6 ms·

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 a

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.
- cwilkes 9y ago
  Post some particulars then. Maybe not of your terms but something like it to see how to reduce the payment and cut the term in half.
  - sidlls 9y ago
    That's easy: let the new rate be r' and the original rate be r. Then choose r'/r < 1/2 by a sufficient amount. For example: let (P; r; t) be ($100,000; 8%; 30 years). The payment is around $740/mo. Now take (P; r; t) equal to ($100,000; 3%; 15 years). The payment is around $700/mo. You can adjust for the fact that some months of repayment already occurred so the term reduction is to a new term greater than half the remaining periods on the existing loan and the present value (i.e. new principle) is smaller and bump r' up accordingly to achieve the same result. Either way it's hardly "impossible" and actually quite easy to do if there's a significant difference between the original loan conditions and the refinance/consolidation.
    - MaulingMonkey 9y ago
      The power of compound interest! For anyone else wishing to double check sidlls math: https://www.wolframalpha.com/input/?i=$100000+3%25+15+year+mortgage https://www.wolframalpha.com/input/?i=$100000+3%25+15+year+m... https://www.wolframalpha.com/input/?i=$100000+8%25+30+year+mortgage https://www.wolframalpha.com/input/?i=$100000+8%25+30+year+m...
    - ams6110 9y ago
      Sure but who is going to lend you $100,000 at 3% for 15 years, with no asset securing the loan? Again, the specific numbers of your situation would go a long way to shutting up the skeptics here. Either your initial rate was absurdly high, or you're exaggerating.
      - josephjrobison 9y ago
        If he's an MD or Engineering Phd from Standford, that's the security that SoFi originally innovated on right?
- JSONwebtoken 9y ago
  I'm sure the SoFi salesperson was also chuckling when you signed off on a magic loan that supposedly made half your principle disappear. Anyone with a calculator can tell the numbers don't add up. You're either embellishing or you got scammed.
  - saalweachter 9y ago
    Eh, there's always the possibility they were pulling an Uber - using VC cash to subsidize unprofitable margins to try to corner a market.
  - sidlls 9y ago
    Who said half the principle disappeared?
  - oscilloscope 9y ago
    Neither the interest rate nor the term of the loan affect the principle. These only change the monthly payment amount. It's possible to have a lower monthly payment with a shorter term, depending on the interest rate.
    - rockinghigh 9y ago
      I think you mean principal.
- joehenriod 9y ago
  Would you mind just stating what the debt was, what your payments were, what your interest rate was and what the term was compared to now? It's kind of a silly fight, and I'm sure it would help educate a lot of people reading about what is possible.
- deleted 9y ago
  [deleted]
- DrScump 9y ago
  my knowledge of finance ... apparently does not include knowing that "principle" and principal have different meanings.
throwayit 9y ago
You are incorrect. This is called refinancing and happens frequently. It's possible SOFI assumed his/her debt at a lower interest rate which in some scenarios could mean a lower payment and lower term. The lower rate could be due to a variety of factors including overall interest rates, a change (or different viewpoint) in creditworthiness of the debtor, etc. Your ego and lack of financial fluency is showing - this scenario is entirely possible.

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.

cwilkes 9y ago
Post some particulars then. Maybe not of your terms but something like it to see how to reduce the payment and cut the term in half.
- sidlls 9y ago
  That's easy: let the new rate be r' and the original rate be r. Then choose r'/r < 1/2 by a sufficient amount. For example: let (P; r; t) be ($100,000; 8%; 30 years). The payment is around $740/mo. Now take (P; r; t) equal to ($100,000; 3%; 15 years). The payment is around $700/mo. You can adjust for the fact that some months of repayment already occurred so the term reduction is to a new term greater than half the remaining periods on the existing loan and the present value (i.e. new principle) is smaller and bump r' up accordingly to achieve the same result. Either way it's hardly "impossible" and actually quite easy to do if there's a significant difference between the original loan conditions and the refinance/consolidation.
  - MaulingMonkey 9y ago
    The power of compound interest! For anyone else wishing to double check sidlls math: https://www.wolframalpha.com/input/?i=$100000+3%25+15+year+mortgage https://www.wolframalpha.com/input/?i=$100000+3%25+15+year+m... https://www.wolframalpha.com/input/?i=$100000+8%25+30+year+mortgage https://www.wolframalpha.com/input/?i=$100000+8%25+30+year+m...
  - ams6110 9y ago
    Sure but who is going to lend you $100,000 at 3% for 15 years, with no asset securing the loan? Again, the specific numbers of your situation would go a long way to shutting up the skeptics here. Either your initial rate was absurdly high, or you're exaggerating.
    - josephjrobison 9y ago
      If he's an MD or Engineering Phd from Standford, that's the security that SoFi originally innovated on right?
JSONwebtoken 9y ago
I'm sure the SoFi salesperson was also chuckling when you signed off on a magic loan that supposedly made half your principle disappear. Anyone with a calculator can tell the numbers don't add up. You're either embellishing or you got scammed.
- saalweachter 9y ago
  Eh, there's always the possibility they were pulling an Uber - using VC cash to subsidize unprofitable margins to try to corner a market.
- sidlls 9y ago
  Who said half the principle disappeared?
- oscilloscope 9y ago
  Neither the interest rate nor the term of the loan affect the principle. These only change the monthly payment amount. It's possible to have a lower monthly payment with a shorter term, depending on the interest rate.
  - rockinghigh 9y ago
    I think you mean principal.
joehenriod 9y ago
Would you mind just stating what the debt was, what your payments were, what your interest rate was and what the term was compared to now? It's kind of a silly fight, and I'm sure it would help educate a lot of people reading about what is possible.
deleted 9y ago
[deleted]
DrScump 9y ago
my knowledge of finance ... apparently does not include knowing that "principle" and principal have different meanings.

throwayit 9y ago

You are incorrect. This is called refinancing and happens frequently. It's possible SOFI assumed his/her debt at a lower interest rate which in some scenarios could mean a lower payment and lower term. The lower rate could be due to a variety of factors including overall interest rates, a change (or different viewpoint) in creditworthiness of the debtor, etc. Your ego and lack of financial fluency is showing - this scenario is entirely possible.