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MEFA Student Loans Review 2022: What You Should Know

MEFA student loans

Searching for a loan provider who can fulfill your demands and offer reasonable loan terms is crucial when you need a private student loan. That’s where MEFA student loans come in. 

Keep in mind that not all private student loan companies are made equal. Therefore, searching for the best deal is crucial

 for finding a reasonable price. 

Looking for nonprofit organizations’ lenders is an excellent place to start because they may be prepared to give better rates and terms.

The Massachusetts Educational Financing Authority (MEFA) is one of these nonprofit organizations. MEFA student loans could be a good choice for graduate and undergraduate students who are U.S. citizens and attend a qualifying college. 

We’ll go through everything you need to know about MEFA student loans. 

With that said, let’s begin. 

MEFA Student Loans: Full Review 

MEFA, unlike most other private lenders, doesn’t have a structured program that allows borrowers to temporarily suspend payments due to financial troubles through forbearance or deferment. 

That implies MEFA refinancing is best for people who have a steady income and don’t expect to need extra space in the future.

To refinance with MEFA, you don’t have to be a graduate. However, you must have paid your loans on schedule for a year. You’re also ineligible if you’ve ever defaulted on a student loan.

We’ll go more into detail in the subsequent sections. 

Types Of MEFA Student Loans 

MEFA offers graduate and undergraduate students private loans, including student loan refinancing. Here are the specifics for each.

Undergraduate Student Loans

MEFA is unique because it gives a lower interest rate while in school, preventing you from accruing excessive interest. A fixed interest rate of 4.5 percent (5.63 percent APR) during the school year and 5.4 percent (6.03 percent APR) afterward.

Because undergraduate loans don’t have a variable rate option, you won’t have to worry about your interest accumulating and adding to your principal as rates climb over time.

Undergraduates who postpone payments can get a cosigner discharge on a 15-year loan. After 48 consecutive on-time payments, applications for cosigner release are considered.

Options for Repayment

Undergraduate loans are available for 10, 15, or 20 years, with three repayment choices.

Instant Repayment. While you’re still in school, you can begin making entire interest and principal payments. As a result, you’ll save money on interest and be able to pay off your student loans faster. In addition, you have the option of a 10-year or 15-year repayment period.

Repayments based solely on interest. You can only select a 15-year payback period. And you’ll only be responsible for interest payments while in school. This keeps your loan principal from increasing while you’re in school.

Deferred repayment. This option, which has a 15-year term, allows you to qualify with or without a cosigner. All payments are deferred until you graduate, but interest continues to accrue.

Graduate Student Loans 

Fixed-rate loans with APRs ranging from 7.5 percent to 7.75 percent are available for post-school and in-school years. In addition, you can defer payments entirely or make interest-only payments while obtaining your degree.

MEFA only offers graduate loans for one year at a time, so you’ll have to reapply if you require funding for multiple years. The maximum term of deferral is 36 months. If you don’t complete your program within three years, you’ll have to begin paying.

MEFA graduate loans have a minimum loan amount of $2,000 for private schools and $1,500 for public schools.

Are MEFA Student Loans The Right Choice For You? 

MEFA student loans

MEFA has modest loan minimums and lets you borrow up to your total cost of attendance. It may be an excellent option if you need to borrow a large sum to meet the school expense or if you want to postpone payments until six months after you graduate.

How Do MEFA Student Loans Work? 

You must fill out an online loan application and consent to a credit check. You’ll have the opportunity to compare loans once you pass the credit check.

You’ll examine and sign loan documentation such as the MEFA loan agreement, loan approval disclosure, and U.S. Education Department self-certification after you’ve decided on a loan. All borrowers must sign the loan.

The loan amount must then be certified by your university or college, and MEFA must be informed of the requested disbursement date. To learn more about the timing and process at your school, contact the financial assistance office.

Furthermore, you’ll apply online for conditional permission and supply financial papers for student loan refinancing. The final review of your application will take 10 to 14 days. After gaining approval and signing loan documentation, the loan is disbursed within five days.

MEFA Student Loans: The Fees, Terms, And Conditions 

Fixed-rate undergraduate student loans with terms of 10, 15, or 20 years are available, and fixed-rate graduate student loans with terms of 15 years.

Undergraduate loans have annual percentage rates ranging from 3.75 percent to 5.75 percent, depending on your credit history and whether you apply with a co-borrower with a good credit score, which MEFA encourages. 

