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SoFi Student Loan Refinance Review

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SoFi is one of the leading lenders in the student loan refinance space. It has some of the lowest interest rates available, and also has great perks not offered through most other lenders.

When you refinance student loans through SoFi*, you won’t have to worry about any hidden fees or upfront costs, either.

Does it sound too good to be true? It’s not. If you’re looking to refinance your student loans with a reputable online lender, SoFi is for you.

Refinance Terms Offered

In most states, the minimum amount required to refinance is $10,000, but there’s no cap on how much you can refinance. This is great news for those with six-figure student loan debt.

Remember those low interest rates we mentioned? Fixed APRs range from 3.89% – 8.07%, and variable APRs range from 2.49% – 6.65%. These rates are available so long as you enroll in autopayment.

You can refinance on a 5, 10, 15, or 20 year term, and you can refinance both private and federal student loans.

The Pros and Cons of the SoFi Student Loan Refinance Program

Aside from having some of the lowest APRs available, SoFi also has an unemployment protection program and an entrepreneur program.

Unemployment protection is beneficial for borrowers. Suffering from a job loss is a big concern among college graduates. You don’t want to find yourself in a position where you can’t afford to make your rent payment, let alone your student loan payment.

If you lose your job through no fault of your own, SoFi will step in and help you get back on your feet. You may be eligible for a period of forbearance – your payments are paused temporarily, and interest continues to accrue on your loan.

Forbearance is offered in three month increments, though you can’t exceed twelve months of assistance over the life of your loan. You must also provide proof you’re eligible for unemployment compensation, and you need to work with SoFi’s career center and actively look for employment.

What’s the entrepreneur program? SoFi doesn’t believe student loans should hold amazing business ideas back, so it created the entrepreneur program to help graduates who dream of owning a business.

Under this program, loans can be deferred for six months so borrowers can focus on growing their businesses. SoFi provides access to networking events, mentors, and investors.

While the low interest rates and perks are great, there are a couple of downsides to refinancing your student loans with SoFi.

First, refinancing is currently unavailable to those residing in Nevada, and variable rate options aren’t available to those in Ohio or Tennessee.

Second, SoFi has a list of available schools and programs it services. If your school or program isn’t on that list, you won’t be eligible to refinance.

Third, SoFi typically requires applicants to have a credit score above 700. It occasionally accepts co-signers – you must call to review your situation with a representative. However, there’s no co-signer release if you move forward with one on your loan.

Lastly – and this goes for any lender – when you refinance Federal loans with a private lender, you lose out on benefits specific to Federal loans. Certain repayment plans, deferment, forbearance, and forgiveness are among the benefits lost when refinancing. However, SoFi does offer forbearance; not all lenders do.

Who Qualifies to Refinance Student Loans With SoFi?

To be eligible to refinance your student loans with SoFi, you need to meet the following requirements:

  • You must be a U.S. citizen or permanent resident 18 years or older
  • You need to have a 4-year undergraduate or graduate degree from a Title IV accredited institution
  • You have to be employed or have an offer of employment starting in 90 days from the time you apply
  • You need to be in good standing on your current student loans
  • You should have a good, stable employment history
  • A strong monthly cash flow is a must
  • An excellent FICO score will improve your chances of being approved

As you can tell, SoFi looks at more than just your credit score when reviewing your application. Income, cash flow, job history and current employment, and education history all matter, too.

Since SoFi uses a soft credit pull for the initial pre-approval, you should try applying with it to see if you’re eligible.

If you’re approved and decide to move forward with one of the loans offered to you, a hard credit inquiry from Experian will be used.

Documents and Information Needed to Apply

According to its website, SoFi’s pre-approval should take you less than 15 minutes to complete. You likely won’t need most of these documents until you’re ready to move forward with a loan, but they’re good to have on hand while you’re shopping around.

  • Existing student loan information (SoFi will need your account information for the loans you wish to finance)
  • Employment information – salary, offer of employment, length of employment
  • Most recent pay stubs as proof of income and employment (if you’re currently employed)
  • Diploma or transcript in the event SoFi needs to verify your graduation

It’s good to note SoFi accepts screenshots from your PC and pictures taken from a phone, so if you don’t have access to a scanner, there’s no need to worry.

