SoFi Student Loan Review: The Pros and Cons

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Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Editorial Note: This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the financial institution.

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2.84% to 10.97% APR1

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3.37% to 11.87% APR3

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  • Variable APR

Although SoFi has been refinancing student loans since 2012, it only recently began offering new SoFi private student loans to those currently attending school.

With its April 2019 product launch, the online-only lender promised a seamless prequalification process to go along with competitive rates for undergraduate and graduate students, as well as parent borrowers.

If you can meet SoFi’s qualifying criteria — international students aren’t eligible, for example — then this lender is definitely worth a look.

SoFi student loans review: The basics

Like other online-only lenders looking to disrupt the student loan market, SoFi offers a wide range of loan and repayment options. Features include:

  • Fixed and variable rates available
  • Loans available for undergraduates, graduate students and parents
  • Apply with or without a cosigner
  • Borrow as little as $5,000 or as much as your school’s cost of attendance
  • Enjoy a six-month grace period (for undergraduate borrowers only)
  • Defer in-school repayment or make fixed, interest-only or full payments (for non-parent borrowers) while enrolled
  • Repay your loan over 5, 10 or 15 years
  • Unemployment protection program allows you to pause your payment for three months at a time
  • SoFi membership also includes career and financial improvement services

In addition, eligible borrowers can expect these perks of SoFi student loans:

  • Prequalify without affecting your credit
  • No fees for application, origination, prepayment or late payment
  • Up to 0.375% in interest rate discounts for being an existing SoFi member and enrolling in autopay
  • Release your cosigner after 24 months of prompt payments

What we like about SoFi student loans

Competitive rates make SoFi worthy of your attention. With strong credit, student and parent borrowers may be able to score lower rates than the fixed APRs associated with federal student loans from the Department of Education.

The lender also promises its lowest rates to graduate students seeking a business or medical degree.

Undergraduate Graduate Parent
Fixed 5.05% to 11.71% 4.33% to 11.99% 5.05% to 11.71%
Variable 3.65% to 11.25% 2.93% to 11.57% 3.65% to 11.25%

Rates as of August 7, 2019 reflecting 0.25% autopay discount

Aside from low fixed and variable rates, other hallmarks of SoFi student loans revolve around the application process and company-exclusive programs.

Prequalify without harming your credit

As you shop around, understand the differences between a soft and hard credit check. A hard check can ding your credit score (mildly) when you apply for a student loan.

However, SoFi allows you to prequalify, submitting to only a soft check that won’t harm your credit.

Even better, you can complete the entire process from your smartphone. You would take and upload pictures of your required documents and sign your application electronically.

Keep in mind that while the preapproval process takes minutes, the timeline for your more formal loan application could span four to six weeks, depending on your school.

Enjoy unique membership perks

When you borrow federal student loans, you enjoy government-exclusive perks such as income-driven repayment that are rare or non-existent among private lenders.

On the other hand, SoFi does offer a collection of perks that you’d be hard-pressed to find elsewhere:

  • Unemployment protection: If you lose your job while repaying your loan, you could postpone your monthly payments for a total of up to 12 months (for three months at a time).
  • Career services: Whether or not you’re unemployed, being a SoFi borrower entitles you to one-on-one coaching sessions with a mentor at talent management firm Korn Ferry.
  • Financial planning: With mobile app SoFi Relay, you can schedule a free, 30-minute session with a financial planner to discuss your loans or other money-related goals.

What to keep in mind about SoFi student loans

So far, SoFi might sound like the right fit for your borrowing needs. However, no one lender is the best option for everyone, and in some ways, SoFi might fall short of your needs.

Strict eligibility rules

Not every borrower (or cosigner) will qualify for SoFi student loans. Only U.S. citizens attending school at least half-time, for instance, meet the lender’s underwriting criteria.

If you find yourself ineligible for any of the following reasons, you might consider a competing lender:

If you are… You might be eligible at…
An international student Citizens Bank
A part-time student* College Ave

*Less than half-time

You also might find yourself unable to hit SoFi’s credit requirements. To qualify, you (and your cosigner) will typically need a credit score of at least 700 and proof of income.

Limited repayment safeguards

SoFi’s unemployment protection program goes above and beyond to provide a safety net for borrowers who, through no fault of their own, suffer a job loss.

But the lender lacks a safeguard for more general economic hardship. A voluntary career transition or a medical emergency, for example, could make your loan repayment more challenging to maintain. Consider competitors like CommonBond that offer a general forbearance not tied strictly to your employment status.

Just as Student Loan Hero does, SoFi candidly recommends you prioritize federal student loans for your education costs before turning to them for funding. This is especially wise if think you might need to pause or reduce your loan payments at some point down the road.

Cosigner release takes two years

If you’re an undergraduate student, it’s likely that you’ll need a cosigner to qualify for a SoFi student loan. A cosigner agrees to repay your loan in the case that you became unable to pay on your own.

Unfortunately, SoFi doesn’t offer you the ability to release your cosigner until after two years of prompt payments.

If an even faster path to cosigner release is important to you, consider borrowing instead from a competitor like Sallie Mae. It allows you to remove a cosigner from your loan agreement after making just 12 monthly payments on time.

Are SoFi student loans right for you?

SoFi student loans come with no fees, low rates and a high degree of flexibility. You could choose whether and how to make in-school payments in addition to selecting one of three loan terms.

Unfortunately, the lender known for refinancing is less forgiving when it comes to repayment protections. Unless you lose your job, you might not have recourse to press pause on your payments.

To decide whether SoFi is right for you, take some time to think about your ideal loan. Then see if SoFi fulfills everything you’re seeking. If it comes up short, you could always compare the lender to some of the other noteworthy private student loan options available.

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

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Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Variable APRDegrees That QualifyMore Info
2.84% – 10.97%1 Undergraduate
Graduate

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3.12% – 10.54%2 Undergraduate
Graduate

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3.37% – 11.87%3 Undergraduate
Graduate

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3.52% – 9.50%4 Undergraduate
Graduate

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2.90% – 11.16%5 Undergraduate
Graduate

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