Over the years, refinancing has become far more common, and SoFi has grown into one of the biggest names in student loans and finance in general.

Despite all of these changes, the fundamental questions remain. Is SoFi student loan refinancing a good deal? What should consumers expect?

Meet SoFi in 2024

SoFi first started as a student loan refinance company, but they have significantly expanded.

SoFi now offers mortgages, personal loans, and investing services. The days of SoFi being the plucky underdog are over.

For borrowers focused on getting a lower rate on their student loans, this evolution has some advantages.

For SoFi to grow, they had to evolve from a lender that focused only on high earners to a lender willing to accept a wide range of borrowers. The good news for borrowers is that many of the perks that SoFi used to target the doctors and lawyers of the world still remain.

SoFi approved many borrowers with less than perfect credit in an attempt to expand. We have also seen borrowers with excellent credit shop around to compare rates and find that SoFi was the best option. As a result of SoFi’s ability to offer the best rate for a variety of borrowers, SoFi checks in at #3 in our student loan refinance lender rankings.

SoFi Refinance Rates and Options

SoFi offers a wide range of student loan refinancing options. As of November, 2024, the following rates and terms are available:

See SoFi disclosure Fixed rates range from 3.99% APR to 9.99% APR with 0.25% autopay discount and 0.25% direct deposit discount. Variable rates range from 5.99% APR to 9.99% APR with 0.25% autopay discount and 0.25% direct deposit discount. Unless required to be lower to comply with applicable law, Variable Interest rates will never exceed 13.95% (the maximum rate for these loans). SoFi rate ranges are current as of 10/04/24 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay and Direct Deposit are not required to receive a loan from SoFi. You may pay more interest over the life of the loan if you refinance with an extended term. for more. All rates are expressed as an APR with all discounts including a .25% autopay discount.

Borrowers can refinance federal student loans, private student loans, and Parent PLUS loans. SoFi, like most legit lenders, does not charge any application fee, origination fee, or prepayment penalties.

Looking at all of the SoFi possible rates and options, borrowers should be careful to tweak loan repayment lengths to find the sweet spot between getting the lowest rate and getting the best monthly payment.

For example, one strange aspect of the current SoFi options is the close rates offered for longer-length loans. The rate on a 10-year loan may be only a fraction of a percent less than the rate on a 15 or 20-year loan. Opting for a longer loan can result in an interest rate that is only slightly higher. The longer loan advantage is more flexibility.

Sherpa Tip: Having a 20-year loan does not mean that a borrower must take 20 years to pay it off. Opting for the longer duration loan gives the borrower the flexibility of low minimum payments. Additionally, the loan can still be paid off aggressively by making extra or larger payments.

The SoFi Advantages

SoFi offers competitive interest rates and flexible repayment terms. However, the advantages associated with SoFi go beyond the numbers.

To handle a large volume of applications and borrowers, SoFi has a streamlined system. The application process and loan funding is fast and simple.

SoFi also runs its customer support out of a California call center. Having the customer support team here in the United States doesn’t necessarily guarantee better service. Still, we do like to see them spending the extra money to make sure customers get the best treatment possible.

Borrower Beware – The Danger of Refinancing Federal Student Loans

If you have the credit score and income to qualify for SoFi, it is a great option. However, there is one warning that all borrowers need to consider carefully…

SoFi, like most other refinance lenders, is willing to consolidate federal loans with private loans. Though combining federal loans with private loans is a mistake for some, in other instances it is a good idea. The classic example would be high-income earners with strong job security.

The important thing for borrowers to realize is that the repayment plans and forgiveness programs of federal loans are eliminated upon private loan consolidation. Because there is no way to undo a consolidation or refinance, it is critical to make a smart decision when weighing the federal perks vs. the lower interest rate on the private market.

Outside of the traditional concerns that go with student loan refinancing, we see no additional concerns associated with SoFi.

How does SoFi work?

First, borrowers specify the loans that they want refinanced. SoFi creates a new loan and uses the funds from that loan to pays off the old loan. The borrower then pays off their debt to SoFi according to the terms of the new loan.

Borrowers typically refinance to achieve one of two goals:

• Lower Payments – Selecting a longer loan or getting a lower interest rate means a smaller monthly bill.
• Reducing Interest – Some borrowers select a short loan with an ultra-low interest rate. Going this route eliminates the loans as quickly as possible and minimizes total spending.

SoFi’s seems to have a goal of becoming the finance company for millennials. This is evidenced by their aggressive expansion into areas like banking and life insurance.

Helping people pay off their student loans seems to be SoFi’s way of securing long-term customers who continue the business relationship in more profitable areas such as wealth management.

From a student loan borrower perspective, this is probably a slight advantage because it means SoFi has an incentive to keep customers happy even after they have refinanced their loans. These long-term goals would also explain why SoFi can keep its rates lower than most of the other lenders in the marketplace.

