Pros and Cons of Getting Student Loans Through Credit Unions

You’ve received your FAFSA offers, but it may be possible that you need a bit more money to cover your college expenses. Private loans can be a good route for some people. However, not only banks offer loans; Credit unions do as well. Here are some pros and cons of getting your student loans through a credit union.

A blue background with text overlayed that says "student loans & credit unions."

Pro: Credit Unions Work For You

You may be surprised, but credit unions actually work for you and other customers who use their services. Banks, on the other hand, work mostly with their shareholders in mind. Instead, at a credit union, extra profits go to their members (meaning you!). When you join a credit union, you now have a stake in their business and success. A not-for-profit, they’re here to help you, not profit off of you.

Con: You Have To Be a Member

Getting student loans through credit unions means that you have to a member of said credit union. Each credit union has different requirements, but they generally ask that you live or work in a specific area and make a deposit if they approve your membership. Sometimes, it’s as little as $1 to $5.

If you’re interested in joining a credit union, look for ones local to you. They will most likely have their requirements detailed on the website. Some credit unions may be much more stringent in their requirements so it’s important to do research into them before applying to be a member.

Pro: Some of the Lowest Interest Rates

Due to being a not-for-profit, credit unions can sometimes offer much lower interest rates when it comes to private loans when compared to banks. In some cases, they actually have the lowest rates you can get anywhere. This isn’t always the case, but it can prove to be a valuable route. Generally, the larger credit unions that are a network will offer lower options.

These lower rates also come in handy if you wish to refinance or consolidate your loans in the future. Not all credit unions offer this yet, so make sure to check with your own. Also, note that you will have to meet guidelines in order to apply for the private loan or to refinance or consolidate after graduation.

Con: They Have Smaller Customer Service Departments

Since credit unions tend to be local and not spread all over the country like banks, their customer service departments tend to be smaller. This can be an issue if you have a problem with your loan or account. However, if you do choose a larger credit union, you may not run into this problem as much.

It’s important to note, that while credit unions definitely have advantages, you do need to apply for a private loan through them just as you would with a bank. They generally ask for over $25,000 in income, a low debt to income ratio, and a good credit score. If you don’t have this, your parents may be willing to co-sign for you.


Lender Rates (APR) Eligibility
Sallie Mae logo.
1.13% to 11.23%1 Variable
3.50% to 12.60%1 Fixed
Undergraduate and Graduate
Credibe company logo.
1.04% to 13.19% Variable
3.00% to 14.14% Fixed
Undergraduate and Graduate
Lendkey company logo.
1.49% to 7.64% Variable >800 FICO
3.99% to 7.64% Fixed
Undergraduate and Graduate
Ascent company logo.
1.82% to 11.32% Variable
3.27% to 12.46% Fixed
Undergraduate and Graduate
College Ave company logo.
0.99% to 11.98% Variable
2.99% to 12.99% Fixed
Undergraduate and Graduate
3.47% to 6.11% Variable
4.60% to 7.40% Fixed
Undergraduate and Graduate
Earnest company logo.
1.04% to 11.44% Variable
3.34% to 12.78% Fixed
Undergraduate and Graduate
1.20% to 11.59% Variable
3.31% to 11.99% Fixed
Undergraduate and Graduate
1Variable interest rates start from 4.12% APR to 10.98% APR. We also offer fixed interest rates from 5.74% APR to 11.85% APR. Click here for important information. Terms, conditions, and limitations apply.
College Raptor is not a loan lender and does not assume responsibility for suggesting a loan to a user who may not be eligible for it. Rates, terms, conditions, eligibility, approval, and other considerations are the decisions of the lenders and may vary depending on which lender or marketplace the user selects. We urge users to carefully consider and review all loan options and terms before committing to taking out a loan.

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