U-Fi Student Loan Consolidation Refinance Review

Learn more about U-Fi and their financial services such as consolidation and refinancing. Understand what exactly refinancing is, learn the eligibility criteria, the differences between consolidation and refinancing, their terms and conditions and which program is best suits your needs.

Updated by Vidish S on 15th June 2020

U-Fi, a Nelnet company, provides loan Consolidation and Refinancing to assist students in reaching their educational goals and making smart decisions financially. They provide simple student loan solutions with financial wellness resources, competitive borrower benefits, and more.

Table of Contents


A few words about U-Fi

U-Fi is a registered trademark of Nelnet for all the products and services offered by Nelnet. In this article, we will discuss what a borrower can expect from U-Fi in terms of loan refinancing and consolidation. U-fi is a good option for borrowers who need to apply with a co-signer and need good flexibility on payments in the future. 


Check out the Best Student loans, compare and decide which lender suits your needs.


U-Fi is an organization that offers private student loans and student loan refinancing options to graduate & undergraduate students. U-fi offers private student and refinancing student loans in 49 states. The lender specializes in offering flexible repayment options. 

Learn more about U-Fi Students Loans


First off, what is refinancing and consolidation?

Refinancing

Refinancing is the replacement of the current debt obligation with another having different terms. The terms and conditions of refinancing can vary depending on the location as well as several economic factors such as projected risk, inherent risk, currency stability, political stability of a nation, borrower's creditworthiness, banking regulations, and credit rating of a nation. 

If debt replacement occurs under financial distress, refinancing might be attributed to debt restructuring.

A loan can be refinanced for several purposes:

  • To receive the benefits of a better interest rate (monthly payment reduction or term reduction)

  • Consolidating multiple debts into a single loan (potentially longer/shorter term contingent on interest rate differential and fees)

  • Monthly payment term reduction(often for a longer-term, contingent on interest rate differential and fees)

  • Risk reduction or alteration (switching from a variable-rate to a fixed-rate loan)

  • To save up cash (for a longer-term, conditional on interest rate differential and fees)

Check out this in-depth article on Refinancing student loans to learn more

Consolidation

Debt consolidation is a form of debt refinancing where one loan is taken to pay off multiple loans. This generally refers to a personal finance process addressing high consumer debt for individuals, but sometimes it can also refer to a country's fiscal approach to consolidate Government debt or corporate debt. The process helps obtain a lower overall interest rate for the whole debt amount and provides the ease of servicing only one loan or debt.

The Federal Direct Student Loan Program (FDLP) combines consolidation loans allowing students to consolidate Federal Perkins Loans, PLUS Loans, and Stafford Loans, and into a single debt. This results in lower monthly repayments and a longer-term for the loan. Compared to other loans, consolidation loans have a fixed interest rate for the life of the loan.


U-Fi Student loan Refinancing

Regarding U-fi and their student loan consolidation services, a wide range of options are available for the loanees.  U-fi offers both fixed-rate loans and variable-rate, along with interest rates beginning at 2.45% APR on the variable loans, and rates starting from 3.55% APR on the fixed-rate loans. The provided rates are fairly competitive compared to other lenders providing similar loan refinancing solutions, with the 2.45% starting number on the variable rate as well as the 3.55% on the fixed-rate being competitive.

U-fi is a company that offers to consolidate federal loans and private loans into a single private loan. Federal and private loan consolidation can be a smart financial move, but it comes with some risks. Particularly, by consolidating federal loans with a private company, you lose many federal perks, which includes student loan forgiveness options and income-based repayment plans. Considering that there is no way to “annul” student loan consolidation, you want to be confident that refinancing a federal loan into a private loan is the right way to go in your personal circumstances.

U-Fi grants student loan refinancing in Washington, D.C. and 49 states (It does not offer services in Vermont.)

The company has saved loanees a $15,000 on average and lowered their interest rates by an average of 3%.

U-Fi offers refinancing terms in three durations of 5, 10 and 15 years. Those refinancing a minimum of $25,000 have some additional options:

  • Choice of a 20-year loan term.

  • Choice of a 25-year loan term at a variable interest rate.

U-Fi refinancing is not offered with a grace period. U-Fi loans have an immediate full principal and interest repayment plan. The first payment is due 30-45 days after the issue of the first loan.

Check out this comparison on the best companies to refinance your student loans to see how U-Fi stacks against others in student loans refinancing.

Risks involved with U-Fi Student loan Refinancing

Refinancing your federal loans into a U-Fi student loan converts them from a federal loan to a privately owned loan. Before refinancing your federal student loans with U-Fi, take particular consideration of the current and potential future benefits of your federal student loans, which may be relinquished.

