MEFA Refinancing Review: Good for Student Loan Borrowers Without a Degree

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Whether you’re just learning about student loan refinancing or are ready to compare rate quotes, it’s worth considering the Massachusetts Educational Financing Authority (MEFA).

MEFA refinancing could help you lower your interest rate or monthly payment while also consolidating your various student loans. Like other reputable lenders, you can check your potential MEFA refi rate without hurting your credit. Still, MEFA loans aren’t always ideal, lacking key features like cosigner release.

MEFA refinancing is a good fit for creditworthy U.S. citizens and permanent residents, especially those who borrowed federal or private student loans for a nonprofit college or university but didn’t complete their degree. Read our MEFA review to learn more.

MEFA loans review

MEFA, located in the heart of Boston, focuses on helping students and families afford college. Created by the state legislature in 1982, MEFA offers a range of services, from student loans to college savings programs.

While you have many options for refinancing, MEFA can be a smart choice for some borrowers. As one of the few companies that offer refinancing loans to borrowers who did not complete a degree, MEFA loans can help you take charge of your debt.

MEFA products

MEFA offers a range of products to help families pay for a college education, including:

Refinancing loans: MEFA also offers refinancing loans to borrowers across the country. Private student loans: MEFA provides undergraduate and graduate student loans. Prepaid tuition: For those looking to save on tuition, MEFA runs U.Plan, a prepaid tuition program available nationally.

For the purposes of this MEFA review, we’ll focus on its refinancing product.

MEFA refinancing at a glance

Like other banks, credit unions and online lenders, MEFA refi loans could allow you to reduce your interest rate or monthly payment. They also yield a more streamlined repayment, as you could consolidate private and federal loans (borrowed for nonprofit colleges and universities only).

Here are the key features of MEFA refinancing:

Refinance as little as $10,000 worth of education debt Fixed and variable interest rates as low as 3.65%, as of Sept. 15, 2020 Check your rate without affecting your credit score Repayment terms of 7, 10 and 15 years Eligibility requirements include U.S. citizenship or permanent residency Ability to apply with a co-borrower or cosigner What to like about MEFA refinancing

Here are some of the upsides to choosing MEFA for refinancing your student debt:

Easily check your potential rate without impacting your credit

MEFA allows you to apply for a student loan or refinancing loan via their website or by phone. Before formally applying, however, you can click “Find My Rate” to be quoted possible terms without submitting to a hard credit check.

You can create your MEFA account and input the necessary information in just a few minutes. However, if you plan to file a full application, you do need to have documents on hand to verify your income, necessary loan amount or cosigner information.

The MEFA website is intuitive and easy to use. However, it doesn’t offer a mobile app, so it can be difficult to navigate on a smartphone.

Also, be aware that if you sign on with MEFA to refinance, it’ll actually be third-party American Education Services that manages your account in repayment.

Options to pause or modify your repayment

MEFA is not a federal loan lender, so it does not offer benefits such as income-driven repayment plans, loan forgiveness programs and expansive options for forbearance or deferment.

With that said, MEFA isn’t alone among lenders that offer temporary payment postponements without outwardly promoting them.

During the COVID-19 pandemic, however, MEFA took initiative, announcing helpful safeguards, including:

Natural disaster forbearance: No payments are due, and while interest accrues onto your balance, it will not capitalize. Modified payment plan: After completing the forbearance period, you could qualify for temporarily reduced monthly dues.

To learn more about their support programs during and after the COVID-19 era, contact the company directly:

Phone: 855-433-7334 Email: refi@mefa.org Mail: P.O. Box 8520 in LaVerne, CA 91750-9998 What to keep in mind about MEFA refinancing

And now, let’s turn to some drawbacks to U-fi refinancing:

MEFA eligibility requirements can be narrow

Unlike most other lenders, MEFA does not require you to have completed your degree before refinancing. That means MEFA may be an option for you if you left school early.

Keep in mind that you must be the primary borrower on the original loans. At MEFA, you can’t refinance a Parent PLUS Loan into your name, for example, as you can do with other lenders.

Here are other eligibility requirements of MEFA refinancing:

Citizenship or permanent residency Solid credit history (or a find a cosigner with one) No previous default on education debt No delinquencies on education debt in the past year No history of bankruptcy or foreclosure in the past five years

Apply with a cosigner but don’t count on cosigner release

To qualify for MEFA refinancing – or to snare a lower interest rate – you could apply with a cosigner.

On the downside, the student loan company doesn’t mention the possibility of a cosigner release anywhere on its website.

If cosigner release is an important feature to your repayment, consider shopping around with lenders like CommonBond.

MEFA interest rates aren’t especially competitive

MEFA claimed on its website that its refinancing customers reduce their interest rate by 28%.

If your application is approved, you can take out a loan with a fixed or variable interest rate as low as 4.65%, as of Sept. 15, 2020 .

While that rate could be a win for your repayment, you might be able to do better with a competitor. Many of the top student loan refinancing companies offer noticeably lower rates.

For example, Splash Financial advertised fixed rates bottoming out at , plus variable rates starting at .

MEFA repayment terms are lacking

If you choose to refinance your student loans with MEFA, you’ll be forced to select a 7-, 10- or 15-year repayment term. If that’s flexible enough for your repayment, you could be good to proceed. You could also simply prepay your loan ahead of schedule.

If you’d like more options, however, consider that many top-ranked lenders offer at least five repayment term options. The most common durations are 5, 7, 10, 15 and 20 years.

Is MEFA refinancing right for your student loan repayment?

As discussed in this MEFA review, this company might be a great lender for some borrowers. It could be especially useful for students who left school without graduating.

But because each lender has different criteria that determine your interest rates, it’s wise to get quotes from multiple lenders to make sure you’re getting your best deal.

To compare MEFA refinancing with other lender products, check out our marketplace of banks that refinance student loans.

Andrew Pentis contributed to this report.

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