The SoFi personal loan application process offers some of the lowest rates around with a maximum rate that is half that at other lenders.
SoFi (formerly called Social Finance Inc.) is one of the leaders in online lending with more than $5 billion in loans issued and one of the few to offer mortgage and education loans.
It’s making waves in the market for student loans, helping people refinance their debt at a lower rate and helping to tackle the growing student loan crisis in America.
I’ve used SoFi loans in the past and it’s one of the most popular personal loan sites on the blog. I used the website for a personal loan of $8,000 to cover some emergency medical expenses for my family. Not only do they offer some of the lowest rates but the widest variety for types of loans among the sites I’ve seen.
Besides some of the lowest rates in personal loans, SoFi is also running a limited time promotion for its SoFi personal loan program.
I’ve used SoFi before but I wanted to look into the possibility of refinancing my student loan debt.
In this SoFi Review, I’ll cover:
- What sets SoFi apart from other loan websites
- My experience getting a SoFi loan
- The SoFi loan application process
- Tips to get lower rates on any personal loan
Click through to start the SoFi personal loan application process.
SoFi Personal Loans Program
Despite its long history as a lending site, SoFi is one of the less well-known social lenders compared to the large peer loan sites like Lending Club. It’s best known for its student loan refinancing but is also one of the biggest personal loan providers online.
In fact, the company has grown aggressively to offer mortgages, student loans, personal loans and even life insurance plans to be one of the most comprehensive financial websites.
Borrowers to the SoFi Personal Loan program can borrow between $5,000 and $100,000 at fixed rates from 5.99% to 16.49%, which is about the lowest rate you’ll find in online lending. Variable rates are also available at rates between 5.74% and 14.60% with direct withdrawal. (Rates current as of 2/25/2015)
The SoFi personal loan application process sets your rate just as any other lender by checking your credit history, employment and other financial details. SoFi has also built other factors into its rate system that help to lower rates for qualified borrowers. If you agree to direct withdrawal for monthly payments, you’ll get a 0.25% cut on your interest rate.
SoFi personal loans are a good alternative to short-term business loans because there are no prepayment penalties. Instead of paying double- or triple-digit annualized rates on short-term loans, take out a personal loan at single-digit rates for a three-year term and pay it off early.
SoFi personal loans also include no origination fees, compared to peer lenders that charge upwards of 5% to underwrite your loan.
That no origination fee is a big advantage among online loans, especially compared to other social lending sites that charge up to 6% as a fee on top of your loan. That means you save as much as $600 on a $10,000 loan by not paying an origination fee.
SoFi is the only lender I’ve seen to offer Unemployment Protection, available to people that lose their job through no fault of their own. Under the program, SoFi will suspend your monthly payments and help with job placement assistance for up to 12 months. Interest continues to accrue on the loan but you’ll avoid the hit to your credit from a defaulted loan.
Summary of SoFi Personal Loans
- Lower rates compared to other lending websites
- No origination fees on loans
- Unemployment protection that suspends loan payments
- An easy loan application process that takes less than five minutes
All of this sounds really good, especially compared to other lending sites I’ve reviewed. Of course, there’s a catch…there always is.
The one complaint I have heard about the SoFi personal loan application process is the strict requirements they use to qualify borrowers. Anyone can apply for a SoFi personal loan but the site targets people with higher income and a proven credit history. SoFi doesn’t share the minimum credit score needed for loans but it seems higher than peer loan sites.
The upside is that if you’re looking for a personal loan, the SoFi personal loan application process won’t affect your credit score. The personal loan application process starts with a soft-inquiry of your credit so it doesn’t go on your report. It takes less than five minutes to get qualified and you might get a better rate than on peer to peer options.
SoFi offers some of the best rates and range of loan types in the industry, if you qualify.
How to Get a SoFi Personal Loan
The SoFi personal loan application process is similar to that of a p2p loan. Basic requirements include:
- U.S. citizen or permanent resident
- At least 18 years old and employed
Click through to begin the personal loan process
The first page you’ll come to in the loan application process is a basic name, email and password creation page.
The application process will then split to different pages according to what type of loan you’re requesting. SoFi is one of the very few lending sites I’ve seen to offer student loans, personal loans and mortgage loans though I haven’t talked to anyone that used the website for a mortgage loan.
I cover the SoFi student loan application process lower in this post. Rates on student loans are comparable with what you will find at private refinancing companies, maybe even a little lower if you agree to the direct deposit payment option.
Once you've selected the type of SoFi loan you want, you will enter personal information to get your rate. This is all pretty basic stuff including address, contact information, education and employment info. You don’t need a college degree to get a SoFi personal loan but it may help you get a better rate.
Again, SoFi doesn’t say much about their loan requirements or about what affects the rate they give you on a loan. We can assume it is mostly tied to your credit score so anything you can do to boost your score, i.e. pay off credit cards, before the loan can’t hurt.