SoFi Refinance Reviews from Actual Customers

When this article was originally published, we could only base our opinion on the black and white terms of the SoFi loans. Since that time, dozens of customers and would-be customers have taken the time to leave their thoughts in the comment section.

What we have learned is that SoFi customer satisfaction seems to revolve around whether or not the application was approved. Because of the originally tough underwriting criteria, many people have stopped by to share their disappointment with their denial. As one user summed it up, “people with high FICOs and high incomes sail right through while people with more moderate FICOs and incomes don’t seem to have the same experience.”

SoFi Complaints and Reviews from the BBB, Reddit, and Others

Most of the SoFi reviews from other experts have reached similar conclusions.

The Better Business Bureau gave SoFi an A+ rating, but there were numerous user complaints about SoFi. Some of the complaints dealt with SoFi’s mortgage and personal finance loans. The customer rating was 1.59/5 from a total of 311 reviews.

Reddit users generally have positive things to say about SoFi. However, when doing head-to-head rate checks with other lenders, SoFi at times did not offer the best interest rates.

The Consumer Financial Protection Bureau complaint database has about 50 complaints related to SoFi student loans. The issues were varied in the complaints. In terms of the volume of borrower issues, SoFi is comparable to other lenders, perhaps a bit better than average.

In short, the SoFi reviews are mixed, which is to be expected with any financial company.

SoFi Compared to Other Lenders

Pros:	SoFi is the biggest name in student loan refinancing for a simple reason – their rates are reliably among the best on the market.	LendKey works with a large network of smaller credit unions and banks. As a result, many applicants get the best offer from LendKey.	Splash has the best new customer bonus right now, and they have excellent rates and term opitons.
Cons:	SoFi has grown into a large company offering mortgages, personal loans, and investment services. They no longer focus entirely on student loan refinancing.	Going the LendKey route does require working with a local bank or credit union. For many, this is a plus, but it is an extra step.	Splash is a newer lender and getting approval may be more difficult for some borrowers.
Bonus:	NA	$150	Up to $500

Should I apply for a SoFi loan?

SoFi is an excellent option for student loan refinancing, but SoFi is far from the only option.

Borrowers looking for the best deal would be wise to check their rate with SoFi. However, checking rates with other lenders is also essential as many companies advertise rates as low or lower than SoFi. Each lender uses different underwriting criteria. Thus, it is impossible to say which of the top student loan refinance companies will actually offer the best rate.

Click here to check your rate with SoFi.

The post SoFi Student Loan Refinance Review appeared first on The Student Loan Sherpa.

On March 3, 2023, student loan refinance lender SoFi filed a lawsuit to end the federal student loan payment and interest pause. The big question for borrowers is how this might impact the payment pause restart date.

The good news is that it probably doesn’t change things.

The bad news is that litigation is, by nature, unpredictable, and a poorly worded order from a judge could cause chaos.

The SoFi Lawsuit Likely Changes Nothing

Before SoFi filed its lawsuit, repayment was set to resume 60 days after the Supreme Court ruled on Biden’s one-time forgiveness program.

Based on typical Supreme Court judgment timelines and a cutoff set by the Biden administration, September 1, 2023, looked like the most likely restart date.

There are two big reasons why the SoFi lawsuit is unlikely to impact the restart. First, litigation takes time. By the time there is a ruling in the SoFi case, the restart may have already begun. Second, SoFi may not win the lawsuit.

Like the lawsuits challenging the one-time forgiveness program, it isn’t clear that SoFi has the legal standing to bring the suit. Losing on this one issue could end the case.

SoFi’s Lawsuit Motivation

If the lawsuit isn’t an easy win for SoFi, and the restart is likely to happen before the case gets resolved, why would SoFi file suit?

It’s a question I’ve been asking myself for weeks.

The most logical answer is that SoFi wants to ensure there isn’t another repayment pause extension. The Biden administration previously declared “final” extensions but later changed course.

This lawsuit could motivate the Biden administration to end the pause as planned, or the court could force payments to resume. Either way, SoFi helps guarantee that the break doesn’t extend into 2024.

It is also possible that SoFi thinks they can quickly win the lawsuit. This outcome seems unlikely, but there is no certainty in litigation.

The Chaotic Timeline

What does the worst-case scenario look like for borrowers?

A judge may issue a preliminary injunction ordering the Department of Education to resume repayment immediately. This disaster scenario would put servicers and borrowers in an awful situation as neither is ready to resume repayment right now.

The injunction disaster is unlikely for several reasons, but it isn’t the only bad outcome for borrowers.

If the suit gets resolved in July, the judge could order payments to resume immediately. Again, it’s a mess for borrowers and servicers because neither is prepared to resume.

Sherpa Thought: I’d be genuinely surprised if either of these chaotic scenarios happened. Then again, I was surprised that SoFi filed the lawsuit, as it appears the only winner is Joe Biden.

If you are worried about yet another disappointment for borrowers, the safest approach is to prepare for the restart now. If you stay ready, you don’t have to get ready.

