ELFI Student Loans
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Expert Take
ELFI is a good bet for college students who need a loan with possibly low rates and a long period of time to pay it off. However, getting accepted will be tricky or impossible for college students who are new to credit or have bad credit.
Pros
- Relatively low rates for student loans and refinancing: This is relative since it depends on your credit score and the interest rate environment.
- Flexible terms: You can take between five and 15 years to pay off your student loan. Terms for student loan refinancing range from five to 20 years.
- Some flexibility on the late fee: You have 10 days beyond the deadline date before a late fee kicks in.
Cons
- Tough eligibility requirements: You need to have a credit score of at least 680 and a credit history of 36 months. Your yearly income also needs to be at least $35,000. Some college students will have trouble meeting those requirements without a cosigner.
- Not available to international students: You’ll need to be a U.S. citizen or a permanent resident alien without conditions and with proper evidence of eligibility to secure a loan with ELFI.
Vault’s Viewpoint on ELFI Student Loans
Working with ELFI student loans could be an excellent strategy for parents who want to help fund their child’s college education.
It’s a reach, however, for a young college student who is just out of high school and probably doesn’t have much of a credit history (you’ll need a 36-month-long credit history to apply). However, a college student should be able to successfully apply for a loan if they have a parent or guardian cosigner who meets the lender’s requirements.
About ELFI Student Loans
How do ELFI student loans work? See our table below.
| Loan amount | Up to 100% of the school-certified cost of attendance (minimum $1,000) |
| Term lengths | — 5 to 15 years for student loans — 5, 7, 10, 15, or 20 years for student loan refinancing — 5 to 10 years for parent refinancing loans |
| Grace period | Six months, unless you choose an immediate repayment schedule |
| APR on student loans | — Fixed: 3.69% – 14.22% — Variable: 5.00% – 14.22% |
| APR on student loan refinancing | — Fixed: 3.69% – 14.22% — Variable: 4.86% – 8.49% |
| Loan types | — Private undergraduate, graduate and parent loans — Student loan refinancing also available |
| Repayment types | — Immediate — Fixed — Interest-only — Deferred repayment options |
| Cosigner required | Possibly, depending on the borrower’s credit |
Who Should Apply for a Student Loan with ELFI?
Before taking out an ELFI loan (or any private student loan, for that matter), you’ll want to first make sure you’ve applied for and taken out any federal student loan available to you. As a general rule of thumb, federal loans offer lower student loan rates (as you’ll find out if you complete the Free Application for Federal Student Aid, also known as the FAFSA).
But for a student or parent who has depleted their federal loan options, ELFI may be an attractive way to pay for the rest of college. Still, it would be prudent to do some comparison shopping with other private lenders as well.
What We Like
ELFI offers plenty for a borrower to appreciate. It provides competitively low rates for private student loans and student loan refinancing, and you can pay the money back as quickly as five years or as slowly as 15 years (20 years if you refinance).
It’s helpful that the late fee doesn’t kick in immediately (you have 10 days beyond the deadline date) since many people have months where cash flow is tight. Plus, you may request a forbearance for up to 12 months due to financial hardship or medical difficulty. However, approval is at ELFI’s discretion.
ELFI also provides every applicant with a student loan advisor who will help the borrower through the application process. Still, no lender should get too much praise for offering customer service. That’s the least one might expect from a lender. ELFI has an A+ rating on the Better Business Bureau (BBB) website, though it should be noted that the company isn’t accredited. On the site, the lender has no customer complaints, but there aren’t any customer reviews yet, either.
Who Should Consider an Alternative Student Loan to ELFI?
ELFI isn’t a student loan that will work for everybody. It should be a good fit for parents—or students with parents or a guardian willing to cosign for a loan. So if you’re a student who is new to the world of credit and lacks a cosigner, you probably would want to look for alternatives to ELFI.
For instance, you may want to look for federal loans, scholarships or grants (which everybody should do, anyway). You may also want to do some comparison shopping for private loans with less stringent borrowing requirements than ELFI
What We Don’t Like
This really isn’t the type of loan that most 18-year-olds who are starting college will be able to get on their own. A new college student will probably need a parent cosigner to secure a loan from ELFI, or they’ll need to look for a student loan that doesn’t require a cosigner. However, that’s typical of many private student loans.
