A SoFi Review: Slick Technology vs. your Student Loan (or Mortgage)

sofi-riverAlmost two years ago, I started getting reader emails asking me if student loan refinancing was a good idea, and if a company called SoFi was a good place to do it. Never having carried such a loan myself I wasn’t sure if I was qualified to answer, but other emails were coming in reporting positive results with the company. So it seemed like a reasonable business to me, but maybe not suitable for the main page of this blog since it only applies to a certain slice of readers.

Since then, things have changed quite a bit. I ran into a SoFi employee at a financial blogger conference one night, and over a beer he gave me a much clearer picture. I read about the history of the company and then talked to cofounder Dan Macklin about what they are up to now.  It started to get more interesting and I put the idea into my list of draft articles. More emails came in so I figured we should ask the readers about their own experiences via informal quizzing on Twitter and Facebook. There is also a detailed discussion of experiences right here on the MMM Forum. Out of those who successfully refinanced,  the results look good.

(Update: as of  2020, I also recommend you check out Credible.com (NMLS No. 1681276) for both student loan and mortgage refinancing quotes in order to see your own personalized prequalified rates. They are competing heavily in these markets, with great results for you. At the time of writing, they are also still offering the $300 re-fi bonus on student loans, which SoFi has discontinued. (See their mortgage disclosure here)

Why Would you Refinance a Student Loan?

I don’t get excited about lower monthly payments, loan forgiveness, or any other financial frills. I also don’t think anyone should borrow money for a wedding, vacation, or car, regardless of the rate. But for any debt you are currently stuck with, I do want you to end up with the lowest possible interest rate. You combine this with the making the largest possible monthly payment to destroy the loan in the shortest possible time, and thus escape from your Debt Emergency very quickly and move on to build real wealth.

You can then go on to optimize small details like “should I pay off my mortgage?” if you are an expert on interest rates versus expected investment returns, but at the end of the day you get wealthy by working hard, earning lots, and spending much less than you earn. Truly large investment gains become easy once you have a large, positive net worth.

How SoFi has Expanded its Usefulness

The company name derives from the words Social Financing, because the company was originally born on the idea of allowing alumni of Stanford and a few other elite universities to fund the student loans of the next generation of students. It was a novel concept at the time, although for a relatively small audience.

But as the company has grown and found success, it has expanded both the source and destination of its funding. Nowadays, instead depending on alumni to write checks, the company has tapped into the current wild surplus of institutional investor money looking for somewhere to invest.  And SoFi’s goal is to connect YOU to this money, via a very modern and simplified interface.

They have also expanded their program to include graduates from a much larger number of universities (over 2200 when I last spoke to them), and started offering mortgages as well.


Fig.1: The SoFi Business Model. Money is easy these days, but this only helps you if you use it to buy freedom from debt, not new cars and fancy weddings.

This business model appeals to me, because I am fascinated by the current low-yield environment. There are trillions of dollars of institutional money swarming around trying to find a good return, while US government bonds pay almost nothing. This has driven up stock market valuations and also brought a surplus of investors to companies like Lending Club in search of cashflow. In general, it is a poor time for value-oriented investors, but a good one for borrowers.

I have also been frustrated with the perpetually low-tech environment of lending. Although I now maintain a peaceful balance sheet with no debt, I’ve gone through at least ten mortgages and refinancings over the past 15 years, and every one was more trouble than it needed to be. Sometimes I’d find myself sitting in a bank employee’s cubicle slowly reciting figures while she typed them into boxes of some rusty old Windows XP application. Other times I’d be signing and scanning paper documents and using various hacks to send them in the antique “Fax” format to bankers who didn’t even have a way to open a PDF.

Student loan refinancing was even worse – the private market for loans was undeveloped, which means there were few options open for many graduates. Thus, many are still stuck with rates above 6% despite rising income and credit worthiness. Much like the taxi industry before Uber arrived and started steamrolling things, the lending industry was ripe for a massive and convenient overhaul, and SoFi has been working on its small revolution since they began in San Francisco in 2011.

With tens of thousands of borrowers and billions of dollars funded so far, they are off to a good start. And it is a big market to grow into: US student loan debt is now measured in the trillions, and some are calling it a bubble. While it may become a problem on a national scale, hype like that doesn’t matter to you – you’ll be eliminating your own student loan within a very short time.

So How Does It Work?

250-20I got myself a SoFi account just to see what the user experience is like. Their system asked about my income, employment and educational status. I even found my own Canadian university in their list of approved schools. From there, you would go on to submit a scanned copy of your diploma, information about your existing loan, and then hand it off to SoFi staff to do the fussy work of verification.

