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I don't understand the value of this company. What services do they provide that existing internet companies don't provide at a lower price and higher level of

I don't understand the value of this company. What services do they provide that existing internet companies don't provide at a lower price and higher level of quality in its separate service lines (personal loans, student loans, mortgages)? In offering so many products, what economics of scale do they bring over established banks and credit unions? If there are any newly discovered efficiencies, they certainly aren't passed down to the consumer as the rates I've been quoted for their loan products are terrible; it's shocking that they get any organic business at all. They call themselves "a new kind of finance company" but there's literally nothing new to benefit the consumer. If anything, they've taken multiple steps back because they're a 1990s boiler room down to their culture, their management, and especially their channel of sales: they masquerade as an "tech company," but really they're just a web form that prints leads to their sleazy call center. If you tick the boxes of the specific demographic they're going after (High Earners, Not Rich Yet - as they call them at SoFi) and you make the mistake of giving them your information by applying for any one of their products, all the mini-Belforts at the company will relentlessly pitch you over the phone to trust them to manage all of your wealth... for a princely return of 1.18%. They have no defensible moats, they have no IP, they have no talent on staff. Their Chief Technical Officer is the CEO's wife, who has a 1 year remote degree from Stanford and no prior experience in software. Seemingly her job is just to stand around and pretend everything is "normal" while her husband sexually assaults girls half her age in the room across. How sad.

