SoFi vs Citizens: Private student loans compared
SoFi typically wins on member perks and faster cosigner release for strong-credit borrowers, while Citizens is often the cheaper option for existing customers who can leverage loyalty discounts and multi-year approval convenience. Both lenders are industry leaders, but your choice depends on whether you prioritize long-term banking relationships or digital-first flexibility.
Choosing the right private lender is about more than just the interest rate—it is about finding the repayment terms and borrower protections that align with your family’s financial future. In this guide, you will learn how to compare rates, eligibility requirements, repayment flexibility, and unique perks to determine which lender fits your situation. We will break down the specific trade-offs between SoFi’s career-focused benefits and Citizens’ relationship-based rewards.
Whether you are a parent looking to help fund your child’s education or a student taking on the responsibility yourself, understanding these differences is essential. By the end of this comparison, you will have the data you need to select the lender that offers the best combination of cost savings and peace of mind for your degree.
Context: Understanding SoFi and Citizens as private lenders
Before diving into the numbers, it is helpful to understand who these lenders are and how they position themselves in the market. SoFi and Citizens represent two very different approaches to student lending, yet both are among the most reputable options available.
SoFi (Social Finance) is a digital-native fintech company founded in 2011. It disrupted the market by offering a sleek, online-only experience focused on high-earning professionals and students with strong future potential. SoFi is known for its “member” approach, offering borrowers access to career coaching, networking events, and financial planning tools. They serve undergraduate, graduate, and parent borrowers, positioning themselves as a partner in your financial journey rather than just a source of funds.
Citizens, on the other hand, is one of the oldest financial institutions in the United States, with roots dating back to 1828. As a traditional bank with physical branches, Citizens integrates student lending into a broader suite of banking products. Their standout feature is the Multi-Year Approval option, which simplifies funding for students with multiple years of school remaining. They cater to families who value stability and relationship banking.
It is critical to remember that private loans should only be considered after you have exhausted all federal financial aid options. As detailed in our Federal vs. Private Loans guide, federal loans offer protections like income-driven repayment that private lenders generally cannot match.
According to Betsy Mayotte, student loan expert, “In general, federal loans should be your first stop, but private loans can be appropriate when you’ve maxed out your federal eligibility.” Once those federal limits are reached, comparing top-tier private lenders like SoFi and Citizens becomes the next logical step.
Why this comparison matters
The financial impact of your choice
Comparing lenders might feel like splitting hairs, but the financial impact is substantial. A difference in Annual Percentage Rate (APR) of just 0.50% can cost—or save—you thousands of dollars over the life of a loan.
Consider a $30,000 loan with a 10-year repayment term. If you choose a lender with a rate that is 0.50% higher than a competitor’s, you could pay approximately $800 to $900 more in interest over that decade. Beyond the raw numbers, differences in cosigner release policies can determine how quickly a parent is freed from financial liability, impacting their ability to finance other goals like retirement or a mortgage.
SoFi vs Citizens: Side-by-side comparison
To help you make a quick assessment, we have compiled the essential features of both lenders below. This table highlights the structural differences in loan terms, fees, and borrower benefits.
| Feature | SoFi | Citizens |
|---|---|---|
| APR Types | Fixed and Variable | Fixed and Variable |
| Loan Amounts | $5,000 up to Cost of Attendance | $1,000 up to Cost of Attendance ($350k limit for medical) |
| Loan Terms | 5, 7, 10, 15 years | 5, 7, 10, 15 years |
| In-School Repayment | Immediate, Interest-Only, Partial ($25), Deferred | Immediate, Interest-Only, Deferred |
| Cosigner Release | After 24 on-time payments | After 36 on-time payments |
| Origination Fees | None | None |
| Late Fees | None | 5% of the past due amount |
| Discounts | 0.25% Autopay | 0.25% Autopay + 0.25% Loyalty (for existing customers) |
| Borrower Types | Undergrad, Grad, Parent, Refinance | Undergrad, Grad, Parent, Refinance |
Source: SoFi.com and citizensbank.com (rates and fees as of May 2025, subject to change)
Let’s examine the most critical factors in greater detail, starting with interest rates and how you can qualify for the lowest ones.
Interest rates and discounts: Where the real savings are
When comparing the cost of borrowing, the interest rate is the headline figure, but the discounts you qualify for determine what you actually pay. Both SoFi and Citizens offer competitive rates, but their discount structures cater to different types of borrowers.
As shown in the comparison table above, both lenders offer fixed and variable interest rates. Variable rates may start lower but fluctuate with market indices (like SOFR), introducing risk if rates rise over the next decade. Fixed rates provide stability, locking in your monthly payment for the life of the loan. For most students and families prioritizing predictability, fixed rates are often the safer choice.