I had no student loan debt to refinance so I pretended I had a mortgage on my house and started a mortgage refi application instead. The whole application took me less than 5 minutes.

With a test case of $50k down on a $250k mortgage, I saw rates of 3.245 to 3.495%. As you might guess, rates increase for larger loans and smaller downpayments, but the premium for these bigger loans was remarkably cheap.

Loans – includng mortgages – from SoFi carry no origination or other typical lender fees, which is a refreshing change and a major factor in your overall borrowing cost. Their 10% down mortgages also require no Private Mortgage Insurance (PMI) which could provide a massive savings in certain cases: PMI generally sucks and should be avoided.

But the most interesting part to me is that you can then slide your loan amount and downpayment back and forth to strategically get the best rate for your own situation. Considering a smaller downpayment so you can keep cash in reserve to buy a rental property next year? You can instantly see how much that will cost you. Comparing 15 to 30 year and fixed to ARM? All that data is right there and it adjusts in real time.

This felt like Justice to me. After years of harassing my bankers to give me dozens of hypothetical rate quotes to help me decide how to structure my mortgages, now the data is all properly presented to me on my own computer screen, rather than filtered through a pipeline of slow-talking human mouths connected by Low-Fi telephone line. So much more efficient!


Some US student loans currently come with niceties that you will lose if you refinance. The Public Service Loan Forgiveness program lets you off the hook if you hold a qualifying job and make your loan payments for 10 years, and this works well for certain people who love their jobs.

On the other hand, my own freedom-oriented personality type would wither under such a long-term job obligation: I’d rather earn as much as possible, devote as much of it as possible to debt elimination and investing, then be free to choose any job from beach bum to tech company CEO without regard to how it affects my loans.  This is why I care mostly about low interest rates.

Also, SoFi is not for everyone. They are deliberately leaning towards the better end of the credit score spectum, which means a good experience for those who qualify but a (thankfully quick) rejection if you don’t.

Share your Own Experience:

I had to draw heavily on reader experience to write this post, but there is surely more to learn. If you have experience with SoFi or an alternative, please share it in the comments below. The goal for all borrowers should be maximum flexibility at minimal cost, and collectively we have a good amount of knowledge in this area. Eliminate debt and prosper!

  • Laurie May 7, 2015, 11:18 pm

    Does this work with parent plus loans and student loans.? We didn’t receive much in federal loans so we had to take out these types of loans and the interest rates are very high. Like 7- 8%. We are trying to find a way to consolidate these loans and marke some progress in paying down.

    • Harry May 9, 2015, 9:21 am

      I had the same question so I called SoFi. Yes, it does work with parent plus loans. I’m refinancing out of 7.9% loans to 5%. Thank you MMM!

  • AndiK May 8, 2015, 1:20 am

    First: Social financing sounds like a very clever concept – regrettably, I am not aware of anything like it over here in Europe.

    Out of curiosity: from a German perspective, the rates stated here sound very high. I am not certain about rates for student loans (it’s uncommon to take on a student loan, over here), but my brother just got an offer for financing a house. He will have to pay 1,7% for a 20-year fixed rate annuity credit with 750k EUR debt and about 200k EUR down-payment. I have heard about similar interest rates from Friends and colleagues. BTW: I think that the prices paid for houses are hillarious – in my brother’s case, it is a tiny house with a very tiny garden, but these are the usual prices currently being paid in the vicinity of large towns like Frankfurt or Dusseldorf.

    Of course, German und US markets are not comparable and you cannot exploit the difference in rates without taking on FX risk. We are in a negative interest rate environment, over here, and some banks are even starting to charge interest for deposits of retail clients.

    I just find it interesting to compare the effects of QE in the states and the effects over here at Germany as it gives me a feeling for the economies and for my personal investment.

    Hence the question whether the rates quoted in the article seem normal to you…

    • Mr. Money Mustache May 8, 2015, 6:13 pm

      Hey AndiK – really interesting comparison there. First of all – yes, the SoFi mortgage rates are very competitive in the current US market. Europe’s economy is still pretty independent from the US, it looks like German rates are based on the European Central Bank’s benchmark rate – currently zero but around 4% as recently as 2008.

      Overall, we are ALL seeing ridiculously low interest rates for now. It probably won’t last much longer as the slack really seems to be coming out of the economy with low unemployment and rapidly rising wages in the tighter areas. Soon enough mortgage borrowers will speak longingly of these times.

