If you’ve got student loan debt, you might want to look for a way to consolidate your loans. If you attended school for at least two years or more, there’s a good chance you have two or more loans under your belt. You also might have more student debt than usual, and you may want to look for a way to restructure your loan repayment schedule to find relief. Both of these are valid reasons to consolidate your loans.

There are a few different ways to consolidate your student loans legitimately. You could go through the federal direct consolidation loan program, or you could find a reputable private lender to do it for you. However, for every reputable lender, there are probably a few scammer companies out there looking to take advantage of you. How do you consolidate your loans without getting scammed?

In this article, you’ll find out how to find reputable student loan consolidators, so you can avoid scams. If you’re in debt, and you need information on how to consolidate your loans with the best company, keep reading.

How to Spot a Student Loan Consolidation Scam

Opportunists are waiting to take advantage of your high-debt situation, and are eager to “help”. Many of them pose as government programs offering loan consolidation and debt forgiveness in order to prey on unsuspecting borrowers who need a way to solve their personal economic crisis. Sometimes, they’ll say they are a third-party company, which they are, and they’ll try to act as a middle man between you and the government. While it might sound legit, it just isn’t. The government consolidation program requires you to sign up by yourself, and it’s perfectly free to do so.

Typically, scammers ask for upfront money for assisting with your consolidation. And when you follow through and sign the loan documents, they may apply your first payments to bogus fees, like service and administrative costs.

Possibly the most frightening threat is from scammers asking for your name, birthdate, banking information, and social security number. Handing out this information to strangers puts you at a high-risk for identity theft which is a big problem, needless to say.

Here is a list of warning signs when speaking to a consolidation company:

  • They ask for money upfront. Assistance with loan consolidation is free, so no one should ever ask you to pay for it. Asking for upfront money is a bad sign, and it is illegal.
  • A company offers to reduce or cancel your debt immediately. While Public Service Loan Forgiveness is legitimate, the only entity that can reduce debt is the government. Contact the student loan center directly.
  • They ask you for your secret pin code to access your Student Aid information online. This information is not to be shared with anyone, so you should never give it out.
  • Scammers ask you to sign a 3rd party authorization form. This signature will give them permission to access your information, which they can then use for identity theft.

If any of this sounds familiar, this is a scam artist working to enterprise from your debt situation, or even to steal your identity entirely.

How to Get a Legitimate Student Loan Consolidation Loan

Loan consolidation assistance should cost nothing. It will help you:

  • Simplify your payments. Instead of paying 2-10 loans every month, you’ll make one payment to the lender.
  • Get longer to pay off loans. Consolidating will offer you as much as 25 years to pay off your loans, whereas a standard program issued to most borrowers only gives you ten The caveat to this longer repay period is that you usually end up paying more interest, but you can always shorten the time length by making extra payments to the lender. 
  • Secure a fixed rate. Consolidation makes it easier to budget, because you’ll have one payment at a fixed interest rate. Knowing exact payments will make it possible to plan well for your financial future.

The key to consolidation is getting a legitimate agency to help you. The best places to go for assistance are Federal Student Aid and Student Loans.

There, you can get personalized assistance from the government directly, and a wealth of information about consolidating.

If you’re trying to consolidate private school loans, you’ll probably need to go to an outside company because private loans won’t be listed on the national sites.

You should never be charged any upfront fees when going with a private consolidator. The best way to check on a consolidation company’s reputation is by visiting the Consumer Financial Protection Bureau.

There, you can browse complaints about companies, get answers to common questions, and read their compiled research and information about student loan consolidation.

Final Thoughts

One of the best ways to avoid scams is to not take unsolicited help from people you don’t know. It’s easy to fall into a scam from someone who speaks well and tells you things you like to hear.

Paying off student debt takes discipline, determination, and years of constant effort. Nothing will happen overnight, so you should ignore anyone making fantastic claims or those who go overboard in their marketing to get you to sign on the dotted line.

Stick with government agencies for government loans, and always double-check any private loan consolidators with the Consumer Financial Protection Bureau.

Have you had any interesting experiences with consolidating student loans?