SoFi.com: Full Review
SoFi is an American internet personal finance company and internet bank. It was established in 2011 and is located in San Francisco. There are currently over 1500 employees and 10 offices in America.
The Society's goal is to help its members manage their money well. With it, clients can gain financial independence to achieve their ambitions. Financial independence is not synonymous with wealth. Instead, it means reaching a level where members' money is working for the life they want to live. As a result, the company continues to develop ways to give customers what they need to achieve their goals.
SoFi offers financial products including:
- Student mortgages and auto refinance;
- Personal loans;
- Credit card;
- Banking services through desktop and mobile application platforms.
The Society, in summary:
- Convenience: there are no commissions and automatic payments have discounts.
- Transparency: Customers can perform concessional credit checks to see if they are eligible for offers. SoFi reports payments to three credit bureaus. The FAQ section provides answers to crucial questions.
- Flexibility: The Company offers direct payments to creditors with debt consolidation loans. Loans can be funded within three business days.
- Customer Experience: There are two methods of customer communication and support is available seven days a week. There is a mobile app to manage loans. Plus, customers get financial education and exclusive user benefits.
What does SoFi offer?
The lending platform offers both online and offline services. It started as a peer-to-peer lending platform where customers got student loans. It provides personal finance services that allow people to borrow, invest, use and insure assets.
In early 2021, the loan company went public through a special acquisitions company, and Social Capital gave it a valuation of over $8 billion. The platform provides various financial services. These range from financial planning to financing and investing. The service operates in a competitive environment against heavily funded entities. The lender offers offline opportunities where students connect with alumni. The report connects students with the mentorship and guidance they need to succeed in school and enter the workforce.
The SoFi model was introduced in April 2012 and was an instant hit. The entity has turned this achievement into its next $77 million Series B funding round. The funds were used to expand to more than fifty institutions of higher education across the United States. In its first year of operation, the entity provided over one hundred million dollars in new student loans. Currently, SoFi has over two million people using the service. Additionally, it is among the top FinTech startups in America, having raised over $2.5 billion in fourteen VC payout rounds.
- Loan service. Today, the entity generates loans through its other network associates. Sometimes they can use collateral to obtain financing. SoFi monetizes the loans it makes using "whole loan sales". They bundle the money into a deal and offer it to institutions and investors like pension funds.
Beneficiaries pay the lender a premium advance to access the cash flows generated by the financing activity.
- Investment service. The service allows people to trade stocks and ETFs. They can also buy cryptocurrencies and fractional shares or choose automated robo-advisor means that make investments.
The entity generates funds from Invest Services through the protection it provides to other financial companies requesting shares for those interested in filling short positions. SoFi earns additional profits from FDIC-insured swipe programs.
The SoFi company also acquires revenue through the market maker rebates they get for payment for order flow services to HFT organizations. Additionally, the platform charges a 1.25% markup on all cryptocurrency purchases made.
- Insurance services. Insurance products require high capital which is why the lender partners with other service providers in the industry to spread the danger of its functions. The loan company receives a referral fee every time they refer a new client to their associates and sign up for a policy.
The amount of money obtained depends on what the lender agrees with their partners and the type of policy a customer receives.
- Storage services. SoFi introduced debit and credit card account services in 2018 and 2020 and partnered with MasterCard. Customers can open and access their accounts using an app without connecting to a bank account.
The Company also benefits from transactions, collecting fees every time customers swipe their cards. MasterCard receives the majority of the transaction money, and SoFi Company receives only a small percentage of the charges.
- The platform also acquires interest on money in customer deposits. The Company offers the money to banks and other financial institutions, accruing interest at the interbank rate. The money earned forms a solid revenue stream for the loan company.
Benefits of SoFi
- No Fees: The platform does not charge origination, late payment or prepayment fees.
- Term Availability: Loan payment terms range from two to seven years, a wide range than specified by lenders. The broad choice allows customers to prioritize lower overall interest with a shorter term or low monthly payments with a longer term.
- Discounts: Customers can enjoy multiple discounts that reduce interest costs. A fee discount of 0.25% points is available for creating the automatic payment. An extra 0.25% point discount is available for creating and maintaining a cash account.
- Co-Signed Loans: Customers can include a co-signer in their application. Referring someone with better credit or a higher income than you increases the likelihood of receiving a lower rate or more money. Unlike co-borrowers, co-signers do not have access to the loan proceeds but are liable for defaulted payments.
- Unemployment Protection: If a person loses their job while repaying a debt, they can apply for the lender's unemployment protection program. If approved, the lender will forbear the money owed and suspend the borrower's monthly payments. Interest will continue to increase during that period, but customers can make interest-only payments to prevent principal from increasing.
- Career and Financial Advice: Lenders offer clients access to career coaching to enable them to find work, enhance their knowledge, and enhance personal branding. Users can also get free advice from certified financial planners to build a budget, form an investment strategy, select insurance, and save for the future.
- Loan Management Mobile App: The mobile lender app checks rates prominently, applies for a loan, and makes payments faster.
Disadvantages of SoFi
- The Company does not offer secured or joint financing services – customers cannot secure a loan using collateral such as a vehicle or savings account. The lender doesn't even allow you to apply with a co-borrower. Using collateral or taking out a joint loan are ways to get a low APR.
- The minimum loan amount is high: The minimum you can borrow from SoFi is five thousand dollars. However, this amount may be too large for people interested in financing a small project or paying for minor expenses.
Below are the requirements to access the loan:
- You must be at least eighteen years old;
- You must be a US citizen, permanent resident or have a visa;
- You must be working, have sufficient income, or expect to find a job within the next 90 days.
How to get a loan on SoFi.Com
The enforcement exercise can be daunting. Borrowers need to understand various things about their current financial situation and history. Here are the steps followed:
- Determine the amount to borrow
It is essential to determine how much you need to borrow. It is not advisable to ask for more than you are asking for as you will be paying interest. Also, you cannot ask for less than you need, as you may be looking for another loan to meet your needs. So it's best to know the exact amount to borrow and work with your lender to determine the interest rate and term that's right for you.
- Check your credit score
It would be better to make sure that your credit score is strong enough. For example, 740 is a satisfactory score, while anything above 800 is excellent. However, SoFi can lend money to people with as little as $670.
- Get pre-qualified
Lending companies allow borrowers to pre-qualify for financing. The company could indicate loan costs, repayment terms and interest rates. Information required for screening includes address, income, and social security number. Flexible credit analysis has no impact on credit ratings. Check other fees such as set-up fees, prepayment penalties, and late fees.
This helps customers avoid surprises later. Plus, understanding the true cost of the loan beyond the interest rate helps you choose the right loan. The good news is that SoFi Company has no fees. Therefore, borrowers have nothing to worry about.
- Submit the application form
Once you have provided all the necessary details, you should submit your application and wait for feedback. Customers may also need to attach documents such as photo ID, proof of address, and proof of employment or income.
Our Final Thoughts
Business loans are available to borrowers for different amounts. Financing has no set-up, prepayment or hidden fees. Customers can check their interest rate in a minute, and you can get cash the same day you request it. You can use the funds you get for home improvement, debt consolidation, emergencies, etc. The Company also allows you to control your rate without affecting your credit