Switching student loan servicers may seem overwhelming, but it is quite simple. Federal student loans are serviced by a third-party organization that handles billing and payment. Changing mortgage servicers is possible if you're unhappy with the one you're currently using. First things first when switching student loan servicers: figure out if your loans are federal or private. Whether you consolidate your federal loans or submit a request to transfer your loans to a different servicer, you can swap services anytime. To apply for federal student aid, visit their website and complete the appropriate application(s). The steps may vary depending on whether your student loans are federally backed or private. Find out from your present loan servicer whether or not they permit loan transfers and whether or not there are any fees or restrictions associated with doing so.
Actions Required to Switch Student Loan Servicers
Step 1: Identify Your Current Service Provider
You need to know who is servicing your student loans before you may switch. Your loan bills or online account portal should make all this data readily available. If you need help locating this data, dial 1-800-433-3243 to reach the Federal Student Aid Information Center at the U.S. Department of Education.
Step 2: Examine Prospective New Service Providers
After identifying your existing service provider, you may begin exploring your options. You can pick between federal and private loan servicers, among others. The following are examples of well-known federal loan servicers:
The Mortgage And Home Loan Guarantee Agency, Inc
Financial institutions like banks and credit unions could also serve as private loan servicers. A few examples of well-known private loan servicers are:
- Financial Aid for College via Sallie Mae's Explore Program
- Earnest Wells Fargo Citizens Bank
A potential new servicer's reliability, responsiveness, and cost should all be considered. Consider whether the servicer provides any additional incentives, including lower interest rates or more payment options.
Step 3: Establish Your Loan Transfer Eligibility
Unfortunately, not all debtors can switch the company servicing their student loans. Federal student loans can only be moved if the borrower consolidates their debt or the loan servicer changes. Private student loans may be transferable at any time; however, you should verify this with both your present and prospective loan servicers.
Step 4: Finish The Transfer Procedure
If you are qualified to do so, you must finalize the transfer of your student loan servicing to a new servicer. The following are some of the general procedures involved in this process. However, they may differ depending on the type of loan you have and the servicers involved:
When you've settled on a new service, it's time to reach out and get the ball rolling on the switch. You might need to follow certain procedures or fill out certain forms.
You'll be asked to detail your current loan situation, including the loan's category, balance, and interest rate. Personal details like your Social Security number may also be required.
You may be required to sign a new promissory note or other loan agreement upon switching to a new servicer.
After you finish the transfer process, your new servicer will let you know everything has gone smoothly. The transfer procedure could take many weeks.
Step 5: Monitor Your Loans
You must keep a close eye on your loans after transferring them to a new servicer to ensure that they are handled satisfactorily. You must keep making payments on schedule and verifying your account frequently to avoid problems. Do not hesitate to contact your new servicer if you discover any problems.
Conclusion
Moving the servicing of your student loans requires some action on your part. After logging in, visit the "My Aid" section of the Federal Student Aid website. The next two options are "Manage Loans" and "Transfer Servicer." Just pick a different servicer from the dropdown. Carefully consider the servicer's terms and conditions before signing up. Choose a new servicer and proceed with the transfer as directed. Changing student loan servicers need not be a hassle. Financial institutions that handle servicing of federal student loans send out bills and collect payments. If you are unhappy with your current provider, consider other options. Be sure you know whether or not your student loans are federal or private before making any changes. Federal student loan borrowers can combine their loans or request a transfer of services. Go on to the FAFSA application website and fill out the forms. There is a different process for private student loans. Get in touch with your loan servicer to learn whether or not they support loan transfers and whether or not there are any fees or other restrictions associated with doing so.