t0mbstone 9y ago
Speaking as someone who has multiple loans from SoFi (consolidated credit card debt, and then re-financed a couple of times as my credit score improved), getting a loan from them was remarkably painless. Their online application was easy to use, and once it was approved, an electronic deposit for the amount simply appeared in my bank account a couple of days later. The interest rates were low, the terms were easy to understand, and there were no gotchas like front-weighted interest or unexpected fees. If another company exists that will happily give me a hassle-free, unsecured loan for $50,000 at 5-6% interest, via an easy to use online form, and then deliver the funds in only a couple of days... please, by all means, let me know!
- JSONwebtoken 9y ago
  [1] https://www.avant.com/ https://www.avant.com/ [2] https://www.upstart.com/ https://www.upstart.com/ [3] https://www.lendingclub.com/ https://www.lendingclub.com/ [4] https://www.prosper.com/ https://www.prosper.com/ [5] https://www.marcus.com/us/en https://www.marcus.com/us/en
  - bduerst 9y ago
    A couple of those companies don't specialize in student loan refinancing. SoFi started as a student loan refinancing institution for low-risk professional pools with Stanford and Harvard alumni. As someone who refinanced their student loans recently with SoFi and shopped around, I can tell you I got the best rate from SoFi. You seem adamantly opposed to SoFi though. Despite the unfounded accusations in your rant, why are you?
    - pyre 9y ago
      Personally, I don't know if "has the best rate" is strong enough to warrant the moniker, "a new kind of finance company," but that's just me.
      - bduerst 9y ago
        So your problem with Sofi is their marketing motto? If we literally judge every financial company by their slogan, then we'll be here a while.
        pyre 9y ago
        Well, your only defence of the company against the parent of this thread was that they got you the best rate after shopping around. I'm pretty sure that "they don't have the best rate" is not an issue that the parent poster takes with the company, so I find it kind of odd that this is your rebuttal.
        9y ago
sidlls 9y ago
They reduced my student loan payment and cut the term in half at the same time. I was able to complete the application and have a decision in less than two days, and the funds were transferred two days later. They're also much easier to get substantial unsecured term debt through at a lower price than, say, Prosper or Lending Club.
- JSONwebtoken 9y ago
  I'm afraid your scenario isn't possible or you've been taken advantage of for your lack of financial fluency. There is no way your loan payments were reduced and the remaining term cut in half at the same time, unless your original interest rate was above 20-25%.
  - caseysoftware 9y ago
    I'm glad I wasn't the only person saying "wait.. what?" over that one. He had to have received a large rate reduction or made a massive payment on the principle. I don't see how the math would work out otherwise.
    - ams6110 9y ago
      Or there's a balloon payment at the end of the term, hidden in the fine print.
  - wil421 9y ago
    Look at the types of loans they have. Their target market is people in a crisis, students, and people with a lack of financial fluency. People make horrible financial desicions and a lot of companies profit off of them.
  - sidlls 9y ago
    I'm chuckling so hard right now. You have no idea what the principle, terms or rates involved are yet feel the need to make assertions about possibilities and my knowledge of finance. It's an incredible representation of a certain kind of know-it-all nonsense.
hkmurakami 9y ago
My high level understanding is that at the start, they tried to target people who were the high "ROI" segment of customers that traditional lenders were lending to. They identified client segments who had better default numbers than the overall debt pool they were placed in, carved them out, and extended them better terms (but terms that would still make SoFi money). Another way to frame this is that they tried to properly "price" mispriced securities (which in this case are individuals with loan terms with worse terms than their financial profile should beget them). Students working towards advanced degrees from elite institutions were seen by the traditional lending market as higher risk than what SoFi deduced that they should be "priced" at. Traditional banks need scale in their businesses an order of magnitude or two compared to a startup. There were quite a few startups whose business model is "we will carve away the most profitable (but small in size) segments of a big bank's client base, and serve those people better".
newgrad 9y ago
What I know is Student loan is quite inefficient, people going to University of Phoenix with low job acceptance rate majors get the same/similar interest rate with people going to Stanford for Computer Science. One side is way more likely to pay back than the other. That side is the horse, while the other one is the burden to the portfolio. There are for-profit schools which spend 70% or more of their budget to solely marketing. I don't see they are producing good workforces. Long term value: driving the masses to correctly study things that have higher chances of concretely contributing to society on short - medium term. I think it's quite valuable. SoFi's way to survive is to collect high quality borrowers which risks are smaller than the average of the student loan portfolio. Let's say govt gave all 8% (idk the real numbers) for everyone, but there are good students/alumnis in it whose risk are calculated actually as 4%, SoFi would refinance the loan with 5%. 1% margin is for SoFi. Borrower is happy, SoFi is happy, student loan system gets a slap of reality in the long run & people would realize the inefficiency of the loaning system. In the next phase after they have gathered the good borrowers, SoFi needs to nurture them to ensure their productivity, while offering other finances if needed. This is still not materialized yet I think. But, acquiring good borrowers & continuously serving them is the holy grail of the business I think.
newscracker 9y ago
> Seemingly her job is just to stand around and pretend everything is "normal" while her husband sexually assaults girls half her age in the room across. This is really a low blow and completely uncalled for. I would expect such comments on reddit or Facebook, but not here.

t0mbstone 9y ago

Speaking as someone who has multiple loans from SoFi (consolidated credit card debt, and then re-financed a couple of times as my credit score improved), getting a loan from them was remarkably painless. Their online application was easy to use, and once it was approved, an electronic deposit for the amount simply appeared in my bank account a couple of days later. The interest rates were low, the terms were easy to understand, and there were no gotchas like front-weighted interest or unexpected fees. If another company exists that will happily give me a hassle-free, unsecured loan for $50,000 at 5-6% interest, via an easy to use online form, and then deliver the funds in only a couple of days... please, by all means, let me know!

JSONwebtoken 9y ago
[1] https://www.avant.com/ https://www.avant.com/ [2] https://www.upstart.com/ https://www.upstart.com/ [3] https://www.lendingclub.com/ https://www.lendingclub.com/ [4] https://www.prosper.com/ https://www.prosper.com/ [5] https://www.marcus.com/us/en https://www.marcus.com/us/en
- bduerst 9y ago
  A couple of those companies don't specialize in student loan refinancing. SoFi started as a student loan refinancing institution for low-risk professional pools with Stanford and Harvard alumni. As someone who refinanced their student loans recently with SoFi and shopped around, I can tell you I got the best rate from SoFi. You seem adamantly opposed to SoFi though. Despite the unfounded accusations in your rant, why are you?
  - pyre 9y ago
    Personally, I don't know if "has the best rate" is strong enough to warrant the moniker, "a new kind of finance company," but that's just me.
    - bduerst 9y ago
      So your problem with Sofi is their marketing motto? If we literally judge every financial company by their slogan, then we'll be here a while.
      - pyre 9y ago
        Well, your only defence of the company against the parent of this thread was that they got you the best rate after shopping around. I'm pretty sure that "they don't have the best rate" is not an issue that the parent poster takes with the company, so I find it kind of odd that this is your rebuttal.
        9y ago

