Social Finance, known as SoFi, was founded by Stanford alumni in 2011 and is best known for its student loan refinancing product targeted at recent graduates with high incomes. The online lender expanded into mortgages and personal loans in 2014 to further its goal of becoming a full-fledged financial services company. It also raised an eye-popping $1 billion in September toward that goal.
To SoFi, an applicant’s credit score doesn’t matter as much as other factors, co-founder Dan Macklin says. For student loan applicants, he says, a history of making on-time payments, high earning potential and the industry they work in is more important.
The company uses the same approach to evaluate personal loan applicants, lending to those who have a solid credit history and enough cash flow to cover their loan payments and living expenses. SoFi doesn’t have minimum credit score or income requirements, but its average borrower tends to have good credit and a high salary, the company says. (If that doesn’t describe you, you might be better off considering these loan options.)
To its well-qualified borrowers, SoFi offers loans of up to $100,000, which is more than most online lenders, as well as fixed and variable interest rates.
[Compare SoFi with other personal loan companies.]
What makes SoFi different
Once you’re part of the club, SoFi tries to provide a “community experience,” Macklin says. SoFi arranges social events around the country, such as happy hours, where borrowers can meet and network with one another.
Borrowers also have access to a variety of career services, such as one-on-one counseling and tips to achieve their professional goals.
SoFi’s flagship offering is its “Unemployment Protection” program. If you lose your job, SoFi will pause your loan payments (although interest still accrues) and help you find a new job through its career counseling services. The job search benefit is available to borrowers for three months at a time, for a total of 12 months over the entire loan duration.
These benefits allow SoFi to attract high-quality borrowers who could easily qualify for personal loans elsewhere, says Macklin, and he attributes the company’s success to them.
“If somebody gets approved for a SoFi loan, it’s more than likely they will take it,” he says.
Here’s what you need to know before applying for a SoFi personal loan:
SoFi’s credit standards
- Minimum credit score required: None
- Minimum gross income required: None
- Limitations: High income, good credit history
- Minimum credit history: None
- Maximum debt-to-income ratio: None
SoFi’s lending terms
- APR:
- Fixed-rate loan: 5.95% to 11.49% with AutoPay, 6.20% to 11.74% without AutoPay
- Variable-rate loan: 4.73% to 9.78% with AutoPay, 4.98% to 10.03% without AutoPay
- Minimum loan amount: $5,000
- Maximum loan amount: $100,000
- Minimum loan duration: 3 years
- Maximum loan duration: 7 years
- Time to receive funds: A few business days
SoFi’s fees and penalties
- Origination fee: None
- Prepayment fee: None
- Late fees: 4% of payment due or $5, whichever is lower
- Personal-check processing fees: None
Hi there Do you think personal loans is a good idea? Are there any moments that I should know? Thanks for advice!
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