I really try to not let things get to me, but Citibank really screwed me over. I applied to consolidate all my federal loans back in April 2006 to lock in the 4.7% Stafford interest rates before they went up by 2% on July 1st and while my loans were still in the in-school status so I could save the extra 0.6%. I also applied for a loan consolidation via the Federal Government in case Citibank declined me for some weird reason.
Fast-forward 4 months. Citibank still hasn’t consolidated my loans. I’ve called them 5 times, they keep telling me everything is okay, I just need to contact my only private federal FFELP loan lender (Mohela) to change my loans to repayment then they can buy it out. Since they said everything is okay, I cancelled my Federal Government consolidation since Citibank has slightly better incentives and better customer support (I could actually get them on the phone).
Fast-forward to another 6 weeks to September. Citibank still hasn’t consolidated my loans. Finally after being on hold for 20 minutes they tell me they can’t consolidate them because of the “Single Holder Rule.” Basically if you have one FFELP loan with one lender (in my case Mohela) you have to go to them first for consolidation. They explained to me this was repealed after July 1st, but since I applied back in April there is no way for them to consolidate them. I asked why no one told me this before, as in MONTHS ago so I wouldn’t have cancelled the consolidation through the government (which the Single Holder Rule doesn’t apply to), and they couldn’t give me an answer. Basically they gave me the option of re-applying for a consolidation with them so it would be after July 1st and the rule wouldn’t apply and my interest rate would go up 2.6%, costing me another $1,000 a year in interest alone (my loans were now in repayment since they told me to put them into repayment, hence the extra 0.6%!!!). The problem is with an interest rate above 7% I know I would be making the maximum payments possible to get it paid off, since that’s the kind of person I am. If it was below 5% I would probably stretch it over 20 years since the interest is at the rate of inflation. Basically I was going to be poor for the next 3-4 years until I had it paid off if my interest rate was going to be that high.
That’s when I found a great company called OneSimpleLoan. They are actually the company that sued the federal government over the Single Holder Rule and they are the reason why it got repealed. They had a great section on their website that mentioned that they can take over another loan consolidation application and that it would be possible to get the same interest rate that you would have gotten. The key part is if you have in your possession a dated loan consolidation application in your possession from another lender. Thankfully, I keep EVERYTHING now (and doing so just saved me probably over $10K in interest. Their customer service has been fantastic, and I would definitely recommend them to anyone. I can’t put it any other way other than they saved me tons of money and years of misery.
Moral of the story, I hate Citibank, they are either incompetent or dishonest, most likely both. I’m not sure which one is worse, but I’ll be either transferring my private loan from them or paying it off completely over the next few months so they won’t make any more money off me.