sidlls 9y ago

They reduced my student loan payment and cut the term in half at the same time. I was able to complete the application and have a decision in less than two days, and the funds were transferred two days later. They're also much easier to get substantial unsecured term debt through at a lower price than, say, Prosper or Lending Club.

JSONwebtoken 9y ago
I'm afraid your scenario isn't possible or you've been taken advantage of for your lack of financial fluency. There is no way your loan payments were reduced and the remaining term cut in half at the same time, unless your original interest rate was above 20-25%.
- caseysoftware 9y ago
  I'm glad I wasn't the only person saying "wait.. what?" over that one. He had to have received a large rate reduction or made a massive payment on the principle. I don't see how the math would work out otherwise.
  - ams6110 9y ago
    Or there's a balloon payment at the end of the term, hidden in the fine print.
- wil421 9y ago
  Look at the types of loans they have. Their target market is people in a crisis, students, and people with a lack of financial fluency. People make horrible financial desicions and a lot of companies profit off of them.
- sidlls 9y ago
  I'm chuckling so hard right now. You have no idea what the principle, terms or rates involved are yet feel the need to make assertions about possibilities and my knowledge of finance. It's an incredible representation of a certain kind of know-it-all nonsense.

hkmurakami 9y ago

My high level understanding is that at the start, they tried to target people who were the high "ROI" segment of customers that traditional lenders were lending to. They identified client segments who had better default numbers than the overall debt pool they were placed in, carved them out, and extended them better terms (but terms that would still make SoFi money). Another way to frame this is that they tried to properly "price" mispriced securities (which in this case are individuals with loan terms with worse terms than their financial profile should beget them). Students working towards advanced degrees from elite institutions were seen by the traditional lending market as higher risk than what SoFi deduced that they should be "priced" at. Traditional banks need scale in their businesses an order of magnitude or two compared to a startup. There were quite a few startups whose business model is "we will carve away the most profitable (but small in size) segments of a big bank's client base, and serve those people better".

newgrad 9y ago

What I know is Student loan is quite inefficient, people going to University of Phoenix with low job acceptance rate majors get the same/similar interest rate with people going to Stanford for Computer Science. One side is way more likely to pay back than the other. That side is the horse, while the other one is the burden to the portfolio. There are for-profit schools which spend 70% or more of their budget to solely marketing. I don't see they are producing good workforces. Long term value: driving the masses to correctly study things that have higher chances of concretely contributing to society on short - medium term. I think it's quite valuable. SoFi's way to survive is to collect high quality borrowers which risks are smaller than the average of the student loan portfolio. Let's say govt gave all 8% (idk the real numbers) for everyone, but there are good students/alumnis in it whose risk are calculated actually as 4%, SoFi would refinance the loan with 5%. 1% margin is for SoFi. Borrower is happy, SoFi is happy, student loan system gets a slap of reality in the long run & people would realize the inefficiency of the loaning system. In the next phase after they have gathered the good borrowers, SoFi needs to nurture them to ensure their productivity, while offering other finances if needed. This is still not materialized yet I think. But, acquiring good borrowers & continuously serving them is the holy grail of the business I think.

newscracker 9y ago

> Seemingly her job is just to stand around and pretend everything is "normal" while her husband sexually assaults girls half her age in the room across. This is really a low blow and completely uncalled for. I would expect such comments on reddit or Facebook, but not here.