SoFi vs Edly: Private student loans compared
For many families, the gap between federal financial aid and the actual cost of college requires a private financing solution. However, not all private lenders operate the same way. When comparing SoFi vs Edly, you are choosing between two fundamentally different approaches to funding education. SoFi is a traditional lender best suited for borrowers (or students with cosigners) who have strong credit and want fixed or variable rate loans with extensive member benefits. In contrast, Edly utilizes an income-share agreement (ISA) model, which is often better suited for students without credit history or cosigners who prefer repayment based on their future earnings rather than a fixed debt schedule.
Whether you are a parent trying to protect your credit score while helping your child, or a student looking for a path to graduation that doesn’t require a cosigner, understanding these differences is vital. This guide covers how these lenders differ in structure, total costs, eligibility requirements, and borrower benefits—plus which option fits your specific financial situation.
While both SoFi and Edly offer legitimate pathways to fund your education, they should only be considered after you have maximized scholarships, grants, and federal student loans. By understanding the trade-offs between a traditional loan and an income-share agreement, you can make an empowered decision that supports your long-term financial freedom.
Context: Traditional private loans vs income-share agreements
To make an informed choice between SoFi and Edly, it is essential to understand that you are not just comparing interest rates; you are comparing two entirely different financial instruments. Most families are familiar with the traditional private student loan model used by SoFi. In this scenario, you borrow a specific amount of money upfront. You and the lender agree on an interest rate (fixed or variable) and a repayment term (such as 10 or 15 years). Regardless of how much money the student earns after graduation, the monthly payment remains tied to the loan balance and interest rate.
Edly, conversely, operates primarily on an Income-Share Agreement (ISA) model. Instead of a traditional loan with an interest rate, Edly provides funding in exchange for a percentage of the student’s post-graduation income for a set period. If the student earns a high salary, they may pay back more than the original funded amount (up to a cap). If they earn less, their payments are lower. If they earn below a certain threshold, they may pay nothing for that month.
This distinction matters because it shifts the risk profile. With a traditional loan like SoFi, the borrower bears the risk; payments are due regardless of employment status. With an ISA like Edly, the lender shares some of the risk regarding the student’s future career outcomes. For a broader look at how these products fit into the landscape, you can review our guide to private student loans.
Quick comparison: SoFi vs Edly at a glance
The following table provides a direct comparison of the key features, costs, and requirements for both lenders. This overview is designed to help you quickly identify which model aligns with your current financial profile and risk tolerance.
| Feature | SoFi | Edly |
|---|---|---|
| Funding Type | Traditional Private Student Loan | Income-Based Repayment Loan / ISA |
| Cost Structure | Fixed or Variable APR | Percentage of Gross Income (Income Share) |
| Repayment Term | 5, 7, 10, or 15 years | Based on number of payments or repayment cap |
| Min. Credit Score | Generally 650+ (or creditworthy cosigner) | No minimum credit score required |
| Cosigner | Recommended (often required for students) | Not required |
| Eligibility | Title IV schools, at least half-time | Specific majors/programs, typically juniors/seniors |
| Fees | No origination, late, or insufficient fund fees | Origination fees may apply depending on state |
| Borrower Benefits | Career coaching, financial planning, rate discounts | Payments pause if income drops below threshold |
Sources: SoFi.com and Edly.org (current as of January 2025).
If you have excellent credit or a willing cosigner, SoFi generally offers a more predictable path with potentially lower total costs. If you lack a cosigner or are entering a field with variable starting salaries, Edly’s model offers flexibility that traditional loans cannot match. As education policy expert Jason Delisle notes, “The private market can and does innovate — offering options federal loans don’t, such as variable rates or targeted underwriting.” This innovation allows different borrowers to find the right fit for their unique circumstances.
Interest rates and total cost comparison
Calculating the total cost of borrowing is the most complex part of comparing SoFi and Edly because their math works differently. With SoFi, costs are determined by your interest rate. As of January 2025, according to SoFi.com, the lender offers competitive fixed APRs of 4.49% - 13.98% and variable APRs of 4.99% - 13.13% based on your creditworthiness, the loan term selected, and the degree type. Borrowers can also secure a 0.25% interest rate reduction by enrolling in autopay. Because the rate is applied to your principal balance, you can calculate exactly how much interest you will pay over the life of the loan before you sign the paperwork.
