SoFi Personal Loans Review
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- Date Established
- San Francisco, CA
- Suited for startups
- Competitive rates and fees
- No additional fees
- No prepayment penalty
- Unsuited for large businesses
Self-described as “a new kind of finance company” that is “taking a radical approach to lending,” SoFi (short for Social Finance) is a non-bank lender. Although SoFi does not offer any loans specifically for business purposes, the company does offer personal loans, which can be used to start a business, among other things.
SoFi deals in installment loans. In other words, you are given the full loan upfront, and you repay the interest and principal on a set schedule.
Compared to its competitors, SoFi’s personal loans tend to be much more flexible — the borrowing amounts are larger, term lengths are longer, the interest rates and fees are lower, and SoFi is often willing to work out a deferment or an alternative payment schedule if you run into trouble paying. In fact, SoFi advertises the friendliness of its personal loans on its homepage: “No origination fees. No pre-payment fees. No late fees.”
However, this flexibility comes at a cost. Like most personal loans, you must be financially stable, have an acceptable debt-to-income ratio, and have a history of making payments on time to qualify.
Furthermore, SoFi’s loans are not fast. While other lenders try to issue loans as quickly as possible, SoFi takes its time; after approval, funds can take up to 30 days to be disbursed, and the sometimes-lengthy application can make the wait time even longer.
That said, if you do qualify and you have the time and patience to apply, SoFi can be an excellent source of financing.
Is this the right loan for you? Keep reading to find out!
Table of Contents
SoFi offers personal loans that can be used for entrepreneurial purposes.
These are the minimum requirements to get a personal loan from SoFi:
|Time In Business:||N/A|
Because these loans are based on your personal creditworthiness, SoFi does not consider business factors, such as your time in business or revenue, when making a lending decision.
Instead, you must be a resident of the US, the age of majority in your state, and have a source of income (or have an employment offer). You must also have a credit score of at least 680, and you must have a solid financial history and meet the company’s other underwriting requirements regarding debt-to-income ratio, education, and other factors.
Currently, SoFi cannot offer personal loans to people in Mississippi.
Terms & Fees
These are SoFi’s rates and fees for its personal loans:
|Borrowing Amount:||$5K – $100K|
|Term Length:||two to seven years|
|Interest Rate:||Same as APR|
|APR Range:||Fixed: 5.99% – 16.24% (with autopay)|
Variable: 5.74% – 14.70% (with autopay)
SoFi offers installment loans. You are sent the full amount up-front, and you repay the principal and interest in periodic installments.
Unlike many lenders, your periodic payments may not be fixed. SoFi offers the option of variable interest rates. If you choose a variable rate, your rate will fluctuate along with the LIBOR (London Interbank Offered Rate). On the other hand, if you choose a fixed rate, your payment will be the same over the life of the loan.
Overall, SoFi’s interest rates are lower than most similar lenders. These rates are inclusive of SoFi’s autopay discount — if you do not agree to autopay, you can expect your rates to be 0.25% higher.
Your monthly payments will vary according to the term length and your assigned interest rate. To give you a good idea of what your monthly payments might look like, SoFi provides some payment examples on its website.
This lender is unique in that they do not charge an origination fee (or an equivalent fee). In fact, aside from potential fees for late or failed payments, borrowers are not charged any fees other than interest.
One nice aspect of SoFi’s personal loans is the fact that, if needed, you’ll be eligible to receive Unemployment Protection, which SoFi describes thusly:
If you lose your job through no fault of your own, you may apply for Unemployment Protection. SoFi will suspend your monthly SoFi loan payments and provide job placement assistance during your forbearance period. Interest will continue to accrue and will be added to your principal balance at the end of each forbearance period, to the extent permitted by applicable law. Benefits are offered in three month increments, and capped at 12 months, in aggregate, over the life of the loan. To be eligible for this assistance you must provide proof that you have applied for and are eligible for unemployment compensation, and you must actively work with our Career Advisory Group to look for new employment.
Additionally, note that while the minimum borrowing amount is listed as $5,000, SoFi states that the “Minimum loan amount may be higher in specific states due to legal requirements.”
The application process is completed online.
To begin the process, you’ll be required to create an account and enter basic information about yourself. At this point, SoFi will run a soft check on your credit, which will not affect your score. SoFi will then determine whether or not you’re eligible for a loan and, if so, what rates they can offer you.
You can use this information to decide whether or not you want to continue the process and get a loan from SoFi.
If you do choose to continue, you may have to submit documents to verify your information, talk to SoFi representatives, and allow the company to perform a hard check on your credit (which will affect your score).
Assuming everything checks out, SoFi will present a final offer to you; if you choose to accept, the capital will be sent to your bank account.
Sales & Advertising Transparency
SoFi provides plenty of helpful information about its loan products and what to expect from the application process on its website. Additionally, SoFi’s customer service is transparent and helpful.
Customer Service & Technical Support
Customer service is available via phone, email, or live chat (the contact info is on the application). The service also has a dedicated Twitter account for support.
Most reviewers appear happy with the level of support offered by SoFi. However, a minority report that, in their experience, customer service was slow to answer questions and had poor in-house communication.
Negative Reviews & Complaints
SoFi has a presence on a number of review sites, including the Better Business Bureau, Credit Karma, Yelp, and Trustpilot. It should be noted that because SoFi offers many products, reviews on the BBB, Yelp, and Trustpilot sites are not necessarily for personal loans (the Credit Karma page is specifically for personal loans, however).
SoFi fares very well in all places, garnering high aggregated scores and relatively few complaints given the size of the company. Regardless, SoFi is a very large company, so there are bound to be some complaints. Here are the most common:
- Funding Delays: The majority of unhappy reviewers complained that there were delays during the application process. Some thought that SoFi requested too much paperwork and documentation, and it took a long time for the company to get everything they needed.
- Technical Difficulties: A few people reported that the system experienced glitches during the application process when uploading or signing documents. Others reported difficulty navigating the online interface to make payments.
- Customer Service: Some customers were frustrated that customer service could not help with problems they were experiencing, that customer service offered conflicting information, or that they were not adequately kept up-to-date on the status of their loan application.
Positive Reviews & Testimonials
Many customers appear happy with SoFi’s service. Despite the complaints, in most of the sources listed above, the company has very strong aggregated ratings. Here are the most common reasons people like SoFi’s service:
- Low-interest rates
- No additional fees
- Easy application process
- Efficient, helpful customer service
We’d like to hear from you, though. Do you have experience getting a personal loan from SoFi? How did it go? Leave a message in the comments!
Those who meet the requirements and have the time to wait would benefit from applying for a loan from SoFi. Although there is always a chance that somebody else will offer a better deal for your particular situation, in general, SoFi offers better rates and more flexible borrowing options than other lenders.
That said, if you have the time to apply for a loan from SoFi, you should have the time to make some comparisons as well. Most of SoFi’s competitors offer prequalification estimates within a few minutes without damaging your credit score, so you can easily tell which lender can offer you the best rates and fees.