The Most Likely Impact of the SoFi Lawsuit

Between the one-time forgiveness case before the Supreme Court and the SoFi lawsuit, there are many unanswered questions.

Undoubtedly, it is a situation for borrowers to monitor closely. However, it seems unlikely that SoFi can cause the restart to happen earlier than planned.

Ultimately, the real impact of the SoFi lawsuit is that it helps guarantee that September 1, 2023, is the day the federal student loan payment and interest pause ends.

The post How the SoFi Lawsuit Impacts the Student Loan Repayment Restart Date appeared first on The Student Loan Sherpa.

Unsurprisingly, borrower advocates and the Biden administration swiftly responded to the lawsuit. The Education Department called it “an attempt by a multi-billion dollar company to make money while they force 45 million borrowers back into repayment.”

Surprisingly, the real winner in this unexpected turn of events is Joe Biden.

Biden’s Win-Win Scenario

Whether or not the judge rules in favor of SoFi, Joe Biden comes out ahead.

If the court rules against SoFi, it is an obvious big win for Biden. When he hits the campaign trail next year, he can justifiably boast about how he stood up to a multi-billion dollar bank on behalf of borrowers. Further, a Biden win in court would save money for millions of Americans.

If the court sides with SoFi, it is still a win for Biden. Losing in court isn’t something to brag about, but having a judge mandate the end to the payment and interest freeze is still a good outcome for Biden. Before the lawsuit, it appeared that repayment would start around September 1 for millions of student loan borrowers. Those that found themselves in an immediate financial hardship because of the restart might blame Biden for this new challenge. Losing to SoFi provides excellent political cover.

The benefit for SoFi is less apparent.

Why Would SoFi End the Pause?

The basic analysis from the SoFi perspective is pretty straightforward.

SoFi must have concluded that the potential revenue from ending the pause earlier than planned is greater than the cost of litigation.

This conclusion is somewhat surprising.

First, the pause is currently scheduled to end in June at the latest, with payments resuming 60 days later. Litigation is notoriously slow, so even in the best-case scenario for SoFi, the restart may not happen much earlier than originally scheduled.

Second, the cost of litigation for SoFi is high. The legal fees incurred by SoFi could be pretty substantial. Additionally, and perhaps more significantly, SoFi is tarnishing its brand by bringing this lawsuit. SoFi has built its brand around helping millennials and gen-z take control of their finances. Now SoFi is filing a high-profile lawsuit that could hurt millions in their target demographic.

At least some borrowers are angry with SoFi:

@SoFi I am a customer almost finished with my personal loan payments but if you sue to end the student loan pause so you can make more money I will never do business with you again. I alway thought I would look into other products because you are different. You are not

— Dr Dragon Slayer (@DrDragonSlayer4) March 7, 2023

It will be interesting to see how the damage to the SoFi brand compares to any benefits they receive by filing this case.

Another Motivation for SoFi to End the Pause?

SoFi’s biggest fear might be that borrowers and the general public realize that student loan repayment hurts borrowers far more than it helps government coffers.

The pause allowed borrowers the financial flexibility to start businesses, buy homes, and even start families. This is good for the borrowers, but it’s also good for the economy at large.

If an economic analysis of the pause shows that it benefits all, there might be a strong argument for more debt cancellation. Such an event could be devastating to SoFi’s bottom line.

Likewise, SoFi may fear that the Biden administration will indefinitely continue the payment and interest pause. They may think that filing the lawsuit is the only way to get the borrower relief to end.

Did the Biden administration want this lawsuit to happen?

The Department of Education had clear authority under the HEROES Act to extend the payment and interest pause during the pandemic. Then they made two decisions that weakened their justification for an ongoing pause. First, they declared an end to the pandemic, which certainly hurts their argument for a continued pause under the HEROES Act. Second, perhaps more egregiously, they announced that the latest extension was to provide time for the Supreme Court to hear the case.

This latter part is the crux of SoFi’s argument. SoFi says there isn’t a statutory basis for extending it to allow the Supreme Court to resolve the one-time forgiveness. On this point, SoFi could be right. Had Biden said that millions of borrowers are still trying to recover from the financial hardship of Covid-19, SoFi’s case would have been significantly weaker.

Some might say that Biden was honest and transparent about his decision to extend the pause. Those who are more cynical might say he cleverly acted the way he did to bait a company like SoFi into filing the lawsuit they did.

Now that the lawsuit has been filed, Biden wins no matter how the court rules.

The post SoFi’s Lawsuit to End Payment Pause is Great News for Joe Biden appeared first on The Student Loan Sherpa.

However, using SoFi’s services is potentially risky. Before signing up with SoFi, it is critical that you understand how SoFi works and the pros and cons of choosing to work with a company like SoFi.

Moving Student Loans to SoFi

Moving to SoFi sounds like a simple process, like moving your checking account from one bank to another.

Unfortuantely, moving student loans is a bit more complicated.

In this case, “moving to SoFi” means refinancing your student loans with SoFi. In a student loan refinance, SoFi pays off the balance of student loans you want to move. A new loan SoFi loan is created, and you repay SoFi according to the terms of the new loan.

