(ThyBlackMan.com) According to the Federal Reserve Bank of New York (FRBNY), outstanding student loan debt has become the second largest form of consumer debt, only behind mortgages.
With seven out of ten students finishing college with student loan debt, the student loan crisis has reached new heights. Student loan borrowers have a tendency to “set and forget” their student loans, blindly paying interest on student loans they took out 4+ years ago. While some borrowers may benefit from federal student loan programs, like Pay as You Earn Repayment Plan (PAYE) or Federal Student Loan Forgiveness, a vast majority of American student loan borrowers do not qualify.
You may be asking; what repayment options exist outside of those offered by the federal government?
Well, one repayment option that has seen increased popularity in recent years is student loan refinancing. Like refinancing a mortgage, private student loan refinancing allows student loan borrowers to consolidate their loans and get a lower interest rate. Some individuals may even qualify for rates as low as 2.13%!
As a student loan borrower graduates and begins their career, they become less credit-risky investments in the eyes of financial institutions. For this reason, student loan borrowers have the ability to refinance their student loans and obtain a lower interest rate. Private student loan refinancing allows student loan borrowers to obtain a lower interest rate, lower their monthly payment, adjust their term length, and also choose their rate type.
San Francisco based Social Finance, or “SoFi”, has established itself as the leader in the private student loan refinancing industry offering the most competitive rates and exceptional customer service.
What is SoFi?
Sofi was founded in 2011, by Stanford alumni, with the idea of making student loans more affordable.
The online lender offers both personal loans and mortgages, but is most well known for their student loan refinancing product. SoFi is the largest student loan refinancing company, and the average member saves about $19,000.
SoFi, arguably, offers the most unique student loan refinancing product on the market. According to co-founder Dan Macklin, an applicant’s credit score is not as important as a history of making on-time payments, high earning potential, and the industry in which the applicant works in.
In January of 2016, SoFi announced that it was no longer using FICO credit score as an eligibility requirement. Despite its unique underwriting model, SoFi continues to offer the most competitive student loan refinancing product (with variable rates as low as 2.19% and fixed rates as low as 3.5%).
The company uses the same requirements to determine eligibility of personal loan applicants, providing loans to those with strong cash flow and high earning potential. Although SoFi does not have a minimum credit score, its average borrower typically has a strong credit history and a high salary.
However, it is not just competitive rates that make this “modern finance company” so great. By refinancing your student loans at SoFi, you become a member of the SoFi community. The company offers a variety of services to its members, including its “Unemployment Protection” program.
If you lose your job, SoFi will temporarily suspend your loan payments and will even help you find a job through its career counseling services. Even if you are employed, SoFi extends personalized career planning and job search assistance to its members. In addition to personalized career counseling, SoFi also organizes exclusive social events, such as happy hours and date nights, where borrowers can network and interact with other SoFi members. Rumor has it, SoFi is even developing their own dating app specifically designed for its members.
Bottom Line
If you are a student loan borrower and you do not plan to take advantage of benefits offered by the federal government, then you should consider refinancing your student loans through a private lender. Private student loan refinancing can provide a flexible repayment option that, in turn, can save you a large sum of money. If you do plan to refinance your student loans, then you should consider refinancing with SoFi. SoFi is an established lender that has built a loyal membership base through competitive rates and outstanding customer service.
Staff Writer; Derrick Parker
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