Your college education helps determine the range of jobs available to you in life. When faced with the rising costs of college education, paying for college and pursuing your dreams can seem challenging.
Credit union student loans give you access to tens of thousands of dollars for books, tuition, housing, and other expenses. Even if you have little or no credit, you may be able to get a student loan with the help of a co-signer.
Types of Student Loans
The two main types of loans are federal student loans and private student loans. Federal student loan programs are fixed-rate loans that only cover up to a certain amount and can only be used on specific expenses, making it harder for students to get the support they need. The financing available is mainly aimed at undergraduate students, with expenses for graduate students not entirely covered.
Private student loans through a credit union can be your primary source of funding or help you fill the gaps of federal student loans. These loans are subject to fewer restrictions and limits than federal loans. If you’re going to a private college with high tuition costs, you will likely need a large portion of your costs to be covered by private loans.
Banks vs. Credit Unions
Many students assume that their current bank is their best option when it comes to private funding. However, banks are for-profit institutions that are usually obligated to make money for shareholders instead of doing what’s best for their customers.
Credit unions are nonprofit institutions that are controlled by an elected board of members. Although they still have to charge interest and fees to cover basic costs, they only charge what they need to remain fiscally responsible and stay in operation. Like Navy Federal Credit Union, some credit unions require you to have ties to a particular employer, but many local credit unions do not.
Because credit unions are nonprofit, they may be willing to work with less-creditworthy customers who traditional banks view as high risk. The exact terms and conditions vary between credit unions, but a credit union loan officer can sit down and talk you through your options.
How Much Money Do You Need?
Tuition is not the only cost you’ll need to consider. Administrative fees, textbooks, and other expenses required for your classes can add up to hundreds of dollars per semester.
You also need to consider the cost of living in the town or city the college is in. Even if you commute to school from your parent’s home, the cost of gas and car insurance can add up fast. It’s common for students to need tens of thousands in loans per year even if they have some financial aid from the educational institution.
For federal student loans, you have to fill out the Free Application for Federal Student Aid (FAFSA) each spring. If you miss the deadline for the FAFSA, you will be ineligible for loans the following year. You also cannot adjust the amount of money you receive midway through the semester when you have unexpected expenses.
The process is much more flexible for credit unions. A loan officer can walk you through different scenarios, like fixed and variable rates, considering your credit score and possible co-signers. You can get a new loan midway through the school year if needed to cover new expenses. It usually only takes a few weeks to get a new student loan, subject to credit qualification.
Refinancing Student Loans
Once you leave college, you also have the option of refinancing or consolidating student loans. Refinancing your loans means you have your credit union pay off your existing loans, then charge you a new lower monthly payment to repay the new loan. This is usually the product of new, longer repayment terms combined with an interest rate reduction.
Refinancing is a strategic option for graduates looking to take advantage of a lower Annual Percentage Rate (APR) or make their monthly payments more manageable. A credit union loan officer creates a customized plan for you depending on your current income, credit score, and other factors.
Trusting Your Credit Union
Students’ choices in college have an impact on the rest of their lives. T&I Credit Union is your hometown credit union that ensures you have the best loan terms and repayment options available for investing in your future.
We provide student loans, auto loans, home loans, and personal loans in varying amounts to the Greater Detroit Metro area. Because we’re local, we understand the cost of living and other needs in this region. Call us today at 248-397-9456 to learn more about how we can help you attend your dream school.