Refinancing student loans used to be something of a fantasy. Yes, it could be done, but it was hard to find lenders willing to do it and, if you did, the rates may not have saved you much money anyway.
That’s changing thanks to companies like SoFi, which sees a win-win in graduates’ increasing student loan debts.
Today, young adults carry around more than $26,000 in student loan debt on average, according to The Project on Student Debt. It’s an albatross for young adults trying to establish themselves financially.
Dan Macklin (pictured), the co-founder of SoFi, wondered much the same while finishing up at the Stanford Graduate School of Business. It was 2011, and over drinks with a few of his classmates, the group talked about the state of the student loan realm—a state of emergency, if you prefer.
“We were horrified by the high rates people were patting for student loans, and 93 percent of loans are made by the government, so there is very little choice for students out there,” Macklin says. “It’s an underserved market and we wanted to bring a new solution, something that was completely fresh.”
And so Macklin set to work immediately. He graduated Stanford on a Saturday and started SoFi the following Monday.
SoFi, short for Social Finance, began by getting alumni from certain top universities to fund student loan refinancing for graduates of their school. In just a few years, SoFi has grown to be the largest provider of student loan refinancing in the United States.
Are you eligible to refinance student loans with SoFi?
To be eligible to refinance your student loan with SoFi, you must:
- Be a U.S. citizen of legal age
- Be employed or have an offer of employment to start in the next 90 days
- Have graduated from an eligible Title IV accredited university or graduate program
- If you are refinancing law school loans, you must have passed the bar and be a licensed attorney
- Have at least $10,000 in student loans to refinance (federal or private)
SoFi provides student loan refinancing to 48 states and Washington. D.C. At this time, SoFi does not provide loans to residents of Nevada or Idaho.
If you meet the above criteria, you can apply to refinance your loan with SoFi. To be approved, you must have a good job and proof of reliably meeting your monthly financial obligations. Note that SoFi does not, however, use FICO scores in underwriting its loans.
Student loan refinancing rates
As for SoFi’s refinancing loan rates, they’re likely to beat anything you currently — even through the federal government.
If you sign up for a fixed rate loan with AutoPay deductions, you’ll be starting as low as 3.5 percent APR. For variable rate loans, the starting rate with AutoPay is 2.13 percent APR. Below is a chart detailing all of SoFi’s student loan refinancing rates.
Important! Variable rates in the below graphic are outdated and are currently approximately 0.2 percent higher.
How to apply for student loan refinancing
SoFi’s application process is all online and quite easy. Assuming you have all of your information at the ready, they say you can get approved in as little as 15 minutes. (Of course, some approvals will take longer depending on your situation).