Should You Refinance Your Student Loans With a Credit Union?

Updated on February 6, 2024

At a Glance

  • Determine if refinancing student loans with a credit union is the right choice by assessing your current loan.
  • Research various credit unions to find those offering competitive rates and terms.
  • Compare rates, terms, and customer service to make an informed decision.
  • Check eligibility criteria to ensure you qualify for refinancing with the chosen credit union.

So you’re thinking about refinancing your student loans? Well, bravo to you for taking the initiative to explore your options! One option that’s worth considering is to refinance with a credit union. But before you dismiss this idea, let’s take a closer look at why credit unions just might be your golden ticket to financial freedom.

How to Know If You Should Refinance

Refinancing your student loans with a credit union can be a useful tool if it make sense. But how do you know when it makes sense? The truth is, circumstances are different for everyone, but below we’ll offer five steps to determine if you should refinance your student loans.

  • Step 1: Assess Your Current Situation Evaluate your existing loan terms, interest rate, monthly payments, and any associated fees. Consider whether your current loan aligns with your financial goals and if you’re satisfied with your current lender’s service.
  • Step 2: Research Credit Union Options Look into credit unions in your area or those you’re eligible to join. Research their interest rates, fees, and loan terms. Credit unions often offer competitive rates and more favorable terms than traditional banks.
  • Step 3: Compare Rates and Terms Compare the interest rates and terms offered by credit unions with your current loan. Calculate potential savings over the life of the loan if you were to refinance with a credit union. Take into account any fees associated with refinancing.
  • Step 4: Consider Customer Service Evaluate the customer service reputation of the credit unions you’re considering. Credit unions are known for their personalized service and community-oriented approach. Consider whether this is important to you.
  • Step 5: Check Eligibility and Requirements Ensure you meet the eligibility requirements to join the credit union you’re interested in. This may include factors like location, membership criteria, or employment affiliations.

As we mentioned above, everyone’s circumstances are different. But if you work through the steps above, you’ll have a better sense of whether refinancing your student loans makes sense for you you.

How to find a credit union to refinance student loans

Refinancing your student loans can be a smart financial move, and finding a credit union to help you with this process is a great idea. 

What is a Credit Union

First and foremost, it’s important to understand what a credit union is and how it differs from a traditional bank. Credit unions are not-for-profit financial institutions that are owned and operated by their members. This means that they typically offer lower interest rates and fees compared to big banks. So, when it comes to refinancing your student loans, credit unions can be a fantastic option.

How to Find a Credit Union

Now that you understand the benefits of working with a credit union, let’s dive into the steps you can take to find the perfect one for your needs:

  1. Do your research online. Check out websites that provide information on credit unions and their offerings. There are numerous websites that allow you to search for credit unions based on your location and specific needs. These websites often provide detailed information about each credit union, including their membership requirements, interest rates, and loan terms. Take your time to explore these websites and make a list of credit unions that seem promising.
  2. Ask around. Talk to friends, family, or even that friendly barista at your local coffee shop. You never know who might have some fantastic credit union recommendations up their sleeve. Personal recommendations can be invaluable when it comes to finding a credit union that offers excellent customer service and competitive rates. Don’t be afraid to reach out to people in your network and ask for their experiences and suggestions.
  3. Reach out to your alma mater. Some universities have partnerships with credit unions, which could give you access to special refinancing programs. It’s like finding hidden treasure! Contact your university’s financial aid office or alumni association to inquire about any credit union partnerships or recommendations they may have. These partnerships often come with added benefits, such as lower interest rates or flexible repayment options, specifically designed for alumni.

As you go through this process, it’s essential to keep in mind your specific needs and financial goals. Take the time to compare interest rates, loan terms, and any additional benefits offered by different credit unions. Remember, refinancing your student loans is a significant decision, so it’s crucial to choose a credit union that aligns with your long-term financial plans.

After You’ve Found a Credit Union

Once you’ve gathered all the necessary information and narrowed down your options, it’s time to reach out to the credit unions you’re interested in. Schedule appointments or phone calls with their representatives to discuss your specific situation and get a better understanding of the refinancing options they offer. Don’t hesitate to ask questions and seek clarification on any points that are unclear to you.

By following these steps and putting in the effort to find the right credit union, you’ll be well on your way to refinancing your student loans and potentially saving thousands of dollars in interest over the life of your loan. So, get started on your research, reach out to your network, and take advantage of any university partnerships. Your financial future will thank you!

Top 3 National Credit Unions to Refinance With

Maybe you’re thinking, “Why limit myself to local credit unions when I can explore the whole country?” Well, my friend, you’re in luck! There are some fantastic national credit unions that cater to individuals all across the United States.

There are lots of credit unions to choose from and comparing all of them can be overwhelming. Below, we’ll discuss our top three picks, including:

  1. LendKey
  2. Navy Federal Credit Union
  3. PenFed Credit Union

Read on to learn more about each of these credit unions. 

