If you’re like most college graduates, you left school with a substantial amount of student loan debt. According to the latest student loan statistics, the average balance among borrowers is $29,650.
Depending on the cost of your education, you may have turned to private student loans to cover some of your expenses. SoFi is one of the most well-known private lenders in the country; as of 2021, the company has over $50 billion in funded loans.
However, your loans could have high interest rates, and it could be difficult to repay your debt. If that’s the case, student loan refinancing can be a helpful solution. Here’s what you need to know about refinancing SoFi student loans and getting a SoFi student loan refinance.
About SoFi
SoFi is a financial services company that was founded in 2011 by Stanford business school graduates. Originally, the company used an alumni-funded lending model that connected recent graduates with alumni in their area. Over time, it expanded to offer refinancing to graduates of all Title IV schools.
In 2012, it launched its SoFi student loan refinance division and became the first company to offer refinancing for federal and private student loans.
Today, SoFi has over 2 million members. Its customers have paid off $22 billion in debt since the company’s inception.
Besides private student loans and a SoFi student loan refinance product, SoFi provides other financial services. Through SoFi, members can open cash management accounts, apply for personal loans or mortgages, or even invest in stocks and cryptocurrency.
Ready to refinance your SoFi student loan?
If you graduated from college, it may be a good time to refinance your loans with a SoFi student loan refinance.
Student loan refinancing is a process where you take out a loan from a new lender and use it to pay off some or all of your current loans. Because you’re taking out a new loan, you can qualify for different terms than you have now. You could potentially lower your interest rate, reduce your monthly payment, and extend your repayment term. You can even remove student loan cosigners from your existing accounts.
Refinancing interest rates are currently at historic lows, so you could potentially reduce your interest rate and save money over the course of your repayment. These rates won’t last forever, so it’s a good idea to take advantage of them while you can.
Did you know? Student loan refinance rates are at historical lows
Lowering your interest rate is the easiest way to save on student loan debt. You can refinance to a shorter term and get out of debt faster.
Takes 2 minutes • No impact on credit
Choosing a student loan refinance lender
There are dozens of student loan refinance lenders out there. If you’re looking to refinance SoFi student loans or private student loans from another lender, it’s important to know that interest rates, terms, eligibility criteria, and benefits can vary from lender to lender.
Before submitting an application for a refinancing loan, it’s a good idea to shop around and compare loan options from multiple lenders so you can ensure you get the best deal.
How to find the best refinance company and start saving
Shopping for a refinancing lender can seem overwhelming. Lenders give you a lot of information, so it can be challenging to figure out which is best for you.
To make it easier, here are some of the most important factors to consider when comparing lenders:
1. Rates
Your interest rates play a big role in your total repayment costs. When you’re looking at lenders, you’ll see that some offer both fixed and variable interest rates on their loans. But what’s the difference?
Fixed-rate loans will have the same interest for your entire repayment period. It doesn’t change, and your minimum monthly payment will be the same for the entirety of your loan’s life. Fixed interest rates tend to be a little higher than variable rates, but you get the peace of mind of knowing exactly how much you’ll pay every month.
Variable-rate loans usually start off with lower interest rates than fixed-rate loans. However, the interest rate can change over time. Your interest rate could increase, and your monthly payment may go up, too. Variable interest rates can be attractive because of their low initial rate, but there’s some added risk involved.
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Free eBook: How to Conquer Student Loans
2. Terms
The loan’s term is how long you have to repay the loan. Terms can range from five years to over 20. The longer the loan term, the lower your monthly payment will be.
However, there is a downside to longer loan terms. Because your loan is in repayment for more time, you’ll pay more in interest charges. And, lenders typically charge higher interest rates on longer loan terms, causing more interest to accrue.
In general, it makes sense to choose the shortest loan term you can afford. By opting for a shorter term, you can get a lower rate, and less interest will accrue.
3. Discounts
When looking at lenders’ interest rates, pay attention to any disclaimers or disclosures. The listed rate is often the lowest possible offered and usually includes special discounts. Some lenders offer autopay discounts or loyalty discounts; if you don’t qualify for those discounts, your interest rate will be a little higher.
With SoFi student loans, you can take advantage of a 0.25% automatic payment discount if you sign up for monthly deductions from a checking or savings account. With SoFi’s discount, the interest savings are applied to the loan principal.
If you’re an existing SoFi customer, you can qualify for a 0.125% membership discount as well.
4. Customer service
Because refinancing lenders are private companies, the level of customer service offered can vary wildly. It’s a good idea to look for a company with a strong reputation for customer support and is readily available to answer your questions.