  • Federal student loan regulations allow a variety of repayment plans, including income-driven repayment (IDR) plans intended to assist loanees who cannot afford their current monthly repayment amount. The outstanding balance can be forgiven after 20 or 25 years of payments. These repayment plans will no longer be available to you.

  • Under federal student loan regulations, the loanees are offered many forbearances, deferments, and repayment plan options during the period of the loan. If your federal student loan is refinanced into a private loan, some of these options will be lost.

  • Subsidized federal loans qualify for an interest subsidy while in school, grace, deferment, or during certain circumstances under an income-driven repayment plan. You will lose this benefit if your loan is refinanced.

  • Full-time active duty service members may lose certain deferment, forbearance, or other benefits afforded to them under federal student loan regulations.

  • Military service members who qualify for a 0% interest rate due to receiving hostile pay will lose the 0% interest rate benefit.

  • Borrower benefits of reduced interest rates or incentives provided by your current federal student loan lender will have to be relinquished and you could end up paying more over the life of your loan.

  • Borrowers working in certain professions like those employed full-time by a public service organization or serving in a full-time AmeriCorps or Peace Corps position, or those employed as teachers in certain situations, may be eligible for loan forgiveness on some or all of their federal student loans. If a federal loan is refinanced into a private loan, you will become ineligible for participation in these federal loan forgiveness programs.

  • Federal regulations provide the borrower with circumstances where the loan may need to be discharged. If your federal student loan is refinanced into a private loan, some of these options for discharge may be unavailable to you.

  • Regulations could be introduced by Congress or the Department of Education at a later date that would provide additional benefits to federal student loan borrowers. These benefits might become unavailable to you if you refinance your federal loans into a private loan.

  • Once a federal student loan is consolidated into a private loan, the process may not be reversed in order to re-establish the original federal loan and the benefits that were forfeited.


Pros and Cons of U-fi student loan refinancing

Here are some pros and cons of U-fi student loan refinancing

Pros

1-Flexibility-One of the advantage of U-fi is the flexible repayment options as you can choose the repayment ranging from 5 to 20 years.

2-Special borrower benefits. U-fi offers refinancing through Citizens One, which allows you to refinance even if you didn’t finish your bachelor’s degree and forbearance program for borrowers experiencing economic hardship.

3-Rate discounts. You can earn interest rate discounts with U-fi, lower your interest by 0.25% when you enroll in their automatic payment program and you can also receive an additional 0.25% reduction as a loyalty discount if you or your cosigner already have a Citizens One account, this helps borrowers in saving money.

4-Cosigner release. U-fi provides a  cosigner release option when you made 36 on-time payments and meet other requirements by the lender.

5-Parent PLUS refinancing.  This option is not offered by every lender as in this you can refinance Parent Plus loans.

Cons

1-Higher rates. Some of the areas are concerning when you choose U-fi as their student loan refinancing rates are a little higher than competitor rates. So it’s better first to evaluate the rates of the lenders and then take appropriate decisions.

2- Fewer options.  U-fi only offers access to Citizens One rather than providing a range of partners for refinancing. As a result, you might not be able to find the exact program that fits your needs and one more concerning part is  U-fi doesn’t allow you to refinance federal debt that’s currently in income-driven repayment (IDR) plan so if you are currently using an IDR plan to manage your federal debt, it might be best to look elsewhere.


Some important details regarding U-Fi Student loan Consolidation

Find some important information related to U-Fi Student Loan tabulated below:

  • Loan terms:

5, 10, 15 or 20 years. 25-year terms available for variable-rate loans.

  • Variable APR:

Starting from 2.45%

  • Fixed APR:

Starting from 3.55% 

  • Loan amounts:

$5,000 – $300,000.

  • Parent Loan transfer to Child:

Yes.

  • Application Fee:

No.

  • Soft Credit Check for Rate Assessment:

Yes.

  • Late fees:

Yes

  • Prepayment penalty:

No.


Eligibility for U-Fi Student Loan Refinance

You need to meet some criteria in order to be eligible for U-Fi Student loan refinancing.

Have a look at them in the table below. 

  • Minimum income:

$36,000.

  • Maximum debt-to-income ratio:

45%.

  • Minimum credit score:

680.

  • Can qualify if you’ve filed for bankruptcy:

Yes; after seven years.

  • Citizenship:

Must be a U.S. citizen or permanent resident, or apply with a co-signer who is a U.S. citizen or permanent resident.

  • Location:

Not available to borrowers in Vermont.

  • Must have graduated:

No.

  • Enrolled in an authorized school:

No.


Some Information about Consolidation of U-Fi Student Loans

Student loan consolidation allows you to combine multiple federal student loans into one new Direct Consolidation Loan provided the loans are eligible. This results in the U.S. Department of Education becoming your new lender. As the Program Administrator, they use companies such as Nelnet to originate and service the loans.

