What If My Lender Sold My Student Loan (veezq-40248)

Student Loans can be tricky and you have to know what to do when a lender goes broke.

Lenders sell their loans for variety of reasons, but usually to get cash in order to make more student loans. The loans are mainly sold to other lenders and organizations in a "secondary market" made up of organizations specializing in these loans.

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This not only happens with student loans but to all types of lenders dealing with loans. Asking the question of whether the lender will sell your loan is the wrong question to ask. The question you need to ask is whether or not the new lender will offer the same benefits and terms.

First you will receive a letter from the lender who is selling your loan. When the loan is actually sold, the new owner will send you a letter that explains why the loan was sold, who the new owner is, where to send your payments and where to call with questions.

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The letter will include a statement listing the loans they are servicing for you, the dates you took out the loans, the interest rate, the names of the loan programs, and the total amount you owe. There should in no way be any change in the rate and terms of your student loan.

The new owner or its servicer (a servicer is a loan service/company that works for many lenders and markets at the same time) may send you a new payment book and may offer you some additional services not available from the original lender.

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You are now indebted to the new owner of your loan, no longer to the original lender that you signed papers with. There will be that question and concern with any new lender if any changes have been made.

As soon as you obtain the name of the new lender, I would ask in writing for a guarantee of your former benefits you received with your prior lender. There rarely is a problem, however, this might make you feel more secure.

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Also, if there is a problem or if you have any questions you should call your College Board loan at 888-272-5543. Read your first statement from the new owner carefully and make sure the information is up to date.

When a loan is sold, it can take up to 60 days for your payments to be forwarded from your original lender to the new owner.

Call your new servicer if you are having difficulties in anyway. They are there to serve you and are glad to have your loan. Let's face it, that's their job and how they make their living.