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SoFi Review: Refinancing Student Loans and Borrowing Parent Loans

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SoFi Review: Refinancing and Borrowing Student Loans

Social Finance, known as SoFi, is the closest thing to a household name in the student loan refinancing market. It became the first company to refinance federal and private student loans together in 2011. It also offers personal loans, mortgages and loans for parents who want to borrow to help pay for their child’s college.

SoFi student loan refinancing review

SoFi parent loan review

SoFi student loan refinancing review

SoFi offers student loan refinancing for borrowers with associate’s degrees or higher, including medical residents; and parents with PLUS loans.

Student loan refinancing means replacing one or more student loans with a single lower-rate loan. It may be right for you if you:

  • Have private student loans.
  • Have federal student loans and don’t plan to use federal benefits such as income-driven repayment and loan forgiveness — you’ll lose access to those programs if you refinance.
  • Have good credit, a stable income and a history of paying your debt on-time.
  • You want to transfer your parents’ PLUS loan to your name.

Refinancing isn’t for you if you have poor credit, an uncertain job situation or have federal loans and want to pursue an income-driven repayment plan or loan forgiveness program.

» MORE: Compare student loan refinance lenders


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SOFI STUDENT LOAN REFINANCING AT A GLANCE

  • Fixed rates: 3.25% to 7.25% APR; Variable rates: 2.58% to 7.07% APR
  • Loan duration: 5, 7, 10, 15 and 20 years
  • Eligible loan balances: $5,000 up to the full loan balance

 

Rates updated Feb. 2, 2018.

APRs include 0.25% rate reduction for automatic payments.

Medical refinance loans are not available to borrowers in Mississippi, Montana and the District of Columbia. The minimum medical refinance loan is $25,001 for borrowers in Pennsylvania, $15,001 for borrowers in Connecticut and Kentucky, and $10,001 for medical residents in all other eligible U.S. states.

Can you qualify?

You’ll have a good chance of qualifying if you:

  • Have good credit: SoFi says its minimum credit requirement “varies,” but the average approved borrower for student loan refinancing has a score above 700.
  • Have enough income to make loan payments. You must be employed, have an offer to start a job within the next 90 days, or have sufficient income from other sources. The average approved borrower has an annual income above $100,000, according to the company.
  • Graduated from an eligible school. You must have attended a program that’s part of the government’s Title IV financial aid program and earned an associate’s degree or higher.
  • Are a U.S. citizen, permanent resident or visa holder. SoFi recognizes J-1, H-1B, E-2, O-1 and TN visas.

Additionally, SoFi considers borrowers’ career experience, cash flow and cost of living based on their location.

» SIGN UP: Check your credit score for free

How to refinance student loans with SoFi

Before you decide on a student loan refinance lender, compare multiple options to make sure you’re getting the best rate you qualify for. In addition to interest rates, compare lenders’ repayment options and the flexibilities they offer for borrowers who are struggling to make payments.

If you’re ready to refinance with SoFi, you can apply on SoFi’s website. Here’s how.

  1. Check your rate. It won’t hurt your credit score, because SoFi will do what’s known as a soft credit pull to estimate your rate. You’ll need to provide the loan amount you want to refinance, along with information about your school and employment. This step takes less than two minutes, according to SoFi.
  1. Choose a loan term and interest rate type. You’ll save the most money by choosing the shortest repayment term you can manage. You can choose between a fixed rate, which will stay the same throughout the life of the loan, or a variable rate, which could change monthly as economic conditions fluctuate.
  1. Upload the necessary documents. You’ll need photos or screenshots of the following:
  • Income verification, such as your most recent pay stub.
  • Identity verification, such as your driver’s license, U.S. passport or green card.
  • The most recent billing statement for the loans you want to refinance.
  1. Add a co-signer (optional). Enter the name and email address of the person you want to co-sign your loan. SoFi will send them the co-signer application.
  1. Agree to a hard credit pull. It will slightly hurt your credit score, but it’s routine for lenders to do a hard credit check before approving borrowers for a loan.
  2. Sign the final paperwork. You can do so online. The average time from preapproval to funding is about 14 days, according to SoFi.

