It’s likely you’ve heard of SoFi, but almost certainly because of its well-known student loan refinance programs.
But if you thought SoFi only handles student loans, guess again.
SoFi has become a virtual one-stop shop for all types of loans and financial services.
In fact, if you qualify for one of their programs, you’ll probably be interested in others. And if you’re new to SoFi, this is a non-exclusive club you’ll definitely want to be a part of! It’s turned into one of the most innovative financial services platforms on the World Wide Web.
- Top student loan provider in the industry.
- Financial services provider for all your needs (loans, investing, banking).
- No fees on most loan programs.
- Very generous referral program.
SoFi was launched in by four students from the Stanford Graduate School of Business. If you’re a recent college graduate, or you’re dealing with student loans, the founding of the company is significant. Because those Stanford graduate students are students themselves, they set out to create a more efficient and affordable way to finance student loans – from a consumer standpoint.
The initial funding was financed by investment capital from Stanford alumni. It developed into a peer-to-peer platform for student loans, eventually being funded by bonds issued through major investment banks.
Short for Social Finance, Inc. SoFi, is based in San Francisco, California, and has grown well beyond its student loan origins. It’s still a major player for student loan refinances, but it now offers mortgages and other home loan products, personal loans, insurance, and even investment products. The company has nearly 1,400 employees, 900,000 members, and has funded over $30 billion in
SoFi has a Better Business Bureau rating of “A-“ on a scale of A+ to F. It also has a rating of 4.6 out of 5 stars among more than 2,300 users on Google Play, and 4.8 stars out of 5 among more than 25,000 users at The App Store.
SoFi has a lot to offer, so let’s take a look at each product and service they have.
Student loans remain SoFi’s core product. The company has provided more than $18 billion in student loan refinances alone, to over 300,000 members. They offer two broad categories of student loans, Private Student Loans and Student Loan Refinancing.
Private Student Loans
Private Student Loans are offered to help students finance their educations. It includes three subcategories:
You can borrow from a minimum of $5,000, up to 100% of the full cost of your college attendance using a loan from SoFi. The entire application takes place online, and there are no fees of any kind. Current interest rates run between 4.73% and 11.46% APR for fixed-rate loans, and 3.04% to 11.56% APR for variable-rate loans. And if you can’t qualify for a loan on your own credit or income, you can add a qualified cosigner.
SoFi offers four ways to repay your loan:
Student Loan Refinances
- Loan discharge – your loan may be completely discharged upon death or total and permanent disability.
Student loan servicing for SoFi is handled by MOHELA, a US Department of Education servicer.
To qualify for a student loan refinance refinance, you must meet the following requirements:
- Be of legal age in your state of residence.
- A US citizen, permanent resident or visa
- holder. As a permanent resident you must provide a copy of your permanent
- residency card with at least two years of remaining eligibility.
- You must reside in a state where SoFi is
- eligible to lend (which is all 50 states).
- You must be employed, or have a promise of
- employment within 90 days, with sufficient income to make your payments.
- Have graduated with an Associate’s degree or
- higher from a Title IV school.
Medical Resident Refinancing
Medical resident refinancing requirements are similar to those for student loan refinancing, except you must have a minimum of $10,000 in outstanding student loan debt, be a medical/dental resident or fellow with up to four years left in your program, and have graduated with an MD, DO, DMD or DDS from an approved school.
There is no compounding of interest during residency, and you can reduce your payments just $100 per month for up to four years. Interest rates range from 3.45% to 7.24% APR on fixed rates, and from 2.56% to 7.24% APR on variable rates. Loan terms range from 5 to 20 years.
Medical resident refinancing is available in 48 states (excluding Mississippi and Montana), but minimum loan amounts may be higher in select states.
Parent Plus Refinancing
Parents can also refinance student loans held in their own names for their children, with no fees. Interest rates range from 3.20% to 5.59% APR for fixed rates, and 2.31% to 5.59% APR for variable rates. Loan terms range from five years to 15 years.
SoFi Personal Loans
SoFi Personal Loans are available for just about any purpose, including paying off credit card debt, making home improvements, taking a vacation, or pay for wedding expenses. About the only limitations is that they cannot be used to for real estate purchases, business purposes, investments – like the purchase of securities, short-term bridge financing or post-secondary education.
