My last student loan, which recently came due, just moved to a new bank. I am done making payments to Citibank. Now, luckily, my loans have all been sold to the same company. Interestingly, that company is the US government.
The Department of Education is quickly buying up student loans from the major banks. My loan is held by the government but serviced by an outside company, Great Lakes. It is important to understand what happens when your loans move to another servicer so you don’t make any mistakes.
- Your loan terms are the same. You owe the same amount each month and you are legally bound by the same promissory note that you signed to start your loan.
- If you are set up for auto pay, you will need to run the setup again for the new lender.
- If you are making payments through your bank’s bill pay, you will need to add the new servicer so your payments are received by the right institution.
It is critically important for your credit that you update all of your information and set up payments for the new lessor. A late payment because your auto pay turned off is not a good enough excuse to keep it off of your credit report.
Have you had to deal with loans moving in the past? Was it a mortgage, student loan, car loan, or something else all together? Please share in the comments.