Purefy Student Loan Consolidation
Purefy isn't the very best on the market, but a tight interest rate range means it could be the best option for many borrowers.
Another name to learn in the world of student loan consolidation and refinancing is Purefy. If it seems like lenders are popping up out of the woodwork, it is because they are. The student loan consolidation business is booming and if you have student debt and want to get rid of high interest rates this is a good thing (it is only bad news if you are a blogger trying to keep track of all these lenders).
Shifting our focus back to Purefy, the company isn’t actually new at all. In reality, Purefy is simply a rebrand of CordiaGrad student loans. As we said when we first reviewed CordiaGrad, this lender is pretty good, but the best. This analysis holds true now that the company is called Purefy. While there are some changes along with the name change, the bottom line is mostly unchanged: Purefy is a decent option and as long as you avoid some major mistakes, it can be a smart financial move.
The Purefy Basics
Purefy loans are offered in 4, 8 and 12 year terms. This makes them slightly different from most other lenders who work on 5, 10, 15, and 20 year terms. The length of the loan matters for two reasons. First, it helps determine your interest rate. The longer the loan, the higher the interest rate will be. Second, it is a huge factor in determining your monthly payment. The longer the loan, the lower the payment will be. Finding the best loan is all about finding your sweet spot between these competing factors.
Interest rates with Purefy start at 3% on their variable rate loans and at 3.95% on their fixed rate loans. These numbers are pretty good, and would represent a huge improvement for most borrowers. The current high end of their rate spectrum is 4.95% for variable rate loans and 6.75% for fixed loans. Like other lenders there is a .25% discount for auto payments and a .25% discount for opening a Purefy checking account. One warning with the Purefy loans would be the interest rate max for the variable loans, which is currently 18%. This cap is definitely on the higher end and something that all borrowers should consider before signing up.
Purefy also offers their services for Parent PLUS loans borrowers. Because not all lenders offer this option, it is a big plus.
Two Huge Warnings
Before signing up with Purefy, there are two mistakes that all borrowers should make certain to avoid…
Ill Advised Consolidation of Federal Loans – This is a topic that we have spent considerable time examining, but the short version is this: federal loans have great perks that justify higher interest rates in many circumstances. Before you take your business elsewhere, make sure you understand what you are giving up and know the risks.
Consolidation of Spousal Student Debt – This is actually a service that is fairly unique to Purefy. We see it as a huge mistake. For starters, dealing with this debt would be a complete disaster in the case of a divorce. Secondly, assuming the best for your marriage, the credit implications make keeping the debt separate a better option. As an example, suppose you want to buy a house in the next couple years. Talk with a mortgage lender about how the various student loan consolidation options would affect your ability to buy.
Qualifying for Purefy
Like most consolidation companies, getting approved isn’t easy, but it is definitely doable. The good news is that Purefy is slightly more transparent than other lenders, and has shared some of their approval data.
At minimum, Purefy requires a credit score of 670, and if you are applying without a co-signer that number jumps to 700. The average borrower has a credit score of 770. Borrowers also need to have two full years of employment and earn at least $25,000 per year ($42,000 without a co-signer). The average borrower makes $95,000.
If you have been at your current job for 1.5 years, look elsewhere. (Purefy is fairly unique in requiring the extended length of employment). Otherwise, Purefy is a solid option for most borrowers. Coming in at number 6 on our list of student loan consolidation companies, Purefy is a decent option and one that smart shoppers should examine before making their final decision.