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How to Change Student Loan Servicers

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When you first take out federal student loans, you can’t choose your servicer, which is the company contracted by the government to manage your loans. But you can change federal student loan servicers if you consolidate.

» MORE: What federal student loan servicing companies might not tell you

There’s no reason to make a change if you’re fine with your current servicer. But you might want to switch if you’re having trouble dealing with it, as many borrowers do.

If you’re not sure who your loan servicer is, log in to StudentAid.gov and find out. You can also get in touch with all of the loan servicer contact centers by calling 1-800-4-FED-AID. The U.S. Department of Education assigns your servicer when your loan is first disbursed. The servicer is in charge of collecting and tracking payments you make. If you run into financial difficulty, it helps you enroll in a new income-based repayment plan and grant requests for student loan deferment or forbearance .

Why some borrowers want to switch servicers

Each year thousands of borrowers file complaints about their servicers to the Consumer Financial Protection Bureau, the federal regulator supervising the entire student loan servicing and lending market. Since the CFPB started accepting complaints in 2011, nearly 40,000 student loan grievances involved problems borrowers had with their lender or servicer, according to the CFPB complaint database.

» MORE: Navient student loan cancellation: What student loan borrowers need to know

Common things borrowers complain about include not getting information about repayment options and difficulty with how payments were being handled. These and other complaints by borrowers have fueled investigations by the CFPB and state attorneys general. It has even led to lawsuits against certain servicers for actions that regulators say harm borrowers as they repay their debt.

If you’re unhappy with your servicer and you want to make a switch, there are only a few ways it can happen. The most proactive solution is consolidation.

Choose a new servicer when you consolidate

By consolidating your federal student loans, you combine your existing loans into one new direct loan. It’s a strategic option that can make it easier to manage loan payments and can extend your loan term, which lowers your monthly payment. But you’ll pay more in interest over time with a longer repayment period.

You can complete a consolidation loan application at studentaid.gov . You enter the loans you want to consolidate and choose a repayment plan. Then, you can pick a new servicer or stick with the one you have. If you’re not familiar with your options, see the full list of servicers available on the Federal Student Aid website.

» MORE: How to consolidate and refinance your student loans

3 other ways your student loan servicer can change

Applying for public service loan forgiveness.

Applying for Public Service Loan Forgiveness will trigger a change in the company that manages your loans. It’s a program for student loan borrowers working in government or nonprofit positions. You must make 10 years’ worth of payments before applying for tax-free forgiveness.

The current servicer that processes forgiveness applications is MOHELA . Once you submit an Employment Certification Form and the Department of Education deems your employment to be eligible, your loans will be transferred to MOHELA.

You'll also need to make payments on an income-driven plan to save money.

Applying for Total Disability Discharge

Applying for Total Disability Discharge is not a strategy for switching servicers. It’s a forgiveness program for borrowers who cannot work due to being totally and permanently disabled, physically or mentally. Nelnet is the only servicer that manages the discharge process, so when your application is approved, it becomes your servicer.

When you apply for discharge, you must document your disability. Nelnet, on behalf of the federal government, will monitor your finances and disability for three years. Your loans could be reinstated if you don’t meet requirements during this three-year monitoring period.

If your loans are transferred by the Department of Education

Over the life of your loan, the Department of Education might move your loan from one servicer to another. If your loans transfer, you’ll be notified by both your current servicer and your new one. From that point on, you’ll send payments to the new servicer.

Prior to loan transfers, borrowers should do the following:

Download and save your payment history from your online account or request a copy from your servicer.

Update your contact information with your most recent address, phone number and email address.

You’ll be notified when a loan servicing transfer happens, and you’ll manage payments with the new servicer. All servicers deliver the same options and programs, but customer service may differ from one to another.

Loans have already traded hands in recent years. FedLoan transferred its portfolio , including PSLF loans, to MOHELA in December 2022. Granite State (GSMR) and Navient stopped servicing loans after December 2021. Navient's loans were transferred to Aidvantage, the servicing arm of Maximus, a government contractor. GSMR's loans were transferred to Edfinancial. Great Lakes began transferring its portfolio to Nelnet in March 2022, and it will wrap up the process in October 2023.

The remaining servicers — Edfinancial, MOHELA, Nelnet and OSLA Servicing — are scheduled to continue servicing loans through at least the end of 2023.

Alternative option: Refinance with a private lender

The only other way to transfer is by refinancing student loans with a private lender. In this case, your current federal loans will be combined into one new, private loan owned and managed by a bank, credit union or online lender.

