NerdWallet rating: 5.0 / 5.0
Good for: Good credit, debt consolidation
Getting a SoFi personal loan can feel like joining an elite club, thanks to the lender’s high credit standards.
SoFi is a good fit for those who:
- Have excellent credit scores. SoFi’s minimum credit score is 660, but borrowers generally have scores above 700.
- Have high incomes. The median annual income of a SoFi borrower is $106,000, according to the company.
- Are new to credit. There is no minimum requirement for years of credit history.
- Want support and networking opportunities early in their careers. SoFi arranges social events such as happy hours for its borrowers around the country. Borrowers also have access to career counseling services. If you become unemployed while paying off a SoFi loan, the lender will pause your payments and help you find a new job, but your payments will still accrue interest.
If you don’t have excellent credit, you might be better off considering these loan options.
Detailed SoFi personal loan review
To review SoFi, NerdWallet collected more than 30 data points from the lender, interviewed company executives, completed the online loan application process with sample data, and compared the lender with others that seek the same type of customer or offer a similar product.
Social Finance, known as SoFi, was founded by Stanford alumni in 2011 and is best known for its student loan refinancing product targeted at recent graduates with high incomes. The online lender expanded into mortgages and personal loans in 2014 to further its goal of becoming a full-fledged financial services company.
Online lenders Earnest and LightStream also cater to people with excellent credit and high incomes. Earnest charges no fees and offers flexible payment options to those with thin credit, while LightStream has very low interest rates that vary according to loan purpose, but requires several years of credit history. To its well-qualified borrowers, SoFi offers loans of up to $100,000, which is higher than most online lenders, as well as fixed and variable interest rates. The average rate for a three-year loan at SoFi is 8.5%, according to the company.
To SoFi, an applicant’s credit score doesn’t matter as much as other factors, co-founder Dan Macklin says.
For student loan applicants, he says, a history of making on-time payments, high earning potential and the industry they work in are more important. The company uses the same approach to evaluate personal loan applicants, lending to those who have a solid — if short — credit history and enough cash flow to cover their loan payments and living expenses.
How to apply
Fill out an application on SoFi’s website to see if you pre-qualify for a loan. You’ll need to create a login and provide information about your education and employment, but you don’t need to provide your Social Security number. SoFi runs a soft credit check that doesn’t affect your credit scores to see if you qualify. The lender reports repayment activity to all three credit bureaus.
You can see the terms of your loan and select the one that fits your needs. You can also choose between a fixed and variable interest rate and select the autopay option to get a slightly lower rate.
Upload documents to verify your income and identity. SoFi accepts photos of documents.
SoFi will process the application and call you if necessary. After you are approved, you can choose a bank account to receive your money and sign the loan agreement. SoFi conducts a hard credit check, which affects your credit, before finalizing the loan.
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Minimum requirements for a SoFi loan
- Minimum credit score required: 660, but typically 700+.
- Minimum gross income required: None, but borrowers’ median income is $106,000.
- Minimum credit history: None.
- Maximum debt-to-income ratio: None.
SoFi’s lending terms
- Offers both variable and fixed rates, ranging from 5% to 15%.
- Minimum loan amount: $5,000.
- Maximum loan amount: $100,000.
- Minimum loan duration: 3 years.
- Maximum loan duration: 7 years.
- Time to receive funds: 10 days.
SoFi’s fees and penalties
- Origination fee: None.
- Prepayment fee: None.
- Late fees: 4% of payment due or $5, whichever is lower, after 15-day grace period.
- Personal-check processing fees: None.
Before you take out a personal loan
If you have a good credit score and are borrowing to consolidate debt, you have cheaper options than an unsecured personal loan. If you’re a borrower with good credit and a high income, you can qualify for a 0% interest credit card. Someone who owns a home might be able to get a home equity line of credit. And you’ll still want to compare other lenders. (See “Personal Loans for Debt Consolidation.”)
Check your credit and know your financial strengths. Your chances of approval and the interest rate you get depend on your credit score, but also on the length of your credit history, your income and other debts. A high credit score may be offset by high debt levels, for example, or a low score could be bolstered by a high income.
Learn how personal loans work. All lenders require certain personal information to verify your identity and your income, as well as check your credit.
Calculate payment scenarios. Run the numbers on different loan amounts at different rates to see how the payments might affect your monthly budget.
Have a plan for getting out of debt. Personal loans are an option to tackle debt, but in the long run, a budget that lets you live off your earnings and put something away for emergencies is crucial.
Updated Oct. 12, 2016
Personal Loans Ratings Methodology
NerdWallet’s ratings for personal loans awards points to lenders that offer consumer-friendly features, including: soft credit checks, no origination fees, payment options, short time to funding, interest rate caps of 36%, and absence of prepayment penalties. Features are considered for their positive impact on consumers’ credit history and financial health. To ensure accuracy and consistency, our ratings are reviewed by multiple people on the NerdWallet Personal Loans team.
— Among the very best for consumer-friendly features
— Excellent; offers most consumer-friendly features
— Very good; offers many consumer-friendly features
— Good; may not offer something important to you
— Fair; missing important consumer-friendly features
— Poor; proceed with great caution