OT: SoFi for Student Loan Refinancing

[psuguy04]

Does anyone have any thoughts/experience/business dealings with using SoFi to refinance (private) student loans?

They seem to get very favorable reviews and I'm seeking input from the board.

This post was edited on 3/6 4:54 PM by psuguy04

 

[psuguy04]

Anyone ever deal with SoFi?

Nfm

 

[tboyer]

You mention these are private loans -- in which case there is no downside as long as you read the fine print and do your homework.

Federal loans -- the downside is you lose the rights you have to deferments and special repayment programs such as income-based repayment.

SoFi is a reputable organization. their business plan is to take advantage of the fact that a person who's been in the workforce for a couple of years making loan payments steadily acquires a good credit rating and may have some assets so they can get much lower rates (especially in the current environment). The typical thing is to refi from 8 or 9 percent to between 5 and 6 percent.

Also keep in mind there may be other sources of credit besides SoFi -- the banks themselves may have refi options to lower interest rates once good credit is established.

 

[psuguy04]

Thanks tboyer...

I don't plan to include federal loans on this refinancing.

I'm looking to do exactly what you said--lower the interest rate and get it fixed. Although a side effect may be a lower monthly payment, I plan to pay what I'm paying now to pay it off early.

Glad to hear it's reputable--I've done a lot of research on SoFi and other options. They seem to have the lowest (fixed) rates of all the places I've seen. I'd like to get this wrapped up, one way or another, before the Fed raises rates.

 

[tboyer]

Re: Thanks tboyer...

One thing I would watch for is a prepayment penalty. If you want to pay off the loan early for some reason, there should not be a big penalty. HELOCs often have an early termination fee if you close the HELOC inside 3 years. That is fair because the bank does have costs setting up a HELOC. There may be something similar but it shouldn't be enough to prevent you from paying at an accelerated rate -- paying off the whole thing if you find some other financing option that's better.

 

[jrl5019]

Check out upstart. Their business model is different but have been getting positive reviews. You can borrow anywhere from 3-35k and have up to 5 years to pay it off. No prepayment penalties and rates as low as 5%. They use your educational background, major, work history and future earnings potential to give you a rate. They don't just use your credit score like other lenders. I was offered a 5% loan but haven't pulled the trigger yet.