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When it comes to investing, most people start with What. What should I invest in? What should my portfolio strategy be? What stock should I invest in?

But there’s actually a more important place to start: Why. Why do you want to invest in the first place? Why are you building a portfolio?

Selecting an investment strategy largely depends on your financial goals. This is sometimes an overlooked first step in building a sound investment strategy.

You can’t plan the right portfolio unless you know what you want to save for, how much you want to save, and when you’d like to use that money.

You might think of building an investment strategy as a top-down approach. Start with the big picture idea of what you want to accomplish. Then, hone in on the strategy that makes the most sense given those goals. Should you even be in stocks, or in bonds? Or should your money be held in cash? Or, should you do something else entirely?

Setting Your Financial Goals

First, you may want to consider these two recommended goals: Creating an emergency fund and saving for retirement. These are sometimes referred to as “bookend goals, because they are your primary short-term and primary long-term financial goals. From there, how you prioritize your other goals is entirely up to you.

Creating an Emergency Fund

Your emergency fund is a lump sum that you can easily access should an emergency arise—for example, if you get laid off or face unexpected health costs. It is common knowledge that this fund be three to six times your monthly spend, depending on how risk-averse and well-insured you are.

Consider Asking Yourself:
•   How much do I spend each month?
•   How much of that is necessary spending, and how much is discretionary?
•   How many months’ expenses would I like to have saved?
•   Do I have dependents or others that live off my income?
•   What’s my target emergency fund?

Creating a Retirement Fund

Retirement may be your largest long-term financial goal, and even if it feels very far away, it’s helpful to start saving early. Why? The earlier you start saving, the more time your money has to work for you.

Consider Asking Yourself:
•   At what age do you want to retire? For those born after 1960, full Social Security full Social Security retirement age is 67 .
•   How much money do you need to live on each year (in today’s dollars)?
•   How long do you expect to live? Statistically, those born in the 1980s have a life expectancy of about 79 years, but to be safe (and optimistic), you may want to plan for (much) longer.
•   What do you currently have saved for this goal? You may want to use a retirement calculator to see if you are on track.

Your In-Between Goals: Houses, Families, Businesses, and More

How you prioritize everything in-between your emergency fund and retirement depends entirely on you. For example, do you want to buy a home? Start a family? Launch a business? Go on an epic month-long vacation? Many of the above?

Any goal you can think of is on the table. You may want to be specific—exactly how much money you need to achieve each goal, and by when. Why? If you’re specific, you’ll have a much higher likelihood of reaching that target, when the time comes to use that money, you’ll have already given yourself permission and can enjoy it.

Consider Asking Yourself:
•   What is your goal?
•   When do you need the money?
•   How much do you need?
•   How much can you save each month?
•   What may be some obstacles that could come up?

Starting Your Investment Strategy

As you’ve seen in the exercises above, each of your goals has a specific time horizon. This leads to an underlying investment strategy: Generally speaking, the longer the time horizon, the more risk you can afford to take, because you can weather market volatility.

When making a decision about how to build a portfolio, you may want to keep in mind that risk and reward are two sides of the same coin. You cannot have one without the other.

There is no such thing as an investment that is high reward with no risk. (If someone promises such an arrangement to you, you may want to run for the hills—it’s probably a scam.)

Oftentimes, risk comes in the form of volatility, which is how much the price of an investment type fluctuates. Although these fluctuations are often temporary, it can take months or even years for returns to even back out to their historical averages.

Short Term (Less Than Three Years)

For goals like: Setting up an emergency fund, travel, buying a new car.

A good rule of thumb is to keep any money you need within the next three years “liquid,” or available to access as soon as you need it. For example, the whole point of having emergency cash is to have access to that money without worry.

Additionally, it is unlikely that you will want to subject money designated for the short term to the volatility of investments like the stock market. The biggest risk you take with short-term money is losing any of it at all, so you’ll probably want to keep it in cash.

If you have a higher risk tolerance, you can consider investing some money for short-term goals in a conservative portfolio that will pay a higher interest than a savings account, but that still has a low risk of losing money. If you go this route, you may want to remain flexible about when and how you tap into those investments.

