The average student loan debt is so high today, that many people consolidate and refinance their student loans to make their payments more manageable. When you are considering refinancing substantial debt, it is important that you consider various lenders. The rates, service and repayment flexibility each offer can impact your financial wellbeing. With that in mind, you will certainly want to take a look at credit union student loan refinancing.
The first thing you should know is that credit unions, unlike banks, are not-for-profit financial institutions. Credit unions have similar services to banks, but they exist to serve their members rather than to maximize profit. This often enables them to provide advantages in the form of low rates and personalized, friendly service.
You Must Be a Member to Get a Credit Union Student Loan
To use a credit union’s services, whether it is to open a checking account or savings account, take out a loan or refinance student loans, you must first become a member. You may have to pay a nominal fee (generally not more than $50) to join, and you may (or may not) have to open a checking or savings account. Membership criteria vary widely depending on whom the credit union was created to serve. Eligibility could involve geography, affiliations with a company, university, industry, or other criteria. You may want to start by checking with your university for credit union affiliations.
Why Consider a Credit Union to Refinance Your Student Loans
Not for Profit Often Means Lower Rates
Since the reasons credit unions exist is to serve members rather than make the largest possible profit, you stand a good likelihood of refinancing your student loans at lower rates than if you go to a bank or other lending institution. If your student loans are substantial, lower rates can mean saving hundreds or even thousands of dollars each year in total interest and payments expenses. Though credit unions generally have very competitive rates, you should also check the rates at other financial institutions, especially online banks.
Personalized Service with Credit Union Student Loans
Beyond competitive rates, another important reason you may want to consider a credit union to consolidate and refinance your student loans is the service. Credit unions usually give you much more personal service than do banks.
It May Be Easier to Get a Student Loan with a Credit Union
Since credit unions exist to server their members rather than to make a profit, it is often easier to get a loan from a credit union than a bank if you have a low credit rating. If you are having trouble qualifying with banks, it may pay you to try some credit unions.
Credit Unions Are More Likely to Let Cosigners Off the Hook
If your credit history is not quite up to par, you may need to get a cosigner when you refinance no matter where you borrow. But after you have been paying regularly, you may want to have your cosigner taken off the loan. Credit unions are generally more likely than banks to let cosigners off the hook after you have paid on time for 12 months.
Potential Drawbacks of Credit Union Student Loans
Everything has its pros and cons. The important thing is to consider all options and choose the best one for your own situation. So, despite all their advantages, you should be aware of what some might consider drawbacks of refinancing your student loans with a credit union.
You May Not Be Able to Consolidate Your Entire Debt
If you have substantial student loans that you want to refinance, be aware that some credit unions may not be willing to refinance the entire amount. Some have a limit they will refinance. You could, therefore, refinance part of your debt, or go to a bank or a larger credit union that can handle your entire student loan debt.
Credit Unions May Not Offer as Much Online Service
Credit unions vary, but some may not be able to offer all the online and mobile services you may find with a large bank. Determine what is important to you and whether the credit union you are considering offers it.
Large Banks Offer One-Stop Shopping
Though credit union offer the same basic services as banks, large banks may still have many more services than credit unions, even investment services. If you have specific financial needs that a credit union cannot fulfill and only want to deal with one institution, you might be better off with a large bank.
Platforms and Credit Unions to Consider for Credit Union Student Loan Refinancing
There are many ways to find credit unions where you are eligible for membership Though you must meet certain criteria to join a credit union, you can find credit unions where you fit the criteria through platforms such as LendKey. Here are some platforms and credit unions you may want to consider.
LendKey is a platform that enables student loan refinancing possibilities for both undergraduate and graduate student loans from hundreds of credit unions and smaller community banks in 45 states and Washington DC. To apply for a loan through LendKey, you must take out a loan of at least $7,500 but not more than $250,000. You can consolidate and refinance both private and federal student loans through LendKey.
Student Choice is another platform you can use to find a credit union to borrow or refinance student loans. They have nearly 250 affiliated credit unions.
Alliant Credit Union
Alliant Credit Union, based in Chicago, is one of the largest credit unions in the United States. It has 335,000 members and manages over $9.3 billion in assets. You can consolidate up to $100,000 in undergraduate and graduate student loans for terms up to 25 years. A member must be an employee (or family member) of a qualifying company. Others affiliated with Chicago or Foster Care to Success may also join as explained on their website.
Navy Federal Credit Union
Navy Federal Credit Union boasts nearly five million members, and you can join if you are in the military, a family member of someone in the military or a civilian DOD employee. See complete eligibility requirements here. Check their website for current refinancing rates. You will be able to refinance $7,500 to $125,000 in undergraduate student loan debt or $7,500 to $175,000 in graduate or combined student loan debt.
Are Credit Union Student Loans Right for You?
First you must decide if refinancing your student loans is wise. If they are federal loans, you will be giving up certain repayment protections. Once you decide to refinance, the best way to determine whether a credit union is right for you is to check out the rates and services of several credit unions and compare them to those of other lending institutions. Consider rates, of course, but also convenience and repayment options.