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How to Refinance Student Loans Using a Credit Union

How to Refinance Student Loans Using a Credit Union
Rebecca Safier
Rebecca SafierUpdated June 14, 2022
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
If you’re looking to refinance your student loans for better rates, consider refinancing with a credit union. As member-owned nonprofit institutions, credit unions may be able to offer better rates and more flexible borrowing requirements than for-profit institutions. Here’s what you should know about refinancing with a credit union, along with recommendations for some credit unions that offer student loan refinance. 

Pros and Cons of Refinancing With a Credit Union

Credit unions are nonprofit institutions, so they sometimes offer better rates and lower fees to their members than for-profit banks. Credit unions also tend to be known for more personalized customer service, which can lead to higher customer satisfaction. That said, credit unions are not guaranteed to offer better rates than traditional banks or online lenders. It’s still a good idea to shop around and compare your options.Plus, some credit unions set a lower cap on student loan refinance amounts, making it difficult to qualify if you have a large loan balance. Finally, it’s important to note that you typically must meet membership requirements to refinance your student loans with a credit union. Recommended: How to Lower Your Student Loan Interest Rate: 7 Easy Ways

Credit Unions for Student Loan Refinance 

There are over 5,000 credit unions across the U.S. serving more than 125 million members. The following is a list of the four biggest credit unions that offer student loan refinance, based on 2021 asset size data from the National Credit Union Administration and compiled by financial data company MX Technologies, Inc. You’ll also learn about LendKey, a financial marketplace that helps you find credit union student loan refinance offers.You can use this credit union locator to find other credit union student loan refinance options or check with your college to see if it offers a credit union to alumni. 

Navy Federal Credit Union

Navy Federal Credit Union offers both fixed and variable rates on refinanced student loans. If you’re a parent borrower, this credit union also gives you the option to combine loans you borrowed for multiple children into one. You can choose repayment terms between five and 15 years, and you’ll get a 0.25% interest rate discount if you sign up for autopay. Borrowers who apply with a cosigner have the option of releasing their cosigner after they’ve made 12 consecutive, on-time payments. Membership requirements: 
  • Be on active duty, a retired service member, or a veteran, or be a family or household member of someone who is 
  • Be a Department of Defense (DoD) employee, retiree, or other DoD civilian  

PenFed Credit Union

PenFed Credit Union is an 85-year-old financial institution that offers fixed-rate student loan refinancing. You can check your rates with PenFed online with no impact on your credit score. You can refinance between $7,500 and $500,000 with PenFed and have the option of applying with a cosigner.Membership requirements:
  • Open to everyone 

Boeing Employees’ Credit Union (BECU)

BECU lets you refinance between $10,000 and $125,000 in student loans. You must be a graduate or a guardian of a graduate who took out student loans on your child’s behalf. BECU’s refinanced student loans have fixed rates, no origination or application fee, and a 0.25% interest rate discount when you sign up for autopay. Membership requirements: 
  • Live, work, worship, or go to school in Washington state 
  • Live in an eligible country in Oregon or Idaho 
  • Be a member of a BECU partner association
  • Be an employee of BECU, Boeing, or another credit union 

First Tech Federal Credit Union

First Tech Federal Credit Union offers fixed-rate student loan refinancing with no application fees, origination fees, or prepayment penalties. If you qualify, you can choose loan terms between five and 15 years and won’t have to make payments for 90 days. You must refinance a minimum of $5,000 if you opt for a five-year repayment term or at least $10,000 for a 10-year term. The maximum amount you can refinance on any term is $500,000. Membership requirements: 
  • Have a family member or household member who is already a First Tech member
  • Work for a company on First Tech Federal Credit Union’s partner list or for the State of Oregon
  • Work or live in Lane County, Oregon
  • Belong to the Computer History Museum or the Financial Fitness Association

LendKey Student Loan Refinance

LendKey is an online marketplace that partners with credit unions to bring you student loan refinancing offers. Through LendKey, you can enter your information once and compare multiple credit union refinance offers.  LendKey’s rate check tool relies on a soft credit check, so checking your offers won’t impact your credit. If you see an offer you like, you can apply directly with the credit union. Some of LendKey’s credit union partners include Veridian Credit Union, University Federal Credit Union, and Zeal Credit Union. 

What Makes Credit Unions Different Than Other Refinancing Options?

Credit union student loan refinance isn’t very different from other refinancing options, but you might be able to find lower interest rates, more flexible borrowing requirements, or more personalized customer service. At the same time, credit unions don’t always offer the same technology or online user experience as for-profit institutions. For instance, not every credit union will let you prequalify for a loan online with a soft credit check. The other main difference is that you must become a member of a credit union to refinance. Although you might be able to check your rates at any time, you’ll need to apply for membership before you can finish the student loan refinancing process. 

Choosing the Best Credit Union for Student Loan Refinance 

If you’re looking into credit union student loan refinance, make sure to shop around and compare multiple offers so you can find the best rate. You might also look for other student loan refinancing benefits for members, such as interest rate discounts or the option of cosigner release. Make sure you understand the difference between prequalifying and submitting a full application so you don’t hurt your credit score as you shop for a loan. Along with comparing rates, keep an eye out for credit union membership requirements. Make sure you’re eligible to join so that refinancing student loans is an option. 

Alternatives to Credit Unions for Student Loan Refinancing

Credit unions aren’t the only financial institutions that offer student loan refinancing. You might check out offers from banks and online lenders. Your current bank might offer interest rate discounts if you’re an existing customer. Many online lenders also offer competitive rates and let you prequalify with no impact on your credit score

Student Loan Refinancing Options With Lantern

Perhaps more important than the type of institution you choose is the rate you get on your refinanced student loan. Every lender sets its own rates and borrowing requirements, so it’s worth shopping around to find the best offer for you. Fortunately, you don’t have to submit multiple applications to check your rates. Through an online marketplace like Lantern, you can provide a few pieces of information and see offers from multiple lenders in a matter of minutes. Before you pursue the benefits of refinancing student loans, it’s worth noting the potential downside of refinancing federal loans. Although it’s possible to refinance federal student loans, doing so means you lose access to federal programs, which may or may not be important to you.Learn more about how Lantern can help you find and compare student loan refinance options

Frequently Asked Questions

Do credit unions offer student loan refinance?
What is the best way to refinance student loans?
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About the Author

Rebecca Safier

Rebecca Safier

Rebecca Safier has nearly a decade of experience writing about personal finance. Formerly a senior writer with LendingTree and Student Loan Hero, she specializes in student loans, financial aid, and personal loans. She is certified as a student loan counselor with the National Association of Certified Credit Counselors (NACCC).
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