Direct Loan consolidation is a service offered by the Federal government. This program allows you to consolidate individual federal loans into a single loan. The weighted average of the interest rates of all the loans you are consolidating becomes the interest rate for the new loan. Unlike student loan refinancing, it is not based on credit. You can also shift your variable interest rate loans to fixed interest rates to circumvent paying more interest if variable rates rise. Usually, student loan consolidation doesn’t save you money, but it combines your payments into a single monthly payment. You also get to retain your federal student loan benefits, such as income-driven repayment plans and loan forgiveness.


Comparing Consolidation and Refinancing

Both programs offer several benefits. These benefits include lowering your monthly payments, simplifying your monthly student loan payments and locking in a fixed interest rate. However, there may be some disadvantages as well. For example, if you prolong your repayment term, you could raise the total cost of your loans, resulting in your forfeiting of the current and potential future federal student loan benefits. Additionally, any incentives assigned to your current loans, such as interest rate reductions for automatic payments, are lost.

 

Student Loan Consolidation

Student Loan Refinancing

Lender

U.S. Department of Education

Banks, Credit Unions, and Financial Institutions

Credit Check Required

No

Yes

Upfront Fees

None

Most lenders do not charge any upfront fees

Interest Rate Type

Fixed

Fixed and variable rate options are offered by most lenders

Interest Rate

The weighted average interest rate of the loans being consolidated, rounded up to nearest one-eighth of 1%

Varies. Factors may include the borrower’s and/or cosigner’s credit history; repayment term; interest rate type; the highest level of education; and current market conditions

Repayment Plans

Standard, Graduated, Extended, and various Income-Driven Repayment plans

Standard Repayment

Repayment Term

10 to 30 years dependant on the amount being consolidated

5 to 20 years

Allowable Loans

Most federal student loans are eligible. Private loans are not eligible

Federal and private student loans are usually allowed by most lenders

Interest Rate Reduction

Rate reduction for automatic payments

Rate reduction for automatic payments. An additional rate reduction is offered by some lenders if your account qualifies.

Multiple Consolidation and Refinance

Generally no, unless additional federal loans are included

Yes

Federal Benefits Loss

Some benefits may be lost

Yes, including potential qualification for Public Service Loan Forgiveness on federal loans.

Consolidation or Refinance Timing

Dropping below half-time enrollment, leaving college, or graduating.

Dropping below half-time enrollment, leaving college, or graduating, although some lenders allow refinancing while in school.


Student Loan Consolidation or Refinance? Which is right for YOU?

Although Student loan consolidation and Student loan refinancing may seem similar, they are distinct programs with unique features. First of all, if you are interested in refinancing or consolidating your current student loans, determine what you want to fulfill.

Your aim may be to reduce your monthly repayments, secure a lower fixed interest rate, and/or decrease your overall cost of repaying your loans. Next, analyze the federal government’s Direct Consolidation Loan program to U-Fi and other private lenders once your goal has been set.

Then, decide if consolidation or refinancing is right for you based on your financial aims and circumstances.

Interested in U-Fi Student Loan Consolidation or Student Loan Refinance?

Get in touch with U-Fi for more information by using these sources given below:

Phone: 844-307-3451

Email: support@U-fi.com

Address: 121 S 13th St. Lincoln, NE - 68508

Website: https://www.ufi.org/




Frequently Asked Questions

  • 1.Does U-Fi offer grace periods for refinancing? 

    No. U-Fi from Nelnet does not offer a grace period for refinancing.

  • 2.Is a degree needed to refinance with U-Fi?

    Yes. Borrowers should at least have an associate degree to refinance with U-Fi. 

  • 3.Are there any states where U-Fi does not offer refinancing?

    Yes, there is a state called Vermont where U-Fi does not offer refinancing. 

  • 4.Who can take advantage of U-Fi student loans?

    U-Fi student loans are best for the borrowers who want flexible repayment options, avoid origination fees, and a short cosigner release period.

  • 5.What are the benefits of refinancing with U-Fi? 

    U-Fi offers several of benefits. They are - -It offers unemployment protection which includes 24 months of hardship forbearance when an unexpected loss of income occurs.  -You can release your cosigner after 24 on-time payments.  -If you agree with automatic monthly payment deduction then it offers a 0.25% interest rate reduction.  -Both federal and private loans can be refinanced.  -Does not charge any fees. 

  • 6.Can U-Fi loans be canceled in case of death or disability?

    Yes. After receiving a death certificate within 60 days of the initial notification, U-Fi suspends due diligence and billing to the deceased party. Disability can be determined by the U.S Department of Veteran Affairs or Social Security Administration along with total permanent disability application.