  • Charlei May 8, 2015, 6:53 am

    Yeah, I tried to refinance with SoFi, but my husband and I don’t make enough to refinance even with a credit score of 764. Oh well – we’ll just have to keep slamming away on the debt without refinancing until one of us manages to get a higher paying job, at which point the plan would be to slam more money towards it, but if possible refinance so that the debt isn’t piling up quite as fast due to the high interest rates. I think Lending Club takes credit score into account more than income since they automatically withdraw payments, but SoFi doesn’t necessarily do so.

  • Econ Nick May 8, 2015, 8:19 am

    Hi, I was wondering if anyone could explain this statement and possibly elaborate for me: ‘There are trillions of dollars of institutional money swarming around trying to find a good return, while US government bonds pay almost nothing.’

    From what I gather, ‘institutional dollars’ refers to financial services money, generally loaned to us. Is this far off the mark?

    Furthermore, I’m trying to get better grasp on the economics of interest rates in the student loan market.

  • Kathie May 8, 2015, 10:26 am

    Is there an individualized *purchase price* (not *mortgage amount*) limit based on income? SoFi wouldn’t allow me to run numbers for a purchase price over $550,000, despite 50% down. Here in coastal Southern California, $.55M purchase price isn’t even a good condo.

  • Nic May 8, 2015, 11:44 am

    So has anybody used SOFI not for refinance, but for a mortgage loan? They actually have their offices right next to mine in the Presidio in SF. Seem interesting, it really would depend on what interest rate I qualified for. I mean no PMI is good, but if your interest is higher than other ones I have been approved for then its not much better. Particularly since you can pay down PMI, where the interest rate you have for the life of the loan.

  • SDN May 8, 2015, 12:48 pm

    Both myself and my partner went through the SoFi student loan refinance process. We both had very negative experiences and found that their customer service reps were not able to handle relatively simple questions in a timely manner. For instance, we first ran my GF’s app through without me as a co-signer, and we were not happy with the rate. We asked them re-run the app with me as a co-signer. This process ended up taking 3 months. To compare, Common Bond simply sent us a spreadsheet with both scenarios laid out for the different financing term options.

    Ultimately, she refinanced with SoFi because it had the lowest variable rate on a 10-year loan, but we ended up only refinancing her unsubsidized loans. Their servicer is MOHELA, and they have been fine.

    In my experience, SoFi was generally unresponsive, and had higher rates than both Common Bond and Darien Rowayton Bank. I ended up taking the sub 3% rate offered by DRB. DRB was hard to deal with also, mostly because their online messaging system is cryptic and difficult to understand, but once the loan financed, their autopay system takes care of the rest.

    Finally, I tried to do a SoFi mortgage, and found the process to be frustrating and unnecessarily difficult. The loan officer never kept to his timeline promises, their underwriters originally denied us because we lacked assets, but they misread a simple bank statement that had a cash balance of $40,000 and reported instead that the cash balance was $5,000 based on a car LOAN we had at the same institution. We finally got approved about 3 hours before offers were due. I didn’t appreciate the white knuckle nature of the experience.

    My advice, if you intend to refinance, is to shop around and get quotes from DRB, SoFi, and Common Bond at the same time.

  • SteveCW May 8, 2015, 12:57 pm

    I think another thing to consider when refinancing is that sometimes having a bunch of smaller loans is nice. For me I had 4 separate graduate loans all at 6.8%. But because they were broken up into nice 5k chunks it made it easier to fully pay off the loan.

    I think the advantage of this, maybe only mentally, is that once you pay off the small loan the reward is instant and clear. Because you have permanently removed the burden of a monthly payment.

    If those had all been one big loan even if I paid down half of it, my payment would remain the same as I had negotiated for the larger loan. Granted the consolidated version would likely have a smaller overall monthly payment. But this way of thinking may only make sense if you have relatively small loans.

    For my friends with much larger student debts I think the only thing that matters is getting that lower interest rate.

  • Nick Miller May 8, 2015, 1:10 pm

    Have you (or anyone else) looked into Credible? They basically use your information to find competing offers for student loan refinances (including So-Fi) so you can make sure you get the best rate and terms.

    • leslie May 9, 2015, 9:15 am

      I just looked at Credible but it seems like they don’t work with SoFi. I also didn’t see any mention of DRB. They seem to work with a few lenders but they all seem to be small – none of them have been mentioned in these comments.

  • Tim May 8, 2015, 5:20 pm

    Do you think it be worth refinancing with them for the purposes of investing in the market? I reckon, with long term stock market average of about 10%, I would make about 5% a year with no effort at all.

