Is Student Loan Consolidation A Scam?

Student loan experts provide advice and support on medical student loan debt and repayment.

Moderator: Adminnaoum

Is Student Loan Consolidation A Scam?

Postby tpskrb1 » Wed Apr 04, 2007 10:40 am

I’ve been getting all kinds of stuff in the mail telling me to consolidate my student loans...one company even offered to lower the amount I owe by 10% Is this a scam?
tpskrb1
New Member
New Member
 
Posts: 3
Joined: Wed Apr 04, 2007 10:28 am

Re: Is Student Loan Consolidation A Scam?

Postby will381796 » Wed Apr 04, 2007 10:43 am

tpskrb1 wrote:I’ve been getting all kinds of stuff in the mail telling me to consolidate my student loans...one company even offered to lower the amount I owe by 10% Is this a scam?


There a lot of gimmicks out there. Read the previous thread in this forum about loan consolidation gimmicks. I have to agree with the statement "if it seems too good to be true, it probably it." There are reputable loan consolidation companies out there; your personal bank may even be able to do it for you. But be very careful. I wouldn't trust any company that uses gimmicks to try and get your business.
User avatar
will381796
Fellow
Fellow
 
Posts: 1062
Joined: Mon Feb 19, 2007 4:22 pm
Location: San Antonio, TX

Postby Adminnaoum » Wed Apr 04, 2007 12:30 pm

You do have to be careful about some claims, but consolidating your federal student loans is generally not a scam.

Advertising and claims are closely regulated by federal agencies, so true scammers face penalties. It turns out the biggest problem has been with schools - student loan companies have beein kicking back perks to college financial aid officers to send students there way. The NY attorney general is going after these colleges and lenders (Student Loan Gate).

In terms of loan consolidation, studentdoc has arrangements with three companies to work with studentdoc visitors. Each has a slightly different deal. Studentdoc makes a comission off of any loans that are consolidated, but we (studentdoc) do not actually do the processing, it goes through these other companies.

1. One Simple loan
2. The student loan network

*edited by mod for new list
Last edited by Adminnaoum on Thu May 03, 2007 5:36 pm, edited 1 time in total.
User avatar
Adminnaoum
Site Admin
Site Admin
 
Posts: 957
Joined: Fri Feb 20, 2004 8:20 pm
Location: Chicago

Postby esma2 » Tue Apr 10, 2007 9:27 am

Student loan consolidation in general is not a scam (although some consolidation companies can use marketing tactics to make you think you getting something you’re not like a very low interest rate)

What consolidation does is combine all of your student loans together into one payment and it can also help you lower your monthly payment. This is done by stretching your payment over a longer period of time (for example, allowing you to make payments over 20 years instead of just 10 years). So, if you want to lower your monthly student loan payment then consolidation might be a good option for you.

It is always best to do a federal loan consolidation (vs a private loan consolidation) with your Stafford and PLUS loans. This allows you to change your interest rate from a variable rate (that can go up each year) to a fixed rate (rate won’t change from year to year).

Just be sure to get all the facts!!!!!!

Here is another forum where users are rating the best and worst consolidation companies:

forums.kiplinger.com/showthread.php?t=6051
esma2
New Member
New Member
 
Posts: 12
Joined: Wed Jun 14, 2006 7:22 am

Postby tpskrb1 » Thu Apr 12, 2007 9:20 am

thanks for all the help! I also found some good info here:

savingadvice.com/forums/personal-finance/27398-student-loan-consolidation-how-compare-offers.html
tpskrb1
New Member
New Member
 
Posts: 3
Joined: Wed Apr 04, 2007 10:28 am

Next

Return to Financial Aid


 

 

cron