SoFi, which is short for Social Finance, Inc is currently the marketplace leader in student loan refinancing. The company to date has helped over 130,000 borrowers refinance their student loans and help them save around $18k on average over the lifetime of their loan.
Here is an ER Doc's story who was able to save ~$40,000 through opting to refi:
Launched in 2011 by four Stanford grads, SoFi has funded over $7B in loans and has surpassed expectations. The companies views itself as:
A modern finance company that's fueling the shift to a bankless world
Student Loan Refinancing
- Average borrower saves $18,936 when they refinance with SoFi.
- Fixed rates as low as 3.5% variable rates as low as 2.14% with auto pay.
- Loan terms: 5, 7, 10, 15 and 20 year
- No application fees or prepayment penalties
- Unemployment protection
- $5,000 minimum to refinance with no maximum amount
How Does SoFi Student Loan Refinancing Work?
You are able to refinance both federal and private loans. The goal is to simplify by lowering your existing and be able to work with one monthly payment. The terms offered are from 5,10,15, and 20 years.
- Fixed rates start as low as 3.50% APR and variable rates start as low as 2.14% APR (With Autopay).
Important Considerations for your federal loans:
- Do you have high interest rates?
- Are you planning on using loan forgiveness as part of your repayment plan?
- Private loans may not offer forbearance and deferment options?
Although Federal Loans generally provide the most flexibility for repayment options, it is important to consider refinancing when you have high interest rates of ~6.8% coupled with high loan amounts. If you are able to lower your rate to 3.5% and work to aggressively eliminate that debt, you have an opportunity to save thousands of dollars.
The goal is to eliminate these debt burdens, so as to improve your financial health and overall well-being, which is why the 5 year term is a great option. This aligns well as you work to resist lifestyle inflation and quickly pay of the loans.Click To Tweet
The company does offer unemployment protection and job placement services during times of low or no income in order to work with customers. In regards, to customer satisfaction, generally the company has overall positive reviews. Additionally, the complaints that are filed with better business bureau appear to be closed in a timely fashion and to the satisfaction of the customer.
Customer Reviews: Pro and Con:
I am very happy with the service I received from SOFI. Eventhough there were mixed reviews, I decided to try and use their services to consolidate a number of high rate loans. I am proud to say that SOFI funded about 98% of what I requested and reduced my interest rate by about 1/2 of my old rate. The process was easy - all done online - and completed within about 2 weeks from the initial application. I am a satisfied customer.
I was "Pre-Approved" for "Up to $99,000" Regardless of the dollar amount I chose, I was denied after a lengthy review process. My credit rating isn't perfect, but it's not horrible either. Very misleading information on their site.
At the moment the company mainly works with highly qualified borrowers, which i take to be a positive aspect as you work to find the best options for your overral repayment plans.
Timeline:
- The company has been working to improve their online platform to improve user experience.
- The online application for a pre-approval takes 3-4 minutes and applicants are not obligated to complete the application after the pre-approval.
- Attaining pre-approval does not affect your credit
- Once all paper work is submitted, SoFi will underwrite your final documents and send for a final signature.
- SoFi will also pay off the borrowers existing loans directly to make the transition easier.
Who Qualifies for a SoFi Student Loan Refinance
To qualify for a SoFi Student Loan Refinance, applicants must meet the following requirements:
- You are a US Citizen or permanent resident
- You are currently employed or have an offer of employment starting in 90 days from the time you apply
- You have a 4-year undergraduate or graduate degree from a Title IV accredited institution
- You are in good standing on your current student loans
If you meet the requirements for student loan refinancing, the straightforward online pre-approval takes no longer than 10 minutes to complete and when you are ready to move forward with the application, you will be required to submit the following:
- Existing student loan information
- Proof of Employment - Recent Pay Stub
- Proof of Identification – Driver’s License, Passport etc
- Proof of Residence – Utility Bill, Bank Statement etc
Who is Sofi's Loan Servicer:
MOHELA ; Who is MOHELA?
- A+ rating by Better Business Bureau
- One of the largest student loan companies in America and is dedicated to easing the burden of financing higher education in Missouri while providing exceptional student loan services.
- 30 years of experience assisting students, families and schools with servicing needs of their student loans.
- First servicer in the not-for-profit sector to receive a federal contract with the Department of Education to service loans as part of the Federal Loan Program.