A parent with good credit typically shouldn’t have a problem getting a loan, and a graduate student with a job and good credit will likely have better luck getting a loan than a college freshman. Parents who plan to cosign should keep in mind that they won’t be able to get out of their responsibilities without refinancing the loan in their child’s name.
There are other downsides to consider before taking on a student loan with ELFI. For instance, you may have trouble getting a loan if you’re not a U.S. citizen or full-time student (or at least carrying a half-load of classes). There are also late fees and returned payment fees that you may face if you have trouble making payments on time (5% of the past due amount or $50, whichever is less; returned payment fees are $30). But, again, most private lenders will foist fees or penalties on borrowers who have trouble making payments.
How to Apply for a Student Loan Through ELFI
How do you apply for a student loan through ELFI? You’ll want to take the following steps.
- First, exhaust your other options. If you can get a federal loan instead, you should do that. You should also compare ELFI with other private student loans before actually signing a lending contract with ELFI. There may be more affordable loans out there, or ELFI may be the best, but you’ll want to compare to find out.
- If you decide to apply for a student loan through ELFI, go to the website and compare the different types of loans that they offer. They have undergraduate student loans, graduate student loans and parent loans. You can also call ELFI at 1-844-601-ELFI.
- Once you’re on the website, click on “find my rate.” From there, you’ll be able to set up an account.
- If you’re pre-approved for a loan, you’ll be assigned a student loan advisor to help you actually select a student loan. During that period, you will need to furnish some personal information, like your government-issued ID, as well as financial paperwork, like pay stubs and tax forms.
How Does ELFI Stack Up to Its Competitors?
There are many private student lenders out there, but here’s a quick glance at how ELFI looks compared to some alternatives.
ELFI vs. Sallie Mae Undergraduate Student Loan
Sallie Mae Undergraduate Student Loans currently have fixed rates from 3.59% – 15.49% APR. Sallie Mae also offers variable rates, from 5.54% – 15.70% APR.
In many ways, Sallie Mae Undergraduate Student Loans are similar to ELFI but its loans are more friendly to part-time students—offering loans to students who attend less than half-time. If you’re just taking a class or two a semester, Sallie Mae could be your cup of tea.
ELFI vs. LendKey
LendKey is a student loan marketplace. Since it partners with several credit unions and community banks to offer student loans, your odds of finding a loan you like may increase due to the sheer variety of loans LendKey offers. With that said, LendKey does service the actual loan.
Fixed rates start at 4.39% APR (with autopay) while variable rates begin at 6.08% APR (with autopay). As with ELFI, you may be able to borrow up to 100% of your school-certified cost of attendance, which would include textbooks and other education expenses. Of course, whether you can borrow up to 100% of what you need depends on your creditworthiness.
ELFI vs. MPOWER Financing
Anyone can apply for MPOWER, but it’s designed for international students, which separates it quite a bit from ELFI. Students don’t need a cosigner or collateral to be approved for a loan.
Currently, the fixed rate before a discount is 13.98% APR. You can get a 0.25% rate discount by choosing to enroll in automatic payments.
Frequently Asked Questions
Is ELFI a Good Loan Company?
ELFI is a good loan company run by the FDIC-insured SouthEast Bank. It offers several types of student loans, including private undergraduate, graduate and parent loans. Rates are low and repayment terms range from five to 20 years depending on the type of student loan.
Does ELFI Student Loans Offer Discounts?
Some competitors offer discounts to borrowers who choose to make automatic monthly payments, but ELFI Student Loans already require borrowers to make payments automatically. So the discount, according to its website, is already there and baked into the approved interest rate.
When Will I Need to Pay Off My ELFI Student Loan?
Typically, if you choose the deferred repayment plan, you’ll start making payments six months after you graduate college (or six months after you drop below half-time enrollment if that happens). At that point, you’ll pay the full monthly principal and interest payments.
Does ELFI Have a Prepayment Penalty?
ELFI doesn’t charge a prepayment penalty if you pay off your student loans ahead of schedule. That means you can pay off your student loans as fast as you want. Additionally, ELFI doesn’t charge application or origination fees on student loans.
What Credit Score Do You Need to Get a Loan with ELFI?
As part of ELFI’s eligibility requirements, borrowers or cosigners must have a minimum credit score of 680 or above to qualify for a private student loan. In addition to the minimum credit score, borrowers and cosigners must have at least three years of credit history.
Newsweek writer Melanie Lockert contributed to this post.
