If you like the idea of borrowing local dollars to fund your education, iHelp may be an option for you. Since 2009, the company has been pairing people who need private student loans with community banks that can lend the money. And this year, the company expanded another loan offering: It can now help borrowers in all 50 states refinance existing loans through community banks.
All of the loans are serviced by Student Loan Finance Corp., iHelp’s parent company, which has been around since 1978. Here we review iHelp private student loans and its student loan refinancing offering.
iHelp student loan refinancing review
Student loan refinancing is a way to save money by trading your existing loans for a new, lower-interest loan. But think twice before refinancing federal loans; you’ll lose federal benefits, including access to forgiveness programs and income-driven repayment plans.
You can refinance as little as $10,000 and up to $150,000 in undergraduate loans and $250,000 in graduate loans through iHelp’s consolidation loan. To be consistent with the language most other student loan refinance lenders use, we call iHelp’s consolidation loan a “refinance loan.” It can be easy to confuse refinancing and consolidation, but the two mean the same in this case.
ihelp Refinancing at a glance
- Fixed rates: 4.65% to 8.84% APR. Variable rates: 3.58% to 9.47% APR.
- 10- and 15-year repayment terms for fixed-rate loans, 20-year term for variable-rate loans.
- Forbearance and partial payment options available.
In addition to the credit and income requirements below, you need at least two years of positive credit history and a debt-to-income ratio of 45% or less to qualify. So if your income is $100,000, for example, you’d qualify if your outstanding debts total $45,000 or less.
If you don’t meet all of the qualifications, you can apply with a creditworthy co-signer. A co-signer is someone, typically a relative or friend, who agrees to repay your loan if you don’t. With iHelp, you can release your co-signer from your loan after you make on-time payments for 24 months.
» COMPARE: Student loan refinancing options
Do you qualify?
|Minimum qualifications||Typical borrower
Where iHelp refinancing shines
Flexible repayment options: If you refinance through iHelp, you can choose to make full monthly payments, interest-only payments for 24 months, or payments on a graduated or income-sensitive plan. These are unique options for a refinance loan; many other lenders don’t offer so much flexibility. Scroll up to NerdWallet’s iHelp private student loan review to read more about interest-only, graduated and income-sensitive plans.
In addition to these options, you can temporarily pause your monthly payments for up to 24 months through forbearance. Interest will continue to accrue even when you’re not making payments, so save this option for emergencies.
Customer support: If you have questions about your loan, you can call your dedicated iHelp account manager. Your call will always be routed directly to that person’s desk, not a receptionist, says Spencer Aberle, vice president of operations at Student Loan Finance Corp. In contrast, some other lenders use third-party companies to field customers’ questions about student loans.
Where iHelp refinancing falls short
Interest rates: iHelp doesn’t offer the most competitive rates in the student loan refinancing market. You could get a lower rate by refinancing with another lender, especially if you have excellent credit.
Longer term lengths compared to other lenders: iHelp’s shortest loan term for refinance loans is 10 years, whereas most other refinance lenders offer five-year terms. Having a longer term may lower your monthly payment, but it also means you’ll pay more in interest throughout the life of your loan. However, you can save money by repaying your loans in less than 10 years if you pay more than your monthly minimum each month; iHelp doesn’t charge prepayment penalty fees.
If you want to move forward with refinancing through iHelp, you can apply directly on its website. But it’s always a good idea to compare multiple refinance options to find the lowest rate you qualify for.
iHelp private student loan review
When you’re applying for student loans, your first choice should always be federal loans, which you access via the Free Application for Federal Student Aid, or the FAFSA. But if you’ve borrowed all the federal loan dollars you’re allowed, private student loans like the ones iHelp offers are an option.
iHelp Student loans at a glance
- Variable rates: 3.53% to 8.98% APR.
- Six-month grace period, 20-year term.
- Deferment and forbearance options available.
