SoFi is one of the largest student loan refinancing companies in the industry. With about $18 billion in refinanced student loans for more than 250,000 members, they specialize in helping young professionals manage their finances.
This SoFi student loan refinancing review will help you understand the pros and cons of the company so you can decide if it’s right for you.
SoFi student loan refinancing review: The basics
SoFi’s approach to refinancing student loans is different than that of many other lenders. Along with competitive repayment terms, the company also offers career support and wealth management services to its members. With these perks, SoFi offers you the opportunity for more than just repaying your student loans.
Here are some of the features of a SoFi refinancing loan:
- APR starting at 2.47% for variable rates and 3.90% for fixed
- Rate quotes without affecting your credit
- 0.25% interest rate discount if you enroll in AutoPay
- Repayment terms between five and 20 years
- Deferment option for those who go back to school, experience disability or serve in the military
- Forbearance option for those who lose their jobs
- No origination fees or prepayment penalties
- Minimum loan amount of $5,000, with no maximum borrowing amount
SoFi also offers an additional benefit for medical and dental school residents: affordable $100 monthly payments for up to four years.
To refinance using SoFi loans, you must be at least 18 years old (or your respective state’s age of majority) and a United States citizen or permanent resident. Your debt must be from a Title IV accredited college or university, and you must have completed your associate’s degree or higher.
You must be employed or show proof that your employment will start in the next 90 days, and you’ll need a minimum credit score of 650 to qualify.
What we like about SoFi student loan refinancing
As you can see from this post and other SoFi reviews, the lender is one of the leading student loan refinancers in the country — and it’s not hard to see why. Here are some of the advantages you may find at SoFi:
Not all refinancing lenders allow you to temporarily pause your payments through student loan deferment. However, SoFi reviews your situation generously, allowing you, for example, to defer your loans while in graduate school, as long as you’re enrolled at least half time. Similarly, you can defer your loans for active military service or if you are on disability rehabilitation.
Interest will still accrue during deferment, however, and your loan will be reamortized to adjust for this.
When you refinance with SoFi loans, you get access to free career coaching. You can schedule one-on-one sessions with career coaches and get help setting career goals, learn about personal branding and even receive tips for creating or improving your resume.
This career strategy also comes into play as part of the lender’s Unemployment Protection program. If you lose your job and enter your loans into forbearance, you’ll be required to use the career strategy services offered by SoFi. The company is invested in getting you back on your feet so you can comfortably manage your student loan debt.
Wealth management services
Not only can you get help with your career, but SoFi also offers its members access to wealth planning services. Through a combination of digital and person-to-person advising, you can set money goals and get help achieving those goals.
SoFi helps you manage your student loans and build wealth through tools like diversification, portfolio selection and automatic rebalancing of your investments.
Parent PLUS and private parent loan refinancing
If you’re a parent who took out Parent PLUS loans or private loans to pay for your child’s education, SoFi has solutions for you, too. They offer comprehensive refinancing services for parent loans, helping you manage the debt you took on to help your children.
What to keep in mind when considering SoFi loans
Even though SoFi is a respected lender, there are some potential disadvantages, depending on your financial situation. Here’s what you should know:
Minimum credit score
To qualify to refinance with SoFi, you’ll need to have a minimum credit score of 650. While SoFi reviews other criteria, including your financial history and your career experience, you won’t qualify to refinance student loans if you have a low credit score.
If you’ve had credit problems in the past, you can increase your chances of approval by adding a cosigner to your SoFi loan. A qualified cosigner can improve your chances of becoming eligible — and help you get a better interest rate. However, it can also add a week or two to the student loan refinancing process.
No cosigner release
If you do use a cosigner on your application, know that SoFi doesn’t allow you to remove them from your loan later, as some other lenders do. Your cosigner has to pass away, or you have to refinance a second time to remove them from the account.
You must have a degree
What if you attended school, but didn’t complete your degree? Unfortunately, SoFi student loan refinancing won’t be an option for you.
Unless you have at least an associate’s degree, you won’t qualify for refinancing with this lender.
Refinancing federal student loans
While refinancing could offer you a lower interest rate, note that you will lose certain borrower protections if you refinance federal student loans. Because the federal government doesn’t currently offer refinancing, any refinancing — including through SoFi — will turn your federal loans into private loans.
As a result, you won’t qualify for income-driven repayment plans or federal student loan forgiveness programs after you refinance with SoFi. If you’re trying to get forgiveness or worried that you might need an income-based repayment plan, it may not make sense to refinance your student loans.
Is SoFi refinancing right for you?
To sum up, SoFi might be a good choice if you…
- … can show consistent monthly income and comfortably afford the payments.
- … have a credit score of at least 650.
- … don’t plan to use income-driven repayment or federal student loan forgiveness on your federal loans.
- … have higher interest rates on your current student loans than what SoFi offers.
- … want access to program perks like career coaching and wealth management.
As you can see from our SoFi refinance review, these loans come with many perks and advantages that student loan borrowers can benefit from.
But before you decide to refinance student loans with SoFi, compare your other refinancing options. Carefully considering your circumstances and your financial needs as you decide about student loan refinancing can potentially save you a good deal of money in the long run.
Student Loan Hero has independently collected the above information related to SoFi refinancing loans, which is current as of Jan. 27, 2019, unless otherwise noted. SoFi has neither provided nor reviewed the information shared in this article.
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