For example, before applying for my loan, I paid off $2,000 in credit card debt and got a limit increase on one card to improve my debt utilization ratio. This was enough to increase my credit score 15 points within two months and helped me get approved through the loan application process.
Once you fill out the SoFi personal loan application, the site will offer a preliminary rate. Checking your rate for a SoFi personal loan won’t affect your credit score because it is based on a soft pull of your credit.
SoFi personal loans are not available to residents of Louisiana, Mississippi, Nevada, and Tennessee but are available in every other state. If you meet basic criteria, SoFi will run a check of your credit report for your FICO score as well as determine your ability to pay the loan from current income.
If you accept the rate for your SoFi personal loan, you will be directed to verify your information and set up to receive your money. The entire SoFi personal loan application process can be completed in a couple of days.
Once you’re pre-approved for a SoFi personal loan, you will be given the option to select different plans and rates available. Loans are available from three to seven years and on fixed or variable rates. I have always liked fixed rates, even though variable terms offer lower rates, because payments are certain through the life of the loan.
SoFi personal loans offer rates that are pretty unbeatable compared to most peer lending options so they can afford to be selective for loan applicants. The best part is though that it doesn't hurt your credit score to apply for a loan.
The company performs what is called a soft inquiry on your credit first to see if you qualify for the loan. This type of inquiry, unlike a hard inquiry that gets listed on the report, is not listed and does not hurt your score.
The entire SoFi personal loan application process can be summed up pretty easily in five steps.
Once you’re pre-approved for a personal loan, you will be given the option to select different plans and rates available. Loans are available from three to seven years and on fixed or variable rates. I have always liked fixed rates, even though variable terms offer lower rates, because payments are certain through the life of the loan.
After you choose a loan, you will electronically upload documents to verify your identity and current loans you hold. Finally, you sign the loan packet and set up your payment method. The whole process can take less than 15 minutes.
SoFi Personal Loan Documents Required
SoFi requires some documents for a personal loan while others it may request if it needs more information. The time spent getting loan documents together for verification is the single biggest delay in personal loans. Getting your required personal loan documents together ahead of time can mean the difference in getting your money in a few days or waiting a week.
SoFi Personal Loan Documents Required:
- Lenders usually require at least one identity document like a driver’s license, passport or something else issued by the government.
- Bank account number and routing number
- Bank statements, usually one or two months
- Pay slips from work, usually one month
SoFi Personal Loan Documents that May be Required:
- Tax returns if you are self-employed
- Utility bills
- Estimate of current income and expenses
SoFi may or may not ask for some of the required documents above but it’s a good idea to have them ready anyway. They usually don’t ask for the other personal loan documents but may if they need more information for your loan.
SoFi Personal Loan Approval Process
The SoFi personal loan approval process is like any peer to peer loan and there are some things you can do to get your money faster. First, it helps to get all the required loan documents together ahead of time to speed up the process. SoFi may not ask for all these documents required for getting a personal loan but you’ll be ready if they do.
The other way to help improve your chances of getting a SoFi personal loan is just to try increasing your credit score before the application. This might not be possible if you need money right now but if you can wait a few months, you might have a better chance at being approved for a loan. I share the 21 steps I used to boost my FICO credit score by 140 points in another post but here are a few quick fixes that can help.
- Try paying off your credit cards. Even if you have to borrow a short-term loan from family, just a few thousand of credit card debt paid off can be a big boost to your credit. Credit bureaus hate card debt and really ding your score if you have too much.
- Getting your credit limit increased on a couple of cards can also boost your score. It sounds crazy but it’s because the credit bureaus look at how much debt you have and how much is available. Having more credit available looks like you’re not scrambling for money. Just don’t spend the higher limit!
- Try contesting a few of the bad marks on your credit report by writing to the credit bureaus. It might not always work but get just one missed payment taken off and you could see much better rates on your peer to peer loan.
SoFi Personal Loan Review and the Student Loan Crisis
I first found out about the company through the SoFi personal loan application process but the lender is best known for its student loan refinancing. SoFi was the first company to refinance both federal and private student loans and it couldn't have come at a better time.
The Federal Reserve reports that student loans outstanding reached $1.3 trillion in September and growing by about $38 billion a year!
Borrowers defaulting on their student loans are increasing along with the trend above. Defaults rose this year to 11.5% and may be much higher since half of student loans are in deferral while the borrower is still in school. Student loans only account for about 10% of all personal loans but as much as 30% of past-due consumer debt payments.
To October 2016, SoFi has completed more than $2 billion in student loan securitizations, helping students to consolidate and refinance their debt to avoid a default. With the massive wave of student loan trouble coming, I would expect other companies to jump into refinancing but SoFi has a strong advantage in size and its first-mover status.
