What SOFR Is & How It Works

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
What Is SOFR?
How Does SOFR Function?
How is SOFR Calculated?
History of SOFR
The underlying markets needed to be robust. Those markets needed to have a high amount of liquidity. The rate index could in no way interfere with future decisions made by the Federal Reserve.
Pros and Cons of SOFR
Why SOFR is Replacing LIBOR
Transitioning From LIBOR to SOFR
How the Transition Affects Consumers
Alternatives to SOFR
SONIA
Federal Funds Overnight index
AmeriBOR
U.S. Prime Rate
Frequently Asked Questions
About the Author
Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
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