SoFi Review: More Than Debt Refinancing

SoFi is a next-gen account good for those seeking low fees.

Social Finance, Inc. — more commonly known as SoFi — is an online financial technology and services company. SoFi was founded on the belief that there was a better, more affordable way for students to get financing for their education. From that humble beginning, SoFi has greatly broadened its product and service line and is dedicated to the financial independence of its community of users. The company now offers products for borrowing, investing, spending, saving and protecting assets. As a SoFi customer, you’ll also have access to career advisors and the collective wisdom of its member community.

In September 2019, SoFi announced that it had acquired 20-year naming rights to the new SoFi Stadium in Los Angeles, the future home to the Los Angeles Rams and Los Angeles Chargers NFL franchises. SoFi continues to expand and improve its products and services for customers — but is it right for you? Here’s a quick look at the features and benefits offered by SoFi to help you find out. Click on one of the following links if you want to jump ahead to an area of interest.

Who Is SoFi Best For?

SoFi is a good option for customers who are looking for low-fee financial products and are comfortable with a completely online banking experience. As SoFi doesn’t have any physical branches, customers must interact with the company exclusively through SoFi’s website and/or app. After beginning as a simple student loan option, SoFi has broadened its portfolio to the point where many investors and savers can find products and services of interest. The sleek user interface, easy-to-understand products and customer-friendly approach of SoFi may be particularly appealing to those new to the world of saving and investing. SoFi also appears on the GOBankingRates Best Banks of 2019 list.

One important thing to note with SoFi is that despite all outward appearances, the firm is not an actual bank. SoFi has six partner banks that hold customer funds. The good news is that with the combined strength of these reliable institutions, SoFi can offer customers $1.5 million in FDIC insurance on savings deposits. However, it’s equally important to note that until your deposited funds make their way to one of the member banks, they are not technically insured.

Check Out: History of Online Banking: How Internet Banking Went Mainstream

Here are some of the pros and cons of banking with SoFi:

SoFi Pros and Cons
ProsCons
  • Low-cost products across the board
  • High APY on SoFi Money product
  • Offers loans, investments, cash management and insurance
  • SoFi community benefits, including SoFi Relay
  • Free robo-advisor
  • Limited investment options
  • No physical branches

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Who May Want To Skip SoFi?

SoFi is great at offering no- or low-fee products and making banking more fun through tapping its user-friendly app. Although the firm is constantly expanding its available offerings, it might not be the best choice for users looking for a one-stop shop approach to finance. SoFi has yet to offer either a complete banking experience or a full line of investment options, making it more of a supplemental choice than a primary one, at least at present.

Who Is SoFi Suitable For?
Best for those who:Worst for those who:
Want an online banking experienceWant an in-person banking experience
Don’t need immediate access to fundsWant the ability to get cash instantly
Want the highest rates and lowest fees on a select number of accountsPrefer a diversified, one-stop bank with a broad product line to serve all financial needs

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    Types of Accounts Available

    SoFi offers the following generic product categories to its customers: Borrow, Invest, Spend and Protect. These product lines are divided into subcategories as follows:

    Borrow

    • Student Loan Refinancing
    • Private Student Loans
    • Personal Loans
    • Home Loans

    Invest

    • SoFi Invest

    Spend

    • SoFi Money

    Protect

    • SoFi Protect

    Beneath these broad groupings are additional specific account types. Here’s an easily digestible overview of what you’ll find in the SoFi product line: 

    SoFi Loan Products
    Type of ProductAPR FeesTerms
    Student Loan Refinancing5-yr fixed: 3.46%-4.79%

    5-yr variable: 1.85%-4.79%

    7-yr fixed: 3.98%-5%

    7-yr variable: 3.98%-5%

    10-yr fixed: 4.67%-5.21%

    10-yr variable: 4.67%-5.21%

    15-yr fixed: 4.69%-5.59%

    15-yr variable: 4.69%-5.59%

    20-yr fixed: 4.89%-5.98%

    20-yr variable: 4.89%-5.98%

    $05-20 years, fixed or variable
    Private Student LoansFixed: 5.05%-11.71%

    Variable: 3.19%-10.79%

    $0Call customer service to learn more
    Personal Loans5.99%-17.88%$0Call customer service to learn more
    Home LoansN/A$500 off for members30-year, 15-year, 7/1 ARM, 5/1 ARM interest-only

     

    SoFi Spend & Invest
    ProductAPYFeesFeatures
    SoFi Money1.60%$0no monthly or ATM fees
    SoFi InvestN/A$0trade stocks and ETFs commission-free
    SoFi CryptoN/A1.25% markupaccess to cryptocurrency including Bitcoin and Ethereum
    SoFi Automated InvestingN/A$0robo-advisor automatically allocates and rebalances portfolio

     

    SoFi Protect
    ProductFeatures
    Homeowners InsuranceNo brokers or paperwork, starting at $25/month
    Renters InsuranceInstant coverage starting at $5/month
    Auto InsuranceMobile app monitors your driving to determine your rate
    Life InsuranceCoverage from $100,000 to $8 million

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    SoFi Money

    SoFi Money is a cash management account that is technically a brokerage account, although it acts as a hybrid between a savings account and a checking account. You can use the SoFi Money account to write checks, make deposits, pay bills electronically and make P2P transfers. You’ll also earn a high APY.

