Sofi personal loans

The Good

• Great rates as low as 3.35%
• Very easy application process
• Unemployment Protection
• Offers 0.25% AutoPay discount when allowing Sofi to automatically deduct payments

Since its founding in 2011, Sofi (which stands for Social Finance) has made over $20 billion in loans.  The company was founded by four students at the Stanford Graduate School of Business with the goal of helping graduate student consolidate their student loan debt at a lower interest rates.  This speaks to the type of borrower that is a good fit for Sofi – individuals with either 1) good credit scores, 2) good income, or 3) both.  If you meet those criteria and have debt that is above 7%, it’s definitely worth going to Sofi to see if they can consolidate that debt at a lower rate.

Sofi has since expanded to offer personal loans and home mortgages. They are going after the same prime borrower with good credit, but loan options are good for someone looking to take on new debt.  Because so much of its business is consolidating student loans, the average loan size is over $50,000.  Regardless of whether

Unemployment Protection

If a borrower (who Sofi calls a “member”) loses a job through no fault of their own, Sofi can halt payment for up to 3 months or until you find another job.  In addition, they offer career coaching services to help in locating a job.  While it is questionable how useful these career services are to most individuals, the ability to pause loan repaymnents is a huge benefit

Other Benefits

• With an ability to lend in 48 states, Sofi has tremendous coverage. The only states where it does NOT offer loans are Mississippi and Nevada
• Sofi does not charge origination fees
• Cosigner option means you can qualify with the help of your spouse’s income

See what rate you qualify for at Sofi.com

The Bad

• If 680-700 FICO, you must demonstrate monthly savings of $2,000
• Reports of slow approval process

Sofi is a financial product for people with very good credit – ideally, well-educated and with good jobs, too.   If you don’t meet that profile, there is a high likelihood that you will be denied.  In addition, conversations with borrowers indicate that the process can be somewhat slow and confusing.  If consolidating a large amount of debt over a multi-year loan, this is worthwhile.  But if it’s a short-term loan or money that is needed quickly, this is a factor you should consider.

The Summary

Sofi started out primarily as a way for MBA students to refinance their high-interest student loans.  So think highly-educated people (schools like Harvard, Notre Dame, and Northwestern) who may have $100,000+ in student debt, but are also a safe bet to make $100,000+.  Consequently, the average SOFI borrower earns $142,414 per year — three times the average 2014 college graduate — and has a credit score of 776.

The Sofi personal loan product is particularly good for people who have a large amount of credit card debt that they roll-over each month.  Sofi will allow these borrower to save on their monthly bill through a lower APR rate.