The SoFi student loan application process is very similar to the process for personal loans. After you fill out your name and create an account, select Student Loan Refi to get started with rates starting at 3.5%
SoFi Personal Loan Review
SoFi personal loans was founded in 2011 at the Stanford Business School and launched offering in-school loans for Stanford graduates. Alumni of the school funded the company with more than $2 million and SoFi now offers student loan refinancing at more than 2,200 four-year universities. The company is headquartered in San Francisco with four offices around the country.
SoFi personal loan and student loan refinancing has jumped this year to $4 billion as of November, more than double the amount funded in 2014. Besides being the first company to offer federal and private student loan refinancing, SoFi was the first lending company to offer mortgages and the first to receive an AAA credit rating from a major rating agency.
Besides loans, SoFi also offers career services assistance and a SoFi Entrepreneur Program that can help get borrowers a six-month deferral on their loans. Unlike other personal loan lenders, the SoFi personal loan application process takes into account your employment history and other factors to better qualify a borrower.
If you can get qualified through the SoFi personal loan application process, it’s usually the best way to go for the lowest rate. It doesn’t affect your credit score to check your rate and get pre-qualified so you might want to check a few different lending sites for your best option. For borrowers unable to qualify for a SoFi personal loan, check out my personalloans.com review for loans to borrowers with lower credit scores.
I’ve included a table of some of the best peer to peer and online lending sites, the most recommended on rates and ease of getting a personal loan. Looking through some of the peer loan requirements, you’ll see that maybe no single site is the best but may be the best for a type of borrower.
I have used PersonalLoans for a debt consolidation loan and Lending Club for loans as well as p2p investing. SoFi has the clear advantage for rates on its loans but requires higher credit scores. Upstart works specifically with recent college graduates for personal loans on no credit.
|Peer to Peer Lending Site||P2P Borrower Fees||Minimum Credit Score||Loan Rates||Notes|
Click to Check Your Rate
|5%||580||9.95% to 36.0%||Three options including P2P Loans, Bank Loans and Personal Loans.|
Click to Check Your Rate
|No Fees||520||Vary by state||No fees and lowest credit requirements with p2p lenders.|
Click to Check Your Rate
|2% to 5%||660||6% to 23%||Specializes in loans to payoff credit cards. Low origination fee and no hidden fees or charges.|
Click to Check Your Rate
|0% to 8%||620||5.67% to 35.99%||Best for graduates and no credit peer loans.|
Click to Check Your Rate
|No Fees||N/A but probably around 680 FICO||5.99% to 16.49% (fixed rates)|
5.74% to 14.6% (variable rates)
|Low student loan refinancing rates.|
Click to Check Your Rate
|1% to 5%||640||5.95% to 32%||Best combination of low fees and low rates.|
SoFi is a great lending site if you have decent credit with no origination fee and low rates. Lending Club is also a good choice for peer loans on good credit though charges a higher fee. Personal Loans is the preferred peer lender for borrowers with bad credit since its credit score minimum is so much lower.
Again, it’s important to note that checking your rate on a personal loan won’t hurt your credit score so you should try a couple of different providers to get the best deal. Start with SoFi or Lending Club before you check out Upstart or Personal Loans. Most borrowers, even people with bad credit, should be able to get a low-rate loan from one of these four lenders.
SoFi Personal Loans Reviews from other Sites
The other SoFi Personal Loans Reviews are generally good on other websites. My experience with the online lender was good but I just wanted to get a few other opinions for this review.
Other SoFi reviews generally point out the lower rates and options for fixed- or variable-rate payments. It’s something you don’t get with peer to peer lending sites so it’s a big advantage of SoFi. The seven-year payment plan is also longer than most other sites.
You have to go to the Better Business Bureau (BBB) to find any SoFi complaints. Most of these are the same kind you find against every p2p website like people being turned down for a loan or problems with the application process. SoFi has a good history of addressing each complaint, something you’ll see on the BBB website.
A few SoFi complaints had to do with the online verification system. SoFi pulls personal information from your credit report to verify your identity, questions like past addresses and where you worked. This is pretty common but can be a frustrating system if you can’t remember the answers. It’s best to pull your credit report before applying for a loan so you can check the information on it ahead of time.
If you can’t remember the answers to the verification questions, you will need the SoFi personal loan documents required for identity verification.
Check to see if you qualify for a personal loan – Click here for rate quote
SoFi Personal Loan Summary
SoFi is one of the best online loan choices available if you qualify for a loan. That might not include everyone but the personal loan application process is pretty quick and it doesn’t affect your credit to see if you qualify. The online lending site has several advantages like no loan fee, lower rates and discounts for variable rate loans.
About the Author
Joseph Hogue is a financial expert and investment analyst. After serving in the Marine Corps, he started his career investing in real estate before becoming an investment analyst for some of the largest private investors. He's appeared on Bloomberg and on CNBC as an investment expert and has published ten books in personal finance. Now he helps investors reach their financial goals and invest in the stock market with some of the same advice he used when working for the rich.