Settle Your SoFi Personal Loan For Less
Do you know if Sofi (personal loan) typically settles on delinquent accounts? I've only missed one payment and realize If they do settle it won't be for a few more months of non payment. If so, how aggressive are they in their collection process?
Can I settle my SOFI loan, and when is the best opportunity to do that?
—Dana
Social Finance Inc (SoFi) loans can be settled for less than what you owe. When and how to go about that in order to get the best outcome will vary from one person to the next.
Personal loans can sometimes be settled for 50% or less. Like you pointed out, you have to be late enough to even begin to negotiate. And because personal loans will follow accounting guidelines for charging off unpaid debts at 120 to 150 days, it is often this time line that you have to work with.
Negotiating with Social Finance Inc
When you call Social Finance directly, in order to talk about your inability to pay, you may be offered some reduced payment options that are temporary. If your current financial set back is sure to be short lived, the lower payment option can make sense. But be sure you only agree to something you are confident you can follow through with. If you fall off of a payment option with SoFi, it is unlikely you will be able to call back and negotiate anew.
If you cannot continue to pay your SoFi loan, and the payment plan they offer is not enough of a concession, you may want to consider settling with them for less than what is owed. But you will likely be negotiating with a third party, and not directly with SoFi.
When it comes to how low you can settle SoFi loans for, it can vary from one person to the next. I would rather be negotiating with Lending Club, or settling personal loans with Avant.
Your SoFi Loan is with a Debt Collector
At the time of this writing, it is not all that common to be able to work out your settlement with SoFi. You end up having to deal with a third party debt collector they send the debt to instead. This may later end up being debt buyers too, but for right now, it is mainly going to be a contingency debt collector, or a collection law firm.
Contingency debt collectors are the most common type. They call and write to you in an effort to get you to pay. They get paid if they get you to pay. They will often only have your account for a short window of time. You can use each debt collectors collection trends to optimize the savings from settling your SoFi loan with them.
Dealing with an attorney SoFi may send your account to is more nuanced, and also requires a certain skill set. I do know that SoFi sends account to Zwicker and Associates for collection.
In either case, the debt collector is going to form a bias about how collectable you look based on your credit reports, and other details. If you look like someone who is managing to keep several spinning plates in the air (mortgage, car, student loans, credit cards), than you are often viewed as a better collection target. If a look at your credit suggests all your plates came crashing down, the outcome from settling with a debt collector on your SoFi loan can often be improved.
Of the personal loan companies out there, I do find SoFi to be among the more aggressive. But you can prepare around that.
You can post a question or comment below with your loan balance, and whether you have additional collection items that are currently showing, or soon will be, on your credit reports. I can offer more feedback from there.
You can also reach me by phone to discuss your situation off line at 800-939-8357, ext 2, or fill in the talk to Michael request by clicking the box directly below.
Update 7/11/21: SOFI has recently been selling some of their unpaid loans to LVNV Funding. This is one of the larger debt buyers in the US. They can be aggressive with collecting in the courts, so it is ideal to negotiate a settlement for less in the early days of SOFI selling to them. We can help you do that. And you can get LVNV off your credit reports at the same time.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry, and is a regular contributor to several personal finance websites.
I have a loan from 2017 that originated at 50K, and is currently at 33K and reaching 120 days past-due. I was current except for the months around my divorce, and fell behind permanently due to COVID related layoff and under-paid income at subsequent contract jobs. Should I work with SOFI to reduce the debt or wait until it goes to a collection agency? I have two large credit cards that are also behind right now.
Settlements on SOFI accounts are often best when they send it to a third party.
Who are the credit cards with? That can impact the priority of who to settle with first.
I am currently trying to negotiate a Sofi loan with Zwicker and Associates. They have a judgement against me, and am tying to settle a lump sum for .less. The alternative is bancruptcy which I would like to avoid. Any recommendations?
It is much harder to get a decent savings when negotiating a judgment. I suggest scheduling a quick consult with me so I can get some more details and talk strategy. You can schedule here: https://calendly.com/debtbytes/15min
I am close to defaulting on my student loan payment with SoFi of about $52,000 for a fraudlent for profit school that’s being sued. I am hoping to settle with them for some reduction in the amount of a loan but I have no clue how to start. I refinanced with SoFi after some bad financial advice from federal loans and don’t know my best next step. I cannot afford the $600 payment per month. Please help!
How long ago did you take out the Sofi loan?
I had a personal crisis about 3 years ago and had to default on all of my loans. I had a loan with SoFi for ~50,000 balance. I was sued and a judgement docketed. I am now trying to put that period in my past and want to settle this account. What settlement amount is realistic for an offer to the lawyer/collection firm that was hired from SoFi?
Who was the collection law firm that handled this? Was it Zwicker and Associates? Do you have a lump sum to work with in order to pay the settlement reached?
yes Zwicker. I have a lump sum that I have gathered, do you think $15k is reasonable to offer?
No. Check out this post about settling judgment debts.
Hello Michael,
I refinanced my student loan with sofi and I took another personal loan. Making 2 loan with sofi, I was 100% on payment till things get worse and I went to prison. I don’t have a way of paying, should I file bankruptcy or call sofi to negotiate?
If you qualify for chapter 7 it will be the lowest cost, fastest, and most effective from of debt relief.
Hi, Michael, I have a $8500 loan from prosper that was charged off in 2014. To my knowledge this has not been sold to a Collection Agency and I do not receive mail from Prosper either. I would like to settle this and put that part of my past behind me but I don’t know how. Any advise on how to get this settled?
I would call Prosper and find out who has the loan. It was likely sold off, but perhaps lost in the shuffle with the purchaser, you moved, changed your phone number, or some other reason for no contact to date. If you need help call in for a consult at 800-939-8357 ext 2.
Michael, I owe 28,000 on a personal loan with So fi. I started a company and it went under. I have called So fi and they said that they do not do settlements. What should i do. i am current on my loan but i just cant pay it anymore as i am changing jobs where i make a lot less. Also, how bad will this all affect my credit? I own a house but need to get a new car in the next couple of years. Also, have they been known to take people to court?
SOFI is not currently working with their customers directly to settle loans for less. They do use third party collectors who you can often negotiate a settlement with.
How hard and for how long settlement hurts your credit is different for each of us. Check out that link and assess your situation.
You can get a car loan if you can fog a mirror these days, but after your settlements, not necessarily while you have unpaid loans still showing.
SOFI will sue to collect. The key is having the money in place to settle and prevent or stop that if it were to happen.
Thank you for your detailed response. I spoke to a representative from Sofi and she stated that they’d like to work with me before charge off. She did not go into detail. I’m hoping she meant settlement. My Loan balance is 40000. I only have made 3 payments and several good faith payments. I will have a decent lump sump saved by the time it gets close to charge off. Will this help my chances of settling? My credit report shows I’m late on loans from lending club, prosper and discover. I am current on 2 credit cards and my student loan.
That loan being so new before things fell apart for you is not going to be helpful. Call me for a consult so I can dig deeper into the details. You can reach me at 800-939-8357, ext 2, or fill in the talk to Michael form in the right column of this page so we can coordinate a time through email.
Should I compose a letter including my hardship and lump sum settlement offer To the creditors that I owe right before charge off?
No. Letter writing is not going to be helpful in your situation. You likely won’t be settling with SoFi, but with the debt collector they send it to.
Can you give me an update of what happened to your situation. Did they end up settling or taking you to court? I’m going through the same situation. I owe $50,000