» MORE: Calculator: Student loan consolidation vs. refinancing

The federal student loan servicers

Learn more about each of the federal loan servicers, including what they can do and how to contact.

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Notifications, as per amendment in the income tax rules, pan or aadhaar are to be mandatorily quoted for cash deposit or withdrawal aggregating to rupees twenty lakhs or more in a fy. please update your pan or aadhaar. kindly reach out to the bank’s contact center on 1800 10 888 or visit the nearest idfc first bank branch for further queries., activate your credit card within minutes and enjoy unlimited benefits, one fastag, three payments:toll, fuel and parking.

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Education loan balance transfer.

Get your education loan transferred to IDFC FIRST Bank now, we have everything that you need. With our education loan balance transfer scheme, you can switch your existing high cost education loan to IDFC FIRST Bank, at lower interest rates in a hassle free manner, along with the attractive offers. Read More

Transferring your education loan to IDFC FIRST Bank will reduce your monthly EMI amount & help you save on interest repayments, which can be used to meet other necessities. With IDFC FIRST Bank’s flexible repayment options, you can choose to repay at your convenience & enjoy an extended tenure with no hidden charges involved. Read Less

Benefits with balance transfer to IDFC FIRST Bank

Here are the key benefits, that you will enjoy with your education loan balance transfer to IDFC FIRST Bank:

Transfer your existing education loan at upto 1 % lower ROI*

Collateral free loans of up to inr 50 lakhs*, loan available upto 1.5 cr., with collateral*, income tax benefits under section 80e, availability of a top-up loan for further studies, an extended tenure with flexible repayment options, 30k+ courses funded globally, across 4000+ universities, faster loan sanction via seamless application process, how does it work.

The process to transfer your education loan to IDFC FIRST Bank is quite straightforward. All you need to ensure is a proper withdrawal of documents from previous financing institution & submit to IDFC FIRST Bank. After the required documents are submitted, the process of education loan balance transfer will be initiated.

You will need a quote from your previous financial institution with below details:

Balance principal amount 

Tenure completed 

Rate of interest 

Sanction Letter / Repayment schedule or Statement of Account

ELIGIBILITY

You must consider certain critical eligibility factors for education loan balance transfer as below*

• The loan transfer should be a 'first-time takeover’, meaning it should be the first occasion when you are applying for your education loan balance transfer
• You must have a good credit score

If you meet above conditions then you are eligible to apply for an education loan balance transfer at IDFC FIRST Bank

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FREQUENTLY ASKED QUESTIONS

Can i transfer an education loan from nbfc to idfc first bank.

Yes, you can carry out an education loan balance transfer from a Non-Banking Financial Company (NBFC) to IDFC FIRST bank.

Can I avail tax benefits on an education loan?

Yes. Section 80E of the Income Tax Act, 1961 relates to the deduction of interest paid on the education loan from your taxable income in a particular financial year.

What are the key factors that lenders consider for approving an education loan?

A lender considers applicant & co-applicant’s capacity to repay the loan along with students past academic records and reputation of the educational institution the student has applied for.

Why should I do my education loan balance transfer to IDFC FIRST Bank?

There are several advantages in getting your loan transferred to IDFC FIRST Bank.       

With our ALWAYS YOU FIRST principle, you will enjoy:

· Collateral free loans of upto INR 50 lakhs*

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What happens to your financial aid when you transfer schools?

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When you transfer to a new college or university, financial aid funds do not automatically transfer with you when you change schools. There’s a variety of reasons for this, including that the aid is typically based on the school you were enrolled in.

If you’re relying on financial aid to help cover the cost of higher education, it’s important to understand how transferring schools may impact your aid package and the steps to take if you want to receive continued assistance.

When you transfer to a new school, you typically must withdraw from the old one first. At the time of your withdrawal, your current financial aid package may cease to exist.

Since aid is distributed based on the school you attend, most forms of financial aid that were in place at your former school will stop, and they probably won’t move to your new school with you — at least not automatically. You may need to cooperate with the new school’s financial aid department, private lenders and possibly others if you hope to receive financial assistance for your future studies.

