Sofi Loans is a company offering a number of different types of loans to customers. To that end, Sofi offers personal loans, mortgage loans, student loans, private loans, and other types. Here, we’ll dive into their offerings and tell you more about what they are, and more importantly, whether or not their loans are a […]
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Sofi Loans is a company offering a number of different types of loans to customers. To that end, Sofi offers personal loans, mortgage loans, student loans, private loans, and other types. Here, we’ll dive into their offerings and tell you more about what they are, and more importantly, whether or not their loans are a good value.
What is a Sofi Loan?
Sofi loans come with a number of different features, depending on what kind of loan you get. However, they take a slightly different approach than banks for giving loans. They offer lower rates than most banks can, because they cut back on overhead by being online-only. Without the need for brick and mortar locations, they pass those savings on to customers.
They also look at more factors than traditional banks when considering a customer for a loan. While traditional banks focus almost entirely on income, credit score, and debt-to-income ratio, Sofi looks at factors like education and estimated overall cash flow as well.
They offer all the loan types of a “normal” lender: there are Sofi student loans, Sofi mortgage loans, and other types.
Sofi Loan Terms & Requirements
Sofi Loans have generally lighter requirements than traditional banks. That said, when applying for any loan, it always helps if you have a better credit score and a higher income level. Fixed and variable rates will be different depending on these and other factors, and what kind of loan you are applying for.
For student loan refinancing, for example, Sofi’s fixed rate loans can run can be anywhere between 3.69% – 8.074%. For variable rate loans, they offer 4.80% to 11.40% with auto pay, 5.05% to 11.65%. Choosing auto-bill pay allows you to get lower rates.
In general, Sofi does not charge an origination fee, which removes what is usually a .5%-1% fee on your total loan. These are especially common for mortgages, and are charged as a one-time fee for initiating the loan. Loan terms, depending on the type of loan, can be 5, 7, 10, 15 or 20 years.
Monthly payments, like interest rates, vary based on how much you borrow and what your financial standing is. If you have credit cards with outstanding payments, your rates will be higher. Sofi’s rates are generally reasonable, but having a good credit score greatly improves your interest rate and monthly payments. There can be late fees applied with Sofi as well, which is standard for any type of loan.
Sofi Application Process
One thing Sofi Loans is known for is their lightning-fast application, approval, and payment process. Same-day approval is standard for many applications, and some customers have their funds the very next business day. For others, it takes up to a week. This can make all the difference when you need the money in a hurry!
Their application process can be done entirely online, making it easy to apply. You’ll have to provide standard information and documents such as a government-issued ID or driver’s license, social security card, or birth certificate to confirm your US citizenship. You also have to prove your home address using a utility bill, lease agreement, or voter registration card.
Financially, you’ll need to prove your standing as well. This is done by providing documents like bank statements, tax forms, or copies of your tax returns. If you have any questions or problems throughout the process, they have 24/7 customer support at the read to help you out any day of the week, even on Sundays. Whether you’re doing loan refinancing or need some other loan type, their customer service availability is a cut above the rest.
The initial pre-approval us determined by a “soft pull” of your credit that, while it doesn’t look at as much information, doesn’t affect your credit score. Only after you give more details do they do a “hard pull” to gather more data and give final approval.
Pros of Sofi Loans
There are lots of pros to Sofi Loans. Some of the biggest include their fast, easy application process that can be done entirely online. Another big positive is their seven-day customer service, which is much more convenient than the typical Monday through Friday service lines offered by other lenders. There’s also no required credit history to apply for a loan.
Sofi also offers a very unique service: unemployment protection. If you become unemployed after taking out a loan with them, Sofi won’t just freeze your payments…they’ll offer you career counseling to help you find a new job. You’ll still owe interest, but this offering gives borrowers tremendous peace of mind. There is also no prepayment penalty on Sofi loans.
Lastly, Sofi also engages in a “social finance” concept. They organize networking events and dinners for its customers where you can meet other people, swap financial advice, and share stories.
Cons of Sofi Loans
Even though Sofi Loans is great for many people, you need a high income (think $100,000 or more annually), and a high credit score to be approved. While Sofi advertises that there is no minimum credit score or income, realistically, most of their borrowers have a credit rating of 700 or higher. This is very high, so you can always try to apply if your score is lower, but your chances of approval won’t be very good.
The idea that there are no minimums officially, but that being below certain levels can still get you denied, creates a slightly misleading situation for those with lower income or less-than-stellar credit.
Sofi Loans is a great option for many borrowers. However, you should have a robust income and strong credit score in order to avoid being declined. That said, their customer service line is open seven days a week, so you can call in before you start the application process to get a better idea if it’s worthwhile for you to apply. It’s also true that having a lot of credit card debt isn’t going to get you the lowest rate, and Sofi is no different. Sofi is a good fit for those with a higher income and excellent credit. For these customers, they have flexible repayment terms.
Student loan borrowers with great credit and others who practice good wealth management and have a very good credit score are a great fit for Sofi. Check them out!
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