Edly’s cost structure is variable by design. Instead of an APR, you agree to an “Income Share Percentage,” which as reported by Edly.org, typically ranges between 2% and 10% of your gross income as of January 2025, depending on your major and the amount funded. You make these payments for a set number of months or until you reach a “Payment Cap.” The Payment Cap is the maximum amount you will ever pay back, typically ranging from 1.5 to 2.5 times the amount funded as of January 2025. Additionally, Edly sets a minimum income threshold (often around $30,000); if you earn less than this, you make no payments.
To illustrate the difference: If a student borrows $10,000 from SoFi at a 6% fixed rate for 10 years, they will pay a specific, unchanging monthly amount. If that same student uses Edly and lands a high-paying job immediately after graduation, they will pay a percentage of that high salary, potentially paying back more than the SoFi loan cost in a shorter time. However, if that student takes an unpaid internship or has a lower starting salary, their Edly payments will be significantly lower than the SoFi fixed payment. For more on how traditional rates work, read our guide on understanding student loan interest rates.
Eligibility requirements: Who qualifies for each lender
The underwriting criteria—the rules lenders use to decide if they will give you money—are starkly different between these two options. According to SoFi.com, the lender uses traditional credit underwriting. To qualify, a borrower (or their cosigner) typically needs a credit score of 650 or higher, a solid employment history, and sufficient income to cover debts. Because most undergraduate students do not yet have this financial history, the vast majority of SoFi undergraduate loans require a creditworthy cosigner, such as a parent or guardian.
Edly flips this model by focusing on where you are going, rather than where you have been. According to Edly.org, the lender does not require a cosigner or a minimum credit score. Instead, eligibility is based heavily on your academic progress. As of January 2025, Edly primarily serves juniors, seniors, and graduate students in specific majors that have strong employment outcomes. They assess your likelihood of graduating and securing a job in your field.
This makes Edly a strong contender for students who may have exhausted their federal options and do not have a parent who can cosign. According to Mark Kantrowitz, financial aid expert, “Most students will need a cosigner to qualify for a private student loan.” While this is true for lenders like SoFi, Edly’s model is specifically designed to bridge the gap for students who cannot provide that security. Before applying to either, ensure you have completed the FAFSA to access federal aid; see our FAFSA guide for details.
Repayment terms and flexibility
Repayment flexibility is a major concern for both students and parents. According to SoFi.com, the lender offers standard repayment terms of 5, 7, 10, or 15 years. Borrowers can choose to start making full payments immediately, pay only interest while in school, or defer all payments until six months after graduation. If a borrower faces financial hardship, SoFi offers unemployment protection, which can pause payments for a specific period (typically in 3-month increments, up to 12 months total), though interest continues to accrue.
Edly’s repayment structure is inherently flexible because it is tied to income. There is no fixed “term” in years; rather, the obligation ends when you have made the required number of payments or reached the payment cap. According to Edly.org, the most significant safety feature is the minimum income threshold. If a graduate loses their job or their income dips below the threshold (e.g., $30,000), their required payment drops to zero. Unlike traditional forbearance where interest piles up, these periods of non-payment are simply part of the agreement.
The trade-off is clear: SoFi offers a fixed timeline where you know exactly when you will be debt-free, provided you make payments. Edly offers “downside protection,” ensuring that if your career starts slowly, your student debt won’t overwhelm your budget. However, this flexibility comes at the cost of potentially higher total payments if your career takes off quickly.
Borrower benefits and perks
Beyond the money itself, both lenders offer benefits that add value to the borrower experience. According to SoFi.com, the lender is renowned for its member benefits. Borrowers gain access to free financial planning, exclusive networking events, and career coaching services, which can be invaluable for recent graduates looking to negotiate salaries or update resumes. SoFi also prides itself on a “no fee” structure—meaning no origination fees, late fees, or prepayment penalties. They also offer a referral program and occasional rate discounts for existing members.
Edly’s primary benefits are structural rather than perk-based. The biggest benefit is the alignment of incentives: Edly only gets paid back if the student succeeds. This creates a partnership dynamic rather than a strict creditor-debtor relationship. Additionally, according to Edly.org, because Edly is an income-based product, it typically does not appear on a credit report as traditional debt in the same way a loan does, which can be advantageous for debt-to-income ratios when renting an apartment or buying a car (though this varies by reporting bureau and is subject to change).
