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SoFi – About The Lender
SoFi (Social Finance) was founded in 2011 by a group of students at the Stanford Graduate School of Business in the hope of creating more funding and affordable options for education. The group of students had around 100 alumni invest in the business to cover the initial start-up costs.
The original idea of SoFi was to have school alumni invest funds in refinancing recently-graduated students’ debt. SoFi has moved away from that business model and moved to a “non-traditional underwriting approach focused on lending to financially responsible individuals. SoFi uses an underwriting model that examines free cash flow, professional history and education in addition to a history of responsible bill payment to evaluate its borrowers.”
They have expanded its product offerings beyond student loans to mortgages, parent loans, insurance, wealth management, checking, and personal loans. Their personal loan options are what we will cover here.
- Loan amount range: $5,000 – $100,000
- Interest rate rage: Fixed, 6.99%-14.99% with auto pay
- Terms: 24-60 months
- Origination fee: None
- Late payment fee: None
- Returned payment fee: None
- Check Processing fee: None
- Prepayment fee: None
- Minimum credit score: 680
- Funding: Up to 7 days
- Personal Information (including address, phone number, email, and SSN)
- Pay Stubs
- Bank Statements
Sofi Loan Pros & Cons
What Can a SoFi Personal Loan Be Used For?
SoFi offers personal loans for many different reasons including debt consolidation, home improvements, relocation, medical expenses, and auto refinancing. SoFi has many restrictions on what their personal loans can be used for.
For example, you cannot use their personal loans for purchasing real estate, business purposes, investments or purchase securities, any postsecondary education or as short-term bridge financing.
SoFi debt consolidation is paying off one or more prior unsecured loans with the new SoFi loan. Instead of multiple payments to multiple lenders you can create one payment to one lender. The idea is that you can take a high revolving interest credit card and save money by replacing it with a low rate fixed installment.
SoFi offers variable rates as well, but still provides a term that clearly indicates when you will be out of debt. SoFi also has a debt consolidation calculator, so you can get an idea of how much you can save.
SoFi home improvement loans are for home repairs or renovations. The advantage of using a SoFi home improvement loan is that you do not have to use your home as collateral and you get funds much quicker with less documentation. Typically, it takes a month or more to get an equity line of credit on your home.
SoFi loans for medical expenses help borrowers manage large, unexpected medical costs. This can include costs for drugs, selective surgery, and adoption.
SoFi personal loans can be used to buy a new or used car or for refinancing your current auto loan. If you have good credit history you may even get a better rate. One advantage is that you do not have to use your car as collateral and you may be able save some money since you won’t need gap insurance
SoFi takes a broader look at its borrowers than just evaluating their credit scores. SoFi requires a better understanding of their borrowers’ ability to repay. Taking this into consideration, understand that SoFi will have more questions and require more documentation than some other personal loan providers.
The application process begins with you creating an account and answering a few questions. SoFi will do a soft pull on your credit. A soft pull does not affect your credit report. At this point, you could be declined. Otherwise, SoFi will give you a list of options for which you can apply. If you want to move forward, SoFi will do a hard credit check and you will then be asked to upload documents to verify information.
You may need to provide pay stubs, bank statements, W-2s, social security card, or state ID. You can sign loan documents online. SoFi also offers a .25% discount if you set up auto pay. SoFi will usually let you know whether you are approved within one day. Because SoFi checks your documentation, it usually takes up to 7 days for your loan to be funded. SoFi may also call you directly to verify some information.
SoFi Loan is Best for..
SoFi offers a great deal of benefits for those who qualify for a personal loan. They also have some of the highest credit and cash flow standards. SoFi is best for those who have a long, solid credit history. SoFi offers professionals many benefits and tools that can help them become more financially independent.