MEFA’s graduate student loans have credit-based APRs ranging from 4.5 to 5.65 percent.

Refinancing loans come with seven, ten, or fifteen-year repayment durations. APR ranges from 2.68 percent to 5.08 percent for fixed rates. According to MEFA, the lowest rates are accessible to those with the best credit.

Undergraduate and graduate student loans start at $1,500 and can go up to the cost of tuition minus financial help at the school. You’re not responsible for the origination, application, late fees, and charges for returned checks.

Advantages Of MEFA Student Loans Refinancing

MEFA has the following benefits over other refinancing lenders:

1. Prequalify For A Loan Without Jeopardizing Your Credit Score 

You may be required to submit an application and undertake a rigorous credit investigation before viewing your loan alternatives and interest rates when applying for a loan. Unfortunately, your credit score may suffer due to each hard credit inquiry.

You can use MEFA’s Refi tool to see current interest rates and confirm your eligibility. It’s just a soft credit inquiry that has no bearing on your credit score.

2. There Is No Requirement For A Degree.

Most refinancing companies require applicants to have a bachelor’s degree before refinancing their loans. In addition, most refinance loans are ineligible if you quit school before graduating.

MEFA doesn’t need applicants to have a college degree to refinance, so you can refinance even if you dropped out.

3. There is No Student Loan Maximum Limit 

Because MEFA has no loan limit, you can refinance up to the total amount of your current loan debt. The option to refinance all of a borrower’s loans is a huge advantage for people with large amounts of debt, such as those who attended law or medical school.

4. There Are No Additional Costs 

MEFA is a nonprofit organization with no membership costs. There are no application or origination costs and no late or returned payment fees. Late fees can be as high as 6 percent of the late payment amount with other lenders.

What to Remember When Refinancing MEFA Student Loans

MEFA is a trustworthy lender that offers refinancing solutions for non-graduates and individuals with substantial loan balances. You should, however, balance those benefits with the following disadvantages:

1. You Only Qualify After six months of On-Time payments 

To be eligible for MEFA refinancing, you have to make six on-time payments on all student loans you want to refinance in the last six months. 

You won’t qualify for a loan until you make six timely payments if you’re in school and have delayed payments or haven’t made payments because your loans are in their grace period.

2. You Don’t Get Variable Interest Alternatives.

Borrowers can select between a fixed and variable interest rate when refinancing student loans. Variable-rate loans are popular among borrowers because they feature lower starting interest rates, making them an excellent option if you want to pay off your debt faster.

MEFA doesn’t provide variable-rate student loans. Only fixed-rate loans can be used to refinance.

3. Forbearance And Deferment Terms Are Not Clear 

MEFA keeps the details of its forbearance and deferment programs for borrowers in financial distress under wraps. Instead, it encourages borrowers to speak with a customer service representative about their options. 

So it’s tough to compare MEFA to other lenders if there aren’t enough specifics.

4. MEFA Don’t Permit Cosigner Releases

Even though MEFA permits you to qualify for refinancing with a cosigner, the cosigner must be willing to make a significant financial commitment. 

MEFA, unlike other lenders, doesn’t offer a cosigner release option. So your cosigner will be obligated to the loan until it’s fully paid off. Refinancing the loan with another lender is the only method to acquire a cosigner discharge.

Should You Refinance Your Loans With MEFA? 

MEFA offers fixed-rate loans for up to 15 years with no maximum loan amount. It makes sense for you if you have significant debt and desire a fixed interest rate for the duration of your loans. 

MEFA would be a good choice if you dropped out of school before graduating because it doesn’t require a degree.

MEFA, on the other hand, doesn’t allow cosigners and offers fewer repayment alternatives and perks than some other lenders. 

Request rate estimates from leading refinancing lenders before applying for a loan to guarantee you’re getting the best deal for your situation.

Review of MEFA’s Private Student Loans

MEFA student loans

Even though MEFA is a Massachusetts-based organization with a state charter, its private student loans are available to families all around the country at competitive rates.

Because most students lack the earnings and credit history required to qualify for a loan on their own, MEFA’s private loans are cosigned by a parent or other “co-borrower” in 98 percent of cases.

If the student can’t make payments, the cosigner or co-borrower is accountable. MEFA allows cosigners to be released after 48 consecutive on-time payments. But only on 15-year loans to undergraduates postponing payment while in school.

What Are The Requirements For Qualification?

