As the cost of college continues to rise, more and more students are turning to student loans to finance their education. According to the Institute for College Access & Success, the average college graduate in the Class of 2016 had $28,400 in student loan debt.
With such a large amount of debt, it’s no wonder that many graduates are struggling to make their student loan payments. In fact, the Federal Reserve Bank of New York reports that nearly one in four borrowers are behind on their student loan payments.
If you’re struggling to make your student loan payments, you may be wondering if there’s anything you can do to lower your monthly payments. One option you may not have considered is working with a credit union.
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Unlike banks, credit unions are not-for-profit organizations that exist to serve their members. This means that they typically offer lower interest rates on loans and higher interest rates on savings accounts.
For example, the average credit union offers a student loan with an interest rate of 3.61%, while the average bank offers a student loan with an interest rate of 5.05%. This can save you hundreds or even thousands of dollars over the life of your loan.
In addition to offering lower interest rates, credit unions also typically offer more flexible repayment options than banks. This can be a huge help if you’re struggling to make your monthly payments.
For example, some credit unions offer income-based repayment plans that lower your monthly payment if your income is low. This can be a lifesaver if you’re struggling to find a job after graduation.
If you’re having trouble making your student loan payments, consider working with a credit union. You may be able to lower your interest rate and get more flexible repayment options.