Is it legal to form a lending company to refinance my own student loans?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Is it legal to form a lending company to refinance my own student loans?
I want to become a lender and then refinance my student loans at 0 interest or
as close to zero as possible through my own lending company. Is this legal to
do? If so, what would be required and what is that process like?
Asked on July 9, 2019 under Business Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
You can, but it is not clear what advantage or purpose doing so serves. When you refinance a loan, you are paying it off to replace it with another loan--even though you may repay the new loan over time, the old loan must be paid off in full; if this would be your own company, that means you'd have to have the money to pay it off; if you could do that, why not simpy pay it off instead of loaning yourself money? Lending yourself money does not let you refinance the existing loan unless you have the money available to do so.
If determined to do this for some reason, just form an LLC and loan yourself the money from the company; an LLC may make a private loan to a person.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.