U-Fi Student Loan Consolidaiton
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.
Article updated 7/3/20 to reflect latest interest rate information.
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.
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 starting at 1.99% APR on the variable loans, and rates starting from 3.19% APR on the fixed-rated loans. These rates are fairly competitive with the other companies in the student loan refinancing business, with the 1.99% starting number on the variable rate being among the best, and a very strong 3.19% on the fixed-rate side.
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 closer to 2.5%, such as SoFi or LendKey, but are not offered rates on their low end, U-fi could enter the picture as a good option.
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.
U-fi is also another company that has its own brand, but is really just offering the Citizen’s One loan. This option is not a bad choice, but U-fi doesn’t seem to add any value beyond what Citizen’s already offers.
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 12 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.