  • Jen Gunderson May 10, 2015, 11:30 am

    My husband makes a good income and we both have high credit scores. Our mortgage is reasonable, we have a small amount currently on a credit card, which will be paid off in a few months. We’re doing okay with the exception of my student loan debt, which is still large almost ten years after graduating (about 44,000 right now down from 65,000). I thought it would be great to see if I could get a lower rate on my student loans but when I started filling out the SoFi form I got to the area about work and income and saw that it specifies only my personal income be listed — not that of my spouse. I am currently a stay at home mom. My son is one. I plan to be home full time with him until he goes to kindergarten when I’ll return to the workplace. SoFi wouldn’t even let me finish the process, since I had to list my personal income as ZERO (versus the reality of our family income which is in the low six figures). Is this typical? Are stay at home parents out of luck? I guess for every other big purchase or loan needed, I was always working but in this case I thought that my husband’s income would be considered my income too. Bummer.

  • Britton May 10, 2015, 4:15 pm

    Don’t get student loans.

    Problem averted.

  • Sara May 11, 2015, 8:11 am

    Aww man! I refinanced with Sofi via Money Under 30 just a month ago and they only gave me a $100 bonus. If only I’d waited!

    Either way, the refinancing was a good experience and I went from 6.55% interest to 4.5%.

  • Adam May 11, 2015, 9:51 am

    11 years of Federal Service, but to be eligible for forgiveness I would need to refinance my student loans again, and then start the clock over for another 10 years? lol


  • Grody_B August 7, 2015, 9:18 am

    It took about 10 GD calls with customer service, but I just got my $300 referral bonus this week! Also reduced my interest rate on ~$30,000 in student debt, down from $75,000 originally, from 6.55% to 3.015%. Thanks so much for the recommendation; I only wish I would have done it sooner!

  • Tanya August 10, 2015, 1:23 pm

    I just wanted to thank you so much for your referral link! I did get the $300 bonus PLUS I somehow got a 0.13% interest rate reduction by following your link. Much appreciated. :)

  • Missy August 17, 2015, 11:05 am

    Be aware that not every state allows a referral bonus. I successfully refinanced through SOFI using MMM’s link and am saving over 2% on my SL, but there is no referral bonus in Michigan. Bummer.

  • Dave August 19, 2015, 5:24 pm

    I tried to apply and was turned down immediatly. All I was looking for was a 50k mortgage on a home we are building. We have the cash forbhe rest.They didn’t even ask how much we make, which is 7,000 AFTER taxes. And we both have more than 10 years at our jobs.
    And we have no other debt , but they don’t even ask that.
    If that kind of income witn 0 debt can’t get a mortgage… Who can.
    I rate them a 0.

    • Jay Holden April 14, 2016, 12:09 pm

      Sorry, did you mean 70k rather than 7k?

  • Bri August 31, 2015, 6:22 pm

    Great experience with SoFi. I consolidated my student loans with a rate 2% lower than my previous loan. Their customer service team was extremely helpful throughout the process which was fast and painless. I’ve been particularly impressed with the services SoFi offer their borrowers (aka members) including career services/counseling, entrepreneurship program (https://www.sofi.com/entrepreneur-program/), and local networking event to name a few.

    Overall very positive experience and happy a company like this finally exists to offer solutions to college graduates who are burdened with student loan debt. Rates and terms are better than any that I’ve found and the services/events they hold clearly shows their interest and mutual investment in the success of their borrowers.

  • Kiah September 11, 2015, 5:07 pm

    I recently applied because they sent me lots of mail which said I was pre-approved or pre-screened for a lower interest rate. This ended up being a lie, but regardless, I applied and after uploading some documents got approved to refinance my student loans. Their website is very nice and the whole application process was easy. Even talking with the customer service representative was very simple because you can chat live on their website. However, their representatives need to actually have some expertise about how their own loans work. I initially got a quote for an interest rate which was higher than what my current rate is for my direct loans. This did not appeal to me at all, so I used the chat window to talk with a representative, hoping that So-Fi could offer something that looked similar to their advertised rates. I have very good credit and am a teacher so my income is modest, but I have never missed a payment on my student loans, which, by the way, is higher than the payment plan they offered me. Anyways, the representative explained that the rate they offered was based on a soft pull. He made it seem like a very preliminary number, and then explained that a hard pull of my credit would provide them with more options for offering me rates. I agreed to let them do a hard pull, which approved me for the unwanted loan, but no other rate was ever offered to me. I asked another representative later on (Sarah) if So-Fi ever gives a new rate after the hard pull, and she said it is possible, but very unlikely. Although I was upset, I was glad that she at least told some truth. I felt that this whole process from the letter in my mailbox to the bad advice about a hard pull was quite misleading. I feel that I’ve wasted my time and part of my credit score on the hard pull, and I hope that writing this review prevents you from wasting yours. Student loan refinancing is a nice idea and there is no reason that it shouldn’t be a good deal for both parties involved. Apparently So-Fi has yet to find a good way to judge a person’s ability to repay a loan, as the federal government will now be getting all of the interest instead of them. My advice to So-Fi is to please train your service representatives better and to stop soliciting people by offering misleading information.