LendKey

If you want a quick and easy way to compare multiple credit union refinancing offers, look no further than LendKey. They’ve got the technology and the smarts to connect you with credit unions that are eager to help you conquer your student loans

>> Check out LendKey

Navy Federal Credit Union

If you have ties to the armed forces, the Navy Federal Credit Union could be your ship to financial stability. They offer a variety of student loan refinancing options and have a reputation for excellent member service. 

>> Check out Navy Federal Credit Union

PenFed Credit Union

Attention, all members of the PenFed Credit Union fan club – they’re not just for military personnel anymore! PenFed has opened its doors to a wider audience, and their student loan refinancing options are worth checking out. You might just fall head over heels for their low interest rates!

>> Check out PenFed

Finding a credit union on your own

For those who prefer to discover things for themselves, here’s are some ways you can find a credit union all on your own:

  • Credit Union Locator Tool – Use the Credit Union Locator tool on the National Credit Union Administration’s website. It’s like a treasure map leading you straight to a credit union’s doorstep.
  • Credit Union Finder App – Check out the Credit Union Finder app. Yes, there’s an app for that! Download this nifty little tool on your smartphone, and you’ll be on your way to finding the credit union of your dreams.
  • Do some old-fashioned detective work. Hit the streets, visit local credit unions, and ask them directly about their student loan refinancing options. Who knows, you might even stumble upon some hidden gems!

Personal Loans as an Alternative to Credit Unions

Depending on your circumstances, you may be looking for refinancing alternative options to credit unions. One of the best alternatives available is a personal loan. The process is, more or less, the same, but you’ll have more options when it comes to personal loans and won’t be limited by memberships. 

Top 5 Personal Loans for Refinancing Student Loans

When it comes to student loan refinancing, there are various lenders in the market who offer diverse interest rates, loan terms, and minimum credit score requirements. However, we have identified a few key players that stand out for their unique attributes. Here are our top picks for student loan refinancing:

  1. AmOne (Best for Okay or Good Credit)
  2. Spring Loans (Best for Bad Credit)
  3. First Premier Lending (Best for Bad Credit)
  4. Upgrade (Best for Quick Disbursement)
  5. RefiJet (Best for Lower Credit Scores)
  6. LendingClub (Best for Higher Credit Scores)

Read on to learn more about each of these refinancing lenders!

1. AmOne (Best for Okay or Good Credit)

AmOne stands out for its proficiency in connecting borrowers with refinancing options tailored for student loans. By streamlining the match-making process between borrowers and lenders, AmOne ensures graduates can manage their student debt more effectively.

AmOne Personal Loan

4.5
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

600

Fixed APR

3.99%-35.99%

Variable APR

N/A

Overview

  • Minimum credit score: 600.
  • Fixed APR: 3.99%-35.99%.
  • Loan amounts: $1,000 to $50,000.
  • Repayment: 1 to 7 years.

Qualifications

  • Must be at least 18 years old.
  • Must be a U.S. citizen or permanent resident.
  • While there’s no specific income requirement, a consistent source of income is essential for the applicant.

Pros

  • Suitable for individuals with lower credit scores.
  • No cost for the matching service.
  • Attractive loan rates.

Cons

  • Acts as an intermediary, not a direct lender.
  • Risk of multiple contacts from prospective lenders.
  • Lack of clarity on lender details.

2. Spring Loans (Best for Bad Credit)

Spring Loans specializes in a broad range of refinancing solutions, particularly for former students looking to better manage their educational debt. With their emphasis on flexible repayment terms, they are an excellent choice for those aiming to optimize their loan conditions post-graduation.

Spring Loans Personal Loan

4.2
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

None

Fixed APR

27.00%

Variable APR

N/A

Overview

  • Minimum credit score: None.
  • Fixed APR: 27.00%
  • Loan amounts: $3,000.
  • Repayment: 48 months.

Qualifications

  • Demonstrate a recurrent income.
  • Minimum age prerequisite: 18 years.
  • Validate U.S. citizenship status with an SSN.
  • Provide a legitimate U.S. driver’s license or a state identity card.
  • Establish a functional bank account for incoming deposits.
  • Adhere to any specific demands by the loan provider.

Pros

  • Open to applicants with any credit background.
  • Four-year loan period aids in structured financial management.
  • The $3,000 offer addresses several short-term financial challenges.
  • Wide-reaching eligibility criteria invite a broad spectrum of applicants.
  • The focus on dependable income over job title benefits varied income sources.

Cons

  • The set 27% APR is higher than many alternatives.
  • Restriction to a $3,000 loan might not cover all financial outlays.
  • Possessing specific IDs is mandatory, sidelining some applicants.
  • A prerequisite for an ongoing bank account may limit certain users.

3. First Premier Lending (Best for Bad Credit)

First Premier Lending offers bespoke student loan refinancing options. Catering to the nuanced needs of graduates, they provide diverse refinancing pathways, helping borrowers navigate the complexities of post-academic financial management.

First Premier Lending Personal Loan

4.2
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

None

Fixed APR

27.00%

Variable APR

N/A

Overview

  • Minimum credit score: None.
  • Fixed APR: 27.00%.
  • Loan amounts: $3,000.
  • Repayment: 48 months.

