Social Finance, Inc (SoFi) is a reputable fintech company that was founded in 2011 by students at Stanford Business School. Initially focusing on student loan refinancing, SoFi has since expanded its services to include mortgages, personal loans, investing, and even crypto trading. With a commitment to providing quality financial products, the company has amassed over four million members and went public in 2021.
However, like any financial institution, SoFi has faced scrutiny and investigations. In this review, we will delve into the pros and cons of SoFi, its loan offerings, eligibility requirements, customer service, and user ratings to determine whether it is a scam or a legitimate choice for borrowers.
SoFi Fast Facts
Before we dive into the details, let’s take a look at some essential information about SoFi:
- Loan Amounts: $5,000 to $100,000
- APR Range: 8.99% to 23.43%
- Minimum Credit Score: Not disclosed
- Loan Type: Multipurpose personal loans
- Repayment Terms: 2 to 7 Years
- Turnaround Time: 24 Hours or more
Pros and Cons of SoFi
- No loan fees: It stands out by offering loans without any origination fees, application fees, prepayment fees, or even late payment fees. This can save borrowers a significant amount of money compared to other lenders who may charge up to 10% in fees.
- Low rates: It provides competitive interest rates, with an advertised rate of 8.99% on unsecured personal loans after the autopay discount. This makes it one of the most affordable options for online personal loans, especially for individuals with good credit who can benefit from lower interest rates when consolidating their debt or making a substantial purchase.
- Loans up to $100,000: Qualified borrowers have access to higher loan amounts, offering loans of up to $100,000. This sets them apart from other lenders who may only provide up to $50,000.
- Unemployment protection: It offers a unique feature on their personal loans, allowing borrowers to pause payments for up to three months if they become unemployed. Additionally, they provide career counselors to assist individuals in finding a job during their period of unemployment.
- Co-signers not available: Unlike some other lenders, it does not allow co-signers to assist in securing a personal loan. Co-signers provide additional assurance and become responsible for the loan in the event of default. However, SoFi does offer the option to apply with a co-applicant who will be jointly responsible for the loan.
- The minimum loan amount is $5,000: It has a minimum loan amount requirement of $5,000, which may be higher than what some borrowers need. Other lenders may offer loans with a minimum amount of $1,000 or less.
- High credit score required: It does not publicly disclose the minimum credit score required, but it is generally understood that a high credit score is necessary to be eligible for their loans.
SoFi’s Loan Offerings
SoFi provides unsecured personal loans for various purposes, including:
- Home loans
- Debt consolidation
- Medical bills
- Vacation expenses
- Wedding expenses
- Purchasing a new or used car
It is important to note that SoFi loans cannot be used for post-secondary tuition fees or any illegal activities. They are also not applicable for business expenses.
It offers fast turnaround times for loan disbursement. Some borrowers may be eligible to receive the loan funds on the same business day that the loan is approved, with same-day funding being offered on select applications. However, it’s essential to keep in mind that the exact timing may vary based on various factors.
To be eligible for a SoFi personal loan, you must fulfill the following criteria:
- You must be at least the legal age in your state to enter into a legally binding agreement.
- You must be a US citizen, permanent resident, or non-resident alien (including those with DACA and those seeking asylum). Proof of identity may be required.
- You must reside in one of the fifty American states or the District of Columbia.
- You should have a job, a stable income from other sources, or a job offer that will commence within the next 90 days.
- It assesses eligibility based on prior financial records, credit rating, and other credit factors on Sofi technologies.
SoFi Personal Loan Features
SoFi offers several notable features on their personal loans:
- Use your loan for (almost) anything: Besides college costs and business expenditures, it allows borrowers to use the loan fund for almost any expense.
- Direct Pay: It can handle eligible credit card payments on your behalf. This process may take up to three working days after the loan is finalized.
- Unemployment protection: If you experience a job loss, it will temporarily stop your loan payments for up to three months. Over the life of the loan, you can receive a maximum of 12 months of unemployment assistance.
- Member benefits: It provides perks for its members, including referral rewards and lower interest rates. Customers with a Money account can enjoy a 0.125% decrease in the rate of personal loans.
- Access to financial and career advisors: It offers free services from career coaches and financial advisors. Whether it’s scheduling an individual call or seeking advice via email, customers can benefit from expert guidance on financial and career-related matters.
Co-signers or Co-applicants with SoFi
While SoFi does not accept co-signers, they do allow applicants to add a co-applicant to their loan. The co-applicant will be jointly responsible for the monthly payments and must reside in the same residence as the main applicant. It’s important to understand the distinction between a co-signer and a co-applicant before applying.
Refinancing a SoFi Personal Loan
It is possible to refinance a SoFi personal loan. However, it’s essential to consider a few aspects before doing so:
- All SoFi personal loans must be kept up to date.
- Refinancing a personal loan with a joint borrower is not possible.
