SoFi Wants to Refinance Your Student Loans–But It’ll Take You Out for a Drink First
Meet the lending company that actually cares if you get laid off.
Dan Macklin co-founded SoFi, a startup that began by refinancing student loans and wants to "be the center of our members' financial lives," as Macklin put it. His official job title is VP of community and member success. SoFi's product offerings have expanded to include other types of loans, as well as wealth management and insurance options. The company expects to issue a deposit-and-withdrawal product within 2017.
Perhaps unexpectedly, many of SoFi's customers also opt to join the company's full-fledged community. SoFi actually stands for Social Finance, and the company lives up to the "social" part of its name by offering everything from career workshops to a private Facebook group to dinners and happy hours. If Sallie Mae asked you out for a drink, would you say yes? Perhaps not, but SoFi has managed to cultivate that kind of draw.
--As told to Sonya Mann
We started the company back in 2011, because we saw that the finance industry wasn't responding to new realities. We saw a new generation coming of age, with new financial needs. At the same time, new technologies were maturing. The fact that now people are carrying a computer around in their pocket -- well, at SoFi, you can be approved for a mortgage within a couple of minutes, just using your phone. That kind of technology didn't used to exist.
Younger, more nimble companies have been quicker to embrace mobile and online technologies. The incumbent players weren't rising to that challenge, so we did. What we've built at SoFi over the past six years is based on speed, transparency, and alignment with our members' interests. Like I said, we have an application process built for the 21st century, including the ability to apply online.
But there's more than that when it comes to being a different kind of financial-services company. We offer things like career support, and I don't know that we have any competition there. For example, should you lose your job after taking out a loan with SoFi, we have a feature called unemployment protection. It allows you to defer your loan in increments of three months, to give you time to get back on your feet. When you lose your job, you're in enough of a stressful situation as it is, trying to work out how to pay the bills and how to get another job. The last thing we want to do is add to that stress level. We want to help, and we do that by allowing you to defer your debt.
Also, perhaps more important, we offer proactive help to our members to find new jobs. Through our careers team, we can help you find new employment. That goes from basic things, like just looking at your rsum and helping you improve it, all the way through to salary-negotiation advice. We can even try to find an actual job for you through the SoFi network. So far, we've helped more than 200 people who were unemployed find jobs again.
The inspiration for this program goes back to why we started the company. We didn't think the finance industry was really on the same side of the table as its customers. We want to stay alongside our members, not opposite them. And there are certain things that we can do for people, to help them, given our scale and expertise. Of course, it's helpful to us as well. If someone owes us $100,000 in student loans and she loses her job, it's in our interest as much as hers that she become reemployed. It's something we think makes a lot of good common sense, but it's also something that wasn't being provided by the industry before we came along.
This type of service is not in the DNA of big banks. It's not what they do, and I think it wouldn't be authentic if they tried to do it. When I go around the country speaking to hundreds and thousands of SoFi members, meeting them at our get-togethers, I ask, "If your bank invited you to an event like this, would you go?" Most of them say no.
The difference comes from the way that SoFi has treated them, through their application experience, through their approval experience, as well as through the experience after they sign their loan. Members have a lot of good feeling toward the company, which is great. For that reason people are happy to come out and spend an evening with us.
There is an appetite out there for real relationships. The community stuff that we do, and the human face that we put on the company, is very important to many people. We've gotten great feedback since we started doing these events. By early April, we had already hosted 105 events in 28 cities, attended by close to 5,000 people. Over the course of this year, we'll put on 400 events.