Refinancing Student Loans With Credit Union

What is refinancing?

A refinance is when you take out a second loan on existing debt at a lower rate than the first loan. The initial loan is called the “principal” while the refinance is known as the “renter.” If you have two loans with different interest rates, a refinance makes sense because you would effectively pay off the lower-interest loan first. You may use the extra money saved to make more payments on the higher-interest loan.

Why should I consider refinancing my student loan?

Student loans aren’t always bad news; they can actually help you build wealth over time! Refinancing lets you turn your student loans into a fixed-rate mortgage or home equity line of credit (HELOC), which can earn you thousands of dollars each year in savings. Not only that, refinancing can reduce your monthly payment by hundreds of dollars, or even eliminate them entirely!

How do I get started?

Before proceeding with any major financial decision, talk with a financial adviser about refinancing your student loans. A good place to start is by calculating how much you could save by refinancing your current loans. To figure this out, add up all outstanding student loan balances and divide by 12 months. Then multiply the result by 0.0625. That’s how much you could potentially save each month. Next, determine if you want to stay at your current interest rate or switch to a lower rate. Finally, calculate the amount of new loans you need to pay off in order to cover the balance remaining on your previous loans. If necessary, use the calculator below to estimate what you might owe after refinancing.

How does it work?

Once you know how much you could save and how much you’ll need to repay, apply online to your student loan servicer. Once approved, the bank will issue you a letter stating the terms of the new loans. Make sure you understand the repayment schedule before signing anything. And remember, if you don’t pay off your entire principal balance within 10 years, you’ll incur additional fees and penalties.

Where do I go for a refinance?

You can find great deals on student loan refinancing services at Student Loan Hero. We connect borrowers with leading lenders with special financing options tailored just for students. Before applying, we recommend checking your eligibility using our free borrower tool. In addition, review our list of recommended providers based on their affordability, customer service, and quality of products and services.

Refinancing Student Loans With Credit Union

Refinance Your Federal Stafford Loan

Federal student loans are just that: federal government guaranteed loans. If you’re still paying back your original loan, refinancing is often the way to go. You may be able to lower your rate, pay less over the course of the loan and save yourself some money. Plus, if you refinance your federal student loans, you will no longer have to make payments directly to the Department of Education; instead, your lender will send those funds directly to the U.S. Treasury.

Refinance Your Private Student Loan

Private student loans are not federally backed, but they do offer many of the same benefits as federal student loans. Private student lenders have access to more competitive rates than the federal government does, but their interest rates tend to be slightly higher than what the government offers. Still, private student loans are often a good option for borrowers who have maxed out their federal student loans, since many lenders won’t allow you to borrow beyond what you’ve already paid in.

Get A Debt Consolidation Loan

Debt consolidation is borrowing money at a lower interest rate to pay off all your debts. For example, you could consolidate credit cards with a personal loan to give yourself a single monthly payment to split between all your accounts. While consolidation lowers your total balance, it doesn’t necessarily mean you’ll get a lower interest rate. In fact, some debt consolidation companies charge a fee for the service — fees that can run upwards of 5% of your total balance. Before you sign anything, ask your creditor how much you will be charged (often called a “points” or “origination” fee) and whether you will receive any type of discount or special treatment (such as a 0% APR).

Apply For An Income Based Repayment Plan

Income based repayment plans cap the amount you pay each month based on your income. The lower your income, the lower the amount you pay back. Unlike traditional repayment plans where you pay the entire amount owed at once, income-based repayment plans are broken up into smaller payments throughout the length of the loan term. This means you don’t end up paying more overall, but you’re only responsible for repaying your fair share of your total balance. Note that your payments under an income-based plan aren’t tax deductible. However, you may be eligible for additional financial aid to offset the cost. Check with your school’s financial aid office to find out if you qualify.

Pay Back As Much Of Your Loan As Possible

Remember that student loan interest isn’t taxable. So pay back as much as possible, starting with the smallest balances first. If you’re unable to pay all of the principal on time, you can always add extra payments to your loan until you reach 100%. Remember to contact your lender immediately if you fail to make a payment, rather than waiting until after you miss the deadline. Any missed payment will increase your late fees, which can lead to even bigger bills.

Refinancing Student Loans With Credit Union

What Is Refinance?

A refi or refinancing is when you take out a loan to pay off a current loan. So instead of paying interest on two loans at once, you now only have to make payments toward one loan.

Benefits Of Using A Credit Union To Refinancing Your Loan

Credit unions are not-for-profit financial institutions owned and operated by consumers themselves. Because credit unions are non-profit they don’t charge usurious rates of interest. Also, credit unions are federally insured which means you’re lending money directly into the U.S. government.

How Do I Get Started On My Refinancing Process?

You’ll need to fill in some information about yourself and then choose whether you want to use cash or a check to prepay. Once you’ve submitted your application we’ll contact you via email for instructions and further details.

What Does It Cost Me?

The cost to refinanc varies based on how much you borrow and what type of loan you get. However, if you finance $10K-$50K you typically save approximately 10% over the course of your loan.

Can I Find Out If I Qualify?

Yes! Just go to our website and click on ‘Get PApproved’ under the heading ‘Get Financed’. We do run background checks, however, you may still qualify even if you had bankruptcy or bad credit in the past.

When Will My Money Hit My Account?

Depending on when you apply and how long it takes to receive approval, you should expect to see your funds deposited into your account within 2-5 business days.

What Are Typical Payment Terms And Fees?

Generally speaking, these types of loans tend to carry higher fees than standard personal loans. These fees include a processing fee (typically 1%-3%), a broker/dealer fee (usually around 0.25%-0.75%) and any origination fees charged by the lender (which vary depending on how attractive your profile is).

Refinancing Student Loans With Credit Union

Credit Unions are not-for-profit financial institutions owned and governed by their members who share a common bond based upon geography and/or industry. Members pool their money together through local branches and credit unions offer loans ranging in size from $100 to $500,000 without charging interest.

The Federal Government pays 1% of its budget to these organizations in fees that help fund student loan programs. These loan programs can refinance existing federal student loans at lower rates than private lenders. There are no fees associated with refinancing at a credit union. If you have any concerns about getting a loan at a credit union, go ahead and apply and they’ll tell you if they can do it for free.

Refinancing Student Loans With Credit Union

This video looks at how student loans can be refinanced with a credit union. Many students take out a loan to pay for their college education. Sometimes, they find themselves in default because they cannot afford to make payments. When students fall behind on their debt, the interest rates keep going up, and the financial burden becomes even bigger. Refinancing reduces the effective cost of money while extending the term of repayment. In our example, we saw that by reducing the interest rate and extending the term, we could save $48 over the first four months of payment. And if you make your monthly payments on time, you may get a reward and receive a lower rate of interest. You can refinance loans with a credit union at any time without paying penalties or fees. Credit Unions provide banking services to not-for-profit organizations across America — saving members millions every day. Find out about opening an account today!

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