ELFI Refinance Review
ELFI combines the stability of the bank with the lowest interest rates available.
Article Updated 1/6/18 to reflect the latest interest rate information.
Right now the student loan refinance company offering the lowest rates on the market is ELFI, short for Education Loan Finance. ELFI has been in the student loan refinance business for less than two years, but it is the product of SouthEast Bank, a regional bank headquartered in Tennessee.
While we are concerned about the limited time in the market, the fact that ELFI loans are actually a bank product gives us some comfort due to the much higher level of oversight on banks. Finance startups typically face less regulation. Because ELFI is a product of a longstanding bank and offers extremely low interest rates, it debuts at #3 in our student loan refinance rankings. As we get reader input on their experiences with ELFI we will adjust its ranking accordingly.
EFLI offers student loan refinance and consolidation for both federal loans and private loans. ELFI loans are offered in 5, 7, 10, 15 and 20 year terms. The ELFI variable-rate loans start at 2.69% and the fixed-rate loans start at 3.09%. The 2.69% is among the lowest rates on the market, while the recent change 3.09% now gives ELFI the best fixed-rate loan available.
In order to qualify for an ELFI loan a borrower does need to have a degree and pass a credit check. Like most legitimate lenders there are no loan application fees, origination fees or prepayment penalties.
One area where ELFI is a little more strict than other lenders is that they require a minimum student loan balance of $15,000 in order to refinance. Borrowers with smaller balances should look at lenders like CommonBond and Laurel Road who require a minimum of only $5,000.
ELFI does offer a co-signer release program, but co-signers can only be released if the borrower is able to pass a credit check on their own.
Education Loan Finance Advantages
ELFI offers more than just the lowest interest rates on the market. Their call centers are all located in Tennessee and borrowers get a single point of contact with a direct number to call for support. This should make resolving any issues go significantly smoother.
ELFI student loans are serviced by Mohela, one of the few student loan servicing companies to get decent reviews.
The concern we have with Education Loan Finance applies to pretty much every student loan refinance company.
Even though it makes sense for some borrowers to consolidate their federal student loans with a private lender, this move can also be a mistake. Refinancing your federal loans means you lose federal perks such as repayment plans based upon your income and student loan forgiveness programs. We look at these programs as an insurance policy. The cost of that insurance policy is higher interest rates. If you think you might lose your job or not be able to afford your student loans, it is best to keep your loans with the federal government. If you will have no problem paying off the debt, locking in a low interest rate could be a smart move.
ELFI Review Final Thoughts
The Education Loan Finance option sticks out due to the 2.39% interest rate. In close to five years of reviewing student loan consolidation companies it is the biggest gap between the lowest rate and second lowest rate that we have ever seen. We suspect it is because ELFI is relatively new to the business and an ultra-low rate will generate attention and help them grab a big share of the market.
Ultimately, advertised rates are a tiny part of the refinance equation. What really matters is the rate you qualify for. Because ELFI combines the stability of a longstanding bank with very low interest rates, it is a lender worth serious consideration.