Is college debt overwhelming? Are you looking for ways to pay off student loans faster at a cheaper interest rate? Then SoFi student loan debt refinancing might be right for you.
There is no arguing that college is expensive, and the cost of attendance is only getting higher. This is why numerous people opt for student loans as they try to complete their studies. However, paying off student loans or qualifying for student loan forgiveness can be a long and tedious process.
This is why individuals who have opted for student loans are always on the lookout for easier ways to repay them.
An option for student loan repayment is student loan refinancing. Although this type of refinancing can be applied to private and federal loans, it may or may not be the right choice for you.
One of the biggest loan financing companies in the US is Social Finance, also known as SoFi.
Although the company offers numerous perks for its customers, it has a few drawbacks that may deter potential customers.
SoFi Student Loans Refinancing Reviews & Overview
Established in 2011, SoFi, short for Social Finance, is one of the first online lenders to have introduced student loan refinancing for both private student loans and federal student loans.
Since its inception, the company has strived to achieve the success that it enjoys today with over 375,000 members and nearly $30 billion US dollars spent in student loan refinancing.
2019, SoFi took refinancing one step further. It started offering student loans for students currently enrolled in classes as well as their parents.
Although the company is viewed as having unnecessarily restrictive requirements for eligibility, they continuously work on improving their services for borrowers to ensure members get the best rates, higher degrees of repayment, and unique, flexible, and exclusive benefits.
Who is SoFi Best For?
The company is especially suitable for borrowers who have an associate degree or higher. However, it also provides numerous attractive options for people looking for low-interest rates on their debt while still having access to various repayment options and facilities. These include forbearance and deferment.
You must remember, though, that borrowers who plan on eventually releasing their loan-cosigner or combining their debt may want to look into this service thoroughly before signing up for it.
For the student loan refinancing space, SoFi has a different approach when it comes to its customers. Unlike other student loan servicers, the company also offers excellent perks other than competitive terms for repayment. These include career counseling or support, great customer service, credit cards, and wealth management services.
Unique Features of SoFi Loan Refinancing
- Ability to confirm eligibility without having to apply for a hard credit check
- Up to 20 repayment terms and repayment options
- Options for forbearance or deferment for individuals who have gone back to school, serve in the military or have experienced disability.
- No penalties for prepayments or fees for origination
- No maximum amount for borrowing and the minimum loan amount is only $5,000
- In case of permanent disability or death, the loan may be discharged
- Additional benefits for medical and dental residents
- Fixed rate and variable rate loans
- Rate discounts with membership benefits
How It Works
Student loan refinancing is a process through which you can simplify your debt payment plans and make them easier to pay off. In refinancing, you can pay off multiple loans or a previous loan with a new one, usually at a lower interest rate.
This new loan will have better terms and interest rates than existing loans and will make it easier for the borrower to pay off their debt. An example of this is when a borrower wants to change their interest rates from a fixed rate to variable rate or extend their terms to have smaller monthly payments.
Benefits of Refinancing Student Loans
When a borrower refinances their loans, they are usually looking to change either the loan's interest rate or the loan's term (also known as the repayment period). These can be done by refinancing student loans to allow individuals to improve their credit scores and pay off loans with ease in their own time and increase their cash flow, instead of struggling to meet deadlines and being bogged down by penalties.
There are terms and restrictions that borrowers have to meet when qualifying for SoFi student loan refinancing. You must be a U S citizen or permanent resident, meet a certain debt to income ratio, and meet specific income requirements. You must also have graduated from a title iv accredited school.
Sofi Student Loan Refinancing Review: Pros and Cons
Before you decide to jump into loan financing, you must weigh out all the pros and cons of such a program. This will help you make a sound decision according to your personal circumstances.
Pros
Before you decide to jump into loan financing, you must weigh out all the pros and cons of such a program. This will help you make a sound decision according to your personal circumstances.
Online Application Process
In a matter of a few minutes, after completing an online application,
Free from fees
SoFi does not charge any sort of fee on student loan refinancing.
