SoFi bills itself as a finance company that is taking a “radical” approach to the peer-to-peer lending market. Their services center on P2P loans and wealth management services, which operates from an online platform.
The services, tools, and resources provided by SoFi Lending Company are aimed at helping individuals become financially successful, get ahead of their debt, improve their credit history, as well as fiscal obstacles.
Some borrowers go to SoFi for financial loan assistance when they are looking to buy a home, increase their savings by consolidating debt from student loan refinancing and credit cards, loan refinancing, invest in career-building tools and future wealth, or to begin on an entrepreneurial pursuit.
SoFi and the SoFi community of professionals and investors are focused on significant financial appreciation through empowering borrowers to accrue financial stability.
SoFi is a peer-to-peer financial lending company. Peer-to-peer (or P2P) lending companies, match up a potential borrower and lender through a non-financial institution-based intermediary. Peer-to-peer lenders have come into prominence, since the financial collapse of 2008, as they are able to offer loans to borrowers with low credit scores and other financial obstacles.
SoFi works to link investors, who wish to fund loans with the borrowers who wish to take out a loan. In essence, SoFi and other peer-to-peer lending companies are banks without banks. SoFi and P2P companies like SoFi, operate as a bank, lending money and investing; however, the appreciation of funds comes from an individual’s investments and ability to pay back loans, directly, instead of depending on a commercial bank, whose assets are tied up in the volatile stock markets.
Sofi reviews reveal that recently, SoFi has seen an increase in consumer defaults on personal loans which have been borrowed. The cause of this has been relatively elusive, seeing as unemployment is relatively low. Normally, defaults are expected from peer-to-peer loan borrowers, when unemployment rates go up in the nation.
Since there is little collateral on an unsecured personal peer-to-peer loan from P2P lenders like SoFi, the investors in SoFi bonds face a loss of interest payment revenue from defaulted loans. Bad loans have to lead to many economic hardships on borrowers and the economy at large for many years. If SoFi and other P2P lenders are getting stuck in loan defaults, the peer-to-peer lending industry might suffer a premature demise.
Most often, peer-to-peer lending services do not offer secured loans, backed by a financial institution. Instead, SoFi offers personal loans which are unsecured and investors are private individuals. Therefore, unsecured loan defaults will result in a much more substantial fiscal loss for investors, than that of investments made in the stock market.
The effect of this trend could result in an unequal distribution of liquid asset reimbursement to investors. This would reduce the overall interest accrued by investors. In a worst case scenario, defaults would reach an untenable maximum for peer-to-peer lending service companies, wherein the principal loan investments would be lost completely.
In this case, companies would likely be forced to shut down and declare bankruptcy. If the company cannot adequately compensate its investors due to overwhelming loan default investments, it would be financially dangerous for new investors to offer a bailout loan, resulting in an overall loss of capital for all parties involved. Here's a video which explains the pros and cons of peer-to-peer investing.
SoFi offers a fast and easy way of finding an individual's student loan interest rate, via their online website. Many college graduates are finding themselves in a difficult situation of repaying several loans at once from multiple lenders.
SoFi's website (& lots of Sofi student loan reviews) tout that those who refinance and consolidate their student loans with SoFi will save an average of $288 every month. This results in an average savings of over $22,000 in total. Unlike some large company peer-to-peer lenders, SoFi is unique in that they handle consolidation of both federal and private student loans.
In addition, those who refinance their student loans with SoFi gain access to many of SoFi's other services. These include career strategizing help, special event invitations and a dedicated customer support service which is available for consultation seven days a week.
SoFi offers interest rates, beginning at around 6% variable rates and reaching as high as 30%. Fixed-rate terms begin around 2% APR to around 6% when using auto pay. They claim on their website that they do not collect any origination fee, unlike some of the largest P2P lenders and they do not penalize borrowers for prepaying on their loans.
Borrowers with SoFi are able to refinance federal student loans, receive assistance in expediting the time in which loans are repaid and to apply for a lower interest rate on their current loans.
Many people have credit card debt, but no one needs to pay 30% interest. With peer-to-peer lending companies like SoFi, you may qualify for as much lower-term rate. Taking out a personal loan in order to pay off a credit card might seem like a counterintuitive idea; however, if a borrower qualifies for a lower interest rate, they can end up saving many thousands of dollars over their repayment term. SoFi advertises (& Sofi personal loan reviews say) that they have personal loan interest fixed-rates starting below 6% APR and reaching as just below 14.5 percent APR.
Low-interest loans can help those who are struggling under their debt to pay off credit cards and to reduce the rates on their high-interest debts. For the professional or entrepreneur, low-interest personal loans through SoFi can allow one to make large investments in career building tools, products, and services. Medical expenses can be reduced through mitigating the accrued interest or updates and renovations can be made to one's home.
If you are one of the millions of people who struggle with their overwhelming high-interest debt, don't turn to more banks to pay off the other banks before you explore the potential benefits of using a peer-to-peer lending company like SoFi Lending Company.
P2P lending offers a lower interest rate, based on lower overall company overhead expenses, due to peer-to-peer lenders online interface. No matter what your financial hardships are, becoming engaged in a long-term financial obligation is a serious decision, which will have fiscal ramifications on your budget. Do not go into any loan agreement lightly. Do diligent research and choose the financial solutions that are best for your individual circumstances.