  • Meg September 14, 2015, 8:46 pm

    Just had a great experience with SoFi – my 66K of remaining student debt was spread out over 6 lenders with an interest rate of about 10% (I wasn’t very keen on math at the start of my adult life). My new rate is 3.3%! The application took me about 15 minutes and was very streamlined and easy, just listing my various loans and attaching a few documents. After submitting, I checked back a few days later, saw I was approved, and was able to read through the approval document with the rate and all the fine print. Had to call customer service once to have them reset the signature page because I choose the wrong answer to the security question by accident, and that went very smoothly. Love that they’re open on the weekend, unlike all my previous lenders’ call centers.

    I don’t remember seeing a box for a cosigner in the online application, though, and they do seem to base their decision mostly on the absolute dollar figure of your income (a friend of mine with much less debt and an income perhaps 20% lower than mine didn’t qualify).

    And if 66K sounds very high, it’s all thanks to MMM that it’s not the 120K it was 18 months ago :-)

  • ShortStuff September 16, 2015, 12:38 pm

    I’m currently with FedLoan and have the classic 6.5% interest rate and 8 years left on my loan. I applied through the link today. Unfortunately SoFi would only offer me 15-year or 20-year on my $48k loan based on my mid 50k income. I have no desire to get an even longer loan term, especially when we’re trying to pay it off ASAP. The issue is that FedLoan factors in a spouse’s income, but SoFi will only factor in a spouse’s income if they are a co-signer. Well I have no interest in adding my spouse on when he is not a cosigner on the original. Unfortunate as I was eager to get a better rate.

    • Mr. Money Mustache September 16, 2015, 12:42 pm

      But aren’t you allowed to pre-pay your loans like almost any other US loan? If so, the term means nothing at all: just throw in money whenever you like, as long as it is at least equal to the monthly payment.

      If I’m right about this, then the only factor you should care about is the rate.

      As for co-signing, it shouldn’t be an issue if you were both willing and are on a rapid path to debt freedom anyway.

  • Lauren Belcher November 15, 2015, 11:06 am

    WOW. I am so excited! Thanks to this article, I have now consolidated my 10 federal loans into one with a 4.2% interest rate. This is much better than my average 5.8% with Federal loans. SoFi was friendly, quick (I heard within a week of applying) and very helpful. I am committed to paying $3300 a month so that we can pay off my over $57k in 17 months. And this is certainly going to help cut down on my overall payout by thousands. Thank you so much MMM for posting this. It was a light in a very dark hole and Mohela (federal loans) was unwilling to help me out even with me paying 5 times my monthly payment. With no other debt, this is the last piece to my financial freedom and to celebrate, my husband and I will be thru hiking the Appalachian Trail in 2017. So, hats off to you and I highly recommend everyone check this company out. They truly seem to be on the side of the customer and treat you like you are the only person they have talked to all day. Great experience.

  • Dani December 12, 2015, 7:26 pm

    I refinanced loans in October of this year after reading your article and used your referral link (even says “Mr. Money Mustache” under the referral part of my application)–but SOFI has still not given me the 300$ referral bonus–despite multiple calls to their customer service team. I feel like I got the bait and switch.

    • Mr. Money Mustache December 13, 2015, 9:29 am

      Hmm, I’ve never heard of this situation before – what does the customer service team say? Anyone else had problems?

      It’s a small company and they do intend to keep their word – I’m sure we can fix the problem if there is one.

      Update: I checked with Sofi boss Dan Macklin, Kyle Osborne, and crew, they verified that bonuses are still being honored. You have to make sure you put the right stuff into the website – I’ve added the details as a footnote to the main article above.

      • Too Tall Taylor January 24, 2016, 11:19 am

        I refinanced with Sofi and cut my average rate from 6.2 to 3.45%. We refinanced my wife’s $30,000 student loans in August and will be paid off by mid-February :)

        That being said, I was unable to get the $300. Apparently the lovely state of Michigan bans borrower kick backs or something like that. The people at Sofi took all of my many calls like champs and I can’t recommend them enough though.

        Michigan Mustachians just need to know there won’t be the bonus waiting for them if they refinance.