By eliminating your old loans and replacing them with a new loan, SoFi offers the chance for borrowers to get better loan terms, like a lower interest rate or lower monthly payments. However, borrowers need to be careful to ensure that the new loan terms are better.

Is SoFi a Good Company? SoFi stacks up pretty well against the other lenders providing student loan refinance services.

To get all the details on SoFi, check the In-Depth SoFi Review.

Who Can SoFi Help?

The big limitation with SoFi is that they won’t help the borrowers who need the most help. If you lost your job or you have fallen behind on your current student loans, SoFi is unlikely to refinance your debt.

Instead, SoFi focuses on borrowers with stable jobs and decent credit scores. The higher your credit score and income, the more likely you are to get favorable interest rates and repayment terms from SoFi.

SoFi can offer low interest rates because they only lend to the borrowers likely to repay their debt.

The Risk of Choosing SoFi

Just because you can qualify to refinance with SoFi doesn’t mean you should refinance with SoFi.

For example, borrowers with high-interest federal student loans should think twice before choosing SoFi. Because SoFi is a private lender, it can’t offer federal perks like Income-Driven Repayment or Student Loan Forgiveness.

If you are only refinancing private loans, choosing SoFi is considerably less risky. However, you still want to make sure that the new loan terms are better than your current loan terms. For some borrowers, this means only refinancing certain loans.

The Benefits of Student Loan Help from SoFi

The headline benefit to choosing SoFi is a lower interest rate and possibly lower payments. If you are looking to spend as little as possible on interest, select a loan with a short repayment period when you refinance. If you want the lowest possible payment, choose a longer loan term, such as 20 years.

Another benefit of refinancing is moving loans with several different lenders to one location. If you have loans with lender A, lender B, and lender C, refinancing can move all of the debt over to SoFi.

If you are concerned about the impacts of inflation on your student loans, refinancing into a fixed-rate loan is one of the best ways to ensure inflation doesn’t mean higher student loan payments.

Finally, SoFi is trying to become the go-to financial institution for young people and recent grads. This means they have a huge incentive to provide excellent customer service.

Click here to learn more about SoFi and its current interest rate offerings.

Alternatives to SoFi

SoFi is far from the only lender that offers refinance services. Even though they are one of the best, it is wise for borrowers to investigate other lenders to find the best possible deal.

If you are looking for the lowest interest rate possible, these lenders advertise the best rates as of November, 2024:

Rank	Lender	Lowest Rate	Sherpa Review
T-1		4.86%	ELFI Review
T-1		4.86%*	Splash Financial Review
3		5.29%	Laurel Road Review

If the goal is to get the lowest possible payment and lower your interest rate, a 20-year fixed-rate loan is probably the best choice. As of November 2024, the following lenders offer the lowest rates:

Rank	Lender	Lowest Rate	Sherpa Review
1		6.08%*	Splash Financial Review
2		6.53%	ELFI Review
3		6.55%	Laurel Road Review

The post How Does SoFi Help with Student Loans? appeared first on The Student Loan Sherpa.

For many years, SoFi dominated our student loan refinance rankings leaderboard. SoFi had a combination of excellent interest rate offerings and high approval numbers that other lenders couldn’t match. Over the last couple of years, the market caught up with SoFi. In the case of Splash Finacial, they now offer lower interest rates than SoFi for many borrowers.

Deciding which company is better will depend upon borrower circumstances.

SoFi vs. Splash Financial: The Basics

Interest Rates	3.99%* - 9.99%	5.99% - 9.99%
Loan Terms	5 - 20 Years	5, 7, 10, 15, and 20 Years
Minimum Loan	$5,000	$5,000
Signup Bonus	Up to $500	NA

From the above table, it should be pretty clear that there are many similarities between these two lenders.

Outside of the numbers, the lenders are pretty consistent on terms as well. Neither company charges loan origination fees or prepayment penalties, and there are no major red flags with either lender from a loan servicing perspective.

Finally, both companies refinance both federal and private loans. Borrowers with federal loans should carefully consider their decision to refinance. Once federal loans are refinanced with a private lender, all of the federal perks, such as income-driven repayment plans and student loan forgiveness, are permanently eliminated.

SoFi Advantages

Refinancing with SoFi comes with two distinct advantages that most lenders cannot beat.

The SoFi Brand – While SoFi started as a student loan refinance company, it has grown considerably. SoFi now offers mortgages, personal loans, and investment management services. SoFi wants the student loan customers to become mortgage customers and wealth management customers. They call their customers “members.” The benefit to consumers is that they can expect higher quality service. If SoFi wants their borrowers to use other services, they need to treat them right.

SoFi Job Placement – One of the perks of being a SoFi “member” is the career coaching available to all customers. The advantage of helping borrowers find jobs is that they are more likely to repay their loans. Borrowers who lose their job may find this to be a valuable resource.

