Giving you something you already have

If you have college loans, it’s inevitable…. Almost every week, you find a half dozen pesky little flyers, letters and offers from companies who want you to consolidate your loans with them in your mailbox, inbox and voicemail.  With so many loan companies out there scrambling for your business, it’s hard to know who you can really trust.

While you’re sifting through this massive amount of information about loan consolidation, imagine this: someone picks up your iPOD and offers to “give” you the same music you have already downloaded onto it. Not likely to happen? That is exactly what many student loan consolidators do every day. They offer to “give” you special benefits that, in fact, are part of the Federal Student Loan program. This includes offering:

• Fixed interest rates
• No fees
• No credit checks
• No prepayment penalties and
• Rates that are “0.6% lower if you consolidate while still in school, or in your grace period.”

The fact is every lender has to offer these “special benefits.” There is, in fact, nothing “special” about these benefits. They are specifically stated in the High Education Act. Many times, the heavy emphasis placed on these benefits is an effort on the part of lenders to hide the fact that they do not have a program that provides you any real substance beyond what they are already required by law to offer you.

There is one last point to keep in mind. Every lender trying to get you to choose their consolidation loan has to calculate your starting interest rate in the exact same way. They take the weighted average of your education loans and round it up to the nearest 1/8 percent. From that point, you can begin comparing who is giving you the best deal on your loan by seeing what discounts they offer beyond those supposed “special benefits.” And if you still aren’t sure what to do or which lender to choose, contact a source you trust for more information. Some helpful websites to visit are: Student Lending Works and nslds.com.

SLW is a nonprofit student lender that offers a choice of education loan discounts based on the individual needs of student and parent borrowers.

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