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Compare credit unions to refinance student loans
You'll find easier eligibility criteria but longer turnaround times than other options.
Credit unions have a reputation for putting customers first, since each borrower is also a part-owner. They can sometimes offer more favorable rates and terms than other types of lenders because they’re nonprofits. But it might not be the right choice if you have federal loans or aren’t interested in becoming a member.
Compare credit unions for student loan refinancing
Not every credit union is right for all borrowers — especially since they’re typically only available to certain geographic areas or employees of a specific organization. On top of this, not all offer student loan products.
Here are five popular choices for refinancing your student debt.
PenFed Credit Union
PennFed Credit Union offers one of the most streamlined refinancing options for both student and parent borrowers. You can apply online even if you’re not a member using the online platform Purefy, which also speeds up the application process. It also services its own loans, meaning you won’t have to deal with another company when making repayments.
Unlike with PenFed’s other products, you don’t need to be a member of the military to become a member for refinancing. The downside is you need a cosigner if you make less than $42,000 a year. You also need a strong credit score to qualify — even with a cosigner — and borrowers who never completed their degree aren’t eligible.
- How much you can borrow. $7,500 to $300,000
- APRs. 3.23% to 5.53%
- Terms. 60 to 180 months
- Eligibility requirements. US citizen; 700 credit score to apply without a cosigner, 670 credit score with a cosigner that has a 720 credit score; at least one student loan; make at least $42,000 a year ($25,000 with a cosigner); willing to become a PenFed Credit Union member
- Servicer. PenFed Credit Union services its own loans
Alliant Credit Union
Like PenFed, Alliant uses another company to process its student loan refinancing applications, which makes for a faster, more user-friendly process. Plus, it has a longer range of terms and more relaxed requirements than some other credit unions.
But it only offers one repayment plan and is only available to borrowers who’ve worked with the same employer for the past six months.
- How much you can borrow. $3,000 to $60,000
- APRs. Starting from 4.56%
- Terms. Up to 12 years
- Eligibility requirements. Must be an Alliant Credit Union member, enrolled at least half-time in a degree-granting undergraduate or graduate program, have an annual income of $24,000+, a credit score of 680+, debt-to-income ratio of 43% or lower, no defaults on student loans and no bankruptcies in the past 3 years.
- Servicer. University Accounting Services
Navy Federal Credit Union
Like the previous two options, this credit union also uses a third party to handle the application process. It could be a good choice if you have over $100,000 in student debt — some credit unions have lower caps — or if you’d like to choose between fixed or variable rates.
However, you must either be a member of the US Armed Forces, Department of Defense or related to a member to join — which you must do during the application process.
- How much you can borrow. $7,500 to $175,000
- APRs. From 2.89%
- Terms. 60 to 180
- Eligibility requirements.Navy Federal Credit Union member, at least $2,000 monthly income, graduate of approved degree program, US citizen or permanent resident, meet underwriting credit criteria
- Servicer. LendKey
First Tech
First Tech offers a more traditional credit union loan than some of these other lenders. While it processes its own application, it’s relatively user friendly. It also services its own loans, so you won’t have to deal with a third party — making this a good choice if you’d prefer to keep everything in one place. Plus, you can become a member during the application process.
However, you might want to stay away from this option if you plan on going back to school. It doesn’t currently offer in-school deferment.
- How much you can borrow. Varies
- APRs. Fixed rates starting at 3.75% APR
- Terms. Up to 15 years
- Eligibility requirements. First Tech member, attended an eligible Title IV school, US citizen or permanent resident, proof of address, Social Security number, age of minority in your state
- Servicer. First Tech Credit Union
LendKey
- How much you can borrow. $7,500 to $300,000
- APRs. From 1.99%
- Terms. 5, 7, 10, 15 or 20 years
- Eligibility requirements. You must be a US citizen or permanent resident and have an undergraduate or graduate degree.
- Servicer. Varies
While not technically a credit union, this online platform can help you find a local credit union that offers student loan refinancing that you’re eligible for. It works with over 300 community lenders to help you prequalify with multiple student loan refinancing providers so you can compare rates and terms. You can also use this tool to find offers from small banks.
How do I refinance my student loans at a credit union?