For more details on SoFi, be sure to check out our full SoFi Refinance Review.

Splash Financial Advantages

Splash current sits at the top of our student loan refinance rankings. The reason for this placement is simple: Splash has the best mix of low interest rates and high approval numbers.

Splash works with an extensive network of funding sources. As a result, Splash customers are more likely to get approved and more likely to get a low interest rate.

A final advantage to Splash is the $500 Bonus for customers who refinance at least $50,000 in student loans. Borrowers should still seek out the lender offering the best interest rate, as a slight rate difference will quickly add up to over $500 in savings for a large loan. However, the bonus is a great perk of going through the refinance process.

Further details on Splash are available on the Splash Financial Refinance Review.

Deciding Between Splash and SoFi

Ultimately, very little separates the two companies.

Borrowers that get identical rate offers may wish to go with SoFi for the member advantages, but most decisions should be determined by the lender that offers the lower interest rate.

Over the past year, Splash has consistently been the lender that offers the best rates. However, each borrower is different, and each lender uses a different formula for deciding what rate to offer. For this reason, borrowers are advised to shop around for the best rate. When rate shopping, both SoFi and Splash are worthy of consideration.

Click here to check your rate with Splash Financial.

Click here to check your rate with SoFi.

The post SoFi vs. Splash Financial: Student Loan Refinance Comparison appeared first on The Student Loan Sherpa.

The world of student loans is full of scammers offering borrowers opportunities that are too good to be true. As a result, borrowers have to be extra careful with many student loan-related decisions.

Today we will peel back the curtain on refinance lenders and explain how they turn a profit.

Holding the Loans and Profiting Off Interest

Many borrowers wonder how a company can profit by lowering interest rates.

The key detail is time. If a borrower has a $30,000 loan at an 8% interest rate, they might be able to refinance and get a 5% interest rate. When the refinance lender pays off the old loan, they pay off the entire balance. At the point the loan is paid in full, it stops generating 8% interest. Meanwhile, the borrower now has a new $30,000 with the refinance company. That refinance company collects 5% interest on the new loan.

In this scenario, the borrower benefits because they get a lower interest rate, and the refinance lender profits on the 5% interest. The only loser in this situation is the original lender, who loses out on the opportunity to collect 8% interest.

Surprisingly, this revenue strategy is becoming increasingly rare in the student loan refinance marketplace. Lenders still using this traditional business model are bank-based lenders such as Laurel Road and ELFI.

Selling Loans as Assets to Investors

Many of the tech-based refinance companies use a different strategy to make money. These lenders package loans into large groups and sell them to investors. The investors pay an upfront cost to get the monthly payments made on the loans. This is the securitization process.

In this scenario, the investors get the revenue from the interest, and the refinance lender gets cash upfront for the loan.

While this process may sound unnecessarily complicated, it doesn’t usually impact borrowers. From the borrower’s perspective, the loan servicer stays the same, and the loan contract terms do not change. The only difference is where the interest profits ultimately end up.

Many tech lenders prefer this approach because it gives them a steady flow of cash coming in and allows them to refinance more loans. Companies that use this strategy include SoFi, CommonBond, and Earnest.

Connecting Borrowers to Lenders

Other refinance companies profit by getting a commission for connecting an interested borrower to a lender.

Some companies lean into the marketplace model like Credible. Part of the credible sales pitch is that it is a one-stop location to check out many refinance lenders.

Other companies advertise under their name but use many different lenders to fund the loan. This is how Splash Financial works. This approach helps Splash offer some of the lowest rates on the market.

Finally, there is the LendKey approach. LendKey works with a nationwide network of smaller banks and not-for-profit credit unions. LendKey connects interested borrowers to these smaller lenders that don’t have the resources to advertise on their own.

How Does the Way Refinance Companies Make Money Impact Borrowers?

There are two major takeaways for borrowers.

First, seeing the different approaches helps explain why rates change with various lenders. For example, if there is a ton of investor interest in student loan products, the tech companies will offer very low interest rates.

Second, this knowledge should help borrowers shop around more efficiently. If you want to qualify for the best refinance rate possible, a smart strategy would be to check rates with multiple lender types. Investor interest may push rates with the tech-based lenders up or down. If you apply with CommonBond, SoFi, and Earnest, it might seem like you have shopped around, but in reality, you have only checked with one corner of the market.

If you understand how the various refinance companies make money, you can be a more informed consumer.

The post How Do Student Loan Refinance Companies Like SoFi Make Money? appeared first on The Student Loan Sherpa.

Unfortunately, the “fast” and “simple” process often ends with a rejection for borrowers.

Rather than focusing on the easiest application, today we will focus on hunting down the easiest approval.

Borrower Circumstances Improve Odds of Approval with Certain Refinance Lenders

Each refinance lender has its own unique formula for determining who gets approved, what interest rate is offered.

Some lenders have a reputation for catering to specific groups of borrowers. If you fall into a targeted demographic, your odds of getting approved increase dramatically.

