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If you’re considering student loan refinancing, there are several lender options to choose from — including credit unions. Because credit unions are nonprofit organizations, a credit union student loan refinance might come with lower interest rates compared to banks.
Here’s what you should know about refinancing student loans with a credit union:
- 4 credit unions for refinancing student loans
- How to refinance student loans with a credit union
- Pros and cons of refinancing through a credit union
- Compare multiple lenders to get the best student loan refinancing rate
4 credit unions for refinancing student loans
Here are a few credit unions that offer student loan refinance. Note that PenFed is a Credible partner lender.
| Lender | Fixed rates from (APR) | Variable rates from (APR) | Min. credit score | Eligibility |
|---|---|---|---|---|
| First Tech Federal Credit Union | Check with lender | Check with lender | Check with lender |
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| Navy Federal Credit Union | Check with lender | Check with lender | Check with lender |
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| PenFed* | 5.49%+ | N/A | 670 |
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| Service Credit Union | Check with lender | Check with lender | Check with lender |
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All APRs reflect autopay and loyalty discounts where available |
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| * Note: This lender is a Credible partner. | ||||
First Tech Federal Credit Union
Best for: Borrowers who expect to earn more income in the future
First Tech Federal Credit Union offers student loan refinancing for both private and federal student loans, including Parent PLUS Loans.
Refinancing with First Tech could be a good option if you expect to earn more income in the future. You can start off with lower monthly payments through First Tech’s Balloon Loan or Interest-Only Loan and then make larger payments later on.
Navy Federal Credit Union
Best for: Military service members and their families
With Navy Federal Credit Union, you can refinance both private and federal student loans. Parents also have the option to combine loans from multiple children.
If you have a small income, refinancing with Navy Federal might be easier to qualify for — you must make at least $24,000 per year (or $1,200 if you have a cosigner).
PenFed
Best for: Spouses who want to consolidate their student loans together
PenFed offers both fixed-rate refinancing for any federal or private student loan. As of 2020, PenFed is also the only lender that allows spouses to refinance their loans together.
PenFed could also be a good option if you’re looking for a short cosigner release period — you can apply for cosigner release after 12 months of consecutive on-time payments.
Service Credit Union
Best for: Borrowers who attended a public or private not-for-profit school
If you graduated from a public or private not-for-profit school, then you might qualify for student loan refinancing with Service Credit Union. Refinancing your loans through Service Credit Union might be a good idea if you’re looking for flexible repayment terms.
Learn More: When to Refinance Student Loans
How to refinance student loans with a credit union
If you’re wondering how to refinance student loans with a credit union, follow these four steps:
- Shop around and compare credit unions: Be sure to compare as many credit unions as possible to find the right loan for you. Consider not only interest rates but also repayment terms and any fees charged by the credit union. Remember that you’ll need to join the credit union to qualify for refinancing, too, so double-check that you’ll be eligible for membership.
- Pick the loan option you like best: After comparing credit unions, choose the loan option that suits your needs.
- Fill out the application: At this point, you’ll need to complete a full application and submit any required documentation, such as pay stubs or tax returns. The lender will review your credit and debt-to-income (DTI) ratio to determine your eligibility and ability to repay the loan. Keep in mind that each lender has its own minimum credit score for refinancing.
- Sign for your loan: If you’re approved for refinancing, you’ll need to sign for the loan. Be sure to continue making your payments on your old loans until your new loan is processed.
On the other hand, refinancing private student loans could be a good option. You might qualify for a lower student loan interest rate through refinancing, reducing the overall cost of your loan. As private student loan forgiveness unfortunately doesn’t exist, refinancing could be a simple way to more easily repay your loans.
You can use our calculator below to see how much you can save by refinancing your student loans.
Step 1. Enter your loan balance
Step 2. Enter current loan information
Step 3. Enter your new loan information to start calculating your savings
If you refinance your student loan at % interest rate, you can save will pay an additional $ monthly and pay off your loan by . The total cost of the new loan will be $.
Does refinancing make sense for you?
Compare offers from top refinancing lenders to determine your actual savings.
Checking rates won’t affect your credit score.
Check Out: Cost to Refinance Student Loans: Fees & Discounts Explained
Pros and cons of refinancing through a credit union
While credit unions might seem similar to banks and online lenders on the surface, there are some important differences to keep in mind, too. Here are some pros and cons to consider as you weigh your options:
Pros
- Lower interest rates: Because credit unions are nonprofit organizations, they tend to offer lower interest rates compared to what you’d get with a bank.
- Fewer fees: Another perk of working with a nonprofit credit union is that they often charge fewer fees compared to other lenders.
- More personalized service: Credit unions tend to be more community-focused, which means you might enjoy a better customer experience.
Cons
- Must be a member: While you might not have to be a member of the credit union to apply for refinancing, you’ll have to join if you are approved and want to accept the loan.
- Lower limits for refinancing: Credit unions often have lower loan maximums compared to banks and online lenders. If you’re looking to refinance a large amount, you might have to consider another lender.
- Limited services: Credit unions are often smaller organizations, which means you might not enjoy as wide of a range of services available as a bank. For example, credit unions sometimes lag behind online banks and specialized online lenders when it comes to technology and the online user experience.
| Credit unions | Banks | Online lenders | |
| For profit | No | Yes | Yes |
| Physical branches available | Yes | Usually yes | No |
| Location | Local or nationwide | Local or nationwide | Nationwide |
| Banking available | Yes | Yes | Depends on the lender |
| Online lending available | Depends on the lender | Depends on the lender | Yes |
Learn More: Pay Back Student Loans
Compare multiple lenders to get the best student loan refinancing rate
Before you refinance your student loans, it’s critical to consider as many lenders as possible to find the right loan for your needs. This will also help you secure a rate that’s best for you.
If you’ve already decided to refinance with a credit union, it’s a good idea to research credit unions local to your area, as they might come with more perks and advantages.
If you have less-than-perfect credit and are struggling to get approved, consider applying with a cosigner to improve your chances. Even if you don’t need a cosigner to qualify, having one could get you a lower interest rate than you’d get on your own.
Find your loan score
If you’re wondering how competitive your loan is — and whether refinancing is a good idea — the loan score tool below can help. Just enter your APR, credit score, monthly payment, and remaining balance (estimates are fine) to see how your loan stacks up.
Keep Reading: Private Student Loan Consolidation
