Review of SoFi Student Loans with Low Rates and No Fees

Review of SoFi Student Loans with Low Interest Rates and No Fees

If you are looking to refinance your student loan debt, you need to check out SoFi student loans. ​Why? Well, SoFi is our top recommended lender for student loan refis and consolidation loans because of their low interest rates and no fees solution.

​So we recommend you start the process of your student loan refi with SoFi.

So let's get started and answer the question of "why we recommend SoFi".

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How a Student Loan Refinance with SoFi Works

SoFi lets you refinance and consolidate your federal or private student loans into a lower interest rate loan. Their goal is to help you save money by providing lower rates than the rest of the industry.

Just remember, if you refinance a federal loan, you will give up all federal protections and programs, including income-based repayment programs.

According to SoFi, the average SoFi borrower saves almost $19,000 over the life of their new loan. This figure includes enrolling in their AutoPay feature.​

In most states, the minimum loan amount required is $5,000 (recently reduced from $10,000), but there’s no cap on how much you can refinance. Based upon your cash flow, SoFi will try to provide an option to refinance all of your student loan debt.

There is no origination fee and no prepayment penalty with SoFi. And they offer some of the lowest rates available.

SoFi's Interest Rates

At this point, you are probably wondering just how low SoFi's interest rates for student loan refinancings are.

SoFi offers you the option of choosing either a fixed rate or variable rate student loan.

  • Fixed rate APRs range from 3.50% – 7.74% (with Auto-Pay activated).
  • Variable rate APRs range from 2.20% – 6.00% (with Auto-Pay).

These rates are available so long as you enroll in Auto-Pay.

And you can choose to refinance or consolidate your loans You can refinance on a 5, 7, 10, 15, or 20 year term.

Auto-Pay is SoFi's program where you sign up to have your monthly payment directly debited from your checking account. In return for choosing this option, SoFi will reduce your interest rate by 0.25%.

We recommend enrolling in Auto-Pay and enjoying the savings over the life of your loan.​

We also recommend choosing the fixed-rate loan option if you are thinking of a longer term loan. With interest rates are at an all-time low, you may not want to risk seeing your rates go higher when you a long time horizon left on your payments.

If you do go with the variable rate option, however, you can save a lot of money and maybe even pay off your loan in a shorter period of time with prepayments.

If you choose the variable interest rate you should know that it is capped. So it will never raise above the following levels:

  • ​Capped at 8.95% APR 5, 7, and 10 year student loans.
  • Capped at 9.95% APR for 15 and 20 year student loans.

​Payment Examples for a $10,000 Loan

Comparison of Interest Rates and Payments for SoFi Student Loans

Image Courtesy of SoFi; Screenshot taken on 8/2/2016

Do Your Qualify

You can refinance both federal and private student loans through SoFi, including previously consolidated federal loans through the FFEL or Direct consolidation programs or loans that were consolidated already with a private lender.

You will need to meet certain eligibility requirements:

  • US citizen or permanent resident.
  • Hold a 4-year graduate or undergraduate degree from an accredited university or graduate program.
  • Good employment history with current employment or a confirmed employment offer.
  • Good standing on current student loans.
  • Adequate monthly income.
  • Responsible financial history.

Right now, SoFi refinances student loans in all states except Nevada. And variable rate loans are not available in Ohio or Tennessee.

SoFi typically looks for applicants with credit score above 700. However, they are more concerned with your credit report showing a strong history of repayments and the monthly cash flow necessary to make their loan payments.

And you can apply for a SoFi student loan and check your interest rate without hurting your credit score. This is because they only do a soft credit check with your application. If you decide to proceed, however, they will do a hard credit check.

Other Advantages

All SoFi loans come with unemployment insurance. This unique benefit is provided free of charge. If you lose your job for no fault of your own (you can’t quit), SoFi will temporarily suspend your monthly payments until you find a new job.

You can suspend payments for up to 12 months. But the interest that accrues during this period would be added to the loan.

SoFi also offers an entrepreneur program to help graduates who dream of owning a business.

Under this program, loans can be deferred for six months so borrowers can focus on growing their businesses. SoFi provides careers services and access to networking events, mentors, and investors, to help you achieve your dream.

Also, SoFi provides great customer support. This includes a simple online application and access to live customer support 7 days a week .​

The Bottom Line

There are a lot of reasons to like SoFi for student loan refis.

​They are a well-funded business, with an excellent customer experience and low rates and no origination fee. In most cases, they will have the lowest interest rates.

So you can see why we recommend that you start your student loan refinancing shopping with them. 

Just remember that you refi a federal student loan, you will lose some of the benefits those loans offer. This includes no longer having access to the Public Service Loan Forgiveness program, which releases you from the rest of your loan if you enter into a qualifying career and make payments for 10 years.

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