SoFi Personal Loan Review 2021: Competitive Rates and No Fees, But Only If You’re Employed With Good Credit - NextAdvisor

SoFi Personal Loan Review 2021: Competitive Rates and No Fees, But Only If You’re Employed With Good Credit - NextAdvisor


SoFi Personal Loan Review 2021: Competitive Rates and No Fees, But Only If You’re Employed With Good Credit - NextAdvisor

Posted: 08 Jun 2021 07:40 AM PDT

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Whether you want to consolidate debt, finance a big purchase, or need to deal with an unexpected expense, sometimes you need quick access to a large sum of money. If that's the case, a personal loan can help — but only if you use it responsibly and pick your lender wisely. 

If you're in the market for a personal loan, SoFi is a popular personal loan lending company that offers loans with competitive interest rates and no fees, as well as perks like an "unemployment protection" program. The catch? You need to have good credit and stable employment to qualify for a loan from SoFi. 

In addition to personal loans, SoFi offers various financial products, including private student loans, student loan refinancing, home loans, auto loan refinancing, banking and investing services, and a credit card. It also offers a mobile app for a convenient, digital experience across all their products. 

What to Know Before Getting a Personal Loan

Personal loans can be a quick way to access cash when you need it, but it's important to use them wisely. Before taking out a personal loan, you should consider whether it's really necessary and come up with a plan to pay it off. Always do your research and comparison shop with multiple lenders to find the best interest rate. 

Be aware that the exact rate you get may differ from the advertised rates since rates depend on your credit score, income, and loan value and terms. Some lenders will let you pre-qualify for a loan or check your rate with only a soft credit inquiry, which won't affect your credit score. Other lenders may require a hard credit inquiry, which could lower your credit score by a few points. When you officially apply for a loan, all lenders will require a hard credit inquiry. In addition to the interest rate, check if the lender charges any fees — such as origination fees, prepayment penalties, or late fees — that might raise the cost of the loan. 

Once you've taken out a loan, be sure to make payments on time to avoid any additional fees or interest charges. Late payments can also damage your credit score.

Finally, know the difference between a secured loan, which uses an asset such as a house or car as collateral, and an unsecured loan, which requires no collateral. Secured loans may offer lower interest rates, but they're riskier for the borrower since you can lose your collateral if you default on the loan. 

Alternatives to Personal Loans

Although a personal loan is a viable strategy to pay for big expenses, it's not the only option. Some alternatives to personal loans include:

  • A home equity loan, home equity line of credit (HELOC), or a cash-out refinance. These three options are similar since they allow homeowners to tap into home equity for cash upfront. Because these financing methods are secured by your house, you may be able to get better rates than an unsecured personal loan. But each one has its unique pros and cons as well. 
  • A balance transfer credit card. Certain credit cards have introductory offers of 0%-APR for a set amount of time, usually 15-18 months. If you're seeking to consolidate debt, one strategy is to transfer your debts onto one such card, pay off the balance before the introductory period ends, and pay no interest on the balance. If you use a balance transfer credit card, it's especially important you have a plan to pay off the balance before the end of the introductory period; otherwise, you'll be on the hook for high credit card APRs. Also, be aware that credit cards with balance transfer offers are typically only available to those with good credit. 
  • Personal savings. If your money needs aren't urgent, consider saving in advance for a big purchase and paying with cash rather than taking out a loan. Having an emergency fund in place can also help you in the event of unexpected expenses. Experts recommend having three to six months' worth of expenses in an emergency fund. You can take these steps to start building yours now
  • Credit counseling. If you're struggling with debt or need help managing your finances, many non-profit organizations offer free or low-cost credit counseling to get you back on track. While credit counseling services won't provide you with money directly, they can provide expert financial advice and direct you to other resources that may be able to help. 

Pros and Cons of SoFi

Pros

  • SoFi charges no origination fees, prepayment penalties, or late fees (but missed payments will continue to accrue interest)

  • Offers an unemployment protection program, which will put your loans into forbearance and provide you with job search resources if you lose employment

  • Can check your rate without a hard credit inquiry

  • 0.25% AutoPay discount available. Potential member rate discount available if you have multiple SoFi financial products

  • Can add a co-borrower

  • Offers a mobile app for convenience

  • Can change the monthly payment due date

Cons

  • Not available to residents of Mississippi

  • Must be employed, have an offer of employment beginning within  90 days, or have sufficient income from another source to qualify for a loan

  • Must have a credit score of 680 or higher to qualify for a loan

  • Minimum loan amount is $5,000 (may be higher in certain states)

