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SoFi Lender Review - Student Loan Refinancing, Debt Consolidation & More

Student loan debt is one of the leading causes of modern American stress, especially among millennials, who are putting off life milestones like marriage, having children or buying a house because they are overwhelmed by their portion of the nearly $1.8 trillion student loan debt.

Social Finance Inc., known commercially as SoFi, is a high-profile member of the online student debt refinancing market. It focuses on graduates with high earning potential, offering refinancing plans that consolidate student debt at lower interest rates.

Target customers often have student loans from private lenders like banks and credit unions, which charge significantly higher interest rates than federal loans. Federal loans, however, can be rolled into a SoFi student loan refinancing, along with private loans.

SoFi also offers its own private student loans for undergrads, graduate students, and parents, as well as personal loans and mortgage refinancing, all aimed at the same good-credit borrower market.

SoFi is one a relatively small group of nonbank online lenders that cater to high earning, not-yet-rich student borrowers, a group called “Henrys” in lending parlance.

SoFi was launched in 2011 as a sort of peer-to-peer lender that raised capital from Stanford University alumni to make loans to a small group of that university’s business school students. Since then, it has expanded rapidly and diversified. It now offers more than 40 products, including mortgages, personal loans, deposit accounts, investment accounts, credit cards, crypto, and insurance.


  • Type of Debt Relief – Student loan refinancing, personal debt consolidation loans, cash-out home equity loans
  • Eligibility and Requirements – SoFi’s underwriting model factors in financial history, credit score (650-680), income; borrowers must be 18 and a U.S. resident
  • Fees – No origination, prepayment, or late fees; 4.24-23.23% APR depending on loan product, credit score
  • Credit score impact – Minimal
  • Consumer Reviews – Mixed

SoFi Loans Pros and Cons

SoFi Pros

  • Lower interest rates than many online lenders
  • Refinancing can combine both private and federal student loans
  • Borrower can refinance student loans multiple times with no additional fees
  • Interest discount of 0.25% for using autopay
  • Interest discount of 0.125% for additional loans
  • Tailored loan refinancing for medical, dental, law and MBA students

SoFi Cons

  • Minimum 650-680 credit score needed for most loans
  • Student loan refinancing does not have cost-saving benefits (e.g., public service forgiveness, income-based repayment) that federal loan consolidation does
  • To release a co-signer on student loan refinancing, borrower must re-apply
  • To get 0.125% discount, additional loans must be different products

How Does SoFi Work?

SoFi has grown from a core student loan refinancing business to a diversified financial company with 5.5 million members. Like other lenders that refinance student loans, its lower interest rates, and ability to consolidate multiple loans into a single debt attracts customers, and its student loan refinancing members number more than 450,000.

As it has expanded to include other products, SoFi has continued to focus on customers with solid credit. SoFI uses what it says is a proprietary underwriting model to evaluate applicants for all of its loans, and doesn’t specify a minimum credit score, but it’s generally believed to be 650-680. Other factors are responsible financial history, income vs. expenses, and employment status.

Would-be loan consolidators and borrowers can prequalify and get a loan rate online or with a cell phone app in minutes. If they are satisfied with the terms, they can proceed with a formal application.

There is a three-day rescission period on student loan refinancing once the loan has been approved and accepted. After that, SoFi sends the money to the borrower’s current loan servicers. Within a week to 10 days, the borrower will get an email from SoFi that explains how to set up an online payment account, with auto pay as an encouraged option. Payments are made to third-party servicer MOHELA beginning 30-45 days after approval.

With SoFi personal loans, someone borrowing $20,000 or less can get money directly deposited into their account as soon as the business day after approval. Larger loans may require more time.

Student Loan Refinancing vs. Consolidation

Student loan refinancing is not the same thing as student loan consolidation, which is offered only for federal loans. Consolidation combines federal student loans, and the interest rate is weighted to what the borrower was paying, but private loans can’t be included. Student loan refinancing is debt consolidation borrowing and has qualification requirements similar to other loans. That means that approval, and the interest rate, is focused on financial strength and credit worthiness. The better the borrower’s credit and income, the better the rate. A downside to student loan refinancing is that benefits offered for federal student loans aren’t available. The upside is, if a borrower has private student loans, refinancing is a good option to combine them and lower rates.

SoFi Student Loan Refinancing

SoFi student loan refinancing begins at $5,000 and ranges up to the full amount of the borrower’s student loan debt. Federal and private student loans are eligible, and there are refinancing options tailored for medical, dental, law and MBA students, as well as Parents Plus refinancing. The refinancing is serviced by third-party loan servicer MOHELA.

Terms are for 5, 7, 10, 15 and 20 years, with both variable and fixed-rate options. Fixed rate APRs are 4.99-8.74%; variable are 5.99-9.99%. Variable-rate loans with 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95%.

