In 2019, students left college with an average of $29,900 in loans. For millions of people, student loans and high interest rates are a significant burden, and many struggle to keep up with their payments.
If you have a balance higher than $15,000 and are considering student loan refinancing, Education Loan Finance (ELFI) is worth a look. While its refinancing eligibility criteria are more strict than some competitors, the low interest rates could help you save money each month or overall.
Education Loan Finance review: The basics
Education Loan Finance is a student loan refinancing and consolidation program run by SouthEast Bank, a financial institution based in Tennessee. The company, which also lends private student loans to undergraduates, was designed to simplify repaying your loans by combining them into one easy payment.
After you graduate from school, Education Loan Finance helps to make your education more affordable. Many students leave school with a mix of private and federal loans, with multiple payments and different due dates. By refinancing, you can combine them into one easy payment, with one due date.
At ELFI, refinancing is available for graduates with their own loans, as well as for parents with federal parent PLUS loans or private loans. As the graduate, you may also refinance your mom or dad’s parent PLUS Loans into your name (if you can qualify on your own, without a cosigner).
Here are some other features you can expect with Education Loan Finance student loan refinance:
- Fixed and variable interest rates
- Prequalify and receive a rate quote — without harming your credit
- No application or origination fees or prepayment penalty
- Refinance at least $15,000, with maximum loan amounts depending on your creditworthiness
- Eligibility requirements include a 680 credit score and a debt-to-income ratio below 55%, but applying with a cosigner is possible
- Repayment terms of 5, 7, 10, 15 and 20 years (for ex-students) and 5, 7 and 10 years (for parent borrowers)
- Up to 12 months of forbearance available for borrowers in a financial hardship (awarded on a case-by-case basis)
- No in-school deferment available (if you return to campus while in repayment)
What we like about ELFI student loan refinance
There are some significant benefits to refinancing your loans with Education Loan Finance.
Competitive interest rates — and few fees
Education Loan Finance’s interest rates vary depending on the type of loan you want. If you apply for a fixed-rate loan and are approved, the offered loan’s interest rate could range from 3.19% to 6.69%.
For a variable-rate loan, the starting APR (annual percentage rate) can range from 2.39% to 6.01%. After that, the APR may increase with market changes.
ELFI bakes the industry-standard autopay discount into your awarded interest rate automatically because the lender requires all borrowers to make payments electronically.
Also, with Education Loan Finance, borrowers are never charged most student loan fees, such as for application, origination or prepayment. For late payments, you may be charged 5% of the late amount or $50, whichever is less. If a payment must be returned for any reason, you could be charged $30.
Potential borrower savings
If you have good credit or have someone willing to act as a cosigner, refinancing your debt with Education Loan Finance can help you save a lot of money.
For example, say you had a $20,000, 10-year loan at 7.00% interest. Over the length of your repayment, you’d pay back a total of $27,866. Because of the relatively high interest rate, you’d pay over $7,800 just in interest charges, according to our monthly payment calculator.
If you refinanced and qualified for a 10-year loan at 4.50% interest, the difference is dramatic. Over the length of your loan, you’d repay just $24,873. By taking a few minutes to submit your refinancing form, you’d save nearly $3,000.
Such arithmetic allows the average ELFI customer to save $13,940 over their repayment, according to the company’s data from February 2020.
Use our student loan refinancing calculator to estimate how much you can save.
Transparent application process
The highlight of Education Loan Finance’s application is its transparency. You can confirm your eligibility and potential rate within minutes and without subjecting your credit report to harm. Not all lenders prequalify borrowers this way.
If you elect to file a formal application with ELFI, you will have to submit to a hard credit check, which could temporarily ding your credit score.
Also, during the formal application process, you’ll need to provide the following documents:
- Recent pay stub or proof of employment
- W-2 form from the most recent tax year (and tax returns if you’re self-employed)
- Government-issued ID
- Bank account information (to set up Education Loan Finance payments)
- Current billing statement or student loan payoff letter for each debt included in your refinancing application
Reliable customer service
Like with other student loan refinancing companies, Education Loan Finance won’t directly manage your repayment. It contracts federal loan servicers MOHELA and American Education Services (AES) to do just that.
At first blush, you might be reluctant to work with federal loan servicers, but MOHELA and AES have among the best servicer track records. MOHELA was absent from the latest Consumer Financial Protection Bureau complaint report, and AES was brought down, in part, by parent company PHEAA. On top of that, Education Loan Finance hasn’t been the subject of a student loan-related complaint filed to the CFPB since 2017.
Education Loan Finance customer service also has other notable positives going for it:
- Each customer is assigned a personal loan advisor
- The company’s management team claims three-plus decades of student loan refinancing experience
Speaking of experience, in January 2020, the company announced it has surpassed $1 billion in refinanced student loans, thanks to its approximately 14,500 customers.
Referral bonus program
Besides the benefits of refinancing, Education Loan Finance offers other benefits, too, like its student loan referral program. If you refer a friend, you get $400, and your buddy will get $100. (You get the money as a check to use as you want.)
Best of all, there’s no limit to how many people you can refer. You can post a referral link on your social media pages, your personal website and more to get the word out and earn cash.
What to keep in mind about Education Loan Finance
There are some drawbacks to student loan refinancing that you should keep in mind, particularly if you have federal student loans.
When you refinance, you’re replacing your federal loans with one private loan. That means you lose out on certain federal benefits, such as access to income-driven repayment plans, the ability to apply for Public Service Loan Forgiveness and forbearance and deferment options. That can make it more difficult to manage your loans later.
Other fine print to be aware of includes:
Stiff eligibility requirements
Education Loan Finance works with borrowers across the U.S. and Puerto Rico, but that’s where its accessibility starts to shrink.
To qualify for refinancing with Education Loan Finance, you must have at least $15,000 in student loan debt, be a U.S. citizen and have obtained your bachelor’s degree or a higher degree from an approved postsecondary institution.
While Education Loan Finance won’t publicly cite a specific number, they do say that applicants should have a debt-to-income (DTI) ratio that shows you can pay back the loan.
ELFI is clear about thresholds for other financial factors, including:
- Minimum income: $35,000
- Minimum credit score: 680
- Minimum credit history: 36 months
If you don’t qualify for a loan based on your own credit, income or DTI ratio, you may need to find a cosigner.
Alternatively, you could find a lender with less stringent requirements.
| Don’t have $15,000 in loans to refinance? | LendKey will refinance as little as $2,000 worth of debt |
| Not a citizen? | Prodigy Finance is among lenders assisting international borrowers |
| Don’t have a bachelor’s degree? | EdVestinU works with borrowers who didn’t graduate or hold an associate’s degree |
| Don’t have income of at least $35,000? | SoFi doesn’t set a minimum income requirement |
| Don’t have a credit score of 680? | Earnest sets its threshold at 650 |
Missing features found elsewhere
Beyond inaccessible eligibility standards, Education Loan Finance doesn’t provide some perks that you’ll find available from other lenders.
The good news is that you could find these features by signing on with a competitor.
| Options not available at ELFI | Alternative lender |
|---|---|
| Spousal consolidation loans | Splash Financial |
| Cosigner release (if you apply for refinancing with a cosigner) | Laurel Road |
| Discharge due to borrower’s death (ELFI reviews each case individually) | Wells Fargo |
Are ELFI student loan refinance right for you?
Although there are some drawbacks to consider before submitting your application, refinancing your loans with Education Loan Finance could help you save money or pay off your debt faster. But it’s always a good idea to compare offers from multiple student loan refinancing companies to ensure you get your best possible offer.
Andrew Pentis contributed to this report.
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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.
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