Note that iHelp only offers 20-year terms and variable interest rates, which can change throughout the life of your loan as the markets fluctuate. Many other private student loan lenders have multiple term-length options and let you choose between variable or fixed rates, which stay the same throughout your loan term.
If you apply through iHelp’s website, your loan will be funded by a community bank in the state or region where you’re attending college. If you apply through a specific community bank that uses iHelp’s platform, that bank will fund your loan regardless of where you attend college.
» COMPARE: Private student loans
Do you qualify?
|Minimum qualifications||Typical borrower|
|Income||$18,000 a year||About $50,000 a year|
In addition to these requirements, you need at least three years of positive credit history to qualify. If you don’t meet the minimum requirements, you can use a co-signer who does, as 94% of iHelp borrowers have done. That person will be responsible for your loan if you ever stop making your payments. Like several other private lenders, iHelp will let your co-signer off the hook for that responsibility after you make 24 on-time payments and can meet the minimum credit requirements on your own. This is a welcome feature if your co-signer doesn’t want to be tied to your loan for the 20-year duration.
While you’re in school, iHelp offers three payment options, as many lenders do. It also offers three additional repayment options that you can access after you leave school, which is somewhat rare in the private student loan market.
In-school repayment options:
- Deferred: You won’t owe anything while you’re in school with this option, but your loans will still accrue interest. The interest will get added to your principal balance when repayment begins through a standard process called capitalization, which increases the total amount you’ll pay throughout the life of your loan. To avoid this, you can choose to pay down the interest before your grace period ends; iHelp doesn’t charge prepayment penalty fees.
- Interest-only: This repayment plan lets you dodge interest capitalization but still pay less than your full monthly loan payment during school.
- Full payments: If you can afford to make full payments while you’re in school, consider doing so. This option will save you the most money in interest throughout the life of your loan.
Post-school repayment options:
- Interest-only payments: You can pay just the interest on your loans for up to 24 months after your six-month grace period. After that, you’ll owe full monthly payments.
- Graduated repayment: This option also lets you make interest-only payments for a set period of time after your six-month grace period. But unlike the interest-only option, your payments will increase gradually until you’re making full monthly payments.
- Income-sensitive repayment: Under this plan, payments are based on your gross monthly income. They’ll be 4% of that income, equal to your monthly interest accrual or $16.67, whichever is greater.
In addition to the options above, you can temporarily pause your loan payments with a forbearance if you have a financial emergency, serve in the military or experience a natural disaster.
Where iHelp student loans shine
Flexible repayment options: iHelp offers more options for struggling borrowers than some other lenders do. Its income-sensitive option is unique in the private student loan market and is somewhat similar to the income-driven repayment plans federal loans offer.
Customer support: Unlike many other lenders, iHelp doesn’t use a customer service call center, says Spencer Aberle, vice president of operations at Student Loan Finance Corp. Instead, you’ll be paired with one origination specialist throughout your application process and one dedicated account manager throughout the duration of your loan term. You’ll be able to call those people directly with any questions about your loan.
Where iHelp student loans fall short
Variable rates are your only option: Since iHelp offers only a variable interest rate, your rate will fluctuate with the market; it’s subject to change every 90 days. There is a cap to how high it can go, but the cap varies depending on the state of the originating lender and corresponding usury laws. Look for a lender that offers fixed rates if you’re uncomfortable with the possibility of your rate changing; most other lenders offer fixed rates.
Longer term than most private student loans: The only term available for iHelp private student loans is 20 years, which is longer than most private loan terms of five to 15 years. That means if you make only the minimum monthly payments, you’ll shell out more over the life of your loan than you would with a shorter term. However, there is no prepayment penalty; if you can afford it, you can and should pay more than the minimum to pay down your debt faster.
You can apply for an iHelp loan on its website. Its instant preapproval tool can tell you if you’re likely to be approved without affecting your credit.
It’s generally a good idea to compare multiple private student loan options before choosing a lender to ensure you get the best rate you qualify for.
Updated Sept. 29, 2016.