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At some point, you may want or need to change student loan officers or lenders. This may be because you are no longer satisfied with their service, the terms of your loan, or both.
While a repairman is the company servicing your loan, a lender originates the loan or lends the money for it. Changing managers will not transfer your student loan to another lender. But there are ways to switch lenders and get a new loan manager at the same time.
If you are considering refinancing with a private student loan, Credible allows you to compare student loan refinance rates from multiple lenders – all in one place and without affecting your credit.
Can you transfer your student loans to another lender?
The US Department of Education is your lender when you take out a federal student loan. The government funds federal student loans, but handles billing, administration of income-based repayment plans, assessment of forgiveness eligibility, and other loan officer services.
If you have private student loans, a private company originates and holds your loan. The private lender will also service the loans it makes.
You may want to transfer your student loans to another lender for several reasons. Maybe you are frustrated with the customer service experience. Or maybe you’re looking for a better interest rate and better terms.
Regardless of your situation, you should be aware that private lenders can sell or transfer your student loan debt to different creditors. But in most cases, you cannot initiate the process as a borrower.
The good news is that you can transfer private and federal student loans by refinancing them into a new loan. And, while consolidating your federal student loans into a federal direct consolidation loan won’t get you a new lender, it might get you a new loan. student loan officer.
10 COMPANIES THAT HELP YOU PAY OFF YOUR STUDENT LOANS
Switch Servicers with Federal Student Loan Consolidation
If you have federal student loans, consolidation is an option. When you consolidate your federal student loansyou get a new direct consolidation loan from the Department of Education and use it to pay off one or more existing federal loans.
The interest rate you receive will be the weighted average of the interest rates on your other loans. Although consolidation does not guarantee a lower interest rate, it can lead to more flexible terms and lower monthly payments.
You may want to explore this option if you have multiple federal student loans with different managers and are overwhelmed with the debt repayment process. Consolidation will give you one payment and one repairer to deal with. Additionally, if you’re having difficulty repaying your federal student loans, locking in a longer repayment term through consolidation can help alleviate some financial stress.
Remember that you will likely pay more interest in exchange for extending your repayment period. Also, any payments you have already made will not count towards the forgiveness available through the Civil Service Loan Forgiveness or income-based repayment plans.
HOW TO REFINANCE STUDENT LOANS WITH BAD CREDIT
Switch lenders by refinancing your private student loans
Student Loan Refinance it’s when you take out a new private loan with better terms to pay off your existing loan. This strategy can work for both private and federal student loans. With a student loan refinance, you can pay off your student loans faster, lower your monthly payments, and reduce your interest rate to potentially save hundreds or thousands of dollars over time.
You may qualify for student loan refinancing if:
- Your credit has improved since you took out your original loans, and you think you could qualify for a better rate than you currently have.
- You pay a variable interest rate and prefer a fixed rate that you can budget for in advance.
- You want to extend your repayment period and reduce your monthly payments.
But before you go ahead with refinancing, be aware that it can be difficult to qualify for a private student loan refinance if you don’t have a good or excellent credit score, or a co-signer with a good credit. Also, if you refinance your federal student loans into a private student loan, you will no longer have access to federal benefits such as income-contingent repayment and student loan forgiveness.
Comparing student loan refinance rates from multiple lenders can help you find the best rate and terms available to you. With Credible, you can easily compare student loan refinance rates in minutes.
What happens after transferring student loans to another lender?
Once you have transferred your student loans to another lender, you can expect some changes. Depending on the strategy you choose and the lender you choose, you may get a different interest rate and monthly payment amount. The transfer can also affect the total amount of interest you pay and the time it takes you to repay the loan.
If you take out a direct federal consolidation loan, you might get a new loan manager. The Ministry of Education has a list of loan servicing companies it works with, and their contact information, on StudentAid.gov.
STUDENT LOAN REFINANCING CAN POTENTIALLY SAVE BORROWERS $5,000 WHILE FIXED RATES ARE LOW
How to refinance your student loans
If you want refinance your student loansFollow these steps:
- Check your credit. When you apply for a student loan refinance, a lender will check your credit. That’s why you need to know where you stand on credit before you apply. You can visit AnnualCreditReport.com to get free copies of your credit reports from the three major bureaus. Dispute any errors or inaccuracies you find, as they may interfere with your ability to qualify for refinancing.
- Compare the prices. Not all student loan refinance options are created equal. That’s why you should compare the rates and terms of at least three lenders to find out which option will save you the most money. Also compare the offers you find to your current student loans to make sure you don’t choose one with higher rates and less favorable terms.
- Apply with the lender of your choice. Once you have chosen a lender, complete the refinance application. Although each lender has its own unique application process, most will allow you to apply online. Be sure to complete your application completely and accurately to avoid delays.
- Close the loan. After you apply for the loan, the lender will review your application and get back to you with a decision, usually within a few days. Keep in mind that if you are prequalified for a loan, there is no guarantee that you will be approved for it. Your lender will let you know your options if this happens. If you are approved, you will review and sign your loan documents.
- Continue to pay your original student loans. You will need to continue making payments on your original loans until the new lender provides you with documentation that lets you know that your existing loans have been paid off. Then you will start making payments on the new loan.
- Set up automatic payments for your new loan. If you want to simplify the loan payment process and avoid missed payments, you can sign up for automatic payments for your new loan. Luckily, many lenders offer an autopay discount that can help you save even more on interest. If you sign up for automatic payment, make sure you always have enough money in your account to cover your monthly payments. Remember that you can pay more than the minimum each month if you want to settle your balance sooner.
If you’re ready to refinance your student loans, you can start with Credible, where you can compare rates from several lenders.