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SoFi Technologies Maintains Strong Credit Quality: Can It Persist?
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Key Takeaways
SoFi's loan originations surged 69% year over year to $14.8 billion in the second quarter of 2026.
Personal-loan charge-offs fell, while 90-day delinquencies improved to 40 basis points.
SoFi maintains a 7-8% maximum loss assumption as recent loan vintages continue to season.
SoFi Technologies’ (SOFI - Free Report) credit performance holds up even as lending activity reached record levels. In the second quarter of 2026, total loan originations climbed 69% year over year to $14.8 billion. Personal loans accounted for $10.7 billion, while student and home loan originations reached $2.7 billion and $1.4 billion, respectively.
The key question is whether credit quality can remain steady as those volumes rise. Excluding the impact of delinquent loan sales, SoFi estimated that the all-in annualized personal-loan net charge-off rate would have been approximately 3.7%, improving 70 basis points (bps) from the previous quarter and 80 bps from a year earlier. Including the impact of delinquent-loan sales, the reported personal loan annualized net charge-off rate fell to 2.62% from 3.03% in the prior quarter.
Delinquency trends also remained controlled. Personal-loan 90-day delinquency stood at 40 bps, down seven bps sequentially, while the student-loan rate was only 11 bps. The student-loan annualized charge-off rate declined to 61 bps from 65 bps in the prior quarter.
SoFi’s lending economics continue to provide room for credit costs. Management said its core personal-loan portfolio generated an approximately 6.1% risk-adjusted margin in the second quarter, based on a 12.9% weighted-average coupon, 3.1% funding cost and 3.7% annualized losses. Lending-adjusted net revenues rose 59% year over year to $712 million.
Still, loan growth means credit trends remain important to watch. SoFi continues to support a 7-8% maximum cumulative net loss assumption for personal loans. Vintages originated from the fourth quarter of 2022 through the third quarter of 2025 had net cumulative losses of 4.68%, with 35% of unpaid principal still outstanding, giving investors another measure to track as the portfolio seasons.
How Are Competitors Faring?
Happen Inc. (HAPN - Free Report) competes with SoFi in digital consumer lending, particularly in unsecured personal loans and debt consolidation. Its credit performance has remained resilient, supported by disciplined underwriting and improving loss trends. In the second quarter of 2026, Happen’s net charge-off ratio on total loans and leases held for investment improved to 3.2% from 3.8% a year earlier, reflecting stronger credit performance.
Ally Financial (ALLY - Free Report) competes with SoFi across digital banking and consumer lending, led by its auto-finance platform. Improving delinquencies, lower charge-offs and disciplined underwriting indicate resilient borrower performance, while its scale provides diversification across credit cycles. In second-quarter 2026, Ally’s consumer auto net charge-off ratio was 1.6%, versus 1.7% a year earlier.
SOFI’s Price Performance, Valuation and Estimates
Shares of SOFI have gained 0.7% in the past six months, underperforming the broader industry and the S&P 500 Index.
Image Source: Zacks Investment Research
From a valuation standpoint, SOFI trades at a forward price-to-earnings ratio of 22.45X, well above the industry’s 15.63X. It carries a Value Score of F.
Image Source: Zacks Investment Research
SOFI’s estimate revisions reflect a favorable trend for full-year 2026. The Zacks Consensus Estimate for full-year 2026 EPS gained a cent to 60 cents over the past two months.
View the Zacks #1 Rank List
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SoFi Technologies Maintains Strong Credit Quality: Can It Persist?
Key Takeaways
SoFi Technologies’ (SOFI - Free Report) credit performance holds up even as lending activity reached record levels. In the second quarter of 2026, total loan originations climbed 69% year over year to $14.8 billion. Personal loans accounted for $10.7 billion, while student and home loan originations reached $2.7 billion and $1.4 billion, respectively.
The key question is whether credit quality can remain steady as those volumes rise. Excluding the impact of delinquent loan sales, SoFi estimated that the all-in annualized personal-loan net charge-off rate would have been approximately 3.7%, improving 70 basis points (bps) from the previous quarter and 80 bps from a year earlier. Including the impact of delinquent-loan sales, the reported personal loan annualized net charge-off rate fell to 2.62% from 3.03% in the prior quarter.
Delinquency trends also remained controlled. Personal-loan 90-day delinquency stood at 40 bps, down seven bps sequentially, while the student-loan rate was only 11 bps. The student-loan annualized charge-off rate declined to 61 bps from 65 bps in the prior quarter.
SoFi’s lending economics continue to provide room for credit costs. Management said its core personal-loan portfolio generated an approximately 6.1% risk-adjusted margin in the second quarter, based on a 12.9% weighted-average coupon, 3.1% funding cost and 3.7% annualized losses. Lending-adjusted net revenues rose 59% year over year to $712 million.
Still, loan growth means credit trends remain important to watch. SoFi continues to support a 7-8% maximum cumulative net loss assumption for personal loans. Vintages originated from the fourth quarter of 2022 through the third quarter of 2025 had net cumulative losses of 4.68%, with 35% of unpaid principal still outstanding, giving investors another measure to track as the portfolio seasons.
How Are Competitors Faring?
Happen Inc. (HAPN - Free Report) competes with SoFi in digital consumer lending, particularly in unsecured personal loans and debt consolidation. Its credit performance has remained resilient, supported by disciplined underwriting and improving loss trends. In the second quarter of 2026, Happen’s net charge-off ratio on total loans and leases held for investment improved to 3.2% from 3.8% a year earlier, reflecting stronger credit performance.
Ally Financial (ALLY - Free Report) competes with SoFi across digital banking and consumer lending, led by its auto-finance platform. Improving delinquencies, lower charge-offs and disciplined underwriting indicate resilient borrower performance, while its scale provides diversification across credit cycles. In second-quarter 2026, Ally’s consumer auto net charge-off ratio was 1.6%, versus 1.7% a year earlier.
SOFI’s Price Performance, Valuation and Estimates
Shares of SOFI have gained 0.7% in the past six months, underperforming the broader industry and the S&P 500 Index.
Image Source: Zacks Investment Research
From a valuation standpoint, SOFI trades at a forward price-to-earnings ratio of 22.45X, well above the industry’s 15.63X. It carries a Value Score of F.
Image Source: Zacks Investment Research
SOFI’s estimate revisions reflect a favorable trend for full-year 2026. The Zacks Consensus Estimate for full-year 2026 EPS gained a cent to 60 cents over the past two months.
Image Source: Zacks Investment Research
SOFI stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.