SoFi Student Loan Refinancing Review

Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice, and in 2017 he received the SABEW Best in Business Award.

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SoFi, which is short for “Social Finance,” is a lender that prides itself on excellent customer service and a more personalized approach to lending than you’ll find with most traditional lenders. The company was one of the pioneers in student loan refinancing. With low APRs, straightforward costs, a user-friendly platform, and more than $30 billion in loans funded, SoFi is a lender you may want to consider if you’re thinking about refinancing your student loans.

Ratings Methodology
Provider Rates & Terms Great For Get Started
Rates & Terms:

Fixed Rates: 3.46 - 5.98%

Variable Rates: 1.81 - 5.98%

Terms: 5, 7, 10, 15 and 20 years

Great For:
  • Low rates
  • Flexible term options
  • Discounts
Get Started: Check Rate
  • Checking rates won't impact your credit score

Top perks

As one of the student loan refinancing industry’s pioneers, SoFi offers feature-packed loans with a lot to like. Here are some of the biggest reasons you might want to consider a SoFi refinancing loan:

  • Low APRs -- SoFi offers competitive rates among its online competition.
  • Five term options -- SoFi offers refinancing loans with term lengths of five, seven, 10, 15, and 20 years. This isn’t the most flexible structure in the industry, but is better than many competitors who only offer two or three terms to choose from.
  • High maximums -- SoFi will refinance as little as $5,000 in student loans and the maximum is only limited by your full balance of qualified education loans.
  • No fees -- SoFi doesn’t charge origination or application fees, and there are no prepayment penalties if you choose to pay off your loan early.
  • In-school deferment -- Here's one big differentiator between SoFi and its competitors. SoFi allows borrowers who return to graduate school on a half- or full-time basis, or who serve on active military duty, to defer their loans. SoFi will also honor the first six months of any active grace period on any loans you refinance with them.
  • Autopay discount -- SoFi offers a 0.25% interest rate discount for borrowers who agree to have payments made automatically from a bank account. This has become a fairly standard feature among student loan refinancers, but is still worth mentioning. (Note: Any other interest rates or APRs listed in this review reflect this discount.)
  • Soft credit inquiry for pre-approval -- You can check your APR without affecting your credit score with SoFi’s quick pre-approval process.
  • Federal and private -- SoFi can refinance both federal and private loans.
  • Membership discount -- If you use SoFi to refinance your loans and end up getting another loan from SoFi, you’ll get a 0.125% rate discount just for being a member.
  • Unemployment deferment -- SoFi will temporarily suspend your payments if you lose your job. Not only that, but SoFi’s support team will help you search for a new job.
  • Ability to add a cosigner -- SoFi allows refinancers to add a cosigner to their application in order to strengthen their chances of approval and potentially receive better loan terms. However, SoFi warns borrowers that adding a cosigner will make the process take 1-2 weeks longer.

What could be improved

As you can see, the list of positive aspects of SoFi loans is extensive. However, there’s no such thing as a perfect lender, and here are a couple of reasons you might want to look elsewhere:

  • High credit standards -- SoFi has a well-deserved reputation for having high credit standards. The company fully acknowledges this -- in fact, there’s a heading on their website entitled “we’re selective.” In addition to your credit score, SoFi considers things like your career, education, and estimated cashflow.
  • Cosigner complications -- SoFi claims that adding a cosigner will lengthen the approval process by as long as two weeks. If you’re planning to apply with a cosigner, other lenders may be able to get it done quicker.

How to refinance with SoFi

Refinancing your student loans with SoFi is a relatively easy process. Simply complete the online pre-approval to determine if you qualify, select the loan term you want, and complete the full application. You can upload any necessary documentation easily with screenshots or photos.

It’s worth mentioning that if you choose to proceed with the full loan application, SoFi will conduct a hard credit pull, which may affect your credit score.

When it makes sense to refinance with SoFi

SoFi became an industry leader by being a great refinancer for highly-qualified borrowers. If you have existing student loans and you have strong credit, stable employment, and are a generally strong applicant, SoFi could be an excellent fit for you.

Alternatives to consider

If you have federal student loans, it may not be a smart idea to obtain a refinancing loan from any private lender. Federal student loans have some big advantages over private loans, which you’re likely to lose if you refinance. Here are some of the main advantages of federal loans you may not want to give up, even for a lower interest rate:

  • Federal loans may qualify for Public Service Loan Forgiveness (PSLF) and other government forgiveness programs. Private loans never do.
  • Federal loans are eligible for income-driven repayment plans, which cap your monthly payment at a certain percentage of your discretionary income.
  • Federal loans are eligible for deferment or forbearance if you fall on tough financial times. Some private lenders offer deferments, but it isn’t common.
  • Federal student loans are often subsidized, meaning that the federal government pays the interest during times when you’re in-school or on a deferment. Even if your private lender offers deferments, you’ll likely still be charged interest during those times.

If any of these things apply to you, it’s probably a smart idea to either leave your federal loans alone, or pursue a Direct Consolidation Loan, which is a federal loan to combine your loans.

Finally, if you do decide that a private lender refinancing loan is right for you, it’s important to pre-qualify with a few lenders to see who offers you the best rates and terms. Most refinancing lenders allow you to do this without a hard credit pull, so there’s no good reason not to shop around, and you may just save hundreds or even thousands of dollars in the process. Our picks of the best student loans can give you a few excellent lenders to add to your comparison shopping.

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