Private student loan consolidation
I have been waiting for a payment to my private student loan to post for a couple of days now. It usually shows up within a few days after I make the payment. Since my bank wasn’t showing it posted, I wanted to make sure it posted on the loan side to keep it current. When I checked out the payment history, it posted but I also noticed out of the last 6 payments I have made, my principle balance hasn’t gone down a penny. Why in the world would I just pay interest?
Soon after that I decided to call the private student loan company to find out what was going on. After being on hold for quite some time, I finally got to someone. They of course didn’t have an answer to my question, so I sat on hold even longer for them to figure it out. As it turns out the index my interest rate is based on skyrocketed this summer up to from 7% to 13% and has now dropped back down to 8.23%. They kept my payment the same, which means my payment has been back paying old interest while my account stays current. I told them I find it absolutely appalling that this wasn’t communicated or even give me the option to see what the unpaid interest was on my billing statement. All I see on the statement is the loans principle balance, rate, amount due, past due and late fees. I made my regular payment as I always have.
This company has got me so frustrated right now because they want me to keep making this same payment for another 213 months, or over 17 years. I started to look for another place to do a private student loan consolidation. Most of them require over $7500 while mine is only $6950. I finally found one that has a $5000 minimum, no fees, and a good rate of 3 month LIBOR plus 4.5%. My other concern was whether or not they were accepting new loans given the current state of the lending industry. They will accept new loans as long as I meet their requirements and can process my application within 24 hours. This means the old lender would get paid off within a week and I would have a new loan with a shorter term and better rate with the payment staying about the same as the existing loan.
I’m getting all the information together for this application along with a copy of my last billing statement from the existing loan company. When I get this in the mail it should arrive and process within a week. My wife has a bunch of private loans with this current lender too, but they are on economic hardship deferment until November. We might make an attempt to move her loans to this other lender as well later in the year. It may be psychological to pay off old loans with a new loan, but I think it creates a feeling that it is easier to move forward.
Hey, Jim!
Thanks for the commment - it caused me to stop and think, and I’m in the position of re-evaluating some things - I answered you over on my blog, but there’s another post coming on some further developments. Thank you for taking the time to put the comment up - I really do appreciate it!
I’m confused, your loan is at a variable rate? That’s strange. Also good job finding a company that will consolidate - I wasn’t able to when I was looking. Definitely try to lock it into a better rate.
I figured this post would draw a lot of spam from the companies that lurk blogs for victims. My private student loan has a variable rate based on an index, it’s not fixed like my nice low low federal loan. I didn’t know you could consolidate private loans until I did a Google search on it.
Update: I got the payoff balance of my private loans and it’s less than what I actually owe! Instead of having to borrow $6950, I only need $9500 because I get a credit for early payoff. This small bonus could make the payment on the new loan even less than what I’m currently paying. That means if I keep my payment the same, I pay it off that much faster than the 10 year projection.
Oh sweet! Are you sure the consolidation company doesn’t want to take over your federal loans though? That’s what I was finding - they didn’t let you pick and choose - they wanted to consolidate ALL of your student loans at once.
My federal loans have already been consolidated. When it comes to those you only have one shot. I did mine back in 2005 and my rate is a tad bit over 2%. Right now there isn’t a lender out there that will consolidate federal student loans. I’m strictly focused on just the private student loans right now. Some private lenders are not working with students right now, but this one is still taking applications.
Jim — I’m looking into private consolidation loans for my younger sister. The pickings are slim, and I’ve googled it. She doesn’t have good credit, but my mom is going to cosign. Can you tell me what company this was? email me if you don’t want to name it publicly
How can you even trust another company? Isn’t everybody out to make more money. It seems that no matter where we move there is always somebody there to exploit. It seems are only chance is to turn to family, friends, or just make more money. I here so many commercials about that are saying they will help out, but it seems they only want to help themselves!
I have same reviews as Sallie’s…
A such Student loans are increasing rapidly.
what’s the name of the company you are using to consolidate your private loan?