SoFi vs. American Express: Which Personal Loan Is Right for You?
Updated: July 25, 2023
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MoneyGeek compared SoFi vs. American Express personal loans to help potential borrowers understand the most important loan factors. A comparison of APR ranges, loan limits and repayment terms helps borrowers gauge whether each lender matches their personal loan needs and whether they meet each lender’s qualifying conditions.
SoFi and American Express are top loan providers in the U.S. that offer loans to borrowers who need money quickly. They both have A+ ratings from the BBB, making them leaders in the personal loan space.
SoFi or American Express: Overview
SoFi and American Express have some similarities when it comes to their personal loans, but they also have some key differences that may make them ideal for certain borrowers.
SoFi personal loans offer a flexible loan amount range with competitive rates and quick funding, whereas American Express personal loans offer existing American Express credit cardholders a straightforward debt consolidation loan with a competitive interest rate.
To determine which lender is best for your funding needs, compare all factors of the loan before making a final decision. This includes APRs, credit requirements, loan terms, fund disbursement times and loan amounts.
SoFi
American Express
APR Range
SoFi offers personal loans with an APR as low as 5.74% to as high as 20.28%, depending on a borrower's creditworthiness. In comparison, American Express offers personal loans with an APR as low as 4.93% to as high as 19.97%.
APR, or the annual percentage rate, refers to the amount of interest put on top of your initial loan amount every year until it is paid off. The lower the APR, the less you pay over the course of your loan.
When selecting a lender, one of the most important factors you want to look at in order to save is one with a lower APR. However, you’ll want to consider all factors of your loan before making a final decision on a lender.
Both lenders offer competitive APR ranges, but American Express wins this category. It offers a minimum and maximum APR that is lower than SoFi’s APR range.
Finding the lowest APR offer yields the highest savings. Though keep in mind that other factors may also affect the APR. For example, selecting a longer repayment period may cause the APR to increase.
Make sure to evaluate all factors of a loan before choosing a lender.
Minimum Credit Score
Borrowers each have an assigned credit score from credit card bureaus. Credit scores are a good benchmark for how a borrower is likely to pay a loan responsibly. Borrowers with a credit score around 300 (lowest credit score) may not have as much chance to qualify for higher loans than borrowers with credit scores around 600 up to 850 (highest credit score).
Some lenders like American Express require applicants to have at least 660 to apply. SoFi requires their borrowers to have a score of at least 680.
American Express is more accessible to a lot of borrowers due to having a lower minimum credit score requirement than SoFi. While you can qualify for some lenders with a low credit score, it helps to improve your score to be able to get a much lower APR and eventually a much higher loan amount in case you need it.
Credit scores are just one factor out of many to consider when evaluating loans. Keep in mind that your chosen loan amount, repayment terms and other factors are also worth reviewing when choosing a lender.
Loan Amount Range
American Express is ideal for borrowers who need a smaller loan as it starts at $3,500 and goes up to $40,000. However, borrowers who need a higher loan amount may find SoFi’s maximum loan amount of $100,000 more suitable.
Regardless of the available loan amount, MoneyGeek strongly recommends applying only for the amount you need. You may end up getting into more debt by borrowing more than you can realistically pay.
A personal loan is one of the easiest solutions during a financial crisis. Consolidating debt, paying off high-interest credit cards and undergoing a major life change are just some of the examples of when getting a personal loan makes sense.
If you need a smaller loan, American Express might be ideal. However, if you need more funding, you may want to choose SoFi.
For this category, SoFi wins since it offers a larger loan amount of up to $100,000. Keep in mind, though, that loan amounts are not the only factor to consider when choosing a lender.
Repayment Terms
SoFi offers loan repayment terms ranging from 12 to 60 months, while American Express lets you repay your loan in 24 to 84 months. American Express has better repayment terms since it offers more flexibility in terms of how long you can take to pay back your loan.
With both lenders, you can pay off your loans early without any prepayment fees. Choosing a shorter repayment term will help you get a lower interest rate. However, it will mean you pay higher monthly payments. Make sure you can afford to do this prior to choosing a shorter repayment period.
In this comparison, American Express has better repayment terms.
The APR that is applied to your loan may also depend on the repayment terms you select. APRs are lower for shorter repayment terms than for longer ones.
Repayment terms are only one consideration when selecting a loan. Equally crucial are other factors, including credit score, loan size and APR.
Time to Receive Funds
American Express disburses funds the same day your loan is approved, while SoFi releases funds after two days.
Keep in mind that applying online will help you get your application approved more quickly, subsequently helping you receive your funds faster. Applying in person will take longer to get your application approved and your funds released.
It’s important to choose a lender who can get you your funds quickly, especially if you have a financial emergency requiring immediate funding.
For some borrowers, especially those who require the money for an emergency, how quickly you may receive the loan may be important. You can use the money more quickly if a lender can deposit the money into your account right away.
American Express releases funds the same day that a borrower’s application is approved, making it the winner in this category.
Don’t forget to review all aspects of a loan’s features prior to choosing a lender.
Final Thoughts
Borrowers may find it easy to compare SoFi vs. American Express just by looking at the available loan amount and APR ranges. SoFi personal loans may better suit borrowers that need a higher loan amount, plus its unemployment protection gives borrowers peace of mind that if they lose their jobs, they can get a reprieve on payments.
On the other hand, American Express credit cardholders may find it more convenient to get a personal loan from the same banking institution. It comes with a lower APR than SoFi and has better repayment terms.
Keep in mind that these suggestions are based on a general borrower profile. You’ll want to evaluate your specific financial needs to choose the best lender for you.
Frequently Asked Questions About Personal Loan Lenders
The following frequently asked questions could help you learn more about SoFi and American Express personal loans.
Personal loan lenders require financial information, such as income, job and debt information, to determine your eligibility.
To get a free credit report containing your credit score, you can visit the Annual Credit Report website. You can also visit their office in person or request a report via phone call.
Upon your initial application, some lenders could perform a hard credit pull, which might temporarily lower your score. If you simply want to verify your rate and eligibility, it's advisable to find lenders like SoFi and American Express that perform a soft credit check.
No. Every borrower is given an APR range by each lender. Depending on your creditworthiness, you could be in the lower or higher bracket.
Some lenders could tack on hidden costs for origination, prepayment and late payments. By selecting a lender that doesn't charge these fees, you can save a lot of money.
Applying for a personal loan online is much quicker than visiting the office. It also speeds up the process of sending documents and loan funding.
Yes. If you choose to repay your loan before the predetermined time period, certain lenders may charge you a penalty.
sources
- American Express. "FAQ." Accessed September 21, 2022.
- American Express. "Personal Loan." Accessed September 21, 2022.
- SoFi. "FAQ." Accessed September 21, 2022.
- SoFi. "SoFi Personal Loans." Accessed September 20, 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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