SoFi vs. LendingTree: Battle for the King of Personal Loans
Choosing the Right Personal Finance Loan Provider
Both LendingTree and SoFi are well-known names in the finance industry. They both carry a good reputation and have several benefits to offer interested borrowers. You can get loans of varying types from both including mortgages, personal loans, credit card loans, business loans, auto loans, reverse mortgages, and student loans.
But, there are also differences between the two that make each stand out. For example, LendingTree is a lending exchange, while SoFi is an actual lender, and in fact, can be found within the LendingTree lender portfolio. LendingTree provides several offers, while SoFi is the sole provider of your financial solution.
With so many variables to consider, how can a borrower decide which of these reputable companies is the right one for their present financial needs? We’ve put together a basic business comparison to help borrowers see the differences between LendingTree and SoFi so that they can come to an educated decision about which one will be the best personal loans provider for them. Take a look.
1. Application Process
LendingTree has a quick and easy online application that only takes minutes to complete. Many people prefer this method because, with one application, borrowers are automatically connected to numerous lenders. This saves time on repetitive application filings and gives borrowers a more competitive edge wherein lenders are competing for their business. All the potential borrower needs to do is fill out a few basic questions such as name, phone number, and current employment status, upload a few documents, and the process is complete. The one drawback that borrowers should be aware of is that they will receive many contact attempts from various lenders once their application is sent out.
SoFi also has an easy online application, so in terms of ease of use, the two even out. Where LendingTree takes the lead in this department is in the number of borrowers that will see that application. With SoFi, it’s one offer only; take it or leave it. LendingTree delivers multiple offers with one easy application. If approved, you’ll receive your loan within a few days.
2. Lending Terms
Possibly the most important factor to consider when taking out a personal loan is the terms that will come along with the loan. The minimum and maximum amount you are able to borrow, how long contracts are for, does the company do a soft or hard credit pull, APR, and interest rates are vital components and should weigh heavily in your decision-making process. As such, this section should play a significant part in your considerations towards the best personal loan company for you.
SoFi offers excellent terms, some of the best in the market in fact. Delivering a fixed APR range of 5.49%-14.24% with a variable APR range of 5.17%-11.32% (and sometimes 5.5%-9%), borrowers can get loans and pay them back for considerably less than anywhere else. That’s significantly lower than most other lenders who go upwards of 35% and leagues below what traditional banks are charging. The loan range is also considerably higher than many lenders, with a minimum loan of $5,000 and a maximum of $100,000. So, entrepreneurs looking to launch a new startup or invest in another business venture can do so without feeling inhibited by their loan amounts. Additionally, SoFi lets members pay off debt over 3-7 year contracts for more flexibility and easier payment plans.
LendingTree is more complicated. Because you are dealing with numerous lenders, the loan terms and conditions will vary depending on which lender you opt for. APR ranges can be anywhere from 5.99%-36%, or more. LendingTree deals with smaller loans ranging from $1,000-$35,000 and contracts range from 1-5 years.
SoFi is known for its strict eligibility requirements. They’re looking for a specific clientele, and many people will not fit that description. The basic SoFi demographic is young, informed, fin-tech-ready and able go-getters. The lender is interested in younger professionals who have a solid employment history and a good track record of keeping their income to expenses at a healthy balance. The general loan eligibility criteria includes US citizens or permanent residents 18 years of age or older who are either employed or have an offer to start employment within 90 days. SoFi personal loans are not eligible in Nevada or Mississippi, but they are available in the District of Columbia. Generally, SoFi also takes financial history, career experience, and monthly income vs. expenses into account. What’s more, this loan company frequently accepts credit scores of 700 or greater, though they will consider lower credit scores if all the other variables are in your favor.
As is the case with loan terms, the LendingTree criteria work on a different scale because there are varying criteria based on the lender of choice. As mentioned, SoFi is one of LendingTree’s lenders, so if you are looking for a loan from this company, the eligibility will hold the same stringencies as a straight up loan from SoFi. Alternatively, some of the other lenders in the LendingTree gamut are a lot more flexible in their acceptance policies. LendingKey, for example, accepts applicants with lower credit scores and prefers bringing a co-signer into the picture rather than relying solely on the borrower’s past credit history. LendingTree partners also accept applicants with 660 credit score, and often even lower.
4. Additional Fees & Price Comparison
SoFi clearly pulls ahead of the competition in the fees department. It doesn’t take any of the usual fees including origination and balance transfer fees, earning them strong popularity points among borrowers who feel that such fees are unreasonable in the first place. But, what makes SoFi unique in this industry, is unemployment protection. While most financial establishments are waiting for borrowers to slip up and miss payments so they can collect exorbitant fees or penalties, SoFi gives its members plenty of wiggle room. If they lose their job, members can put their loans on hold, and SoFi will even help them find suitable employment options to get back in the game. Take a look at the table below to get a clearer picture of the fee benefits:
15 days late on payments which amounts to
either $5 or 4% of the payment (whichever is less)*
5. Platform Features
Both companies have strong platforms that are easy-to-use and provide additional assistance to their clients. For SoFi, it’s about building up clients to help give them the best opportunities for financial success. Customers are called members, and that's a clear indication of how SoFi intends to treat you once you're on board. It's about community, and SoFi (literally short for social finance) invests heavily in its borrowers and offers many opportunities for advancement including:
Financial literacy enhancement (educating borrowers on healthier, smarter financial choices)
Creating mentoring connections
Peer to peer networking
Community and entrepreneur events
Job opportunities via social networking and events
LendingTree takes the more traditional approach to personal loans and offers some neat online tools and widgets such as a live mortgage rates tracker, mortgage/loan calculators, free credit scores, credit/financial education, insurance quotes comparison calculator, and other loan calculators. While these are useful, they cannot compare the breadth and depth of involvement that SoFi offers its customers.
And the Winner Is...
Of course, there are various other considerations to take into account. For example, which security and safety measures are being taken to ensure the wellbeing of borrowers? SoFi uses Norton Secured and is regulated by the Securities and Exchange Commission. What kind of customer support experience will you receive? LendingTree has toll-free phone and online form support, while SoFi offers US-based telephone, email, and live chat support 7 days a week, along with social media outlets like Facebook and Twitter. They also have a great blog and FAQs section.
At the end of the day, LendingTree and SoFi really cater to different audiences. LendingTree is the best option if you have a spotty credit history or are looking for multiple offers to hone in on the best one. SoFi is the lender of choice for the more tech savvy, ambitious millennials who are planning on going from strength to strength and just need a foot up to get themselves started. It’s also the better choice if you have decent credit and can afford to be choosy. This is because SoFi offers better terms, so you'll end up paying less over time than with the LendingTree and has stronger benefits like unemployment protection. So, while LendingTree is a solid option, SoFi really pulls ahead in most departments. If you can afford to be picky, go with SoFi for better rates, more options, and the unparalleled community experience you won't find anywhere else.