One important note about SoFi private student loans and refinancing loans is that SoFi doesn’t service its loans. Instead, it works with MOHELA, a loan servicing company. MOHELA is the company you go to if you have questions about your payments, hardship options, or account issues.
5. Benefits
Some lenders offer customers extra perks. SoFi has some robust borrower benefits, including:
- Career coaching: If you’re planning on switching careers or are interviewing for a promotion, you can use SoFi’s career coaching service to get help with your resume or practice your interviewing skills.
- Member experiences: SoFi hosts special events for members all over the country. You can use these events to build your network and get to know people in your community.
- Financial planning: You can meet with a financial planner at no cost to talk about your goals and develop a plan.
Why should I refinance my SoFi student loan?
SoFi is a major private student loan lender. While it’s a popular option, you may find that a SoFi student loan refinance may be beneficial after you graduate. Refinancing SoFi student loans can make sense in the following situations:
- You may have a high interest rate: Depending on your credit at the time you applied and when you took out your loan, you could have a very high interest rate on your loans. As of 2021, SoFi loan rates can be as high as 11.26%. With such a high rate, your loan balance can grow over time as interest rapidly accrues.
- You want a different loan term: When you first took out your SoFi loans, you selected a loan term that worked for you at the time. However, your needs may have changed since you took out the loan. You could need a different loan term to give you more breathing room in your budget, or you may want to pay off your debt more aggressively.
- You’re unhappy with your loan servicer: You may be unhappy with the level of customer service provided by MOHELA, SoFi’s loan servicer. If so, you’re not alone. According to the Consumer Financial Protection Bureau, over 170 complaints were submitted by customers about MOHELA over the past three years. Common issues included problems dealing with the servicer, incorrect information being submitted to the credit bureaus, and difficulty repaying the loan.
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SoFi student loan refinance review 2021
SoFi is a favorite refinancing lender for many borrowers. As of 2020, SoFi has refinanced over $30 billion in student loans. The lender doesn’t charge prepayment or origination fees, and it even offers forbearance options. However, the lender isn’t for everyone.
If SoFi is on your shortlist of refinancing lenders, here’s some additional information to help you make an informed decision.
SoFi student loan refinance options
SoFi student loan refinance offers refinance options for more than just undergraduate loans. The company has the following refinancing programs:
- Student loan refinancing: If you have undergraduate or graduate federal or private student loans, you can refinance and choose a variable or fixed rate.
- Medical resident refinancing: With medical resident refinancing, physicians and dentists can refinance and make $100 payments during their residency periods.
- Parent PLUS refinancing: Parents who took out money to pay for their child’s education can refinance their debt through SoFi. SoFi is also one of the few lenders that allow children to refinance and take over their parents’ loans.
- Medical professional refinancing: Doctors, dentists, and nurses can qualify for special interest rates when they refinance their student loans.
- Law and MBA refinancing: If you went to law school or got an MBA, you can take advantage of refinancing to save money over time.
Advantages of refinancing through SoFi
SoFi student loan refinance is a reputable lender, and there are several benefits to refinancing your loans through the company:
- You can take advantage of its benefits: SoFi has a formal unemployment protection program. If you lose your job, SoFi will suspend your payments — and help you find a new position.
- There is a rate guarantee: SoFi has a low rate guarantee. If you find a refinancing lender that offers you a lower rate, SoFi will give you $100.
- You could save money: If you qualify for SoFi’s lower rates, you could save a substantial amount of money over the life of your loan.
- You could lower your payments: SoFi offers loan terms as long as 20 years. By selecting a longer loan term, you can significantly lower your monthly payments and boost your cash flow.
Disadvantages of refinancing through SoFi
While SoFi is a well-known lender, it has some drawbacks to keep in mind:
- Cosigner releases are not available: While SoFi does allow you to apply with a cosigner, it doesn’t offer cosigner releases. Your cosigner will remain on the loan — and be legally responsible for payments if you fall behind — until the loan is paid off, or until you refinance with another lender.
- Degrees are required: If you’re still in school or you didn’t complete your degree, you’re not eligible for refinancing through SoFi. To qualify, you must have at least an associate degree or higher from an accredited Title IV school.
- Good to excellent credit required: While SoFi doesn’t publicly list its credit score requirements, it generally requires borrowers to have good to excellent credit. If your credit score is less-than-perfect, you’ll need a cosigner on your application.
SoFi student loan refinance reviews
In SoFi student loan refinance reviews, some borrowers complained that the process was lengthy and time-consuming. And, even though they were pre-approved through a soft credit check, some consumers said their applications were ultimately denied.
On Trustpilot, SoFi has a 3.2-star rating out of five based on over 2,400 customer reviews. Out of those reviews, 79% rate the company as excellent, while 11% rate it as “bad” or “poor.”