Your cash can be held in a savings account of your choosing. You may elect to keep this cash in an interest-bearing savings account where you can earn interest on your cash savings. You may even find it helpful to open multiple savings accounts, giving them distinct names, in order to keep track of your various goals.

Medium Term (Five to 10 Years)

For goals like: Home purchase, starting a family.

With a time horizon of five to 10 years, you may be able to afford taking some risk with your money and give it a greater chance to grow. For these types of goals, you could potentially choose a moderate or moderately conservative portfolio.

Depending on your comfort level, this portfolio may hold a combination of cash, other fixed-income investments, like bonds, and some stocks.

More than likely, you’ll hold these investments in an investment account, which is sometimes also called a brokerage account.

For goals where you’re investing money for the mid-term, it generally does not make sense to use a retirement account like a 401(k) or Traditional IRA. You could be penalized for pulling the money out before retirement.

Medium to Long Term (10-20 Years)

For goals like: Child’s college savings, second home

With a time horizon of 10-20 years, you may be able to afford taking more risk with your money in order to take advantage of the power of compounding.

Depending on your comfort level, you may want to consider a moderate to moderately aggressive portfolio. Generally, the longer your investing timeline, the more risk you can take. This may mean building in a higher allocation to stocks and bonds.

Investments for goals with a pre-retirement timeline should be held in an investment or brokerage account. For a child’s college, consider using a 529 Plan which provides some tax benefits to those that are saving for the purpose of higher education.

Long Term (20+ Years)

For goals like: Retirement, financial independence

For long-term goals, time may be on your side. Having several decades or more gives a portfolio time to weather the ups and downs of the market and economic cycles. This allows an investor to take on more risk with the hope of more reward.

With this in mind, you may want to focus on aggressive growth while you are young, and then shift to a more conservative investment allocation over time. Depending on your comfort with the stock market, this may mean allocating a majority of your portfolio to the stock market or other high-risk, high-reward investments.

To save for retirement, you may want to consider investing in an online IRA, a 401(k) plan, or some other retirement-specific account. Retirement accounts have benefits when it comes to taxes, such as deferment on paying taxes until you withdraw from your 401k, or the ability to withdraw contributions from your Roth IRA early without penalties.

What’s Next?

Once you’ve outlined your goals, you’ve completed the first step of investing.

A good second step? Learning more about the investment options that are available to you. This will aid you in building a portfolio that will help you achieve your goals.

A good place to start is learning the different asset classes and their respective risk and reward profiles. If you are going to be invested in something, it’s helpful to know what to expect. Proper expectations may make you a more successful long-term investor.

Another option is to set up a complimentary appointment with a SoFi financial planner, who can help you define and quantify your goals and discuss the potential investment strategies to reach them. With SoFi Invest, this service is complimentary.

Depending on how involved you would like to be, SoFi has options for building your own investing portfolio or having an automated portfolio built for you, with your goals in mind. There are no associated costs or fees with utilizing either investing option.

Investing isn’t just for the wealthy; it’s for anyone who wants to achieve financial goals. There are low-cost, simple, and effective investing options that are accessible to investors of all sizes. You could get started today with a few clicks.

But before you do, you may want to spend some time thinking about what you’re investing for. Naming your goals will help guide you towards an appropriate investment portfolio. As a bonus, thinking deeply about goals may just help you to find the motivation to stick with them.

Interested in investing, now that you know where to start? Check out SoFi Invest® today.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, LLC and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.

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When it comes to the stock market, things can change—rapidly. Numerous factors impacting the value of individual stocks and the market as a whole can translate into being up one day, down the next. And try as they might, it can be near impossible for analysts to predict how the stock market will fare.

While the markets can be unpredictable, fluctuation is a sign that the stock market is working normally. As an investor, it’s important to get comfortable with the market’s volatility. Understanding how risk plays a role in investing can help inform the investing decisions you make for yourself.

What Is Investment Risk?

All investments come with risk. Unlike when you store your money in a savings account, investing has no guarantees that you’ll earn a return. When you invest, experiencing a financial loss is a possibility.

