Best Credit Union Student Loans for Your Needs. A college education can be expensive. Sometimes federal loans, scholarships, and savings aren’t enough to cover tuition and living costs. That’s where credit union student loans come in.
Private student loans from a credit union look and act very similar to those from banks. They are available to students who meet specific requirements, like a cosigner who is also a member.
1. Lower Interest Rates
As not-for-profit organizations, credit unions prioritize serving their members above all else. This focus allows them to offer borrowers favorable loan terms, including lower interest rates than banks.
For borrowers who are new to the world of borrowing and loans, this can be a huge benefit. In addition to offering a competitive rate, credit unions also often offer personalized information and advice as you navigate the loan process and make payments. This can be particularly important for students who may be navigating the repayment of student loans after graduation.
Another way that credit unions can offer better loan terms than other lenders is through their relationship with Sallie Mae, the largest provider of private student loans in the US. Credit unions like Best Reward partner with Sallie Mae to provide borrowers with the best possible loan options. Because of this partnership, many Best Reward members receive lower interest rates than they would through a typical bank or online lender.
Credit unions are also typically less strict about their membership criteria than banks. This can be helpful for borrowers who don’t meet the traditional requirements to qualify for a student loan but have a good financial history or a solid co-signer. In addition, some lenders only offer their loans through certain credit unions, so be sure to check out which ones offer the type of loan you need before applying.
Lastly, because credit unions operate as not-for-profit entities, they don’t have the same level of overhead and expenses that banks do. This can also help them pass on savings to their members in the form of lower interest rates on their student loans.
While a college education is an investment that can open doors, it’s not always easy to pay for. Even with scholarships, grants, and loans from family or friends, many students are left with gaps in their funding that need to be filled with private student loans. To fill this gap, some banks are partnering with credit unions to provide better loan terms than their competitors, helping to keep debt affordable for students.
2. More Flexibility
Credit unions are known for their personalized approach to lending and often have a more flexible loan approval process. As a result, they can be a great choice for students who need loans that go beyond what their federal student loans and savings can cover. In addition, credit unions may offer lower fees than banks. However, there are some things to consider before choosing a credit union for your student loan.
For example, some credit unions have strict membership requirements, while others may only be open to certain types of employees. If you don’t meet these requirements, you won’t be able to take out a student loan from that institution. This is why it’s important to research different credit unions and see if they have the right lending criteria for you.
Also, some credit unions require a minimum credit score to qualify for their student loans, while others use other factors to assess your application. Lastly, you should understand how the credit union will handle cosigners before making your decision. Some lenders allow you to release your cosigner after a certain amount of on-time payments, while others require the cosigner to remain responsible for the loan until it is paid off.
While credit unions can be a good source of private student loans, you should try to max out your federal student loans before taking out a private loan. This will help keep your debt to a manageable level and can help you avoid paying higher interest rates in the future.
Another option is to look for a lender that offers an income share agreement (ISA). This type of loan provides funding for college based on your future salary, so you can pay back your loans with a more manageable amount of money. This can be a great option for students who want to stay close to home but are having trouble finding enough grants and scholarships to cover all their expenses. You can find ISAs at some credit unions and community banks, as well as many other companies that specialize in education loans.
3. Better Customer Service
In a world of online banking and automated call center support, credit unions are famous for the level of personal service they provide. This can make a difference for borrowers who want to feel like they are not just an account number, but a valued customer.
For student loan borrowers, it can mean a better experience in managing their debt and repayment. Credit unions are often able to offer flexible repayment terms and can work with borrowers who may not meet strict bank credit criteria, or have extenuating circumstances.
Because they are owned by their members, not shareholders, credit unions prioritize the needs of the community over profits. This translates into lower fees, better rates, and more personalized service. This is also why many consumers find that they are more satisfied with their credit union experience than with national banks and online lenders.
While they may not be the best choice for every borrower, credit unions offer an option that is worth exploring. In addition to offering student loans, they can be a great resource for other financial products. For example, some credit unions have partnerships with online lending platforms to source qualified borrowers. This allows them to offer a personalized and branded lending experience without investing in costly marketing.
It’s important to remember that although credit unions are an excellent choice for students, they do not offer federal student loans. They are private student loan providers, and their loans do not have the same perks as federal student loans. If you plan to refinance your student loans, it is recommended that you only do so to a federal loan provider to keep your income-based repayment options and loan forgiveness benefits intact. If you’re considering a private student loan, be sure to compare all of your options and choose one that will suit your needs. You should also consider whether you’re able to meet the loan qualification requirements, including minimum credit scores and other eligibility criteria.
4. More Options
Credit unions are known for their personalized and member-centric approach to financing, which is a big reason why they offer better loan terms than banks do. They also tend to be more flexible than traditional lenders when it comes to borrowers with unique financial circumstances, such as those who have struggled to manage their debt in the past or are seeking to rebuild their credit.
Credit union student loans are private loans that work similarly to those provided by banks, and they can be used to subsidize any remaining gaps in college costs not covered by federal loans. As a general rule, credit union student loans have more competitive interest rates and lower fees than those offered by banks. They may also come with a range of different repayment options, including deferment, income-based and pay-as-you-go plans, and loan forgiveness after 25 years or 30 years (known as PSLF).
One of the main things to keep in mind when shopping for a credit union student loan is that students will need to be members of the specific credit union that they want to borrow from to receive the best rates and the most favorable borrowing conditions. However, most credit unions allow current and former members, along with immediate family members of those who are currently members, to apply for membership. This can provide a viable option for borrowers who may not be able to meet the strict requirements of some credit unions but still have a strong chance of being approved for student loans at other institutions.
Some credit unions have taken the lead in offering student loans, including Navy Federal, which offers a wide variety of flexible loan options. These include Smart Option Student Loan for Undergraduates, which has super low rates, Parent Loan, which allows parents to combine loans on behalf of their children and even refinance federal Parent PLUS loans, and Graduate Student Loan, which can be used for law school, medical school or MBA programs.
Another option is Ascent, a lender that provides non-cosigned loans for undergraduate and graduate students as well as DACA borrowers. This company has a unique approach to its lending, which includes assessing the student’s academic performance, GPA, and cost of attendance in addition to their credit history. As a result, Ascent offers a range of repayment options that can be customized to fit the needs of each borrower, from interest-only payments to fixed monthly payments and even a nine-month grace period.