Why your aid amount might be different when you transfer schools

Your new school might not issue the same amount of aid as your former school, so it’s highly unlikely that your new financial aid package will match your former one when you transfer. Here are a few reasons you might receive a different amount of aid at a new school:

• Federal student loans have annual loan limits. Because the federal government limits how much you can borrow in federal loans every year, you might not have enough available funds left when you transfer schools to cover the cost of additional tuition.
• You cannot receive more than the total cost of attendance . In general, you cannot receive more than your school’s cost of attendance through scholarships, grants and student loans. This means that if your new school has a lower cost of attendance, your loan amounts, grants or scholarships could be reduced.
• Work-study options may not be available. If you were participating in work-study at your former school, you may not be able to carry that aid over to your new school. Work-study availability varies from school to school, and work-study is typically distributed on a first-come, first-served basis — so students transferring in the middle of the academic year may not be able to benefit from the program, if one exists at all.
• Some institutions may prioritize incoming freshmen. Where financial aid is concerned, a school may focus on providing available financial aid to freshmen. As a result, less financial aid may be available for transfer students who may be put at the back of the distribution line.

How to get federal aid when transferring to a new school

If you’re currently receiving federal student aid, you’ll need to take action to maintain those funds when you transfer schools. Here’s how:

• Confirm that your new school participates in federal student aid programs. Many schools in the U.S. participate in federal student aid, but there are exceptions. If your new school doesn’t participate, you won’t be able to transfer your federal aid, such as a Pell Grant or federal student loans. You may have to find other ways to manage the cost of college , like private student loans or scholarships.
• Update your FAFSA. Even if you’ve already submitted your FAFSA, you’ll need to update it with your new school’s information by the deadline . Available aid may differ, as each school has different amounts that are available to students.
• Review your new aid offer. After you update your FAFSA , your new school should contact you with a new financial aid award letter. You can then review this letter and accept any offered aid.
• Contact your current school. Your current school’s financial aid office should be able to assist you with any questions regarding your transfer. Ensure that your account is fully settled before transferring and submit a withdrawal request if you’re changing schools midsemester to cancel any future disbursements. You’ll still be responsible for repaying any past federal student loan disbursements.

Do transfer students get less financial aid?

The amount of financial aid you receive could go up or down when you switch to a new school. Some institutions may prioritize incoming freshmen where financial aid is concerned. As a result, less financial aid may be available for transfer students who might put at the back of the distribution line. Timing may also be a factor — students transferring while an academic year is in progress may miss out on more limited forms of aid that are given to students who apply early.

Will my loans enter repayment if I transfer schools?

When you withdraw from school, even if you’re planning on enrolling elsewhere, your lender will receive a notice of the change. This could send your loans into repayment since most loans enter repayment once you withdraw or drop below half-time enrollment.

With that said, the federal government will typically place loans back into deferment status when you enroll in a new eligible academic program. If it doesn’t, you may need to initiate a request to put your loans back into in-school deferment status.

Private loan companies may have stricter guidelines, but typically there are similar in-school deferment programs available. If your lender isn’t notified about your new enrollment automatically, follow up and ask about your options.

The bottom line

Transferring from one school to another when you rely on financial aid requires careful planning. Aid packages don’t automatically transfer from one school to the next, and the amount of aid you receive at your new school may not be the same as what you previously received.

When making such a big move, be sure to reach out to the new school’s financial aid department to help make the transition easier. Find out whether the school participates in federal student aid programs and what actions you need to take to continue to receive the funds you need.

Related Articles

What is the FAFSA dependency override?

How to add schools to the FAFSA

What to know if your student loans are transferred to a new servicer

What to do if you lose your financial aid

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Education Loan Transfer in 2024: Ultimate Guide [Tips Included]

• Shreya Berry
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• 12 min read
• Last Updated: February 14, 2024

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It takes 10-15 years or longer to pay off student loans. Over time, you may get frustrated with the lender, the loan terms or the loan servicer, or a combination of all three. It is quite possible to move the existing college loan from one bank to another one and to potentially make financial profits from such a education loan transfer. You will also get a greater amount of credit in addition to lowering the interest rate. Yet you ought to weigh both the pros and cons involved and understand how refinancing student loans work with such a debt swap instead of immediately running into it.

What Is A Education Loan Transfer?

Here’s how an education loan transfer from one bank to another works. Let’s say that you have taken an overseas education loan from NBFC because of their shorter processing period and a year later, you are not happy with their student loan repayment scheme and would like to apply for a student loan refinancing from a public bank. In such a scenario, you may apply for a Education loan transfer from your NBFC to a banking institution.

Types of Education Loan Balance Transfer

The four main types of students education loan transfers or takeovers are listed below:

Secured to secured: If you transfer a secured loan from one secured loan to another secured loan, the new loan will also be secured by collateral. In this scenario, the process will be completed on Xerox papers since you won’t have any collateral originals.

Unsecured to secured: Most people think about getting an unsecured education loan from private banks or NBFCs because of time restrictions or the lack of required collateral papers. Students discover how expensive their loan is when it comes time to repay it. Students can borrow money from government banks at a lower interest rate with collateral security.