Different types of investments come with different levels of risk. Typically, as the risk increases, so do the potential returns. Understanding the types of risks associated with investing can be the key to informing your risk tolerance.

Types of Investment Risk

Just as there are a variety of investment vehicles, there are a number of different types of risk involved in investing. Here are a few common kinds:

Market Risk

Sometimes global economic trends, like a recession, or current events, like a natural disaster or political turmoil, can impact how the markets perform. Market risk refers to the potential for an investor to experience losses due to factors that are influencing the financial markets as a whole.

This type of risk is often referred to as systematic risk. The four most common types of market risk include interest rate, equity, commodity, and currency risk.

Interest rate risk reflects the market fluctuations that might occur after a change in interest rates is announced. Fixed-income investments, like bonds, are the investments that are most likely to be influenced by interest rate risk.

Equity risk refers specifically to the risk investors face from market volatility—the possibility that the value of shares will decrease.

Commodity risk comes from price fluctuations in commodities (raw materials) that impacts the users and producers of those same materials.

Currency risk is also known as exchange-rate risk. It stems from the price differences when comparing one currency to another. This type of risk is most relevant to investors who have assets in a foreign country or companies who have a lot of activities abroad.

Inflation Risk

Inflation measures the increase of the cost of goods over a set period of time and a rise in inflation means consumers have less purchasing power. Inflation risk is a concern for investors that have money saved in accounts with fixed interest rates, because the rate of inflation may outpace the fixed interest rate being earned.

Business Risk

When you buy a stock, you’re essentially buying a small share of the company. In order to make a possible return on your investment, the company you’ve invested in needs to remain in business. If a company goes out of business, common stockholders are likely the last to get paid, if at all.

Liquidity Risk

This type of risk reflects the concern that investors won’t find a market for their holdings when they ultimately do decide to sell their investments. This could prevent investors from buying and selling assets as desired; they may have to sell for a lower price, if they are able to sell at all.

This risk could also apply to investments with strict term limits like a certificate of deposit (CD). Account holders would typically face a penalty from withdrawing or liquidating this account before the specified time.

Horizon Risk

In investing, a time horizon is the amount of time you have until a specific financial goal.

A lengthy time horizon could potentially allow you to take on riskier investments, since if you do suffer a loss, your investments will have more time to rebound.

Horizon risk occurs when the time horizon of an investment is unexpectedly shortened—like, say, by an unexpected, expensive medical emergency.

On the other side of the spectrum, investors in or nearing retirement could face the risk of outliving their savings. This is referred to as longevity risk.

Concentration Risk

This type of risk can occur when an investor is invested in a limited number of assets or owns assets only in one category or asset class. If that one category experiences losses, so will a concentrated investment portfolio.

The Investment Risk Pyramid

Remember the food pyramid? Before MyPlate , the food pyramid was the gold standard of nutrition in the U.S. It recommended a hearty foundation of grains, followed by a smaller layer of fruits and veggies, followed by an even smaller layer of dairy, meats, beans, eggs, and nuts. At the very top, making up the smallest portion of the pyramid were fats, oils, and sweets.

The investment risk pyramid takes a similar approach, and could prove helpful if you’re looking for guidance as you’re evaluating the risks associated with different types of investments.

It may help you understand which investments pose the greatest risk, and can assist you in creating a portfolio that falls in line with your personal risk tolerance.

At the base of the pyramid are lower risk investments that have the potential to earn foreseeable returns. These investments create the foundation of a financial portfolio. Low risk investments typically include things like government bonds, CDs, money market accounts, and savings accounts.

In the middle of the pyramid are investments with moderate risk. These investments will be a little riskier than the base of the pyramid, but will hopefully lead to capital appreciation. Investments like high-income government bonds, real estate, equity mutual funds, and large and small cap stocks would fall into this category.

The riskiest investments are at the peak of the pyramid. Just like sweets, fats, and oils should make up a limited portion of your diet, these investments are generally recommended to only make up a relatively small portion of your overall investment portfolio.

