Is That Student Loan Refinancing Offer Legitimate?

There is currently over $1.7 trillion of total student loan debt in the United States. Those who hold student loans know they can be a financial drain over time. Refinancing student loans is one way to lessen the burden. But not all of these deals are real. Is that student loan refinancing offer legitimate, or just a scam?

Is It a Real Company?

This might sound like a silly consideration, but it’s really something that can save you from being taken advantage of by a scammer. The first thing you should do before entering into any kind of financial agreement, or giving away your sensitive information, is to ensure the company is real and reliable.

That second aspect is almost as important as the first; but we’ll get to that in a minute. Checking to see if a company is real or not should be as easy as a Google search. If nothing shows up, that’s definitely a bad sign. It’s even worse if there are many negative reviews or warnings that say the company is engaging in deceitful practices.

A lot of legitimate student loan refinancing firms have names that you wouldn’t know unless you had specifically worked with them. Since there are some smaller lenders in this world, fraudsters might attempt to say they’re just a new company. Don’t fall for this. Only go with a lender that has a proven track record of not just real, but reliable and fair lending standards.

Does It Sound Too Good to Be True?

You probably know the old saying: If it sounds too good to be true… it probably is. Student loan refinancing is no exception to this rule. If something seems like it can’t possibly be so good, it isn’t, it’s a scam.

Lenders are generally working under similar conditions. While there are definitely some differences in rates or offerings between different lenders, you’re not going to randomly find a refinance that comes with an interest rate several percent lower than anywhere else. Any student loan refinance deal that is dramatically better than anything else out there is almost certainly fraudulent.

Do You Fully Understand the Deal?

In order for a student loan refinance to be legitimate, it has to make sense to you. Even if it is a legitimate organization, if you’re not sure about the terms and conditions, it’s best to not get involved with it. Therefore, before you go out looking for a student loan refinance deal, it’s essential you have a working knowledge of what it means to refinance student loans.

Those who can’t at least reasonably answer the question of “what is refinancing” are putting themselves at risk by taking any offer. Refinancing a student loan is the process of acquiring a new loan that replaces your old one. You would do this in order to get a better interest rate on the loan, or potentially change the loan term.

If there’s any kind of confusion about these aspects, or any other features of the loan, it could very well be a scam. You only want to get a student loan refinance with an organization you can trust, such as Juno. Instead of being a lender themselves, Juno takes bids from a large pool of lenders hoping to get access to their members’ business. By hand-picking the best offers from all of these, you can find the absolute best student loan refinance deal out there without having to do any of the legwork. This way, you won’t even have to worry about whether a student loan refinance is a scam. You already know where to get the best rates out there.

Is It Telling You to Hurry?

There are very few situations where it makes sense to rush into a financial decision. This is certainly not something you need to do when refinancing your student loans.

While it’s looking like interest rates will start rising in the near future, this is something that’s going to happen over the course of months and years. There’s absolutely no reason why you should have to hurry any excessive amount to get approved for a student loan refinance. Anytime someone is trying to get you to sign something or make a decision fast, it’s usually a good idea to take a step back and reassess the situation.

Do You Have to Pay for It?

If you’re being advertised a student loan refinance deal that requires you to pay for it, it’s almost certainly a scam. Paying origination fees is common for some kinds of refinancing, but this isn’t the case with student loans. There is no cost to refinance your student loans, which makes them one of the best types of loans to refinance if you already have private loans.

There are some debt relief organizations that will charge you for services that aren’t necessarily fraudulent, but also probably not needed to improve your repayment plan. If you’re struggling with student debt repayment, seek out advice from a credit counseling service or another consumer-focused resource.

Are Representatives Asking for Too Much Information?

We live in an age of stolen identities and data. You need to be extra vigilant when dealing with things that involve your personal finances and identifying information. It’s a bad sign if someone is asking for what seems like a lot of your info. Someone might call saying they can cancel your student loans. In the excitement of the moment, you could possibly give away critical info about yourself.

There are also student loan debt relief scams that will attempt to gain your FSA ID password. They do this because it gives them power over your loans and they can then charge you without actually providing any service. This is clearly a bad deal for consumers, and many scammer companies have already been flagged by government agencies.

It’s always best to avoid being scammed versus having to deal with the aftermath. Your financial health and personal information are precious and should be kept as safe as possible. Knowing how to spot student refinance scams can help ensure this.

Martin Woolridge

“Pop culture advocate. Troublemaker. Friendly student. Proud problem solver.”