Unsecured to unsecured: In the event of an unsecured-to-unsecured transfer, it is more likely that the borrower will take out a loan from an NBFC and then choose to transfer their account to a private bank because of benefits like Section 80E, which will enable them to reduce their tax liability on interest payments.

Secured to unsecured: This is extremely rare since it involves trading lower interest rates for higher interest rates. This typically occurs when the owner of the collateral is ready to sell the asset and pay off the loan.

How To Transfer Federal Student Loan To Another Lender Or Servicer? 

Education loan transfer to other banks  involves a specific process. Here are the general steps you can follow:

1. When you finally decide if you wish to move the loan, your old lender can send you a statement on the remaining balance of the loan to be repaid.

2. Following this, the document must be sent to the bank offering the student loan with refinancing.

3. Upon receipt of this statement, the loan process will proceed as normal. Once the loan has been sanctioned, the new bank will send a check to clear all unpaid fees of the previous lender.

The interest rate of takeover loans is often smaller than that of fresh loans which are because the risk factor related to a new bank is very minimal.

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Total interest payable, total payment (principal + interest), eligibility criteria for the transfer of  educational loan.

Eligibility criteria for the transfer of an educational loan can vary depending on the policies of the lending institution or loan servicer. However, here are common factors that lenders may consider when evaluating eligibility for the transfer of an educational loan:

Active Loan Status:

Typically, the loan should be in an active status, meaning that it is not in default or delinquent. Lenders may be less likely to approve a transfer if the borrower has a history of missed payments.

Good Repayment History:

A positive repayment history, with on-time payments and adherence to the agreed-upon repayment plan, can enhance eligibility for a loan transfer. Lenders may review your payment history with the current servicer.

Creditworthiness:

Some lenders may assess the borrower’s creditworthiness before approving a loan transfer. This can include factors such as credit score, employment status, and income. A strong credit profile may increase the likelihood of approval.

The type of educational loan may influence eligibility. Federal student loans, for example, may have specific requirements and protections, and transferring them may involve a different process compared to private student loans.

New Educational Institution Acceptance:

If you are transferring your loan due to a change in educational institutions, you may be required to provide proof of acceptance from the new school. This ensures that the loan is being used for educational purposes.

Documentation:

Lenders typically require documentation to process a loan transfer. This may include an application form, identification documents, proof of enrollment, and any other paperwork specified by the lender.

Loan Amount:

Some lenders may have minimum or maximum loan amount requirements for transfers. Be aware of any limitations on the amount that can be transferred, and ensure that the new loan aligns with these guidelines.

Interest Rates and Terms:

The terms and conditions of the new loan, including interest rates and repayment terms, may influence eligibility. Lenders may assess whether the new loan offers favourable terms compared to the existing one.

You should also see to it that there are no more disbursements that the loan applicant must take from their current lender’s loan. It means that your previous bank has already disbursed whatever loan amount had to be disbursed and the loan applicant can not borrow any more money from the previous loan.

Before you plan to move your education loan, you must keep some things in mind, such as processing costs, interest costs for education loans, and other expenses, to see if your final outflow will be less or more.

What Are The Benefits Of An Education Loan Transfer?

A lender taking over your education loan provides numerous financial benefits. Some of them are listed below-

Low student loan interest rate: If you are switching from a private lender to a government bank, you are in for a treat! The most important takeaway is that the you can transfer educational loan at low interest rate will be significantly lower than it would have been had you continued with your private lender.

Eligibility for government-subsidised education loans: If you are eligible for  interest subsidy schemes on education loans under one of several government-funded schemes, you can get it when you switch from a private lender to a government lender. 

The longer repayment period for education loans: Most NBFCs have set a ten-year repayment period for education loans. Students can obtain a total repayment term of 15 years from public banks. Another way to look at it is that the lower the initial EMIs are, the longer the repayment period.

What Should You Be Aware Of During The Transfer Process?  

When transferring a federal student loan to another lender or servicer, it’s crucial to be aware of several factors to ensure a smooth process and avoid potential issues. Here are key considerations:

Check out your final financial outflow: By offering lower EMIs, at a low student loan interest rate and a longer maturity schedule, modern banks aim to draw buyers, which may seem appealing on the face of it, but it may turn out to be more costly in the final analysis. So, determine how much you would potentially pay in both scenarios, and then consider which situation will be more appropriate for you. Experts will advise you to stick with your current bank and pay greater EMIs if you are not too hard-pressed for cash, finish off your loan sooner, even if the interest rate for education loans is higher, and rest easy.

