Credit Union Student Loans

As higher education costs continue to rise, grants and federal student loans are no longer enough to cover the costs. To meet educational expenses, many students will apply for private student loans. We recommend you apply for federal student loans prior to applying for private student loans. Once you know the amount you will receive from federal student loans, you can determine the amount you will need to borrow from a private student loan lender. You can obtain a list of lenders from your school’s Financial Aid Department or search for lenders on the Internet. You should apply for credit union student loans before applying at banks.

Credit unions are nonprofit financial institutions owned by their members. Credit unions charge fewer fees than most major banking institutions. In addition, they offer lower interest rates on loans, including student loans. Credit unions offer low fee checking accounts and higher returns on certificate of deposits and savings accounts. In addition, dividends are paid to the members. Credit unions offer a wide variety of financial services that are similar to the services offered by banks.

You must be a credit union member of a to apply for loans. However, in many cases students are allowed to become members for the purposes of applying for student loans. You will be required to open a checking or savings account. There are approximately 8,000 Credit unions in the United States and the simplest way to find one to get a student loan is to visit custudentloans.org. You can also choose from the list of credit unions your school recommends.

Credit Union EdAccess Student Loans

The Credit Union EdAccess Loan Program offers many benefits. You can borrow up to $30,000 per school year with a lifetime maximum of $120,000. If you only need to borrow a small amount of money, the loan minimum is $2,000. Like federal student loans, you can defer interest and full principal payments until you leave school or graduate. The payments will begin six months after the date you graduate or leave school. The interest rate can be as low as 2.8 percent and will not exceed 8.8 percent. You can choose to pay the interest on the loan while attending school or you can choose to pay a “Good Faith” payment of $25. We recommend you make interest payments if you can. This will keep your loan balance from increasing. In addition, your interest payments may be tax-deductible. You can also use the money you borrow to pay for all qualified educational expenses including any past due tuition.

Benefits of EdAccess Credit Union Student Loans

If you qualify for credit union student loans you will enjoy the benefit of zero origination fees. Many banks that offer student loans charge origination fees. If you do not have satisfactory credit, you will need a cosigner with excellent credit. Credit unions also offer the benefit of credit and academic based underwriting. Your academic progress may earn you a lower interest rate. After you have paid 10 percent of your loan, you will qualify for a one percent rate reduction. If you have a cosigner, the cosigner will be released from the obligation of the loan after you have made 24 payments on time.

To qualify for a student loan, you must attend an approved school and you must pursue a degree program. You will need to join a credit union during the application process. If you do not have a credit history, you will need a cosigner that has acceptable credit and at least 21 months of history. College juniors or seniors with excellent credit can apply without a cosigner, although you will qualify for a lower interest rate if you have a cosigner. Foreign students can apply; however, they will need a cosigner who is a US citizen.

As the borrowing limit is higher than federal student loans, we recommend you borrow only the amount you actually need. You will have to start paying back all your loans six months after graduation. Many students graduate with in the region of of $60,000 in student loan debt, which is a tremendous amount of money to pay back. If you can pay the interest or make minimum payments while you are attending school, you may be able to reduce the amount of debt. If your federal student loan will not cover your expenses, we recommend you apply for credit union student loans. If you do not qualify for the loans, you can then apply at banks for private student loans. The credit union EdAccess program offers the best rates and benefits. If you obtain a loan and realize you do not need the full amount you borrowed, you can pay that amount back without penalty. You will need to manage your money wisely to avoid an exorbitant debt upon graduation.