SAN FRANCISCO–SoFI and Fannie Mae have announced a new loan option the two organizations say will enable homeowners to pay down student debt using equity in their homes.
SoFI, the brand named used by Social Finance, Inc. is an online personal finance company that provides student loan refinancing, mortgages and personal loans. The company is reportedly also branching into other financial services.
SoFi claims the plan allows homeowners the ability to refinance mortgages at a lower rate and pay down the balance of an existing student loan. With its cash-out refinance student loan payoff plan, SoFi will pay down the student loan by disbursing payment directly to the servicer of the student debt. SoFi is a Fannie Mae approved seller servicer, the organizations said.
“People can pay off student loan debt and are left with one loan at the low rates that mortgage borrowers are enjoying in today’s market,” said Michael Tannenbaum, senior vice president of mortgage at SoFi, in a statement.
SoFi further said the Student Loan Payoff ReFi actively addresses a growing burden that impacts a wide range of households, with Experian data saying the average household with a student loan balance is carrying $36,000 on those student loans, and those with outstanding Parent PLUS loans have $33,000 in student debt.