Are Credit Unions a Smart Idea for Student Loan Refinancing?

By Kat Tretina Updated on May 3, 2019

If you're struggling with student loans, you’re not alone. On average, graduates leave school with $37,172 in education debt. Worse, it takes most people nearly 20 years to pay off the loans in full.

If you’ve decided to tackle your debt by refinancing your student loans, going through a credit union instead of a traditional bank can be a smart choice that can save you money. Even better: There's a new, innovative lending platform that can make finding the best deal a whole lot easier. Let's talk about how to find a loan through LendKey


What is a credit union?

Unlike banks, credit unions are non-profit organizations. When you join a credit union, you become a member, and may even gain voting rights for the institution. Credit unions often offer the same services as a traditional bank would: savings and checking accounts, home mortgages, and even student loan refinancing.

But because they’re non-profits, credit unions sometimes offer lower interest rates and more reasonable repayment terms than other financial institutions.That lower interest rate can help you save a significant amount of money over the length of your repayment term.

By refinancing with a credit union, you could also exercise the option to extend your repayment term and dramatically reduce your monthly bill. You’ll pay more in interest over time, but this approach can give you much-needed breathing room if you need to increase your monthly cash flow.  

Use our student loan refinancing calculator to find out what your monthly payment could be after completing the process.

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How to get the best rates through a credit union

Before moving forward with refinancing, it’s a good idea to compare offers from multiple lenders so you get the best rates. If you want to go through a credit union, there are two different ways to do so.

1. Find a local credit union

You can shop around for a local credit union on your own. Ask friends or family members for recommendations, or you use an online tool like the Credit Union Locator to find one near you.

Once you find one, you can become a member by completing an application and, in some cases, paying a small fee.

The downside to this approach is that it can require a lot of work on your part to find local credit unions, research their student loan refinancing options, and compare their rates.

Thankfully, there’s an easier way.

2. Use LendKey to compare offers from multiple credit unions

If shopping around on your own sounds too hard or confusing, try using LendKey as a super-efficient alternative.

LendKey works differently than other financial institutions. When you apply for student loan refinancing through LendKey, it connects you to hundreds of credit unions and community banks nationwide.

You only need to submit your information once, but you'll receive multiple offers, giving you a better chance of getting approved for a loan and scoring a lower interest rate.

Plus, LendKey does a soft credit inquiry rather than a hard inquiry, meaning you can get a quote for a loan without damaging your credit score.

If you take a loan with a LendKey partner lender, LendKey will become your loan servicer. That means you'll be able to easily manage your account through LendKey's easy-to-use platform.

Because LendKey works with credit unions and community banks, you can also count on a higher level of customer service. And, the money that the credit union earns from your loan is reinvested in the local community, so you’re paying it forward, too.

Tackle your student loan debt

Dealing with student loan debt can be challenging, but student loan refinancing can help make your debt more manageable and can help you achieve your financial goals.

If you’d like to learn more about student loan refinancing, get a quote and compare offers from multiple lenders through LendKey.

Learn more about LendKey by reading our in-depth review

Published in: Refinance

About the Author
Kat Tretina

Kat Tretina is a freelance writer based in Orlando. Specializing in personal finance, she is focused on helping people pay down their debt and boost their incomes. Her work has been feature din publications like The Huffington Post, Entrepreneur, and U.S. News. Read more by Kat Tretina