Just as we began tackling our T-I-P goals, a timely, pre-approved offer from Sofi fluttered into our mailbox. It promised significantly lower interest rates for refinancing our student loans. In the past, such offers immediately found their way to the recycle bin. For absolutely no reason, I always assumed a scam lurked in between the lines.
Casting cynicism aside, I figured a little research wouldn’t hurt. Very quickly, I found helpful reviews (here and here) with links promising even better bonuses than my mailed offer!
It turns out that Sofi is not a scam at all. It is a pretty solid (albeit new) company founded by Stanford grads (Go Cardinal!) who connected fellow alum (and their surplus investment dollars) with current students while offering affordable financing for their educations. With such a small and carefully selected subset of borrowers, investors were almost guaranteed a safe return on their investments. According to the White Coat Investor, they have a default total of 2 loans, both the result of premature deaths, which the company graciously wrote off. As the company grew and the pool of borrowers widened, Sofi upheld stringent approval criteria, lending to only super prime borrowers. They flat out reject ~40% of their applicants!
Feeling pretty good about the quality of the company, we applied to refinance of Hubs MBA loans. It was a quick and fairly painless experience.
The whole application process included 15 minutes online, chatting with a customer service rep about a few questions on the adjustable rate loans (which are significantly cheaper than their fixed rate loans), while simultaneously completing a 30-minute application which included scanning in a few required documents verifying identification, income, and loan amounts. Immediately prior to submittal, I called in to ensure the application of a signing bonus since I (stupidly) forgot to use the provided link. Since I was filling out the application on Hubs’ behalf, this required a quick phone call from Hubs to the company to authorize me as a decision maker for the account. The company was extremely responsive throughout this process and I never felt the presence of red tape or other hoops to jump through.
Upon submittal, I received an email requesting final documentation. I called in again to walk through the process with a rep – another 10 minutes tops. After that, just one additional email requesting the same information, which I cleared up with a 2 minute phone call. Easy breezy.
20 days later, we received notification that the loan is funded! Hubs is a super prime borrower! Hooray!
A few days after that, we received all the paperwork with the nitty-gritty for an adjustable rate, 10 year loan. This took Hubs’ school loans from 6.55% APR to an interest rate on a monthly float at 2.875% above 1-mo LIBOR. This month, the rate’s at 3.065%. Double hooray! (An adjustable rate seemed optimal in light of our intention to repay the loans in full by year end.)
As the loan processes and a new account profile is established, payments are halted for about 2 months, which accounts for the increase in Hubs’ school loans balance at the last T-I-P update.
The ease of this experience is bringing to light the various options available for affordable financing. I’m kicking myself for not looking into this earlier! Somehow, I have a feeling this will be recurring theme as we progress with our Independence Project: the real and immediate benefits of deviating from mainstream protocol and solutions.