SoFi Personal Loans Review (April 2024) (2024)

MarketWatch Rating: 4.9 out of 5 stars

SoFi is one of the best-rated personal loan companies on the market today, offering low interest rates, a variety of repayment term lengths and a broad loan amount range.

One factor that makes SoFi stand out is its unemployment protection program, which lowers your payment while you are looking for a job. It also has a career strategy department that provides free career coaching for SoFi customers.

There are many benefits and drawbacks to using a personal loan from SoFi. Here’s what to know before applying.

SoFi personal loans are a good choice if you need to take out a large sum but still want to get a relatively low interest rate. Also, SoFi lets you choose your own repayment plan, so you can customize your monthly payment.

Additionally, SoFi claims that many of its customers who took out a personal loan for debt consolidation of $10,000 or more saw their credit score increase by an average of 22 points over the first year of the loan if they made timely payments.

Interested in a SoFi personal loan? Here’s what you should know about applying, qualifying and receiving the loan funds.

Application Process

Before completing a full application for a SoFi personal loan, you can check your interest rate without getting a hard inquiry on your credit report. A hard inquiry happens when you formally apply for credit, and too many hard inquiries in a short period of time can negatively affect your credit score. However, SoFi will give you an offer based on a soft inquiry, which does not damage your credit.

To complete a loan application, you must provide a government-issued ID. You can apply for a personal loan through the SoFi mobile app, which is available on both iPhone and Android devices.

Approval and Funding

Some lenders, including SoFi, can pay off your credit card debt directly when you take out a personal loan. That means that the money will go straight from SoFi to your credit card issuer. When you apply, you’ll simply designate which creditors you’d like paid and the total balances there. This can help you resist the temptation to use the loan funds for something else instead of eliminating your debt. Plus, SoFi even offers an interest rate discount if you choose direct pay – the lender’s term for paying your creditors directly.

You should receive the loan funds within a few days, which may be slower than other lenders that can provide same-day or next-day financing. If you choose to receive the money in your own bank account, the funds will be sent to you via the Automated Clearing House (ACH) network, the secure system used by banks and credit unions for money transfers nationwide.

One of the prevailing negative themes about SoFi is that it may present a lower rate during prequalification but ultimately offer you a higher rate once you fill out a real application.

“I received multiple mailings about a personal loan from SoFi. I went in and got some okay interest rates. Decided to proceed today to pay some medical expenses. Once I had submitted my application, they changed the terms including a higher interest rate. Bait and switch. I asked them to remove the credit pull from my credit report. They refused although they apologized for ‘misinformation.’ I will never do business with them and caution anyone else considering it. What interest rates they show you may not be the rate you get. Bait and switch.”

— Susan, Decatur, Ga., May 10, 2023, ConsumerAffairs

“I had been receiving offers for a while and after careful research I decided to go with SoFi. The funds were in my account the next day. The rate is higher than expected but less than my credit cards.”

— Efraine Toro, U.S., September 2023, Trustpilot

“SoFi is great. They were so easy to work with. They did everything they said they would do. I just wish the interest rate was lower.”

— Joseph, Sept. 15, 2023, WalletHub

“I applied for a debt consolidation loan, and SoFi jerked me around for THIRTY days getting documents. I had to go PAY FOR a copy of my child support order to show I’ll get it for another 3 years, which it doesn’t even say. Emails, texts, phone calls, for them to end up saying no because I have too much debt … What a waste of my time, resources, and credit score drop from their hard pull. Avoid. AVOID.”

— Alicia K. Jones, June 13, 2023, WalletHub

SoFi declined to comment on individual cases but said by email that changes in a borrower’s credit profile between prequalification and application can affect the rates offered.

If you’re curious about taking out a personal loan from SoFi, here are the criteria you need to meet to qualify.

Credit Score and Financial History

Your credit score is one of the biggest factors that a lender such as SoFi considers when reviewing your application. While SoFi does not state a particular minimum credit score, its website does indicate that many lenders use a credit score of 670 as their baseline. Generally, the higher your credit score, the more likely it is that you will be approved.

