The number of companies offering private student loan consolidation is surprisingly small. With such a small number of competitors on the market, it critical to explore all of your options. One option to explore is the iHelp Student Loan Consolidation…
What is iHelp?
iHelp loans are funded by member banks of the Independent Community Bankers of America and serviced by the Student Loan Finance Corporation. Because smaller banks are funding these loans, borrowers can expect many of the pros and cons of dealing with a smaller bank.
The minimum consolidated loan with iHelp is $25,000 and the maximum loan for undergraduates is $100,000. Graduates can get loans up to $150,000.
Of all the student loan consolidation programs that this site has reviewed, iHelp is perhaps the most straightforward in its loan terms, and most notably, qualification requirements. With instant approval or rejection becoming standard for most credit applications, lenders make most decisions based upon a formula. However, few actually disclose what is necessary for approval.
On the iHelp webpage, they give fairly specific terms required for approval. Perspective borrowers must make over $24,000 per year, have 2 years of positive credit history, and no bankruptcies, foreclosures, or repossessions in the past 5 years. Borrowers must also stay under the debt-to-income ratio of 45%.
iHelp also has some favorable plans for borrowers who run into financial trouble. iHelp allows up to two years of interest only payments and also offers a graduated repayment plan. Forbearance options are also available for circumstances ranging from military service to dealing with a natural disaster.
One other perk of these loans is that they are all fixed rate. Though we will see the rates are a little higher than those offered by their competitors, borrowers with fixed rate loans can be assured that their interest rate will never go up.
Perhaps the biggest disadvantage to iHelp is the interest rates. The lowest possible interest rate that someone can get 6.22% APR, and that rate is reserved exclusively for people who have a co-signer. The best rate someone without a cosigner can get would be 7.21%.
Part of the reason the APR on these is so high is that there is a “2% Supplemental Fee” added at the time of the loan disbursement. These fees are not unheard of, but many other lenders have shifted to a zero loan fee structure.
The final major disadvantage with these loans is that the maximum repayment term is only 15 years. For many, having their loans paid off in that amount of time would be a dream come true, but it just isn’t feasible. While longer repayment terms do mean more interest paid in the long run, shorter repayment means higher monthly bills.
One other thing for potential borrowers to keep in mind is that iHelp will consolidate Federal student loans with private student loans. Because the many advantages of Federal government loans are lost when these loans are combined with private loans, such a combination is almost never recommended.
Who is iHelp best for?
iHelp loans are best for people who are willing to pay a little extra in order to work with a smaller bank. It is also worth noting that iHelp loans are only available to a limited number of graduates. Eligible schools are limited to the following states: Connecticut, Delaware, Georgia, Illinois, Maryland, Minnesota, Missouri, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Virginia, West Virginia, or Wisconsin.
Readers: Have you dealt with iHelp, The Student Loan Finance Corporation, or the Independent Community Bankers of America? Please share your experiences in the comments.