Sallie Mae vs SoFi: Which private student loan lender is right for you?

The choice between Sallie Mae vs SoFi typically comes down to borrower eligibility and specific loan features: Sallie Mae specializes in accessible financing for students still in school, while SoFi targets creditworthy borrowers with competitive rates and member benefits. For families, this decision often hinges on cosigner release timelines and long-term flexibility; for students, it is about securing the lowest possible cost of borrowing while managing cash flow during school.

Covering a tuition gap without overpaying on interest is a balancing act that requires a clear understanding of your options. Both lenders are industry leaders, but their ideal borrowers look quite different. Sallie Mae, with its deep roots in education finance, offers robust options for undergraduates who may need flexible approval criteria. SoFi, originating from the tech-focused refinancing space, often provides perks like unemployment protection and career coaching that appeal to those with established credit profiles.

Choosing the wrong lender can mean missing out on valuable protections or paying more than necessary over the life of the loan. This guide covers the essential details you need to compare these two powerhouses. You’ll learn how their rates compare, who qualifies for each, and which lender fits your specific borrowing needs so you can move forward with confidence.

Context: How Sallie Mae and SoFi differ as private lenders

Before comparing numbers, it is helpful to understand the core philosophy of each lender. Sallie Mae is one of the most recognizable names in student lending. It operates exclusively as an education finance company, serving undergraduate, graduate, and professional students. Because its primary focus is funding education, its products are designed specifically for borrowers who are still in school, offering a wide range of in-school repayment options and broad eligibility criteria.

SoFi, short for Social Finance, began as a student loan refinancing company and has since expanded into a comprehensive financial services platform. SoFi focuses heavily on “members” rather than just customers, targeting borrowers with strong credit histories and high earning potential. While they now offer private student loans for current students, their approach still leans toward borrowers who demonstrate high creditworthiness, often providing a suite of financial tools and career resources alongside the loan.

Both lenders require school certification, meaning they will verify your enrollment status and ensure the loan amount does not exceed the school’s cost of attendance minus other aid. Additionally, both utilize credit-based pricing. This means the interest rate you see in advertisements is the lowest possible rate; the actual rate offered to you will depend heavily on your (or your cosigner’s) credit score and financial history. Understanding these distinctions provides the necessary context for interpreting the rates and terms discussed below.

Sallie Mae vs SoFi: Quick comparison table

To help you make an immediate comparison, the table below outlines the key features, terms, and fees associated with each lender. This snapshot allows you to see the structural differences side-by-side before diving into the details of eligibility and cost.

Source: Sallie Mae and SoFi disclosure pages, as of January 2025.

The most distinct differences visible here are the minimum loan amounts and fee structures. Sallie Mae allows for smaller borrowing amounts, which can be crucial for students needing to cover a minor gap in funding like books or fees. SoFi, consistent with its borrower-friendly brand, eliminates late fees entirely, which provides a safety net against accidental oversight. Additionally, the cosigner release timeline is significantly shorter with Sallie Mae, a factor that often weighs heavily on parents planning their own financial future.

Sallie Mae vs SoFi: Interest rates and fees

Interest rates are the primary driver of your loan’s total cost. While both lenders offer competitive pricing, the rate you actually receive depends on a comprehensive underwriting process. Lenders analyze your credit score, income, and debt-to-income ratio to assign a risk profile. Because most undergraduates have limited credit history, adding a creditworthy cosigner is often the most effective way to secure the lowest advertised rates shown in the table above.

Both lenders provide the choice between fixed and variable interest rates. A fixed rate remains the same for the life of the loan, offering predictability for budgeting. A variable rate may start lower but can fluctuate monthly or quarterly based on market conditions. In a high-interest rate environment, fixed rates generally offer more security. According to Mark Kantrowitz, financial aid expert, “Private loans can offer variable interest rates, which may be lower than federal fixed rates initially,” but borrowers must weigh this against the risk of future rate hikes.

To help lower these costs, according to Sallie Mae and SoFi disclosures as of January 2025, both lenders offer a 0.25% interest rate reduction when you enroll in automatic payments. This discount is standard across the industry but effectively reduces the APR for as long as autopay remains active. As reported by Sallie Mae and SoFi as of January 2025, neither lender charges origination fees or prepayment penalties. This means you are not charged upfront to take out the loan, nor are you penalized for paying it off early to save on interest.