SoFi student loan refinance details

  • Loan servicer: MOHELA
  • Application or origination fee: No
  • Prepayment penalty: None
  • Late fees: Yes; $5 late fee if you reach 15 days past due
  • Co-signer release option: No

Repayment options for struggling borrowers

Throughout your repayment period, it’s understandable that you may need some leeway on your payments. SoFi offers these options:

  • Deferment: Pause your loan payments if you return to graduate school at least half-time, serve on active military duty or undergo rehabilitation for a disability.
  • Forbearance: Postpone your loan payments for three months at a time, up to 12 months total, if you lose your job through no fault of your own. SoFi calls this its Unemployment Protection Program, and most lenders offer similar forbearance policies. To qualify for SoFi’s program, you must work with SoFi’s Career Advisory Group to look for a new job.
  • For medical residents and fellows: You can choose to pay just $100 a month during your residency or fellowship for up to 54 months. Interest will still accrue during that time. If your payments don’t completely cover the interest, it will be capitalized, or added to your principal balance, after your residency or fellowship period.

SoFi extras

SoFi offers its borrowers the following perks:

  • Career coaching: Work with a one-on-one advisor to plan a career transition, search for a job and improve your personal branding.
  • Community events: Attend workshops, speaker series and social events such as happy hours and dinners.
  • No-fee investing: Use SoFi’s wealth management platform without paying any fees.
  • Entrepreneur Program: Apply to SoFi’s accelerator program to get seed financing, mentorship and access to venture capitalists at a demo day.

Frequently asked questions

  • Can I apply with a co-signer? Yes. You’ll likely get a lower rate if you do.
  • Is there a co-signer release option? No.
  • Can I qualify if I’ve filed for bankruptcy in the past? Yes, after the bankruptcy drops off your credit report. This happens after seven years for Chapter 13 bankruptcy and after 10 years for Chapter 7.
  • Can I qualify if I didn’t go to a Title IV-accredited school? No.
  • Can I qualify if I didn’t graduate? No.

» MORE: Read more student loan refinancing FAQs

Contact SoFi

SoFi customer support: 855-456-7634

Email: customerservice@sofi.com

SoFi parent loan review

SoFi’s parent loans are private student loans for parents who want to borrow to help cover their kids’ college costs.

The Department of Education offers federal parent PLUS loans for the same purpose. Federal parent loans have some benefits that private parent loans don’t, including access to income-contingent repayment and Public Service Loan Forgiveness. However, if you have good credit and a large enough income to afford the loan payments, you may get a lower interest rate with a private parent loan.

A SoFi parent loan may be right for you if you:

  • Need to fill a gap in the financial aid your child received after filling out the Free Application for Federal Student Aid, known as the FAFSA.
  • Have good credit or a creditworthy co-signer.

» COMPARE: Private student loans


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SOFI PARENT LOAN AT A GLANCE

  • Fixed: 4.25% to 8.00% APR; Variable: 4.02% to 7.45% APR
  • Loan duration: 5 or 10 years
  • Loan amounts: $5,000 minimum. Maximum: The school’s cost of attendance.

Rates updated Feb. 2, 2018.

APRs include 0.25% rate reduction for automatic payments.

Variable rates are not available to borrowers in Illinois or Ohio.

Before borrowing a private student loan from SoFi or any lender, submit the FAFSA to apply for federal grants, work study and federal student loans. Max out federal student loans before using private ones because federal loans have more borrower protections and don’t require a co-signer.

» MORE: NerdWallet’s FAFSA Guide

Can you qualify?

