SoFi sues some borrowers after they default on a personal or private student loan, but there may be time to negotiate a debt settlement or to refinance with a private lender before the lawsuit is filed.
SoFi has become a major player in the private lender space by spending heavily on marketing efforts encouraging federal student loan borrowers to refinance their higher-interest loans into a private loan with a lower interest rate. Refinancing helps you save money on interest over the life of the loan, but it can leave you stuck with a monthly bill you can’t pay.
It’s also spent heavily to grab a huge share of the personal loan market. As a result, SoFi holds a bunch of debt, most of which is paid on time.
But people’s financial situations change, and they fall behind on their monthly payments. Miss enough payments, and SoFil will charge off your loan balance and send it to a debt collector. Sometimes that’ll be a collection agency that Sofi sent the debt to see what results they could achieve. Other times, it’ll be a debt buyer that Sofi sold the loans at a discount.
No matter what route the loan takes, you — and your cosigner, if any — will suffer the same consequences: collection calls and credit score damage. You won’t have to worry about SoFi garnishing your wages, taking money out of your bank account, or putting a lien on your home until it takes you to court and gets a judgment.
Related: What Happens if You Default on Private Student Loans?
From the time your loan defaults until SoFi hires a law firm to sue you, there’ll be time to try and resolve the debt.