Borrowers who use auto pay, where the monthly payment automatically comes out of a bank account, get a 0.25% interest rate discount. This is a benefit on all SoFi loans.

Medical and dental professionals who have a student loan balance of more than $150,000 can get a slightly lower APR. Medical and dental residents can opt to pay $100 a month while in residency, though SoFi cautions the amount may not cover the loan’s interest, so could result in large payments when they start paying in full.

SoFi student loan refinancing is best for working graduates who have high-interest unsubsidized Direct Loans, Graduate PLUS loans, and private loans. Co-signers are allowed, but to release a co-signer, borrowers must reapply. The good news is, those with SoFi student loan refinancing can refinance as many times as they want, without paying a fee.

SoFi Mortgage Refinancing

Homeowners with equity can apply for SoFi mortgage refinancing with cash out, which can be used to pay off student loans, or for anything else. When mortgage rates are lower than student loan interest, the program is a way to cut monthly payments. SoFi has a lower credit score requirement for a mortgage refinancing or home equity loan, 620 or even less since the loan is based on home equity and the house is being used to secure it.

Borrowing against a home to pay student loan debt comes with risks. If the borrower can’t keep up with higher mortgage payments, the lender can foreclose. Using mortgage equity for student loan refinancing also means the borrower loses the tax advantage a student loan brings. A home equity loan or line of credit is only tax deductible if it’s used for specific home repairs.

Still, cash out mortgage refinancing holds an allure for those with substantial home equity and have cosigned student loans or used parent loans to fund a child’s education. They can usually shave several percentage points off their interest by converting a student loan into a mortgage payment.

SoFi Personal Loans

SoFi customers can apply for personal loans that can be used for many purposes, including credit card and student loan debt consolidation, home improvements and paying medical bills. Amounts range from $5,000 to $100,000 for 3-7 year loans. The average amount borrowed in 2022 was $30,000. APRs range from 8.99% to 23.43% (with 0.25% autopay interest rate discount and 0.25% direct deposit interest rate discount). Eligibility requirements are similar to student loan refinancing, but a credit score of at least 680 may be necessary.

SoFi Loan Discount, SoFi Money

SoFi members who meet a balance minimum and are in good standing can get a 0.125% interest rate discount on additional loan products, as long as it’s not the same product they’re already paying on. For instance, a student loan refinancer can get a 0.125% interest discount on a personal loan.

SoFi also offers an app-based cash management account, SoFi Money. Before 2022, it was a deposit account with APY interest. That’s changed, and members must upgrade to SoFi checking and savings accounts to earn APY, which is as much as 4.30% on savings accounts with active direct deposit and 1.2% on all checking, and savings without active direct deposit.

What Makes SoFi Different from Other Lenders?

SoFi offers fringe benefits to borrowers that include free access to financial planners, career counselors and membership events. It’s also among a small group of lenders that consolidates both federal and private student loans.  It’s really embraced the nuances of student loan refinancing, with special products for medical, dental, law and MBA education borrowers, as well as parents.

SoFi Reputation and Consumer Reviews

SoFi ran afoul of the Federal Trade Commission in 2018 for making false claims about how much its borrowers can save through refinancing. It settled with the FTC in 2019, agreeing to back off its money-saving claims. Since then, things seem to have gone smoothly, and SoFi has an A-plus rating by the Better Business Bureau.

The Consumer Financial Protection Bureau has received 512 complaints about SoFi since 2011, with the highest amount in 2022, when it changed the model for SoFi Money. Complaints about student loan refinancing and other loan products are minimal.

On its website, it says 98% of users in a 2019-member survey said they’d recommend SoFi to friends and family. Positive online reviews cite the ease of getting a loan, the good rates, and the ability to refinance as many times as a borrower wants to.

Negative reviews on the BBB website and elsewhere online focus on customer service, the credit requirements necessary to get a loan and technical glitches.

What Are the Requirements to Qualify?

To qualify for SoFi student loan refinancing, applicants must be graduates of a four-year accredited college or university or have a two-year associate degree. They must be employed or have assurance of a full-time job that will start within 90 days.

SoFi’s underwriting model considers free cash flow, credit score, as well as strong financial history, professional credentials, and income. Even borrowers who meet the minimum credit score (650-680 minimum) may not qualify for a loan if they have a lot of debt or an inconsistent or low income. Requirements for other SoFi loan products are similar, with credit score requirements higher for personal loans, and lower for mortgage refinancing.

As with almost all accredited lenders, borrowers must be at least 18 and a U.S. resident, and have a Social Security number and a bank account.

What Are SoFi’s Repayment Terms and Loan Fees?

