SoFi wants to give big banks a run for their money (and those banks have lots of money).

But what is SoFi? And why should you care?

You may have read about how SoFi is offering student-loan refinancing at variable rates of about three percent or how SoFi can give young professionals with promising careers mortgages when traditional banks say no.

You might see SoFi’s Super Bowl commercials this weekend that claim “This is the beginning of a bankless world.”

What SoFi is (and isn’t)

At the moment, SoFi loans money for a variety of uses. SoFi currently offers:

  • Student-loan refinancing
  • Unsecured personal loans between $5,000 and $100,000
  • Parent loans (for students)
  • Student loans for some graduate programs
  • Mortgages (Not offered in the state of Virginia).

But SoFi is not a bank. SoFi loans are funded by investors, not deposits.

(We should also point out that SoFi is an advertiser on Money Under 30. If you apply for some of their products, like personal loans or student-loan refinancing, using a Money Under 30 link, we may receive a commission. If you choose to support our free content that way, thanks!)

To a customer who gets a loan from SoFi, this distinction may seem unimportant. But not being a bank can actually allow SoFi to offer more competitive products and—possibly—be more customer friendly.

SoFi makes student loan refinancing less intimidating by taking a comprehensive approach to underwriting. Traditional lenders often required high FICO scores to qualify for student loan refinancing. Trouble is, most people want to refinance their student loans in their mid-20s, yet it can take 10 years to build a truly excellent credit score.

SoFi recently announced that they will no longer use FICO scores when making student loan refinancing decisions. That doesn’t mean that someone who never pays their bills on time can just get approved. SoFi still requires borrowers to have a stable income and a track record of managing their monthly financial obligations responsibly. (SoFi does use FICO scores as part of their underwriting for personal loans and mortgages).

Easily see if you qualify online

I think the credit application process has been unfair to applicants for decades because lenders have more information about applicants (and their credit) than the applicants themselves do, and lenders can leverage this differential to charge higher rates (or, in egregious cases, discriminate against certain people).

Furthermore, applicants can be punished for shopping around for credit because too many credit inquires can damage their credit scores.

The rise of products like Credit Karma and Credit Sesame have helped a bit by enabling consumers to monitor their own credit scores for free. Lenders could do even better by being upfront about the requirements for a loan before you apply.

SoFi does that. You can check your eligibility for free in about two minutes on their site—a process which will not affect your credit score. They also offer some fairly clear minimum criteria for each of their products.

The lowest interest rates available

Like all lenders, SoFi sets its interest rates based upon each individual applicant’s creditworthiness. For applicants with stellar credit, however, I haven’t seen interest rates that beat SoFi’s anywhere.

For a personal loan*, SoFi offers fixed rates between 6.99 percent and 14.87 percent and variable rates between 5.844 percent and 14.144 percent when you sign up for automatic payments. As I mentioned before, the variable rates on student loan refinancing can be as low as 2.80 percent. That’s lower than most competitors and way lower than normal credit card rates (0 percent introductory rates aside).

What’s next for SoFi

SoFi is now four years old and has made more than 100,000 loans with a total value of more than $7 billion. But like I said before, SoFi wants to give big banks a run for their money, and, thus far, SoFi has barely made a ripple in the banking industry’s sea of cash.

We don’t know what all of SoFi’s future plans hold, but they do have some projects in the works. For example, SoFi is adding automated low-cost wealth management (similar to robo-advisors like Betterment and Wealthfront). The SoFi wealth feature will be free for SoFi loan customers for the life of their loan.

Learn more about SoFi

We’re written more above refinancing student loans with SoFi here. We also have an article about the somewhat unique SoFi mortgage which can be attractive if you’re a young professional with a good income but have student debt or live in an expensive real estate market that makes it difficult to qualify for the mortgage you want.

Finally, see how SoFi’s personal loans compare to other top personal loans.

Or, just visit SoFi’s Website to learn more about student-loan refinancing or personal loans

All rates, member figures, estimates, terms, state availability, and savings calculations are current at the time this article was written. All of the above may update in the future. For the most up-to-date information, visit SoFi.com.