Private Student Loans

SoFi vs. Citizens Bank

Finding the right bank to refinance your student loans can be a challenge. If you limit yourself to the top lenders in the field, then you’ll end up comparing SoFi and Citizens Bank at some point.

The student loan industry in this country is in crisis. Unfortunately, many current and former students simply can’t keep up with the payments for the loans that financed their education. The Consumer Financial Protection Bureau reports that 1-in-4 student loan borrowers are past due or in default on a student loan.

Refinancing can be an effective way to consolidate loans and create a more affordable monthly payment.

Social Financial, or SoFi, is a pioneer in the private student loan refinancing industry and Citizens Bank is a traditional bank that began offering these services in 2009. Both lenders appear to target the same borrowers, but there are some important differences to consider. This review will help you see what aspects of each lender’s program could make one a better choice than the other for your student loan refinancing.

Here are the pros and cons of the SoFi and Citizens Bank student loan programs, as well as some borrowing scenarios. We’ll also discuss in detail what sets each of these lenders apart so that you can make the right decision.



Here is a list of the benefits and the drawbacks of SoFi.

  • Extremely low interest rates
  • Flexible loan types and repayment terms
  • Additional 0.25% discount applied for autopay
  • No application or origination fees
  • No prepayment penalties
  • Fast approval and loan funding
  • Rigorous qualification standards
  • Minimum $5,000 in student loans to qualify
  • Requires minimum salary and credit score
  • Can’t remove a co-signer from your student loans
  • Must have a degree from an accredited U.S. university
  • Not available in Nevada


Example Scenario: $40,000 student loan debt with 6.8% interest rate and monthly payments of $460.32. If refinanced with SoFi under a fixed rate loan for 10 years.

  • Minimum savings: Save over $5,500 in interest over the life of the loan.
  • Monthly payment: Approximately $414 for 10 years to pay off the entire loan with no additional fees.
Bottom Line: SoFi is one of the best lenders on the market to refinance your student loans. If you meet their qualification standards, you should apply here first.

Citizens Bank


Here is a list of the benefits and the drawbacks of Citizens Bank.

  • Can make interest-only payments while you’re still in school
  • Repayment terms of 5, 10, and 15 years
  • No application or loan origination fees
  • No loan prepayment penalties
  • Loans as small as $1,000 permitted
  • Can remove a co-signer after 36 months
  • Can qualify for as much as 0.50% in rate discounts (AutoPay and Citizens Account)
  • Cap of $170,000 on student loans
  • No 20-year repayment term option
  • No income-driven repayment plans
  • You might need a co-signer to qualify (80% use one)
  • Forfeit some federal student loan protections
Example Scenario: $25,000 student loans with 6.9% interest rate and monthly payments of $223.31. If refinanced with a variable rate loan for 15 years at 4.27%,

  • Maximum savings: Save over $6.298 in interest over the life of your loan.
  • Monthly payment: Approximately $188.32 for 15 years to pay off your entire student loan.
Bottom Line: Citizens Bank is another top lender for refinancing student loans. They are an excellent choice if you want competitive rates and possible payment deferments while you’re still in school.

How SoFi and Citizens Bank are alike

Truth be told, these two lenders differ quite a bit. A few standard items that you’ll find among the two are that you won’t have to pay any application fees or loan origination fees. Also, if you decide to pay off your loan early with either, you won’t be penalized. Aside from these aspects, there are several key differences.

SoFi loan terms

SoFi offers more loan options and more competitive interest rates than Citizens Bank. SoFi has both fixed and variable rate loans, with repayment term choices of 5, 7, 10, 15, and 20 years. Citizens Bank also has fixed and variable rate loans, but they don’t have a seven-year loan.

SoFi’s variable loan rates start as low as 2.35%, and fixed rates are as low as 3.37%. Citizens Bank rates start at 2.38% for a variable rate loan and 4.73% for a fixed rate loan.

SoFi rigid qualification standards

SoFi is well-known for its stringent borrower requirements. The average borrower has a credit score in the high 700s. To borrow from SoFi, you must have graduated from college from one of over 2,000 accredited U.S. Title IV universities. You also need to have excellent income and show strong monthly cash flow. Most borrowers have annual incomes well over $100,000 and can demonstrate a strong history of on-time bill payment.