Who Benefits the Most from Refinancing Student Loans with SoFi?

Those with higher balances and interest rates whose school or program are on SoFi’s list will benefit the most.

Unfortunately, SoFi’s requirements are a little on the strict side, but it is working to expand the schools and programs eligible for refinancing.

Those in a good job position – with excellent credit, consistent employment history, and a decent salary with strong cash flow – are the best candidates.

The Fine Print

There’s not much fine print to be aware of with SoFi’s student loan refinance program. There are no prepayment penalties, application fees, or origination fees.

The only fees associated with the loan are the typical late fee and returned payment fee.

If you’re 15 days past due on a payment, a late fee not exceeding $5 or 4% of the past due amount must be paid.

Each time a payment is unsuccessful, you have to pay a $10 fee.

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Alternative Student Loan Refinancing Options

SoFi is one of our most highly recommended lenders, but understandably, some people won’t meet its requirements. If that’s the case, you might have an easier time being approved by one of these lenders.

Citizen’s Bank allows you to refinance up to $90,000 of student loan debt if you have an bachelor’s degree or below; up to $225,000 if you have a graduate or doctoral degree, including MBA; up to $300,000 if you have a law degree; and up to $350,000 if you have a professional degree such as dental or medical.

It has the same repayment options as SoFi with terms of 5, 10, 15, and 20 years. Its variable APR ranges from 3.89% – 9.99%, and its fixed APR ranges from 2.98% – 9.72%.

Unlike SoFi, its credit requirements are less strict (though it does use a hard credit pull right away), and it accepts co-signers with a release possible after 36 consecutive and timely payments. It also offers a forbearance option, and there are no prepayment penalties or origination fees.

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Earnest is another option offering very similar rates to SoFi. Its fixed APR ranges from 3.50% – 7.89%, and its variable APR ranges from 2.49% – 7.27%. There’s also no limit to how much you can refinance, and the minimum is only $5,000.

There are no origination fees or prepayment penalties, and you can freely switch between fixed and variable rates should your needs change. Earnest is big on offering flexible options to its borrowers, which is great if you’re unsure of what your financial future might look like.

Additionally, you can also skip one payment per year (although interest will still accrue), so you can take advantage of that if you have a rough month with your money.

Earnest also offers unemployment protection, which comes with the same forbearance option as SoFi offers.

You can get pre-approved with a soft credit inquiry, and a hard credit inquiry will be used if you choose to move forward with the loan.

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There Are Great Options Out There – Shop Around

While SoFi is a great choice for refinancing your student loans, there are clearly other comparable options out there that might suit your needs better. Do your research and take a look at the different options out there. The great thing for borrowers is lenders like SoFi and Earnestmake it easy to check rates available to you. You can still shop lenders that use hard credit inquiries, such as Citizen’s Bank – just make sure to do it within a 30-day window so your credit score isn’t affected as much.

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Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Millard
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Erin Millard is a writer at MagnifyMoney. You can email Erin at [email protected]

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College Students and Recent Grads

8 Things to Know Before Applying for Student Loans

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

8 Things to Know Before Applying for Student Loans
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If you’ve never borrowed money before, applying for student loans can be confusing. You might have to choose between federal and private student loans, for example, or a fixed or variable interest rate. With all your options, it’s crucial to learn how to apply for student loans before entering any kind of contract.

By understanding how to apply for college loans, you’ll be empowered to make smart decisions about paying for your education. This beginner’s guide will go over what you need to know about how and when to apply for student loans.

What to know before applying for student loans

1. Your loans might be federal or private

As a college student or parent of a college student, you have two options for student loans: federal or private. Federal loans come from the Department of Education and are available for any student attending an eligible school.

You can access federal loans, such as subsidized and unsubsidized loans, by submitting the Free Application for Federal Student Aid, or FAFSA. In most cases, it’s smart to max out your eligibility for federal loans before turning to a private lender.

This is because the federal government offers relatively low interest rates and a variety of flexible repayment plans. But since federal student loans come with borrowing limits, you might need more help to pay for school.

