Borrowize's Take: SoFi offers top-notch personal loans for those lucky enough to qualify
Social Finance Inc., also known as SoFi, is a high quality, affordable credit alternative for borrowers with excellent credit. Our only complaint is that they don't offer a mainstream loan for borrowers with good credit, especially since so many people could benefit from their personalized client perks.
That being said, we understand they're focused on a specific market niche, and believe there are enough borrowers within it to continue growing rapidly while also keeping default risk low.
If you've been approved for a SoFi loan, it means you'll likely qualify for most of the other top quality credit offers, such as 0% credit cards and private banking products at a major bank.
Before choosing a product, you should keep in mind that a SoFi personal loan is a term loan and not a line of credit, which means you'll pay equal monthly principal and interest payments on the total loan balance even if you don’t use the money. Therefore, if you just want to have immediate access to credit in the event of an unforeseen expense, or if you pay your credit card balance in full each month, then a premium credit card with rewards or a bank line of credit might be a better fit.
However, if you have a major expense coming up such as a home improvement project, a personal business expense, or a major life event like a wedding, or vacation, then SoFi is your best option.
SoFi offers lower interest rates than most banks and credit card companies, and will lend you up to $100,000, which is more than most online lenders. In addition, you will have a set repayment schedule and a wealth of personalized benefits at your disposal.
SoFi personal loans at a glance:
- Loan Amounts & APRs: SoFi offers loans of $5,000 - $100,000 with fixed APRs between 5.49% and 14.24% that charge equal monthly payments over a 3 to 7 years
- Loan Uses: Pay off credit card debt, home improvement project, or major life event (wedding, moving, medical, etc.)
- Fees & Fine Print: Follows through on transparency and common-sense pricing by not charging any origination fees, payment processing fees, or most importantly, prepayment fees. Charge a late payment fee equal to the greater of $5 or 4% of missed monthly payment.
SoFi is a good fit for:
SoFi personal loans are a good fit for established borrowers with excellent credit, high earnings and limited debt obligations, or those with considerable liquid assets.
The company also targets "HENRYs" (High Earners who are Not Rich Yet). HENRYs tend to be recent graduates with an education from a top notch school with high salaries or who have strong future earning potential and solid job security.
While SoFi does not place a big emphasis on traditional credit scores, their average borrowers typically have FICOs of 750 or above and annual salaries greater than $100,000.
SoFi is NOT a good fit for almost everyone else. We want to emphasize that most people will NOT qualify for a SoFi loan. If you saw their Super Bowl ad, you may recall the ending line: “Find out if you’re great at Sofi.com… you’re probably not.”
SoFi Company Snapshot: Not your typical financial institution... in a good way
SoFi, has big plans to shake up the personal finance sector and compete with large banks for coveted life-long clients. Judging by their Super Bowl ad a few years ago, rapid growth, and continued run of success, they seem to have to the long-term game plan and resources to take on the challenge.
SoFi got its start as a student loan refinance company catering to young, up-and-coming high-earners with post-graduate degrees. Over the last couple of years, they expanded beyond student refinance loans to personal loans, mortgages, wealth management, and insurance products.
In an effort to offer more traditional bank products, they recently acquired Zenbanx, which will add deposits, online savings accounts, and ATM cards to their suite of products. Their vision is to become the anti-bank alternative.
SoFi is unique because it makes clients feel like they're part of an elite club
SoFi claims to be much more than a lender, and in fact, it is. They realize that to attract their target customers – most of whom are millennials with a negative opinion of financial services companies – they have to offer additional, long-lasting value. As such, SoFi not only emphasizes affordable products but also positions itself as a financial partner.
SoFi’s customers have access to unique perks such as networking events, career training, wealth management advice, entrepreneurial programs, and other benefits. If you happen to lose your job, SoFi’s unemployment protection will pause your monthly payments, and the career strategy team will help you get back on your feet.
How to Apply for a SoFi Loan:
Start your application process with SoFi by first checking to see if you qualify using their online rate checker. Doing this will only take you a couple of minutes and require you to create a user profile and enter a few personal details such as education, employment status and income. SoFi performs a "soft" credit check, which means that getting a pre-qualified rate NOT affect your credit score.
If you're approved, then congratulations! From there, the SoFi application process is straightforward and can be done entirely online in about 15-30 minutes. First, SoFi will present you with one or more loan offers depending on your financial background, and typically include a fixed and variable rate option, as well as different repayment terms.
After you select the best loan option for you, you will be asked to complete the application process and verify certain personal information, at which point they will also perform a "hard" pull, which can negatively impact your credit score. To do so, you will need the following:
- Drivers license
- Recent pay stubs
- Bank account information
- List of assets and liabilities
Once your application has been verified, you can review and sign the final loan agreement electronically, and your funds should be deposited between 4 and 7 business days.