Most companies in the student loan business tend to work with positive motives and upright virtues. They help ambitious students and their parents through the tacky process in a legit and systematic manner. The legitimate companies work hard to find and filter the right option for clients and to satisfy all their financial needs. Unfortunately, there are organizations with negative motives! The Department of Education advises young students and parents to steer away from disreputable companies that are nothing more than scams.
Check #1 – Fake promises
First of all, don’t be carried away by organizations that promise to get your applications processed through bankruptcy. This is a strategy that is close to impossible! Always remember that student loans cannot be processed through bankruptcy.
Check #2 – Better Features
If a company claims to offer you very low monthly payments and rock bottom interest rates, you should think twice! All federal student loans are governed by similar terms and conditions. The monthly payment will depend on your income, qualification, loan term, family size and plan. If a company promises to get you better offers, they are definitely lying.
Check #3 – Immediate Solutions
Consolidation companies that promise immediate student loan relief alias forgiveness should be avoided. No company can guarantee upright forgiveness! And, there is no scheme to stop all monthly payments abruptly. In most cases, you must make at least 120 qualifying payments to be a part of the forgiveness plan.
Check #4 – High Maintenance Fees
While choosing student loan consolidation companies, keep an eye for the maintenance fees. Bad companies will force you to pay high maintenance fees. On the other hand, legitimate companies will charge a single maintenance fee for their forgiveness, consolidation and application services.
Check #5 – Intense Experience
Always remember to verify if the consolidation company has been around for several years! Check if their work schemes and strategies are upright. Some companies will not guarantee you instant solutions. If the company didn’t process your application properly, you should ask for an immediate refund! Never work with companies that are not sure of the entire loan application/consolidation process.
Check #6 – Flexible Options
Moving on, check if the consolidation company will let you cancel at any time. The company should have a special cooling off period for their clients. Generally, legitimate companies give students a 10-day window to cancel their service agreements.
Check #7 – Fancy Looks
Finally, take a good look at the company’s logo, website and name. Companies that are outright scams will have catchy logos and taglines to convince potential customers. For your own safety, you should steer away from such organizations. Go through sites like the National Student Loan Data Source to gather information about the entire loan process. Such sites have everything you should know about student loan consolidation.
Check #8 – External Bonding
Finally, verify if the student loan consolidation company will bond you with a private firm. If yes, it would be wise to avoid them.