SoFi vs Upstart

Upstart and SoFi both get a lot of press in the world of fintech. On the surface, the two appear more than a little similar. But if you’re looking for a way to refinance your student loans or obtain other credit services, there are some small differences that can make a big difference when it comes to your monthly budget. Read on to find out which of these two leading lights in fintech are right for you and your wallet.


Upstart has made their mark in the world of fintech by offering credit services to college-educated consumers who suffer from a thin credit file. The bare minimum credit score required is 620, though the average credit score for an approved loan is 692. That said, Upstart makes their business to lend to people who don’t have much in the way of a credit history and might not even have a score. If you’re just starting out in your career, good news: Upstart will take a job offer letter from your future employer as proof that you can repay the loan.

While Upstart has made their name working with people who have thin credit files, they also specialize in people with higher than average earnings. The average Upstart borrower earns over $97,000 annually, which is significantly above the average income in the United States. Another piece of the average Upstart borrower profile is that they tend to have low debt-to-income ratios. The average Upstart borrower has a debt-to-income ratio of 18 percent.

Upstart is particularly useful for people who are looking for money to further their career in the world of IT. To that end, they partner with several boot camps for coders. If you get accepted into one of these pre-approved coding boot camps, you won’t have to have a job or a college degree to qualify for a loan from Upstart.

Once you’re approved for a loan with Upstart, you have some flexibility when it comes to the terms of that loan. The main difference is the term of repayment. Most loans with Upstart are going to be repaid over the course of three or five years. Loans with a three-year term generally have more generous interest rates than the five-year term. Being approved for a loan with Upstart requires a hard credit check through TransUnion as well as a loan origination fee. Depending on how attractive you are a loan prospect, that origination fee will be between 1 and 6 percent.

Loans range between $1,000 and $50,000. Funds will be received the next day, with a three-day waiting period for education loans. The APR will vary from 6.25 percent to 29.99 percent. There is no penalty for early repayment of your loan.


SoFi was originally started by graduates of Stanford University to help out the future graduates of Stanford University. It then morphed into a general student loan service where alums from elite universities could help out the future alums of their schools. Now SoFi is open to just about everyone and you don’t have to be borrowing money for college to use their services. They now offer mortgages, personal loans, parent loans, parent PLUS loan refinancing and even wealth management services.

When it comes to SoFi, there’s just no competing with the perks they offer. If you lose your job, SoFi won’t just suspend payments on your loan (though your loans will still accrue interest). They’ll help you find another one. For entrepreneurs, there’s an entire program that’s highly competitive, but offers much in the way of mentoring and networking, with a proven track record of success. SoFi will even let budding entrepreneurs use their office space to meet with investors if they like. Their rates for wealth management beat even the low ones offered by robo-advisors and are certainly a sight better than what you can expect from a human advisor. However, SoFi also offers access to human advisors to help young investors define and meet their goals.

All of this alone would be enough to give SoFi a huge recommendation. However, in addition to their perks, their basic services are also worth mentioning. The average person who consolidates or refinances their student loans with SoFi saves a whopping $288 monthly or $22,359 over the course of their entire loan. In their entire suite of loan products, not a single thing that SoFi offers requires you to pay a loan origination fee, giving them a clear advantage over Upstart right out of the starting gate.

SoFi’s magic works because they work with very low-risk customers. You need to have at least a 620 FICO score to get approved for a loan with SoFi, though most of their customers have much higher credit scores, closer to 700. However, SoFi does not have minimal income qualifications and generally has an eye more on your earnings potential than what you happen to be making in the here and now. This makes them a particularly attractive lender for those who are currently in school and have what are known as “good prospects.” If you’re in the middle of your education or just through with it, not earning much but have a lot of potential, SoFi might be just what the doctor ordered when it comes to getting your student loans to a manageable place.

Because SoFi tends to work with very low-risk customers, they’re able to offer some of the most competitive interest rates in the entire industry. Fixed rate loans vary from 3.375 percent to 6.740 percent, depending on the repayment term of the loan. Variable rate loans start at 2.365 percent and go up to 6.290, again, depending on the term of the loan as well the creditworthiness of the applicant. These are just the interest rates for student loan refinancing. Fixed personal loans vary in interest rates from 5.7 percent to 14.24 percent.

Overall, SoFi is a student loan refinancing company, but it’s increasingly becoming more of a full-service financial services provider. In addition to student loan consolidation and refinancing loans, they also offer mortgages and mortgage refinancing. This means that even after you’ve paid off your student loans, it’s worth hanging around with SoFi, because they have so much more on offer than just simply a lower rate on your existing student loans.

SoFi does not show their interest rates for mortgages on their website. However, they offer four different mortgage products: A fixed 30-year loan, a fixed 15-year loan, a 7/1 adjustable rate mortgage where the rate is locked in for the first seven years, then adjustable on an annual basis, and a modified version of the 7/1 ARM that allows you to pay only interest for ten years, then only principal for the next 30. The first three of these services require a mere 10 percent down on the loan. The fourth requires only a 15-percent down payment to get started. Perhaps most attractive of all, none of the mortgage products offered by SoFi require that you pay for any mortgage insurance. For people with a lower down payment looking to get into the housing market, this can be a godsend, saving you hundreds of dollars every month.

SoFi’s mortgage products offer other perks to young people looking to get into the housing market. SoFi tends to be more flexible about debt-to-income ratios than traditional lenders, allowing you to get more housing for your dollar. Financing comes quickly, which allows you to close on the house of your dreams sooner rather than later. As stated above, there are no application or origination fees for any products that SoFi offers. Because SoFi begins underwriting at the pre-approval stage, you’re able to compete with all-cash offers. When you pre-qualify, you’re looking at the real interest rates you can expect to pay when you get a mortgage.

Finally, even if you just want a place to repay your student loans at a lower interest rate, SoFi will assist you in ways that no other lender will. We’ve already talked about how they will find you a new job if you lose the one you have. However, SoFi also offers various networking events that allow you make professional contacts or friends in your area. They also offer career guidance for people who are just starting out in their field.

The choice is clear: SoFi goes far beyond what you can expect from traditional lenders — and far beyond anything offered by Upstart. Whether you need student loan services or something else, those who have an established track record of good credit would do well to investigate how a relationship with SoFi can benefit them in the long and short term. The best part is you can investigate this at no cost to you and no ding to your credit score. In the world of fintech, there’s just no serious competitor at this stage.

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