SoFi Personal Loan: A Review of How it Works

Posted on February 25, 2021 in Loans

In today’s world of revolving debt and credit, personal loans are plentiful. Yet, SoFi is one of the most popular lenders among millennials and the upcoming Generation Z.

Started in 2011 by a Stanford graduate, SoFi is a leading online agency that specializes in student debts, refinancing, and restructuring. However, they do offer other types of loan products including mortgages and personal loans.

With a mission to “help people reach financial independence,” SoFi has a cult following beyond belief and as of 2020 has funded more than $50 billion in loans — but, with such popularity some newcomers may wonder if SoFi is a tool for growth or another company fueled by social media hype.

Below we’ll dive deeper into SoFi’s offerings and provide some knowledge to help you make the best decision.

SoFi Personal Loan Requirements

SoFi differs the most from other lenders because it is not a bank and doesn’t consider itself to be a traditional financial institution. Nonetheless, the company’s lending practices are still held to high regulatory compliance standards.

When it comes to personal loans, and other SoFi loan offerings, the biggest benefit comes in the form of no origination fees. This means there are no establishment fees that are typical when you initiate an account with a bank, broker, or company. Usually, this origination fee can either be a set amount or percentage of the loan.

With SoFi, there are also no prepayment fees or late fees — but eligibility factors are in alignment with most other financial institutions.

To obtain a loan from SoFi, you must meet the following requirements;

  • You must be the age of majority in your state and be able to enter into a binding contract.
  • You must be a US citizen, permanent resident, or visa holder (see site for visa details).
  • You must have proof of your residency status such as a permanent residency card (Green Card) or have the ability to apply with a creditworthy co-borrower who is a US Citizen or permanent resident.
  • You must reside in a state where SoFi Lending Co. is authorized.
  • You must be employed, have a sufficient source of other income, or have an offer to begin employment within 90 days.

SoFi Personal loans are not available to residents of Mississippi and Michigan residents can only have one SoFi Personal Loan at any given time.

SoFi Personal Loan Rates

SoFi personal loans can be intimidating to those who require smaller amounts. Personal loans have a minimum loan amount of $5,000 and maximum of $100,000 — some states may require an even higher minimum loan amount.

According to Credible, SoFi wants to see at least $1,500 in free cash flow, but most borrowers that complete the SoFi approval process have $2,500 or more left over each month after paying their bills.

Regardless, if you are considering a SoFi loan, the lender offers both fixed- and variable-rate loans. Sofi offers a range of rates listed from fixed rates between 5.99% to 18.83% APR with loan terms from 3 to 7 years. Your rate is based on a number of factors and SoFi offers a no obligation application process.

SoFi Personal Loan Calculator

If you are considering a SoFi loan as an option for consolidation or transferring the balance of your debt, the company offers you the Personal Loan Calculator to help you check the rates currently available and secure your decision.

According to the SoFi website, the Personal Loan Calculator will show exactly how much interest you could save by paying off your existing loan or credit card with a SoFi Personal Loan. This is done by comparing your existing debt information to see how lowering your interest rate and monthly payments can help you save on total interest.

Best yet, this is all done in a side by side comparison of your loan or debt vs a SoFi personal loan, directly on the company’s site with no login or membership required. This makes it easy to see if you qualify to receive the lowest rate, and to get specific expectations for your Sofi personal loan.

SoFi also offers calculators to help determine Student Loan refinance options, Mortgages, Home Affordability, and more.

Getting Approved for a Personal Loan Quickly

The SoFi lending process is also in alignment with our mobile age and your loan process can be completed through the SoFi website or from the company’s mobile app.

The process begins with a registration and account setup. You will need to provide all of your personal information, including school information even if you are not applying for Student Loan services. You should also be prepared to upload any supporting documents like proof of employment and residency.

As you continue your loan application process, you will be led through a credit check. At this time you can be pre-approved for your loan or additional steps will be provided to guide you through determining your eligibility.

Upon approval, rates and terms are provided. According to SoFi, once approved, your disbursement should be deposited within a few days.

SoFi Personal Loan Credit Score

Loan eligibility also depends on having a responsible financial history, credit score, and monthly income vs. expenses. Though SoFi has said to not have a minimum credit requirement, nine out of 10 SoFi members have a credit score of 700 or more. This is definitely something to consider before applying for a loan.

With that said, the average SoFi borrower has a FICO score of at least 753, gross income of $151,144, and $5,696 monthly free cash flow. Most reviewers agree that this lender is best for those who have free cash flow —income left after expenses— every month.

