ELFI | Student Loan Refinancing FAQs | ELFI (2024)

One of the biggest myths is that refinancing student loans is expensive, often due to it being confused with other types of refinancing, such as mortgage refinancing, which has fees such as closing costs.

Unlike other types of refinancing, most lenders don’t charge any application or origination fees for student loan refinancing – and with Education Loan Finance, there are no prepayment penalties, so you’re free to pay off your new loan as soon as you’d like.

Consolidating or refinancing your education loans may be the right decision for you if:

• You’d like to lower your monthly payments by choosing a longer repayment term.
• You have additional income because you can shorten the life of the loan.
• You want the simplicity of consolidating your loans into a single monthly payment.

To learn more, check out this blog on consolidating and refinancing.

Additionally, check out this guide to learn more about the signs that you should refinance student loans.

Some forms of loans can take months to process, but student loan refinancing is different. You can complete the application in minutes, and you can do everything online. Once you submit your application, the lender will review your information and make a decision. In some cases, you’ll find out whether or not you’re approved in as little as one business day, depending on whether you’ve submitted all of the required documentation.

If approved, the lender will work to disburse your loan. It can take a few days to a few weeks for that process to be completed, so keep making payments on your current debt until you receive a notification that the loan was disbursed. If you refinance your student loan with ELFI, you’ll have a Student Loan Advisor who will be your guide throughout the entire process.

You may think that student loan refinancing isn’t worth the work because it won’t save you enough money. But taking just a few minutes to submit a refinancing application can potentially help you save thousands over your loan repayment term.

In a 2021 survey, ELFI customers reported that they are saving an average of $278 per month or that they will save an average of $20,774 over their loan term after refinancing.¹

Use ELFI’s student loan refinance calculator to find out how much money you could save by refinancing your debt. Also, check out this blog to learn more about student loan refinancing savings.

^{(1)Average savings calculations are based on information provided by SouthEast Bank/ Education Loan Finance customers who refinanced their student loans between 01/03/23 and 03/01/23. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon a number of factors.}

Refinancing may not be right for you if:

• You only have a couple more years or a few thousand more dollars left until you pay off your student loan.
• You’re using benefits provided by your current lender. Switching to a new lending institution may eliminate existing benefits. It’s crucial to investigate how refinancing will affect your student loans.
• You do not want to change the terms of your existing student loan.
• You have federal student loans and would like to take advantage of federal programs and benefits such as income-driven repayment plans, federal loan forgiveness programs, and potential government programs that could be offered in the future.

To learn more about refinancing and consolidating your loans, check out this blog post.

Some people hold off on student loan refinancing because they’re afraid it will damage their credit. However, lenders like ELFI allow you to get a rate quote (prequalify) with just a soft credit inquiry, which doesn’t affect your credit score.

If you find a quote that works for you and submit a refinancing application, the lender will then complete a hard credit inquiry, which can impact your credit. However, the effect is usually minimal. According tomyFICO— the organization behind the FICO credit score — one hard credit inquiry will typically take less than five points off your FICO credit score.

In most instances, a cosigner can’t refinance student loans on their own. When a borrower initially agrees to take on a student loan, they own the obligation to repay it, and therefore, the power to refinance it.

A Payoff Verification Statement is a statement prepared by the lender or servicer showing the remaining total amount due as of a specific date for a student loan. The payoff amount takes into account the loan balance, interest, fees, and the future payoff date provided.

We will use this Payoff Statement to finalize the loan for you so that we can pay off your current lenders and become your new lender.

If you already refinanced your loans once, you may think you’re out of luck, and you’re stuck with your current interest rate. However, there’s no limit to how many times you can refinance your loans.

If your credit score improves or you get a raise at work, you canrefinance your loans againto see if you qualify for a lower interest rate. As you progress in your career and your finances stabilize, refinancing multiple times can help you pay off your debt even faster.

Yes, you should continue making payments on your existing student loans during the refinancing process until your outstanding loans are paid off as reflected by a $0 balance for each of your loans at your current servicer(s). This is to ensure that you do not risk having a late payment with your current servicer(s) as it can take between 2-3 weeks for the loans you are refinancing to pay off and for funds to post.

Our payoff of your outstanding loans may post after your payment(s) on your refinanced loans, which may cause an overpayment with your previous lender(s). In this case, we request the funds be sent back to us, and we then apply them to the principal balance of your ELFI loan and backdate it to the day we disbursed the initial payoff. Receiving the refund and applying it to your account can take between 4-6 weeks.