Is Cash Back College Loan Consolidation a Reality?

Cash, Non-Cash and Convenience Savings

There’s no doubt that the two simple words “Cash Back” get a lot of attention when attached to any monetary offer. The promise of cash sells like crazy in a world where the cold hard real deal is in high demand. You may haggle, negotiate, shop low interest rates, and look for fee-free loans, but when the cash back incentive is laid out on the table, borrowers prick up their ears. Lenders know full well that the prospect of a little cash in your pocket after you’ve settled on a student consolidation loan sounds like a dream…but is it too good to be true?

The truth is that the idea of student loan lenders who giving away money hand over fist, like street corner hawkers bidding for your attention, is a myth. No one is giving away cash for free these days, whether it’s involving student loan consolidations or not.

As you might guess once you get past the initial rush of a free money incentive, actual cash back is a rare find. While once upon a time, in the early world of student lending, you might have scored a sweet cash bonus from a handful of organizations on the block, today you will find rewards and perks more along the lines of low interest rates and reduced origination fees, rather than cash.

Seeing New Ways to Save with Lenders

The good news for you college-bound students, though, is that with some savvy shopping and shrewd decision-making, you may score a deal that is essentially equivalent to cash back that lets you in on extra fee savings, exclusive interest rates, or savings of convenience. In this way, you end up keeping a little dough in your pocket if you know where to look and are picky in your choice of lender.

Competition among lenders is particularly stiff for the consolidation loan market. The cost of a college education is inescapably high and the average student loan debt is an intimidating statistic. Nearly everyone must borrow at least one or two loans from the federal government, and with this increase student consolidation loans have been on a non-stop upward climb as huge numbers of college grads try to balance their personal financial budgets and avoid delinquent payments. More and more students who can’t immediately meet their monthly payments are choosing to cut them in half and lengthen their repayment term rather than defaulting on their loans or even going bankrupt.

Federal loan consolidations and alternative, or private, loan consolidations are popular and commonplace now. For many borrowers who are swimming in debt, floundering in the job market, and overwhelmed by another huge monthly bill, there is no more responsible move when it comes to preserving your credit and financial success. Additionally, some lucky students will get the chance to have their student loans taken care of by someone else, as is the case with the National Guard’s student loan repayment program, a great incentive for those who qualify.

But forget about any significant “cash back” or savings bonuses now when you consolidate your federal loans. Subsidies to lenders have been sharply cut and in turn many lenders have chosen to cut their losses by cutting borrower benefits, particularly in the consolidation area. Keep on looking at further options below to find cash or equivalent savings in combination with your financial aid.

Cash, Non-Cash, Rebate and Convenience Incentives

If you practice thinking strategically about the benefits any company offers, you’ll keep cash in your pocket and spend less time worrying about your budget in the first place. Per the aforementioned, if you are looking specifically for a cash-back option you are not likely to find many as they have been cut and strangled out by the edginess of the current market. Instead, examine the other perks a lender offers: online financial management tools, and quick application processing and approval.

For example, here’s a perfect representative of a “savings” convenience: Sallie Mae, one of the most prominent private student lenders in the US, offers to fill out your loan application for you, thereby saving you valuable time, possible error, and hassle. While not as obvious a perk as cash back, perhaps, incentives like this can end up making a major difference in your happiness with your loan plan in the end.

Sources for Cash Savings when You Consolidate

While most lenders are no longer legally able to attach the cash kickbacks to loan deals, some rewards that you can still find are cash prizes and cash savings:

• Sallie Mae features a Great Cash Giveaway contest. If you are or become a borrower/customer of Sallie Mae, you may register to win up to a very generous $25,000. Cash prize drawings are held each month for one lucky student.
• Shop for lenders that still advertise borrower benefits, such as interest rate reduction for so many on-time payments in a row plus another percent or so off the interest when you pay electronically with an automatic withdrawal from your bank account. The couple percentages off in interest you will save here add up to a major amount of money put away.
• Likewise, if you are consolidating private loans, lenders will sometimes advertise “fee-free” and reduced interest rates for on-time and electronic payments. Consider the interest rates attached to the private consolidation loans and compare lenders side-by-side before you decide you’ve struck a deal and sign away.

How to Save Cash

Remember, above all, your best strategy in the new era of fair lending: weigh all the benefits and costs provided by a student loan consolidation lender before you commit. Look for fee-free, interest rate discounts and reductions, remarkable account management and assistance, and even a few short-term or temporary cash sweepstakes or giveaways as a bonus.

Now that you know the truth and the myth about cash back with student loan options, you also know that taken all together, your “cash” savings could be quite significant when you drive your lenders to a hard bargain in terms of savings incentives. If you look at it this way, the cash back giveaway is still there, albeit in a different form that is non-obvious. Your savvy decision-making and picky shopping will be its own reward in the long-run when you take advantage of the incentives available to you.