  • Does not offer same-day funding; applications typically take between 2-15 days to process, and funds are generally available within a few business days

SoFi Compared to Other Lenders

SoFi LightStream Marcus by Goldman Sachs
Current APR 5.99% to 18.85% 5.95% to 19.99% 6.99% to 19.99%
Loan Term Range 2 to 7 years 2 to 7 years 3 to 6 years
Loan Amount $5,000 to $100,000 $5,000 to $100,000 $3,500 to $40,000
Credit Score Needed 680 Not specified Not specified
Prepayment Penalty None None None
Origination Fee None None None
Unsecured or Secured Debt Unsecured Unsecured Unsecured

The above rates and loan information is accurate as of June 4, 2021. The NextAdvisor editorial team updates this information regularly, though it is possible APRs and other information has changed since it was last updated. Also, some loan offerings may be specific to where you live.

How to Qualify for a SoFi Loan

To qualify for a personal loan, you need to be a U.S. citizen, permanent resident, or visa holder,  age 18 or older. SoFi loans are not available to residents of Mississippi.

You'll also need a credit score of at least 680 (which is considered by Experian to be in the "good" range) to qualify for a loan. Keep in mind that even if you meet the minimum score requirements, having a lower score will likely mean getting interest rates on the higher end of SoFi's range. 

Aside from credit score requirements, SoFi also requires you to be currently employed, have an offer of employment that starts within 90 days, or have an alternate source of sufficient income. There's no minimum income requirement specified, although monthly income and expenses will be considered when evaluating your loan application. Other factors that SoFi may look at when determining your loan eligibility include your financial history and professional experience. 

If your credit history is less-than-stellar, SoFi allows a co-borrower (which is different from a cosigner) to a loan, which could increase your chances of qualifying for a loan or getting a better rate if your co-borrower has better credit than you. However, adding a co-borrower to a loan has its own risks and should only be done after careful consideration of the pros and cons. 

If you have one or more existing SoFi personal loans and want to take out another one, you'll need to have made at least three on-time payments on your existing loans in order to qualify for a new one. Michigan residents may only have one SoFi loan at any given time.

Who Should Get a SoFi Loan

SoFi personal loans can be used for:

  • Personal, family, and household purposes 

They can't be used for:

Some common reasons for taking out a personal loan include:

  • Financing large expenses (such as an expensive purchase or home improvements)
  • Consolidating debt
  • Paying for unexpected expenses (such as medical bills or repairs to your home or car)

Because of SoFi's relatively strict credit score and income requirements, SoFi loans are best for those who already have a solid credit history, stable income, and can wait a few days for their loans to be funded. SoFi loans are probably not the best source of emergency funds. For example, if you've recently lost your source of income, you may be better off finding a lender with looser income requirements and same-day funding. 

If you have an existing SoFi loan or use SoFi's investment or banking platforms, using SoFi again will provide you the convenience of your finances all in one place. You may also be eligible for a member rate discount. However, be sure to compare rates and fees from multiple lenders to make sure you're actually getting the best deal. 

How to Apply for a SoFi Loan

1. Figure out your desired loan amount and terms

Before you take out a loan, decide how much you want to borrow and the timeframe you would like to pay it back. With the same loan amount, a longer loan term will mean smaller monthly payments, but you'll pay more in interest over the life of the loan. Different lenders may have different options for loan amounts and loan terms. SoFi offers loan amounts ranging from $5,000 to $100,000 and loan terms ranging from 2 to 7 years. 

2. Check your rate online

You can check your rate by filling out an online form on SoFi's website. Since this isn't a formal application, it doesn't require a hard credit inquiry and won't affect your credit score. We recommend shopping around and getting quotes from multiple lenders to find the best rate.

Pro Tip

SoFi offers a 0.25% rate discount if you enroll in AutoPay, which will automatically withdraw money from your bank account to pay your bill each month.

3. Submit your application

After you check your rate, you'll need to fill out a formal application. Most lenders will require you to provide documentation like a photo ID, proof of address, and proof of income. This is also the stage where lenders will perform a hard credit check, which may lower your credit score a few points. If you would like to add a co-borrower to your application, you may do so at this stage. 

4. Wait for your loan to be approved, signed, and funded

The average processing time for SoFi personal loan applications is 2-4 days. If you're self-employed or have other forms of complex income, or you have a co-borrower on your application, the process may take longer, up to 15 days. After your application is approved and the final documents signed, you'll typically receive your funds within a few business days. 