• If you have medical school debt – The residency salary is often dwarfed by medical school debt. Large debt and a smaller income can be devastating for refinancing approval odds. However, Laurel Road has a clear focus on young physicians. Their formulas account for the low starting salary but high earning potential. As a result, Laural Road may be the easiest place for a young doctor to get approval.
• If you have money in a retirement or savings account – At most lenders, credit score and debt-to-income ratios are the primary concerns. This is unfortunate for savers who have demonstrated financial responsibility. A notable exception to this rule is Earnest. Applicants to Earnest can document their savings to get lower interest rates and increased odds of approval.

Sadly, the list of lenders targeting specific groups is short. In most cases, shopping around is the best way to get a loan.

Borrowers short on time can cast a wide net by targeting lenders that work with many different companies.

• LendKey – LendKey works with a long list of local, not-for-profit credit unions to create a national student loan lender. Borrowers that apply are paired with a local credit union. By applying, borrowers are essentially checking rates with many smaller credit unions that don’t advertise their loans.
• Credible – Credible has a continually evolving roster of national lenders on its platform. Credible doesn’t directly offer student loans. Instead, they allow borrowers to check rates with about a dozen lenders with one application.
• Splash Financial – Splash started out as a smaller lender but has grown quickly by offering a mix of in-house loans and loans offered by other lenders. Over the last year, Splash has gone from being a more selective lender to one of the easiest approvals in the business.

Surprisingly, the overlap between the lenders on LendKey, Credible, and Splash lenders is minimal. By spending approximately 30 minutes, borrowers can cast a very wide net. Not only does this approach increase the odds of approval, but it also helps borrowers ensure they have found the lowest interest rate available.

Refinance Company Health and Available Funding Influences the Chances of Getting a Loan

Lenders short on cash will be far more strict with loan approvals. Limited finances mean the lender may be more selective, and that interest rates might be a bit higher. Their goal is to maximize profits from a smaller pool of money.

The flipside of this equation is the lenders who are well funded. Finding customers is the biggest obstacle for these lenders. Thus, they will offer better interest rates to a wider group of borrowers.

However, lenders don’t advertise how well funded they are or how desperate they are for new borrowers. The best I can do is infer who is most likely to approve borrowers based upon trends and feedback received from readers to this site. I try to incorporate this information in the refinance lender rankings. If a company has tightened up its approval requirements, it will fall in the rankings.

Presently, lenders ELFI and CommonBond are approving borrowers at a higher than expected rate. Meanwhile, SoFi approval rates seem to be dropping. Individual experiences may be different, but that is the trend I am seeing based upon reader feedback.

The Lesson for Borrowers

Predicting which lender is most likely to approve any individual borrower is an inexact science. We can make predictions based upon the previously discussed borrower and lender health, but it is hard to say anything for certain.

However, the one thing that can be said for certain is that the more applications you submit, the better your chances are for approval. Some borrowers may strike out completely, but it isn’t unusual to see a borrower get rejected at two lenders and then approved with a third.

Generally speaking, borrowers have two main objections to checking rates with many different lenders:

• It takes too much time. The time commitment is a fair concern, but for most people, it is time well spent. Each application normally takes 10 to 15 minutes. A reduced interest rate can save hundreds or even thousands of dollars per year. As far as time commitments are concerned, spending some time shopping around is time well spent.
• I Don’t Want Multiple Credit Inquiries – Protecting your credit score is always a good idea. Fortunately, consumers are not penalized for rate shopping with multiple lenders. While there may be a slight drop in credit score for checking with one lender, each subsequent lender is treated as shopping around and does not impact the credit score. The window for shopping around is 14 to 45 days depending upon the credit model in use.

In short, if you are looking for an approval or low interest rates, your best bet is to visit at least 3-5 lenders.

Turning a Student Loan Refinance Rejection Into an Approval

If you shop around and receive only rejections, hope is not lost.

The two crucial numbers to try to improve are your credit score and debt-to-income (DTI) ratio. One of the quickest ways to improve things is to pay down credit card balances. A reduction in credit card debt can help both your credit score and DTI.

However, many tricks can be used to quickly increase your chances for approval after a rejection.

The post These Student Loan Refinance Lenders Offer the Easiest Approvals appeared first on The Student Loan Sherpa.

At present they are both ranked in the top ten in our student loan refinance rankings. What separates these lenders?

SoFi vs. LendKey Basics

Variable-Rate Loans	5.31 - 9.12%	5.99% - 9.99%
Fixed-Rate Loans	4.89 - 9.04%	4.49% - 9.99%
Loan Terms	5, 7, 10, 15, and 20 Years	5, 7, 10, 15, and 20 Years
Minimum Loan	$5,000	$5,000
Signup Bonus	$150	NA

Interest rates and loan terms are quite similar for both lenders.

Arguably the biggest difference between the two companies is their structure. SoFi is a financial services tech company and LendKey works with a vast collection of banks and local credit unions.

Like all legitimate lenders, neither company charges loan origination fees, application fees, or prepayment penalties.

