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Monday, October 25th
SoFi wants people to be able to manage their money and reach financial independence so they can make ambitions a reality. With over two million customers and $50 billion in funded loans, this service is absolutely helping people like you accomplish just that. While you can definitely use SoFi just for a home improvement loan and nothing else, you may want to take advantage of their additional products and tools that can give you guidance for attacking your debt with a plan, building and maintaining a safety net, putting your money to work, and even saving for retirement or other goals.
Some unique application questions
To apply for a home improvement loan from SoFi, you enter your name, state of residence and email address to create an account on their site. Next, you put in the desired loan amount (from $5,000 to $100,000) and click on the category that matches your intended use of the funds. Their next question hints at SoFi's focus on healthy money management: "What monthly payment amount works with your budget?" You can enter any number between $150 and $500, or skip it altogether. The remaining questions help SoFi to verify your identity; otherwise, you'll be asked for your Social Security Number if they can't match your credit history to the details you provided.
Big perks you won't find elsewhere
SoFi has some huge perks compared with many financial institutions offering home improvement loans. Their interest rates are generally lower than what you'll find elsewhere, with an added deduction if you set your repayments to automatically come out of your bank account each month. Better yet, the APRs on SoFi home improvement loans have zero origination fees - good luck finding that with other lenders!
Unemployment protection benefit
Our favorite SoFi benefit, though, is their Unemployment Protection program. If you lose your job through no fault of your own and your home improvement loan is in good standing at that time, you can apply to have your loan repayments suspended for three months at a time, for a total of 12 months over the life of the loan. SoFi's Career Advisory Group will even help you look for a new job.
However, we were disappointed to find out that in the time that has passed since our last evaluation, several of SoFi's rivals have done a better job of keeping clients happy. In fact, even though the BBB gives them an "A+" rating, Sofi's listing there says "this business receives a high volume of complaints" . That's not good. Looking at nearly 2,500 independently-verified reviews elsewhere, SoFi comes in with a disappointing 3.2 out of 5-star average, and less than 80% of their reviewers would give the service a perfect score. Ouch!
Customer service needs improvement
The biggest complaints we found described frustrating challenges getting ahold of anyone in SoFi's customer service department - and the resulting long timeframes for resolving issues. If you need funds quickly, or if you have any problems with your home improvement loan, you want to know you'll get a prompt, professional response. Unfortunately, SoFi has some work to do in that regard.
Still a strong option
SoFi has a lot to offer: you'll find low interest rates on your loan, and no other lender we found works with you so supportively if you lose your job. But you need to look at the whole picture, and their increase in customer complaints leave us feeling more than a little disappointed. We really hope to see an upswing in customer satisfaction in the near future, because SoFi has previously been a great option for loans.
If you're looking to finally renovate that kitchen straight out of the 70's, or build on the extra bedroom you need, chances are good that you don't just have the cash sitting around to get it done. Most homeowners use a home improvement loan to access the funds required to turn their house into a "home sweet home" .
There are several types of financing that can be used to make improvements or repairs. These depend on a variety of factors: the amount of equity you have already built up in your property, your credit history, and the amount of money you need.
If you have little equity in your home - in other words, you haven't made many payments on your mortgage yet, and you didn't put down much money at closing - you'll most likely use a home improvement loan to fund your projects. These loans are based on your overall credit history; the higher your credit score and the lower your debts, the better rates and terms you'll get.
On the other hand, if you've built up equity in your home, you'll be able to access three other types of home improvement loans: cash-out refinancing, a home equity loan (HEL), and a home equity line of credit (HELOC). Each type has its ins and outs, and not every loan type is appropriate for a particular borrowing need. For example, a cash-out refinance is great if you can reset your mortgage at a much lower interest rate - but it also comes with closing costs (which can sometimes be rolled back into the loan amount). HELOCs let you take money out as-needed, but interest rates can be higher than some home equity loans and are often adjustable: your payments may increase in the future.
As you can see, choosing a home improvement loan leaves you with some research to do. While considering your options, here are some guidelines to help clarify which service you should use:
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