Updated April 2, 2020, to include the latest rate information.
In the world of student loan refinancing and consolidation, two of the biggest names are SoFi, short for Social Finance, and Laurel Road, a product of Key Bank. Both SoFi and Laurel Road have rock bottom interest rates, currently at 3.50% for SoFi and 1.99% for Laurel Road. Both lenders also have perks that other lenders cannot compete with. It is part of the reason these two lenders sit at the top of our student loan refinance company rankings.
Deciding between SoFi and Laurel road is difficult as both lenders are similar. SoFi tends to be more focused on providing perks and other services for their members, but both companies have a reputation for providing an outstanding student loan refinance experience.
Despite the many similarities, there are also a few key differences. It is these subtle differences that can tip the scales in one direction or the other for many borrowers.
The SoFi Advantages
After reviewing a wide variety of student loan consolidation companies, the thing that makes SoFi stand out above others is their job placement program. SoFi, in an industry first, has hired a team of individuals to help unemployed borrowers find new work.
For most borrowers, job placement assistance is a low priority item. This perspective makes sense because nobody plans on getting fired or losing their job. Unfortunately, the reality is that it will happen to many borrowers. Having this program in place could help many individuals find work before they fall too far behind on their finances. After all, SoFi has a big incentive in making sure that you make enough money to pay your bills each month. The fact that their first avenue is job placement rather than collection agencies is excellent. Hopefully, employment assistance programs will one day become the standard for student loan refinancing companies.
Another direct advantage to going with SoFi is the $150 sign up bonus that they are offering new borrowers. As we noted in our SoFi Review, the $150 is a nice perk, but in the long run, it isn’t a ton of money over the life of a student loan. That being said, $150 for signing up is definitively better than nothing.
[Update: Laurel Road is now also providing a $150 bonus to new customers]
The Laurel Road Advantages
Key Bank, the company behind Laurel Road, is a traditional bank (before 2019 Darien Rowayton Bank owned Laurel Road). As we noted in our Laurel Road Review, being a product of a conventional bank stands in stark contrast to many of the top student loan consolidation companies today. Most of the consolidation companies with ultra low-interest rates are new companies with just an internet presence.
Despite the traditional bank structure, Laurel Road is still able to offer interest rates much lower than other companies with a more physical presence such as Wells Fargo and Citizens Bank. For many borrowers, the ability to walk inside a building and talk to a real person has a considerable value.
Another advantage of Laurel Road is its specialized borrower programs. Perhaps the best example is the one for medical school graduates. Residents and Fellows can pay only $100 per month towards their student loans for the entirety of their residency or fellowship. Six months after the training has concluded, borrowers will then be expected to make standard payments according to the repayment plan. This program, specifically created for doctors, is a great perk because it recognizes the short-term financial hardships that many professionals face early after graduation, but allows for immediate refinancing to start saving money on interest long before the higher paying work is secured.
SoFi or Laurel Road: Which student loan refinance company is the best?
When two companies are so similar on paper, the difference for most borrowers comes down to interest rates. Both companies have low interest rates, but not everyone qualifies. SoFi has the lowest rates, but Laurel Road has a very tight range, so the lender offering the best rate will vary depending upon the borrower.
The key is to see who can offer you the best interest rate based upon your finances. Because all lenders evaluate borrowers slightly differently, the only way to know who has the best rates for you is to apply to both.
Checking Rates with Both Lenders
Completing applications with both lenders may sound tedious, but it could save you thousands in interest. Fortunately, the credit agencies recognize this activity as “shopping around,” so the multiple inquiries do not hurt your credit score.
The other significant advantage to applying to both companies is that you can personally evaluate the customer service that you receive. If one company stands head and shoulders above the other, your decision could be an easy one.Check Rates with SoFi Check Rates with Laurel Road