The student loan refinancing process varies depending on the credit union. Before you get started, first make sure you’re eligible for a loan. If you are, you can typically apply online — even if it uses a third party to process the application.
How do I know if I qualify?
Unlike with other types of lenders, there are two types of eligibility requirements you have to meet:
- Membership eligibility
- Student loan refinancing eligibility
Start by checking the credit union’s website. If it’s not clear what the membership or refinancing requirements are, stop by a branch or call customer service to learn more.
Should I refinance my student loans with a credit union?
Refinancing student loans with a credit union isn’t the right choice for everyone. You might want to consider it in the following situations:
- You want to join a credit union. One of the main perks of borrowing from a credit union is that you get to become a partial owner. Don’t want to join? You can often find a similar deal at a local bank.
- You’ve made headway in your career. Many credit unions have minimum income requirements, and some don’t allow you to defer when you go back to school. You’ll generally have an easier time qualifying for more competitive rates if you’ve settled into a career.
- You have a creditworthy cosigner. Meeting all credit union requirements can be tough. You might have a better chance at a competitive rate if you apply with a creditworthy cosigner.
- You don’t plan on using federal benefits. Federal student loans come with benefits like income-driven repayments and eligibility for forgiveness programs that you’ll lose by refinancing.
Benefits of refinancing with a credit union
From its softer requirements to its cosigner release option, here are a few perks of refinancing with a credit union:
- Save by working with a nonprofit. All credit union profits go back into serving customers, which means they can often afford to offer more competitive rates than private lenders.
- Cosigner release. If you can’t qualify on your own, many credit unions offer the option to take your cosigner off your loan after making several on-time repayments.
- Softer requirements. Credit unions can be friendlier than banks to borrowers with a thin credit history or less-than-stellar score.
- Online and in-person service. While you can apply online, you often also have the benefit of visiting a local branch to speak with a representative if you have questions or concerns.
- Become eligible for other products. Once you’re a member, you can sign up for other products that your credit union offers, such as checking accounts and investment services.
Drawbacks of refinancing with a credit union
Consider these potential drawbacks before refinancing your student loans with a credit union:
- Restrictions to how much you can refinance. Some credit unions have low maximum borrowing amounts, meaning you might not be able to include all of your student loans when refinancing.
- Fewer online services. Often, these nonprofit lenders don’t have the resources to invest in making their website user friendly. Chances are you’ll have to pick up the phone or visit a branch at least once.
- Limited financial services. Your credit union might not be a one-stop shop for everything. Big national banks typically offer a wider range of services — as well as more branches and ATMs.
- Slower turnaround. While some credit unions have partnered with other companies to speed up the application process, they’re usually not as fast as going with an online lender.
Banks vs. credit unions vs. online lenders
Still not sure if a credit union is right for you? Let’s see how they compare to other student loan refinancing providers:
| Feature | Bank | Credit union | Online lender |
|---|---|---|---|
| Application process | Apply online or in person | Apply online or in person — but need to become a member beforehand or during the application process | Apply online |
| Credit requirements | Good credit typically required | Most credit types accepted with a cosigner | Most credit types accepted with a cosigner |
| Cosigners | Typically allowed — though not always with cosigner release | Typically allowed — with cosigner release | Typically allowed — with cosigner release |
| Availability | Available in all or most states | Often available in a few states or employees of a specific company | Available in all or most states |
| Maximum amount | Typically $100,000 to $300,000 | Typically $100,000 to $300,000 | Total student loan debt load |
Compare more options for student loan refinancing
Other ways to save on student loans
If you’re refinancing to save money, you might also want to consider these other options:
- Forgiveness programs. If you have federal loans, you might be eligible for full or partial forgiveness.
- Repayment assistance. The government and many private organizations offer partial loan forgiveness, depending on your career. And some companies even offer student loan repayment benefits.
- New repayment plan. Your lender might allow you to shorten your term if you want to pay off your loans faster and with less interest.
Bottom line
Refinancing with a credit union is a bigger step than refinancing with another lender. You have to become a member to apply, which might not be open to everyone. But it can give you access to more competitive rates and terms than you currently have, as well as offer more personalized service than an online lender.
Read about your other student loan refinancing options in our guide.
Frequently asked questions
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