According to SoFi’s official site as of May 2025, borrowers receive a 0.25% interest rate reduction for setting up automatic payments. This is available to any borrower, regardless of where they bank. Occasionally, SoFi offers additional temporary rate discounts for members, but the autopay reduction is their standard offering.
As reported by Citizens as of May 2025, they also offer a 0.25% autopay discount, but add a significant layer of savings for existing customers with an additional 0.25% “Loyalty Discount” if you or your cosigner have a qualifying account with them at the time of application. This means if you already bank with Citizens, your total interest rate reduction could be 0.50%, which is a significant advantage over competitors.
To secure the lowest advertised rates from either lender, you (or more likely, your cosigner) will need excellent credit. This typically means a FICO score of 740 or higher, a stable income history, and a low debt-to-income ratio. If your credit profile is in the “good” rather than “excellent” range (670–739), you can still qualify, but you should expect rates toward the middle or higher end of the ranges listed in the table. For more strategies on lowering your costs, read our guide on how to get the best student loan rates.
Eligibility requirements and cosigner policies
Qualifying for a private student loan is fundamentally different from federal aid. While federal Direct Loans are available to almost all students regardless of credit, private lenders like SoFi and Citizens operate like mortgage or auto lenders—they assess your risk.
Both lenders require borrowers to be U.S. citizens or permanent residents (or have a cosigner who is). International students generally cannot apply with SoFi, and Citizens requires an eligible cosigner for international applicants. While neither lender publishes a hard “minimum” credit score, industry data suggests that a score of at least 670 is usually necessary for approval, with scores above 700 seeing significantly better rates.
Income verification is also strict. Students who are working part-time rarely meet the income requirements on their own. This leads to the most common dynamic in private lending: the need for a cosigner.
According to Mark Kantrowitz, financial aid expert, “Most students will need a cosigner to qualify for a private student loan.” This aligns with data showing that over 90% of private undergraduate loans have a cosigner. A cosigner is legally responsible for the debt if the student cannot pay, which is a serious financial commitment.
For many parents, the goal is to help their child get approved but eventually remove their name from the debt. This is where SoFi has a distinct advantage. According to SoFi’s official site as of May 2025, borrowers can apply for cosigner release after making just 24 consecutive on-time payments of principal and interest. This offers parents a faster “exit strategy” from the loan.
As reported by Citizens as of May 2025, they also offer cosigner release, but the timeline is longer—you must make 36 consecutive on-time payments before applying to release the cosigner. In both cases, the student must meet the lender’s credit and income requirements on their own at the time of the release application. For families planning their financial future, that one-year difference can be significant. You can learn more about this process in our guide to student loans with cosigners.
Repayment options and flexibility
Once approved, the structure of your repayment plan will determine your monthly cash flow during and after college. Both lenders offer the standard term lengths of 5, 7, 10, and 15 years, allowing you to choose between paying off debt aggressively (shorter term, higher monthly payment) or lowering your monthly obligation (longer term, higher total interest cost).
How you handle payments while in school is a major decision point. Both lenders offer three standard options:
- Immediate Repayment: You pay full principal and interest while in school. This saves the most money long-term.
- Interest-Only Repayment: You pay only the accruing interest each month. This prevents the balance from growing.
- Deferred Repayment: You pay nothing while in school. Interest accrues and is capitalized (added to your balance) after graduation, making this the most expensive option.
According to SoFi as of May 2025, they offer a unique fourth option: a partial interest payment of $25 per month. This serves as a middle ground for students who cannot afford full interest payments but want to contribute something to keep the habit of repayment and slightly offset interest accrual.
Both lenders offer a standard 6-month grace period after graduation before full principal and interest payments begin. This aligns with federal loan standards, giving graduates time to find employment and settle into their post-college life. However, it is important to note that unlike subsidized federal loans, interest continues to accrue during the grace period for both SoFi and Citizens loans.
Choosing the right repayment plan involves balancing your current budget with your future debt load. For a deeper dive into these strategies, review our student loan repayment options guide.
Hardship assistance and borrower protections
Life circumstances can change unexpectedly, making hardship protections an important consideration when choosing a lender. While private loans generally offer fewer safety nets than federal loans, reputable lenders like SoFi and Citizens do provide assistance programs.
If you lose your job or face a medical emergency, both lenders offer forbearance options, which allow you to temporarily pause payments. According to SoFi’s official documentation as of May 2025, they offer up to 12 months of forbearance in total over the life of the loan, typically granted in 3-month increments. As reported by Citizens as of May 2025, they also offer forbearance for financial hardship, generally capped at 12 months as well, though eligibility may depend on your repayment history.
It is important to remember that during forbearance, interest usually continues to accrue, increasing your total loan balance.
Both lenders offer compassionate discharge policies. In the unfortunate event of the primary borrower’s death or total and permanent disability, both SoFi and Citizens will discharge the loan. This protects the estate and the cosigner from inheriting the debt—a standard protection in the private market but one worth verifying.
