Thinking about refinancing your student loans? There are many student loan refinance companies out there, so it’s important to find one you trust and feel good about.
A community-minded lender, like a credit union, might offer the intimate lending experience you’re looking for. Learn more about credit union student loan refinance and how to choose the right lender.
Credit union student loan refinance
When refinancing student loans, you work with a financial institution to get a refinance loan to pay off your current loans. Some credit unions provide this option like other financial institutions, but credit unions have some important differences.
Credit unions are a type of financial institution, similar to a bank, that is member-owned. Because credit unions share with their members, they can offer competitive rates.
Having a focus on members and offering great rates make credit unions appealing, especially if you’re looking to refinance. When you refinance student loans, you want the best rate possible to get the most savings. A credit union can help you do that.
“As member-owned and community-based financial institutions, credit unions see their mission as helping people realize their dreams – and education finance is a major part of that mission,” explained Devin Hughes VP, Business Development at LendKey. “Many credit unions offer cost-effective solutions for refinancing student loan debt and often provide benefits such as interest rate reductions for customers who are in good standing.”
The good news is that it doesn’t have to be hard to find a credit union you can work with to refinance your student loans.
4 lenders for credit union student loan refinance
When financing through a credit union— or any financial institution, really— make sure you comparison shop for the best rate. Our student loan refinancing survey found 40 percent of student loan borrowers only shopped at one place. To score the best rate, check out all of your options, credit union or not. But since credit unions typically offer better rates, here’s a good place to start:
LendKey is an online platform that connects borrowers with credit unions and community banks. One of its product offerings is student loan refinancing. Using their site, you can check your rate by providing some personal information and submitting your income amount and the amount you’re requesting for a refinancing loan.
The good news is when you check your rate, it only does a “soft pull” on your credit, so your credit score won’t be affected. Only when you proceed with a full application will there be a “hard pull,” which may lower your score temporarily by a few points.
Working with LendKey can help simplify your search as they aggregate credit union and local bank lenders to provide you more options. There are also no origination fees, and loan terms of 5 to 20 years are available.
2. PenFed Credit Union
PenFed Credit Union, short for Pentagon Federal Credit Union, offers student loan refinancing to their members. Currently, they have rates as low as 3.12% — depending on your credit, of course.
Refinancing your loans with PenFed can simplify your repayment process and save you money on interest. To qualify, you need to be a member of PenFed, but it’s not hard to apply.
For example, if you’re a member of one of their partners — like the American Red Cross, U.S. Department State of Energy, or others — you could qualify for membership. There are other ways to become a member as well. If you’d like to pursue membership but aren’t sure you qualify, get in touch with them for more details.
Applying for student loan refinancing with PenFed means no fees, an online application, and the possibility of having a cosigner for a lower rate. Just be aware that a cosigner is legally liable for the loan as well, so tread carefully.
3. Alliant Credit Union
Another option for credit union student loan refinance is Alliant Credit Union. They offer refinancing loans of up to $100,000 with repayment terms between 5 and 20 years. They offer variable and fixed interest rates, starting at 4% APR.
You must be a member of Alliant to take advantage of their student loan refinancing, but joining is easy. You need to meet one of their five requirements for membership:
1. Live or work in an eligible Chicagoland area
2. Be an immediate family member or a current Alliant member
3. Be an employee or retiree of an eligible company
4. Be a member of an eligible organization
5. Be a supporter of partner organization, Foster Care to Success
Meeting just one of these requirements can score you membership into Alliant Credit Union, making you eligible for their student loan refinancing product.
4. Your local credit union
Depending on where you live, you may qualify for various credit unions in your areas. There can be credit unions based on where you live or your profession. Check to see credit unions in your area to see which ones you qualify for and if they offer credit union student loan refinance products. Find your local credit unions to see which one makes sense for you.
What to know about credit union student loan refinance
Regardless of which financial institution or credit union you use, it’s important to know the risks of refinancing student loans. Although you can save money on interest, you’ll give up federal student loan benefits.
That means no income-driven repayment or student loan forgiveness. You can also refinance multiple times, but remember refinancing is irreversible— you can’t go back to federal student loans.
Also, research the eligibility requirements for membership at the credit union, and make sure it works with your finances and lifestyle.
If the pros outweigh the cons, look at offers from credit unions and other student loan refinancing companies to see which lender offers the most financial support.