In this case, you could turn to private student loans, which come from a bank, credit union or online lender. Unlike federal student loans, you’ll need to meet underwriting requirements for credit and income to get a private loan.

Most undergraduates apply with a cosigner, such as a parent. Although private student loans can help fill the funding gap, be careful about borrowing a loan with a high interest rate. Private lenders typically aren’t so flexible if you run into financial hardship.

2. You may pay interest right away

Whatever type of student loan you borrow, you’ll have to pay back the principal amount and interest. As of July 1, 2018, federal student loans have an APR of 5.05% for undergraduates and 6.6% for graduate students.

Private loan interest rates vary depending on which lender you choose and how strong your credit is. Lenders in MagnifyMoney’s private student loans marketplace offer fixed APRs starting at 5.25% and variable APRs from 4.07%.

Because of interest, you’ll end up paying back a good deal more than you borrowed, especially if repayment spans 10 or more years. Plus, interest typically starts accruing from the date your loan is disbursed.

For example, let’s say you borrowed a $30,000 loan at a 5.05% rate. Over 10 years, you’ll end up paying $8,272 in interest. If you can pay off your loan in five years, you could save $4,263 on interest.

Note that subsidized federal loans, which are available to students with financial need, work slightly differently. The government covers interest while you’re in school on subsidized loans, so you’ll only have to start paying interest once your repayment period begins after graduation.

3. You’ll likely have a grace period

As a college student, you probably won’t have a lot of money to pay back your loans. Luckily, federal loans, as well as most private loans, don’t require immediate repayment.

Instead, you can postpone payments while you’re still in school and for six months after you graduate. This deferment is called a grace period, and it lets you focus on your education before having to worry about student loan payments.

But since interest might be accruing, you could choose to make small payments while you’re still in school. If you can swing small payments, perhaps with income from a part-time job, you won’t be facing such a big balance after graduation.

Note that some private lenders require you to make in-school payments, sending your first bill just a month or two after your loan was disbursed. Make sure you understand all the terms and conditions of a private loan before borrowing so you don’t accidentally fall behind on repayment.

4. You have various repayment options

Learning how to apply for student loans is a crucial first step, but you also need to know how to pay them back. Your options will look different depending on whether you’re borrowing federal or private student loans.

Federal student loans come with a variety of repayment plans. The standard plan spans 10 years, but you can opt for a different plan to adjust your bills, such as income-driven repayment or extended repayment.

Income-driven plans, which span 20 or 25 years, can lower your payments and end in loan forgiveness. But if you stretch repayment over two decades, you’ll end up paying a lot more in interest.

If you owe $35,000 at a 5.05% rate, for example, you’d pay $9,650 in interest over 10 years. But if you stretch repayment out over 20 years, you could pay $20,669 in interest. With a 25-year loan, you’d pay $26,688 in interest. So even though your monthly payments feel more affordable on an income-driven plan, you’ll end up paying more on your loan overall.

Private student loans work a bit differently. When you apply, you’ll choose your loan terms, typically somewhere between five and 15 years. After this point, you might not be able to change your terms.

Some lenders will be flexible if you run into financial hardship, and you might be able to choose new terms through refinancing. But you won’t have access to the many plans available for federal student loans, so make sure to choose your repayment plan carefully before applying for student loans from a private lender.

And no matter the repayment plan you select, you can always prepay your federal or private student loans without penalty.

5. Your private loan could have a fixed or variable interest rate

Federal student loans come with fixed interest rates that remain the same over the life of your loan. But private lenders set their own rates and assign the best ones to creditworthy borrowers. Plus, they typically let you choose between a fixed rate and a variable rate on your student loan.

A fixed rate stays constant, while a variable one could rise over time. If you’re spreading out repayment over a decade or more, a variable rate could cost you. But if you’re planning to pay back your loan quickly, electing a variable rate could save you money on interest.

6. You might be able to pause payments in certain circumstances

Even if you have every intention to pay back your student loan on time, you can’t help it if an emergency pops up. Maybe you lose your job and don’t have an income for a few months. Or perhaps you decide to return to school and want to pause payments again.

