Experience with SoFi (customer or investor?)

[PencilThinMustache]

I've seen some recent posts about SoFi (https://www.sofi.com/) but would love to hear more from someone who has used them or thought about using them and decided not to proceed. 

Does anyone think it is a stupid idea to refi federal loans, even if they are massive (>100k) and at obscene rates (6.8%)?  Possible reason being that feds can offer some types of forgiveness and hardship deferments, etc. 

Also any sense in taking the "risk" of refinancing if I plan to pay it off within 2-3 years?

[Spec7re]

I'm in the same boat, but with $46k at 6.375%.  Just payed off my CC debt and I'm waiting for that to be reflected on my CC report before I attempt to refinance.  I plan to pay the debt off in 2-3 years while simultaneously maxing retirement options.  It seem like the interest saving will be easily over $1000/yr.

[randymarsh]

I think for federal loans it probably doesn't make much sense. The rates appear to be around the same (~6%) unless you go variable which IMO is risky unless you know you can pay it off within a short amount of time. I think the max is around 9% so I guess if you know what you're doing, the risk might be worth it. Then as you said, you give up income based repayment options, 25 year repayment option, forgiveness, etc.

For private student loans with high rates (I've heard of rates as high as 13%), I think it's likely to make a lot more sense.

[PencilThinMustache]

I just logged in and did the perfunctory qualification and they gave me interest rates of 3.99% for 5 year term fixed (3.03% for variable) and around 5% for 10 yr fixed.

I agree that a variable SL sounds like a bad idea, but 3.99 fixed is pretty good and 5 yr timeline would force me to pay it off quickly (which I want to do over 3 years anyways)

By my math, If I paid off my 85k at 6.8% over 3 yrs it would be ~94k total.  If I consolidated and paid same principle over 3 yrs at 3.99% it would be 90k.  Total savings of 4k. 

2 additional thoughts: Are "private" SL's like SoFi forgiven in the event of death?  Would interest paid still be tax deductible (if you qualify)?

[ingrownstudentloans]

I did refinance with SoFi.  They gave me 3.2% variable 10 year (with direct deposit deduction it was 2.92%, but recently dropped to 2.91%!!!!)  I am paying off aggressively, and refinanced just over $70,000 from the federal 6.8% rate.  I figured I could knock a chunk out before the rates went up, and I would have close to 4% to work with before I was even paying the same rate again.  Plus they are capped at 8.6% or something like that, so I wasn't gambling with too much...especially if rates stay low (thanks Fed for keeping artificially low rates for the time being - this is the only time that I will ever thank the Fed, for anything...) 

If i recall correctly, the loans are forgiven upon death (though probably after settling with the estate to the extent any assets are left). 

The interest is tax deductible if you qualify, unfortunately I do not.

When i first signed up they offered me some higher rates, but after a few phone calls and some negotiating with supervisors, I was able to get them to lower their rates significantly (this was about 6 months ago now).  It never hurts to ask.

If anyone wants more info I would be more than happy to give more details, let me know.  So far I have been pleased with my SoFi experience.  They also have a referral program where you get money if someone joins (and the new customer gets money too, like $100 for each...free money).  This is my referral link, if anyone is interested http://friends.sofi.com/HGpn

[Spec7re]

For you guys qualifying for the 3% variable rate, are you 0 debt outside of school loans.  Right now they offer me 3.78/4.74 var/fixed for the 5 year, but I currently have a credit score of 764 and $7000 on a credit card.  I've payed $5000 of that off, but it won't appear on my credit until 6/5.  Trying to figure out if I should wait until I have 0 credit card debt and reapply.

[PencilThinMustache]

For you guys qualifying for the 3% variable rate, are you 0 debt outside of school loans.  Right now they offer me 3.78/4.74 var/fixed for the 5 year, but I currently have a credit score of 764 and $7000 on a credit card.  I've payed $5000 of that off, but it won't appear on my credit until 6/5.  Trying to figure out if I should wait until I have 0 credit card debt and reapply.

well I don't have consumer debt (unless you count whatever is revolving on my CC that I use for all month expenses and pay off monthly, but I don't think that is factored in) and my credit score is very similar to yours. 

I think the different rate is based on the schools we went to.  I have read a bit about the company and it sounds like SoFi is set up like a peer to peer lending club, where the capital to pay off your loan (and the assumed risk) is taken by a group of alumni from your school who act as investors in your debt.  My guess is the reason for the marginally different interest rates we are being offered has to do with the folks doing the lending wanting different rates of return.

[ingrownstudentloans]

I applied with $0 consumer debt and close to $200k in mortgage debt, credit score was slightly higher than yours. 

I am not sure about how they figure out the rates and if, as PencilThinMustache said, they take into consideration where you went to school...

It might be worth reapplying.  Good luck!

[mrfilthyrich]

I feel like I got screwed when I refinanced with Sofi, but it was still better than not refinancing with them at all.  I had about 83k at 7.55% that I refinanced with them down to 6.125%.  I was seeking a variable rate, but I was only approved for a fixed rate.  I'm working on getting that debt down to 60k or so and then will try to refinance with them again at the start of next year. I guess I should have tried to negotiate with them for a lower rate, but I was just happy I was getting something better than my 7.55%.  I have a credit score over 800 so not sure why I wasn't approved for a lower rate or variable at all.  I found the customer service response to be lacking at times with them, but once my debt was transferred to TruStudent I have not had to deal with them at all so well worth the minor headaches.

[Ryan_8099]

I'll just throw out there that you can get $100 off your loan if you use a referral code.  Happy to share mine as I'm an affiliate, but thought that might be frowned upon.  I'm also going to be featuring them on my blog as I'm a huge proponent of saving/refinancing student loans.  Enjoyed reading the first hand experiences here.