The LendKey Edge

LendKey’s edge comes from the fact that they work directly with local banks and credit unions.

These smaller local institutions have a desire to create lasting financial relationships with local college graduates. Because many of the credit unions are not-for-profit, they are able to offer lower interest rates than most national lenders.

[Further Reading: LendKey Student Loan Refinance Review]

SoFi’s Edge

SoFi originally started out as the “premium” student loan refinance company. They had the best rates, but these rates were reserved for people with excellent credit scores and debt-to-income ratios. This left many borrowers with less than perfect credit upset over being rejected.

However, for SoFi to grow as a lender, they had to be willing to accept more than just high earners with perfect credit. SoFi has largely accomplished this goal. As a result of the growth of SoFi, borrowers are now much more likely to be approved, and more likely to get a preferable interest.

SoFi has also expanded far beyond student loans. They now offer personal loans, mortgages, and wealth management services. These other financial services can be far more profitable than student loan refinancing. This creates a huge incentive for SoFi to offer low interest rates to establish a relationship with as many borrowers as possible. Even if a borrower has no interest in any of these services, the fact that SoFi offers them gives SoFi a reason to provide quality service in hopes of getting a borrower to sign up for more SoFi financial products.

In our In-Depth Review of SoFi, we also noted that SoFi offered a job placement program for borrowers. The bet that SoFi is making is that they will make more money by investing in their borrowers and helping them find jobs than they would if customers were left to struggle on their own.

SoFi vs LendKey: Loan Details

As an incentive for new borrowers, LendKey also offers $150 to borrowers who sign up for their service.

One item that all borrowers should understand is that both lenders are willing to refinance or consolidate federal government student loans. The advantage to borrowers is that it allows them to lock in lower interest rates. The danger is that federal perks like income-driven repayment plans and student loan forgiveness programs are gone forever if they refinance.

Ultimately, from a loan term standpoint, there is very little that separates these two lenders.

SoFi vs. LendKey: Interest Rates

The one number that matters to all borrowers is interest rates.

Both lenders consistently offer excellent interest rates.

The advertised interest rates in all categories are currently very close with these two lenders. Borrowers looking to find the best deal would be wise to apply with both to find the company that actually offers the lowest interest rate.

Click Here to check your rate with SoFi.

Click here to check your rate with LendKey.

The post SoFi vs. LendKey: Picking the Better Refinance Company appeared first on The Student Loan Sherpa.

When comparing SoFi and ELFI, very little separates the two companies. However, ELFI’s improved interest rates and approval rates give them a slight edge.

Both of these lenders rank toward the top of our student loan refinancing rankings, so no lender is clearly better than the other. Borrower circumstances may dictate which lender ends up being the better deal.

SoFi vs. ELFI – The Company Basics

ELFI, short for Education Loan Finance, is one of the newer national lenders offering student loan refinance. The ELFI strategy targets borrowers with large amounts of debt, excellent credit, and high incomes. While ELFI is a new name on the student loan marketplace, it is a product of SouthEast Bank, a longstanding regional bank. As we noted in our ELFI Review, this makes ELFI a compelling option.

SoFi is the established giant in the student loan refinance marketplace. Even though the company was founded less than ten years ago, SoFi now refinances more student debt than any other lender. Our SoFi Review explains how SoFi has grown so quickly.

Loan Terms Compared

These two lenders are very close in terms of interest rate offerings. ELFI rates currently start at 5.28% for their five-year variable-rate loan, while SoFi is a bit behind at 6.24%. On the fixed-rate side of things, Sofi has a 5.24% starting rate, while ELFI offers a slightly better 5.08%. Rates for both lenders tend to be close in nearly all loan categories. To compare these lenders across different loan types and lengths, be sure to check out our best student loan refinance interest rates page.

Neither lender caps maximum borrowing, but SoFi is willing to take on smaller balances starting at $5,000. To refinance with ELFI, you need a student debt of at least $15,000.

Finally, ELFI offers a signup bonus of $150. The $150 is a nice perk for signing up, but the interest rates offered will be the numbers that matter in the loan run.

Refinance Approval Rates

Approval rates with these two lenders tend to fluctuate.

When this article was first written, SoFi had a clear edge. As of the last update, ELFI appears to be slightly better than SoFi.

Ultimately, getting loan approval requires good credit and income, no matter what lender you select. The only way to know for sure what lender has the best interest rate is to apply with ELFI and then check your rate with SoFi.

SoFi and ELFI Perks

Each lender offers a consumer perk that is unique to the student loan refinance market.

SoFi Job Placement – Unlike any other lender, SoFi will help you find a job if you find yourself out of work or underpaid. Their calculation seems to be that by helping borrowers find jobs, they will spend less time and money chasing down borrowers who default on their loans. It is a bold strategy. We hope to see other lenders copy in the future.

