SoFi Originated a Record $10.7 Billion in Personal Loans Last Quarter. Here's Where That Credit Risk Actually Sits.

SoFi Technologies (NASDAQ: SOFI) shares have been on a disappointing trend. As of Aug. 12, they have fallen 32% in 2026. And they trade 45% below their peak from last November.

That performance takes away from the underlying company's solid financial results. Lending activity has been exceptional, as SoFi's loan originations totaled $14.8 billion in the second quarter (ended June 30), up 69% year over year. The growth is superb.

Personal loans continue to be the focal point, with record originations of $10.7 billion in Q2. But investors should understand where this fintech stock's credit risk actually sits.

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Take a closer look at the loan book

SoFi's headline numbers were terrific. Last quarter, it reported year-over-year revenue growth of 43%. Net income soared 61% compared to Q2 2025. The digital bank also added 1.1 million net new customers, and now commands a user base of 15.8 million members.

It's hard to find any faults with SoFi's impressive trajectory. As with any lender, however, there is credit risk. And because this company leans heavily on personal loans, an unsecured product with shorter terms and higher monthly payments, it's worth taking the time to look under the hood.

Of the $10.7 billion in personal loans originated in the second quarter, "$7.6 billion was originated for our balance sheet," said chief financial officer Chris Lapointe on the Q2 2026 earnings call. The rest was sold via the loan platform segment, offloading risk to third parties.

SoFi's balance sheet currently categorizes $27.6 billion, or 100%, of its personal loans as held for sale. But there isn't a strict amount that is kept or sold. It likely depends extensively on market demand and maintaining adequate capital ratios.

If a recession leads to deteriorating credit conditions that pressure borrowers' ability to make payments, SoFi could see higher defaults and losses. As of June 30, personal loans accounted for 57% of the business's entire loan book. What's encouraging, though, is that the net charge-off rate for personal loans was 3.7% in Q2, down from 4.5% in the year-ago period.

Shareholders should certainly be encouraged by the company's ability to drive substantial personal loan growth, especially at a time when the Federal Reserve is leaning away from taking an accommodative stance and cutting rates. The demand is robust. And it could lead to durable interest or fee income for SoFi.

Don't forget, however, that an increase in originating record volume is only a positive development if credit risk is properly managed and controlled. Understanding this takes more effort on the part of investors.

So far, SoFi looks to be in good shape, as indicated by its strong financial results. But investors should pay close attention to the lending book's credit performance for any signs of weakness.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.