How To Find The Best Credit Union Student Loans (2024)

There are many institutions that offer student loans, but some might provide more options or lend at better rates than others. As you research banks and online lenders for private student loans, don’t forget about credit unions.

Credit unions often offer very competitive rates to its members when compared to other lenders. So, you might have more—and sometimes, better—options by broadening your search. Here’s how to find the best credit union student lenders.

How Credit Unions Differ From Banks

Banks and credit unions offer many of the same products, including checking and savings accounts, credit cards, loans and mortgages. However, they differ in some significant ways.

Banks are for-profit businesses that are either privately owned or publicly traded. Because banks have to make a profit, they may charge more fees and higher interest rates than a credit union, which is a nonprofit organization. Banks are also less stringent about who they allow to open an account, and most people are eligible to use a bank’s services.

In contrast, credit unions are owned by its members. And because credit union members share ownership of the organization, there are often requirements to join. You might have to work for a specific employer, live in a certain area or be a member of another group, such as a labor union, church or school. If a family member meets the requirements, you also may be eligible to join.

And because credit unions are nonprofits, they are able to return earnings back to their members. To do this, credit unions generally offer fewer fees, lower interest rates on loans and higher rates on savings accounts. That’s why getting a student loan from a credit union can be beneficial—you may find options that can beat those offered by traditional banks or online lenders.

Look for Credit Union Loans in Your Area

Because many credit unions require you to meet certain membership criteria, it makes sense to start your search in your community. A simple online search for “credit unions near me” will show you local credit unions. You can also use the National Credit Union Administration’s credit union locator to find a comprehensive list.

Just like banks and online lenders, it’s important to review each credit union before committing to anything. Look for things like:

• Student loan products: Some credit unions don’t offer student loans and might only be limited to certain products and services.
• Membership requirements: Make sure you’re eligible for membership to each credit union you review. Some may require you to join the credit union and be a member for a certain amount of time before applying for a student loan. Others might let you become a member and apply for a student loan at the same time.
• Interest rates and fees: Review and compare interest rates between local credit unions to see which ones offer the lowest interest and fewest fees.
• Loan eligibility: See what’s necessary to qualify for a student loan. For instance, you might need a minimum credit score or meet a certain income threshold to qualify. Since these are private student loans—not federal student loans that come from the government—your credit history is a major consideration.

Find Nationally Available Credit Unions

While credit unions thrive in local communities, there are some that are available nationwide. Here are a few you may want to consider for your student loans.

1. LendKey

LendKeypartners with credit unions and community banks around the country and matches them with potential borrowers. You can apply for a private student loan or refinanced student loan, among other options. Students who are enrolled at least half-time can apply for a loan, and you can add a co-signer if you need some help qualifying for the lowest rates. Applicants may be eligible to borrow up to the cost of their school’s attendance.

2. PenFed Credit Union

Anyone is eligible to join PenFed Credit Union, which offers new student loans to undergrad and graduate students, along with scholarship opportunities. You can borrow up to your school’s cost of attendance, and refinancing options are also available if you’ve already graduated. Membership with PenFed also comes with access to other savings opportunities, with discounts on things like car insurance, tax services and home security systems.

3. Navy Federal Credit Union

Navy Federal Credit Union offers new student loans or refinancing options. To become a member, you or a family member must have served in the armed forces, including the Army, Navy, Air Force, Coast Guard or National Guard. You can apply for membership at the same time you submit your loan application. Borrowers also get automatic access to Navy Federal’s career assistance program, which provides interview tips, a resume builder and other useful tools.

What Makes Credit Union Student Loans Different?

Even though lending institutions generally offer similar products, credit unions, banks and private lenders handle student loans a bit differently. Here’s what to expect from a credit union student loan.

More Attuned to Member Needs

If you’re struggling to qualify for a private student loan at a bank or online lender, you might find more opportunities and less stringent lending requirements at a credit union. You could have a more seamless time qualifying for a student loan at a credit union if you already belong to one that’s located in your community.

Smaller Network

If you take out a loan from a national bank or online lender, you usually have access whenever you want. Along with a mobile app and website, you can probably call or talk to someone through an online chat whenever you’d like.

If you take out a loan from a credit union, you might have more limitations. Online services may be less robust, and you may have to go into a branch or call during business hours for help. Lastly, there may be fewer locations when you use a credit union. That means if you’re traveling or move out of the area, managing your loan could be more complicated.

Personalized Service

Because credit unions are typically community-based, they often have a smaller customer base than national banks or lenders so you might get more personalized service. And since credit unions are member owned and operated you can vote on certain business decisions, including selecting its board members.

Of course, not all credit unions are created equal. If you’re not sure about a credit union’s reputation, read online reviews or ask your network for personal recommendations.