On Monday, online lender SoFi announced its members have cumulatively paid off over $5 billion dollars in credit card debt using its SoFi Personal Loans and getting them out of debt faster with lower interest rates.
According to SoFi, members who used SoFi Personal Loans to pay off credit cards reduced their effective interest rate by 42% on average. They also saw their credit scores rise by 17 points on average due to reduced credit utilization, a key component of credit scores. Meron Colbeci, SVP of Product at SoFi, stated:
“Credit cards offer great convenience and rewards, but there are better forms of financing for longer-term debt. If you’re carrying a balance, you owe it to yourself to look at a Personal Loan to pay off those cards.”
SoFi currently offers a variety of options for Personal Loans, letting members find their rate, choose their loan amount (up to $100,000), and choose their term (three, five, or seven years) through a simple, fully-online application process. Loans are funded in less than a week on average. Though SoFi Personal Loans can be used for lots of purposes, more than 70 percent of SoFi members report using them for credit card refinancing and loan consolidation.