Protection from Unemployment
SoFi student loans has a unique Unemployment Protection Program through which individuals can put their loans into forbearance if they lose their job. Although conditions apply, they are generally lenient and are only there to ensure this rule is not abused.
Besides this, SoFi also has numerous resources and services for employment that customers can take advantage of. These include resume-parsing, personalized career counseling, and strength assessments as well.
Co-signer Discounts
SoFi gives members a 0.125% discount on their student loans (private), if they have a co-signer.
Your Credit Score is not Harmed
One of the most reasonable expectations to have from loan refinancers is to be able to check whether you are eligible for their scheme without hurting your credit score or being needlessly long. This helps borrowers compare varying rates before committing to a particular lender. But, often, even such baseline expectations are not met.
SoFi, on the other hand, guarantees a verdict within two minutes without needing a hard credit inquiry. However, once you select an offer and apply for it, your application will be subject to further scrutiny, including hard credit inquiries.
Applicable to Associate Degree Holders
Most student loan refinancing services remain inaccessible to people with associate degrees. However, SoFi does not limit its services to bachelor's degree holders. Associate degree holders qualify for their services as well.
Forbearance and Deferment Options
Rarely do lenders allow borrowers to temporarily pause their payment through deferments, especially in refinancing student loans. However, SoFi tries to give its customers as much leeway as possible and reviews requests for deferment generously.
There are numerous instances for which forbearance or loan deferment is allowed. However, these also include basic circumstances such as studying in graduate school while being enrolled at least half-time.
Transference of Parent PLUS loans
Parents who have taken out either Parent PLUS or private loans to pay for their children's education are also included in SoFi's programs. The company offers refinancing services to help pay off a debt that parents have taken on.
Besides this, the company also allows individuals to transfer their Parent PLUS loans from their parents into their own name, as long as they are the main applicant.
Career and Employment Perks
SoFi provides its applicants with numerous perks besides refinancing solutions as well. At the forefront of these is their renowned career counseling services. If you have opted for SoFi's student loan refinancing, then you can get personalized career counseling sessions with qualified coaches who will help you set career goals, teach you about how to brand yourself better, and give you advice on how to work on your resume.
These career coaching services are especially useful if you have lost your job and are applying for forbearance. The company is heavily invested in ensuring its customers have secure well-paying jobs.
Wealth Management Services
SoFi's members also have access to their wealth management services. This helps individuals set and achieve financial goals through a series of advisory sessions by qualified professionals.
The company can help you increase your savings and wealth and repay your student loans through practical and strategic services such as a selection of portfolios, diversification, and investment rebalancing.
Cons
As with all organizations, SoFi has its fair share of eligibility requirements and disadvantages as well.
Credit problems are an issue
Although SoFi is lenient with other criteria such as your career and finances, they do not grant refinancing student loan services to individuals with a poor credit score.
One way to tackle this issue is by adding a co-signer to your SoFi plan. If the co-signer is qualified for student loans, this will help you significantly improve your chances of being eligible for SoFi while also improving your interest rates.
No Co Signer Release
SoFi does not allow a co signer release for someone that that has been added to your application. The only way for them to be removed is during the event of their death or if you refinance again with new terms.
College Education is Necessary
SoFi does not qualify individuals who have not completed their schooling yet. The minimum degree of education required is an associate degree.
No Consolidation of Spousal Loans
Some lenders allow for spouses to consolidate their student loans so that paying them off is simpler. However, SoFi does not offer any such services.
Refinancing Federal Student Loans Always Poses a Risk
By refinancing student loans, you will lose a blanket of protection offered by federal student loans. Since the government does not offer any refinancing services, refinancing carried through third parties will automatically turn your federal student loan into a private student loans. This means that you may not qualify for federal loan forgiveness programs or income repayment plans by opting for SoFi.
Pricing and Cost
As a loan servicer, SoFi offers some of the best interest rates and terms currently on the market. Although the actual interest rate itself will depend on you and if you have a co-signer, then both of your financial situations.
