SoFi has extended its product offering by launching personal loans in 45 states and the District of Columbia. The new personal loans allow consumers to borrow between $10,000 and $100,000 at fixed interest rates starting at 5.5% APR.
SoFi believes this to be the only loan in the market that is designed to meet the needs of the early career professionals. More than half of millennials report that debt reduction is a key financial goal for 2015, and that reducing credit card debt is a top priority. And SoFi is aiming to secure its place as a viable bank alternative for millennials. The Millennial Disruption Index (MDI), a survey of more than 10,000 millennials, found that 53% of those aged 18-34 "don't think their bank offers anything different than other banks," and 71% "would rather go to the dentist than listen to what banks are saying."
Mike Cagney, CEO of SoFi, commented:
"The introduction of personal loans is an important milestone for SoFi. First, it deepens our relationships with existing members – many of whom have refinanced their student loans with us – and helps us reach an even broader segment of early career professionals. Second, it shows that our underwriting model, which helped us become the largest refinancer of student loans, is a critical differentiator for SoFi. And just as importantly, it proves we're making great strides toward solving borrowers' biggest pain points with traditional lenders."
Aimee Young, Chief Marketing Officer at SoFi, said the MDI research supports SoFi's mission and product expansion. She explained:
"Our members tell us they are eager for solutions that remove barriers that prevent them from pursuing their ambitions and interests. The SoFi personal loan was designed to help people free themselves from the cycle of high interest credit card debt and allows them to invest in what matters to them most -- whether that's relocation, a wedding, or home improvement."
SoFi’s original offering was student loans, and since launching it has funded more than $1.75 billion in cumulative transactions. SoFi’s model is one that aims to attract young professionals and then keep them with the platform by serving all of their financial needs. In October SoFi started offering mortgages that were also targeted at early stage professionals. On top of this SoFi is committed to ensuring the loyalty of its users by extending extensive member benefits, like job placement assistance and SoFi Unemployment Protection, to personal loan borrowers. As with its student loan refinancing products, SoFi Unemployment Protection will suspend monthly SoFi loan payments for borrowers who lose their jobs through no fault of their own. It has been rumoured that SoFi will IPO at some point this year, this latest product is helping them build momentum ahead of a possible floatation.