Since these investments are so risky, some guidelines suggest only investing money that, if lost, won’t cause serious issues in your day-to-day life.

As you continue building your investment portfolio, it’s helpful to know that although the investment risk pyramid can be a useful tool, it’s just a guideline. Just as everyone’s dietary and nutritional needs are different, so are individual investment portfolios.Take it with a grain of salt.

Managing Risk

Here’s the thing about investing—risk is an unavoidable reality. While you won’t be able to eliminate risk completely, there are strategies to help you manage the investment risks your portfolio is subject to.

Understanding Your Financial Goals and Risk Tolerance

The first step in managing risk will be determining your risk tolerance—how much risk you are willing to take on as an investor. Your financial goals could help inform your risk tolerance. Consider asking yourself what you want to use your money for and then figuring out the timeline for when you’ll need it.

The amount of time you have to invest will likely influence the type of investments you make with your money.

For example, if you are saving for retirement in 40 years, you may be able to take on more risk than someone who plans to retire, in say, 10 years.

Try as we might, we can’t plan for everything and life can change quickly. As it does, it can be helpful to re-check your financial goals and re-assess your risk tolerance to see if any changes are necessary.

For example, if you’ve recently had a child, you may want to integrate a college fund into your financial plan. Or perhaps you and your partner have decided you want to upgrade to a bigger house before growing your family.

Diversifying Your Portfolio

With a diversified portfolio, your money isn’t concentrated into one specific area. Instead, it’s spread across different asset classes—like stocks, bonds, and real estate—the money isn’t concentrated in one specific area within each asset class.

While it can be tempting to concentrate your investments into areas you are most familiar with, limiting yourself to only a few industries or types of investments can be the financial equivalent of putting all of your eggs in one basket.

A diversified portfolio can provide some insulation to risk. If your portfolio is highly concentrated in one area and that sector takes a dip, it’s likely your portfolio will be impacted.

But if your portfolio is balanced across varied assets and classes, the impact of one underperforming section won’t be felt as dramatically. While a diversified portfolio won’t eliminate risk, it could help make your portfolio a little less vulnerable.

You could choose to diversify your portfolio through a series of thoughtful investments. As an alternative, you could also choose to invest in mutual funds or ETFs—exchange-traded funds.

When you buy shares in a mutual fund, you are automatically invested in each company that is included in the fund, which provides instant diversification. ETFs, on the other hand, bundle a group of securities together in one neat package and they can be a low-cost way to diversify your portfolio.

Monitoring Your Investments

It can be tempting to set it and forget it when it comes to investments. But keeping an eye on your portfolio is another step that could potentially help you manage risk. You won’t know there is an issue unless you monitor progress.

As the market fluctuates, your portfolio likely will, too. Consider setting a recurring time to monitor your holdings. It doesn’t have to be every day, but once a week or even once a month could be a good idea.

How have the assets been performing? Is your portfolio still in line with your current risk preferences? If not, consider taking the time to make adjustments so you’re comfortable with where your investments stand.

Regularly checking in with your investments will also allow you to monitor your progress and see if you’re still on track with your goals.

Asking for Help

Investing can be confusing. Sometimes all it takes a second set of (experienced) eyes to provide a bit of clarity. Don’t feel like you have to build your investment portfolio in a vacuum.

Consider speaking with a financial advisor who can assist you in creating a personalized financial plan that is designed to help you achieve your specific goals.

Know that financial advisors often charge fees for their services, but they can often provide valuable insight and advice. SoFi members have access to one-on-one advice with certified financial professionals, at absolutely no cost.

Becoming an Investor

Now that you understand how risk impacts investments and some of the ways to manage risk, you might be ready to build your investment portfolio. Investing can be a good way to grow your wealth in the long term. And the good news is it’s never too early or too late.

If you’re ready to get started, consider an account with SoFi Invest®, which offers a variety of options so you can invest in line with your personal risk preferences and financial goals.

For those that like to be in the driver’s seat—there’s active investing. You can buy and sell stocks, creating a completely personalized portfolio without any fees.