SoFi FAQs

Is SoFi good for personal loans?

SoFi offers personal loans with competitive interest rates, no fees, and membership perks like an unemployment protection program and member discounts. SoFi offers more benefits than many other lenders, but it comes with a catch — you need a credit score of at least 680, as well as stable employment, to qualify for a loan. But for those that do meet the qualifications, SoFi is a good lender to consider.

What credit score do you need for a SoFi loan?

You need a minimum credit score of 680 to qualify for a SoFi loan. Keep in mind that you'll need a higher credit score than the minimum to qualify for the best rates.

Can I get a SoFi personal loan with bad credit?

SoFi requires a minimum credit score of 680, which is in the "good" range as defined by Experian. If you have a "fair" (580-669) or "poor" (300-579) credit score, you may be better off with one of the lenders on our personal loans for bad credit list.

Does a SoFi loan hurt your credit?

Applying for any loan requires a hard credit inquiry, which can stay on your credit report for one to two years and may lower your credit score by a few points. Once you've taken out a loan, any missed or late payments will damage your credit score significantly, so make sure to pay on time and in full.

FHA Home Loan: Requirements and Rates - Chase News & Stories

Posted: 12 May 2021 12:22 AM PDT

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How to protect your credit from fraud - FOX 10 News Phoenix

Posted: 08 Jun 2021 11:52 AM PDT

Consumers can avoid public WiFi and not click on suspicious links to avoid fraud. (iStock)

Cybercriminals are always one step ahead of consumers and the rampant credit fraud they commit can impact your credit report for years, damaging your credit score and increasing the interest rate you receive for loans.

Consumers who have lower credit receive higher interest rates for auto, student and personal loans and even mortgages because they are a higher risk to lenders.

If you suspect credit fraud and want to view your credit history, view your credit score at Credible without negatively impacting it.

THIS IS HOW CREDIT MONITORING CAN HELP YOU BOOST YOUR CREDIT SCORE

Protecting your credit score from identity theft is important since this type of organized crime is often sneaky and the behavior can go undetected for several months.

Identify and credit card fraud is very common and is built into the business model of most financial institutions, said Michael Isbitski, technical evangelist at Salt Security, an API security provider.

"If a fraudster attempts or succeeds in compromising identity or credit card information, don't fault yourself or get overwhelmed with guilt," he said. "At some point, every citizen and customer is targeted. Fraudsters are pervasive, persistent, cunning and often well-funded. They will use a large variety of attack methods to obtain and use the information for financial gain."

There are several ways consumers can protect their credit and credit card information from the dangers of fraud and identity theft.

WHY IS IT IMPORTANT TO HAVE GOOD CREDIT?

1. Avoid those robocalls from "credit card services" since they are all scams – hang up and ignore.

"You should never volunteer personal information or account data to a phone agent who calls you out of the blue," said Hitesh Sheth, CEO at Vectra, a provider of technology that applies artificial intelligence to detect and hunt for cyber attackers.

2.  Change your passwords regularly and don't use the same password for multiple financial accounts, Sheth said.

3. Learn to recognize the fake phishing emails from banks, credit card companies or even credit scoring agencies. They are not hard to spot after a while - look for bad grammar and typos or hyperlinks that reveal weird, or unknown URLs when you mouse over the link, Sheth said.

"Coach the elderly in your circle to be skeptical of robocalls, cold calls and unexpected email attachments," he said.

4. Read your monthly credit card statements.

"It's amazing how many people don't," Sheth said. "Flag purchases you don't recognize. Most banks make it easy nowadays to dispute a sketchy charge to your card."

5. Get a copy of your credit history annually, which is provided to you for free through the three credit bureaus: TransUnion, Experian and Equifax. Consistent credit monitoring could help you catch fraud and errors in a more timely manner.

"You may even find that some legitimately reported information is inaccurate and must be amended," Isbitski said.

You can improve your credit score through Credible's partner product Experian Boost by choosing and verifying a positive payment history that you want to add to your credit file.

6. Sign up for text and email fraud alerts for each bank and credit card account so you are notified as new charges are made. Ideally, set thresholds, so you don't create alert fatigue for yourself, he said.

"Fraudsters will often test the waters with small transactions of roughly $1 to see if stolen card information is valid and whether the bank's fraud prevention systems catch it," Isbitski said.

HOW OFTEN DOES YOUR CREDIT SCORE CHANGE?