The loans are completely unsecured, and available in amounts ranging from $5,000 up to $100,000. There are no fees or prepayment penalties. Terms range from 2 to 7 years, offering interest rates ranging from 5.99% APR to 20.91% APR.
SoFi Home Loans
Not surprisingly, SoFi also offers home loans. These include mortgages for purchases and refinances, including cash-out refinances. They also offer “jumbo mortgage” financing, as well as home equity.
SoFi offers its own unique mortgage program. You can borrow up to $3 million with a down payment of 10%. Private mortgage insurance is required if you make a down payment of less than 20% within conforming federal loan limits, currently at $510,400 for 2020. However, if your loan amount exceeds the conforming limit, no private mortgage insurance will be required on loans with less than 20% down.
SoFi currently offers 30 year fixed, 15 year fixed, and 7/1 adjustable-rate mortgages. As a SoFi Member, you can save $500 on your loan processing fees. Mortgages are available for owner-occupied primary residences and second homes.That includes condominiums, and single- and two-family homes. Co-ops are not available for jumbo loans.
However, unlike SoFi’s other loan programs, their home loans do charge fees, which are typical mortgage related closing costs, like title charges, appraisal, transfer taxes, and escrow fees. You can also pay discount points to lower your interest rate.
By downloading the SoFi app, you can trade stocks and exchange traded funds (ETFs), as well as cryptocurrencies. But SoFi also offers an automated investing option as well. You can begin trading with as little as $1, and trade both stocks and ETFs free of charge.
How can you invest with so little money? This is done through what is known as fractional trading – purchasing a stock for only a fraction of its full price. SoFi refers to this as “Stock Bits”, and they have a list of securities available for this type of investing.
SoFi is currently paying a bonus of $25 worth of stock when you fund a SoFi Invest account with at least $500.
Among cryptocurrencies, you can trade Bitcoin, Ethereum and Litecoin in your SoFi account. However, SoFi does charge a fee of up to 1.25% on cryptocurrency transactions. The minimum transaction size is $10, and the maximum purchase is $50,000 per day, per individual.
SoFi offers taxable investment accounts, as well as traditional, Roth, and SEP IRA accounts. You can even do a rollover of an external retirement account or an employer-sponsored plan into your SoFi retirement account.
One of the major advantages to investing through SoFi is that as a SoFi member, you’ll have access to rate discounts on other SoFi products, but you’ll also be able to connect with other members who are participating in the investment platform, to share stories and information. It’s the social nature of SoFi membership.
SoFi Automated Investing
If you’re not comfortable managing your own investments, you can take advantage of SoFi’s robo-advisor service. It’s an automated, online investment service that creates your portfolio, then rebalances it to maintain target allocations. Similar to individual investing, you can begin with as little as $1 and there are no fees to participate.
Automated investing allows you to choose from one of five different investment strategies, ranging from conservative to aggressive. Your account will be invested in a mix of stocks and bonds, based on your risk tolerance and investment goals. You can even have separate portfolios, each with a different
financial goal. Along with your account, you have access to a licensed financial advisor to help you with the investment process. Automated investing is also available for both taxable accounts and IRAs.
To go along with your SoFi Invest account, or even if you don’t want to hold any investments at all, you can take advantage of the cash management account known as SoFi Money.
SoFi Money currently pays 0.20% APY on all balances, and charges no account fees.
There is no minimum initial investment requirement, nor is there a minimum account balance requirement.
The account comes with a Visa debit card, and though SoFi does not have an ATM network, they’ll reimburse you for fees charged by banks for use of their ATM machines.
You can use the account to make mobile and direct deposits, electronic bill payments, person-to-person transfers, as well as writing checks. In fact, checks are available at no cost to you. ATM withdrawals are limited to $610 per day.
All funds held in SoFi Money are FDIC insured for up to $250,000 per depositor.
SoFi Protect – Insurance Products
As a member of SoFi you’ll be able to purchase insurance through various SoFi third-party partner organizations. That includes life insurance, auto insurance, homeowner’s insurance and renter’s insurance.
The various policy types are offered by the following providers:
Homeowner’s And Renter’s Insurance
Offered by Lemonade, you can purchase homeowner’s insurance for as little as $25 a month, or renter’s insurance for as little as $5 per month. However, the coverage is available in only about
half the states in the country. Lemonade is a different kind of insurance company. It’s designed for social impact, in which they pay a flat fee for claims, and give leftover funds to the charities of your choice.
