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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 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

In order to get a student loan from a credit union, you have to be a member. 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 the 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.