Your credit score also helps determine what interest rate you receive. In general, only those with excellent credit scores will receive the lowest available rates.

SoFi may also look at other financial factors, such as your debt-to-income (DTI) ratio and your credit report, which shows any recent bankruptcies, liens, defaults, foreclosures, late payments and more. Your DTI compares your monthly earnings to all loan payments – such as a car loan or student loan.

Income and Employment

Most lenders require that you be gainfully employed to qualify for a personal loan. You can prove this by showing your most recent pay stub or W-2. If you are self-employed, you may have to provide a recent tax return or several years of tax returns.

While you cannot add a co-signer to a personal loan application, you can add a co-borrower. This may help if you have any income or employment issues. Co-borrowers are equal applicants, with full access to the loan money. Cosigners, on the other hand, have the responsibility to make payments if you fail to do so, but cannot access the loan money.

Citizenship, Age and Residency

To get a SoFi personal loan, you must be the age of majority in your state. For most states, it’s 18 years old, but for states such as Alabama, it’s 19 years old.

SoFi personal loans are available in the following 29 states as well as Washington, DC:

• Alabama
• California
• Colorado
• Delaware
• Idaho
• Illinois
• Indiana
• Iowa
• Kansas
• Louisiana
• Maine
• Maryland
• Michigan
• Minnesota
• Missouri
• Montana
• Nevada
• North Dakota
• Oklahoma
• Oregon
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota
• Tennessee
• Texas
• Vermont
• Washington
• Wyoming

You can typically use your personal loans for many different reasons, including the following:

• Debt consolidation
• Medical bills
• Home repairs
• Auto repairs
• Financing a vehicle

You cannot use a SoFi personal loan for the following:

• Postsecondary education expenses
• Business costs
• Investments

Many personal loans come with fees that you may not be aware of. Here’s what you should know about SoFi’s personal loan fee schedule.

Loan Origination Fees

A loan origination fee is a fee that a lender charges for setting up and creating the loan. Loan origination fees typically cost between 1% and 10% of the loan amount, and the fee is often deducted directly from the loan funds.

Many top personal loan companies, including SoFi, do not charge loan origination fees. However, SoFi does give you the option of paying a one-time origination fee in exchange for receiving a lower interest rate.

Early Repayment Penalties

When you take out a loan, the lender will charge you an interest rate in exchange for letting you borrow money. If you pay off the loan ahead of schedule, some lenders will charge you a prepayment penalty, which is supposed to help them recoup some of the costs they miss out on if you don’t pay the full amount of loan interest.

SoFi does not charge a prepayment or early repayment penalty. You are free to pay back your personal loan as early as you want without any negative consequences.

Even if a SoFi personal loan seems like the perfect choice for you, you should compare its personal loans with other lenders. Here are some of SoFi’s top competitors and how it stacks up against each.

If you want the option of choosing your loan repayment term yourself or need to borrow a large sum, then SoFi may be a solid choice. Its unemployment protection program alone makes it stand out from most other lenders. Plus, you won’t have to pay any late fees, prepayment penalties or origination fees.

One downside to consider is that SoFi’s lowest starting interest rate is a percentage point higher than lenders like LightStream, Discover and PenFed. Make sure you compare the pros and cons of each lender to determine if SoFi is still the right choice for you and your unique situation.

Sofi also made our list of the best savings accounts, making it an excellent and well-rounded bank.

Our team put together a comprehensive 100-point rating system to evaluate personal loan companies. We gathered data points from 28 of the most prominent lenders in the U.S. and analyzed disclosures, licensing documents, sample loan agreements, marketing materials and websites. Our rating system takes into account four broad categories.

• Affordability (35%): How expensive each company’s loans are to pay back.
• Loan features (35%): The breadth of loan terms and features available to prospective customers.
• Customer experience (20%): Ease of application, prequalification and customer service interactions.
• Company reputation (10%): An exploration of lenders’ Better Business Bureau (BBB) files, customer reviews and outstanding regulatory actions.

Our top-rated lenders may not be the best fit for all borrowers. To learn more, read our full personal loans methodology.