If you have federal loans, you can postpone payments temporarily through forbearance or deferment. Both programs let you pause payments, but you won’t have to pay interest on subsidized loans during a period of deferment — only on unsubsidized loans.

Forbearance is typically used during times of financial hardship, while deferment is more often used when you return to school, go on active military service, join the Peace Corps or experience unemployment.

Some private lenders also offer forbearance and deferment, but this varies by lender. Plus, there’s not much of a distinction between these two programs when it comes to private loans, since private loans will always keep accruing interest.

If you’re worried about your ability to keep up with payments, consider applying for student loans with a lender who offers this benefit.

7. You could qualify for loan forgiveness or repayment assistance

Depending on where you live and work, you could get some of your student loan debt wiped away through forgiveness or repayment assistance. Federal programs, such as Public Service Loan Forgiveness and teacher loan forgiveness offer partial or total forgiveness after a certain number of years of service in a qualifying organization or profession.

Many states also offer student loan repayment assistance to certain professionals who work in a shortage area or with a high-need population. Several of these programs offer assistance to pay off both federal and private student loans.

A growing number of companies are offering a student loan-matching benefit to their employees to help them cut through debt. If you’re looking to get your debt discharged ASAP, explore your options for loan forgiveness and repayment assistance.

8. You can restructure your debt through student loan refinancing

With Americans owing more in student loans than ever before, many are looking for relief. For some, student loan refinancing can help.

When you refinance, you give one or more of your old loans (federal or private) to a lender. That lender then issues you a new loan in their place, hopefully with better terms.

Creditworthy applicants can snag lower rates on their debt as well as choose new repayment terms, usually between five and 20 years. Not only can refinancing save you money on interest, but it also lets you adjust monthly payments in a way that works with your budget.

Along with these benefits, though, keep in mind one potential downside: Refinancing federal loans turns them private. As a result, you lose access to federal protections like income-driven plans and forbearance.

But if you’re confident you can pay back your loan on time, applying for student loan refinancing could be a strategic way to manage your debt.

Learn how to apply for student loans to pay for college

Most students should borrow federal student loans before turning to a private lender. Submit the FAFSA and you’ll have access to the world of federal financial aid.

But if you need more funding, learn how to apply for student loans with a private lender. You’ll need to fill out an application and submit your (or your parent’s) documents, such as pay stubs and tax returns.

It’s a good idea to shop around with lenders before choosing one. That way, you can find a private loan with the best rate to finance your education.

The information in this article is accurate as of the date of publishing.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Rebecca Safier
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Rebecca Safier is a writer at MagnifyMoney. You can email Rebecca here

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College Students and Recent Grads

7 Private Student Loan Options That Let You Pause Payments

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

7 Private Student Loan Options That Let You Pause Payments
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With student loan debt in the U.S. surpassing $1.56 trillion, it’s not surprising that more than 1 million borrowers default every year. If you’re struggling with payments, you might be wondering about student loans with deferred payments.

Fortunately, you can pause payments on federal student loans through forbearance or deferment. Deferred private student loans are also a possibility, though policies vary by lender.

Here’s what you need to know about postponing payments on your student loans, followed by seven lenders that offer private student loan deferment and forbearance.

Forbearance vs. deferment: What’s the difference?

Both forbearance and deferment allow you to postpone payments on your student loans without going into default. But when it comes to federal student loans, these two programs have some key differences.

Deferment is available for students who go back to school, lose their job or are on active military duty. Forbearance is designed primarily for borrowers who have encountered financial hardship.

If you have subsidized federal student loans, they won’t accrue interest during deferment. But you will be responsible for interest that accrues on your loans, subsidized or not, during forbearance. So deferment is a preferable option if you have subsidized loans and can qualify.

While forbearance and deferment are different programs with federal loans, the distinction can get fuzzy with private loans. Some private lenders use the terms interchangeably since they effectively work the same way.

The downside of student loans with deferred payments

Pausing payments on your student loans could be important while you look for a job or work on your next degree. But unless you have subsidized loans in deferment, interest will keep rising.