Qualifications

  • Maintain a consistent source of income.
  • Must be at least 18 years of age.
  • Possess valid U.S. citizenship and a legitimate social security number.
  • Hold a current U.S. driver’s license or state-issued ID.
  • Keep an active bank account for direct deposit.
  • Satisfy any lender-specific criteria, such as credit rating, borrowing history, or place of residence.

Pros

  • No minimum credit score requirement allows accessibility for those with varied credit histories.
  • 48-month term provides clarity and allows for long-term financial planning.
  • Specific loan amount of $3,000 can meet many short-term financial needs.
  • Broad set of qualifications make the loan accessible to a wide range of people.
  • Emphasis on consistent income, not necessarily employment type, allows flexibility for borrowers.

Cons

  • A fixed APR of 27% is relatively high.
  • Loan amount is capped at $3,000, which might not cater to larger financial requirements.
  • Requirement of a U.S. driver’s license or state-issued ID could exclude some individuals.
  • Mandatory active bank account could be limiting for those who are unbanked.

4. Upgrade (Best for Quick Disbursement)

Upgrade stands out in the student loan refinancing arena with its straightforward options. Graduates seeking transparent terms and competitive refinancing rates will find Upgrade’s offerings beneficial in managing their educational debt.

Upgrade Personal Loan

5.0
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

560

Fixed APR

8.49% - 35.99%

Variable APR

N/A

Overview

  • Minimum credit score: 560
  • Fixed APR: 8.49% – 35.99%
  • Loan amounts: $1,000 to $50,000
  • Repayment: 3 to 5 years (7 years on some larger loans)

Qualifications

  • Possess an active bank account.
  • Able to provide a legitimate email address.
  • Minimum age requirement: 18 years (19 for Alabama residents).
  • Credit score of 600 or higher.
  • Annual income of $25,000 or more.

Pros

  • Willing to accommodate borrowers with a credit score as low as 560.
  • Offers flexibility with a range of loan amounts from $1,000 to $50,000. This can be suitable for both small and large financial needs.
  • Provides options for repayment, allowing borrowers to choose a timeline that best suits their financial situation.
  • Once approved, borrowers can access funds in just one day, which is useful for urgent financial needs.

Cons

  • Origination fees can go as high as 9.99%, which might add a significant cost to the loan.
  • Apart from the origination fee, there are fees for late payments and failed payments, which can add up if one is not careful.
  • While there is an option to extend repayment for larger loans up to 7 years, it’s not standard for all loan amounts.

5. RefiJet (Best for Lower Credit Scores)

While RefiJet primarily deals with auto refinancing, their dedication to providing transparent and flexible lending solutions might be of interest to graduates exploring diverse avenues for refinancing their student loans. It’s worth checking if they’ve expanded their services to accommodate student loan refinancing needs.

RefiJet Refinancing Personal Loan

3.5
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

550

Fixed APR

4.54-21.99%

Variable APR

N/A

Overview

  • Minimum credit score: 550.
  • Fixed APR: 4.54-21.99%.
  • Loan amounts: $5,000-$100,000.
  • Repayment: 24-84 months.

Qualifications

  • A FICO credit score of at least 550 is required.
  • Credit history requirements differ among lenders.
  • The minimum annual gross income is set by individual lenders, with $30,000 being the lowest known requirement.
  • The debt-to-income ratio should not exceed 60%.
  • Applicants should have no open or discharged bankruptcies in the last 12 months.
  • Services are accessible in all 50 states.

Pros

  • Pre-qualification is possible using a soft credit inquiry.
  • Automatic payment can lead to rate discounts with certain network lenders.
  • Services span across all states.
  • Customer support is accessible on Saturdays.
  • The website features a Spanish version.

Cons

  • An origination fee up to $395 may apply.
  • A fully online application process isn’t offered for those who desire it.

Credit union student loan refinancing FAQ

Now that you’ve familiarized yourself with credit unions and their student loan refinancing options, it’s time to weigh the pros and cons before diving headfirst into the deep end. Here are a few things to consider:

Am I eligible for membership with this credit union?

Before you get your hopes up, make sure you meet the eligibility requirements for joining a credit union. Some credit unions have specific membership criteria, such as working in a certain profession or living in a particular area. Don’t worry if one credit union doesn’t work out – there are plenty of fish in the sea!

Can this credit union meet my student loan refinancing needs?

Each credit union has its own student loan refinancing terms and conditions. Make sure you carefully review the interest rates, repayment options, and any fees that may apply. It’s like shopping for the perfect pair of jeans – you want to find the right fit!

Is it better to refinance with a credit union?

Ah, the million-dollar question! While credit unions can offer competitive rates and excellent customer service, they may not always be the best option for everyone. It’s essential to compare their offerings with those of other lenders, such as banks or online loan platforms. Crunch those numbers and choose the option that puts the biggest smile on your face!

Final Thoughts

As we bid adieu, remember that refinancing your student loans is a big decision and should not be taken lightly. Credit unions can be an excellent choice for many borrowers, but it’s crucial to do your due diligence and explore all your options. Now go forth, my friend, and conquer those student loans like the financial superhero you are!

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Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.