U-fi Student Loan Consolidation and Refinance Review

Michael Lux Blog, Student Loan Consolidation Reviews, Student Loans 1 Comment

A new name on the student loan consolidation market is U-fi.  While U-fi is a new to the game, their primary partner, Nelnet, is not.  On the positive side, Nelnet is an established company that has been in the student loan business for a while.  However, on the negative side, they don't have the best reputation based upon their work as a federal student loan servicer. U-fi Basics When it comes to U-fi and their student loan consolidation services, there is a wide range of options for borrowers.  U-fi offers both variable-rate and fixed-rate loans, with interest rates ranging from 3.31%…

U-Fi Student Loan Consolidaiton

Interest Rates
Co-Signer Release
Loan Terms
Repayment Length

Average

U-Fi is a middle of the road consolidation option. They have some gimmicks that don't add much value, but their 25 year repayment plan is among the very best.

A new name on the student loan consolidation market is U-fi.  While U-fi is a new to the game, their primary partner, Nelnet, is not.  On the positive side, Nelnet is an established company that has been in the student loan business for a while.  However, on the negative side, they don’t have the best reputation based upon their work as a federal student loan servicer.

U-fi Basics

When it comes to U-fi and their student loan consolidation services, there is a wide range of options for borrowers.  U-fi offers both variable-rate and fixed-rate loans, with interest rates ranging from 3.31% APR to 6.96% APR on the variable loans, and rates ranging from 4.37% APR to 9.07% APR on the fixed-rated loans.  These rates are fairly competitive with the other companies in the student loan refinancing business, with the 3.31% starting number on the variable rate being a little high, but the 4.37% on the fixed-rate being more competitive.  Overall, they are not the best from a rate perspective, but they are not outrageously high.

We do like to see that borrowers have repayment options of up to 25 years, as this is one of the longest terms on the market, but unfortunately, the 25 year repayment options is only available on the variable-rate loans.  If you are going to have the loan that long, you probably want to lock in a fixed rate.  That being said, U-fi does have a pretty good range of options from a repayment length perspective.

What we like about U-fi

Perhaps the best thing about U-fi is that they are another legitimate competitor in the student loan refinancing market.  As you shop around, it is a company worth investigating.  This is especially true considering the fact that the advertised rate is not necessarily the rate you will qualify for.  If you apply with companies offering rates below 2%, such as SoFi or LendKey, but are not offered rates on their low end, U-fi could enter the picture as a good option.

Be Advised…

One thing that looks pretty cool on the surface is the on-time payment bonus that U-fi offers, as long as you make 12 on-time payments in a row.  If you look at the fine print, you will see that borrowers can get 1.5% of the principal balance for a bonus, with a maximum of $500 per calendar year.  That sounds great, and $500 bucks per calendar year could really add up, especially on the high balance loans.  However, if you continue to read the fine print, you will see that it is a one time payment.  We think using the “per year” language on their website is a bit misleading.  The on-time bonus is a nice little perk that should enter your calculations, but is by no means game-changing.

Additionally, U-fi is another company that offers to consolidate federal loans and private loans.  Consolidating federal student loans into a private can be a smart financial move, but it does come with huge risks.  Specifically, by consolidating federal loans with a private company, you give up many federal perks, including income based repayment plans and student loan forgiveness options.  Because there is no way to “undo” student loan consolidation, you want to be certain that refinancing a federal loan into a private loan is a good idea in your individual circumstance.

Cosigner options???

One feature prominently displayed on the U-fi website is the cosigner release option after 24 consecutive on-time payments. While being able to get your cosigner off the loan is a great feature, we think this loan feature should not be much of an incentive to borrowers.  For starters, 24 months until release is one of the longer terms on the market as many companies offer 12 months or less.  Secondly, the actual release aspect is left at the discretion of the company, and U-fi does note that their terms are subject to change.  We are especially skeptical of these cosigner release programs.  If you can get your cosigner released, great, but it would be a huge mistake to assume that you can get it done after just two years.

The Bottom Line

U-fi checks in at number six on our student loan review big board.  They are pretty solidly in the middle of the pack.  The key with all of these companies is to keep in mind that the one with the best advertised rate and the one with the best actual rate can be very different.  If you are smart and shop around, you can find the best deal in your situation.

  • Hmm 4.37% isn’t bad, but are there any options below 3.0% these days? I’m considering consolidating our student loans to get a lower rate, but would prefer a fixed rate below 4.0%. Perhaps it’s not possible but I’d be much more motivated to go through the consolidation/refinance process if I could get a rate like that.