The main divergence in fees lies in late payments. According to Sallie Mae’s disclosure as of January 2025, Sallie Mae charges a late fee of 5% of the past due amount up to $25 if a payment is missed. SoFi does not charge late fees. While no borrower plans to miss a payment, SoFi’s policy offers peace of mind for those worried about occasional administrative slip-ups.

For a deeper understanding of how these rates function, you can review resources from the CFPB.

Eligibility requirements and cosigner policies

Qualifying for a private student loan generally requires a strong credit history and steady income. Both Sallie Mae and SoFi look for borrowers with good to excellent credit. However, SoFi is known for having slightly stricter underwriting criteria, often requiring higher credit scores and established income levels compared to traditional student lenders. Sallie Mae, while still requiring creditworthiness, is often viewed as more accessible for undergraduates, provided they have a creditworthy cosigner.

Citizenship is another standard requirement. Both lenders require borrowers to be U.S. citizens or permanent residents. However, Sallie Mae also lends to international students provided they have a creditworthy cosigner who is a U.S. citizen or permanent resident. This makes Sallie Mae a viable option for a demographic that often struggles to find financing.

The reality for most undergraduates is that they will not qualify alone. According to the Consumer Financial Protection Bureau as of January 2025, over 90% of private undergraduate loans have a cosigner. This makes cosigner policies a critical part of the decision. A cosigner is legally responsible for the loan if the student fails to pay, which can impact the cosigner’s credit score and debt-to-income ratio.

Cosigner release is a feature that allows the cosigner to be removed from the loan after the student borrower meets specific requirements. According to Sallie Mae’s disclosure as of January 2025, borrowers can apply for cosigner release after making 12 consecutive on-time principal and interest payments. According to SoFi’s disclosure as of January 2025, borrowers must make 24 consecutive on-time payments to be eligible. For parents anxious to clear the debt from their credit report, Sallie Mae’s shorter timeline is a distinct advantage.

If you cannot provide a cosigner, your options with both lenders will be severely limited. Students with thin credit files generally cannot qualify for SoFi or Sallie Mae loans independently. In these cases, maximizing federal options is even more critical. For more on navigating this, read our guide to student loans and cosigners.

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Repayment terms and in-school options

Managing cash flow during college is a major concern for students. The repayment plan you choose affects both your monthly budget while in school and the total cost of the loan. Both Sallie Mae and SoFi offer standard repayment terms of 5, 10, and 15 years. SoFi additionally offers a 7-year term, providing a middle-ground option that balances monthly affordability with interest savings.

In-school repayment options are where borrowers can exercise control over their debt growth. Interest accrues on private loans from the moment funds are disbursed. If you choose a deferred repayment plan, you make no payments while in school, but the interest piles up and is added to your principal balance (capitalized) once repayment begins. This results in a higher total cost.

Both lenders offer alternatives to full deferment. You can choose to make interest-only payments while in school, which prevents the balance from growing. According to Sallie Mae as of January 2025, Sallie Mae also offers a fixed repayment option, where you pay a flat amount (e.g., $25 per month) while enrolled. This small payment helps build a habit of repayment and slightly offsets accruing interest. SoFi offers similar flexibility, allowing borrowers to choose immediate full repayment, interest-only payments, or partial payments.

After graduation or dropping below half-time enrollment, both lenders provide a 6-month grace period before full principal and interest payments are required. This gives graduates time to find employment and settle into their new financial life. Choosing a shorter loan term (like 5 or 7 years) will result in higher monthly payments but significantly less interest paid over time. Conversely, a 15-year term lowers the monthly obligation but increases the total cost of the loan. For more strategies, explore our guide on student loan repayment options.

Borrower benefits and hardship protections

Beyond the numbers, the “extras” offered by a lender can add significant value. SoFi distinguishes itself with a robust member benefits program. Borrowers gain access to free career coaching, financial planning advice, and networking events. Perhaps their most notable feature is the Unemployment Protection Program. According to SoFi’s disclosure as of January 2025, if a borrower loses their job through no fault of their own, they may apply to pause payments for 3-month increments (up to 12 months total) while receiving job placement assistance. This safety net is rare in the private lending space.

According to Sallie Mae as of January 2025, Sallie Mae offers benefits tailored more specifically to the student experience, including free access to Chegg Study for four months, providing homework help and textbook solutions. They also provide free access to FICO credit scores, helping students track their financial health. Regarding hardship, Sallie Mae offers forbearance options for financial difficulties on a case-by-case basis, though they are generally less codified than SoFi’s unemployment program.

