Student loan debt is a major issue among several students. It is a burden especially upon graduating, you get a low-income job. The borrower may find it difficult to repay these loans with his/her low earnings. It becomes worse if he/she fails to secure a job upon graduating from school.
Few companies and banks provide student loan refinancing, one such financial service provider is SoFi.
SoFi is a leading student loan refinancing company. It was one of the first to refinance federal and private student loans together in the year 2012.
Ever since it was founded in 2011, it has refinanced student loans worth $18 billion. However, refinancing student loans can be a confusing topic. Learn more about refinancing student loans.
List of contents
- Refinancing by SoFi
- SoFi refinancing overview
- Advantages of refinancing student loan with SoFi
- Parent PLUS and parent loan refinancing
Refinancing by SoFi
When you decide to refinance your student loans, irrespective of the fact whether its a federal or private loan, you taking another loan with less interest rate, to repay the original student loan.
Under the SoFi student loan consolidation, you get to pay a new interest rate based on your current financial position. This new loan with a lower interest rate can reduce the total interest costs and ultimately lower your monthly payables depending on the choice of terms.
If you have a good credit score and financial position to avail refinancing, you qualify for a lower interest rate payment on this loan. This can make you save a good amount in refinancing. SoFi doesn’t charge any hidden fees or prepayment penalties.
The company provides services in an easy and convenient way. Borrowers can apply or request for refinancing online simply by filling the application form and no charge or fee is demanded when applying. Origination and prepayment penalties are also overlooked.
SoFi also came up with a plan which allows its customers to subscribe for a membership in order to avail discounts on the interest rate.
|Loan amount||More than $5000|
|Student Loan rates||Fixed-rate: 3.89% – 8.07%
Variable-rate: 2.5% - 7.12%
|Loan terms||5,7,10,15 or 20 years|
The student loan refinancing can be availed easily and quick and all the process happens online.
Check for eligibility – Checking whether or not you are eligible must be the first and important process before requesting for refinancing. You could fill the application form available online in the official portal of SoFi. Based on the details provided on employment, financial position and credit score of 650, you will be evaluated for availing refinance.
Verification of information and signature – You could upload all your financial information and electronic signature in the portal for getting an approval on your request to refinance.
Approval of refinancing – When your request is approved for refinancing, all your loans will be consolidated whether or not they are federal or private student loans. When refinancing, all you have to do is pay a single monthly payment for the whole consolidated loan with a lower interest rate.
SoFi refinancing overview
Fees and interest rates
You have an option to check for eligibility which depends on your credit score and you can choose your preferred interest rate depending on your term.
No application and origination fee is required during application
No prepayment penalty
Late fees will be imposed on delayed payments made after 15 days
SoFi refinancing Requirements
1. Financial requirements
SoFi requires a credit score of 680 and above
The average score should be above 700
No minimum income is required
Minimum debt-to-income ratio is not disclosed
2. Other requirements
The person should be US citizen or permanent resident of US
Must be a graduate
Should have attended Title IV-accredited school
He/she should be employed or should have enough income from other sources
3. Option of repayment
People can postpone payments if they return to school after deferment
Payments can be postponed if the borrower is involved in active military duty
Payments can also be postponed if the borrower is under rehabilitation or has a minor disability
Physicians and dentist can pay the reduced payment of $100 per month during their residence
Borrowers can postpone payments if they lose their job
4. Customer service
In house customer service team is available
Borrowers don’t get assigned to a banker or representative
The time taken for approval is about a week
5. Perks to borrowers
An advisor would help the borrower in planning for a career transition, searching for jobs and personal branding.
SoFi provides wealth management platform to help borrowers invest without charging for a management fee.
Advantages of refinancing student loan with SoFi
Both private and federal student loan can be refinanced by SoFi, although the US Department of Education doesn’t offer student loan refinancing. Even though refinancing your federal student loans with SoFi is possible, the refinanced loan must not be on an income-driven repayment plan.
Refinancing federal student loan with SoFi would restrict you from availing federal loan benefits, however, there is no such thing for private loans.
Benefits of refinancing student loans with SoFi
You would get a lower monthly payment
It helps to pay off your loan sooner, saving you money in interest
A lower monthly repayment would decrease your debt-to-income ratio
The lender provides a flexible term length
- Borrowers are offered fewer fees and interest rates
SoFi provides services to borrowers irrespective of location
This lender is recognized for providing more than 12 months forbearance period for academic or military deferment and any other type of policy that helps borrowers in tough times.
Wondering about loans for college? Learn about student loans and clear your doubts
How can SoFi refinancing improve?
1. While many lenders provide cosigner release, Sofi is yet to provide cosigner release to its customers.
2. The refinancing option is not available for those who don't have a degree.
3. Forbearance period can be above 12 months.
4. Discharge of loan due to death and disability is approved case by case.
Parent PLUS and Private Parent Loan Refinancing
SoFi provides a comprehensive refinancing service for parent loans. These services help in managing the debt that was gotten as a result of the child’s education.
Refinancing the refinanced student loan
SoFi provides an option for borrowers to refinance student loans as often as they like. Refinancing and paying off your loan without going delinquent would help to improve your credit score.
With good credits, you have the option of refinancing once again with a lower interest rate. This process does not require the payment of an origination or application fee.
It’s better to refinance now or never
If you have availed the private student loan, you must have discovered that it has a high-interest rate. Therefore, it is better to refinance as a private student is not eligible to receive government loan benefits.
If you have a good credit score, refinancing your loan could be a wise decision since borrowers with good credit scores are offered lower interest rates on their refinance.