How to Find the Best Credit Union Student Loans for You

 March 31, 2021
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Private Student Loan rates starting at 2.49% APR

2.49% to 13.85% 1

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2.55% to 11.44% 2

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3.25% to 13.59% 3

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  • Variable APR

Note that the government has paused all repayment on federally held student loans through the end of 2022, with no interest to be charged during that period and no loans to be held delinquent or in default.

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While federal student loans should be your first stop when borrowing for school, they don’t always cover the full cost of college. If you need additional funding to pay tuition, consider credit union student loans in addition to loans offered by big banks and online lenders.

Not only do credit union student loans offer competitive terms, but they also might offer a better overall experience. In order to decide whether they’re right for you, let’s answer the following questions:

Banks vs. credit union student loans: What’s the difference?

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For the most part, credit unions and banks offer the same services — but their motives set them apart.

Banks are for-profit businesses, so for all intents and purposes, their primary goal is to maximize their profits.

On the flip side, credit unions are not-for-profit businesses that return their profits to their members via higher savings yields, lower loan interest rates and better service. Those are among the pros of credit union loans for college students.

Credit unions often serve a specific community, either regional or organizational. They can better understand the needs of their members because they’re more deeply rooted in the community. That doesn’t mean they’re always the best option, but they’re worth considering.

Keep in mind, however, that membership may be required to apply for credit union student loans or other financial products. In some cases, you might not qualify based on a credit union’s eligibility requirements.

Pros of credit union student loans Cons of credit union student loans
● Credit unions aren’t strictly focused on profits
● Competitively low interest rates
● Potential for more personalized customer service
● Credit union membership may be required
● Eligibility requirements can be restrictive
● Perks offered by banks, may not be offered by online lenders

Where can you find competitive credit union student loans?

As you search for the best private student loan option for you, it’s worth looking at marketplaces where you can find local credit unions, as well as some of the national credit unions that offer loans directly. You might also check with local credit unions that serve residents of your state or region.

To get started, here are three possibilities worth considering:

1. LendKey
2. Credit Union Student Choice
3. Navy Federal Credit Union

1. LendKey

LendKey works with hundreds of banks and credit unions to try to give you the best student loan and refinancing deals based on your needs and eligibility.

Its lender partners offer student loans with variable and fixed interest APRs. Fixed APRs start as low as 2.99% and variable APRs start at 4.13%. These APRs include an interest rate reduction of 0.25 percentage points for setting up autopay.

Loan limits and repayment terms can vary by credit union, but here are some other features LendKey’s lender partners offer:

  • You can qualify for cosigner release after you’ve met the lender’s payment and credit criteria.
  • You’ll experience a fast application and approval process.
  • You don’t have to pay application or origination fees.

2. Credit Union Student Choice

Like LendKey, Credit Union Student Choice works with hundreds of credit unions to try to get you the best offers in your area.

Credit Union Student Choice doesn’t provide specifics on interest rates and other terms, though. Instead, it asks for your ZIP code or school and points you to one or more credit unions that can help you.

Check Credit Union Student Choice’s list of approved schools to see if you’re eligible.

3. Navy Federal Credit Union

If you’re a military service member, a veteran, a Department of Defense employee or a family member of a current member or someone who’s eligible, Navy Federal Credit Union student loans might be a good option for you.

Navy Federal offers both private student loans and consolidation loans.

Here are some other highlights:

  • You can borrow up to your school’s certified cost of attendance.
  • Repayment terms go up to 15 years, including a grace period of up to five years while you’re in school and a 10-year repayment period.
  • If you have a cosigner, you can submit a cosigner release request after 24 consecutive, on-time payments.
  • You’ll pay no application or origination fees or prepayment penalties.
  • You can qualify for an interest rate reduction of 0.25 percentage points if you set up autopay.

Navy Federal doesn’t have any other financial products that stand out compared to the competition. But the credit union does offer some special discounts and deals to its members, including:

  • Up to 20% off Hertz rental cars
  • A special discount on GEICO auto insurance
  • Up to $8,000 cash back when you buy or sell your home with RealtyPlus
  • Extra loan interest rate discounts if you’re an active-duty or retired military member

Navy Federal has some strict eligibility requirements, so you might not qualify. But if you do, the discounts that come with membership and the credit union’s dedication to the military community might make it worth it.

What alternatives are there to credit union student loans?

Even if you like the idea of borrowing from a community-oriented financial institution, don’t immediately resort to credit union student loans without reviewing all of your options. You might find a better deal by looking for loans specific to your academic program, for example, or another aspect of your personal profile. And who knows, a credit union could be among the recommended lenders for that loan type.

Great private student loan options by…
Borrower Programs Other degrees Personal situation Lender feature
Part-time students Community college Associate degree Applying without a cosigner Cosigner release
International students Trade school Non-degree programs Bad or no credit Economic hardship forbearance
Adults returning to school Nursing school Hybrid interest rate
Graduate students Medical school
Parents Law school
Dental school
Business school

Should you opt for credit union student loans?

There’s no one right answer to this question. The biggest consideration with credit union student loans is determining whether you qualify for membership. If you do, you’ll need to compare the credit union’s interest rates, fees and other features to those of other top private student loan companies.

As you do your due diligence, you’ll have a better chance of picking the lender that offers you the best combination of features for your needs.

Rebecca Safier and Andrew Pentis contributed to this report.

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