Rocket Loans vs. SoFi: Which Personal Loan Is Right for You?
Updated: July 25, 2023
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MoneyGeek collected data and evaluated Rocket Loans vs.SoFi to help the average borrowers choose between these two personal loan providers. We are a reliable source for comparing the largest personal loan lenders in the United States, and we gather updated, relevant data to make these evaluations.
Both Rocket Loans and SoFi offer rapid loan disbursements with reasonable APRs. However, SoFi is better if you need a larger loan, while Rocket Loans is ideal for people who want to borrow a little-to-moderate amount of money.
Rocket Loans or SoFi: Overview
MoneyGeek compared Rocket Loans and SoFi in terms of their APR ranges, loan amounts, loan disbursement times, repayment flexibility and qualifying minimum credit score requirement.
Although both lenders can distribute money fast, SoFi is a superior option for anyone wanting to finance significant purchases because it can offer up to $100,000. In contrast, you may borrow as little as $2,000 with Rocket Loans, making it ideal for minor expenditure loans.
Rocket Loans
SoFi
APR Range
The amount of interest a borrower will pay on their loan each year, plus any additional fees or charges imposed by the lender, is expressed as an annual percentage rate (APR). SoFi offers a lower starting and maximum APR in comparison to Rocket Loans.
It is important to remember that APRs frequently change, and you aren't guaranteed to acquire the lowest rate that's offered. Numerous variables, including your loan type, credit score, loan size and the underwriting model used by the lender, affect your APR. Knowing which APR range bracket you fall into is a good factor to consider.
When comparing the two APR ranges, SoFi wins since its minimum and maximum APRs are less than what Rocket Loans offers.
Keep in mind that the APR raises a loan's overall cost. A loan with a lower APR will end up costing less in fees and interest over time. Because it lowers the cost of the loan overall, a lower APR is preferred versus a higher APR.
Nevertheless, it is wise to consider all loan terms as you evaluate lenders since APR is just one aspect of your loan.
Minimum Credit Score
While SoFi requires a minimum credit score of 680 in order to qualify for a personal loan, Rocket Loans welcomes candidates with fair credit of 640. The 40-point gap is significant enough to influence some prospective borrowers' decisions.
Using the data from your credit report, the main credit agencies produce your credit score. This is a numerical evaluation of your creditworthiness. It is used by lenders to determine your APR, loan terms and, ultimately, whether or not to approve your loan.
In general, credit scores range from 300 to 850. Individuals with credit scores of 670 or above are frequently seen by lenders as acceptable or low-risk customers, providing great prospects for speedy approval.
Keep in mind that your score can be impacted by things like your credit and payment history, unpaid debts and new credit account applications.
Rocket Loans is the clear winner in this category, requiring only fair credit as opposed to SoFi’s good credit requirement. Lower credit score requirements are more flexible since most applicants don't have to improve their credit scores to qualify.
However, low credit scores can also translate into higher interest rates, increasing the overall cost of the loan beyond what was anticipated.
To find the best lender for you, be sure to consider other variables of the loan’s terms.
Loan Amount Range
The lowest and highest sum that a lender will lend to a borrower falls within the loan amount range. SoFi has a significantly greater cap than Rocket Loans, allowing applicants to borrow up to $100,000. SoFi would be excellent for major expenditures, like a car or big house projects. On the other hand, Rocket Loans personal loans can cover smaller, less expensive lower than $5,000 so that you don’t have to borrow more than you actually need.
Instead of taking out several little loans from several lenders, it is preferable to find one lender whose product line covers all of your lending demands. It is easier to stay on top of your total debts and payments this way.
SoFi is the undisputed winner in this area, offering up to $100,000, which is $55,000 more than what Rocket Loans offers.
Your circumstances and the intended use of the borrowed money will determine how much you require. A larger loan range is good for higher costs, while a smaller loan is ideal for more modest demands. You shouldn't borrow more money than you actually require because it means you’ll also be paying more in interest.
