Refinancing could be a way to lower your interest rates, lower your monthly payments, or pay off your loans faster. This article will tell you everything you need to know about SoFi’s student loan refinancing program.
Social Finance (SoFi) was founded in 2011 by four students who met at Stanford Graduate School of Business. When SoFi introduced its signature product, student loan refinancing, in 2012, it became the first company to refinance federal and private student loans.
Since then, the company has expanded its financial services, including loan refinancing for medical residents and fellows, mortgages, personal loans, credit cards, insurance, investing, and deposit accounts. To date, SoFi has recorded over $30 billion in refinanced student loans for more than 375,000 members.
SoFi is the pioneer of student loan refinancing, and their program could be the right fit for you. Follow along below as we explore their eligibility requirements, most current interest rates, and the perks and borrower protections they provide for members.
At first glance, here’s what you can expect with SoFi:
SoFi was the first company to refinance student loans, which may be why they have tough criteria for qualifying. Here are SoFi’s eligibility requirements for student loan refinancing and parent PLUS loan refinancing:
Borrowers who are non-permanent resident aliens or DACA recipients need to apply with a creditworthy co-signer who is a U.S. citizen or permanent resident by calling 877-936-2269.
With SoFi, you can borrow up to the full balance of your qualified education loans. The minimum amount you can refinance on your student loans or parent PLUS loans is $5,000, but that figure may be higher in specific states due to legal requirements. For medical and dental resident student loan refinancing, though, the minimum loan amount is $10,001.
Some lenders may offer lower minimum loan amounts for refinancing compared to SoFi. Since student borrowers reportedly owe an average of nearly $40,000 each in education loans, a $5,000 minimum may not pose a significant barrier to qualifying.
SoFi offers loan terms of five, seven, 10, 15, or 20 years. To check how much you can potentially save by refinancing your student loan debts with SoFi, use their Student Loan Refinancing Calculator. Input your current loan information and the tool will show your estimated savings — both monthly and over the life of your loan.
SoFi’s repayment terms are the same as most private lenders, except for their unique repayment plan for refinanced student debts of medical and dental residents and fellows. SoFi allows residents to make minimum monthly payments of $100 on their debt until the end of their residency or fellowship program, up to 54 months. This is a huge benefit for residents and fellows in training and not earning a full physician’s salary but carrying large amounts of education debt.
SoFi’s interest rates* for student loan refinancing are:
SoFi’s medical and dental student loan refinancing rates are:
These are SoFi’s interest rates for parent PLUS refinancing:
SoFi uses the London Interbank Offered Rate (LIBOR) to set interest rates for loans. LIBOR is an interest rate benchmark commonly used by banks and other lenders to set rates for loans. If you refinance with a variable rate loan, you’ll see your loan’s APR and monthly payment fluctuate depending on the index’s rise or fall. Rates are typically adjusted monthly.
If you’re confused about why interest rates are listed as APR, here’s a little definition to clarify. An interest rate is a percentage of the loan amount added to the total payment as the fee for borrowing money. APR stands for annual percentage rate. It’s a broader measure of the cost of borrowing money since it reflects the interest rate and fees you have to pay to get the loan.
There are two ways to benefit from SoFi’s interest rate discounts:
Here’s some important information about SoFi’s autopay program:
Since SoFi looks at your financial history, credit score, and debt-to-income ratio to qualify for refinancing, having a creditworthy co-signer can strengthen your profile and may get you a lower interest rate.
SoFi, however, encourages borrowers to apply first to give them a chance to process information. You can add a co-signer by logging into your account to enter their name and email address in the application. SoFi will send them an invitation to consent as a co-signer, enter their information, and supply necessary documents.
You’ll also need to let your co-signer know that SoFi doesn’t offer any co-signer release. Co-signers could only be removed if you chose to refinance your loan and qualify on your own (though SoFi does discharge loans in the case of a borrower’s death so the loan does not become a burden of the co-signer).
SoFi doesn’t discharge loans in the event of a co-signer’s death, however. They’re simply removed from the contract. Be sure to read your promissory note so you are clear on these terms.
SoFi’s parent PLUS refinancing has the same eligibility criteria as student loan refinancing. The interest rates are capped slightly lower with fixed rates 2.99% to 6.04% APR and variable rates at 2.24% to 5.59% APR. Both rates are reduced by an autopay discount.
