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Wednesday, September 28th
MEFA stands for the "Massachusetts Educational Financing Authority" . It was created by the MA state legislature in 1982 as a way to make college more affordable for students statewide. Despite its origins, MEFA now offers private student loans and loan refinancing nationwide, not federal or state funding.
No surprises in the prequalification process
Like most of the lenders we reviewed, MEFA makes it easy to find out if you qualify for refinancing on your student loans, with no impact to your credit score unless you decide to submit a full application for approval. You'll start by creating an account and then entering your information, like gross monthly income, school attended, and how much you'd like to refinance. You'll be told right away if you prequalified for a MEFA refinancing loan (and, if not, you'll be given the specifics of why you were declined).
Interest rates and loan terms aren't very competitive
If you qualify to refinance your student loan with MEFA, you can expect interest rates a bit higher than other lenders in our review. MEFA has a higher-than-average required minimum for student loan refinancing: $10,000. You'll also find slightly fewer repayment terms here too: 7, 10, or 15, with no options for 5- or 20-year loans. On the plus side, this is one of the few lenders that will refinance your student loans even if you didn't finish your degree.
Refinancing takes a while
You shouldn't expect your refinancing to happen lightning-fast with MEFA. Once you complete the full application and submit all of your documents, it can take up to two weeks for the final review to be completed. When your new loan has been approved and you e-sign your documents, the funds should be disbursed within five days.
Limited feedback from borrowers
It's hard to say what clients think about MEFA: there's just not a ton of feedback. We didn't find a BBB listing, and most of the other comments we encountered were related to MEFA's financial presentations and not to their student loans or refinancing.
No forbearance or deferment programs
Another issue is that MEFA doesn't seem to have any kind of deferment or forbearance options for borrowers who encounter temporary financial difficulties. That puts this lender far below their rivals who have clearly-defined ways of helping borrowers in times of need.
Not the best for student loan refinancing
While we didn't find anything alarming about MEFA's student loan refinancing, we also didn't come away convinced that this lender is worth much thought when choosing a service. Their interest rates are just okay, and their loan terms tend to be less generous than competing financial institutions'. You'll likely find better options elsewhere.
If you got your student loans back when interest rates were high, you're smart to think it might be a good idea to refinance when rates have dropped. Whether you get a lower rate or take years off your loan (or both!), your savings could be in the tens of thousands of dollars.
You can typically qualify to refinance your student loans if your outstanding balance is at least $5,000, though some lenders have higher minimums. You'll often need to be in good standing and up to date on your current loan payments, have steady income and a credit score of 660 or higher. Otherwise, your refinancing may require a cosigner.
But, be careful if you're considering refinancing your federal student loans into a private loan. There are some benefits offered with government student loans that don't carry over into privately-funded ones. Do your research before you sign on the dotted line and make sure that the benefits you'd gain outweigh the perks you'd lose.
So, you've determined that it's the right time to refinance your student loan. What should you look for in a lender? Here are some factors to guide your decision-making:
To help you determine the best way to refinance your student loan, TopConsumerReviews.com has evaluated and ranked today's top lenders. We're confident that with this information, you'll easily find the right rate and term on your loan refinancing!
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