Out of every 10 graduates 7 are worried about their student loan, and having all the loans consolidated to one is often another challenge. You will agree with me that missing a loan repayment has an impact on credit score, plus a ripple effect on almost every other thing.
To make matters worse, pockets of scammy student loan consolidation companies are springing up. It is amazing how they swindle people and make the suffering even worse. I have heard about people paying as much as $500 to either get their loans paused, terms extended, loans forgiven and interest reduced without any result.
These fake student loan consolidation companies are terrible people, they do not care about the pains people are going through in their personal lives. You may be wondering how do they get to people so easily, they are trolls, they buy data about student loans from sources we trusted with our information.
It will shock you that what most student loan consolidation companies do can be done by individuals. Yes! all it takes is to learn more about student loan consolidation programs, research on federal and private student loans and that is it. By the time you finish reading this article you will be prepared to handle your student loan consolidation and refinancing effortlessly by yourself.
What you need to know about student loan consolidation companies
– 90% of the genuine loan consolidation companies do not collect any form of fees upfront.
– Federal loans consolidation are best handled by the Direct Loan Consolidation Program, the instructions are well detailed and easy to follow.
– You probably do not know that most extended term that reduce your monthly payment, increases the total amount you pay eventually.
– Getting a debt forgiveness is limited to special circumstances, if you are reading this then you can read more about it here.
– Pausing your loan is at the discretion of the loan companies, you must proof that your have a genuine reason to demand for the pause. It is easily obtained with the federal student loan program, but some private companies also grant such offers. You can read more about it below.
– Most people are frustrated with the customer service line of the loan companies, keep trying and try every available method of communication to reach them. Use emails, Skype, phone calls, chats and even comments on their official websites blog.
You cannot take the burden any longer, what you need to do.
If you are unemployed or a teacher, lawyer, doctor or nurse you may consider the following:
- You must be prepared for volunteer activities – Americorps, Peace Corps and VISTA
- Teach or practice medicine in special and specific locations
- Be in the military
You must have a federal student loan to qualify for these, and must be in the income based or standard 10 year repayment program. You can save a great deal of funds or get forgiven for part or all the federal loan.
For debt forgiveness, you can either have it full or partial.
Another option is to look for a company that will refinance or consolidate your student loan. A longer repayment or lower interest might be what you want, go for it. Avoid non-payment of loan as much as you can, and be careful of whom you deal with. See more on private refinancing and consolidation companies below.
Cases where student loans are forgiven.
- Total & Permanent Disability
- Teacher Loan Forgiveness
- Public Service Loan Forgiveness
- Bankruptcy – Under special and rare circumstances.
Consolidating Your Federal Student Loans
It is advised you stick with the federal direct loan consolidation Program if you have a federal student loan. They have the most friendly perks, that most private student loan consolidation companies would not offer you. To apply sign up here
It takes 5 basic steps to complete the application process.
1. Choose Loans & Servicer
2. Repayment Plan Selection
3. Terms & Conditions
4. Borrower & Reference Information
5. Review & Sign
There is no cost to you to complete the Federal Direct Consolidation Loan Application
Consolidating Your Private Student Loans
A few private student loan consolidation companies help graduates refinance and consolidate federal student loan, they promise a better result than what you have with the federal loan. It is often advised to handle the federal separately from your private loan.
Related Post: How to get a student loan without a cosigner
Most private student loan consolidation companies have different features that distinct them from each other, I will list below the common features which makes them unique or found in most of them.
- Most of them prefer employed applicants or loan applicant with a job offer letter.
- Some of them are limited to certain areas or state.
- They sometimes prefer graduates of certain institutions or Title IV accredited University.
- They have different minimum and maximum loan amount.
- Almost all private student loan companies require US Citizen or permanent resident.
- Consideration of your credit score is often required.
- Graduates with certain degrees are considered in some cases
- Length of employment and history is sometimes considered.
- Interest rate – Fixed and Variable are often administered differently.
- Some allow you to pause or take a break while many will not allow it.
- No origination and processing fee in most cases.
- Age restricted to a minimum of 18 years.
Okay, this is just the major factors considered, you need to match offers to your needs. To make this work easier you can use this private student loans locator, it is safe to use.
These should end this topic now, but hey! Why should I, am yet to give you the real juice of the matter, stay with me.
A quick recap and things to note to avoid getting scammed.
- You do not pay for Federal Loan Consolidation Program, it is free.
- Most private lenders do not collect origination fees.
- Most information you need to have are available online.
- Never give out your credit card or bank details unless you are sure the company is legitimate.
- If you need to communicate, explore all options; phone, email, fax, comment on their website or visit them.
- Watch out for identity thieves, they are always on parole.
- Keep your Federal Student Aid ID to yourself, do not share it with a third party.
- Avoid giving to much of information about yourself on phone to a cold caller.
- Report stolen belongings that may compromise your information or data immediately.
Review of legitimate private student loan companies
Companies under consideration are:
- Darien Rowayton Bank
- CU student loans
- Common Bond
- Signature Loan
- Charter One
- WSFS Bank
- Wells Fargo
SoFi – Social Finance, Inc.
Social Finance, Inc – SoFi provides funding in a unique way by connecting recent graduates and students with alumni and institution investors via school specific student loan funds. They play it safe by selecting low risk loan applicants, however they provide unbelievable interest and terms to qualifying student and recent graduates.