SoFi also offers transfer of a parent PLUS loan to the student’s name. However, there’s no additional information provided on their website on how to proceed. If you are looking to refinance a parent PLUS loan into your child’s name, you’re encouraged to contact customer support for more details. You can call 855-456-7634.
Like most lenders in the industry, SoFi doesn’t charge application fees or origination fees. There are no prepayment penalties, too, if you can pay off your student loan refinance before the end of the repayment term. However, you’ll be assessed a $5 late fee if your loan is 15 days past due.
In the case of forbearance and deferment, repayment options are at the discretion of SoFi or MOHELA, depending on permissions granted by SoFi. It’s also important to note that unpaid accrued interest may be capitalized at the end of a forbearance or deferment. Capitalization means any unpaid accrued interest will be added to the principal of your loan.
SoFi offers the following borrower protection repayment options:
There may be additional eligibility criteria and requirements you’ll need to show before any of the above repayment options can be granted. To determine if you qualify, call SoFi or MOHELA at 877-292-7470.
Aside from competitive rates and comparable options for repayment plans, refinancing with SoFi also comes with some perks you might want to explore.
Member benefits include:
SoFi’s student loan and parent PLUS refinancing programs are great choices if you can take advantage of the extra perks they come with. SoFi also has helpful repayment options for medical residents and fellows.
Refinancing is a great way to manage your payments, qualify for a lower interest rate, and pay off your debts faster. If you’re looking to refinance your federal student loans, understand that you are giving up access to federal repayment programs, such as income-driven repayment plans and Public Service Loan Forgiveness (PSLF). You can also choose not to refinance loans where you can qualify for federal repayment programs.
Compare and prequalify if you can with several lenders to make sure you are getting the lowest rates available. Consider each lender’s borrower protection options, repayment terms, and benefits, as well. There’s no shortage of lenders, and you’re sure to find one that will suit your needs.
At CollegeFinance.com, we help potential and current borrowers understand the ins and outs of student loans, explore loan payment options, and more. Explore our platform for resources and guides on planning, managing, and repaying your student loans.
SoFi’s current fixed interest rates are at 3.99% to 9.99% APR (with autopay) and the variable rates range from 5.99% to 9.99% APR (with autopay).
No, SoFi only does a soft credit pull when you check your rates, so it doesn’t affect your credit. They’ll do a hard credit check once you decide to apply, which could temporarily lower your score by a few points.
SoFi doesn’t disclose the minimum FICO score borrowers need to qualify. SoFi maintains that qualifying for a loan depends on your financial history, employment, other sources of income, debt-to-income ratio, and credit score.
*Fixed rates range from 3.99% APR to 9.99% APR with 0.25% autopay discount and 0.25% direct deposit discount. Variable rates range from 5.99% APR to 9.99% APR with 0.25% autopay discount and 0.25% direct deposit discount. Unless required to be lower to comply with applicable law, Variable Interest rates will never exceed 13.95% (the maximum rate for these loans). SoFi rate ranges are current as of 10/4/24 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay and Direct Deposit are not required to receive a loan from SoFi. You may pay more interest over the life of the loan if you refinance with an extended term. 0.25% Direct Deposit Discount: Terms and conditions apply. Offer good for Student Loan Refinance (SLR) borrowers that apply for a new SLR on or after 9/17/2024. To be eligible to receive the 0.25% interest rate reduction offer: You must (1) Complete a Student Loan refinance application with SoFi beginning September 17, 2024; (2) Be approved by SoFi for the loan meeting all SoFi’s underwriting criteria; (3) Have either an existing SoFi Checking and Savings account, a SoFi Money cash management account or open a new SoFi Checking and Savings account within 30 days of funding the new loan, AND receive a direct deposit of at least $1,000 to the account within the first 30 days of funding the new loan (“Direct Deposit Account”); (4) Be the primary SLR account holder. If eligible at SoFi’s sole discretion, you will receive this discount during periods in which you have received direct deposits of at least $1,000 every 30 days to a Direct Deposit Account. This discount will be removed during periods in which SoFi determines you have not received at least $1,000 every 30 days in direct deposits to your Direct Deposit Account. You are not required to enroll in direct deposits to obtain a Loan. This discount lowers your interest rate but does not change the amount of your monthly payment. SoFi reserves the right to change or terminate this Rate Discount Program to unenrolled participants at any time without notice.