The process of loan consolidation has changed a little bit in the last few years so  there are some misconceptions about how it works. Heere are some basic facts about the process that need to be reiterated to correct any myths about what student loan refinancing can and can’t do for your.

First of all you can’t consolidate student loans jointly with your spouse. You used to be able to but the laws regarding this were changed in the summer of July 2006.  The law was changed because too many loans were not being paid. This is because when married students consolidated their loans together each became responsible for the total amount of the loan and neither would pay. The ability to take out joint student loans was actually repealed as part of the Higher Education Reconciliation Act that was passed in Congress in 2005.

Yet another common misconception about federal student loans is that you cannot consolidate them with any other lender than the one that you took the loans out from in the first place.  A law called the Emergency Supplemental Appropriations Act which was passed by Congress in 2006 allows you to now shop around for a better lender Thant offers superior discounts or a lower interest rate. So until really quite recently you really were stuck with the original lender. You can go with whatever lender you like whether you are a parent who took out a Parent Plus loan or a student who took out a federal loan.

Another myth around student loan consolidation is that you do not qualify for it if you do not have good credit. In fact a credit check is not necessary at all and if a lender asks to pull your credit report you should refuse to deal with the company. More than likely the lender is not reputable. You should also not be asked to provide proof of income (also known as income verification) to renegotiate a student loan.

The student loans consolidator is also not that reputable if you are being charged a fee for the loan. There should be no fees at all as consolidation is a right, not a privilege to be charged for.

One fact about the consolidation process is that it is hard to change after it has been put together as a deal. It is difficult to add a loan to it once it has been put into motion.  If you want to add a forgotten eligible student loan to your new consolidation loan then you have to add it within 180 days of the loan consolidation. If you do not add the forgotten loan within that period then you are going to have opened a new consolidation loan to handle it.  This is why it is so important to be organized about how you are going to handle the student loans before you decide to visit the student loans consolidation officer in the first place. Forgetting to add one can be a costly mistake!