Deciding the best way to pay back student loans can be intimidating for many graduates. Should you consolidate your student loans? Should you switch to a different repayment plan? Does it make sense to refinance with a private loan?
Answering these questions takes time and effort — and the confusing financial jargon doesn’t help. For busy people with demanding jobs, families to care for, and high student loan balances, it can be hard to do the research and determine the best course of action to avoid defaulting on your loan.
Fortunately, for all these reasons, there are now companies and independent consultants who specialize in helping people devise student loan repayment plans. But is it worth hiring a consultant to help you with your student loan questions?
What student loan repayment consultants do
Understanding how a professional can help isn’t so clear cut when it comes to the student loan business. But a consultant in this area can offer a number of services, including:
- Recommend student loan repayment strategies
- Offer personalized guidance based on your personal financial situation
- Explain student loan jargon in a way you can understand
- Give recommendations on what to do if your life plan changes
- Save you time by researching your loan details and calling lenders on your behalf
Jan Miller is an example of a student loan consultant who performs these services. A seasoned student loan consultant with more than 17 years of financial services experience, Miller offers what he coined the “Student Loan Business Plan™,” which considers a number of personal factors to create a customized student loan repayment plan that fits your budget and lifestyle.
Some credit counseling companies also offer specialized advice regarding student loan repayment. Like independent student loan experts, these organizations can look at your entire financial picture, including whether you also have other types of debt, to provide suggestions on how to approach a student loan repayment plan.
Finally, many student loan consultants specialize in helping borrowers within specific career fields. For instance, it’s not uncommon for medical residents to work in excess of 80 hours per week — unusual schedules and a stressful work environment make calling their loan servicers and researching the best repayment plans nearly impossible.
PGPresents is an example of an independent student loan consulting firm that works with medical students and other professionals who have significant student loan debt and little free time available to negotiate student loan repayment plans.
Student loan consultant costs
Student loan consultants can charge anything from $300 for one phone call to a higher monthly or yearly flat fee. So, is the cost worth it?
Well, student loans are designed so that you can take care of your repayment needs without such personalized assistance. If, however, you are the type of person who needs a second opinion or is far too busy to research all your options on your own, a student loan consultant might be the best bet for you.
Also, remember the goal is to pay back your student loans as quickly as possible, minimizing the amount of interest you have to pay over time. If paying a consultant to help you means you can accomplish this, it’s probably a good choice. If you can save money going at it on your own with the assistance of free information and tools, even better.
Whichever you choose, the important part is that you’re making student loan repayment a priority.
Alternatives to student loan consultants
While there are many student loan consultants available with varying fees, there are also plenty of free resources available to help student loan borrowers learn about the different types of repayment options and determine which one is best.
- The Department of Education website: The government’s financial aid website is filled with tools and simple answers to questions about all of your federal loans. You can find out about how to switch your repayment plan, what to do if you temporarily can’t pay your loans, and how to qualify for a forgiveness program.
- Online calculators: Websites such as Student Loan Hero provide calculators to help you answer pretty much any question you might have about your student loans. If you’re wondering whether you should refinance your student loans, there’s an easy-to-use calculator available to run the numbers for you. There’s also prepayment, consolidation vs. refinancing, and different repayment plan calculators available.
- American Student Assistance: American Student Assistance (ASA) is a free service that helps you pick the best repayment plan, figure out how to communicate with your loan servicer, decide how to file the appropriate paperwork, and find solutions when you can’t afford your payment. You just need to register with ASA’s financial education site Salt.
Be smart when using a student loan consultant
Although student loan consultants can be helpful for keeping or helping you out of debt, it’s important to remember it’s a fairly new type of financial professional. In fact, the Wall Street Journal once described the student loan consultant as “a vocation so new that regulators don’t oversee it and private firms don’t measure it.”
As with any new, unregulated industry, some “professionals” will attempt to abuse the system, which is why consumers should always use caution.For example, one of the largest student loan consulting companies, GL Capital Partners, recently made news when it was shut down and their CEO was arrested for fraud.
While this is certainly not indicative of the student loan consultant industry as a whole, it does reinforce the importance of shopping around, reading reviews, and getting referrals before working with any student loan consultant if you choose that route. Start with the free options available to you first before trying a student loan consultant to avoid any problems and to not pay more than necessary.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.57% – 6.98%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 5.87%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.80% – 6.22%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.57% – 8.17%6||Undergrad & Graduate||Visit Citizens|