- You must have made three consecutive on-time payments.
- You must still meet the criteria for a personal loan.
- Review the terms and specifics of the loan before refinancing.
Customer Service and Ratings
It offers customer support through email, telephone, or online chat during business hours. Personal loan support is available from Monday to Thursday, between 5 am and 7 pm Pacific Time, and from Friday to Sunday, between 5 am and 5 pm PT.
SoFi has garnered positive ratings and reviews from its customers. In the latest J.D. Power Consumer Lending Satisfaction Study, SoFi secured the eighth position among personal loan lenders. Additionally, Trustpilot user reviews give SoFi a rating of 4.4 out of 5 stars, based on more than 4,000 reviews. Customers often appreciate the excellent customer service and the fast application process provided by SoFi.
How to Apply for a SoFi Personal Loan
To apply for a SoFi personal loan, follow these four steps:
- Pre-Qualification: It offers a convenient online pre-qualification process that allows you to check your rates and loan terms without impacting your credit score. During the application, you’ll need to provide information such as your full name, current address, income details, and date of birth.
- Selecting a Loan: Based on your eligibility, SoFi will present you with loan options, including details on interest rates and loan periods. The loan duration ranges from 2 years to 7 years, and the interest rates may vary depending on the loan period and the amount borrowed. Choose a loan option to proceed with your application.
- Submit the Application: After selecting a loan, you’ll need to complete the online application form. You may be required to submit financial and personal documents, such as tax forms, bank statements, pay stubs, and driver’s licenses.
- Sign the Documents: Once your application is submitted, you’ll need to sign the loan agreement to finalize your loan request. After signing, your loan may be ready for use on the same day. The funds will be transferred to your bank account via ACH, except for Direct Pay loans that are sent directly to creditors.
1. Can I use a SoFi personal loan to start my own business?
Answer: No, SoFi personal loans are not applicable for business expenses. While SoFi offers various loan purposes such as debt consolidation, home improvements, and medical bills, starting a business is not one of the approved uses for their personal loans. If you’re seeking funding for a business venture, you may want to explore other financing options specifically designed for small businesses, such as business loans or lines of credit.
2. Does SoFi offer any special benefits for borrowers with excellent credit scores?
Answer: Yes, SoFi provides additional benefits for borrowers with excellent credit scores. In addition to offering competitive interest rates, SoFi offers lower interest rates for qualified applicants who have a Money account. With a Money account, borrowers can enjoy a 0.125% decrease in the rate of their personal loans. This benefit serves as an extra incentive for individuals with excellent credit to choose SoFi as their lending partner.
3. Can I make extra payments towards my SoFi loan to pay it off faster?
Answer: Absolutely! SoFi allows borrowers to make extra payments towards their personal loans, which can help pay off the loan faster and potentially save on interest charges. There are no prepayment penalties or fees for making additional payments or paying off the loan early. So, if you have the financial means to make extra payments, you can take advantage of this opportunity to become debt-free sooner and potentially reduce the overall cost of your loan.
4. Is there a grace period for making payments on SoFi loans?
Answer: SoFi does not offer a grace period for loan payments. It’s important to make your loan payments on time to avoid any late fees or negative impacts on your credit score. However, if you encounter financial hardship and become unemployed, SoFi provides unemployment protection. This unique feature allows borrowers to pause their loan payments for up to three months. During this period, no payments are required, providing temporary relief while you search for new employment.
5. Can I refinance my SoFi personal loan multiple times?
Answer: Yes, it is possible to refinance a SoFi personal loan more than once. However, there are a few things to consider. First, all your existing SoFi personal loans must be kept up to date, meaning you should have a good payment history with the company. Second, you cannot refinance a personal loan with a joint borrower; refinancing is only available for individual borrowers. Lastly, when you apply to refinance your loan, you’ll need to meet the eligibility requirements for a personal loan and undergo the application process again, which may include submitting necessary documents and meeting credit criteria.
It’s worth noting that refinancing a loan should be carefully considered based on your specific financial situation. It’s important to review the terms, interest rates, and any associated costs before deciding to refinance your SoFi personal loan.
In conclusion, SoFi is a legitimate and reputable fintech company that offers a range of personal loan options with competitive interest rates and various borrower benefits. While it faced scrutiny from the Federal Trade Commission in the past, SoFi has taken steps to rectify any misleading practices. With no loan fees, unemployment protection, and the availability of high loan amounts, SoFi can be an attractive choice for individuals with good credit looking for personal loans.
However, it’s important to consider the eligibility requirements and the specific terms and conditions of SoFi’s loan offerings before making a decision. Customer ratings and reviews indicate positive experiences, with many praising the company’s customer service and fast application process.
Ultimately, whether SoFi is the right fit for you will depend on your individual financial circumstances and needs. We recommend carefully evaluating the pros and cons discussed in this review, comparing them with other lenders, and making an informed decision based on your personal situation.