ELFI Customer Support – Several lenders, including SoFi, have customer support entirely based in the United States. What makes ELFI unique is that each borrower is assigned a single point of contact for handling questions and issues. This means you have a direct number to the same person who is addressing any questions or concerns. The result is more personalized customer service and less time explaining the same problem over and over.

Which Student Loan Refinance Lender is Better: SoFi or ELFI?

Separating these two lenders is a bit of a challenge. ELFI has slightly better rates, but SoFi is the biggest lender for a reason.

In our student loan refinance rankings, we put SoFi in fifth place and ELFI in third. ELFI offers some of the very best rates to consumers with excellent credit scores and high income, but SoFi is still a willing lender able to offer excellent interest rates.

That being said, how we rank these two lenders should be of little significance to someone looking for the best deal on student loan refinancing. For a prospective borrower, the deciding factor should be the lender who offers the lower actual rate. The good news is that it takes less than 15 minutes total to check your rate with SoFi and to check your rate with ELFI.

Readers: Did you look into both of these companies? How did the rates they offered compare?

The post SoFi vs ELFI Student Loan Refinance Comparison appeared first on The Student Loan Sherpa.

In our student loan rankings, we provide a template for sorting through the various companies, but it isn’t an exact science. The reality is that the best student loan refinance lender is usually the one offering the best interest rate.

SoFi, Laurel Road, LendKey, Earnest, Citizens, and Splash are the lenders that most frequently appear in these reader emails. This makes sense because these lenders spend the most on advertising and offer some of the best interest rates in the student loan consolidation business.

Advertised Rates vs. Actual Interest Rates

If there is one concept that anyone shopping student loan refinance companies should understand, it is the difference between advertised rates and actual interest rates.

Advertised interest rates vary from company to company and can fluctuate based upon the market and cost of borrowing. Most of the top lenders will all be within a fraction of a percent of each other. However, just because a company advertises the lowest interest rate, it does not mean that it will offer any particular borrower the best interest rate.

Actual interest rates depend upon a number of different factors. The potential borrower’s credit score, income, debt-to-income ratio, occupation, and school all can be considered.

However, each lender may treat these factors differently. For example, Earnest also considers your retirement account balances. From their perspective, if you are saving a ton of money for retirement at a young age, it is a sign you are probably a responsible borrower. Each company guards its exact formula closely.

Lenders make money by offering the best rates to the consumers who are the lowest risk. The better they do identifying these consumers, the more money they will make.

What this means for you the borrower is that each lender will apply your particular information to their credit evaluation formula. SoFi may decide you are too much of a credit risk and decline your application or offer you a higher interest. Meanwhile, LendKey might look at exactly the same information and conclude that you are a safe bet, and offer you their lowest interest rate. Because each borrower is different and each lender looks at borrowers differently, it is impossible to know what lender will have the best rate.

A final factor that should be considered is the term of the loan. Laurel Road might offer an excellent rate on a short-term variable-rate loan, but the long-term fixed-rate loan might come with a really high interest rate. Meanwhile, Splash could do the opposite. Their fixed-rate loans might be the best deal, but their variable-rate offers don’t hold up. The only way to know what a lender will offer and what deal you can get is to apply.

Shopping Around

The extended discussion about advertised rates vs. actual rates is necessary to explain the importance of shopping around.

When it comes to student loan refinancing, that means applying with a number of companies to find the best deal.

The major credit bureaus encourage shopping around because multiple credit inquiries are treated the same as a single check, so long as they were within 14 days (some even give you longer). This means that the only downside to applying to multiple lenders is the time it takes to fill out the applications. It may be a bit of a headache, but the potential savings make it time well spent.

Those concerned about the time commitment required to shop around should estimate that it takes about 10 minutes per lender to check rates.

We have prepared a full list of lenders in our rankings and also included links to current promotions with most lenders.

What is the point of Rankings?

The rankings should be useful for a couple of reasons.

First, it provides a starting point for your research. Having all the companies in one place provides a guide for where you should go when shopping around.

Second, it is helpful when comparing the offers two companies have made.

Suppose SoFi and Citizens both offer the same interest rate for your consolidation. Part of the reason SoFi is ranked number one is because of its favorable cosigner release terms and because of its career development opportunities for borrowers who lose jobs. This gives them the edge in our rankings, so if the interest rates are close, it is a good tie-breaker.

Bottom Line

Finding the best student loan company is all about doing a little bit of extra legwork.

There are some differences between SoFi, Laurel Road, LendKey, Earnest, Citizens, and Splash, but at the end of the day they are all offering similar services and the best choice is typically the lender with the best rate.

The extra effort to find the best rate is minimal and it pays off.

Put together a list of lenders you are considering. Send out applications to each lender. Evaluate who has the best deal. Compare how the companies did from a customer service perspective. By the time you have offers and experience with the lenders, you should know what lender is best for you.

Shopping around in this manner will ensure that you save as much money as possible. At present, these lenders are advertising the lowest interest rates.

The post Deciding Between SoFi, Laurel Road, LendKey, Earnest, Citizens, and Splash appeared first on The Student Loan Sherpa.