Prevent Being Scammed By Student Debt Consolidation Companies

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Avoid Being A Victim Of A Student Loan Scam

Everybody’s out to make a buck these days. It’s the American way; free enterprise and all, right? There’s nothing wrong with running your own business as long as it’s done honestly and professionally. Take, for example, companies that offer to help you with your student debt consolidation and avoid a potential Student Loan Scam . As with anything else, there are those companies with an exemplary record who do an amazing job helping their clients save thousands of dollars each year, and there are those who ought to thank The Steve Miller Band for writing their theme song, “Take the Money and Run”.

So how is it that you, the average student loan holder, are able to tell the difference between the “good guys” and the “bad guys”/Student Loan Scam in the biz? This article outlines the 4 key questions you’re going to want to consider when choosing a company to assist you with your student debt consolidation. We’ll also cover a few additional items you’ll want to check on before trusting your business to a particular company to prevent a possible Student Loan Scam.

Upfront fees don’t always mean it’s a Student Loan Scam, However, It is a red flag

The first question you want to consider to prevent Student Loan Scam is “Are there any fees, and if so, what exactly am I receiving for the said fee?” This is an excellent place to start because most scammers charge exorbitant upfront fees and provide little to no services. In some cases, you may never even hear from the company again. Some companies charge anywhere from $500-$1,500 in upfront fees alone and, if they are unable to help you refinance or consolidate, they keep your fee to cover “services”. Other companies take their client’s money but have put their loans into forbearance (Student Loan Scam). In forbearance no payments are due on the loans, so the company was essentially pocketing the money and calling it a “fee” to keep the loan in forbearance when the client can do this themselves for free with one phone call. Our advice is to only consider companies with no upfront fees. These companies many times will even do the research, give you a list of options, and get the paperwork started before even collecting a penny. This is the sure sign of a company that has your best interests at heart.

What exactly are you getting for your money?

You wouldn’t go into a shoe store, have the salesperson hand you a box, take it to the register and pay for it without first looking at the shoes and trying them on, right? Same holds true for student debt consolidation companies. As we mentioned earlier, companies that are not reputable will snag your hard-earned money and run thus becoming a Student Loan Scam. Reputable companies will keep you in the loop when it comes to clearly explaining your options, filing your paperwork, answering your questions, and making you feel confident with your choice to consolidate or the program you choose. You should be able to contact a knowledgeable team member during business hours who will be more than happy to answer any of your questions. If you can’t reach anyone, they’re probably already in Bora Bora celebrating with your cash.

Where is the company located and how much experience do they have in the business?

Is the person you are talking with hanging out in fuzzy slippers at home? Or, are they in an actual professional office building? While we’ve all heard the saying “Size doesn’t matter”, and in many cases, this may be true when it comes to student debt consolidation companies you may want to go big or go home. Take the time to look into the company’s background, especially if their team is “in-house” or are they being outsourced to another country? Check their years of experience, the average number of clients they have serviced, their client approval record, and the size of the company. This will be a good indicator of whether or not they are in it for the long haul.

Is the staff knowledgeable about loan rules, laws, and regulations, especially if the laws have recently changed?

You want to make sure that you are following all of the loan consolidation guidelines to the letter for a few different reasons. First, you don’t want to disqualify yourself by not providing the proper information. Secondly, not filling out paperwork properly can lead to delays and possibly even hidden fees and penalties tacked onto your student loans. Lastly, you want to make sure that you are opting for the program that will best suit your financial needs. A good rule of thumb is if a company says they are “authorized” by, working “with”, or work in conjunction with the Department of Education, this is a huge red flag. Some companies use this ploy to gain credibility, so you may want to take your business elsewhere.

In short, in order to find a reputable student loan consolidation company that absolutely has your best interests at heart, take these questions into consideration and do your research. Don’t be afraid to ask the tough questions. If you don’t get the answers you are comfortable with, take your business to a company that is willing to put you and your financial needs first. There are some diamonds in the rough out there, you just have to find the one that is a right fit for you.