The CU Student Loans is a major network of more than 160 non-profit credit union lenders. The main goal of these lenders is to provide all members with a more cost-effective option when it comes to private student loan programs. Primarily, there are two loan products offered in the program such as the CU Grad Private Student Loan Consolidation and the CU Scholar Private Student Loan. The Member Student Lending, LLC, which is a Credit Union Service Organization (CUSO) manages CU Student Loans.
CU Student Loans Gets Credit Unions to Compete and Gets you Low Interest Rates:
The CU Scholar private student loans are issued from credit unions that are a part of the CU Student Loans program. Moreover, the loaned amount may be used to cover qualified college expenses such as room and board, tuition and fees, and books to name a few.
Essential Facts about Credit Unions Student Loans
Credit Unions are basically non-profit financial institutions, which means borrowers are going to do much better than with traditional banks. With credit union student loans, you will be able to refinance your debts at lower rates. Thus, you can save a huge amount of money each year in payment and total interest expenses. In addition, you can expect massive savings without extending your loan’s terms.
With private student loans obtained from traditional banks between 2008 and 2012, some borrowers are left with maximum interest rates of 14 percent. When you apply for the CU Student Loans Program, the rates offered on consolidation are between 4.75 and 7.25 percent. Co-signers are also eligible for lower interest rates, and they no longer need to worry about their financial obligation if the borrower has made payments on time for 12 consecutive months.
Benefits of CU Student Loans
With CU Student Loans, borrowers may obtain several benefits that reduce the burden of paying off the loan. For instance, borrowers who are unemployed at least six months after graduating from college may request to pay for the interest expense on their loan during the initial two years when they are still in repayment status. This benefit is also called the “Initial Interest-Only Option”, which may be requested in writing within the 6-month grace period.
Moreover, borrowers who have been out of school for over two years may request forbearance. Those who are eligible to apply for forbearance are borrowers who suffer from unemployment, underemployment, and inability to make their payment because of financial constraints. For CU student loans, the maximum forbearance time allowed is 18 months, which is granted in increments that is limited to up to 6 months. Applicants are required to complete their forbearance form, and they must make their payments until they receive a notification that their request has been approved.
The maximum amount that individuals can borrow is $120,000 (undergraduate debt) or $160,000 (graduate debt). Furthermore, there is no origination fee applicable to student borrowers, and there is a 1 percent rate reduction when 10 percent of the total loan principal is repaid within the full repayment period. If you wish to cancel your loan within 30 days of the disbursement period, you may do so without paying any fees or interest.
With CU Student Loans, you may choose from two types of in-school repayment options such as the interest-only and proactive payment. For the interest-only repayment plan, borrowers are responsible for making their full monthly interest loan payments while they are still enrolled in school. Upon leaving school after 6 months, borrowers automatically enter the repayment status. This means, they are responsible for settling their principal and full interest payments.
On the other hand, the proactive payment option comes with other benefits and features. For instance, those who are enrolled half-time in their degree granting program are required to settle their $25 proactive payments monthly within the in-school period. All unpaid accrued interests are added to their outstanding loan balance when borrowers are at the end of the in-school period.
There are some things you need to keep in mind before you decide to send your application to the CU Student Loans program. In most instances, you can only qualify to the CU Student Loan program if you are within the credit union’s field of membership, and this depends on the location of your home, place of worship or the company where you work. There is also a one-time payment of about $5 to $50, depending on the credit union.
If you choose to apply for a student loan, the credit union will need to check your credit score before considering your application. Since many students have poor or little credit history, it is unlikely for them to qualify for a loan unless they have a co-signer who meets the required monthly gross income and credit history.
It is also important to note that most credit unions require students to show the university’s acceptance letter prior sending their loan application form. This way, the credit union can validate the student’s primary objective for applying for a loan.
As with federal private student loans, credit union loans do not require borrowers to make any payment while they are still in school. Additionally, students are provided with a 6-month grace period before they are expected to make loan payments. After that period, borrowers are left with a few options, as compared to the flexible repayment schemes provided by federal loans that are directly proportional to their income.
For the most part, the interest rate offered by credit union student loans are relatively higher than subsidized federal student loan interest rates. The borrower’s credit scores also have an impact on the loan’s terms, and there are limited options and leniency when it comes to repayment. What’s more, borrowers are required to present a letter of acceptance from the university or college of their choice before they may apply for a student loan.
CU student loans offer a number of benefits to borrowers, although there are several other factors that should be considered before applying for a loan. Thus, it is ideal to apply for private student loans after you have analyzed and exhausted all possible scholarship options, grants and federal aids. By doing so, you can avoid greater financial issues in paying off your loan debts. If you liked this CU student loans review please share on twitter, facebook and google plus. Thanks for reading!