Looking for a student loan partner to help you with your repayments is tough job. There are a lot of student loan companies that can help you manage your payment. Most of them are qualified to help you assess and execute your student loan repayment. So it makes sense to get a student loan partner to help you in your repayments.
But the biggest challenge is looking for the best student loan partner that will be able to help you achieve your goals. The danger of partnering up with a scam artist can leave you high and dry and deeper in debt than when you originally started. Unfortunately, there are some student loan borrowers who has already fallen into this trap.
One of the ways scam artists lure in student loan borrowers is preying on their desperation to get out of their student loan predicament.With the promise of low monthly repayment amounts and an assurance of getting out of the debt fast, these borrowers take up scam companies as their student loan partner.
Because of this, a lot of borrowers are taking a step back because they are afraid to fall into a debt trap. As a result, some of them are making mistakes in their repayment and end up paying for it financially. This is one of the facets of having a student loan partner, they are able to dispense important pieces of advice when tackling student loan repayment.
Choosing the best student loan partner
There is wisdom in getting a company to help you manage your student loan repayment. This is because they can thoroughly look into your student loan accounts and lay out possible repayment options especially how loan consolidation can help you with your payments. Here are some of the things you might want to look into when choosing a student loan partner.
- Transparency with the fees. This is usually where scam companies are able to victimize some borrowers. Some of them requires clients to make upfront payments even before any actual work has been done. This practice is actually against the law and one clear cut way to spot a scam company. Be mindful because some companies put fancy terminologies when referring to upfront fees. As long as you are being asked to pay something prior to actual work, that is an upfront fee. There are also some companies who are earning by adding a percentage for every payment. This might leave you with a higher payment down the line. What you want to look for is a company that computes their fees according to their performance. If they were able to help you with your goal, they collect their fees. That is how it should be done.
- Background of customers.When looking for a student loan partner and someone who can help you consolidate your student loan accounts, you need to look for a company that has a track record of delivering on their promises. Look at how they were able to service previous and even existing customers to gauge how their service delivery versus their promises to help in consolidating student loans. You can easily research what people are saying about the company to see if they are worth taking up as a student loan partner.
- Track record with industry affiliations. When looking at student loan consolidation reviews, one of the important things to look for is being affiliated with industry associations. For one, this helps you ensure that you are talking to legitimate companies. They need to be registered entities to become members which is one of the reasons why Sallie Mae lost a case versus a borrower because some of the company name suing was not registered according to TheGuardian.com. This lets you know that the company tries to make an effort to make sure their name is clean.
Looking at your repayment habits
Sometimes even with student loan partners, the borrowers themselves are to blame for their student loan repayment struggles. The repayment is challenging but it should not be the end of the world for the borrower. Here are some of the habits that you might not notice you are committing.
- Limiting yourself on ramen to save on food. It is a good idea to be frugal about your living expenses. But this does not mean dumpster diving or eating ramen for the rest of your life until you pay off your debt. More than being unnecessary, you might end up with a bigger debt with health bills. Student loans does mean you need to make some sacrifices like passing up on a dinner with a group of friends because a restaurant opened up in town. It could also be going straight home instead of having a few rounds of beer after work. But it does not require you to fast on noodles just to save money for payment.
- Overlooking other funds to pay student loans. Once you graduate and start living life on your own, you will also have to deal financial planning not just for your daily needs but for a financially better-off future. For one, this means that you would need to make sure that you have enough emergency fund to sustain you when you encounter financial hardship. This could mean minimum payments on student loans to be able to build your emergency fund. Taking advantage as well of a company matching for your 401(k) can mean your extra funds can be more hardworking when used to build up your retirement fund.
- Forcing a repayment plan you cannot sustain. For federal student loans, even your student loan partner would recommend the Standard Repayment plan. This is because it offers the shortest repayment time frame and will save you the most when looking at interest paid over the life of the loan. This is true but you have to remember that this is looking at and comparing only the repayment plans. These plans are only as effective as your capacity to pay. You cannot force a high monthly payment when your budget cannot afford it. There are plenty of repayment plans for federal student loans to choose from that can match your payment capability. Private student loan lenders are also starting to look at payment modification for their borrower as reported by Forbes.com.
- Not paying your loans at all. This is the worst thing that you can do when you have a student loan debt. Choosing to ignore the situation will not be recommended by anyone even your student loan partner. Delinquency and default brings so much devastation to your credit score and bankruptcy is almost always never an available option. The US Department of Education also has wide-reaching collection powers that can include wage garnishment for borrowers who has defaulted on their student loans but currently holds a steady job. The government can also intercept tax refunds and even lottery winnings.
Missteps in college
People all make mistakes but the important thing is to pick up the pieces and learn from them. But there are also those that choose to try and use student loans for other means. Credit.com reported how Mindy Ritch of Texas was arrested for taking out more than $500,000 in fraudulent student loans under her name.
There are a lot of decisions that can put you under a lot of student loan debt that student loan partners can point out to help you in managing loans. Borrowing more than what you need is one where you take out more than what you need and you use the refund check for other activities like a vacation or buying expensive non-school related gadgets. It is important to understand how repayment will affect you in the future.