EDvestinU Refinance Review
EDvestinU scores points for interst rates and transparancy, but comes with some warts.
Article Updated 2/21/18 to reflect the latest interest rate information.
EDvestinU is a funny sounding student loan refinance company that offers an excellent deal to certain student loan borrowers. EDvestinU scores points for being a non-profit and for consumer transparency. The short-term interest rates are not the most competitive, but EDvestinU excels in the long-term loan categories. As a result, EDvestinU checks in at 6th place out of 15 lenders in our student loan refinance company rankings.
EDvestinU Refinance Basics
EDvestinU interest rates start at 3.52% for their 5-year variable-rate loan, but the highlight with EDvestinU is the long-term fixed rate loans starting at 4.69% for the 10-year loan, 5.09 for the 15-year loan, and 5.49 for the 20-year loan. These rates are not quite the best long term fixed-rate loans, but they are close. Borrowers can refinance between $7,500 and $200,000 worth of student loans.
EDvestinU is also a rarity in the student loan consolidation world as they will allow Parent PLUS loans to be refinanced and they do not require a college degree.
Like the other legit refinance companies, there are no loan origination fees or prepayment penalties from EDvestinU.
Reviewing the EDvestinU Advantages
The longer you need to repay an EDvestinU loan, the better the interest rates get compared to other lenders. The 15-year fixed rate and the 20-year fixed rate are among the very best student loan refinance rates available.
EDvestinU is also one of the lenders participating in the Credible Platform, which allows borrowers to check actual rates offered by a number of different companies and get a $200 bonus for refinancing.
Lastly, EDvestinU gets major points for their transparency in the cosigner release program. Many lenders offer a cosigner release, but they always say that it is subject to credit approval. EDvestinU sets out the specific requirements to get a release. A borrower must: make 36 consecutive and on-time payments, have a FICO score above 699, and make more than $30,000 per year for student loan balances up to $100,000 or make more than $50,000 per year for balances above $100,000. Additionally the borrower needs a debt-to-income rate of 43% or less, and cannot have any foreclosures, repossessions, wage garnishments, unpaid judgments, or bankruptcy proceedings.
While the requirements for a cosigner release are quite strict and take longer than some other lenders, we love that borrowers know exactly what is required to get the release. Hopefully more lenders will adopt this policy.
Even though we like the EDvestinU transparency on their cosigner release program, we do not like the fact that EDvestinU places such an emphasis on having cosigners. In researching EDvestinU we used their consolidation calculator to see what rates were offered for various circumstances. We noticed a disturbing pattern: In order to get the lowest advertised rates a cosigner with a FICO credit score above 800 is required. EDvestinU’s consolidation calculator indicates that even for borrowers with credit scores of 800 or more, the best rate they can get when applying alone is .4% above the lowest advertised rate.
From EDvestinU’s perspective this policy makes sense. Having a cosigner makes the loan less risky, so it is somewhat understandable that they can offer a lower rate. That being said, we hate to see such an emphasis on having a cosigner because we think using a cosigner to refinance should be viewed as an option of last resort.
Like nearly all other student loan consolidation companies, EDvestinU refinances federal student loans. By refinancing federal loans with a private lender, borrowers give up all of the federal perks that come with the loan such as income-driven repayment plans and student loan forgiveness. For some borrowers, the perks are unnecessary and the lower interest rates justify the move. For others, it can be a mistake. The key is for borrowers to understand what they are giving up when they go through the refinance process.
If you are looking to refinance your student loans for an extended period of time and you have a cosigner, EDvestinU may be the best option available. EDvestinU is not without drawbacks, but it is unquestionably one of the better lenders on the market and borrowers who are shopping refinance options would be wise to check their rate with EDvestinU.