The SoFi customer service advantage

The one place where SoFi sets itself apart from nearly all other lenders is with its customer service and its commitment to its borrowers. The company is fast to let you know whether or not you qualify for one of their loans and if you do, they will fund your loan within just 30 days.

Few people find a career straight out of college and stick with that same employer until retirement. In fact, the Bureau of Labor Statistics reports that the average Baby Boomer changed jobs more than 11 times over the course of their working career.

If you find yourself out of work and financially strapped with refinanced student loans, SoFi has a unique program to help. The company has a career services department that will help you find a new job as quickly as possible. SoFi also offers forbearance for up to one year.

If you plan on starting your own business, SoFi also has an Entrepreneur Program that can help. Not only will they provide you with resources to help with your startup, such as a mentor, but they will also defer your student loan payments for up to 6 months while you get your new venture off the ground.

Citizens Bank qualifying criteria

Citizens Bank is also a reputable lender with some good student loan refinancing deals. They are a traditional bank, located in Rhode Island, that began offering student loans in 2009. A few features of their loan program might make it a better choice than SoFi’s products.

The first is that you don’t need to have finished your degree to qualify for a student refinance loan with Citizens Bank. They only ask that you have made on-time payments on your existing loans for the past year. You can’t currently be enrolled in school when you apply, however.

Citizens Bank might also approve you with a lower income than a lender like SoFi. In fact, the company states that their minimum income requirement is just $24,000.

Citizens Bank larger rate discounts

Most student loan financing companies provide a 0.25% interest rate discount if you enroll in AutoPay. Both SoFi and Citizens Bank are included in this group. Citizens Bank also provides a 0.25% loyalty discount for borrowers who have checking and savings accounts with the bank. That’s a total of 0.50%.

Unfortunately, that loyalty discount isn’t available in Connecticut, Delaware, Maine, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, and Vermont. The interest rates that we quoted earlier included all available discounts with Citizens Bank. So, if you live in one of these states, you’ll need to add 0.25% to those minimum rates because you can’t get the loyalty discount.

SoFi is best for customers with high incomes and excellent cash flow

SoFi is a good student loan refinancing option if you have a high annual income and can show the company that your job prospects are bright. They’re a top lender that considers your area of study as well as your personal financial data.

SoFi is best for customers with more than $170,000 in student loans

SoFi is also a good option if you have large student loans to refinance or consolidate. Citizens Bank has a cap on student loan refinancing of $170,000, so if you’ve financed medical school or another advanced degree with student loans, SoFi is likely the better choice.

SoFi is best for customers with smaller student loans

SoFi is also the better choice if your loan is between $5,000 and $10,000 because Citizens Bank has a $10,000 minimum and SoFi has recently lowered their minimum to $5,000.

Citizens Bank is best for customers who don’t qualify for SoFi

Unfortunately, many borrowers simply won’t qualify for a loan with SoFi. The company reports that they accept about 60% of applicants. If you don’t get a favorable result from a SoFi application, then you might want to try Citizens Bank.

Citizens Bank is best for customers who need a cosigner

Citizens Bank is known for lending to borrowers who might have slightly lower incomes or higher debt-to-income ratios. Because of this, they often ask for a cosigner on their refinanced student loans. In fact, 80% of their loans have cosigners.

The good news about using a cosigner on a Citizens Bank loan is that it doesn’t have to be a permanent arrangement. If you make 36 on-time payments on your loan, you can ask the bank for a cosigner release. SoFi doesn’t have this option, and a majority of its borrowers don’t use a cosigner.

Bottom line

The good news is that there are private student loan companies who cater to different segments of the market. SoFi and Citizens Bank are prime examples.

Your choice of lender will depend on several factors. If you have a high income, steady cash flow, and are looking for a lender with a strong service record, SoFi is undoubtedly the best choice. SoFi has the most competitive interest rates in the industry and a wide variety of loan choices so that you can choose an affordable repayment term.

On the other hand, if your income is below $100,000 and you have a willing cosigner, you might be able to get favorable rates with Citizens Bank.