SoFi Student Loans: Competitive Rates and Easy Application

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Well known for its low-rate student loan refinancing options, SoFi launched its own private student loans this year for undergraduates, graduate students and parents. With a SoFi student loan, you can enjoy a streamlined application process, competitive rates and flexible repayment terms, though there are some drawbacks as well.

This SoFi student loan review will try to help you decide if this loan is the right option for funding your college or graduate degree.

SoFi student loan review: What is SoFi?

SoFi Student Loan Review: Rates At a Glance

Loan type

Fixed interest rate

Variable interest rate

Undergraduate5.05% to 11.71% APR3.65% to 11.25% APR
Graduate4.33% to 11.99% APR2.93% to 11.57% APR
Parent5.05% to 11.71% APR3.65% to 11.25% APR

SoFi is an online lender that made a splash in the fintech world with its student loan refinancing business. After helping more than 250,000 customers refinance their student loans, SoFi is bringing its same approach to the world of student loans.

Through SoFi, you can borrow up to the full cost of attendance of your school. Parents also have the option to borrow student loans on behalf of their children. Thanks to its competitive rates and no-fee structure,SoFi student loans are worth exploring as you compare options for a private student loan.

Plus, SoFi doesn’t just offer money for school — the company also provides a number of special benefits for its members. For example, if you borrow with SoFi, you’ll have access to exclusive networking events, career coaching services and other activities.

While it’s always a good idea to focus on the best interest rates when you shop around to find a private student loan, SoFi’s special perks are also worth keeping in mind for the added value they could bring to your college and post-graduate experience.

Types of student loans SoFi offers

SoFi offers three types of student loans to borrowers: undergraduate, graduate, and parent student loans. Undergraduates will likely need to apply with a cosigner to meet SoFi’s underwriting requirements. (Note that applying with a cosigner is typical for private student loans — according to data firm MeasureOne, 92% of undergraduates applied for private student loans with a cosigner in the 2018-19 school year.)

See the chart above for the interest rates SoFi offers on its student loans. The lender will look at your creditworthiness, along with other factors, to assign you a from the appropriate range rate after you’ve decided whether to take a fixed-rate or variable-rate loan.

SoFi doesn’t charge any origination, prepayment or even late fees on its student loans. Student and parent loans must be at least $5,000, but can be as much as the entire cost of attendance of the school.

SoFi student loans repayment options

Whether you’re borrowing an undergraduate, graduate or parent student loan from SoFi, you have the option of a five-year, 10-year or 15-year repayment term. Going with a shorter term will mean higher monthly payments, but you’ll pay less interest and get out of debt faster. A longer term could be easier on your budget, but it will increase your overall cost of borrowing.

As for when you start paying back your loan, SoFi offers four options:

  • Deferred repayment: SoFi’s “grace period” — you don’t start repayment while you’re in school or for six months after you graduate. This option isn’t available on parent loans.
  • Interest-only payments: Pay any accrued interest while you’re in school to reduce the overall cost of your loan.
  • Partial payments: Make fixed payments of $25 per month while in school to lower the costs of your loan. This option isn’t available for parents.
  • Immediate payments: Start making full payments on the principal and interest right away.

As noted, parent borrowers can choose only the interest-only payment or immediate repayment on their SoFi loan. For students, meanwhile, choosing to make small or interest-only payments while you’re in school could cut down on costs and avoid a ballooning balance after you graduate.

How SoFi compares with other lenders

SoFistands out among the competition due to its relatively low interest rates and flexible repayment options. Here are a few ways in which SoFi beats the others, as well as some areas where it might fall short.

Advantages of SoFi student loans

You can choose a repayment plan that works for you. While some lenders have even more term-lengths to choose from, SoFi’s options of between five and 15 years still offers enough freedom to pick a repayment plan that works for your budget and goals.

You don’t have to worry about hidden fees. SoFi doesn’t charge any origination fees, application fees, insufficient funds fees or prepayment penalties — it doesn’t even have late fees. That said, missing payments could harm your credit, just as it would on any type of debt.