While these protections are helpful, they are not as comprehensive as federal options. For borrowers who may need income-driven repayment (where payments are pegged to your salary) or Public Service Loan Forgiveness (PSLF), federal loans offer protections private lenders simply cannot match. If you anticipate working in a lower-paying field or public service, review our federal loan benefits guide before committing to a private loan.
Unique benefits and perks
Beyond standard protections, each lender offers distinctive perks that may influence your decision. This is where the difference between a modern fintech company and a traditional bank becomes most apparent.
SoFi markets itself as a membership rather than just a lender. According to SoFi’s official site as of May 2025, their most unique value proposition is the “SoFi Member Benefits” program. This includes:
- Career Coaching: Members have access to one-on-one career coaching to help with resume building, personal branding, and salary negotiation.
- Financial Planning: Access to credentialed financial planners to help map out broader financial goals.
- No Fees Policy: As mentioned in the comparison table, SoFi charges no origination fees, no late fees, and no insufficient fund fees. This fee-free structure is rare and provides peace of mind against accidental slip-ups.
Citizens focuses on streamlining the borrowing process and rewarding loyalty. According to Citizens’ official documentation as of May 2025, their standout features include:
- Multi-Year Approval: This is a significant stress-reducer for parents. Instead of applying and undergoing a hard credit check every single year, eligible borrowers can get approved once for their entire degree. You simply request the funds needed for subsequent years without re-qualifying.
- Loyalty Discounts: As detailed in the rates section, the ability to stack an additional 0.25% rate reduction for existing customers makes Citizens highly attractive for families who already bank there.
- Branch Access: For those who prefer resolving issues face-to-face rather than via chat or phone, Citizens’ physical branch network (in covered regions) is a tangible benefit.
Which lender is right for you?
With all these factors in mind, the “best” lender depends entirely on your specific profile. Here is a framework to help you decide.
- You value career support: The free career coaching and networking events offer value beyond the loan itself, especially for students entering competitive job markets.
- You want faster cosigner release: If relieving your parent of financial responsibility quickly is a priority, SoFi’s 24-month release period is superior to Citizens’ 36-month requirement.
- You want a completely fee-free experience: The absence of late fees provides a safety net that most other lenders do not offer.
- You prefer a digital-first experience: SoFi’s mobile app and online dashboard are highly rated for ease of use.
- You are an existing Citizens customer: The loyalty discount often makes Citizens the mathematically cheaper option if you already have a checking or savings account with them.
- You want to avoid annual applications: The Multi-Year Approval feature saves time and protects your credit score from multiple hard inquiries over four years of college.
- You prefer traditional banking: If you value the ability to walk into a branch or want to build a relationship with a long-standing financial institution, Citizens is the better fit.
If you have strong credit and no existing banking preference, you should apply to both. Private student loan rates are highly personalized. It is common for one lender’s algorithm to offer a significantly lower rate than another’s for the exact same applicant.
Frequently asked questions
While it is possible, it is difficult for most undergraduates. Both SoFi and Citizens generally require a strong credit history and sufficient income to qualify alone. Students without established credit or steady income will almost certainly need a creditworthy cosigner to get approved.
There is no single answer because rates depend on your credit profile and selected loan terms. However, Citizens typically offers lower effective rates for existing customers who qualify for the loyalty discount. For non-customers, SoFi is often highly competitive. You must compare personalized quotes to know for sure.
Both lenders offer rapid preliminary decisions, often within minutes of submitting an online application. Full certification with your school and disbursement of funds typically takes 1-2 weeks. Citizens’ Multi-Year Approval can significantly speed up the process for your sophomore, junior, and senior years.
Yes. Both SoFi and Citizens are major players in the student loan refinancing market. If interest rates drop after you graduate or your credit score improves, you can apply to refinance your loans (from either lender) to secure a lower rate.
Generally, no, unless the international student has a cosigner who is a U.S. citizen or permanent resident. Neither lender offers loans to international students based solely on their own credit profile.
Choosing between SoFi and Citizens comes down to matching their strengths to your needs. Both are top-tier lenders that offer competitive rates and reliable service, but they serve slightly different borrower profiles.
Key takeaways:
- SoFi is ideal for borrowers who want flexibility, faster cosigner release (24 months), and valuable career coaching perks.
- Citizens shines for families who want the convenience of Multi-Year Approval and for existing customers who can unlock loyalty rate discounts.
- Compare your options: Never assume one is cheaper without checking. Rates vary by individual.
- Federal first: Always exhaust federal Direct Loans before signing for a private loan to ensure you keep essential borrower protections.
Ultimately, the right choice is the one that offers the lowest total cost while providing the flexibility your family needs. Take the time to check your rates with multiple lenders—it is a small step that can save you thousands over the long run.
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References and resources
For further research and to verify current terms, consult the following official resources:
