SoFi started in 2011 and is a lending company that recently surpassed $40B in funded loans as of 2020. They have 400,000+ customers and have raised a total of $2.5 B in 12 rounds of funding.
The company was founded by Mike Cagney, Dan Macklin, James Finnigan and Ian Brady, four students who met at the Stanford Graduate School of Business. They got together because they wanted to make lending and refinancing easier for borrowers using social lending.
The gist of their business is that lenders are willing to lend at a lower rate to people similar to themselves versus complete strangers. In other words, alumni should be more willing to lend to students and fellow grads of their alma matter because they share the same educational qualifications and should have a strong likelihood of repaying their loans.
SoFi is considered the largest and most successful fintech lender today. They are based right here in San Francisco, and I've met many of their employees.
SoFi Company Overview 2020
Date Founded: August, 2011
Founders: Michael Cagney, Ian Brady, Daniel Macklin, James Finnigan
Headquarters: Building A, 1 Letterman Dr #4700, San Francisco, CA 94129
Description: Social Finance (SoFi) is a finance company that offers a range of lending and wealth management services. The company primarily caters to early-stage professionals and offers variable and fixed rate parent, personal, and MBA loans, mortgage refinancing, and more.
Contact: firstname.lastname@example.org | (866)357-6342
SoFi Funding History – $2.5 Billion
Social Aspect To Lending
What I found most intriguing about SoFi's student loan refinance program is that it has this great unemployment benefit clause where it will pause your debt repayment schedule if you lose your job. Interest will still accrue while you are looking for work, but at least you're saving some cash flow when you need it most. Now that's some pretty good unemployment insurance!
SoFi also offers other benefits that traditional lenders don’t. For example, career advising, networking events (which I've attended), and entrepreneurial support to help borrowers achieve financial and professional success. To date, SoFi has helped about 70 SoFi members secure new jobs through its Job Search. Another 30 have gone through their Entrepreneur Program. Participants from SoFi’s first two classes boast two acquisitions, one merger and several rounds of multi-million dollar funding.
What I really like about SoFi is that their underwriting process takes into account merit, education, and quality of employment history, in addition to the traditional income, credit score, and existing debt levels assessed by traditional banks. I firmly believe that if I went through SoFi's mortgage refinance process back in early 2015 when the 10-year yield was at 1.68%, my refi would have passed.
SoFi's Two Main Products
* Fixed rates as low as 3.48%, variable rates as low as 2.14% with auto pay
* Zero origination/prepayment fees
* Offer terms from 5, 10, 15, 20 in both fixed and variable
* Can refinance both private and public student loans.
* Offers Unemployment Benefits
You can apply to refinance a student loan here.
* Fixed interest rates start at 5.99% APR and variable rates start at 4.77% APR (with autopay)
* Can lend up to $100K
* No origination/prepayment fees
* Unemployment benefits
You can apply to consolidate your high interest rate loans here.
SoFi has since expanded to life insurance and mortgage loans.
SoFi Loan Application Snapshots
Here are a few snapshots to show you what the application process looks like for borrowers on SoFi.
Step 1 of populating your Profile is basic personal information:
Step 2 is where you enter your education information including your graduation date:
Next is typical employment information including your current employment status and salary:
And here's a snapshot of what the application form looks like for their mortgage products:
It's all very straightforward and doesn't take that long to complete.
All rates, figures, estimates, terms, state availability, and savings calculations are current at the time this article was written. All of the above may update in the future. For the most up-to-date information, visit SoFi.com.
Take Advantage Of SoFi For Lower Rates
Everybody who has a student loan or high interest personal loan should get a quote from SoFi to see if you can refinance your existing rates.
For a GREAT alternative lending marketplace that provides free quotes from competitive lenders, check out San Francisco-based Credible. You can get real quotes in under 3 minutes.
About the Author: Sam began investing his own money ever since he opened an online brokerage account in 1995. Sam loved investing so much that he decided to make a career out of investing by spending the next 13 years after college working at two of the leading financial service firms in the world. During this time, Sam received his MBA from UC Berkeley with a focus on finance and real estate. He also became Series 7 and Series 63 registered. In 2012, Sam was able to retire at the age of 34 largely due to his investments that now generate roughly $250,000 a year in passive income. He spends time playing tennis, hanging out with family, consulting for leading fintech companies and writing online to help others achieve financial freedom.
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