Should You Refinance Your Student Loans With a Credit Union?

credit union student loans

When you’re refinancing your student loans, choosing the right lender makes all the difference. You want a lender with low rates that can offer you a deal — while also providing you with a great customer experience.

Considering the above, is it better to refinance with a credit union over a traditional bank? After all, unlike banks and other lenders, credit unions are not-for-profit financial institutions. They invest profits back into their services and membership, and are known for their customer service.

This means credit union student loans are often some of the best deals out there, including when it comes to refinancing. Here’s how to decide if a credit union is right for you, as well as how to find the best credit union student loans and refinancing deals.

How to find a credit union to refinance student loans

Credit unions can be a smart option to refinance or consolidate student loans. They offer competitive interest rates with a member-oriented model of service. Because they are not-for-profit, credit unions can also be more flexible in their underwriting standards. So you might find it easier to qualify for student loan refinancing with a credit union.

However, credit unions have specific membership requirements, so you can’t join just any credit union. And not every credit union offers student loan refinancing. Here are some credit unions to consider when you’re looking to refinance your student loans.

LendKey

One of the quickest and easiest ways to find a credit union to refinance your student loans is with LendKey. LendKey is a network that connects borrowers with hundreds of credit unions and community banks that offer student loan refinancing.

With LendKey’s rate check tool, you provide a few pieces of information about yourself and your student loans. LendKey will perform a soft credit check – it won’t affect your credit.

Based on the information you provide, LendKey returns a list of personalized student loan refinancing offers from credit unions and other lenders. Having one place to check multiple student loan refinancing offers at once means you can easily compare rates and choose the terms that best fit your needs.

Read our full LendKey review for a rundown on how to use this network to find a deal on student loan refinancing.

National credit unions

In addition to LendKey, you might want to check out these larger credit unions that almost anyone can join — and that offer student loan refinancing.

Alliant Credit Union

Alliant Credit Union can refinance up to $100,000 in private and federal student loans. Rates start at 4.00% APR with repayment terms up to 25 years.

Alliant Credit Union is based in Illinois, but almost anyone can become eligible to join by donating $10 or more to Foster Care to Success.

Navy Federal Credit Union

Navy Federal Credit Union’s student loan refinancing rates start as low as 3.27% APR (after a 0.25% discount for automatic payments). New student loans have terms of five, 10, or 15 years.

Navy Federal Credit Union offers membership to U.S. Armed Forces and other military and defense organization members, as well as their family members. Visit Navy Federal Credit Union to find out more about joining this credit union.

PenFed Credit Union

Pentagon Federal Credit Union, or PenFed, has partnered with Purefy to offer student loan refinancing. Through refinancing, members can get new student loan rates as low as 3.50% APR with terms of five to 15 years.

PenFed has broad membership eligibility guidelines. You can pay $17 a year for dues to join either Voices for America’s Troops or National Military Family Association and become eligible for membership with PenFed.

Find a credit union on your own

You might already be eligible to join a credit union that offers a great deal on student loan refinancing. For instance, many college students and alumni might be able to join a college credit union associated with their alma maters. Or you could qualify to join a local credit union based on where you live, work, or worship.

Check around your community and see if anyone you know has a credit union they just love. You can also use this credit union locator from the National Credit Union Association to find credit unions in your community.

Weighing credit union student loan refinancing

If you choose to refinance with credit union student loans, you’ll have the usual considerations of refinancing. Make sure you’re asking yourself the right questions about refinancing student loans and weighing any benefits against potential downsides.

Sure, you can get a lower interest rate by refinancing, but you’ll also lose out on federal student loan protections. These could include deferment, access to affordable repayment plans, and participation in Public Service Loan Forgiveness and similar programs.

Then there are the considerations specific to refinancing student loans with a credit union. Here are a few things to take into consideration as you compare credit unions with other lenders.

Am I eligible for membership with this credit union?

As mentioned above, you won’t be able to join just any credit union. Many have specific membership criteria which you’ll have to meet. Make sure you can actually join the credit union before you request a rate estimate.

Can this credit union meet my student loan refinancing needs?

Credit unions are smaller lenders, and student loan refinancing is just one of many products they usually offer. Because of this, many credit unions offer student loan refinancing terms that are a little more limited than what big or national lenders provide.

For instance, some credit unions set a limit on how high of a student loan balance they will refinance. Credit unions also might have more limited repayment terms. You will also want to check if you have specific needs, such as needing to refinance with a cosigner, to ensure the credit union you’re interested in offers this option.

Is it better to refinance with a credit union?

Lastly, don’t assume that any offer from a credit union is the best deal out there for you. Credit unions do have competitive student loan refinancing rates, but you should still shop around and compare offers from other lenders, too.

As previously mentioned, most credit unions and lenders can collect preliminary information and run a soft credit check to give you a personalized refinancing offer. This will include the rate you’re likely to be offered, as well as your options for the length of a new loan and other terms of the new student loan.

Complete this process with a few lenders, including LendKey or your credit union of choice. Then you can look at each offer and decide which is the best fit for your needs.

Refinancing with credit union student loans

Once you’ve compared your rate offers and choose the best one, what are your next steps? If you’ve chosen a credit union, the next step is to officially apply to refinance your student loans.

The process of refinancing student loans with a credit union is very similar to what you’d encounter with other lenders. Credit unions will want to perform a full credit check and get proof of income as part of their underwriting process.

There might be one additional step for consolidating student loans with a credit union: becoming a member. In addition to applying to refinance a student loan, you’ll likely also need to apply for credit union membership. Check with the credit union to find out if you can apply for both at the same time, or if you need to become a member before applying to refinance your student loans.

Interested in refinancing student loans?

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