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What is a Credit Union Student Loan

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.

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

Recommendation
Best for Private Loans
Interest Rates

Variable Rate Line of Credit: 1.99% APR – 11.49% APR1

Fixed Rate Loan: 3.49% APR – 11.49% APR2

Repayment Terms

20 or 25 years for variable rate LOC

15 years for fixed rate loan

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
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