    • Tanya December 13, 2015, 2:02 pm

      I refinanced my loans on 8/7 and got the bonus on 10/1. Make sure you complete the referral program information under “REFER” on your Sofi account page. That is the information they use to deposit the money.

      • Dani December 13, 2015, 7:17 pm

        Hi Tanya,

        Thanks for the FYI–my refi was around 10/26, so perhaps there’s still hope. I have already completed the referral program information under “REFER” on my Sofi account page.

        Every time I’ve talked to someone at SOFI’s customer service, the say “It should be in your account in your account by the end of this week”, but the first time I heard that was 3 weeks ago. I called last Wednesday to followup and was told by the representative that he, or his manager, would call me back within 24 hours to let me know what the issue was…but never heard back.

        I hope they do intend to keep their word! The bonus was an incentive that made me decide to pull the trigger a refinance.

    • Lauren Belcher December 16, 2015, 12:25 pm

      I had no problem getting mine (came about 12 days after application date this November). I haven’t heard of anyone else having this issue either. Don’t stop trying though. They need to follow through on their word. Best of luck!

  • D January 14, 2016, 6:48 pm

    Thank you so much for this! I’m determined to shatter my student loans this year and this is super helpful. The variable rates SoFi’s offering me right now aren’t as low as I hoped they’d be, compared to other people’s comments from a while back, but to get the opportunity to lower my interest rate AND get a $300 towards payment? Just awesome.

  • Joe Money January 23, 2016, 7:28 pm

    Thank you for writing this article. I refinanced in December 2015. My original student loans were for 6.5%. I refinanced with SOFI, and I have an adjustable rate starting at 3.85%. I plan on paying it all off by September 2016. I received my $300 MMM credit within a couple of weeks. Your blog is awesome!

  • SabrinaGee February 17, 2016, 4:27 pm

    DUDE! My SoFi rebate just posted! Awesome : $300. I wasn’t that was going to work, but it did. Thanks for the tip. Thanks for all you do to shed light on finances! I am very grateful!

  • Tyler Walker April 8, 2016, 3:31 pm

    I couldn’t agree more with the other negative reviews about SoFi’s poor application process. Their customer service will say one thing but never do it, or it will take months for things to happen with no status updates. I would not recommend SoFi to anyone.

    In December of 2015 SoFi approved my loan application, but I later ended up canceling due to so many mistakes made. First they couldn’t verify my identity and had to mail a paper application. Then SoFi sent the wrong fund amount to my original provider Navient – and at the wrong time. SoFi was waiting on Navient to reduce my payoff amount by $7,000 per a negotiated lump-sum payoff.

    Prior to my SoFi application AND after SoFi told me they would wait to mail a check until Navient updated the final reduced payoff amount. SoFi told me this twice and even called me to check on the status. Well, SoFi’s “computer” automatically mailed a full amount fund anyway, before Navient applied the reduced payoff term. Obviously Navient kept the extra money and rejected my reduced payoff term, costing me $7k in savings.

    SoFi apologized and said they would cancel my application and reverse the payment. That took three months. SoFi also said they would temporarily put my new loan on hold while they rectified the situation – that never happened. I had overlapping duplicate payments through both SoFi and Navient for the same loan. I called SoFi to get help and the SoFi rep basically said “too bad” and claimed the previous reps told me wrong information.

    I requested escalation to a supervisor and was told exactly this: “Sounds like we’ve been telling you what you want to hear, but haven’t been delivering results” – which is spot on. That supervisor went on to say she would personally handle my application mix-up and call me right back – which never happened. I was never able to contact that supervisor again.

    Another annoying thing – you can’t call service reps directly who are familiar with your situation. Every time you call their customer service you have to verify 10 contact information questions with whoever answers before they will transfer you. On a few other occasions the rep would ask me to explain my situation instead of transferring, staring the whole process all over again. Very frustrating.

    SoFi’s internal communication is non-existent. I referenced their internal support ticket numbers, but many reps “couldn’t pull up that system” to read my notes.

    I had to call SoFi’s loan provider Mohela directly in order to get any kind of decent customer service and results. Mohela was able to temporarily suspend my duplicate payments until SoFi reversed the funds. What’s the point of using SoFi if they just punt you to Mohela anyway?

    I’d rather get a refinance loan through the DMV. Stay away from SoFi.

  • Jay Holden April 14, 2016, 11:56 am

    Gotta say I was completely flummoxed by my recent SoFi mortgage quote.

    Competitors want to charge me 3.25% for a mortgage. SoFi wants to charge me 5.13%.

    10% down. My debt-to-income is 25% (not as good as a lot of mustachians, but not terrible). Credit score in the upper 700s.

