Student Loan Refinance | Wright-Patt Credit Union (2024)

FAQs

Will a credit union refinance a student loan? ›

Refinancing student loans through a credit union is similar to refinancing with a bank or online lender with a few differences. But the type of lender you choose is less important than finding the best possible rate and features you're seeking.

With student loan refinancing, you work with a private lender to consolidate your loans. Your loans are transferred to the bank or credit union issuing the loan, so your loans are no longer federal. Private student loan refinancing can help you qualify for a lower rate and save money.

Refinancing your student loans could initially cause a slight dip in your credit score. This is because lenders conduct a hard credit inquiry to determine your eligibility for refinancing. While a hard inquiry could reduce your credit score by a few points, the impact is typically minimal and short-lived.

In general, you'll need to have a credit score in the mid- to high 600s, a debt-to-income ratio of less than 43 percent and a source of steady income to refinance a student loan, but the requirements vary by lender. Getting pre-qualified is an excellent way to see if you're eligible for student loan refinancing.

Because credit unions are “non-profit” credit unions tend to have lower mortgage interest rates and fewer lender fees. So, if you're shopping for a lender and comparing banks and mortgage brokers, don't forget to see what credit unions have to offer. We think you'll be pleasantly surprised.

Fixed rates range from 5.34% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Variable rates range from 6.14% APR to 9.99% APR (excludes 0.25% Auto Pay discount).

They're kind of like that helpful neighbor who's always there when you need a hand. Credit unions often offer better interest rates compared to big banks, making them an excellent choice for covering those extra expenses that your federal student loans, scholarships, and savings just can't handle.

A balance transfer can improve your credit over time as you work toward paying off your debt. But it can hurt your credit if you open several new cards, transfer your balance multiple times or add to your debt.

Sallie Mae doesn't offer student loan refinancing. However, it offers private student loans to undergraduates, graduate students and parents. If you took out Sallie Mae loans to pay for college, you can — and probably should — refinance with another lender if it will save you money.

Whatever the reason, if your new loan has a higher interest rate than you currently pay, you may not see any financial benefit from refinancing. You're not confident in your income. If you have federal loans and your future earning potential is uncertain, think twice before refinancing federal loans into private loans.

Is there a penalty for refinancing a student loan? ›

Key points. You can refinance both federal and private student loans into a private refinance. There are no prepayment penalties on federal and private student loans, so nothing stops you from refinancing your student loans.

If you refinance your federal loan with a new private student loan, you will no longer be eligible to participate in these federal loan forgiveness programs. You may also lose the protection of loan discharge or forgiveness in the case of death or permanent disability, which you get with federal student loans.

As long as you meet lender requirements, it's possible to refinance student loans without a cosigner. Refinancing means that a private lender bundles some or all of your loans, pays them off, and structures them into one new loan. A private lender can be a bank, school, credit union, or state agency.

Refinancing is essentially just borrowing money via a new loan to pay off an existing lender, so there's no limit to the number of times you can do this. You're only limited by the amount of time you have to research what's best for you. You can refinance all of your student loans at once or just part of what you owe.

Before settling on a lender to refinance with, it's important to shop around and compare multiple offers, including banks and credit unions. Banks can be a good choice for refinancing student loans for many reasons. If you already have accounts with the bank, you may get a discount on your loan interest rate.

And when you refinance, your loans will get converted from federal to private, which means forfeiting access to federal benefits, such as loan forgiveness programs. However, if you have private student loans and can find a co-signer, refinancing might be worth exploring to deal with student loans with no job.

Refinancing your loans to repay at a lower interest rate is the most common reason people state they want to refinance. If that is your goal and you qualify for a lower interest rate loan, refinancing can definitely help you pay less overall.

Since private student loans are held by a private bank or lender, you can't refinance private student loans to federal loans. The reverse, however, is possible. You can refinance private and federal student loans into a new private student loan with a new, ideally lower, interest rate.