SoFi is not accredited by the Better Business Bureau (BBB), but it does have an A+ rating. BBB ratings are given based on the company’s responses to customer complaints, time in business, and transparent business practices.
According to the BBB, SoFi receives a high number of complaints. As a result, the BBB displays just 25% of the complaint submitted. Many of the complaints are about other aspects of SoFi’s business, such as its personal loans or investment options, and not just refinancing.
Controversy and SoFi
SoFi has been the subject of some controversy in the past.
In 2018, the Federal Trade Commission (FTC) lodged a complaint about SoFi, alleging that the company made false statements about student loan refinancing savings in TV, web, and print advertisements. According to the FTC, the average savings mentioned in SoFi’s ads were inflated because the company omitted large categories of its customers.
In 2019, SoFi came to an agreement with the FTC and agreed to stop misrepresenting student loan refinancing savings.
SoFi student loan refinancing eligibility
To qualify for student loan refinancing through SoFi, you must meet the following requirements:
- You must be at least the age of majority in your state (18 in most states)
- You must be a U.S. citizen or permanent resident
- Non-permanent residents can qualify if they have a cosigner that is a U.S. citizen
- You must be employed or have an offer of employment and a start date within 90 days
- You graduated with at least an associate degree from an accredited Title IV school
- Your existing loans must be federal or private student loans; non-education loans are not eligible
- You must have at least $5,000 in student loans to refinance
How to apply for student loan refinancing
Whether you apply for student loan refinancing through SoFi or another company, you can complete the process in just six steps:
1. Set a goal
Spend some time thinking about your financial goals and what you hope to accomplish from refinancing since that will affect what terms to choose.
For example, if you want to pay off your student loan balance as quickly as possible, it would be wise to choose a shorter loan term so you can get a lower interest rate.
If you want to reduce your monthly payments to free up more money in your budget, look for a longer loan term.
2. Gather your documents
When you apply for refinancing, you’ll be asked to provide some personal information, including your Social Security number, employment information, income, and loan balances. You may need to provide proof of income in the form of tax returns or pay stubs. You can save time by gathering these documents ahead of time.
3. Check your credit
To maximize your chances of getting approved for a loan and securing a low interest rate, check your credit report before applying for a loan. You can view your credit reports for free at www.AnnualCreditReport.com.
Look at your credit report and ensure it’s accurate. If you notice any mistakes, dispute those errors with the major credit bureaus right away. Inaccurate information can damage your credit and make it harder to qualify for a loan.
4. Get a quote
SoFi, like many refinancing lenders, allows you to get a rate quote. The loan prequalification tool gives you an estimate of what interest rates and terms to expect, and it only requires a soft credit check; there’s no impact on your credit score. We recommend comparing your SoFi rate quote with other top lenders. You can do so quickly an easily using Purefy’s rate comparison tool, which gets quotes from multiple lenders with one fast form.
Getting a quote can help you compare lenders and choose the right loan term for your situation.
5. Consider adding a cosigner
If your credit is less-than-excellent, adding a cosigner to your application may be a smart decision. If you have a friend or relative with excellent credit that is willing to cosign your loan, their help can improve your odds of getting a loan and a lower interest rate than you’d get on your own.
However, asking someone to be a cosigner is a big ask. They’re responsible for the loan payments if you don’t make them, and having the loan on their credit reports can make it more difficult to qualify for other forms of credit, such as mortgages.
6. Submit your loan application
Once you have all of your documentation handy, have found a cosigner, and have picked the right loan term, you can move forward with completing the application.
With SoFi and other lenders, you can complete the refinancing application entirely online. It takes just a few minutes to finish,
If you’re approved for a SoFi refinancing loan and you sign the loan agreement, it can take seven to 15 business days before your loan is funded and your existing loans paid off. To make sure you don’t incur late fees or have late payments reported to the credit bureaus, continue making payments on your current loans until you receive a notification from SoFi that the funding process is complete.
Refinancing your loans
If you’re considering refinancing your SoFi student loans or want to refinance other loans through the company, you should know that SoFi student loan refinance is a popular choice. However, it’s not a good match for every borrower, and you may be able to get lower interest rates and more favorable terms from other lenders.
While you can comparison shop on your own and manually compare rate quotes, there’s an easier way: you can use Purefy’s Compare Rates tool to get quotes from top refinancing lenders by filling out one simple form. It doesn’t affect your credit score, and you can compare several loan options at once to find the best match for you.
Need additional help? Schedule your free student loan refinance consultation. A Purefy student loan advisor will talk to you and provide personalized guidance on the different lenders, loan options, and key benefits. When you’re ready to apply, the advisor will help you through the entire application process from start to finish. You can schedule your free consultation online.