It is important to calculate processing and other fees beforehand: Think how much you are paying out, and what the new bank will charge for a transaction tax, stamp tax, appraisal cost, and legal costs, then balance it against the interest rate cut. If you find that the new education loan in India is still cheaper after taking these items into consideration, then you should go with it, or else stick to the old education loan.

Associated account requirements : If you take out an education loan in India, banks normally require you to open a savings account with them so that they can route your EMIs via it. So, if you intend to transfer student loan to another bank, this aspect would also need to be taken into consideration closing one saving account and opening another with another bank, and the costs it will require.

Relations matter : Personal relationships do matter in banking, as in all other sectors; they will make the operation and procedures simpler. In other words, the simplicity of doing business leads to a great deal of peace of mind. If you transfer student loan to another bank and the workers don’t comply much, it will only raise your problems, mess with your professional job, and make life more complicated in general. So, in those cases, Education loan transfer may not be worth it.

Collateral ratio to outstanding ratio: If you’ve already repaid a substantial part of your loan, don’t give your current bank absolute original collateral. Why would you agree to offer a security that is double the value of your loan outstanding? Instead, you can use it to take an extra loan, if the need emerges. Give a smaller sum of collateral to the current bank. And if the bank also persists on the same matter, bargain more to lower the interest rate.

Some Other Terms and Conditions For the Student Loan Transfer

 If you plan on transferring your current education loan from one bank to another during the Education loan transfer of collateral, the new bank will take over your existing collateral.

You may have to place valuable collateral with a particular public bank if you have an existing non-collateral loan with your current lender and you want to transfer student loan to another bank, which mostly lends collateral-based loans. No loan margin occurs. You will be granted a 100 percent credit on the collateral value by the public bank to which you plan to move the education loan.

If you have used a moratorium on your equalised monthly installments (EMI) and are planning to move your loan to another bank with a lower interest rate, it is possible that your proposal will be denied. On the basis of the credit policies and risk appraisal of the issuer, not all balance Education loan transfer demands submitted by borrowers who applied for a moratorium may be authorised by the creditors. This is because the lender would conclude the borrowers who applied for a moratorium are facing cash flow difficulties. So, until they can persuade shareholders that their cash flow issues have been fixed, it can be tough to get a loan transition completed.

Final Steps When Loan Transfer Is Being Serviced

The final steps when your loan transfer is being serviced involve ensuring a seamless transition and updating your records accordingly. Here’s a guide to the concluding steps:

Confirmation of Transfer:

Confirm with both your current and new loan servicers that the transfer has been completed successfully. Ensure that all relevant details, including your loan balance and repayment terms, have been accurately transferred.

Update Contact Information:

Make sure your contact information is up to date with the new loan servicer. This includes your mailing address, email address, and phone number. This ensures that you receive important notifications and statements.

Set Up Online Account with New Servicer:

If your new loan servicer offers online account management, set up your account. This allows you to access your loan information, make payments, and track your repayment progress conveniently.

Review Repayment Schedule:

Carefully review the repayment schedule provided by the new servicer. Confirm the due dates, amounts, and any changes in your repayment plan. If you have automatic payments set up, ensure they are aligned with the new schedule.

Update Automatic Payments:

If you have automatic payments set up with your bank, update the payment details to reflect the information of the new loan servicer. This helps avoid any disruptions in your payment schedule.

Monitor Loan Status:

Keep a close eye on your loan status with the new servicer. Verify that payments are being applied correctly, and address any discrepancies promptly. This may involve checking your account statements regularly.

Stay Informed about Benefits and Protections:

Confirm that any federal benefits and protections associated with your student loan, such as income-driven repayment plans or loan forgiveness programs, remain intact after the transfer. Seek clarification from the new servicer if needed.

Save Documentation:

Retain all documentation related to the loan transfer, including confirmation notices, communication with both servicers, and any paperwork provided during the process. This documentation may be useful for future reference.

Contact Customer Service for Clarifications:

If you have any questions or concerns, reach out to the customer service of your new loan servicer. They can provide assistance and clarification on any issues you may encounter.

Gradually Adjust to the New Servicer:

Familiarise yourself with the policies and procedures of the new loan servicer. Understand how they handle inquiries, where to find important information, and any additional services they offer.

By completing these final steps, you can ensure a smooth transition between loan servicers and maintain control over your student loan repayment. 

