing
SoFi also has a student loan refinance option for parents who have outstanding balances on their Parent PLUS loans or qualified private education loans. You can choose either fixed or variable rates.
The application process and eligibility requirements for refinancing parent loans are similar to regular student loan refinancing.
Medical/Dental Resident Refinancing
Unless you live in Missouri or Montana, you may be eligible to apply to refinance your medical or dental student loans. To qualify, you must have less than four years left to complete your professional degree program.
You also must carry at least $10,000 in student loan debt, though this number may be higher in certain states. You should also be on track to graduate with an MD, DO, DMD, or DDS from a Title IV accredited university or graduate program.
SoFi Loan Costs: Fees and Interest Rates
- There are no application or origination fees when you apply for private student loans or student loan refinancing. And there are no prepayment penalties for borrowers who pay off their student loans early.
- Compared to other lenders, SoFi has competitive interest rates on all its student loan products. Your rate will depend on various factors, including your gross monthly income, and credit score.
- Borrowers who sign up with autopay can receive a rate discount of 0.25%.
- SoFi does charge late fees. You’ll be charged $5 once your loan is 15 days overdue. This is still a relatively low fee compared to other lenders.
SoFi’s Student Loan Application Process
To refinance student loans or take out a private student loan through SoFi, you’ll start by applying on the lender’s website. Then, the company will do a soft pull on your credit, so you can get a personalized rate offer without taking a hit to your credit.
If you choose to accept the rate, you’ll continue the process. This includes submitting the following information:
- Pay stub or income verification (must be within the last 30 days or less.)
- ID (birth certificate, certificate of citizenship, certificate of nationalization, driver’s license, military ID, US Passport, or Social Security card.)
- Loan statement
- Proof of address (bank statement, credit card bill, utility bill)
If you’re refinancing your loans, you’ll need to submit a 10-day payoff number. SoFi will need to know the exact payoff amount so it can pay off your existing loan balance.
Fixed Rate vs. Variable Rate Student Loan
Lastly, you’ll have to decide whether you want to refinance with a fixed-rate or variable-rate loan.
A fixed-rate loan has an interest rate that doesn’t change over the period of the loan. This means that your first payment will be the same as your last. This is preferable to people who like knowing exactly how much they must set aside each month to cover their loan payments.
A variable-rate loan means that the interest rate will change over the term of the loan, causing your monthly payment amounts to fluctuate. For SoFi student loans, the rate may change monthly, so each payment could be different. The good news is that the rate is capped at either 8.95% or 9.95%, depending on the length of the loan term you choose.
If you’re not a fan of surprises, choose a fixed rate. If you want to take advantage of possible savings, choose the variable. If your finances can handle SoFi’s maximum rate of 8.95% or 9.95%, or you intend to pay off your student loan debt quickly, you might consider choosing a variable-rate loan.
SoFi Special Features
Deferment Options – Loan repayment options, such as loan deferment, are available if you go back to graduate school at least half-time, enter disability rehabilitation, or enter into active military duty.
At the end of your deferment period, your principal balance is re-amortized. To initiate deferment for any of those reasons, you must first sign a loan deferment request form, as well as submit any requested documentation.
Unemployment Protection – If you lose your job through no fault of your own, SoFi has an unemployment protection program. If you qualify, SoFi puts your loans into forbearance. Loan forbearance allows you to stop making payments on your loan for a period of time, but the drawback is that interest will continue to accrue.
If you choose, you can make interest-only payments while your loan is forbearance, so the total balance on your loan does not increase. SoFi offers loan forbearance in three-month increments and caps it out at 12 months.
Rate Discount for New Loans – SoFi realizes that it’s easier to keep an existing customer than get a new one. Perhaps that’s why they offer a 0.125% discount on other loans for current members interested in additional financing.
Even if you have completely paid off your original loan, you’re eligible to receive the discounted rate. Whether it’s a personal loan or mortgage, the discounted rate applies to all of SoFi’s loan products.
Career Counseling – If needed, another unique feature about SoFi is that you can discuss your career with a career coach. Career coaching is one-on-one, and you can discuss any career-related topics during a session. Your coach will ask you sets of guided questions to determine if you’re in the right line of work and what you consider to be a success.
Many members discuss career changes with their coach, how to negotiate and network, and personal branding. It doesn’t matter what level you’re on in your career path. Top or bottom, your career coach can help you take the next step forward.
Referral Bonus – If you refer a friend to SoFi, both you and your friend will get some extra money: $300 for you and $100 for your friend.
Financial Advising – As a SoFi member, you’ll also get complimentary financial advising to help meet your future goals. They also waive any fees if you choose to invest with SoFi Wealth.
Bottom Line
SoFi student loans are a suitable option for moderate to high-income borrowers. The company allows you to apply for private loans or refinance your existing loans. If you have a strong credit history, you will likely qualify for competitive interest rates.
If you have a limited credit history or your credit score is on the low side, it may be harder to qualify for a loan through SoFi. However, you can substantially improve your odds by applying with a creditworthy cosigner.
It’s a good idea to get pre-approved with multiple lenders and see what kind of offers you receive. This will allow you to compare your options and choose the right lender for you.