As our lives continue a noticeable shift to virtual SoFi has positioned itself as an option in an increasing number of online personal financial services.
SoFi offers a variety of lending options such as student loans, home mortgages and personal loans, as well as money management and investment tools. It’s marketing itself as a one-stop financial shop on your mobile devices.
The one-stop shop even offers no-cost membership perks like career services and financial planning advice.
What Is SoFi?
SoFi, which is short for Social Finance, Inc., is an online personal finance company that offers a variety of financial services through its app and website.
The types of financial services offered by the California-based company include student loans, home mortgages, and personal loans, as well as investing and banking options. It also offers special perks to members, including regional events and discounts on future lending opportunities.
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How Does SoFi Work?
Your first step is to sign up for a user account with SoFi to become a member.
To do so on a cell phone, you can download the SoFi app on the Google Play Store or Apple App Store. Otherwise, most functions of the SoFi service can be found on its website.
Membership does not cost you anything and the initial signup process requires no more than your name and a valid email address. Once logged in with your membership, you will have access to browse and apply for each of the SoFi services.
Remember, you get to pick and choose what you use from the products that are offered under the SoFi portfolio. That means you only have to provide personal information that is necessary for each product. For instance, a student loan may require different documentation than a home loan, so you’re only going to be asked to provide the pertinent information for the one for which you apply.
Since there is not a physical meeting with bankers or financial planners, communication with SoFi staff is done electronically through the app, website and email.
What Services Can I Get With SoFi?
SoFi has a wide variety of financial services available actually too many to list here so we have provided an overview of some of the more popular categories.
Student Loan Services
SoFi offers student loan solutions for pretty much every situation: offerings for new student loans, people looking to refinance their student debt and even student loan options for parents.
New Private Undergraduate and Graduate Loans
For those entering college or are already enrolled, SoFi has a private student loan program where you can apply for both undergraduate and graduate loan. The rates are higher on the latter. That’s to be expected in the student loan industry. SoFi offers both fixed and variable rate loans, allows for adding cosigners during the online application process and touts that the loans will cover 100% of the cost of attendance.
For undergraduate loans, SoFi will allow you to repay via one of four methods: deferred (make first payment six months after graduation), interest only (pay only interest while in school), partial ($25/month fixed payment while in school) or immediate (start paying right away).
Refinancing Student Loans
SoFi will refinance both federal and privately funded student loans. There are no application or origination fees involved, and these refinanced loans have no prepayment penalties. It appears that you can receive a quote on your potential interest rate without enduring a credit check.
Parent Student Loans
If you are a parent who either is paying for or plans to help pay for your child’s higher education experience, SoFi has some options for you as well. These privately funded loans allow for a fixed or variable rate of borrowing on a child’s tuition.
The repayment method on these loans is limited to either immediate (pay regular payments as your child progresses through school) or interest-only (pay only the interest on your loan for your child’s tuition until education is complete).
Home Loans
You may not think of a phone app like SoFi as a mortgage lender, but they actually do have the capability to help you purchase your next house or refinance the one you already have.
The mortgage offerings require as little as a 10% down payment and can be for as much as $3 million.
SoFi says it can quote you a home loan interest rate in as little as two minutes without impacting your credit score by using a “soft credit pull,” so you should be able to get an idea of how competitive they are with rates you’re seeing elsewhere before applying. However, do note that they will have to pull a full credit report (which impacts your credit report) if you decide to move forward with the application process.
Other mortgage perks touted are SoFi’s ability to “typically” close loans within 30 days and a $500 discount on processing fees for members.
We recommend of course that you get several mortgage quotes before making any decision on a purchase or refinance. For most people, this is the largest debt obligation of your life and being sure you’re making the right choice is of the utmost importance.
Personal Loans
If you’re looking to make a major purchase or pay off some outstanding debts with a potentially lower rate of interest, SoFi’s personal loans may be an option worth considering.
SoFi will issue personal loans for between $5,000 and $100,000 with no origination fees or prepayment penalties. At the time of this article, SoFi was advertising fixed rates as low as 5.99% APR if you’re willing to enroll in their autopay program.
As you apply for this type of loan, SoFi is going to assess things like the purpose of the loan, your desired amount and capacity for a monthly payment.
SoFi Money is the new Online Bank
SoFi Money is a “cash management” product that gives SoFi offers to members on a fee-free platform. It is free to sign up and has no minimum balance requirement.
While the program does offer some of the full-service bank-like options, it’s important to note that you are not signing up for an online checking or savings account. Instead, you are signing up for what amounts to a FDIC-insured brokerage account.
Some of the functions you’re able to execute with an account like this include basic banking necessities:
- Debit card spending
- No-cost ATM access
- Automated bill pay
- Free person-to-person cash transfers
- Earn interest on balance (SoFi was offering 0.2% APY at the time this article was published)
If you’re looking for an online bank Sofi has proven to be one of the easiest to set up and actually paid their bonuses fast!
SoFi Invest from Fractional Stocks & Bitcoin
In addition to its loan and money management elements, SoFi has tools for making investments.
There is no fee for trading traditional stocks and ETFs and the service even allows you to invest in “stock bits” in increments as little as $1. That’s basically buying a share of a share of an expensive stock. For example, at the time this article was published Amazon’s stock was trading for roughly $2,400 per share. “Bit” or “fractional” investing would allow you to purchase as little as 1/2400 of a share of Amazon for $1.
SoFi also allows you to invest in cryptocurrencies like Bitcoin.
SoFi Relay
The SoFi Relay platform is also offered free of charge and is all about monitoring your financial well-being. You can access things like a free credit health tracker as well as a host of tools for your personal budget.
It’s important to note that you’ll have to link personal banking information to the SoFi platform in order to enable things like analysis of your spending trends. Services like Digit and TrueBill that also monitor your spending habits and may potentially offer more benefit by automatically saving money or trimming the cost of your monthly bills.
What Users Are Saying About SoFi
The generally positive outlook on the services rendered by SoFi extends to the Better Business Bureau, which has issued SoFi an “A-” rating. That’s a score between 90 and 93.99 on its 100-point grading scale.
The SoFi app has a 4.8 out of 5 star rating on the Apple App store with more than 32,000 reviews. The Google Play Store rating is slightly lower at 4.1 out of 5 after more than 3,000 reviews.
Membership Benefits
Once you are signed up as a member with SoFi, you have access to a menu of benefits that you may not typically expect from a company trying to make money on your financial decisions. SoFi has been known to host regional events such as cooking classes or a night at a fancy restaurant that are exclusively offered to members.
Here’s a quick rundown of some of the membership perks:
- Access to financial planning advice through credentialed advisors
- Member rate discounts (save on your interest rate if you sign up for an additional loan through SoFi)
- Referral bonus programs
- Personalized career advice
- Ticketed member events such as cooking classes, themed parties and topic-specific speaking events and webinars
Final Thoughts
SoFi definitely offers a fresh alternative to many of the traditional outlets for your personal financial needs. As things like social distancing become a regular part of our society, having the ability to access so many financial options right from your mobile phone is a plus. None of us like to go into banks or deal with “nosey” bankers.
We think you’ll find that Sofi is pretty easy to navigate. We recommend using this as just one of many tools in your financial life. Just like with travel or anything else you want to have a bunch of tools at your disposal to live your most frugal life.
If you are looking for a one-stop shop for financial services and are comfortable completing major transactions without much human interaction, you may find that SoFi is the perfect fit for your personal financial situation.