Comparison Between Different Banks For Transfer Of Student Loans

When exploring options to transfer student loans, it’s essential to compare offerings from various banks to find the most suitable terms for your financial needs. The table below provides a comprehensive overview of key criteria such as interest rates, repayment terms, eligibility requirements, and additional features for top financial institutions of India. Consider these factors carefully as you weigh the pros and cons of each bank to make an informed decision.

Can we transfer education loans from one university to another?

Certainly, you can transfer education loans from one university to another, but it’s crucial to inform the bank about the change and submit the required documents. You might be wondering, “If I change universities, do I have to repay any loan amounts?”

In short, no, you won’t be obligated to repay any loan sums if you switch universities. However, to benefit from the latest changes, it’s essential to communicate with the bank.

Ensure you provide the necessary paperwork, including an acceptance letter from the new school, evidence of any scholarships earned, and other documents specified by the bank.

It may, thus, be concluded that an educational loan may be transferred from one bank to another. But there is a need to be aware and to take into consideration all the factors mentioned above before deciding whether to transfer the educational loan or not.

Q1. Can student loan be transferred?

Ans: Yes, you can transfer your education loan to a lender with a lower interest rate, but remember to also consider repayment terms, processing fees, and customer service before deciding.

Q2. What happens to my student loan if I change university?

Ans: You can modify your education loan details, including changing your university, by filling out a form with the new information and submitting it to the bank.

Q3. Can I take a student loan from 2 different banks?

Ans: Yes, you are eligible to obtain a second education loan as long as you meet the necessary requirements. You have the option to choose either the same bank that provided your graduation loan or a different lender for this second loan.

Q4. Can I transfer my loan account to another bank?

Ans: To transfer your loan to a new bank, simply close your loan account with the current lender and pay a transfer fee to the new bank. The new bank will then clear your existing loan, and you can start repaying them through equated monthly instalments at a new rate of interest.

Q5.  What is balance transfer in an education loan?

Ans: Balance transfer in an education loan involves moving an existing loan from one lender to another, often to secure better terms or interest rates.

Q6. Will my credit score be affected if I transfer my education loan?

Ans: Transferring your education loan should not significantly impact your credit score, as it’s considered a standard financial activity. However, maintaining regular payments and a positive credit history during and after the transfer is crucial to preserve or improve your credit score.

Q7. Will I be charged a penalty if I transfer my education loan before the end of the repayment period?

Ans: Penalties for transferring an education loan before the end of the repayment period depend on the terms set by the specific lender. Some lenders may charge a prepayment penalty or processing fees, while others may not.

Q8. Can I transfer my education loan if I have defaulted on payments?

Ans: Transferring an education loan while in default may be challenging, as lenders typically assess the borrower’s creditworthiness and repayment history. It’s advisable to first address the default by working with the current lender to establish a repayment plan.

Q9. Can I transfer my education loan to a lender that offers a lower interest rate?

Ans: Yes, you can transfer your education loan to a lender offering a lower interest rate through a process known as loan refinancing or balance transfer. 

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🚀 Over 5K Students Secured Abroad Education Loan With UniCreds!

• Check your Loan Eligibility

Can you transfer your student loan from one bank to another?

A balance transfer is a process of transferring high-interest debt from one account to another bank account with a considerably lower interest rate. Various parameters need to be considered before you apply for an Education loan balance transfer.

Eligibility Criteria

The loan must be a first-time takeover.

The loan requires to be fully disbursed at the time of take-over.

Repayment should have been started and the borrower must have a good CIBIL score.

Know about the processing fees and other related charges before you apply for the Education loan transfer from one bank to another. For some banks charge processing fees while others don’t. Depending upon the number of charges required overall, consider if the transfer would be a net benefit or net loss.

Collateral to the outstanding ratio:

In case you have already paid back the majority of the loan amount don’t offer the original collateral to the bank. Instead, offer your new bank a lesser amount of collateral and utilize the higher amount collateral to take up another loan.

Read all the terms and conditions of the bank before finalizing the loan transfer.

While the new bank will attract you with an extra-low annual percentage rate (APR) sometimes as low as zero per cent, do not fall prey to such schemes as the promotional offer may not last until the end of your repayment period.

The transfer of student loans to another lender can be beneficial because of the reduced rate of interest from the new bank but be aware of the pros and cons of loan transfer as you might end up saving money from the reduced interest rate but the bank might charge rates in the form of processing fees or other allied charges for the transfer. Consider studying the recent trends of loan transfer to avoid falling prey to interesting interest schemes.

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How to transfer an education loan?

The process of transferring an abroad education loan from one school or program to another and when it might be necessary to do so .

You must thoroughly examine a loan provider’s terms and conditions for loans for international education before choosing them.

