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SoFi is a US internet personal finance company and internet bank. It got created in 2011 and is located in San Francisco. Presently, over 1500 employees and 10 offices within America exist currently.
The Company’s objective is to help its members get their money right. Through it, customers can gain financial independence to achieve their ambitions. Financial independence does not imply richness. Instead, it means reaching a level where members’ money works for the life they desire to live. As a result, the Company keeps developing ways to give customers what they require to achieve their goals.
SoFi offers financial products, among them:
The Company, at a glance:
The lending platform offers both online and offline services. It began as a peer-to-peer lending platform where customers got student loans. It provides personal finance services that let people borrow, invest, use, and insure assets.
At the beginning of 2021, the lending company became public through a Special Acquisitions Company, and Social Capital gave it a valuation of over eight billion dollars. The platform provides various financial services. They range from financial planning to funding and investments. The service runs in a competitive environment against highly funded entities. The lender offers offline opportunities where students get connected with alumni. The relationship enables learners to find mentorships and advice needed to go through school and join the employment sector.
The SoFi model got introduced in April 2012, and it hit instantly. The entity turned that achievement into its following funding round in a seventy-seven million dollars Series B. The funds got used to expand into over fifty higher learning institutions in the US. During the first operation year, the entity provided learners with over one hundred million dollars in new loans. Currently, SoFi has over two million people using the service. In addition, it is among the top FinTech startups in America, having collected above 2.5 billion dollars across fourteen VC payment rounds.
Loan services. These days, the entity generates loans via its other network associates. At times, they can use collateral to underwrite funding. SoFi monetizes the loans it provides using “whole loan sales.” They bundle the money under an agreement and offer them to institutions and investors like pension funds.
The recipients pay the lending company a premium upfront to access the money flows generated via the origination activity.
Investment services. The service lets people trade stocks and ETFs. They may additionally buy cryptocurrency and fractional stocks or pick automated robo-advisory ways that perform investment.
The entity generates funds from the Invest services through the protection it gives other financial companies that require shares for individuals interested in covering short positions. SoFi additionally profits from the FDIC-insured sweep schemes.
SoFi company also acquires revenues via rebates from market creators that they get for providing payment for order flow services to HFT organizations. In addition, the platform gathers a 1.25% markup on all crypto purchases done.
Insurance services. The insurance products require high capital, which is why the lender partners with other service providers in the field to spread the danger of its functions. The lending company gets a referral fee whenever they send a new client to their associates and register for a policy.
The sum of money gotten depends on what the lender agrees with their partners and the kind of policy a customer receives.
Deposit services. SoFi introduced debit account and credit card 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 additionally benefits from transactions, collecting fees whenever clients swipe their cards. MasterCard is the one that receives most of the transaction money, and SoFi Company only gets a small percentage of the charges.
The platform additionally acquires interest on the money in their customer deposits. The Company offers the money to banks and other financial entities, thus gaining interest at the interbank rate. The money gained forms a solid revenue stream for the lending company.
Below are the requirements for qualifying for a loan:
● You must be at least eighteen years;
● You must be a US citizen, either a permanent resident or hold a visa;
● You must be working, have enough income, or expect to get a job within the following ninety days.
The application exercise can be daunting. Borrowers have to understand various things about their present financial situation and history. Below are the steps followed:
1. Determine the amount to borrow
It is essential to determine how much you should borrow. Applying for more than you require is not advisable since you will pay interest.
Further, you cannot ask for less than you require since you may look for another loan to meet your needs. Hence, it is better to know the exact amount to borrow and work with the lender to determine the interest rate and term that suits you.
2. Check Credit score
It would be best to ensure 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.
3. Get Pre-Qualified
Lending companies let borrowers pre-qualify for funding. The activity could show loan costs, repayment terms, and interest rates.
The information needed for pre-qualification includes address, earnings, and Social Security number. The soft credit analysis has no impact on credit ratings.
Check for other charges like origination fees, prepayment penalties, and lateness fees.
Doing that helps customers avoid surprises later. In addition, understanding the actual cost of borrowing beyond interest rate helps decide on the right loan. The good news is that SoFi Company has no fees. So, borrowers have nothing to worry about.
4. Send the application form
After providing all the details needed, you have to send the application and wait for feedback. Customers may also need to attach documents such as a picture ID, address proof, and employment or income evidence.
The company loans are available to borrowers for various amounts. The funding has no origination, early repayment, or hidden fees. Customers can check their interest rate within one minute, and it is possible to get money the same day you apply. You can use the funds you get for home improvements, debt consolidation, emergencies, etc. The Company also allows checking your rate without hurting your credit rating. Thus, SoFi is a good option for anyone looking for a loan.