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Top Student Loan Debt Relief Companies

Top Student Loan Debt Relief CompaniesTop Student Loan Debt Relief Companies

With over three trillion dollars in student debt from 2020 and 2021 alone, you are bound to hit a roadblock when pondering over how you will settle your student debt. Your best options to deal with your student loan are either refinancing or consolidation, and figuring out the difference between them, let alone which one suits you most and from which company, is another headache by itself.

This is why we are taking the liberty of explaining it all to you to help you make a smart decision that will help you lead a more financially stable life. In simple terms, consolidating a loan means putting together your debts into one debt and one loan to pay it off, while refinancing gives you better loan terms and interest rates; however, both can be done together. Let us explain your options more thoroughly.

Click here to skip down to our recommended debt relief companies.

Private Loan Consolidation

You might have come across private loan consolidation, which means consolidating your loans through a private lender. The private lender will combine your loans into a single one and will weigh you an average interest rate from your other loans. For example, if your loans have interest rates of 7% and 9%, your consolidated loan interest will be 8%.

If you are consolidating your loan through a private lender, you also have the option to refinance it. Unfortunately, some online sources use both terms, refinance and consolidate interchangeably, which is why it can be confusing to anyone who is not very familiar with all this terminology.

Federal Loan Consolidation

Federal loan consolidation is for government-issued loans. It works similarly to private loan consolidation by combining your government-issued loans into a new one. Your new loan interest is calculated in the same way by taking the average interest of your old loans.

Suppose your loan is government-issued, and you apply for private loan consolidation. In that case, you will lose all benefits that you may be entitled to, such as forbearance, income-driven payment plans, forgiveness programs, and deferment. As such, only government-issued loans are eligible for federal loan consolidation.

Student Loan Refinancing

Student loan refinancing works a little like consolidation by taking a new loan to pay off your previous ones. The main difference is that when you refinance your student loan, you will be eligible for new loan terms, thus a lower interest rate. Student loan refinancing is most suitable for those with good credit, for the higher the credit, the lower the interest rate you will get.

The only catch, however, is that student loan refinancing is only available through private lenders. So if you have a government-issued student loan that you want to refinance through a private lender, you will lose the federal benefits we mentioned earlier.

Pros and Cons of Consolidating Student Loans

Student loan consolidation benefits

  1. A fixed loan rate: While consolidation does not promise a lower interest rate, you at least get a fixed one, so your payment will be consistent throughout your loan payoff.
  2. One payment: As your loans are combined into one, you will only need to pay one bill, so to speak, instead of many.
  3. Time-based payment: One option you are presented with when consolidating your loan is choosing a time-based payment, which extends your loan term and lowers your monthly payment.
  4. No credit check: Student loan consolidation requires no credit check, unlike refinancing.

Drawbacks of loan consolidation

  1. More payment: If you chose the time-based payment mentioned above and extended your loan term, you will eventually be paying more in interest over time.
  2. No savings: Loan consolidation will not save you money; it will simplify the payment process.
  3. No lower interest rate: A weighted average for the interest rate is basically the same interest before consolidating, unlike refinancing, which offers you a lower rate.

Benefits and Drawbacks of Refinancing Student Loans

Student loan refinancing benefits

  1. Money-saving: With refinancing your student loans, your new loan terms will encompass a lower interest rate, which will eventually save you money.
  2. Variable or fixed interest rates: You get to choose either a variable or fixed interest rate, unlike loan consolidation, where it's always fixed.
  3. Private lenders: Refinancing a student loan means you get to work with a private lender, and that can be entirely your choice.
  4. Consolidation benefits: As part of the refinancing, your loans are merged into one, just like loan consolidation.

Drawbacks of student loan refinancing

  1. Credit-check: When applying for a loan refinance, your credit score matters. The higher your credit, the lower interest you may get, and the lower your credit score, the higher the interest rate.
  2. Extra fees may be applied: Some companies may subject you to pay origination fees when applying for loan refinancing.
  3. Federal benefits loss: You may lose your federal protection benefits if you have a government-issued loan and are applying to refinance it with a private lender.

Should You Consolidate Your Student Loan or Refinance It?

It all depends on your circumstances and what is best for you. If you have good credit and a non-governmental loan, then a student loan refinancing could be your best option as you will not be losing federal privileges. Moreover, it's highly advised to apply for a refinance if you have good credit as it will give you a chance at lower interest rates with your new.

On the other hand, if you have government-issued loans, your best option could be to consolidate your loans with federal loan consolidation because you won't lose any borrower protection benefits. You can also choose time-based payment to extend your loan term and decrease your monthly payments.

Best Student Loan Refinancing and Consolidation Companies

1. JG Wentworth


Minimum Debt Required: $10,000

Fees: 9%-15%

Timeframe: 2-4 years

Average Net Savings: 25% after fees

Affects Credit Score: Yes

BBB Rating: A+

Money-back Guarantee: No

JG Wentworth has been in the debt relief business for 30 years, helping people solve their financial problems and pay off their debts. JG Wentworth provides free consultation that will help you decide whether to refinance or consolidate your student loans.

JG Wentworth's fees vary from 9% to 15% depending on your debt terms; however, the fees can change drastically depending on your state of residence. JG Wentworth is most suitable for those with at least $10,000 in unsecured debt.

Read more about JG Wentworth debt relief services in our full JG Wentworth review.


2. GreenPath


Minimum Debt Required: N/A

Fees: Up to $50 one-time setup fee

Timeframe: 3 to 5 years

Average Net Savings: N/A

Affects Credit Score: No

BBB Rating: A+

Money-back Guarantee: No

GreeenPath is an A+ BBB accredited company that offers a free student loan counseling session that reviews your student loans and determines your best payment options. GreenPath also offers a 2nd tier student loan enhanced support that costs $200.

It conducts an in-depth analysis of your financial status, creates personalized plans for you, aids you in completing the application process for a student loan repayment program, and finally, contacts your student loan servicers and be your advocate until a final commitment is reached. GreenPath has a compassionate and professional staff that is waiting for your phone call to get you started.

Read our full GreenPath review to know more.


3. New Era Debt Solutions


Minimum Debt Required: None

Fees: 16% to 20% of enrolled debt

Timeframe: 24 to 48 months

Average Net Savings: Between 36% and 40% after fees

Affects Credit Score: Yes

BBB Rating: A+

Money-back Guarantee: No

New Era Debt Solutions is another great company that will help you with your private student loans. New Era does not require a minimum debt amount to be eligible for their debt relief services, and it provides a free consultation with no upfront settlement fees.

New Era also provides a debt consolidation service, which allows you to pay off your loans by taking one big loan. This way, you end up making one payment instead of many. Click here to go back to debt consolidation.

Read our full New Era Debt Solutions review to know about all its services.

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