Does a SoFi Loan Hurt Your Credit?

Your credit score is determined by several factors including Payment History (35%), Amounts Owed (30%), Length of Credit History (15%), New Credit (10%), and Credit Mix (10%).

With that said, a new SoFi account can have a slight affect on your credit score. This impact could be either a positive or negative effect based on your own credit history. When using SoFi as a consolidating option consider aligning your loan with your overall amount owed and not much more to help ensure it doesn’t have a strong affect pon your credit score.

Regardless, any credit or loan requires a hard credit inquiry which can adversely impact your credit score — but this is a much smaller impact than other factors.

Can You Pay off a SoFi Loan Early?

While Prepayment clauses are still a mystery to most, some lenders will still charge investment costs, a percentage of the balances, or a flat-fee for early loan payoffs. As part of their commitment to no fees, SoFi is one of the lenders that doesn’t charge a prepayment penalty. This means with SoFi loan repayment options, you won’t be penalized for paying your loan off early.

SoFi Personal Loan Login

As a SoFi member, your Personal Loan login provides you access to benefits that help you with your finances and your career at no additional costs. This includes financial planning, referral bonuses, member rate discounts, an online community, access to the Unemployment Protection Program, career coaching, and career advice tools.

On top of that, SoFi offers exclusive access to experiences, dinners, happy hours, and other networking events. SoFi members can also take advantage of expedited entry to The SoFi Stadium in Los Angeles and are able to access The SoFi Member Lounge on site.

SoFi Loan Consolidation

When it comes to debt consolidation, most credit repair experts will warn against the use of consolidation loans because of how they affect your utilization ratio. However when considering interest rates and terms, SoFi is a viable money-saving option.

SoFi’s personal loan products include fixed personal loans with rates that range from 5.99% to 20.69% APR with auto pay, home improvement loans, credit card consolidation loans, relocation assistance, medical loans, and more.

Credit Card Consolidation

While transferring your balance from a credit card to a loan does nothing for your available credit, there are a few key benefits to using SoFi for credit card consolidation.

When utilizing a personal loan, as opposed to transferring your credit card balance from a high interest credit card to a lower interest credit card, you are changing the type of credit from revolving debt to installment debt. In this case,  your credit card will be paid off and your owed amount is reflected as another type of debt on your credit report.

With SoFi in particular, you can take advantage of this benefit along with lower rates in comparison to your credit cards.

Student Loan Consolidation

SoFi’s Student Loan consolidation services are among the most popular services in which the company provides.

Since beginning in the student loan refinancing space, the company has branched into other product lines including private student loans, law school loans, medical student loans, and parent loans.

Aside from providing financial assistance in the area of Student Loan consolidation, SoFi offers a platform for learning and personalized help. Prospective applicants can even benefit from job search assistance and hefty discounts on ACT or SAT prep courses.

If you are considering SoFi for student loan consolidation, you can rest easy as the company has been rated repeatedly as one of the best private student loan providers. Even lower than some federal loans, with a 60 month term fixed-rates are typically 4.13% to 11.52% with an autopay option or 1.77% to 11.89% at a varied-rate.

With a refinancing option, you can expect a 2.25% to 6.43% variable APR or a 6.88% fixed APR. Eligibility requirements also vary by loan type, but each loan type allows a 6 month grace period.

SoFi Personal Loan Customer Service & Phone Number

In alignment with the Americans with Disabilities Act (ADA), SoFi offers additional assistance for loan applications. Whether or not you require ADA accessibility options, SoFi customer service has been highly rated by Consumer Affairs and has achieved an A rating with the Better Business Bureau.

In the event that you require further assistance, be sure to contact SoFi by email at accessibilityteam@sofi.org or by phone at (855) 456-7634. Technical support is available through online chat or on Twitter @SoFiSupport.

Is SoFi legit?

When it comes down to it SoFi has a cult following for a reason. As from a very generous referral program where you and a friend each get $300 for approved referrals, SoFi has helped members pay off more than $22 billion in debt.

SoFi is truly a leading next-generation financial services platform. If you are still questioning whether SoFi is legitimate or a good loan option, we’re here to say SoFi is one of the best lenders you will find in today’s market.

Related blog posts

Need expert financial advice?

Let TurboFinance connect you with the best consulting services and resources to help you take control of your finances and find a path to build wealth.

TAKE CONTROL OF YOUR DEBT