    Buyer beware and all that.

    • Nic April 14, 2016, 12:08 pm

      Yeah I had the same thing, 10% down 800 credit score the quoted 5.25% although ofcourse it was when rates of competitors were near 3.875-4%

      The one note is they don’t have PMI for us below 20% DP (or essentially the PMI is just built into the higher interest rate) So you have to factor that it. It could work out in some situations. So be sure to calculate in the PMI you would have to pay otherwise, it would make the interest rates much closer. For your example it certainly wouldn’t work out with 3.25%+PMI < 5.13%

      So did I go with SOFI? No. It was too high in my situation, I ended up getting one for 3.875 with PMI, but it worked out to less. Also I can get rid of PMI after I work up the equity, where I can't change the rate unless I refinance.

      The one place they could work out is in a extremely competitive markets to compete with cash buyers because they get you through underwriting ahead of time so you can drop contingencies. Which is they only way to compete in hot markets. They are definitely a niche mortgage company.

      • Jay Holden April 14, 2016, 12:41 pm

        Well *technically* you’re right. But for the math to work out in SoFi’s favor at my price range it would need to take me

        *does calculatoring*

        1,599.5 months to pay off the 10% difference between my 10% down and the 20% PMI threshold.


  • Oregon Ashley May 12, 2016, 8:58 am

    I just refinanced with SoFi, shifting from 7.5% and 6.5% to a consolidated loan at 5.990%. I have $31,000 in loans from graduate school to finish plowing through. This should save me over $3000 in interest, not including the extra payments I hurl at them on every occasion available. I can’t say enough good things about their customer service. I have called with lengthy lists of questions on two separate instances and the person greeting me on the other end of the line was cordial, well-informed, patient, and helpful.

    I am in public service and would have qualified for the 10 year write off, but that isn’t cool with me. I am pushing to say goodbye to the debt by payment year 7, which should be in summer of 2018. I am ready to say goodbye to the unfortunate debt monkey and move on to cooler things like investing and road tripping!

  • Ramsay May 27, 2016, 12:30 pm

    Mr. Money Mustache, now that it’s been about a year I wonder if you’ve come to consider any of the other options out there to be better than SoFi — for example, Earnest. I do indeed have student loans & refinanced them with Earnest, and my experience has been much better than that of friends who used SoFi — primarily because SoFi buys your loans and then sells them to some other loan servicer like Mohela or Costep (and then you have to do all your customer support through them), while Earnest does everything in-house. Their customer support is amazing (they’ll text you to help you find stuff on your current loan-servicer’s website!) and they gave me a $15 amazon gift card for pointing out a tiny error in their UI. I can’t recommend them highly enough, and given how much you value a good customer experience from a company with friendly & smart people running it, I thought it might be up your alley, too!

  • Imelda July 16, 2016, 12:12 pm

    Has anyone heard of college ave loans. I was approved to refinace my student loans but can they be trusted?

  • Lauren August 25, 2016, 12:27 pm

    Wow, it’s awful how high some folks’ student loan interest rates are! I went to the site to see if refinancing would save me any money, but my rate is currently 4.25% and all the SoFi offerings were higher.

  • Sebastian September 26, 2016, 3:48 pm

    I am wondering if anyone has thoughts on the benefit of refinancing with companies like Sofi vs. keep the loans with federal providers and having the $2500 yearly interest tax deduction?

    • Mr. Money Mustache September 27, 2016, 12:35 pm

      Hi Sebastian,

      I’m not 100% sure about this, but you could check with SoFi or any tax person: I think a refinanced student loan is just as tax-deductible as a federal one. Anyone else have experience or thoughts on this?

      • matt September 27, 2016, 7:37 pm

        MMM is right, you can deduct up to $2500 (depending on your income) from private loans (like SoFi) . What you really need to look at though if you transition from federal to private is the loss of eligibility for things like income-based repayment and public service loan forgiveness. Those are only available on federal loans. Additionally, certain employers provide student loan repayment as part of a compensation plan, but sometimes only for federal. It’s a big decision that goes beyond interest rates. FWIW, I personally had a mix of private and federal topping $100k that I consolidated into one big private loan at 3% interest in 2004. Knowing what I know now, I wish I kept it all federal as I work in public service now. Happy ending though – 18 months ago I refinanced with SoFi the last 45k of it and I managed to pay that off nine months later.

    • Philip September 27, 2016, 3:46 pm

      Hi Sebastian,
      I’m a CPA – student loan interest is deductible with companies like Sofi too. Find the lowest rate you can.