But what if you wind up taking out an education loan from a lender with extremely high interest rates, whose loan repayment terms are inconvenient for you, or if you wish to switch schools or programs?

If you find yourself in such a circumstance, there is a solution that you may learn about by reading this article.

Can I transfer my education loan from one bank to another

Eligibility criteria for education loan transfer, process of education loan transfer, other terms and conditions for education loan transfer, can we transfer education loans from one university to another, how long will it take for the bank to approve my request to switch universities, which bank is best for education loans abroad .

• Moving high-interest debt from one lender to another with a much lower interest rate and better repayment terms is an education loan transfer.
• Lenders, in this case, include banks and NBFCs. Banks like SBI, Union Bank, and Bank of Baroda offer takeover loan programs to transfer student loans.
• You may effortlessly switch your expensive education loan to SBI through the takeover loan program to lower monthly EMIs. The highest loan limit for this is INR 1.5 crores, with no processing cost.

3 Steps on how Education Loan works?

Only if the loan applicant meets the following requirements may they apply for an education loan transfer:

• There should be no more loan disbursements from the existing lender for the applicant. It indicates that no more money may be borrowed from that lender because the disbursements have already been made.
• The borrower’s CIBIL score and the repayment of the previous loan must have begun in the form of EMIs. Go here to learn more about the CIBIL score.
• The financing has to be a new takeover.

Applying for Education Loans

• Your former lender will offer you a statement regarding the outstanding loan amount that has to be repaid after you decide to transfer your loan.
• The bank offering the student loan refinancing must then get the presented statement.
• After receipt of this statement, the loan application procedure will start as usual. When the loan has been approved, the new bank will send a check to pay off any outstanding debts owed to the previous lender.
• Because the risk component connected with the new bank is relatively minimal, takeover loans always have lower interest rates than new loans.

• The new bank will take over the current collateral if you move an education loan with collateral.
• In contrast, if you want to move a non-collateral loan to a public bank that typically provides loans based on collateral, you will need to provide the specific public bank with valuable collateral. The collateral will secure no loan margin and a 100% loan amount.
• Because of the lower interest rates and better repayment options, moving student loans from one bank to another is usually advantageous. Nonetheless, to prevent any losses, think about researching previous patterns in loan transfers before making the decision.

Certainly, but you must inform the bank about the change and provide the necessary paperwork. You could now wonder, “If I switch universities, would I have to refund any loan amounts?”.

The short answer is no. You won’t be required to repay any loan sums if you switch universities. But, to take advantage of the most current modifications, you must speak with the bank.

You must also present the necessary paperwork, including a letter of acceptance from the new school, proof of any scholarships you may have earned, and other records specified by the bank.

Depending on the bank’s internal procedures and the intricacy of your request, the time it takes to accept your request to move universities may change.

It is advised that you contact your bank as soon as possible to establish a rough schedule.

Finding the best bank for school loan programs might take a lot of work because so many banks provide these loans. Following are the best banks and education loans to study abroad:

• The State Bank of India: SBI Global Ed-Vantage Scheme
• The Bank of Baroda: Baroda Scholar Scheme
• The Punjab National Bank: PNB Udaan Scheme
• Canara Bank: IBA Model Loan Product For Higher Studies Abroad

There is no such thing as a sure thing, and during your time studying abroad, you can decide that you want to switch colleges or countries after your loan has been approved and occasionally disbursed. You won’t need to worry about the changes afterward.

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Education Loan Transfer to SBI Bank: Check Major Features and Benefits 

Shekhar Suman

Updated on: November 7, 2023

Education Loan Transfer to the SBI Bank: Have you started repaying your education loan? Are you facing a high interest rate and your loan is getting costlier? Well, this is the right time when you should go for education loan refinancing . State Bank of India (SBI) is the largest public sector bank in India with over 22,405 branches in the country and 65,627 working ATMs. 

The Indian banks have provided around INR 17000 crore of education loans in FY 2022-23 and SBI is one of the leading lenders in that. For education loan refinancing, SBI offers a dedicated scheme to the students called SBI Takeover of Education Loans. Let’s understand the major features of education loan transfer to SBI.

Table of contents

Sbi takeover of education loan, eligibility criteria for education loan transfer to sbi, documents required for education loan transfer to sbi, how to apply for education loan transfer to sbi.

SBI Takeover of Education Loan provides loan refinancing of up to INR 1.5 crores with a flexible repayment period of up to 15 years. The bank will offer you the most competitive interest rates in the market and you will get the loan without any processing fee. There are no hidden charges and the bank will provide you with complete transparency. 