You could qualify for a very low rate. SoFi offers very competitive interest rates — its lowest rates even beat those on federal student loans. If you or your cosigner has excellent credit, you could qualify for a low-cost student loan.

You can check your rates without harming your credit. As an online lender, SoFi makes it easy to prequalify with an instant rate quote. This rate check only does a soft credit pull, so you don’t have to worry about dinging your credit score. You’ll only consent to a hard credit inquiry — which can lower your credit score slightly for a short period of time — after choosing a loan offer and submitting a full application.

You can qualify for an “unemployment protection” benefit. If you lose your job, SoFi might allow you to place your loan into forbearance for three months at a time, up to a maximum of 12 months total. You won’t have to make payments during this time, but your loan terms won’t get longer, meaning that you’ll have to make increased payments once forbearance ends.

You can put your loan in deferment if you go back to school. Borrowers who go back to school can pause payments through deferment for up to 36 months.

You can benefit from career coaching, networking events and other perks. As a SoFi member, you’ll get access to complementary career coaching, which can help you with your job search, personal branding and other aspects that can help in building your career. You can also access networking events, such as dinners, happy hours and financial education workshops. Benefits like these are rare among student loan lenders.

You could release your cosigner. SoFi allows borrowers to apply for cosigner release after 24 months of full principal and interest payments. Note, however, that cosigner release isn’t guaranteed.

You could get discounted rates on future SoFi loans. If you borrow another SoFi loan in the future, such as a personal loan or mortgage, you could get a rate discount of 0.125%. Plus, you can earn up to $300 for referring others to become SoFi members.

You can borrow a loan in all 50 states. While some other lenders have geographic restrictions, SoFi lends in all 50 states and the District of Columbia.

Disadvantages of SoFi student loans

You might have a tough time qualifying. You or your cosigner will have to meet certain underwriting requirements to borrow from any private lender, including SoFi. While SoFi doesn’t advertise a specific credit score, it says most borrowers have a score of 700 or higher. If you look at SoFi’s reviews on the BBB (the Better Business Bureau) website, you’ll likely see some dissatisfied customers that weren’t able to meet SoFi’s stringent credit requirements.

You might find a longer grace period elsewhere. While SoFi offers the standard grace period of six months, Earnest offers an even longer grace period of nine months. Although delaying repayment will make your loan more expensive, it could be helpful if you’re having trouble finding a job after graduation.

You might be able to find better rates with a different lender. Although SoFi offers very competitive rates, it’s always a good idea to shop around — you never know if you could get even better rates elsewhere unless you look.

You won’t have access to federal benefits. Finally, it’s important to note that SoFi student loans, just like any other private student loan, don’t qualify for federal benefits. You won’t be able to access income-driven repayment plans, or government-sponsored forgiveness programs, such as Public Service Loan Forgiveness. Before turning to any private lender, it’s probably a good idea to max out your eligibility for federal student loans first.

What it takes to qualify for SoFi student loans

When you apply, SoFi reviews your or your cosigner’s credit and income, as well as your financial history, your career experience and your monthly income versus your expenses.

Along with making sure you meet credit and income requirements, SoFi reviews your application to make sure you also meet these criteria:

  • Attend a qualifying school at least half-time. Most four-year public and private degree institutions qualify
  • Be the age of majority in your state, or apply with a cosigner who is
  • Use the loan for qualified educational expenses
  • Make satisfactory academic progress toward your degree
  • Be a U.S. citizen

Note that parent borrowers are not required to be the legal guardian of a student to apply for SoFi’s parent loan.

Are SoFi student loans right for you?

With its low rates, flexible terms and host of member benefits, SoFi could be the lender to meet your financial needs. But it’s always a good idea to look at several lenders, so you can find the private student loan with the best rate or other benefits.

Take advantage of the instant rate quotes that online lenders such as SoFi, Earnest or College Ave Student Loans offer, so you can compare offers without hurting your credit. By doing your lender-research homework, you can feel confident you’ve found a student loan with the lowest costs of borrowing.

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Rebecca Safier
Rebecca Safier |

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

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