LendKey is unique in the student loan refinancing and consolidation marketplace. Comparing it to SoFi is similar comparing apples to oranges. They both have their niche in helping borrowers to get tailored loans, but both do things rather differently. Lendkey is the bridge between borrowers looking for a great loan and the credit unions who provide these loans. LendKey is a cloud-based technology company.
Refinance Your Student Loan With Ease(No Credit Score Required)
SoFi was actually created by a group of Stanford business students who wanted to help other business students. This concept was expanded to some other schools, and new program additions were included, until eventually SoFi became a nationwide program. This approach is commonly called crowd-sourcing or peer-to-peer lending. Both are aggressively succeeding in their own niche and offer loan solutions for just about anyone looking to refinance or consolidate those student loans.
LendKey as the ‘middleman’
Fynanz was the private student lending solutions provider which enabled over 300 credit unions to enter the private student loan and private student loan consolidation markets. The cloud-based technology company LendKey became the new brand is and offers the essential infrastructure for lending organizations to quickly, securely, efficiently, and profitably lend to anyone.
LendKey is a bit of an oddity in the student loan consolidation and refinancing marketplace. Most lenders fall into one of two groups. Group one would be the startups like SoFi and CommonBond which as newer companies offer the low interest rates, but they lack a local presence or longstanding reputation. However, with that being said, SoFi is fast becoming the number one contender for student loan consolidation. Group two would be established banks and lenders like Wells Fargo Bank. These companies have higher interest rates, but borrowers are able to physically visit a local branch when they have concerns about their loans.
The goal behind LendKey’s approach is to allow smaller credit unions and local banks to compete on a national scene. Credit unions have always received high marks from consumers because they are member fed. Not only this they have exceptional benefits, immediate data on portfolio performance and offer some of the best loans to borrowers. Credit union’s capital goes to work from private student loans, attracting new members and supporting the higher educational goals of members.
Lendkey is a platform which helps borrowers access a wide range of credit unions to find a custom loan program and deliver a superior experience for the consumer. Lendkey believes the student loan consolidation experience should be transparent, seamless, and intuitive. They want the process to be easy for the worried borrower.
LendKey leverages data to be successful. This way they can continue to tailor market to borrowers. Loan seekers do not have to search out every bank and credit union for the best loan, this is Lendkey’s job. Students also have the opportunity to obtain a lower rate if their Academic Credit Score (ACS) improves and are encouraged applying for a lower rate loan.
SoFi Helps People beyond Loans
SoFi invests in their borrowers. Believe it or not, SoFi has a dedicated huge career services division. The best thing SoFi did to help borrowers was create a job placement program. SoFi actually hired the former Assistant Dean for Career Services at a top MBA school to lead its career services division to help unemployed borrowers get back to work. This is commendable in a loan company given most lenders want their payment now, and seem to lack insight as to why borrower’s payments are late or falling so far behind. Unfortunately, the world we live in today, people are losing their jobs. It could be in a variety of ways like outsourcing or aging out someone. SoFi made the change borrower’s needed to see. The first line of help is with job placement, and not a beeline to the collection agencies. At some point in this marketplace, expect to see these programs as the industry standard. SoFi is likely to implement even more commendable programs in the future.
SoFi offers new borrowers a nifty $150 sign up bonus as a quick little perk. This doesn’t have much to do with the loan, or the lifetime of the loan amount, but still who else is doing this?
One of coolest things about SoFi’s goals is they encourage former borrowers to go on to become lenders. What company seeks an ongoing relationship with its customer after the business transaction has ended? This gives SoFi a huge advantage over other loan consolidation companies. SoFi has the incentive to care, groom and keep their borrowers happy.
The Quick List for LendKey:
- Work with not-for-profit credit unions
- interest rates under 2% APR
- Range of 1.93% APR to 6.92% APR.
- higher approval rates
- long unemployment protection
- Fixed and variable rate loans
- A Unified Application Process
- Cosigner Release Available after 24 consecutive on-time payments
- No Origination Fee
- Further Interest Rate Reduction
- 0.25% ACH Interest Rate Reduction for automatic payments
- Federal and Private Loans Can Be Consolidated Together.
- Return Policy offers to let you cancel the loan within 30 day of disbursement without fees
- Not quite a student loan marketplace
- 15 Years Max to Repay Loans, no industry 20 year term
- Misleading Marketplace, some lenders are listed who are not currently accepting new applicants
- LendKey Doesn’t Give You the Complete Picture on their interface, they don’t help much stacking institutions against each other.
- Only Certain States Offer Fixed Loans
The Quick List for SoFi:
- Refinancing and consolidation of private and federal student loans
- Must have completed an eligible undergraduate or graduate degree program
- Available for both undergraduate and graduate school student loans
- 1.90% APR to 5.19% APR (with autopay) variable rates, capped at 8.95% to 9.95% APR
- 3.50% APR to 7.24% APR (with autopay) fixed rates
- 5, 10, 15, 20 year repayment terms
- No origination fees or prepayment penalties
- Unemployment protection – loan payments are paused and they help find new job
- Career support – complimentary coaching for SoFi members
- Entrepreneur program – qualified applicants can receive loan deferrals and mentorship
LendKey or SoFi: Which is the best?
These two loan consolidation companies each offer a unique avenue to obtaining a new loan. It is all going to come down to specifics in what the borrower is looking for in a student loan. If creditworthy, the interest rates of both companies are competitive. If you are not in LendKey’s supported coverage area, then this is an obvious no-go. SoFi does offer new programs, like career support and entrepreneur program, which can be a cushion for nervous borrowers.
(If your income isn’t huge or your credit score is less than perfect working with a company like Lendkey may be a better alternative. They will match you with a non-profit credit union to consolidate your debt – you just won’t get the rock bottom interest rates.)