SOFI personal loan
A SOFI personal loan can come in handy when you have many bills that are giving you sleepless nights. You can use the loan for emergency expenses, make major purchases, pay off a student loan, among other uses. But as much as SOFI personal loans can be the best solution to meet your immediate financial needs, it is important that you only apply for a loan if you are able to repay the debt and cater for your monthly expenses. But this is not the only point to take note of. Getting the wrong loan can also turn out to be a nightmare. Going through SOFI personal loan reviews is the best way to ensure that you get the best loans for your needs. Compared to other online lenders, SOFI has high requirements for their loans. For instance, you must have a steady income source and high credit score for you to qualify for credit. However, they offer low interest loans with no additional fees.
‘Breaking down’ SOFI personal loans
Social Finance (SOFI) is an online lender that provides personal loans, student loan refinancing, and mortgages. Although the company does not offer business loans, their personal loans can also be used to start or improve a business. SOFI deals with installment loans. This simply means that borrowers have to repay the loan and the interest rate incurred in equal monthly payments. Compared to other lenders, SOFI loans are flexible in nature. They offer large loan amounts with longer-term loans. Most SOFI personal loan reviews are also positive, making them one of the best personal loan providers. However, SOFI has strict requirements for personal loans. Besides having a steady source of income, your debt to income ratio should also be low. Additionally, you should have a history of paying bills on time.
SOFI personal loan requirements
Even before starting with your application process, you first need to make sure that you meet all the requirements for the loan. To qualify for a SOFI personal loan, you must be a U.S citizen and be above the age of 18 years. You also should have a steady source of income. For your loan to be approved, you need to provide details of your employment history, monthly income and expenses. Your financial history will also be reviewed to confirm that you are good at saving and paying bills on time.
Should you have a good credit score?
SOFI has flexible loan payment terms and conditions for the loans. But this does not mean that personal loans are given to everyone. Aside from the above requirements, personal loans for debt consolidation are also given based on your credit history. If you have a low debt-to-income ratio and prove that you can pay bills on time, you are likely to have your loan application form approved. On the other hand, if you have a credit report full of collection accounts and late payments, you will reduce your chances of accessing a SOFI personal loan.
SOFI personal loan application process
To begin with the application process, you first have to get your rate quote online. This can be done by logging in to your account using your email address and password. After you log in, you can use the personal bank link to begin the application process.
Start by entering your name, address, phone number, citizenship status and date of birth. Information on whether you own or rent your house will also be required. You can then fill in education, employment and income information. You also need to explain what you intend to use the money for and whether you agree to the rate check terms.
Once you are informed of the terms and conditions of the loan, you will be required to provide supporting documents to start a formal application process. You can choose from either fixed or variable rate loans. SOFI disburses funds electronically, which means that you also have to provide your bank account details. Complete the application process by signing the acceptance packet.
SOFI loan can be used for different purposes including debt consolidation, major purchases, and college fees payment among other uses. The loans are available in different states. However, they are not available in Nevada or Mississippi. The loan requirements also vary depending on your state of residence.
SOFI has a fast and straightforward loan application process. Once you meet the requirements and provide all the necessary details, you can have the money in your bank account within a week.
What to expect from a SOFI personal loan
SOFI started by financing student loan. Up to now, the online lender targets borrowers with degree and high levels of income. Borrowers are also required to have good credit history. This makes SOFI one of the top personal loan providers for borrowers with good credit. Other additional benefits of SOFI personal loans include;
- Fixed and variable interest rates
- Interest rate discounts for auto pay customers
- Career counseling services
- Exclusive social and networking events
- Unemployment protection
SOFI also offer high loan amounts, making it the best solution for consolidating your credit card debts.
SOFI fees and penalties
Since personal loans from SOFI are meant for qualified borrowers, there is less risk involved when compared to loans that are also given to borrowers with poor credit. This is also advantageous to borrowers since most fees and penalties are eliminated. With SOFI personal loans, you don’t have to worry about personal check processing fees, origination or prepayment fees. However, the loan attracts 5% of the outstanding amount as late fee.
SOFI student loan refinancing
With SOFI student loan, you can refinance as low as $5000 of student loan debt. Just like SOFI personal loans, there are no prepayment penalties and origination fees. SOFI also has low rates of 3.89% and 7.80% APR on fixed rate and 2.49% to 7.53% APY for variable rates. With the low interest rates, you need to carefully consider your options before signing up for variable interest rate. Paying off the loan over a short time means saving money.
Both private and federal student loans can be refinanced by SOFI. But when it comes to federal loan refinancing, you will be required to give up federal protections. What makes SOFI unique is its ability to provide unemployment insurance during the life of the loan. In case you lose your job on an issue that wasn’t your fault, your monthly payment will be suspended for up to 12 months. The accrued interest during this period will be added to the loan. Entrepreneurs programs are also available to help students who want to start their own businesses in future.
Disadvantages of student loan refinancing with SOFI
With all the benefits that come with refinancing a student loan with SOFI, there are also some drawbacks involved. First, refinancing loans are only available in 50 states. Secondly, SOFI has a list of schools and programs they work with. You won’t be eligible for refinancing if your school or program is not included in the list. For you to be eligible for refinancing, you also should have a good credit
The following requirements have to be met for you to qualify for student loan refinancing
- You must be a U.S citizen and above the age of 18
- You should have a four years undergraduate or graduate degree
- You should be on permanent employment or have an employment offer at least 90 days before application.
