Have great credit? SoFi might be the lender for you. This is a lender with almost ridiculously high credit standards, but that can help out people who don’t have a lot of credit history. Borrowers from SoFi have a minimum credit score of 660, but the vast majority rank above 700. These are people who generally make six figures a year, have relatively little credit history, and want a little bit of help early on in their careers.
SoFi, unlike other lenders, wants to make an investment in its customers. It hosts networking events for borrowers around the country and even offers career counseling. Get laid off? SoFi will pause your payment and even help you find a new job. This is a different kind of lender, one that wants to grow its clientele base through success.
A Review of SoFi
Social Finance, aka SoFi, is probably best known for helping high-income students refinance their student loans. Founded by Stanford grads in 2011, the company moved from refinancing to mortgages and even personal loans just a few years ago in an attempt to become a full-fledged financial services company.
SoFi is representative of a new wave of lenders, companies to seek out borrowers who have great credit and who have very high incomes. Some of these companies make their mark by cutting out fees, while others offer incredibly low interest rates. What most have in common, though, is an attempt to market to those with established credit histories. SoFi differs because it looks primarily at income, offering up incredibly high loans (up to six figures) that other lenders might not touch. The company offers an average rate of eight and a half percent, with fixed and variable rates that differ by loan purpose and credit score.
SoFi also differs because it tends to downplay credit scores in general. Student loan borrowers, for example, are judged by their payment history as well as the industry in which they work. This same set of data is used in the personal loan side of the business, concentrating on solid credit histories and making sure that the applicant can actually handle the loan payments.
Applying to SoFi
It’s not particularly hard to apply to SoFi. Go to the website and fill out an application, and you’ll find out if you are prequalified relatively quickly. You’ll only need a log-in, password, and a bit of education and employment information for the first steps. The initial check will be a soft credit check, so you won’t get hit if you aren’t approved. On the other hand, SoFi does report to the three credit bureaus, so you’ll get a good bump on your credit score if you are approved and you make regular payments.
Once you are preapproved, you can view your loan terms and find the borrowing solution that fits your needs. You’ll also get a chance to pick an interest rate and set up your payment options so you can secure a lower rate. You’ll need to upload photos of your documents to continue, and those who are approved will be able to have their money directly deposited to the bank.
Requirements and Terms
So, who gets a SoFi loan? Again, you’ll need a credit score of at least 660 and generally above 700, and most borrowers have an income in the six figure range. There’s no required minimum credit history, nor is there are a maximum debt-to-income ratio. As you can imagine, though, having both of those factors in good order is helpful.
Should you get a loan, you should expect a fixed or variable rate between five and fifteen percent APR. Minimum loans are around five thousand dollars, with a maximum loan amount of one hundred thousand dollars. Loan duration is usually between three and seven years, and it will take you about ten days to get your loan. There are no origination fees or prepayment fees, but there is a four percent (or five dollar) late fee if your payment is more than fifteen days late.
As always, those who are most qualified to get personal loans are often those who have better options. If you have a solid credit score and a good income, you might be better off looking at a 0% APR credit card. If you own a home, getting a home equity loan may be a cheaper alternative. Even if you do qualify for SoFi, it may still be a good idea to look around at multiple lenders for a better rate.
If you do decide to stick with the personal loan, go into the process armed with knowledge. The higher your credit score and income, and the lower your debt, the better the deal you’ll get. If your credit score is high but your history is bad, your rates are going to be higher. If you have a bad credit score but a good income, though, you may be able to negotiate for a better rate. You are in charge of your financial future, so learn all you can before you accept a loan.