Social Lending For Mortgage, Student Loans, And Personal Loans

Social Lending For Mortgage, Student Loans, And Personal Loans

SoFi started in 2011 and is a lending company that recently surpassed $15B in funded loans as of 2021. They have 225,000+ customers, 240 employees and have raised $1.9 B in equity funding after raising $500M led by Silver Lake in February 2021.

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. It’s worth checking to see if you can get a lower student loan rate with SoFi. The cost is free.

SoFi Company Overview

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, mortgage refinancing, and more.

Contact:  | (866)357-6342

SoFi Management 2021

SoFi Funding History – $2 Billion

SOFI Funding Rounds  2021

On Feb 24, 2021, a $500M Series F funding round was announced led by Silver Lake.

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

Student Loans:

* Fixed rates as low as 3.375% variable rates as low as 2.345% 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
* SoFi also offers a 7 years repayment term for student loan refinancing

You can apply to refinance a student loan here.

Personal Loans

* Fixed interest rates start at 5.70% 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 Loan Application Snapshots

Here are a few snapshots to show you what the application process looks like for borrowers on SoFi.

Welcome screen:


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:

SoFi Mortgage Screenshot

It’s all very straightforward and doesn’t take that long to complete.

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.

A great alternative to SoFi: Check out Credible, a student loan marketplace that has qualified lenders competing for your business. Credible provides real rates for you to compare so you can lower your interest rate and save. Getting a quote is easy and free. Take advantage of our low interest rate environment today!

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 $260,000 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.

About ONIG Financial Blog: FinancialSamurai.com was started in 2009 and is one of the most trusted personal finance sites today with over 1 million organic pageviews a month.  ONIG Financial Blog has been featured in top publications such as the LA Times, The Chicago Tribune, Bloomberg and The Wall Street Journal.

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