There’s a good chance you’ll qualify for a SoFi private student loan if you:

  • Have good credit: SoFi says its minimum credit requirement “varies,” but the average approved borrower for student loan refinancing has a score above 700.
  • Have enough income to make loan payments. You must be employed, have an offer to start a job within the next 90 days, or have sufficient income from other sources. The average approved borrower has an annual income above $100,000, according to the company.
  • Have a child attending an eligible school. Your child must be at least a half-time student at a Title IV accredited school. They must be under age 24, unmarried and have no legal dependents. You must be the biological or legally adoptive parent, or a legal stepparent.
  • Are a U.S. citizen, permanent resident or visa holder. SoFi recognizes J-1, H-1B, E-2, O-1 and TN visas.

Additionally, SoFi considers borrowers’ career experience and cash flow. You don’t need a college degree to qualify for a SoFi parent loan, but you may get a better rate if you have one.

» SIGN UP: Check your credit score for free

How to apply for a SoFi student loan

Before you take out a private student loan, compare your options to make sure you’re getting the best rate you qualify for. In addition to interest rates, compare lenders’ repayment options and the flexibility they offer for borrowers who are struggling to make payments.

If you’re ready to borrow through SoFi, you can apply on SoFi’s website. Here’s how:

  1. Check your rate. It won’t hurt your credit score, because SoFi will do what’s known as a soft credit check to estimate your rate. You’ll need to provide information about your education and employment, and your child’s education, including the amount you want to borrow. This step takes less than two minutes, according to SoFi.
  1. Choose a loan term and interest rate type. You’ll save the most money in interest by choosing a five-year repayment term, if you can manage the monthly payment. You can choose a fixed rate, which will stay the same throughout the life of the loan, or a variable rate, which could change monthly as economic conditions fluctuate.
  1. Upload the necessary documents. You’ll need scans, photos or screenshots of the following:
  • Income verification, such as your most recent pay stub.
  • Identity verification, such as your driver’s license, U.S. passport or green card.
  • A private education loan application self certification form, which you can download from the application. Lenders issuing private student loans are required by law to have borrowers sign this form, which explains that there is free and low-cost federal financial aid available.
  • Your child’s financial aid award letter.
  1. Agree to a hard credit pull. It will slightly hurt your credit score, but it’s routine for lenders to do a hard credit check before approving borrowers for a loan.
  2. Sign the final paperwork. You can do so online. The average time from preapproval to funding is about 14 days, according to SoFi.

SoFi parent loan details

  • Grace period: None
  • Loan servicer: MOHELA
  • Application or origination fee: No
  • Prepayment penalty: No
  • Late fees: Yes; $5 late fee if you reach 15 days past due.
  • Co-signer release available: No

General repayment options

You’ll be required to start making payments 30 to 45 days after the loan is funded. There is no deferment option for parent loan borrowers.

Repayment options for struggling borrowers

If you lose your job through no fault of your own, you can postpone your loan payments for three months at a time, up to 12 months total. SoFi calls this its Unemployment Protection Program, and most lenders offer similar forbearance policies. To qualify for SoFi’s program, you must work with SoFi’s Career Advisory Group to look for a new job.

SoFi extras

SoFi offers its borrowers the following perks:

  • Career coaching: Work with a one-on-one advisor to plan a career transition, search for a job and improve your personal branding.
  • Community events: Attend workshops, speaker series and social events such as happy hours and dinners.
  • No-fee investing: Use SoFi’s wealth management platform without paying any fees.
  • Entrepreneur Program: Apply to SoFi’s accelerator program to get seed financing, mentorship and access to venture capitalists at a demo day.

SoFi parent loan FAQs

  • Can I apply with a co-signer? Yes, if the co-signer is another parent or legal guardian.
  • Is there a co-signer release option? No.
  • Can I qualify if I’ve filed for bankruptcy in the past? Yes, after the bankruptcy drops off your credit report. This happens after seven years for Chapter 13 bankruptcy and after 10 years for Chapter 7.
  • Can I qualify if my child isn’t attending a Title IV-accredited school? No.

Contact SoFi

SoFi customer support: 855-456-7634

Email: customerservice@sofi.com

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