Why Should You Refinance Student Loans with a Credit Union?
Student loans may have helped you get the education needed for your future career, but making student loan payments can also be a pain point in your monthly expenses. Refinancing one or more of your loans could save you money and simplify your repayment. Before you determine where you should refinance your student loans, you should consider if it’s a smart decision for you.
What is Student Loan Refinancing?
Refinancing is when a borrower takes out a new loan with different terms. The new lender (such as a credit union or bank) pays off the rest of the old loan(s). The borrower then makes payments on the new loan. There are many reasons you may choose to refinance student loans:
- Locking in a lower interest rate could save you money over the life of your loan
- Extending the repayment term of the loan could save you money each month on payments (though you may ultimately pay more in interest)
- Getting all your outstanding student loans under your name by combining PLUS loans and other student loans could simplify your repayment
Keep in mind that you don’t have to refinance all of your student loans – only those that make sense. Federal student loans come with certain benefits such as income-based repayment or student loan forgiveness that you could lose if you decide to refinance with a private lender.
Why Should You Refinance with a Credit Union?
Once you’ve decided to refinance one or more of your student loans – how do you find the right lender? A web search will return countless banks, credit unions, fintechs, and other lenders. But credit unions come with a lot of benefits you won’t find elsewhere.
Their Cooperative Spirit Means Lower Rates
Credit unions were started by people who wanted to pool their money and loan it to others in need – the original crowdfunding, which is why they are known as “financial cooperatives.” The dollars invested in big banks land in the pockets of big investors; credit unions are dedicated to serving their members, who are actually stakeholders in their business. When you become a member of a credit union, you’re helping your fellow members as well.
Because of their cooperative nature, credit unions offer their members more favorable rates and fewer fees than big banks. You can check out the low rates of leading credit unions in one spot with our credit union finder tool.
Personalized Service and Education
One of the perks of doing business locally is that you’ll often see the same faces working in your financial establishment as you’ll see shopping in your grocery store. They may even know you by name! In addition, Student Choice provides another level of personal support, with one-on-one help from our team of experts. You’ll have a real person to speak with any time you have questions about your student loan refinance, the application, or process.
Support Your Local Community
While credit union membership was once available only to small, select groups, nearly everyone is now eligible to join a credit union! Some credit unions offer a nationwide field of membership, but most stay focused on a local geographic region. Chances are if you borrow from a credit union, you’ll see its logo on community event sponsorships and its employees volunteering in your area.
Lifelong Financial Partner
Credit unions offer more than just student loan products. You can establish a checking account, savings account, and possibly other loans in the future, all under one roof. Many credit unions also offer auto loans and mortgages, making them your partner for all of the major milestones in your life. Plus you’ll continue to reap the benefits of low/no fee accounts and lower interest rates that come with your membership.
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