U-fi Review: How This Student Loan Refinancing Lender Stacks Up

·8 min read

Note that the situation for student loans has changed due to the impact of the coronavirus outbreak and relief efforts from the government, student loan lenders and others. Check out our Student Loan Hero Coronavirus Information Center for additional news and details.

* * *

An increasing number of companies are interested in helping you refinance education debt, and one of the newer options is U-fi student loans.

U-fi is a partnership between Union Bank and Nelnet, a well-known originator and servicer, that could help you adjust and simplify your debt repayment. This U-fi student loan refinancing review can help you decide if it’s the right company for you.

U-fi refinancing is a good fit for borrowers with solid credit seeking longer repayment terms (20 to 25 years). The company stands out for serving customers who didn’t graduate and offering repayment protections in the form of forbearance and cosigner release.

U-fi student loan refinancing review

When you refinance your debt through U-fi, your current student loans are replaced with one new loan. Because U-fi offers private refinancing, you will lose access to federal protections and programs if you refinance federal student loans with this program.

In some cases, though, you might not need access to programs like income-driven repayment or Public Service Loan Forgiveness (PSLF). If refinancing can save you significant money and you have a steady income, it could make more financial sense to do so. Carefully evaluate your options and situation to see if refinancing is right for you.

Here are the key characteristics of U-fi student loan refinancing…

Fixed and variable interest rates Check your rate without harming your credit report Refinance between $5,000 and $125,000 (borrowers with undergraduate degrees), $175,000 (graduate, doctorate or MBA degrees) or $500,000 (graduate health professions degrees) Repayment terms of 5, 7, 10, 15, 20 and 25 years available Enroll in autopay and lower your interest rate by 0.25 percentage points Release your cosigner (if you have one) after two years of prompt payments Pause your repayment for up to two years over the life of your loan in cases of economic hardship Assume responsibility for your parent’s PLUS Loans What to like about U-fi student loan refinancing

Here are some of the upsides to choosing U-fi for refinancing your student debt:

Prequalify without impacting your credit

When you decide to refinance student loans, it’s wise to shop around with at least a few different banks, credit unions and online lenders. This way, you can find the lowest possible interest rate and best overall loan.

U-fi student loans are a good contender for the comparison-shopping process because they allow you to prequalify, with or without a cosigner. After entering some basic information and submitting to a soft credit check, you’ll see what rates and terms are available. Then you can compare these details with offers from competing refinance lenders.

Once you are ready to file a formal application with U-fi, however, you’ll be asked for additional information, including:

Employment details, plus proof of income Loan details, including debt payoff letters Refinance Parent PLUS Loans into your name

If your parent had borrowed federal Parent PLUS Loans on your behalf, refinancing with U-fi could be your way of paying them back. The student loan company allows you to assume responsibility for PLUS Loan repayment by lumping this debt into your newly consolidated loan.

U-fi is one of many lenders that allow you to refinance parent loans in your name.

Unfortunately, it doesn’t provide the option for spousal consolidation loans.

Flexible repayment terms

Qualifying borrowers can choose from one of six different repayment term options:

5 years 7 years 10 years 15 years 20 years (when refinancing $25,000 or more) 25 years (when refinancing $75,000 or more, and picking a variable interest rate)

This degree of choice is greater than many competitors, who sometimes don’t offer terms spanning longer than 15 years.

With that said, keep in mind that the longer your repayment term, the more interest you’ll pay over time. That could make U-fi’s 20- and 25-year term options less attractive.

Unemployment protection

Should you lose your job or suffer another economic hardship during repayment on a U-fi student loan, you could postpone payments temporarily. In fact, U-fi allows its customers to pause monthly dues for up to two years over the life of a loan.

If your career is on shaky ground, consider U-fi among other refinancing companies with job loss protection.

Apply with a cosigner and pursue cosigner release

If a cosigner helps you qualify for U-fi student loan refinancing, they won’t have to stick around until you’re student debt-free. U-fi’s cosigner release policy allows you to thank your loan guarantor and send them on their way after 24 months of on-time payments.

If your potential cosigner is willing to help but doesn’t want to put their credit at risk long-term, U-fi could be the right lender for your situation.

Just be sure your cosigner meets the student loan company’s eligibility criteria:

U.S. citizen or permanent resident Annual income of at least $36,000 Strong credit history What to keep in mind about U-fi student loan refinancing

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

Interest rates can be beat

Here’s the problem with U-fi interest rate ranges: The ceiling is competitive, but the floor can be beat.

The interest rate you end up with on your student loan refinancing depends on a number of factors, including:

Your credit Whether or not you have a cosigner The highest level of education you have

U-fi student loan refinancing rates are also quoted depending on your selected repayment term. Here are the interest-rate ranges as of Sept. 15, 2020:

5 years

3.10%-4.86%

2.10%- 4.80%

7 years

3.33%-5.09%

3.42%- 5.18%

10 years

3.32%-5.28%

3.37%-5.34%

15 years

3.44%-5.59%

3.45%-5.59%

20 years

3.82%-6.47%

3.75%-6.29%

25 years

N/A

3.68%-6.52%

As of Sept. 15, 2020

Like with other loans, variable interest rates can rise or fall, based on what’s happening in the market. That makes fixed rates a safer, smarter option for many borrowers.

To find lenders with lower interest rates, check out our marketplace of refinancing options.

Eligibility requirements: No degree necessary, but good credit required

U-fi is among few companies that refinance student loans for borrowers who didn’t leave school with a degree. That’s enough to make it a top option for borrowers who didn’t graduate.

You simply must have entered a grace period or started repayment on your education debt, and no longer be enrolled more than part-time.

With that said, U-fi’s other eligibility requirements aren’t as forgiving:

U.S. citizenship or permanent residency with a valid Social Security number Be the age of majority in your state Have an annual income of at least $36,000 Have a credit score or 680 or more

Also, loans weren’t available in Vermont, at least as of Sept. 15, 2020.

If you don’t meet U-fi’s criteria, you might find a better lender for your situation.

Not a U.S. citizen?

Prodigy Finance is among lenders assisting international borrowers.

Don’t have income of at least $36,000?

SoFi doesn’t set a minimum income requirement

Don’t have a credit score of 680?

Earnest sets its threshold at 650

Is U-fi student loan refinancing right for you?

There’s a lot to like about U-fi student loan refinancing, from its prequalification process to its options for repayment terms, forbearance and cosigner release. It’s even accessible to creditworthy applicants who didn’t receive a college diploma.

Like all refinancing companies, however, U-fi has some shortcomings too. The bottom of its interest rate ranges aren’t the most competitive. Plus, some of its eligibility requirements are restrictive to the average student loan borrower.

Weigh the pros and cons of U-fi refinancing, but don’t forget to compare it to other lenders as well. You might find a lower rate and better overall loan elsewhere. Start your search with our top recommended lenders for student loan refinancing.

Andrew Pentis contributed to this report.

The post U-fi Review: How This Student Loan Refinancing Lender Stacks Up appeared first on Student Loan Hero.