Student Loan Refinancing
Private student loan refinancing allows you to refinance and/or consolidate one or more student loans into one private loan at a potentially lower interest rate, monthly payment, and/or repayment term.
Each person’s situation is different, so there is no clear-cut answer when deciding whether a fixed or variable rate loan is better for an individual borrower. However, several factors should be taken into account when deciding which type of loan to select.
- What is the current interest rate environment? Are rates at historical lows or highs? Have rates been moving up or down?
- If interest rates are relatively low, but are expected to increase in the future, a fixed rate loan may be favored. However, if interest rates are relatively high, or are expected to go down, a variable rate loan may be preferred.
- How long will loan payments be deferred while a student is in school? What is the repayment period for the loan?
- While the interest rate and/or monthly payment amount for variable rate loans will initially be less than fixed rate loans, the longer the deferment period and repayment term, the greater the opportunity for variable interest rates and monthly payments to fluctuate.
- Does the borrower prefer stable payments, or will they be able to afford higher payments if rates rise?
- If the borrower prefers predictable payments that will not change, then a fixed rate loan may be their best choice. If a borrower desires a lower initial interest rate, a variable rate loan may be preferred; however, variable interest rates may change throughout the loan’s repayment period.
|Variable Rate Loan||Fixed Rate Loan|
|Interest Rates||Interest rate is tied to a rate index set by the lender and may change periodically during the life of the loan. The interest rate will move up or down based on fluctuations in the economy.||Interest rate will not change over the life of the loan, regardless of whether market rates go up or down.|
|Cost of Loan||Tend to offer a lower initial rate than a fixed rate loan, but if the interest rate rises it may end up costing more over the life of the loan.||Tend to offer a higher initial rate than variable rate loans, but if interest rates rise it may end up costing less over the life of loan than a variable rate loan.|
|Monthly Payment||Payments can vary as the interest rate changes. Each lender varies on when the payments are updated.||Payments remain the same each month regardless of market rate changes.|
You can include both federal and private student loans in your refinance loan. However, before refinancing any federal student loans make sure you understand what important benefits you might lose.
How much you save depends on many factors, including current interest rate(s), your outstanding student loan debt, your repayment term, and your (or your cosigner's) credit history.
You can refinance as little as $5,000, and as much as $225,000, depending on your highest level of education. Review U‑fi refinancing loan limits now.
Refinance loans have several general requirements for eligibility.
The U‑fi refinance loan enters full principal and interest repayment immediately. The first payment is due within 30-45 days of the loan being made.
The U‑fi refinance loan offers a repayment term between 5 and 25 years, depending on loan amounts.
You may withdraw your loan application at any time during the loan application process, up to and including until midnight of the third business day after you have received the Final Loan Disclosure.
Upon notification of the death of a borrower or cosigner, U-fi will immediately suspend due diligence and billing to the deceased party. If confirmation is received of the borrower’s death via acceptable proof of death per program guidelines, U-fi will write off the remaining loan balance, effective the date the borrower died. If proof is received that the cosigner is deceased, the cosigner will be removed as a party on the loan and servicing continues for the borrower, as the sole responsible party. If no death certificate is received within 60 days of initial notification, due diligence and billing processes will resume.
A cosigner is a creditworthy person willing to assume responsibility for the loan liabilities if the borrower fails to repay the loan. Cosigners may help a borrower qualify for a loan and also lower the interest rate. Cosigners must be eligible U.S. citizens or permanent residents.
Cosigners are generally only required if a borrower does not meet certain minimum requirements such as age, creditworthiness, employment, or income.
After a completed application is submitted, the lender will pull a credit bureau report for both the borrower and cosigner, if applicable. The borrower and cosigner’s creditworthiness is assessed based on their credit history and score.
- U-fi borrowers may receive a lower interest rate on their loan for having a cosigner, which lowers their monthly payment and overall costs.
- It can often be difficult for many students and borrowers to meet the credit and income requirements, so a cosigner can help them get the loans they need.
- Qualified borrowers are eligible after they have made 24-consecutive, on-time payments of principal and interest within 15 days of their due date.
- When requesting for the cosigning benefit, borrowers must meet the latest credit underwriting eligibility requirements for an individual borrower.
- If the borrower is denied a cosigner release, he or she will be notified and may reapply at any time.
You can select one of the following loan repayment terms:
- 5-year term
- 10-year term
- 15-year term
- 20-year term (for loan amounts of $25,000 or more)
- 25-year term (for loan amounts of $75,000 or more with variable rate interest)*
With a shorter repayment term, you may lower your interest rate and will lower your overall cost of borrowing, but you will have higher monthly payments. With a longer repayment term, you will lower your monthly payment amount, but you may have a higher interest rate and will increase your overall cost of borrowing.
No matter which term you choose, you can always make additional payments without penalty. This lets you pay off your loan faster and saves you money.
*Note: Not all repayment terms may be available depending on the borrower's and/or cosigner's credit.