Other SoFi Services
SoFi Referral Program
You can earn up to $10,000 referring friends to SoFi each year! That includes friends to sign up for SoFi Money, Active Investing, Student Loan Refinancing and Personal Loans. For example, you
can earn $300 for a referral on an eligible funded loan.
SoFi Platform Tools
The SoFi website offers a multitude of valuable tools, including a calculators to help you with student loan refinancing, mortgages, student loan payments, personal loans, retirement, student loan payoff, debt payoff and much more. They also provide important resources, including help centers for home loans and student loans, the medical school refinance guide, and many other educational resources.
SoFi Features And Benefits
SoFi Relay: The SoFi mobile app enables you to connect all your accounts on the mobile dashboard, giving you an opportunity to track your financial activities in one place, in real time. You can also set goals to direct your money toward, including paying off debt. Other goals include building an emergency fund, saving for the down payment on a house, or saving for retirement.
SoFi Personal Loans offer unemployment protection: You can apply for if you lose your job through no fault of your own and your payments and are in good standing at the time of the request. Your loan payments will be suspended but you must participate in SoFi’s job placement assistance program during the time of forbearance. Interest will continue to accrue and be added to your principal
balance. Unemployment protection is available in three-month increments, up to a maximum of 12 months.
Customer service: Available by email and phone, Monday through Thursday, 4:00 am to 9:00 pm, and Friday through Sunday, 4:00 am to 5:00 pm – all times Pacific.
SoFi Mobile App: The SoFi app is available at The App Store for iOS devices, 12.0 and later, and is compatible with iPhone, iPad, and iPod touch. It’s also available at Google Play for Android devices 6.0 and up.
SoFi Pros And Cons
SoFi has a lot of positives, and a few negatives to consider.
- SoFi has become perhaps the preeminent
- student loan refinance provider in the country.
- It’s a full-service financial platform,
- offering mortgages, personal loans, investing, career counseling and insurance,
- in addition to student loans and student loan refinances.
- SoFi functions as an online community, where
- you can get support from company personnel as well as participating members.
- Except for home loans, SoFi loan programs
- required no fees and include no prepayment penalties.
- Investment options include self-directed
- active investing, automated investment management, and a high-yield cash
- management account.
- The Referral Program offers an opportunity to
- earn thousands of dollars per year by referring others to SoFi products and
- SoFi focuses its business model on borrowers with good to excellent credit, and strong employment and income situations. It is generally not a recommended option for those with average credit or below, or with unstable employment or high debt ratios.
- SoFi has also largely been designed for the benefit of college graduates. If you are not one yourself, it may not be as welcoming.
- Mortgage loans require a minimum of 10% down.
- Auto insurance is available only for good drivers.
Should You Do Business With SoFi?
The entire financial industry is undergoing a seismic shift to online and mobile platforms offering simple, low-cost products and services. SoFi is definitely one of the leaders in that change. But what makes them stand out from the pack is that they offer so many different financial services. Though they’re best-known for student loans and student loan refinances, they also offer mortgages, personal loans, insurance, career counseling, financial advice, and so much more. It’s possible to open a single account type with SoFi, then gradually slide into others.
There’s little doubt, the online convenience and no-fee policy is a winning combination for consumers. And perhaps just as important, is the ability to get career and financial advice. Since the company targets primarily new college graduates, it offers a real opportunity to help Millennial’s learn from the platform what they didn’t get in college. In short, not only does it provide the products and services needed to begin building your financial life, but also the advice to help you make the right decisions.
Even if you don’t need a loan right now, it will be well worth your time to open a SoFi Money account, just to earn some interest on your savings and join the community. From that humble beginning, you’ll be able access all the services offered by the company.
If SoFi has a drawback it’s that it does cater primarily to those in stronger financial positions. That includes college graduates, those who are well-employed, and have excellent credit. If you don’t meet those qualifications, and you need a loan, there may be better choices elsewhere.
If you’d like more information, or you’d like to apply for one of the many SoFi product offerings, visit the SoFi website.
- Top student loan refi provider in the industry
- Multiple financial services - loans, investing, insurance, etc
- No fees on most loan programs
- Career coaching and financial planning available
- Very generous referral fee program
- Best for those with good/excellent credit, strong employment
- Works best for college graduates
- 10% minimum down payment on mortgage program
- Auto insurance is designed only for good drivers