7. Enroll in multi-factor authentication at each bank and credit card company. This can be email or texts.

"These mechanisms provide some account login protection, making it more difficult for fraudsters to access or modify your bank information online," Isbitski said.

Make sure passwords are not your only security control, said Joseph Carson, chief security scientist at Thycotic, a provider of privileged access management solutions.

"One way criminals steal your identity is by taking over your accounts," Carson said. "Do not make it easy for them. Use strong access controls to protect your most important accounts using a password manager and multi-factor authentication."

8. Limit the number of cards used online to a single card – if there is a fraud issue, there is only one card to replace, said Brandon Hoffman, chief information security officer at Netenrich, a provider of IT, cloud and cybersecurity operations and services. The damage is reduced significantly, Carson said.

"Being a victim of card fraud is generally not a big deal thanks to many of the protection laws and processes implemented by card issuers and processors," he said. "However, identity fraud can quickly become a nightmare that can entangle a person for years to come."

Consumers can get credit for phone, utility and streaming bills they've been paying all along via Credible's partner Experian.

Credit card fraud occurs often and nearly everyone becomes a victim at some point. Don't be afraid to ask for tips and help from friends and experts, Carson said.

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.

The Future Of Payments: Fintech 50 2021 - Forbes

Posted: 08 Jun 2021 03:00 AM PDT

Before Covid, payments companies were some of fintech's fastest-growing. As the pandemic caused online transactions to spike, these startups went on an unprecedented tear. Stripe and Plaid nearly tripled their valuations in a year, reaching $95 and $13.4 billion, respectively. Marqeta is preparing to go public at a valuation rumored to be north of $10 billion, up from $4 billion a year ago.

Ten payments companies made the Fintech 50 this year. They range from fraud-fighting startups to a business that lets companies offer digital wallets to Latin American consumers to one that tries to make transferred bank funds available in one day, instead of five.

Here are the payments companies that made the Fintech 50 in 2021: 

Arcus

Headquarters: New York City

Banks, fintech startups and retailers use Arcus' software to offer digital wallets and online payments to their end customers in Latin America. Walmart's digital banking app Cashi allows users in Mexico to deposit cash into a digital account and pay utility bills thanks to Arcus. 

Funding: $19 million from SoftBank, Citi Ventures, the Winklevoss twins and others

Latest valuation: $75 million

Bona fides: 85 clients including BBVA and fast-growing Mexican food delivery startup Rappi

Cofounders & Co-CEOs: Edrizio De La Cruz, 40, who was an airplane mechanic at JFK airport before going back to college; Iñigo Rumayor, 30, who cofounded Arcus while still an undergraduate at the University of Pennsylvania

Bolt

Headquarters: San Francisco

Its checkout software covers everything from fraud prevention and loyalty programs to integration with buy-now, pay-later financing. Its 5.5 million registered users can buy items from Bolt clients in one click. During 2020, Covid pushed its business to grow by more than 100%, processing $1 billion-plus in ecommerce transactions. 

Funding: $215 million from Westcap, General Atlantic and Activant Capital

Latest valuation: $850 million, according to PitchBook

Bona fides: Recently became the checkout provider for Authentic Brands, which includes retailers Forever 21, Barney's and Brooks Brothers

Cofounder and CEO: Ryan Breslow, 27, who dropped out of Stanford's computer science program in 2014 to start Bolt

Finix

Headquarters: San Francisco

Gives companies more control over their credit and debit card processing, letting them keep a bigger share of the fees that merchants pay, sometimes resulting in 0.4% more on each transaction. In 2020, while ecommerce surged, Finix's business grew 300%. For every new funding round Finix raises, it has also committed to setting aside 10% of the newly issued equity for investors of color. 

Funding: $102 million from Bain Capital Ventures, Inspired Capital, Lightspeed Venture Partners and others

Latest valuation: $450 million

Bona fides: Processed nearly $5 billion in transactions in 2020

Cofounders: CEO Richie Serna, 33, a former Booz & Company consultant and Sean Donovan, 38, who previously spent 14 years at large payment processor Vantiv (now WorldPay)

Forter

Headquarters: New York City

Uses machine learning to help retailers and banks decide if a credit card transaction, rewards-points redemption or item return is fraudulent. When Covid hit the U.S. and consumers started behaving differently—for example, by having online orders shipped to stores for curbside pickup—Forter had to quickly retrain its models so it didn't reject too many transactions. It nearly doubled revenue during 2020, reaching $10 million a month. 

