SoFi Private Student Loan Debt Consolidation Review
When it comes time to refinance or consolidate your private student loans, there’s basically no better company to handle that than SoFi.
What makes SoFi the Best Student Loan Debt Consolidation Company?
That’s simple: they’ve got the lowest interest rates on fixed-rate plans, they don’t require origination or application fees, they don’t have prepayment penalties, and they offer an incredible career services and entrepreneurship program that can help you find a better job and make more money.
If you’re already convinced that SoFi is the lender for you, then click the orange button below to start your application right now!
If you need more evidence that SoFi deserves your business, feel free to read on.
Who is SoFi?
If you haven’t heard of SoFi (their official name is “Social Finance Inc.”) before, then this should alleviate some of your concerns about the company itself.
SoFi is different from traditional banks – they don’t lend money based on the typical indicators like credit reporting and such, because their underwriting approach is entirely different.
Instead of credit score ruling the roost, SoFi uses a more holistic approach to determining who can borrow money, focusing on indicators like merit, employment history, level of education and other factors.
The company offers all sorts of different financial products, from student loan refinancing and consolidation to home mortgages, mortgage refinancing and even personal loans.
This may sound a little scary, but SoFi’s been around for years, raised $164 million from Silicon Valley’s darling venture capital firms, and funded more than $2 billion in loans.
This is no fly-by-night operation, and you will not have to worry about them disappearing into thin air. You can trust SoFi.
What Types of Loans can SoFi Consolidate or Refinance?
SoFi refinances both Federal and Privately-funded student loans, typically helping people to save money by reducing their interest rate or improving the loan repayment terms.
Support is also offered for both Undergraduate and Graduate student loans, making it easy to wrap them all up into a single consolidated loan with one convenient payment.
One thing I want to point out before continuing is that almost never a good idea to consolidate your Federal loans with Private loans, since that will disqualify you from excellent benefits programs offered to Federal student loan borrowers, like the Federal Student Loan Forgiveness Program, Public Service Loan Forgiveness Program, the awesome Income-Based Student Loan Repayment Plans, and the Forbearance and Deferment Programs.
With SoFi, the one limitation on loans is that you’ll have to have at least $10,000 in debt, because that’s their minimum threshold for refinancing and consolidation.
Does SoFi Offer Fixed-Rate Loans?
Yes! In fact, SoFi’s fixed-rate loans are offered at rates as low as 3.50% APR (with AutoPay enrollment), which is basically as low as it gets in the industry.
For those who are looking to get an even lower rate, their variable rate loans drop to as low as 1.90% APR (with AutoPay).
SoFi’s loan terms allow you to borrow for 5, 10, 15 or even 20 years, giving you plenty of time to repay the debt in an affordable fashion.
What are SoFi’s Minimum Interest Rates?
They’ve got some of the best in the market, including:
- Variable Rate Loans: 1.90% to 5.19% APR (with enrollment in AutoPay)
- Fixed Rate Loans: 3.50% to 7.24% APR (with enrollment in AutoPay)
Honestly, even in 2016 with interest rates hitting historic lows, this is about as good as it gets from a private lender, making SoFi one of the best possible choices for those of you interested in getting your interest rate as low as possible.
Does SoFi Charge Origination Fees?
No! Surprisingly, SoFi offers their consolidation and refinancing packages without any origination fees or application fees.
In fact, there are no up-front costs at all with SoFi. And that’s good news for anyone looking to reduce their monthly payments, but who doesn’t have access to lots of cold, hard cash.
Does SoFi Charge Prepayment Penalties?
No! SoFi doesn’t charge prepayment penalties for paying off your loan early, which is excellent since that’s one of the best ways to reduce the total cost of your student loan debt.
To tell you the truth though – if you can qualify for their minimum rates, then there’s almost no reason to pay your loans off early anyway, since they’re about equal to inflation and you could make much better returns by investing the free cash you do have in the stock market (even an ETF should do significantly better than 3.5% APR!).
Does SoFi Offer Interest Rate Reductions?
Yes! When you get a loan from SoFi, you’ll be able to receive an interest rate reduction for enrolling in their automatic payments program.
The SoFi 0.25% AutoPay interest rate reduction will require you to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account, but it’s totally worth it.