  • Stacey September 29, 2016, 8:11 pm

    I have been in the throes of SoFi’s mortgage approval process for a month. It’s been slow and painful. My emails often go unanswered for a few days, and promises of follow-up by phone go unfulfilled. It feels to me like the person at SoFi handling my situation does the minimum to move things forward and does not really take ownership of the process. I called to complain about this and ask for a new person, but that did not do the trick. It’s been frustrating. I wish I had better things to say, but I would not recommend SoFi based on my experience.

  • Krislyn October 31, 2016, 3:35 pm

    I found this article because I want to refinance my house mortgage.
    When I tried to refinance with SoFi I was shocked to be denied. I haven’t been denied for any loans in a very long time. Usually I’m tossing the ads in the recycling. I have an excellent credit score and debt to income ratio. When I called to get more details then the denial letter could give me the customer service agent basically just red the letter to me.
    I’m thinking SoFi might have become a little too automated. Too bad they had a nice rate. I’m disappointed.

  • BR November 7, 2016, 9:31 am

    My lowest possible interest rate quoted was higher than my current average rate! I have excellent credit and have never been late on a credit card or loan payment. I have a stable job with decent pay and only 15k left in loans. What a disappointment, I really wish there was a way for me to stop throwing money at interest. :(

  • Kadie January 27, 2017, 10:55 pm

    Question, if anyone knows from experience–when you refinance with SoFi, are you able to continue to use your interest payments as tax deductions each year?

  • Angela April 25, 2017, 8:40 pm

    Since I’m dealing with a crazy interest rate with Navient I tried a refinance with SoFi. I have a good job and decent credit score. Despite improving my credit score a hundred points since becoming a MMM fan by getting rid of old delinquencies, and buying my own home thanks to MMM over 5 months ago, I was not approved since those delinquencies fell within 24 months. Just posting this for other people wondering what kind of requirements they have, or wondering why they were rejected. I guess I’m stuck with the bad rate with a student loan company that is currently in the news for ripping off its borrowers because of my naughty pre-mustache behavior (I even bike everywhere now) and for being too poor to pay my bills when I was a teacher. I wish they would take into consideration dramatically improved finance behavior.

    • Mr. Money Mustache April 29, 2017, 11:33 am

      Yeah, hang in there Angela. 24 months is still very recent in the credit world. Heck, I’d be hesitant to lend anyone money who had EVER had a delinquency in their life, or even run their net worth down below $1000 after age 16. :-)

  • Benchwarmer00 July 2, 2017, 6:47 pm

    What would you do in our situation? My wife has about $95k in student loan debt. Average interest rate is 5.8%… but 20k of it is very low 2% rate that I don’t mind delaying paying down. It’s the high 45k in debt that is 6.8% interest that I want to pay off fast. We make combined $200k a year since she graduated and got s good job. We bought a fixer upper house in 2011 in Los Angeles are and it’s up about $300k in equity. Since we can’t write off student loan interest at our income but can write off home equity… would it make sense to take out say a $50k home equity loan and pay off the student loans. With our excellent credit we could a 4-5% fixed rate and be able to write off 45% of the money come tax time in high tax CA. It would be a higher monthly payment… because we are currently on a 25 year $700 a month payment plan that is hardly taking a dent out of the debt and we aren’t able to write off any interest. Only perks we lose are loan forgiveness, which probably wouldn’t qualify for, and other help in case of job loss since the government loans seem flexible when you fall on tough times. With a probable recession headed our way in the next few years it might come in handy.

  • Matt September 13, 2017, 1:38 pm

    Article that paints SoFi in a bad light, not sure I’d want my name associated with this firm MMM


  • Kristen September 13, 2017, 3:15 pm

    I applied. They offered me a rate greater than my current rate. Oh well. Can’t win them all.

  • G N February 6, 2018, 1:34 pm

    Does SOFI only work for private loans? I have federal loans with a 6% rate

  • Annie Dombowsky May 9, 2018, 1:05 pm

    Is there a Canadian version of SoFi?

  • Christina May 14, 2018, 10:11 am

    Sofi is a great option if you do not intend to pay off your loan early. I just applied for a refinance and was approved, but when I read the contract before signing, I noticed that there would be no credit of the “finance charge” if I paid off my loan early. It looks like Sofi calculates the amount of interest you will pay over the life of the loan and considers that the “finance charge” that must be paid no matter when the balance is paid off. I contacted the company and they confirmed that if I pay off my loan early, I am still responsible for paying the full amount of interest I would have paid if I had made payments for five years. The low interest rates may still be a great deal for those who do not intend to pay off their loans in less than five years. For me, it did not make sense.


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