Funding: $525 million from Sequoia Capital, Bessemer Venture Partners and Salesforce Ventures

Latest valuation: $3 billion

Bona fides: 250 customers, including Nordstrom, Instacart and Priceline; processing over $250 billion in transactions a year

Cofounders: CEO Michael Reitblat, 39; president Liron Damri, 38; and chief analyst Alon Shemesh, 43. All three worked for an Israeli anti-fraud company acquired by PayPal.

Marqeta

Headquarters: Oakland, California

Processes debit card transactions, giving companies that issue cards to employees and customers more control over whether transactions are approved. Instacart uses Marqeta to limit what items its food delivery people can buy, reducing fraud. Thanks to Covid, Marqeta's on-demand-delivery clients were processing three times as many transactions at the end of 2020 as a year earlier, while its buy-now, pay-later clients had increased transactions fourfold.

Funding: $528 million from Granite Ventures, Iconiq, 83North and others

Latest valuation: $4.3 billion, with an IPO planned this year

Bona fides: Large stable of fast-growing customers, including DoorDash, Fintech 50 member Klarna and Square's Cash App

Founder and CEO: Jason Gardner, 51, who started a rent payments company in 2004 that was acquired by MoneyGram for $28 million

Orum

Headquarters: New York City

In the U.S., employee paychecks, bank transfers and bill payments still take up to five days to settle. Orum aims to speed that up to one day by using machine learning to assess the risk of a transaction, allowing fintechs and banks to advance money to customers more quickly for transactions deemed safe. 

Funding: $29 million from Bain Capital Ventures, Homebrew, Inspired Capital and others

Bona fides: Analyzed $150 million in transactions in the first quarter of 2021 for 15 customers, including digital bank SoFi and First Horizon Bank

Founder and CEO: Stephany Kirkpatrick, 40, a certified financial planner who was previously general manager at financial planning software company LearnVest

Plaid

Headquarters: San Francisco

Helps fintech apps like Robinhood, Coinbase and Venmo connect to customers' bank accounts, enabling consumers to make deposits and payments. In early 2021, Plaid launched new features letting consumers easily switch their direct-deposit bank and allowing lenders to quickly verify borrowers' income and assess risk.

Funding: $745 million from Kleiner Perkins, Andreessen Horowitz, NEA and others

Latest valuation: $13.4 billion, up from $5.3 billion 15 months prior

Bona fides: More than 4,500 customers, including the largest names in fintech, up from 2,600 a year ago

Cofounders: CEO Zach Perret, 31, and former CTO William Hockey, 33. They met as junior Bain consultants before founding Plaid in 2012.

Socure

Headquarters: New York City

Uses artificial intelligence to help financial services companies signing up new customers online to verify identities and prevent fraud. Analyzes data including an applicant's email, IP address and device type to predict how likely someone is to be who they say they are.

Funding: $196 million from Accel, Commerce Ventures, Scale Ventures and others

Latest valuation: $1.3 billion

Bona fides: More than 400 customers, including three of the top five U.S. banks and seven of the top 10 credit and debit card issuers, plus digital banks Chime and Varo 

Cofounder and CEO: Johnny Ayers, 35, a Boston College grad who started a recruiting company before Socure

Stripe

Headquarters: San Francisco

Its software lets companies ranging from tiny upstarts to Amazon and Zoom accept online payments in more than 100 countries. In 2020's Covid economy, its business grew more than 50%, estimates MoffettNathanson. Recently announced new banking-as-a-service features, where Stripe customers can let their own users hold money, make payments and earn interest.

Funding: $2.2 billion from Sequoia, Andreessen Horowitz, Tiger Global and others

Latest valuation: $95 billion, up from $35 billion a year prior

Bona fides: Estimated 2020 revenue of more than $1 billion 

Cofounders: CEO Patrick Collison, 32, and president John Collison, 30, Irish-born brothers

Wise (formerly TransferWise)

Headquarters: London

Does online international money transfers for consumers at a 0.7% average fee, compared with 3-4% from U.S. banks, by matching currency orders within a country. While Western Union's brick-and-mortar-heavy business shrank in 2020 due to Covid, Wise's revenue grew 70%, hitting $420 million. Its debit card can be used to hold funds, transfer money and make purchases in 55 different currencies.

Funding: $542 million (according to PitchBook) from Sir Richard Branson, IVP, Andreessen Horowitz and others

Latest valuation: $5 billion

Bona fides: 10 million customers, up from seven million in early 2020

Cofounders: CEO Kristo Käärmann, 41, and chairman Taavet Hinrikus, 40, both originally from Estonia

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