    Pros

    • no account fees
    • no ATM fees
    • unlimited ATM fee reimbursement
    • automated bill pay
    • up to $1.5 million in FDIC insurance

    Cons

    • digital-only experience; no branches or physical locations
    • daily ATM limit of $610

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    Investment Options

    SoFi Invest is constantly evolving, but it doesn’t yet have a full range of investable products. Currently, you can trade stocks, ETFs or crypto through SoFi. You can also hand your money over to a robo-advisor run by SoFi. Self-initiated trades of stocks and ETFs are commission-free, while crypto trades are marked up 1.25%. Even SoFi’s automated investing platform, in which the firm will build and manage a portfolio for you, is free of charge.

    Related: The 9 Best Robo-Advisors This Year

    One recent addition to the SoFi investment lineup is StockBits. With as little as $1, you can buy fractional shares of stocks and ETFs, all at no charge. For example, if you’re looking to own some Amazon stock but only have $100 to invest, you’d be out of luck with most firms, as the stock trades at around $1,800 per share. With SoFi’s StockBits, however, you can invest your $100 and receive about 0.55 shares.

    Pros

    • commission-free trading
    • fractional share ownership via StockBits
    • robo-advisor free of charge

    Cons

    • no bonds, mutual funds or other types of investments beyond stocks, ETFs and crypto
    • StockBits trades are only executed once per day, around 3:30 p.m. EST, so you can’t actively trade them

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    Loans

    SoFi offers three main types of loans: private student loans, personal loans and home loans. Here’s a look at the features and benefits of each:

    Private Student Loans

    SoFi offers undergraduate loans, graduate loans and parent loans, all with no fees. Borrowers who sign up for autopay enjoy a 0.25% rate discount. The minimum loan balance is $5,000, and SoFi private student loans can finance up to 100% of the school-certified cost of attendance, including food, tuition, books, room and board, personal expenses, transportation and supplies. Loan rates currently range from 5.05% to 11.91% for fixed loans and 3.19% to 10.79% for variable loans. SoFi private student loans can be paid back in one of four ways: deferred, interest-only, partial and immediate. You can apply online for your loan and check your prequalification status in minutes, before you even finish the full application.

    • Pros
      • no fees
      • four repayment options
    • Cons
      • actual funding can take 4-6 weeks

    Personal Loans

    SoFi personal loans can be used in any manner you see fit. One good use of a personal loan can be to pay off other high-interest debt, such as credit card accounts. SoFi personal loans have no origination fees, no prepayment fees and no late fees, with loan limits from $5,000 to $100,000. Live customer support is available seven days a week. Loan terms range from two years to seven years.

    One interesting benefit of being a member of the SoFi community is that if you lose your job while you have an outstanding loan, SoFi will temporarily pause your payments and help you find a job. Known as Unemployment Protection, this benefit is paid out in three-month increments up to a maximum of 12 months total.

    You can prequalify for a SoFi personal loan online in about two minutes. Eligibility criteria includes the following:

    • 18 years or older
    • U.S. citizen, visa holder or permanent resident
    • employment, future employment within 90 days or sufficient outside income
    • residence in a state where SoFi is authorized to lend

    Your financial history, career experience, credit score and monthly income versus expenses are also considered as part of your application.

    • Pros
      • no fees of any kind
      • high loan limits
      • 7-day customer support
      • Unemployment Protection
    • Cons
      • high $5,000 minimum
      • cannot be refinanced

    Home Loans

    SoFi offers four types of home mortgages: 30-year fixed, 15-year fixed, 7/1 ARM and 5/1 ARM interest-only. SoFi members automatically qualify for $500 off loan processing fees, and only a 10% down payment is required. Home mortgages are offered in 41 states, plus the District of Columbia.

    You can begin the mortgage application process online, getting a prequalification notice within two minutes. However, SoFi is currently only accepting home mortgage refinance applications and is not issuing any new home mortgages.

    • Pros
      • low down payment requirement
      • $500 off fees for members
    • Cons
      • mortgages only available for owner-occupied primary residences and second homes

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    Student Loan Refinancing

    SoFi’s student loan refinancing is designed to help working graduates refinance their existing high-rate loans. To qualify, you’ll have to meet the following minimum requirements:

    • be a U.S. citizen or permanent resident
    • be a graduate of a Title IV accredited university or graduate program
    • be employed or in receipt of a job offer starting within 90 days
    • have sufficient income
    • have a responsible financial history
    • show a monthly cash flow

    You can refinance both federal and private student loans with SoFi. Both variable- and fixed-rate loans are available, with maturities of five, seven, 10, 15 and 20 years.

