Student Loan Payments: How to Change Service Providers
Each year, thousands of borrowers file complaints about their student loan servicer with the Consumer Financial Protection Bureau (CFPB). According to the CFPB, “dealing with your loan servicer or lender” was one of the top-cited reasons for filing a complaint in 2021.
Out of the borrowers who filed a complaint about their loan servicer or lender, receiving bad information about their loan, having trouble with how payments are handled and problems concerning customer service are the top complaints.
Consolidate Your Federal Student Loan
If you have a federal student loan and wish to switch service providers, consolidation is an option. When you consolidate your federal student loans, you’ll get a new direct consolidation loan to pay existing federal loans. Fox Business reports that consolidation can also potentially lead to lower monthly payments and flexible terms.
You can complete a consolidation loan application for your federal student loans at studentaid.gov.
Changing Student Loan Servicers on a Private Loan
If you have a student loan through a private lender, Fox Business noted that your lender is typically your loan servicer as well. To change your service provider on a private student loan, you will need to change lenders.
By refinancing your private student loan, you can take out a new private loan with a different service provider to pay back your existing loan. However, to qualify for a student loan refinance, you will need good or excellent credit.
Refinancing also allows borrowers to choose new repayment terms and possibly lower their interest rates. This enables borrowers to pay less each month, save money on interest — or both.
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