• You can also avail a top-up loan for further study as per your requirement.
• You can pay your EMIs through various payment modes like Net Banking, Mobile Banking, Cheques etc.
• You can easily get a top-up loan after refinancing to pursue further with an extended repayment period for that course.
• The refinancing is available with a minimum amount of INR 10 lakhs.
• The Quantum of Finance for SBI take over of education loan will cover all the outstanding in the account including limits sanctioned as Top Up Loan (if any) and the prepayment penalty (if any)
• The collateral should be 100% value of the education loan.

Also Read: Credit Score and its Impact on Education Loan Refinancing  

State Bank of India (SBI) has prescribed some eligibility criteria which is mandatory to be fulfilled by the student. Always carry all the required documents and make sure that you are completely eligible for the education loan transfer before applying to avoid rejection and any other issues. Check the eligibility criteria for education loan transfer to SBI below:

• The education loan should be a fresh take-over i.e. the application should be the first and the loan shall not have been transferred previously. 
• The applicant i.e. the student applying for the education loan transfer to SBI shall be a major applicant i.e. above 18 years of age. 
• No amount shall be pending from the existing bank and the entire amount shall have been transferred to the respective amount.
• The education loan repayment shall have been started before applying for a loan transfer.
• The EMI payment towards the existing loan shall be regular in the books of the existing lender. 

Always be a responsible applicant and keep your documents perfect as directed by the bank. If any supporting documents are missing from your application it may create unnecessary delay and hassle in the loan transfer process. Check the list of documents prescribed by SBI for the takeover of the education loan.

• A completely filled-in Loan Transfer Application Form signed by the student as well as co-applicant/parent. 
• 2 passport-size photographs of the student
• Copy of the PAN Card of the student as well as the parent/co-applicant
• Aadhaar Card/UID of the student and as well as the parent/co-applicant
• Identity proof of the student (Driving Licence/Passport/Aadhaar)
• Residential proof (copy of Driving Licence/Passport/Electricity bill etc)
• Bank account statement of the Student and co-applicant for the last 6 months
• IT return of last 2 years of co-applicant (if paying income tax)
• Statement of assets & liabilities of Parent or co-applicant
• Income proof like salary slips of Parents or co-applicants 

Also Read: Best Education Loan Refinancing Rates and Lenders  

You can apply for an education loan transfer to SBI through their official website. The bank offers a seamless application process for takeover of education loans and the processing is also very fast. Check the below-mentioned steps to apply online:

• Login to www.sbi.co.in
• Visit the education loan section and click on the takeover of education loan
• On the left side of the page, you will see the ‘apply now’ button
• Click on the Apply Now button and enter the necessary information
• Enter your contact number and mention the relationship you are maintaining with the bank

• Choose the category as per your requirement
• Click on the submit button
• The bank will verify your application and the loan will be approved subject to terms and conditions 

The credit score criteria depend upon the terms and conditions of SBI. However, you should always try to maintain a CIBIL score of 700-750 and above so that you can easily get loan approvals. 

The application process for SBI takeover of education loans is completely online. However, you may have to visit your nearest branch subject to the verification process of SBI.

SBI offers a flexible repayment period of up to 15 years for takeover education loans.

SBI is the largest public sector bank in India and one of the leading banks in terms of education loans. Contact your nearest branch or visit their official website for all loan-related queries. 

To know more about education loan refinancing, the best bank accounts for students , forex and banking experience for global students or international money transfers , reach out to our experts at 1800572126 to help ease your study abroad experience. 

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About Shekhar Suman

Shekhar is a versatile writer with a passion for sharing knowledge and creativity. With expertise in crafting informative blogs on study abroad and finance, Shekhar helps readers navigate the complexities of education and financial planning. Most of his writings blend the practicality of finance and the beauty of language, making a meaningful impact in both spheres. Beyond his professional pursuits, he finds solace in the writing Shayari.

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Patricia Zengerle has reported from more than 20 countries, including Afghanistan, Iraq, Pakistan, Saudi Arabia and China. An award-winning Washington-based national security and foreign policy reporter who also has worked as an editor, Patricia has appeared on NPR, C-Span and other programs, spoken at the National Press Club and attended the Hoover Institution Media Roundtable. She is a recipient of the Edwin M. Hood Award for Diplomatic Correspondence.

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Bird flu: us tests show pasteurized milk is safe.

Additional tests of milk showed that pasteurization killed the bird flu virus, federal health officials said on Friday, as Colorado became the ninth U.S. state to report an infected dairy herd.