However, SoFi's apr rates are still some of the lowest in the market. Following are details that explain the pricing and cost of SoFi's refinancing student loan service:
- Only a soft credit check is made to ensure you qualify for the service
- Prompt response
- No origination fee or prepayment penalty
- Parent loans can be transferred to the child
- Fixed rate loan terms can be anywhere from 5, 7, 10,15, and 20 years
- There is no maximum loan amount. However, SoFi does require a minimum of $5000 outstanding loan balance
- Minimum late fees ($5) if payment is overdue for more than 15 days
What Credit Score is Needed for a SoFi refinancing loan?
SoFi requires at minimum a FICO score of 680.
Pricing and Cost
SoFi has some of the best interest rates and terms currently on the market. Although the actual interest rate itself will depend on you and if you have a co-signer, then both of your financial situations.
However, SoFi's rates are still some of the lowest in the market. Following are details that explain the pricing and cost of SoFi's refinancing student loan service:
- Only soft credit inquiries are made to ensure you qualify for the service
- Prompt response
- No origination fee or prepayment penalty
- Parent loans can be transferred to the child
- Loan terms can be anywhere from 5, 7, 10,15, and 20 years
- There is no maximum loan amount. However, a minimum of $5000 of outstanding balance must be present
- Minimum late fees ($5) if payment is overdue for more than 15 days
Alternatives
When it comes to student loans, you have repayment options. When choosing a financing institution, you want to choose a company with the best rates and repayment terms that fit your budget.
Splash Financial
Splash Financials is a lending company marketplace that offers some of the lowest interest rates in the market through its network of lenders. As of 2020, their rates and terms are some of the best in the market currently.
Borrowers can choose from a variety of options for their loan terms. Although there is no maximum amount of loan you can take, individuals must have a minimum of $5,000 debt for refinancing with Splash Financials.
Lenders are not charged prepayment penalties, and neither are they charged for application or organization.
RISLA
The Rhode Island Student Loan Authority (RISLA) is an industry-leading refinancing company that offers excellent rates and numerous benefits to its customers. One of its best features includes an income-based repayment plan that bases your payments according to your income and your family's size, helping to reduce the installment amount.
Besides superior customer service, they help borrowers with the hassle of student loan paperwork such as completing FAFSA forms and other student loan options.
Discover
Discover offers student loan refinancing for either federal or private loans and makes paying off student debt easier with its excellent services. Although some lenders usually include an application, origination, or prepayment fee, Discover does not. There are no penalties on late payments of fees. However, borrowers do have to watch out for accruing interest on a loan.
Will Refinancing My Student Loans Hurt My Credit Score?
While we're talking about student loans and credit, it is essential to understand how applying for refinancing schemes might affect your credit score. Every time you apply for such financial services, it leaves a light mark on your credit score, especially if the service performs a hard inquiry.
However, SoFi gives fast feedback and lets you know whether you qualify for their services by performing a soft inquiry that is unlikely to leave any mark on your credit. A formal application for refinancing student loans will prompt the company to perform a hard inquiry.
No matter which loan servicer you choose, when repaying your student loans, you always want to make sure you pay your loans back on time. The best way to never miss a payment and keep your credit score in check is to have your payments set up on autopay. Sofi offers borrowers a rate discount when you set up payments automatically.
Conclusion
Student loans are one of the most common types of loans taken in the US. Typically, lenders have rigid criteria and little room for error or unforeseen circumstances when it comes to paying back this amount. This is why so many borrowers struggle with paying their student loan debt back. Refinancing student loans is one way to ease the burden of such loans and make paying them back much easier.
Is SoFi Legit?
SoFi is one of the leading companies when it comes to refinancing student loans. The company generously provides refinanced loans for individuals. It has numerous options that make it easier to pay the loan back. Although there are other companies in the market for this purpose, SoFi has the best terms and market competitive interest rates. They also offer private student loans, personal loans, mortgages, and credit card consolidation. They have recently added new SoFi credit cards to their list of services.
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