SoFi doesn’t charge loan origination fees or have prepayment penalties if a loan is paid off early.

It also doesn’t charge late fees, but that doesn’t mean there aren’t financial consequences for those who make a late payment, pay less than what’s due or miss a payment. All of those missteps accumulate more interest, which means paying more overall and higher payments.

SoFi offers a 0.25% discount for auto pay, but the discount is terminated if auto pay is stopped. Auto pay isn’t required in order to get a loan, but SoFi encourages it and using it helps borrowers be consistent with payments.

Student loan refinancing is available for 5,7,10, 15 and 20-year terms and personal loans are available for 3 to 7-year terms. Student loan refinancing and personal loan payment periods begin 30-45 days after disbursement.

Borrowers who lose their job after taking out a SoFi loan are eligible for the Unemployment Protection Program, which suspends monthly payments for borrowers in three-month increments. If there’s a co-signer, both must be unemployed to qualify. There is a 12-month cap on UPP for the life of the loan.

Interest will continue to accrue while payments are suspended and be added to the principal balance at the end of each forbearance period. To be eligible, the borrower must provide proof they’ve applied for and are eligible for unemployment compensation and work with SoFi counselors on finding a job.

Who Is a Good Candidate for SoFi Refinancing?

SoFi claims it keeps its rates lower than other companies with its selective underwriting. By focusing on candidates with high credit scores and solid career prospects, it reduces the risk that comes with offering loans to a wider range of borrowers.

If you’re a college graduate with good credit and a promising career path, SoFi student loan refinancing is worth evaluating. Whenever you make a financial decision that involves years of payments and tens of thousands of dollars in borrowing, it pays to do serious comparison shopping before making a commitment.

Alternatives to SoFi Refinancing

If you don’t qualify for SoFi student loan refinancing, there are options to get a loan with bad credit.

Some other online loan options to consider are:

  • Upstart is there for borrowers with credit scores as low as 580 can apply for a personal loan of 36 or 60 months, with a maximum $50,000. There are origination fees on some loans. Money is usually available within days.
  • Credible is another option for borrowers with low credit scores. Credible, Upstart’s parent company, requires a minimum credit score of 600 and lends up to $100,000. Terms are 12 to 84 months, and APRs range from 5.40-35.99%. Credible works with multiple lenders, so applicants get several offers to choose from, some of which may have origination or other fees.
  • LightStream caters to borrowers with good credit and offers low-interest debt consolidation loans up to $100,000. It doesn’t specify a minimum credit score, but 680 or higher is considered necessary. Assets like savings or a retirement account work in an applicant’s favor. Rates are capped at 20.49%. A downside is that there’s no prequalification option, so if you want to see if you qualify it counts as a hard credit pull. If you’re not sure your credit history will qualify you, don’t damage it further with the credit inquiry.
  • Prosper is the original peer-to-peer lending company. It doesn’t specify a minimum credit score, but its website says scores under 600 likely won’t qualify. It allows up to a 50% debt-to-income ratio, offers loans from $2,000 to $50,000, and repayment plans from 2-5 years. APRs range from 6.99%-35.99%, with origination fees of 2.41%-5%. Online application approval and loan money may be available as soon as 24 hours.
  • Discover has APRs of 6.99%-24.99%, with loan amounts $2,500-$40,000, and repayment terms 36-84 months. Credit scores can be a little lower than what SoFi allows. Discover’s “buyer’s remorse” option allows a borrower to return the loan money within 30 days of receiving it with no interest charged.

Alternatives to Personal Loans

There are other ways to consolidate or eliminate credit card, student loan or medical debt without borrowing more money. Sometimes all it takes is getting your budget squared away and getting serious about making payments.

If you need help with figuring out how to budget and pay down student loans, credit card or medical debt, talk to a credit counselor at a nonprofit credit agency. Credit counselors are required by law to offer advice that’s in your best interest, rather than pitch a product. They will go over your finances and debts with you and review options for reducing debt and getting a handle on your bills.

A credit counselor may suggest a debt management plan. This is not a loan, but a program offered by nonprofit credit counseling agencies that helps reduce the interest rate on credit cards, which reduces your monthly payment and eventually reduces the amount you’ll pay overall.

Counselors work with creditors on your behalf to get the lower rates. You pay a fixed monthly amount to the credit counseling agency, and they pay off your unsecured debt in 3-5 years.

About The Author

Maureen Milliken

Maureen Milliken has been writing about finance, banking, investment, entrepreneurship, real estate and other related topics for more than 30 years. She started as the “Business Beat” columnist for the now-defunct Haverhill (Mass.) Gazette and currently is one of the hosts of the Mainebiz business-focused podcast, “The Day that Changed Everything” in addition to her daily writing. She also is is the author of three mystery novels and two nonfiction books.


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