For students focused on career acceleration, SoFi’s networking and coaching are tangible perks. For students worried about economic uncertainty, Edly’s built-in income protection is a benefit that provides peace of mind.
Application process comparison
Applying for private financing can be stressful, but both lenders have streamlined their digital experiences. According to SoFi.com, the application is fast and entirely online. You can check your rate with a “soft” credit pull (which doesn’t affect your credit score) in just a few minutes. If you proceed, you will need to upload proof of income, identification, and school information. Once approved, SoFi works with your school to certify the loan amount, a process that can take a few weeks.
Edly’s application process is slightly more involved because they are underwriting the student, not the credit score. According to Edly.org, you will need to provide details about your major, GPA, and credits completed. Edly verifies this information directly with the school to ensure you meet their academic criteria. Because they are assessing your future potential, the approval process may take a bit longer than an automated credit check. However, like SoFi, the entire process is digital.
Regardless of which lender you choose, having your documents ready—including transcripts, financial aid award letters, and ID—will speed up the process. Remember, you should always have applied for federal loans first. If you haven’t, check our Federal Student Loans guide.
Which lender is right for you?
Choosing between SoFi and Edly ultimately depends on your financial profile and your risk tolerance. Here is a framework to help you decide.
- You have excellent credit (or a cosigner who does): You will likely qualify for the lowest interest rates, making this the most cost-effective option.
- You want predictability: You prefer knowing exactly what your monthly payment will be for the next 10 years.
- You value member perks: You want access to career coaching, financial planners, and networking events.
- You plan to refinance: Traditional loans are generally easier to refinance later if interest rates drop.
- You do not have a cosigner: You are an upperclassman who needs funding but cannot rely on parents for credit backing.
- You are entering a volatile industry: You want the safety net of knowing your payments will drop to zero if you are unemployed or underemployed.
- You are confident in your major: You are in a high-demand field but lack the credit history to prove it to traditional banks.
- You prefer flexibility over fixed costs: You are willing to potentially pay more in total in exchange for monthly payments that match your budget.
Compare your options and see personalized rates from multiple lenders
Frequently asked questions
Generally, you can, provided the total amount you borrow does not exceed your school’s certified Cost of Attendance (COA) minus other aid. However, managing two different repayment structures—one fixed and one income-based—can be complex, so proceed with caution.
Income-Share Agreements are a form of education financing, but they are legally distinct from traditional loans. However, they are still financial obligations. While they may not always appear on credit reports in the same way as loans, you must disclose them when applying for other credit, such as a mortgage.
Refinancing an ISA into a traditional private loan is possible with some lenders, but not all. Lenders like SoFi may allow you to refinance an ISA into a traditional loan if you meet their credit criteria after graduation, but you should verify this specific policy before borrowing.
With SoFi, you are still responsible for repaying the full loan balance plus interest. With Edly, repayment terms depend on your contract; typically, you are still responsible for repayment, but the income-based protections (no payments if income is low) would still apply.
Yes, absolutely. Federal student loans offer benefits that neither SoFi nor Edly can match, such as access to Public Service Loan Forgiveness (PSLF) and specific income-driven repayment plans. Always maximize federal aid and scholarships first.
Navigating the choice between SoFi and Edly comes down to understanding your own financial reality and risk tolerance. Both lenders offer valuable solutions for bridging the gap between financial aid and the cost of a degree, but they serve different types of students.
Key takeaways:
- SoFi is typically the best choice for borrowers with strong credit or creditworthy cosigners who want the lowest possible fixed cost.
- Edly provides a vital alternative for upperclassmen without cosigners, offering safety through income-based repayment.
- Always calculate your estimated total cost based on your expected starting salary before signing.
- Ensure you have maximized all federal aid, grants, and scholarships before turning to private financing.
- Consider the value of borrower protections: SoFi offers career coaching, while Edly offers income protection.
You have the power to choose the financing that fits your future. By weighing the stability of a traditional loan against the flexibility of an income-share agreement, you can select the path that best supports your education and your financial freedom.
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