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Are there advantages of choosing one loan servicer over another regarding the department of education loans?

On receiving department of education loans a loan servicer contacts you. An example of a company handling such is the cornerstone student loans servicer. Even though there is no choice to the loan servicer assigned by the department of education, you can choose to change them during the repayment period. Loan servicers offer attractive services like consolidate federal student loans into a single payment. However, these services may have unforeseen consequences like the low-interest student loans take longer to settle thus increasing the amount to pay.

Kristi Hammond

in Student Loans

1 answer

1 answer

Ralph Lopez on June 11, 2018

The student loan servicer known as Cornerstone has been in business since the early 1970s. It is one of the many financial loan servicers approved by the educations’ department. When applying for a student loan, a servicer is assigned to you by the department of education. The servicer usually establishes contact after the first payment of the loan is disbursed. Even though one is not allowed to choose which loan servicer they are assigned to, there is the option of moving from the accredited during the repayment process. This choice can be influenced by the different services the servicer has to offer and how well they suit you.

A loan servicer is a company that handles the collection of payments and other services concerning your federal student loan. They work with you on repayment plans and consolidate federal loans for students. Loan consolidation is the combining of multiple loan payments. The result is a single payment with a determined duration, for example, a month. Loan servicers also help to facilitate the amount of the loan if situations change during the payment period. This may mean there was a change in income which either increased or decreased or any other combination of circumstances

Loan consolidation does seem like a good idea. It minimizes the number of payments you have to make if you have multiple loans with different loan servicers. However, it comes at a price. By consolidating, the payment period increases and therefore the low interest from your student loan increases drastically.

Loan forgiveness is one excellent service offered by loan servicers like Cornerstone. Loan forgiveness means that students don’t have to pay back their loan if you meet the criteria . This is an excellent benefit to borrowers. The loan payments can thus be directed into savings plans to build the future.

Payments of education department’s loans have been fully paid thanks to loan servicers. Since these companies aim to attract the most borrowers, they package their services very attractively. For example, an alternative that borrowers opt for is refinancing. It mainly involves settling the first debt by creating a new one. The opportunity to refinance can bring about lower interest rates to the loan and therefore save the borrower a little amount that would have been otherwise paid in a bid to settle the loan. Services that offer refinancing options don’t consolidate as the opposite is also exact. Therefore a borrower is left with the opportunity to choose one and forewent the other. 

Nicholas Rivera2 years ago

Loan servicers are a great assistant while settling an education loan. Their services make sure there is a plan to cover the amount accumulated during one’s education. By consolidating federal student loans, they make sure all payments are bundled into one. Luckily there is an option to choose which loan servicer best meets your payment plan needs. Numerous loan servicers are available for each different offering packages it is easy to weigh benefits and drawbacks and make a decision.

Considering the duration of time a loan will take to clear is essential. With fewer payments, there are also smaller interest rates incurred. This is one of the many considerations to keep in mind. Even, the short-term benefits should not be overshadowed by the long-term constraints. Since a loan will take time to repay all details associated should be carefully analyzed. It would, therefore, be wise to choose a service with the option of refinancing as compared to consolidating. 

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