In the past, borrowers could refinance their student loans again and again with multiple lenders. On July 1st 2006, Congress reversed this option for borrowers, leaving only a few exceptions for switching lenders. However, on July 1st, Congress also awarded more choices to borrowers seeking their first student loan consolidation, allowing them to shop around rather than being forced to consolidate with the lender who issued their original loans.
In short, borrowers have essentially one shot to choose the right company with which to consolidate student loans, but have more freedom in selecting that lender. If you are currently considering consolidating student loans for the first time, you’ll want to do your research and choose your lender wisely.
Qualities to look for in a student loan refinance company:
- Income sensitive repayment plan
- Money saving incentives
- Accessible customer service
- Online application tracking
You can still switch lenders and reconsolidate under certain circumstances
If you’ve already refinanced, there are still a few possibilities for switching companies and renewing your consolidation loan:
- Your current lender doesn’t offer an income sensitive repayment plan
- One or more federal loans is not included in your current consolidation
What is an income sensitive repayment plan?
An income sensitive repayment plan means that your payment can be adjusted based upon your gross monthly income. Each year, payments are adjusted as your income fluctuates. This is a critical feature in today’s economy where the college tuition costs have risen at a faster rate than the cost of living. ScholarPoint offers a generous income sensitive repayment plan to ensure that student loans never become a burden, no matter your current income level.
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