Getting SoFi to finance your loan is like seeking admission into a highly sought after ivy league university. Loan beneficiaries have claimed having wonderful experience with the company. They also claim they can save you up to $26,000 if switching from a 10-year loan with a weighted average rate of 7.67% to SoFi’s best 10-year rate of 5.49%.
Features of SoFi
- Starting at 1.90% APR to 5.17% APR (withautopay) variable rates, capped at 8.95% to 9.95% APR
- 3.50% APR to 7.24% APR (with autopay) fixed rates.
- 5, 10, 15, 20 year repayment terms.
- Minimum loan amount of $10,000.
- Must be a US citizen or permanent resident.
- They can consolidate and refinance your federal student loan and private loans.
- Good employment history. Currently employed or hold a confirmed offer of employment.
- Acreditcheckis required – Good credit score.
- No origination fees or prepayment penalties.
- Entrepreneurial program is available with mentorship.
- Strong monthly cash flow.
- Employment protection program suspends your monthly payment for a limited time in case of job lose.
- They provide a free job placement service to help you get a new job.
- Hold a 4-year undergraduate or graduate degree from a Title IV accredited institution.
- Must be 18 years or older.
Darien Rowayton Bank
This is a community bank with presence in most states if not all states of the US, they have a strong financial base been one of the banks that did not need a government bail out. They have consistently remained focus and committed to their service.
Features of Darien Rowayton Bank
- No origination fee or prepayment penalty.
- 1.90% – 3.98% (with autopay) variable rates.
- 3.50% – 6.25% (with autopay) fixed rates.
- Loans can be funded within 5 days.
- They refinance and consolidate undergraduate, Parent PLUS and graduate loans including MBA, Law, Medical/Dental (Post Residency), Physician Assistant, Advanced Degree Nursing, Anesthetist, Pharmacist, Engineering, Computer Science and more.
- They refinance and consolidate both federal and private student loans.
- Must be a US citizen or a permanent resident.
- 5 – 20 years repayment terms.
- Minimum loan amount is $5000 there is no maximum.
- Forbearance option available limited to 1 year.
- Income, credit score, employment history are considered.
CU Student Loans
CU Student Loan is part of the Lendkey community that matches consumers with finance companies that will offer the best solution to the customer based on set criteria.
Features of CU Student Loans
- $7,500 – $125,000 in undergraduate student loan debt ($7,500 – $175,000 in graduate debt)
- Applicants must have reliable gross monthly income of $2,000 to apply alone. To apply with a cosigner, applicants must have reliable gross monthly income and cosigners must have reliable gross monthly income of $2,000.
- US Citizen or Permanent Resident.
- No origination fee.
- Co signer release available after consistent 1 year principal and interest payment.
- 2.92% APR to 7.83% APR (with autopay) variable rates
- Refinances and consolidates federal and private student loans
- 15 years repayment terms
- Minimum loan they can finance is $7,500
- Up to 18 months payment pause available.
- Automatic payment via ACH get 0.25% interest rate reduction.
- Undergraduate and graduates are both eligible.
Upstart is a platform that allows you to obtain unsecured funding through fixed rate loans. Upstart believes that you are more than your credit score. Their statistical model considers the school you attended, your area of study, academic performance, and employment history to offer you the loan you’ve earned.
Founded by ex-Googlers, their proprietary underwriting model identifies high quality borrowers despite limited credit and employment experience. Funds can be used for almost anything, including starting a business, paying for a coding bootcamp, eliminating student debt or paying off credit cards.
Features of Upstart
- Interest starts at 5.7%, 12 – 36 months
- Loan amount between $3000 – $35,000
- No prepayment penalty, no fee to apply but there is an origination fee.
- Quick approval process 1 – 2 days.
- Must be a US citizen or a permanent resident
- Must be 18 years or above
- Full time job or job offer starting in six months.
- In case of job lose, you may contact them to arrange something for you.
- Minimum FICO score of 640 as reported by a consumer reporting agency.
CommonBond is an online lending company that connects borrowers and investors to make education finance better. Through CommonBond, borrowers gain access to a robust suite of low fixed- and variable-rate student loan products to refinance existing student loans after graduation or to finance graduate degree education while in school.
Features of Common Bond
- US Citizen or Permanent Resident.
- Select schools and degrees considered.
- Employment history, credit and current income considered.
- Does not have an income based repayment plan
- If you cannot pay for any reason, they can grant you economic hardship forbearance.
- No charges on early repayment.
- Autopay enrollment reduces interest rate by 0.25%.
- They charge 2% origination fee for new loans origination.
- Refinances and consolidates both federal and private student loans.
Other legitimate student loan consolidation companies include the following.
- Charter One
- Wells Fargo
- Signature Loan
- WSFS Bank
- Citizens Bank
- Prosper – Peer-to-Peer lender.
You need to be vigilant and also weigh all the pros and cons, make a choice that is the most friendly. Based on the offers available it might seem students from less known universities and colleges may be shortchanged or graduates with bad credit and are currently out of job.
The federal loan is the most flexible, and can accommodate various needs. The private loan companies that refinances student loans also offer services to students and graduates with a very bad credit. To start with check your eligibility to see how you fair.
Is there any challenges you are currently facing, share it here. If you have a good experience with any company or is it a bad one, it will be nice to hear it. Thanks for your time.