If you’re looking for low interest rates and can meet SoFi’s strict student loan eligibility requirements, this lender is well worth considering. Although SoFi is well known for student loan refinancing, this lender began offering private student loans for current students in 2019. SoFi is a good option if flexible repayment terms are important to you.
SoFi’s Pros and Cons
Pros:
Cons:
Founded in 2011, SoFi began as a student loan refinancing lender, operating as an online-only private company. In fact, they were the first lender to refinance both federal and private student loans. In 2019, SoFi began offering private student loans to those currently in school, boasting low, competitive rates.
SoFi began with a mission to help individuals achieve financial freedom and independence to meet their life goals, such as completing school or pursuing a postgraduate degree. To date, they’ve funded over $50 billion in new and refinanced student loans and have over 1 million borrowers (called members).
One of the key differences between SoFi and other private lenders is the company’s flexible repayment options, which allow borrowers to better manage their loan repayment terms and create a schedule that works for their budgets.
SoFi also offers a variety of member resources, tips, and tools to help their borrowers take control of their finances and make smarter decisions when it comes to student loans and refinancing.
SoFi claims to be one of the top choices in private loan funding for students across the country, but how well do those claims hold up? We’ve looked at some trusted company reviews to help you understand how SoFi stacks up against the competition.
The Better Business Bureau (BBB) is a nonprofit company formed in 1912 to bring honest evaluations of businesses to consumers. This platform allows businesses to respond publicly to customer complaints and offers transparent ratings and reviews.
SoFi has a fairly high rating on the BBB: they’ve received an A. The reason SoFi does not have a higher score is that there is active government action taken against this lender. SoFi has been accused of misrepresenting how much borrowers have saved through their student loan refinancing services, offering inflated figures and data.
One of the top review websites, Trustpilot, also offers mixed reviews on SoFi. While there are many positive customer reviews, the site gives the service 3.6 out of 5 stars, mostly due to SoFi only responding to 3% of the negative reviews on the Trustpilot website.
SoFi’s main benefit over other private student loan providers is the flexibility and customized rates that the company can offer borrowers. SoFi allows you full control over selecting your loan terms, setting repayment schedules, and even combining federal and private loans when refinancing. The application process is also easy and fast, and SoFi will offer you rates without running a hard credit check — so you can decide if SoFi is right for you without impacting your credit score.
Here are some additional benefits to consider:
All student loan borrowers have different needs, so there’s no one-size-fits-all lender when it comes to taking out new student loans or refinancing. Let’s look at some of the disadvantages of borrowing through SoFi, so you can make the smartest student loan decision for your financial situation.
SoFi offers many benefits to student loan borrowers and those looking to refinance — but before jumping the gun and taking out a loan with SoFi or any other private student loan lender, we encourage you first to explore your federal student loan options.
Federal student loans are financed through the U.S. government and managed by the U.S. Department of Education. Federal student loans offer subsidized (the government pays your interest while you’re in school) and unsubsidized loan options and typically offer fixed interest rates that won’t rise over time.
Federal student loans don’t usually require borrowers to have a credit history, high income, or co-signer to apply for funding. Instead, aid is determined by student need when you fill out the Free Application for Federal Student Aid (FAFSA). In general, federal student loans offer more attractive rates that private lenders simply can’t match.
Even if you think you won’t qualify, it can’t hurt to apply for federal student loans. These loans are also more secure than private student loans since they’re backed by the U.S. government. There are other benefits to consider when looking at federal student loans, such as:
For these reasons, we recommend applying for federal student loans before turning to private lenders. Federal student loans offer benefits and protections that private lenders can’t and should be used as your primary loan funding, after extinguishing any financial aid.
However, federal student loans and aid may not be enough to cover your college expenses. When this happens, we recommend turning to trusted private student loan lenders, such as SoFi, for supplemental student loans.
If you’re not eligible for federal student loans or need additional assistance paying for your education, SoFi could be the right supplemental lender for you. What we like most about SoFi is that you’re able to apply and see your loan rates, limits, and term options without impacting your credit score.
SoFi has helped hundreds of thousands of students afford college. While SoFi can be a great option, we recommend first exploring your federal student loan options, scholarships and grants, and other alternatives for paying for college.
CollegeFinance.com can help connect you to the tools you need to make school more affordable. We’ll educate you on repaying and refinancing your student loans and help you better understand all of the options available to you.
We recommend conducting additional research on private student loans before choosing a lender and consulting our guide on the best private student loans before committing to a lender.