How Best to Choose a Consolidation Lender

How then to choose among the various lenders and offers? There are 3 main characteristics that separate consolidation companies.

1. Customer Service
   The consolidation process can be quick, easy and painless, if you pick the right lender. As competition for consolidation loans has picked up, leading lenders have developed many customer service friendly services, including fully online applications with electronic signature, ability to track loan status online and extended and weekend call center hours. Make sure the lender you choose offers these options; even if you don t use all of them they are a sure sign your lender is customer focused.

2. Borrower Benefits
   Ask potential lenders what additional benefits (sometimes called borrower benefits ) they offer over and above the standard consolidation package. These benefits might include additional interest rate reductions for using electronic payments and for making a certain number of on-time payments.

   One thing to keep in mind is that your current lender may have a disincentive to offer you additional benefits to consolidate. Offering borrower benefits costs lenders money out of their own pockets and lenders offer them begrudgingly to compete for your business. Be aware that your current lender may view you as a captive customer and as a result may not be as motivated to offer you additional incentives to consolidate.

3. Track Record and Stability
   Inquire as to the experience the company has in consolidating loans. As a result of the refinancing boom, any number of small online student loan marketing companies have sprung up in recent years, many with limited experience in the intricacies of consolidation. It pays to pick a company that has the experience and track record to know the consolidation ins and outs because generally you can only consolidate once so you have to get it right the first time.

   It also pays to pick a company that has the stability to stand behind its promises to you. Many consolidation companies do not service their own loans but instead sell them to other financial institutions. You can generally fell much more secure that your borrower benefits will be honored if your lender also services your loan. While having your loan sold by your consolidation company is not necessarily a bad thing you must get assurances that you will keep your borrower benefits if your loan is sold.

At Vault, we believe we have developed a loan consolidation service that offers you a great combination of customer service, borrower benefits and lender track record and stability. Our loan consolidation service offers you:

1. Access to all the tools and information you need to make the right decision about consolidation. Use Vault s loan consolidation service and you will get:
   • A no-obligation, secure and confidential way to understand your consolidation options;
   • Preferred access to first class loan counselors to answer your questions and advise you on your options; and
   • Access to industry-leading online tools to let you apply for and track your loan quickly, easily and painlessly.

   
   Have questions? Please drop Vault's expert, Peter Wilkniss, a line at pwilkiniss@vault.com. Peter holds a BA in Economics from the University of Virginia and a JD/MBA from Columbia (with tons of student loans!). He practiced law at Wachtell, Lipton, Rosen & Katz in New York, and held senior financial management positions on Wall Street, before helping start and run a student loan company.

2. Additional borrower benefits. You are eligible for up to an additional 1.25% reduction in your interest rate when you consolidate through Vault's loan consolidation service. When you sign up to make your payments via auto-debit you will receive an immediate 0.25% reduction in your interest rate. And you will get an additional 1% reduction in your interest rate after you make 36 on-time payments.

3. An experienced consolidation lender with the backing of a $60 billion financial institution. All consolidation loans made through our service are funded and serviced by a member company of CIT Group, Inc. (NYSE: CIT), a $60 billion financial institution founded in 1908. So you can be sure that our promises to you will be honored.

• Click here to see how much you can save through Vault's no-obligation loan consolidation service.