How to find the best credit union student loans for you


Note that the government has suspended all federally held student loan repayments until the end of 2022, with no interest to be charged during this time and no loans to be held past due 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 student loans from credit unions in addition to loans offered by major banks and online lenders.

Not only do student loans from credit unions offer competitive terms, but they can also provide a better overall experience. In order to decide if they are right for you, let’s answer the following questions:

Student loans between banks and credit unions: what’s the difference?

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

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

On the other hand, credit unions are non-profit enterprises that return profits to their members through higher savings returns, lower loan interest rates, and better service. These are among the advantages of credit union loans for students.

Credit unions often serve a specific, regional or organizational community. They can better understand the needs of their members because they are 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 student loans or other financial products. In some cases, you may not qualify based on a credit union‘s eligibility criteria.

Benefits of Student Loans from Credit Unions Disadvantages of student loans from credit unions
● Credit unions are not strictly profit-oriented
● Low and competitive interest rates
● Potential for more personalized customer service
● Membership in a credit union may be required
● Eligibility requirements may be restrictive
● Benefits offered by banks may not be offered by online lenders

Where can you find competitive student loans for credit unions?

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

To get started, here are three options to consider:

1. LendKey
2. Choice of Credit Union Students
3. Federal Naval Credit Union

1. LendKey

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

Its lending partners offer student loans with variable and fixed interest rates. Fixed APRs start as low as 2.49% and variable APRs start at 2.05%. These APRs include an interest rate reduction of 0.25 percentage points for setting up automatic payment.

Loan limits and repayment terms may vary from credit union to credit union, but here are some other features offered by LendKey’s lending partners:

  • You may be eligible for co-signer release after meeting the lender’s payment and credit criteria.
  • You will experience a fast application and approval process.
  • You don’t have to pay any application or set-up fees.

2. Choice of Credit Union Students

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

However, Credit Union Student Choice does not provide details on interest rates and other terms. Instead, it asks for your zip code or school and tells you one or more credit unions that can help you.

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

3. Federal Naval Credit Union

If you are a military service member, veteran, Department of Defense employee or family member of a current member or someone who is eligible, Navy Federal Credit Union Student Loans could 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 tuition.
  • Repayment terms are 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 co-signer, you can submit a co-signer release request after 24 consecutive, one-time payments.
  • You will not pay any application or set-up fees or prepayment penalties.
  • You can benefit from an interest rate reduction of 0.25 percentage points if you set up automatic payment.

Navy Federal has no other financial products that stand out from the competition. But the credit union offers discounts and special offers to its members, including:

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

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

What alternatives are there to student loans from credit unions?

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

Should you opt for student loans from credit unions?

There is no right answer to this question. The biggest consideration with student loans from credit unions is determining if 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 major private student loan companies.

By doing your due diligence, you’ll have a better chance of choosing the lender that offers you the best combination of features for your needs.

Rebecca Safier and Andre Pentis contributed to this report.

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