Getting credit union student loans can be a smart move if you need more money after receiving other financial aid. Similar to big banks, credit unions offer private student loans to both students and parents. Sometimes the rates and benefits from credit unions can be the most competitive in the market. There may also be other long-term perks that come with borrowing through a credit union, such as discounts on other products and services.
How is a Credit Union Different from a Bank
While credit unions are similar to big banks in that they offer private student loans as well, there are some key differences between them. Unlike banks, these credit unions are not-for-profit organizations that are member-owned. Credit unions promote the well-being of their members and profits are returned back to credit union members in the form of higher savings rates, lower loan interest payments and rates, or reduced fees.
More >>> Pros and Cons of Credit Unions
Credit Union Private Student Loans
Private credit union student loans can help you pay for tuition, fees, books, supplies, and living expenses. You should only borrow private credit union student loans after you have exhausted financial aid that does not need to be repaid (i.e. grants and scholarships), and after exploring your (and your parent’s) federal student loan options.
Keep in mind that the school will need to certify any loan that is approved by the credit union to confirm your eligibility based on your academic program, and that your loan amount will not exceed your cost of attendance minus all other financial aid received. While credit union student loans offer competitive interest rates, they are not always the lowest option. We recommend that you shop around. Credit union student loans do offer flexible repayment terms and some of them also provide a multi-year line of credit. This means you can complete the application process once and simply go through a new credit review each year without repeating the paperwork.
Borrowing From a Credit Union
Much different from federal student loans, credit union student loans can only be borrowed by members of the credit union. Meaning, you must be a member, or be willing and eligible to join the credit union as a member in order to receive a credit union student loan. Some credit unions base membership on occupation or where you live, or you may be allowed to join if your parents or family members are already part of the credit union. There are also private and federal credit unions that cater to service members and veterans of the armed forces, such as USAA Federal Credit Union and Navy Federal Credit Union.
Apply for a University Credit Union Private Student Lending Solution
- Variable rate line of credit option allows you to apply once and secure funding for your entire college career.*
- Variable rates as low as 1.99% APR1; Fixed rates as low as 3.49% APR2
- Personalized 1:1 support at every step of the lending process.
- In-school deferment option
- 15-, 20-, and 25-year repayment terms available◊
- Cover any school-certified costs including tuition, housing, and books.
*Subject to credit qualification and annual review. Must continue to meet school’s Satisfactory Academic Progress (SAP) requirements. Credit union membership and minimum share deposit required.
**Approved schools subject to change without notice.
^The APR will not fall below the floor rate as stated in the account opening disclosure regardless of the index or any additional rate discount.
◊ Variable Rate Line of Credit Option: the repayment term is 20 years if your principal balance at repayment is $40,000 or less, and 25 years if your principal balance at repayment is more than $40,000.
Fixed Rate Loan Option: The loan term is a total of 15 years including a combined maximum of 4.5 years of in-school or grace period, and a repayment term of up to 10.5 years. Full repayment begins at the end of the grace period unless full repayment is selected during enrollment.
1Variable Rate Disclosures
The Annual Percentage Rate (APR) for our undergraduate private education line of credit is variable and is based on the Prime index plus a margin. The current offered rate will be between 1.99% and 10.49% APR. The Annual Percentage Rate is subject to increase after consummation. The interest rate will be adjusted quarterly, based on changes to the Index. The APR will not exceed 18.00% or fall below the floor rate regardless of the Index or any additional rate discount. Any increase in the Index may increase the APR and the amount of your monthly payment. The "Index" for the quarter beginning July 1st, 2021, is 3.25%, which was the Prime index published in the Wall Street Journal on the first business day of June 2021. Current offered rate(s) are calculated by using the index, margin and floor value(s) in effect. Your specific interest rate, margin, floor, and/or credit approval depends upon the credit qualifications of the student borrower and co-borrower (if applicable). Margin will be disclosed at account opening. Student borrowers may apply with a creditworthy co-borrower which may result in a better chance of approval and/or lower interest rate.
2Fixed Rate Disclosures
The Annual Percentage Rate (APR) for our undergraduate private education loan is fixed for the life of the loan. The current offered rate will be between 3.49% and 11.49% APR. Your interest rate is fixed and your rate and/or credit approval depends upon the credit qualifications of the student borrower or cosigner (if applicable). Your actual rate within the range stated will be disclosed upon approval.
Student borrowers may apply with a creditworthy coborrower which may result in a better chance of approval and/or lower interest rate.
All loans subject to approval and restrictions may apply. We reserve the right to change rates for new applications at any time and without notice. Credit union membership and a minimum share deposit is required.
Credit Union Student Loan FAQs
Do Credit Unions Refinance Student Loans?
Yes, a number of credit unions offer student loan refinancing. However, membership restrictions apply. If you are not currently a member of the credit union you want to use, you will need to meet the membership requirements and join the credit union first, before you can refinance your student loans.
Student loan refinance products are also very competitive. It is recommended that you compare your options before deciding on a bank or credit union.
Can You Get Student Loans Through A Credit Union?
Yes, as long as you are a member of that credit union and you meet the criteria for student loan eligibility, you are likely able to get a student loan.What Is The Minimum Credit Score For A Credit Union Loan?
Credit unions are all different and have no specific number for what a minimum credit score needs to be—it will vary between credit unions. Since credit unions are not-for-profit organizations, they will likely give loans to those who meet their specific standards and eligibility criteria for student loans.
If you’re unable to qualify for a credit union student loan on your own, you may be able to qualify with a creditworthy cosigner.
Benefits of Credit Union Student Loans
There are several benefits of working with credit unions. To start, credit unions are non-profit companies with a different mission than traditional banks. They focus on building relationships within the community and providing privileges to their members. Another unique feature, members are owners of the credit union. Some of the benefits members can receive are lower rates on different types of loans (such as auto loans and mortgages), as well as credit cards. Typically, savings accounts yield higher rates than traditional banks, and credit unions offer financial education and counseling to their members. Since credit union members are owner, they have the right to vote on board member elections. For military credit unions, there’s also help and resources available during deployment.
Credit Union Membership Requirements
All credit unions have membership requirements in order to join. There are different requirements for every credit union. Here are some of the most common types of membership requirements:
- Government employees
- Military personnel
- City and county employees
- Teachers unions
- Community charters (as long as you live/work in a particular community, a credit union may welcome you to join)
- College students (some universities have their own credit unions)
- Family members (spouse, kids) of a credit union member
Credit Unions are a great resource for new student loans or refinancing existing student loans, especially if you are already a member or qualify for membership. They offer another option to supplement your financial needs for college and in some cases will save you money when compared to traditional lending institutions.
Potential Drawbacks for Credit Union Student Loans
While the possibility of better interest payments and flexible lending standards may have you excited about getting a student loan through a credit union, there are some drawbacks to consider when choosing one as your lender.
- You are required to join the credit union
- Not all credit unions offer student loans
- Your credit history and credit score will be reviewed
- You may require a co-signer depending on credit score and maximum loan amount