You or the cosigner will require the following to qualify for a MEFA private student loan:

  • For a family of four, an income of at least the federal poverty level is required.
  • At least a 670 credit score. You’ll need a minimum of 710 if your payments are fully deferred. 

Furthermore, you have to be: 

  • Enrolled at a nonprofit school for at least half-time. You don’t qualify if you attend a for-profit school. 
  • A permanent U.S. resident or a citizen.

How The Repayment Works 

Undergraduates can select between three repayment programs and a 10- or 15-year repayment duration on their loans:

  • Defer monthly payments for six months after you’ve graduated from high school (it’s a costly alternative)
  • Start paying your entire monthly bill right away (cheapest alternative)
  • While still in school, make interest-only payments (lowers overall interest charges)

All graduate student loans have a 15-year repayment period, with borrowers having the option to make interest-only payments or delay payments while still in school.

How Can You Qualify For MEFA Student Loans? 

To qualify for a MEFA graduate or undergraduate loan, you must be enrolled at least half-time in an approved degree-granting program at a qualifying school and make sufficient academic progress as defined by your school.

MEFA loans are available to undergraduates enrolled for the current academic year to cover the summer term or a past-due amount from the current academic year. 

Graduate students who are enrolled or plan to enroll at least half-time during the typical academic year may apply for a MEFA loan if they are only enrolled for a portion of the time during the summer.

You must be a U.S. permanent resident or citizen, and all loan applications must pass MEFA’s credit approval requirements. In addition, according to MEFA, most undergraduate students will require a creditworthy co-borrower who will be equally accountable for repayment

However, MEFA has not revealed the minimum credit score required for a loan.

The following are some of the requirements for refinancing student loans with MEFA:

  • Having a good credit history, with no bankruptcies or foreclosures in the previous five years.
  • Being a borrower on any loans, you plan to refinance.
  • All refinanced loans must have a spotless six-month payment history.
  • Having educational debt incurred due to paying for tuition at a nonprofit degree-granting school. 
  • Having no history of student loan defaults or delinquencies in the previous year.

What Features Do MEFA Student Loans Have? 

MEFA has several digital tools available. An example is an online calculator that estimates monthly student loan payments depending on years to graduation, the loan amount, and credit profile. 

An online refinancing calculator can estimate payments based on the overall refinance and your credit profile, the refinance period, and the existing monthly payment.

Only for student loan refinancing can you check your rate online without affecting your credit score.

Borrowers and cosigners can apply for loans online and electronically sign documents with the help of phone support if needed. When you refinance, MEFA will ask for documentation, which you can upload to their website.

You can make your payments online once you have AES account access. Log in to your account and go to Payments and Billing

 to get started.

You can automatically deduct your payment from your bank account every month by logging into AES and completing the electronic fund transfer agreement.

Pros And Cons Of MEFA Student Loans 

Pros

There are no additional costs. For example, there are no origination or application costs for graduate and undergraduate student loans and no prepayment penalties. In addition, there are no late penalties or costs for payments that have been returned.

There are several ways to repay your debt. Depending on your loan, you can have numerous repayment options, including interest-only payments, deferred payments, immediate payback, and deferred with a cosigner release.

There is a release form for cosigners. You can request a cosigner release after making 48 consecutive on-time monthly payments.

Borrow up to the total tuition amount. Unlike some private student loan lenders, MEFA allows you to borrow up to the total cost of attendance.

Cons 

Prequalification for a loan isn’t available. However, many lenders have prequalification loan tools to acquire a rate quote without filling out a complete application. MEFA, on the other hand, lacks this feature. 

You must apply for a loan and undertake a rigorous credit investigation, which can affect your credit score, to find out if you qualify and the interest rate. They do, however, provide a payment estimation calculator.

There is no autopay discount. When you sign up for automatic payments, most lenders provide you a small interest rate savings. Because MEFA doesn’t provide this service, there is no financial benefit to enrolling in autopay.

Maximum deferral periods are in effect. While payments can be deferred until after you graduate or leave the school, the maximum deferral term for undergraduate students is 60 months and for graduate students is 36 months. You’ll have to make payments while in school if you take longer than that to get your degree.

Final Thoughts

MEFA student loans isn’t a well-known lender, and its advertising budget is far smaller than that of SoFi. They also have a significantly narrower number of loans to choose from. MEFA, on the other hand, can be a terrific alternative if you meet the MEFA requirements and are searching for a 15-year loan.