Choosing CU student loans are one of the most practical ways in making your way through college, simply because credit unions provide lower rates than that of private student loans.
But should you really opt for this kind of service?
Read on to learn more about credit union student loans.
Understanding CU Student Loans
What makes CU Student Loans unique?
Unlike the usual single lending companies who offer the same service, CU Student Loans is a group of at least 160 non-profit credit union lenders in the country.
They all work together to compete with large organizations by offering the lowest rates possible.
And by lowest, we mean a current variable rate of 2.76% vs. 7.76%, which is the highest.
Since they are a not-for-profit entity, they get dividends instead of profit.
These are then distributed to all their members.
This is unlike big lending companies who distribute their profits to all their shareholders and investors.
However, CU student loans only consolidate private loans through credit unions and repayment terms is 15 years.
Why should I consider CU Student Loans?
Students apply for loans to seek financial aid in paying for their education.
So it is only reasonable for students to seek a service where they can spend less and save more.
Although there are a lot of banks and private organizations who offer different types of student loans according to the borrower’s needs, it usually entails higher interest rates and additional fees, unlike CU student loans.
Here’s why you should consider CU Student Loans:
- No origination fees.
- Only require an annual income in excess of $24,000.
- Has a program to release co-signers after 12 months, which is one of the shortest offered in the market today.
- They are more forgiving with your credit score than major lending companies who require a good credit standing.
- No penalty for early payments.
- Interest only payments for a maximum of four years.
- Forbearance may be requested by borrowers, but with a maximum duration of 18 months.
- Students can borrow a maximum amount of $120,000 for undergraduate debt or $160,000 for graduate debt.
- 1% reduction if 10% the total loan principal is paid during the full repayment period.
- No fees or interest to pay if you decided to cancel your loan (within 30 days of the disbursement period.)
Are CU Student Loans for me?
— Edvisors (@Edvisors) January 18, 2017
Although they offer a good and budget-friendly service, it also has its disadvantages like everything else.
Here are several things to consider in applying for a CU student loan:
- Since it’s somewhat new to the lending scene, there are not many repayment options to choose from.
- The borrower should be a member of the credit union to qualify for this program and still depends on the borrower’s location of their home, company where you work, and place of worship.
- A co-signer is needed if the borrower has a poor credit history.
- Requires an acceptance letter from the University to prove the borrower’s objective for applying for a loan.
- For someone who has a huge amount of debt to pay off, the maximum repayment term of 15 years can be short. Although it would be nice to have your debts paid off in the shortest period possible, this may not be plausible for some.
- Interest rates are not fixed, so if an economy is under recovery, their rates are likely to increase.
- CU student loans’ interest rates are somewhat higher than that of a subsidized federal student loan.
Learn how to pay off your student loans here.
How great would it be to have nothing to do? Like wake up and not worry about bills or student loans? Do something fun everyday or nothing ?
— Rocco Esposito (@RowcohEsposito) September 19, 2016
How do I apply for a CU student loan?
Applying for one is easy, as you only have to fill out a form that usually takes about five minutes.
Once approved, you will have to join a local credit union who will provide the loan.
And finally, an initial deposit of about $5 is required for this to commence.
Almost 71% of undergrads have student loans. Federal loans don’t always cover everything. Tell your members about your CU’s private loans.
— Membership Marketing (@MembershipMarke) May 31, 2016
Watch this video from CUNA to learn more about student loans and Credit Unions:
The search for a lending company is as easy as Googling for one.
But, as good as CU student loans may appear, they still have risks.
That’s why it is always important to consider all your options before making a decision.
Here are five steps to get out of debt. What are your thoughts about our CU Student Loans review? Tell us in the comments section!