SoFi offers a wide variety of options for those looking to refinance their student loan debt, with special options for parents and students in specific fields.
Undergraduate & Graduate Student Loan Refinancing
Refinancing allows borrowers to receive a new loan with a new interest rate and terms, typically saving them money and/or reducing their monthly payment in the process. Borrowers may also combine multiple student loans with different interest rates and monthly payments into a single loan to make for easier repayment.
With some of the lowest rates in the student loan refinancing industry, SoFi is at the top of their game. Repayment terms include 5, 10, 15, and 20 years, which means borrowers are likely to find a monthly payment amount that fits their budget.
Current interest rates start at 3.69% APR for a fixed rate loan with an automatic payment and 2.43% APR for a variable rate loan with auto-pay. Their rates are based upon your credit report as well as other factors. To find your personalized rate, you can fill out a short non-obligatory questionnaire that doesn’t affect your credit score.
There are no application, origination, or other fees and no prepayment penalties with SoFi. The lender allows you to refinance both federal and private loans, which means you can combine all of your loans under one payment regardless of whether they originally came from a private lender or the Department of Education. The minimum loan amount is $5,000 and there is no maximum.
All in all, SoFi’s offerings are fast, easy, and highly affordable, saving their customers thousands in the long run when compared to their competitors.
Medical/Dental Resident Refinancing
If you went to medical or dental school and are now working through your residency, not only do you probably have a huge student loan bill, but you’re likely not making a lot of money either. Student loans are usually due six months after graduation, often causing financial issues for med school graduates working through their residency.
While forbearance or deferment are options, they don’t stop the interest from compounding on your loan, increasing your balance and only postponing what will become a huge problem later. SoFi, however, has a program that can help.
Under SoFi’s Medical/Dental Resident Refinance program, you can refinance and consolidate your federal and/or private loans together for a term of up to 20 years, with no fees, while only making $100 monthly payments during the residency.
Variable rates range from 2.72% to 7.75% APR with auto-pay while fixed rates range from 4.15% to 8.74% APR with auto-pay.
Parent PLUS Refinancing
Students aren’t the only ones who take out student loans. In fact, more and more parents are taking out federal loans on their own in an effort to help their children pay for school. The federal Parent PLUS Loan is a popular product that allows parents to borrow on behalf of their child. They, not the student, are responsible for repayment, and sometimes parents find themselves in need of refinancing too.
>> Learn More: Best Lenders to Refinance Parent PLUS Loans
SoFi refinances both the Parent PLUS Loans and qualified private parent loans into one convenient loan with one monthly payment and interest rate. Also, like the other refinancing products, there are no associated fees.
Variable interest rates range from 2.47% to 7.17% APR with auto-pay while fixed rates range from 3.90% to 7.50% APR with autopay.
The entire process can be done online. With SoFi’s quick pre-approval process, you can know whether you’re approved before completing a full application. After pre-approval, you can then complete the full loan application and see your loan options.
Once you choose your best fit, you’ll be asked to upload documents to verify your current student loans and identity—but they may accept screenshots or even smartphone photos. Your loan signature is done electronically, and then the funds will be deposited to pay off your loans within a few business days—it’s that easy.
Pros and Cons of SoFi’s Student Loan Refinancing
SoFi’s many refinancing options help thousands of students and their parents every year. Refinancing can help save money in the long run through lower interest rates, which can be helpful especially if you have private student loans with high interest rates.
Like with most other refinancing lenders, there are a few drawbacks to consider.
First off, refinancing is hard to qualify for. Borrowers must have a solid credit history and high income so the lender knows that they can afford the monthly loan payments and are likely to make them. Applicants with spotty or nonexistent credit history may be unable to refinance with SoFi.
In addition, when you refinance federal student loans into private student loans, you will lose access to federal benefits and repayment programs. If you are hoping to receive student loan forgiveness or to enroll in an income-driven repayment plan, it is in your best interest not to refinance.
In the case of the medical/dental residency refinance, the $100 minimum payment may not cover the total accrued interest for the month, which means your loan balance will be higher when the residency is over as compared to when it started. Before signing up for any refinancing program, it’s best if you do some research as to how it will affect both your short-term and long-term financial goals.
Author: Jeff Gitlen
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