Let’s say you owe $30,000 in student loans with a 5% interest rate on a 10-year term. After three months of student loans with deferred payments, you’ll accrue an additional $373 in interest. After a year of paused payments, your balance would increase by $1,500.

Taking loans out of deferment or forbearance is typically considered a capitalization event, meaning the interest that has accrued will be added to the principal. In effect, you’ll end up paying interest on top of interest.

That’s why deferment and forbearance should only typically be used as a last resort. If you can continue to make payments, or at least pay off the interest each month, you won’t run the risk of a ballooning student loan balance.

Another option is adjusting payments on your federal student loans through an income-driven repayment plan, which adjusts your bill based on how much money you make. Unfortunately, you probably don’t have this option with private student loans.

So if you can’t afford to pay, private student loan deferment could be the way to go.

7 lenders that offer private student loan deferment and forbearance

Terms and conditions vary by lender, and only some offer student loans with deferred payments. Here are seven lenders that offer deferment or forbearance on their private student loans or refinanced student loans.

1. LendKey

If you refinance your student loans through LendKey, you can apply for deferment for up to 18 months for any reason. LendKey approves these requests on a case-by-case basis, so make sure to reach out to your loan servicer if you’re having trouble making payments. However, LendKey doesn’t offer in-school deferment with its private student loans.

2. Sallie Mae

If you have a Sallie Mae Smart Option student loan, you could request up to 60 months of deferment for returning to school or taking part in an internship, fellowship, residency or similar program. Sallie Mae suggests it can postpone payments through forbearance for those who run into financial hardship, but it encourages borrowers to call customer service to discuss their options.

3. SoFi

Student loan refinancing provider SoFi lets you pause payments for a few reasons. Along with a general forbearance policy, SoFi offers deferment for economic hardship, unemployment or military service. It will also defer your payments while you’re in school. To submit a deferment or forbearance request, you’ll need to contact SoFi’s servicing partner, MOHELA.

As a SoFi member, you can also benefit from its career coaching program, which helps you search for jobs and transition into a new career.

4. CommonBond

CommonBond offers both private student loans and student loan refinancing. If you took out a cosigned loan for school, you’ll get a 60-month academic deferment, including the grace period. This means you won’t have to pay your loan while you’re in school or for a few months after graduation. Depending on your circumstances, you can also apply for up to 12 months of forbearance.

If you get a Master of Business Administration loan from CommonBond, you’re eligible for 32 months of academic deferment and 12 months of forbearance. Finally, CommonBond’s refinanced student loans are eligible for 32 months of academic deferment and 24 months of forbearance, which can be used three months at a time.

5. Laurel Road

Laurel Road allows forbearance for up to 12 months if you run into financial hardship. The provider, which funds graduate student loans and refinanced student loans, reviews forbearance requests on a case-by-case basis.

As for students in school, it’s up to you if you want to make payments on your loan or defer them until after you graduate. Laurel Road does not offer in-school deferment on its refinance student loan products.

6. Earnest

Earnest offers private student loans and refinanced student loans. If you go back to school, you can defer your Earnest student loan payments for up to 36 months as long as you’re enrolled at least half time.

And if you run into financial hardship, you can apply to skip a payment or put your loans into forbearance.

7. Education Loan Finance

Student loan refinancing provider Education Loan Finance offers 12 months of forbearance for financial hardship or disability over the term of your student loan. You’ll need to apply each month to keep your loan in forbearance. If you don’t contact Education Loan Finance each month, your loan will come out of forbearance and full repayment will resume.

Explore all your options before pausing payments

Deferment and forbearance options can be a godsend if you’re struggling to keep up with payments on your student loans. But both are a temporary solution, and your loans could get more expensive over time.

Before applying for deferment or forbearance, look into alternative ways to adjust your student loan payments. You might put federal loans on an income-driven plan, for instance, or refinance private student loans to get a new term.

While pausing payments can bring immediate relief, don’t forget to account for long-term costs before making changes to your repayment plan.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Rebecca Safier
Rebecca Safier |

Rebecca Safier is a writer at MagnifyMoney. You can email Rebecca here

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