    • Pros 
      • no application or origination fees
      • no prepayment penalties
      • range of maturities available
    • Cons
      • high minimum of $5,000

    See Also: Best Student Loan Consolidation Rates

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    Insurance

    SoFi doesn’t offer its own insurance products, but it does believe that a large number of Americans, particularly millennials, are underinsured. Thus, the company has partnered with insurance industry leaders to provide life insurance, auto insurance, homeowners insurance and renters insurance. Here’s a quick look at the options available on the SoFi platform:

    Life Insurance: Provided by Ladder, coverage ranges from $100,000 to $8 million.

    Auto Insurance: Provided by Root Insurance Company, your rate is derived from how you drive. Your driving habits are measured remotely by the Root app to determine if you qualify for a rate as much as 52% lower.

    Homeowners Insurance: Provided by Lemonade, the SoFi Homeowners Insurance program promises no brokers and no paperwork, with rates that begin at $25 per month. This insurance is currently available in 25 states, plus the District of Columbia.

    Renters Insurance: Also provided by Lemonade, the SoFi Renters Insurance program offers affordable, instant insurance for as low as $5 per month. You can get insurance in as little as 90 seconds and file claims from the app. The SoFi Renters Insurance provided by Lemonade is available in the same 25 states plus the District of Columbia as Homeowners Insurance.

    • Pros
      • cutting-edge, innovative insurance programs using modern technology to deliver efficient policies at lower rates
      • four types of insurance available
    • Cons
      • not issued directly by SoFi itself
      • only available in select states

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    How To Bank With SoFi

    You can open a SoFi account either on the web page or via the mobile app. You’ll need to provide standard personal and financial information to get started, including your name and address, date of birth and Social Security number. You’ll also need to link a bank account to fund your SoFi account. Once your account is established, you can manage it via either the website or the mobile app.

    SoFi Relay

    SoFi Relay is a money tracking service provided free-of-charge by SoFi to its community members. At no cost, you can consolidate the information from all of your external accounts so you can see all your income and expenses on one mobile dashboard. You also have the option of speaking one-on-one with a financial advisor so you can discuss your financial goals. In the future, SoFi intends to add a debt payoff strategy to its SoFi Relay package.

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    Fees

    SoFi is one of the industry leaders when it comes to fees on its products. For its major investment products, including its savings account and its stock trading platform, there are no fees or commissions at all. This extends to SoFi’s crypto account as well. Even its StockBits account is free. Loans and insurance, of course, have ongoing costs, but there are no loan origination or insurance setup fees, just the cost of the actual product.

    Read: Making This Mistake at Your Bank Can Cost You $10,221

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    Availability of Funds

    One of the drawbacks of saving with SoFi is that deposits don’t post instantly. In some cases, you may have to wait up to three business days until you can access the money you transfer into the SoFi Money account from an outside source, such as your regular checking account. 

    Once your money arrives, however, SoFi offers an ATM card that you can use anywhere around the world without triggering an ATM fee. If a third-party terminal hits you with a fee, SoFi rebates that amount almost immediately. This is a huge benefit for international travelers, as traditional banks often slap fees of $5 or more on overseas withdrawals, in addition to any third-party fees. 

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    Should You Bank With SoFi?

    SoFi offers a wide range of features and benefits, but it’s not for everyone. Here’s a quick review of the most notable pros and cons of SoFi that will give you a clearer picture of whether you should bank with this fintech firm:

    Benefits

    • no-fee cash management account
    • a multitude of loans and insurance products available
    • no-fee stock and ETF trading
    • crypto trading available

    Drawbacks

    • limited overall investment options
    • high minimums for loans
    • no physical branches

    The bottom line is that if you are comfortable with dealing with an online-only financial institution and don’t need advanced trading products, you might be very happy with SoFi. The high APY on the SoFi no-fee cash management account is a great start for many customers. Others will enjoy the no-fee stock trading capability, along with the ability to buy fractional shares of stock. Even for those who want more diversified portfolios or the ability to speak with advisors in a branch office may enjoy using SoFi as a secondary savings and investment account.

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    More From GOBankingRates

    Rates and fees are subject to change. This content is not provided by SoFi. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone and have not been reviewed, approved, or otherwise endorsed by SoFi.

    About the Author

    After earning a B.A. in English with a Specialization in Business from UCLA, John Csiszar worked in the financial services industry as a registered representative for 18 years. Along the way, Csiszar earned both Certified Financial Planner and Registered Investment Adviser designations, in addition to being licensed as a life agent, while working for both a major Wall Street wirehouse and for his own investment advisory firm. During his time as an advisor, Csiszar managed over $100 million in client assets while providing individualized investment plans for hundreds of clients.