Does SoFi Offer an Interest-Only Payment Plan?
No, apparently they do not. I’ve searched far and wide to see if SoFi offers the same benefit that a few other lenders provide (LendKey being one of them), but I haven’t been able to find any evidence of an interest-only repayment plan at SoFi.
Does SoFi Offer Unemployment Protection?
Yes! SoFi has a great unemployment protection program, though it’s slightly less comprehensive compared to LendKey’s offer (LendKey provides up to 18 months, while SoFi only offers 12 months).
With SoFi, if you lose your job “through no fault of your own”, you can apply for Unemployment Protection, which puts your loan into deferment for 3 months at a time.
You’ll be able to use Unemployment Protection for 12 total months during the life of the loan (meaning 4 3 month increments), and during that deferment period, you won’t have to make principal or interest payments, but you should note that interest will continue to accumulate, then be recapitalized once the loan restarts.
To get approval for Unemployment Protection, you’ll need to provide proof that you are eligible for unemployment compensation, prove that you have applied to receive it, and you will have to actively work with SoFi’s career services department to search for a new job.
Career services department?
Does SoFi Offer Career Counseling?
Yes! And while you may think this is strange for a lender to offer career counseling and job placement services, it actually makes perfect sense.
Since SoFi looks to provide money to people who may not have great credit, but who do have excellent prospects, they have to rely on those borrowers remaining employed (and gainfully employed!) to get their money back.
Accordingly, SoFi’s job placement program is one of the best in the business, and they even hired the former Assistant Dean of Career Services from a top MBA school to head up this division and ensure that it operates smoothly.
Honestly, it makes perfect sense, and it’s one of the biggest perks to borrowing from SoFi. They’ve got connections in all sorts of different career sectors, and their career counselors are routinely praised in forum, blog and social media posts all around the web.
Does SoFi Offer a Deferment Period for Recent Graduates?
Yes! SoFi’s “Entrepreneurship Program” is one of the best deferment programs available from private lenders, as it allows recent graduates to defer payments for up to 6 months, as well as provide access to networking and professional mentorship opportunities.
Resources include workshops, lectures and advice sessions from executives and other successful businesspeople, access to SoFi’s investors network and “Pitch Day” events, as well as a peer network of fellow members and alumni from the Entrepreneurship Program.
This is an entirely unique opportunity that we have not seen offered by any other lender, and one that anybody trying to launch a startup or get a business going should absolutely take into consideration when determining who to consolidate with.
You can get more information about SoFi’s Entrepreneurship Program here.
Does SoFi Offer Cosigner Release?
No. As far as I can tell, cosigner release is not available at SoFi.
Who Funds SoFi’s Loans?
From what I can tell, SoFi itself funds all the loans issued to their borrowers, but the loans are sometimes serviced by third party companies.
SoFi’s own FAQ includes the questions “Who is Mohela?” and “Who is Tru Student?”, stating that both of these are third-party loan servicers, so when you get a loan from SoFi, you may end up having it serviced by these companies.
From what I’ve read, it doesn’t matter if SoFi itself or one of these third-party lenders ends up servicing your loan – the terms and conditions don’t change, you just end up sending the check to a different address.
Also, according to the Student Loan Sherpa, SoFi’s customer service is run out of a call center in California, which is excellent, since it means you should be able to understand the people you’re calling for support.
You’ll also more likely be speaking to people who will be able to commiserate with the problems you’re facing (since virtually all Americans – even those working in call centers – are buried in student loan debt).
Can You Trust SoFi?
Yes, absolutely. As I mentioned in the opening paragraph, SoFi has provided over $2 billion in loans, and basically all the reviews I’ve found online are extremely positive.
The only time I’m finding negative press about the company seems to be from people writing testimonials to say that they were denied a loan from the company.
That’s no reason to distrust SoFi, and no reason to shy away from applying either.
SoFi operates differently than other traditional banks, and has even stated that one of their goals is to turn borrowers into future lenders.
While that may sound unrealistic to you, it seems like they’ve actually had some success on that point, and even the idea proves that the company is looking to continue relationships with their borrowers.
