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U-fi Student Loan Refinancing Review

March 1, 2016
Loans, Student Loans
U-fi Student Loan Refinancing Review
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U-fi is a solid middle-of-the road option for borrowers looking for student loan refinancing. Founded in 2015, the company is new to the student loans landscape, but it’s a partnership between veteran student loan servicer Nelnet and Union Bank & Trust. Student loan refinancing through U-fi is available to borrowers in every U.S. state except Vermont.

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At a glance

  • Generous deferment and forbearance policies
  • Term lengths up to 25 years (longer than most competitors)

U-fi doesn’t offer the lowest APRs compared with other student loan refinancing companies, but there are still reasons it might be a viable choice for you. It’s a good option for borrowers who need a co-signer to qualify for student loan refinancing, or those who want one to qualify for a better interest rate. With generous deferment and forbearance policies, U-fi gives repayment flexibility to borrowers who want to go back to school or get an internship, or to borrowers for whom money is temporarily tight.

Like most student loan refinancing lenders, U-fi offers both fixed and variable interest rates, and it gives a discount of 0.25 percentage points to borrowers who set up automatic debit payments. You’ll also get a better interest rate if you have a co-signer, even if you have better credit than your co-signer, says Dean Wildman, director of consumer marketing at Nelnet. After making 24 consecutive on-time payments, you can release your co-signer from your loan if you meet the minimum requirements to qualify for the loan on your own, and you can keep the interest rate you initially qualified for with a co-signer.

» COMPARE: Student loan refinancing options

Do you qualify?

 Minimum qualificationsTypical U-fi borrower
Credit scoreMid-600s
(with a co-signer)

(without a co-signer)
Debt-to-income ratioThe higher your credit score, the higher debt-to-income ratio U-fi will accept.
The higher your credit score, the higher debt-to-income ratio U-fi will accept.

Where U-fi shines

Generous borrower protections: U-fi offers deferment and forbearance options that are more generous than many of its competitors. If you go back to school or get an internship while your U-fi loans are in repayment, you can defer your loans for up to 36 months. If you experience a financial hardship or natural disaster, you can get forbearance on your loans for 24 months. However, interest continues to accrue during both deferment and forbearance.

Long loan terms: U-fi offers a 25-year term for borrowers who have $75,000 or more in student loan debt. Most other student loan refinance companies offer only terms up to 15 or 20 years, so U-fi could be a good option if you want to lower your monthly payment by increasing your term to 25 years. However, the longer your loan term, the more you’ll pay in interest over time. To save the most money, choose the shortest loan term you can afford.

Where U-fi falls short

Interest rates: U-fi’s lowest fixed and variable interest rates are higher than many other student loan refinancing companies. The lender determines interest rates based on your credit profile, the term length you choose, your highest education level (undergraduate or graduate), the type of interest rate you pick (fixed or variable), whether you have a co-signer, and whether you choose automatic debt payments. You’ll qualify for the lowest rate if you have excellent credit, if you choose a five-year term, if you’ve completed graduate school, if you have a co-signer, and if you sign up for automatic debit payments.

Next steps

If you’re sold on refinancing your student loans through U-fi, you can fill out an application on the company’s website. However, it’s smart to compare refinance offers before choosing a lender.

Teddy Nykiel is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @teddynykiel.