Investors who prefer to take a less intensive approach can opt for an automated account. You won’t have to worry about tracking individual stock prices and making timely trades. The account will do most of the work for you, automatically rebalancing to stay in line with your specified risk preference.

And SoFi offers a range of exchange-traded funds. SoFi offers four different types of ETFs that are intelligently weighted and are automatically rebalanced, so they’re always at the forefront of growing industry.

Ready to start managing your investment risks? Learn more about ETF investing and how they can help you make the most of your investments.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, LLC and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“SoFi Securities”).
Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
Advisory services are offered through SoFi Wealth LLC, an SEC-registered investment adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at adviserinfo.sec.gov .

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Trying to figure out ways to lower your student loan interest rates?

The process may seem impossible to understand. Consolidation, refinancing, federal vs. private student loans, variable vs. fixed rates—what do these terms even mean?

The lingo isn’t as scary as it sounds. And snagging a lower student loan rate may not be as difficult as you think.

Granted, there are a lot of moving parts, between understanding average student loans rates and learning the difference between federal and private loans.

Don’t worry, though — we’ve done some homework for you. Once you get the hang of how rates work, you may be able to better determine whether you’re getting a good deal.

Who Sets Student Loan Rates for Federal and Private Loans

Federal student loan rates are set by Congress (through legislation). Your student loan servicer, or the company in charge of your loan repayment plan, doesn’t have any power to change your federal student loan interest rates.

Private lenders set their own interest rates, and each of those lenders may have multiple loan packages offering different rate and term options. The rate can depend on several factors, such as the lender’s underwriting criteria, and the borrower’s credit history, employment history, and income.

Average Student Loan Rates for Federal Loans

For the 2019–2020 school year, the interest rate on undergraduate Direct Loans taken out after July 1, 2019, is 4.53%. And for graduate Direct Loans, it’s 6.08%.

Direct PLUS loans, which are federal loans available to graduate students or to parents of undergrads, have an interest rate of 7.08% as of July 2019.

To break this down a little further, let’s say your debt is $31,172 , which is the average amount of student debt per person in the U.S. as of 2019.

Using SoFi’s Student Loan Calculator for an estimate, if you are paying an interest rate of approximately 4.53% over a 10-year term, your monthly payment would come to around $323.51 and the interest charge would be approximately $7,650, for a total debt of $38.822.

While these numbers may seem high, federal rates are actually down. Rates on federal student loans had been steadily rising for the past two years, but they dropped from 5.05% for the 2018–2019 school year to 4.53% for the 2019-2020 school year.

Federal student loan rates have been reset annually (in July) since a 2013 law that tied loan rates to market conditions and placed a cap on rates. Because of this law, federal student loan rates are based on the yield, or return on investment, of 10-year Treasury notes. These notes are sold at Treasury auctions held annually in May. A lower yield at the Treasury auctions prompts lower student loan rates.

If you’re a parent expecting more than one child to attend college in the coming years, remember that federal rates currently change annually. This means that your second or third child’s rate could be different from the rate of your student starting school in 2020. .

However, if rates rise, you can take comfort in knowing that a higher yield at the Treasury is also seen as a signal of investor confidence in U.S. economic growth—and though there’s obviously no guarantee of where the economy is headed, a strong economy is just the kind of thing you want when your child enters the job market after college.

Average Rates for Private Student Loans

Private lenders each set their own fees, interest rates, terms, and APRs. An APR (or annual percentage rate) combines the interest rate over a year with the fees to reflect the total cost of the loan and make it easier to compare lenders.

As of this writing, APRs on private student loans range from around just under 3% (for variable rate loans) to just under 14% . This range is similar to 2019, but can (and does frequently) fluctuate. Many lenders offer repayment terms of five, 10, or 15 years, and some will offer even more repayment options, like eight-year terms.

Even for a single lender, rates offered can differ depending on factors like the borrower’s credit history, employment, whether they have a cosigner, and the specific loan package chosen.

Lenders typically offer fixed rate loans, meaning the rate doesn’t change over time, or a variable rate loan, meaning the rate could go up or down during the debt repayment term depending on market factors.

