Student Loan Refinance | Wright-Patt Credit Union (2025)

FAQs

Are credit unions good for student loans? ›

Choosing a credit union for a private student loan can be a smart move to help with your school costs. Credit unions are known for their lower interest rates, fewer fees, and excellent customer service.

When you refinance federal debt, you lose access to government programs, such as income-driven repayment plans, student loan forgiveness, and deferment and forbearance. That said, if you're nearing the end of your repayment term and see a lower rate, refinancing your federal loans could save you 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.

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.

Today's loan refinance rates are significantly higher, making it more difficult to find substantial enough savings through refinancing to justify the loss of the federal protections, including loan forbearance and the ability to access federal income-driven repayment plans.

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.

Do student loans go away after 7 years? While negative information about your student loans may disappear from your credit reports after seven years, the student loans will remain on your credit reports — and in your life — until you pay them off.

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.

Is there a penalty for refinancing a student loan? ›

Refinancing carries no fees or costs. For those who qualify for a lower interest rate, student loan refinancing may help you accomplish one or more of these goals: Pay less interest over the life of the loan. Pay off education debt faster.

Refinance your student loans

If you obtain a lower rate with a shorter loan term you could pay off your loans sooner, reducing the overall interest paid over the life of the loan.

Courtney's Zero-Percent Student Loan Refinancing Act would: Allow student loan borrowers to refinance their federal loans to 0% – all eligible federal FFEL, Direct, Perkins, and Public Health Service Act student loan borrowers could refinance their high-interest loans down to 0% through December 31, 2024.

There is no limit on how often one can refinance. Taking this step makes the most sense when your finances or credit score improves or interest rates decline. Under these circumstances, it's possible to save thousands of dollars in interest by lowering your interest rate just a few percentage points.

Credit unions tend to offer lower rates and fees as well as more personalized customer service. However, banks may offer more variety in loans and other financial products and may have larger networks that can make banking more convenient.

Eligibility requirements for personal loans from credit unions are less strict than a bank's criteria. In particular, a low credit score may not disqualify you from a loan with a credit union, because a credit union is more likely to take into account your overall financial circumstances.

Limited accessibility. Credit unions tend to have fewer branches than traditional banks. A credit union may not be close to where you live or work, which could be a problem unless your credit union is part of a shared branch network and/or a large ATM network such as Allpoint or MoneyPass.

When you apply for a personal loan, lenders will run a hard credit check to have access to your credit report and history. Hard credit checks temporarily lower your credit score by as much as 10 points. But if you have excellent credit, applying for a loan will most likely make your score drop by five points or less.