Both lenders have policies for death and disability discharge. If the student borrower dies or becomes permanently disabled, the loan is typically forgiven, and the cosigner is released from the obligation. This brings private lenders closer to federal standards, though federal loans still offer superior protections. Federal loans include access to Income-Driven Repayment (IDR) plans and potential loan forgiveness programs that private lenders simply do not match. For a full comparison of safety nets, review our article on federal student loan protections.

Which lender is right for you? Decision framework

Deciding between Sallie Mae and SoFi requires looking at your specific financial picture. Because rates are personalized, the “cheaper” lender varies from person to person. Use this framework to guide your choice:

• Choose Sallie Mae if:
  • You are an undergraduate student who needs a lender with flexible approval criteria.
  • You have a cosigner who wants to be released from the loan obligation as soon as possible (12 months).
  • You need a smaller loan amount (under $5,000) to cover a specific gap.
  • You want the option of a small fixed monthly payment ($25) while in school.
• Choose SoFi if:
  • You or your cosigner have a strong credit profile and high income.
  • You value additional safety nets like unemployment protection and career coaching.
  • You want to avoid the risk of late fees entirely.
  • You are comfortable with a longer timeline (24 months) for cosigner release.

Consider both if: You have good credit and a willing cosigner. In this scenario, the smartest move is to prequalify with both. Since prequalification does not hurt your credit score, you can see the actual interest rates each lender would offer you. If the rates are similar, let the benefits (like cosigner release or unemployment protection) be the tiebreaker.

Remember, private loans should only fill the gap left after you have maximized scholarships, grants, and federal student loans. For more alternatives, check our private student loan comparison guide.

Not sure which lender offers you the best rate? Prequalify with multiple lenders in minutes without affecting your credit score. Compare your personalized offers.

Frequently asked questions

Neither is universally “better.” Sallie Mae is often more accessible for undergraduates and offers faster cosigner release. SoFi typically offers additional perks like unemployment protection and career services, appealing to borrowers with strong credit profiles. The best choice depends on which benefits align with your needs and who offers you the lower rate.

Both lenders typically require a credit score in the mid-to-high 600s at a minimum to qualify, though the most competitive rates go to borrowers (or cosigners) with scores in the mid-700s or higher. SoFi generally targets borrowers with higher credit scores and stronger financial histories than Sallie Mae.

It is possible but difficult for most undergraduate students. Without a substantial income and credit history of your own, you will likely be denied or offered very high interest rates. Graduate students with established credit histories are more likely to qualify independently.

Interest rates are personalized based on creditworthiness. While both offer competitive ranges, one lender may view your financial profile more favorably than the other. Prequalifying with both is the only way to know for sure which will offer you a lower rate.

You should always use federal student loans first. They come with fixed rates, income-driven repayment plans, and potential forgiveness options that private lenders do not offer. Fill out the FAFSA to access federal aid before applying for private loans.

Choosing between Sallie Mae and SoFi is a significant financial step, but it doesn’t have to be overwhelming. By understanding the trade-offs between cosigner policies, fees, and borrower benefits, you can select the lender that best supports your education goals and your family’s financial health.

• Sallie Mae stands out for current students who prioritize flexible in-school payment options and a faster 12-month path to cosigner release.
• SoFi is a strong contender for families with excellent credit who value career support, unemployment protection, and a fee-free structure.
• Both lenders require good credit or a cosigner, and neither charges origination fees, making them both competitive options in the market.
• Actionable Step: Use the prequalification tools available from both lenders. It takes only a few minutes and uses a soft credit check, giving you real numbers to compare.
• Reminder: Always exhaust federal Direct Loans first to take advantage of government protections before turning to private financing.

You have the knowledge to make a smart choice. By comparing your options carefully, you can bridge the funding gap and focus on what matters most: your education.

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References and resources

• Sallie Mae Official Website: For current interest rates, loan terms, and disclosure details.
• SoFi Official Website: For membership benefits, unemployment protection details, and current rates.
• StudentAid.gov: The official source for federal student loan limits, interest rates, and FAFSA information.
• Consumer Financial Protection Bureau (CFPB): Resources for understanding student loan debt and borrower rights.
• College Finance: Federal Student Loans Guide: Comprehensive overview of federal borrowing options.
• College Finance: Private Student Loan Comparison: A guide to other top lenders in the market.
• College Finance: FAFSA Guide: Step-by-step instructions for maximizing federal aid.
• College Finance: Cosigner Guide: Detailed advice on the risks and benefits of cosigning a loan.