Don’t forget to evaluate all aspects of a loan’s terms before applying. Loan amount ranges are just one factor to consider.
Repayment Terms
The length of time you have to repay a loan is determined by the repayment term, sometimes referred to as the payback period. Usually, lower interest rates are associated with shorter payback terms. However, other variables, such as your credit score, may still play a role.
SoFi offers a wider variety of options than Rocket Loans. This means that you can choose a shorter or longer payback period depending on what's financially better for you.
However, keep in mind that a lengthier payback period has disadvantages. In other words, even if your APR is low, you will pay more interest if your payback time is lengthy. Consider this while assessing a lender's payback period.
According to our data, SoFi has a competitive advantage over Rocket Loans in this category because of its more accommodating payback periods. It provides borrowers 12 to 60 months to pay back their loan, which is helpful for people looking for funds with flexible terms. Meanwhile, Rocket Loans’ repayment term is from 36 to 60 months.
Although longer monthly payments may sound better, interest rates are frequently cheaper for loans with shorter payback durations.
Still, to make an informed decision, you must take into account the full picture of the loan and lender-related factors.
Time to Receive Funds
Applying for a loan online rather than in person is better if you want the money you need as soon as possible. The majority of lenders let you prequalify before applying without having an impact on your credit score. Providing all the necessary papers could also increase your likelihood of getting approved, not to mention the speed.
That said, both Rocket Loans and SoFi disburse money quicker than typical lenders. Both of these lenders may provide funds a few days after an application is approved, unlike conventional lenders that may take a few weeks.
In addition, both lenders let you prequalify within a few minutes of inquiry, and both also offer online applications to speed up the process.
Rocket Loans wins in this category because it can release funds the next day, while SoFi takes two days to disburse funds. The borrower can spend the money sooner if lenders release their funds quicker.
If the money is going to be utilized for emergencies, disbursement speed is critical. For less urgent matters, it might not be as important.
Remember to analyze all factors of a loan’s terms to choose the best option for your funding needs.
Final Thoughts
SoFi, with its higher credit and gross income requirement, is harder to get approved for. However, if you qualify for its personal loans, then it could be the better choice when compared to Rocket Loans. It has a lower APR and a higher loan amount limit. This means better flexibility on where you can spend your money.
Rocket Loans also possess good qualities. It can process and release funds immediately. Plus, you can borrow as little as $2,000 for small expense loans.
The ideal personal loan company will ultimately depend on your needs and your profile. Consider your options to see whether you require a longer payback time, a bigger loan amount or a lower interest rate.
Frequently Asked Questions About Personal Loan Lenders
A personal loan must be carefully considered before applying. MoneyGeek has included some commonly asked questions regarding personal loans in order to assist you with the process.
Lenders might differ in what they require for a personal loan application. However, the majority ask for at least a fully filled-out loan application form, proof of identification, proof of income and proof of residency.
Visit the Annual Credit Report website to obtain your free credit report, which will also include your credit score. A request can also be made over the phone or in person at their office.
Yes. Most lenders will make a hard inquiry once you submit your application. This entails thoroughly reviewing your credit history from one of the main credit agencies, which could temporarily lower your score.
No, interest rates for personal loans vary between lenders.
Yes, although the charges and costs may differ from one lender to another. Some lenders charge for late payments or early repayment. Origination fees, returned check fees, application fees and payment protection insurance are also imposed by some lenders.
Applying online can be faster, especially if you have all the necessary documents. You no longer have to travel to your lender’s office or wait in line. Also, if you apply online, you can usually prequalify within seconds.
Yes, you can pay off your loan early if that will create a better financial situation for you. However, keep in mind that some lenders charge you prepayment penalties.
sources
- Rocket Loans. "Rocket Loans Personal Loan." Accessed September 21, 2022.
- SoFi. "Personal Loans." Accessed September 21, 2022.
The content on this page is accurate as of the posting/last updated date; however, some of the rates mentioned may have changed. We recommend visiting the lender's website for the most up-to-date information available.
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