Most of us know that the typical relationship with a bank essentially ends completely as soon as we’ve signed up for their loans, so this dedication to keep borrowers happy and wanting them to remain involved is a major plus in SoFi’s corner.
My personal opinion is that SoFi is probably your safest, best bet when it comes to consolidating your student loans – especially if you can prove that you’re making good money.
When my family members and friends ask who to call for a consolidation, I typically send them to SoFi first.
What are SoFi’s Eligibility Requirements?
Like I keep mentioning – SoFi does things a little different from traditional banks, but they still have an applications process that seeks to weed out risky borrowers.
The bare minimum requirements for getting approved on a SoFi loan include:
- Being a U.S. citizen or permanent resident
- Being at least the age of majority in your state (usually 18)
- Being currently employed
- Being a graduate from a Title IV accredited college or university (undergraduate or graduate)
If you don’t meet any of these requirements, then your loan application will be denied.
In addition to the above criteria, SoFi will also evaluate:
- Your ability to repay the loan, calculated by performing a “cash flow analysis” that evaluates your current income and expenditures, making sure you have enough free cash to make your monthly payments
- Your credit history, looking for missed payments and defaults on other loans, which could lead to a denial.
It’s important that your credit history shows a strong trend of making payments, even though SoFi doesn’t determine who gets a loan based on FICO scores (since they favor other factors, like employment, education level and cash flow).
It’s been reported that people with FICO scores below 700 may have trouble getting approval from SoFi, especially if the score was driven down by missing payments or rapidly building up debt.
If you’ve got a score under 700, but it’s because you haven’t done much in terms of building up credit, you have little debt, and have never missed a payment, then you can still get a consolidation loan from SoFi relatively easily.
If you have collection items on your report, judgments filed against you, or bankruptcies and other significant negative legal actions, then you are likely to have a tough time getting approved from SoFi, unless your cash flow analysis turns out extremely positive.
Fortunately, no matter what your chances are of receiving approval, it’s possible for you to figure out whether or not it’s likely without taking a ding on your credit score.
SoFi uses a “soft pull” to determine your interest rate and loan amount, so you have nothing to lose by signing up, starting the application process, and figuring out if SoFi will work for you.
But better yet, finding out whether or not you’re likely to get approved should only take about 2-3 minutes of your time!
(Also, even if you are approved, you aren’t obligated to take out a loan. You literally have nothing to lose by checking.)
Should I Consolidate with SoFi?
If you’re making more money and have a better score than you did when you originally took out your student loans, then you should absolutely consider consolidating, because it could save you a ton of money.
How Do I Apply?
That’s the best part about SoFi – you can do literally EVERYTHING required to apply and receive approval for a loan via the Internet.
All you need to do to get started is click the orange button below.
Can I consolidate my loans with my spouse’s?
Do SoFi Loans Count as “Student Loans” for Tax Purposes?
Yes, these loans count as student loans for both federal and state tax considerations.
Can I refinance a Parent PLUS loan?
Yes, you can with SoFi.
Can my child refinance my Parent PLUS loan in their name?
Yes, they can, but they have to apply themselves.
Other Questions? Comments?
Do you have any other questions about SoFi, student loan consolidation, or student loan debt in general?
If so, please fill out the comments form below and submit them to this site. I’ll do my best to get you a response quickly.
Also, if you’ve personally used SoFi for any of their financial services (but especially for their student loan consolidation product), then please let me know how it went!
I would love to be able to share your story with my readers, and I think you know how important it is to help steer people the right direction since consolidation is a complicated, potentially frustrating, but almost always scary process.
Please Support This Site
If you can’t tell, this website takes a lot of work to run and maintain, and I can only afford to do it with help from people like you.
Please, if this site helped you out, then I would really appreciate it if you could do the same for me.
Share a link to this site with your friends, family members, or followers. Post a link to this page on Facebook, Twitter, or your personal Blog.
Thank you for visiting, and thank you so much for your support!
In the interest of full disclosure, I want to point out that I have an affiliate marketing agreement with SoFi.
If you sign up for a consolidation or refinance through one of my “Apply Now” links above, I will receive a small commission for having referred you to them.
Please keep in mind though that I’m being 100% honest about my evaluation of their service. When I say that they’re the first place I refer friends and family – I really do mean it.