- You should have a strong monthly cash flow
- Having a good fico score will also increase your chances of being approved
SOFI loans can be the best fit if;
- You have an attractive score
To qualify for the loan, you should have a minimum credit score of 680.
- You earn high income
The average income of the borrower should be above $100,000.
- You want a loan with flexible terms
SOFI, unlike other personal loan providers, does not charge late fees if you want to change the payment due date. It also offers employment protection if you happen to lose your job on an issue that wasn’t your fault.
- You want career support
Other additional benefits include career coaching for student loan borrowers.
- You have a short credit history
SOFI focuses more on how responsible you are at paying bills.
- You don’t need a co-borrower
Just like many other online lenders, joint borrowers on a single loan is not allowed
- You want an online experience with the loan
With SOFI loans, the whole process, right from applying for the loan and getting the funds approved takes place online. This makes the whole process much easier and convenient for borrowers.
SOFI loan rates and terms
SOFI offers a minimum loan amount of $5000 and consumers can borrow up to $100,000. Borrowers with very strong credit history have higher chances of qualifying for the maximum amount. The loan attracts a 6% to 15% APR. Once your loan is approved, it typically takes seven days for the funds to be transferred to your account.
SOFI lending terms
Whether you decide on a fixed or variable interest rate loan, there are several factors that determine the quote you receive. This includes your financial history and whether you are able to pay your bills on time. The difference between SOFI and other online lenders is that apart from your credit history, your financial future will also be considered before approving the loan. SOFI personal loans are secured, which means that you don’t have to provide collateral.
What if you are turned down?
If you are denied a loan from SOFI and your financial position is strong enough, you can either call them or send an email for clarification. The reason may just be a processing error or your credit report has some information that needs to be investigated. If you have a credit score of less than 680, you can consider other lending options that have fewer restrictions and favorable rates. If you take out a SOFI personal loan, your information will be sent to the three credit bureaus which will in turn boost your credit score if you pay installments on time. However, late payments will have a negative impact on your credit score.
Advice for taking out a personal loan with SOFI
Before taking out a SOFI personal loan, here are some of the tips to help you make the best financial decisions;
- Shop around to find the best product
It is important to compare several lenders before deciding on the best loan to meet your financial needs. Most lenders will only require a soft pull on borrower’s credit reports, which will not have an impact on your credit score. If you have a high credit score and huge monthly income, you may qualify for low interest personal loans. You also have the option of access loans is by using your home equity. You can easily qualify for cash-out refinance or home equity line of credit if you have equity in your property.
- Calculate your payments
If you qualify for a loan, it does not mean that you can also afford monthly payments. Once you pre-qualify for the loan, use a loan repayment calculator to find out if you can afford repayments. Don’t forget that paying low monthly payments could increase the interest rate you pay in the long run.
- Review your credit report
Even before applying for a loan, it is important to confirm that all your credit report information is accurate. This can especially come in handy when you are applying for a SOFI personal loan considering that payment history is among the major determinants to have the loan approved.You can start by requesting for your credit reports from the three main bureaus, Equifax Experian and TransUnion. Free credit reports are usually available to consumers on a yearly basis. Once you get a copy of your credit reports, go through them to ensure that all the information is updated and correct. This should be done at least a month before applying for credit since the bureaus could take a longer time to update your report.
Advantages of SOFI personal loans
One benefit of SOFI personal loans is that they have flexible loan terms and can be a great option when you want to pay the loan over a long period of time. SOFI loan term ranges from 3 to 7 years. SOFI does not have any additional expenses in form of application fees, origination fees or late payment fee. You can also pay off the loan ahead of time without incurring any additional fees.
SOFI provides information about the loan application process and available products on their website. They also have transparent and helpful customer service.
Drawbacks of SOFI personal loans
Personal loans from SOFI can be the best choice for borrowers with good credit history. But as much as most SOFI personal loan reviews are good, the following are reasons why other lenders may be the best choice for you;
- Long processing time
While SOFI has an online application process that only takes a few minutes to complete, the underwriting process takes more time. Compared to many online lenders who only take a few hours to approve your loan, it will take you up to 7 days to have a SOFI personal loan in your account.
- Borrowers should meet high standards
SOFI personal loans only target high quality borrowers. This means that you should have a high credit score and monthly income to qualify for the loan. Unlike other lenders who also offer credit to borrowers with poor credit scores at relatively higher rates, you may have a hard time getting a SOFI personal loan if you have an unattractive score.
If you have a good credit history and a steady income source, taking out cheap personal loans from SOFI can be the best solution to meet your financial needs. The competitive rates and lack of fees are what makes the loan attractive to borrowers. It is, however, important to make some comparisons by going through SOFI loans reviews and reviews from other lenders before deciding whether a personal loan from SOFI is the best option for you. Most online lenders offer prequalification estimates without interfering with your credit score and you can easily find a lender with the best rates of interest. Before requesting for a personal loan, ensure to confirm that all the information in your credit report is accurate. This is because the credit report information is used to calculate your credit score, which is among the top considerations for a SOFI personal loan.