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.
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.
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.
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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