Lowering Student Loan Payments by Consolidating or Refinancing

Whether you have one student loan or several, you might be able to get better rates or terms by either refinancing or consolidating your loans.

When you initially took out your student loan(s), you agreed to certain conditions, like fees, length of loan repayment, and, of course, interest rate. But better loan conditions might become available after you’ve agreed to your loan terms.

Maybe there’s a student loan option that better fits your needs but didn’t exist before, or there’s a new financial institution that’s arrived on the scene.

Or maybe your own financial situation has changed and you have a better-paying job or an improved credit score. Or perhaps you’ve chosen to work for a non-profit or for a government agency to give back to underserved communities.

In these cases, among others, consolidating or refinancing could be a game-changer. These two options are similar but have some important differences.

Lowering Monthly Payments by Consolidating Student Loans

If you have multiple federal loans, you could consider consolidating them with a Direct Consolidation Loan. When you consolidate federal student loans, you lump the loans you have chosen to consolidate into just one loan.

Consolidating your loans won’t necessarily land you a lower rate, first because the outstanding interest on the loans you’re consolidating is added to the principal balance on your new Direct Consolidation Loan..

In addition, to determine your new interest rate with a Direct Consolidation Loan, figure out the weighted average of all your original loans’ rates, then round up to the nearest eighth of a percent. You may want to play with the mix of loans you are thinking about consolidating to view different weighted averages.

In some cases, your monthly payments may decrease when you consolidate your loans, but it’s usually because you end up paying back your loans over a longer period of time—which means paying more for your loans overall.

Consolidation could be an ideal solution, especially if you’re seeking to take advantage of income-driven repayment or Public Service Loan Forgiveness (PSLF), but you might not save much on interest in the long run. However, some borrowers still prefer to consolidate. One reason may be because making one monthly payment is simpler than making several, so it can be easier to keep up.

Lowering Rates by Refinancing Student Loans

If you have private student loans (or a combination of federal and private student loans), you may benefit from refinancing. Essentially, refinancing is taking out a new loan with new terms to pay off an older debt.

How can refinancing lower your interest rate? When you refinance, the lender looks at your financial situation now as opposed to your finances from when you originally took out your loans.

Depending upon market conditions and if your credit has improved or you earn more money now, you could possibly qualify for a lower rate or more favorable terms on a new loan. If you qualify for a better interest rate, refinancing could mean saving thousands of dollars over the life of the loan. And the earlier you refinance into a lower student loan interest rate, the more you could possibly save.

Student loan refinancing into a longer term also could be a great way for working graduates with high-interest loans to save money without having to cut other expenses. Although, just as it is with the Direct Consolidation Loan, lower monthly payments are usually achieved by having a longer repayment term, which likely means paying more interest over the life of the refinance loan.

When refinancing, you can typically choose between fixed or variable interest rates. If a rate is fixed, your monthly payments will stay the same until you pay off the entire loan. When the rate is variable, it can change as economic conditions change.

As of this writing, fixed rates for private refinance loans range anywhere from around 4% to around 13%, and variable rates range between just under 3% to around 13% (but these rates can, and do, change frequently ).

Before you choose between a fixed or variable rate, you might want to talk with your chosen lender and if you are considering a variable rate, check out the London Interbank Offered Rate (LIBOR) movement to view how the LIBOR index is directly tied and can move in tandem with economic conditions and the fed funds rate. Refinancing is always done through a private lender. Many private lenders handle only private loans, but SoFi refinances both private and federal loans. This makes it possible to have only one monthly payment, even if you have both federal and private loans.

This way, you’ll no longer have to deal with the hassle of keeping track of multiple student loan payments that may have different lenders, terms, or interest rates.

SoFi doesn’t charge application fees, origination fees, or prepayment penalties. As a SoFi member, you are also eligible to gain complimentary access to features like career services, exclusive member events, , and live online customer support.

Before refinancing, keep one thing in mind: Refinancing government loans could mean losing out on federal benefits such as student loan forgiveness programs and income-driven repayment options, so it is worth considering this tradeoff before making any decisions.

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