Imagine enjoying post-grad life even more when you reduce your student loan burden and simplify your finances. That can become a reality when you refinance or consolidate your student loan. Where do you start looking? Credit unions can be an excellent option since they can save you more money than large national banks, have cosigner releases available, and consistently have better customer service. But let’s first define refinancing and consolidation since the terms are often used interchangeably.
What’s the difference between refinancing and consolidation?
Student Loan Consolidation
Student loan consolidation is a way of combining multiple loans into a single loan, but the amount you owe is the same. If you took out several different loans to go to college, you are dealing with multiple bills every month and also probably dealing with the headache that goes along with it! Forgetting to pay bills on time can negatively impact your credit score, so if you want to simplify your finances, consolidation is the way to go. If you want to save money on total interest or lower your monthly bill, you should consider refinancing.
Student Loan Refinancing
Student loan refinancing refers to taking out a new loan under new terms which is used to pay off your existing student loans. You will now pay back the new lender. You might consider doing this to get better loan terms. It never hurts to explore your refinancing options because you could be saving significantly over the life of the loan. The only exception is if you have federal student loans— you would lose the perks that come with it if refinancing with a private lender.
Why Use a Credit Union?
Saves You More Money
Credit unions provide many of the same financial services as large national banks but since they are not-for-profit organizations, they can pass the savings on to you. Credit unions are also cooperatives, which means they’re controlled by its members and unlike large national banks, are not trying to make money to please their stockholders. Proceeds from credit unions are reinvested in the credit union, which allows for lower interest rates, saving you money. It may help you sleep better at night knowing you have credit union student loans from an institution that will be on your side!
Cosigner Release Available
When you first took out your student loans, you were most likely required to have a cosigner since at the time you didn’t have enough credit history to take out a loan yourself. If you have been paying all your bills on time and have a stable income, you may now be creditworthy of a cosigner release by going through a credit union. Parents and grandparents may finally be off the hook!
Better Customer Service
In recent ratings on the American Customer Service Index, credit unions are the winners when it comes to banking services. Credit unions consistently provide better and more personal customer service because they have roots in the community and they do not work for stockholders, but for its members.
Apply today to start the student loan refinancing process with a credit union or community bank in our network.