How To Refinance Student Loans With Credit Unions And Community Banks

I know what you’re thinking right now. Your mind is racing trying to figure out how to refinance student loans.

Did I get that right, or are you still stuck on Final Fantasy XV? That will be my first installment since X.

For those who said yes and wondered how I gained such incredible psychic abilities, I can see why you’re having trouble with student loans.

In 2011, American students collectively had over $1 trillion in outstanding student loans with that number only going up since then. Student loan rates have varied over the years between 3-7%.

And the college degree isn’t worth the paper it’s printed on.

Roughly 40% of Americans have a college degree, a number I could have sworn was significantly higher. Because it feels like everyone and their mother has a Bachelor’s.

A Bachelor’s degree has become the standard today. Going to college is seemingly an expectation and a given. As a result, practically everybody goes. With subsidized loans available to pretty much anyone who asks, it’s no wonder that the average price of a year of in-state public college was $24,061. With that much demand on a societal level (even the government pretty much tells you that you should be going to college no matter what) and loans that are subsidized so that the lender faces minimal risk in case of a default, even state and city public schools are priced at a ridiculous premium.

And so everyone goes to college and everyone comes out with a degree. And guess what? High supply of degrees, low demand as a result. As I said, the Bachelor’s Degree isn’t worth the paper it’s printed on. It used to be the great differentiator; now it’s just a very expensive minimum requirement.

I have a friend who’s literally dumb as a brick and doesn’t even know that Italy fought in World War II, and he has a Bachelor’s in History.

Anyhoo, my point is that so many kids have these outrageous student loan payments when they come out of college because we force college down people’s throats.

I’d love to see us culturally move away from “college for EVERYBODY”, but if you can’t beat ’em, join ’em.

There’s little that can be done to change the fact that roughly $1.3 trillion of debt is outstanding, but maybe we can all ease the burdens if we just figured out how to refinance student loans. Because the lower those interest rates, the less money that our creditors take.

Does Refinancing Really Make A Difference?

I guess before we learn how to refinance student loans, we should ask ourselves why should we do so? Does it really make a difference?


Remember that while a percentage point or two might not seem like a lot of money, it is. It is thanks to the magic of compounding which can add thousands of dollars extra in interest to the life of a loan just by increasing the rate by one percent for a person making only the minimum payments.

Watch this. I’ll show you a little magic trick. Using a loan refinance calculator, we’ll take a hypothetical student with $50,000 outstanding in student loan debt who is paying 7%, adding up to about $580 in monthly payments. This person has ten years left on this loan.

Now, let’s refinance that loan into a 15 year loan at 4%. So we’re going from having 10 years left at 7% to having 15 years left at 4%. What’s the difference?

This many!
This many!

While the best way to save money is to put as much towards principal as possible each month, that’s not always possible. Regardless, the lower your rate and monthly payment, the more money you can save.

The ability to save thousands–or potentially tens of thousands–in unnecessary interest payments is but one of 3 benefits of refinancing your student loans.  But as wonderful as releasing your cosigners from your tyrannical grasp and consolidating those heaps of monthly bills into one, it’s the ability to save a ton of money that forms the real meat as to why student loan refinancing is something you’re going to want to look into.

Lending, Locally Sourced

It may be hard to believe, but the big banks are large, faceless organizations who don’t really see you as a person, only as an account balance. And between clubbing baby seals, burning down orphanages, and team-killing on Halo multiplayer, the big banks are charging you the highest interest rates simply because they are greedy and want your money.

How To Refinance Your Student Loans With Credit Unions And Community Banks
“Grab her by the money!” — Donald Trump [Photo courtesy of imagerymajestic at]
Okay, that may not be completely true, but the fact of the matter is that the big banks have one thing in mind above all else: profit.

There’s nothing wrong with that. I run my own business and that’s for profit. I go to work for the paycheck (and so do you). This blog is monetized……….somewhat. The banks are no different. They ultimately exist to make money, and the officers and board members have a fiduciary responsibility to make a positive return on investment for the shareholders who’ve entrusted them with their money.

But you’re not a shareholder. You’re a borrower. And this doesn’t help you because the bank is going to maximize its profits off your back. Higher interest rates, origination fees, and smaller grace periods are going to be what you get because the bank needs to earn as much money as possible from doing business with you.

And that’s all it’s interested in. Making money off you.

Perhaps you’d be better off with a lender that prioritizes people over profits. A lender who is local rather than one who sits in an ivory tower six states away. A lender who has a vested interest in the growth of your neighborhood rather than one who has never heard of your town.

How To Refinance Student Loans With Credit Unions And Community Banks
A lender that’s a unicorn that poops other unicorns rather than one that just poops poop. [Photo courtesy of]
Alright, but who are these lenders if not the banks? The government which cares so much about you (soon to be led by Donald Trump, champion of the working man)? No, they are credit unions and community banks.

Common sense tells me that you are all adults and should know in 2016 what credit unions and community banks are, but traditional blogging techniques and strategies tell me to treat you all like you are mentally retarded and explain it to you like you’re five. Also, modern political correctness society tells me that you’re all going to get offended by the term “mentally retarded” and that I should have said “mentally handi-capable” instead.

So, anyway, credit unions are not-for-profit organizations that greatly resemble banks. However, they exist with the intention of serving the lending needs of specific communities. The world’s largest credit union, for example, Navy Federal Credit Union, will only allow members of the Department of Defense and U.S. Coast Guard to be members. “Members” of a credit union are simultaneously customers and owners. They have the deposit accounts and the lending products, but the “profits” made by the credit union are held with the purpose of lending out to its members at lower interest rates. Hence the term “credit union”; a specific group of people essentially pooling their money together in a “union” to provide credit to each other.

A community bank is a for-profit bank that operates locally. Meaning that, rather than a big bank that operates all over the country and is often far removed from its customers, the bank operates solely in certain areas and is dedicated to serving the needs of the specific community. Its employees and executives will also tend to be members of that community. Community banks usually seek to–and benefit from–using their lending power to add wealth to the communities they live in, and tend to be lighter on fees and APRs as a result.

Okay, so for those of you looking up how to refinance student loans at much lower rates with much better terms, that’s a pretty good start. Ditch the big banks and government and look for the credit unions and community banks.

But we can’t just end it there. I mean, what are you guys expected to do? Get up and walk into each branch of each credit union and community bank in town and ask for a rate quote? I mean, you could, but it’s better to work smarter, not harder.

So let’s do some smarter comparative shopping, mmkay?

Unlock Your Loan’s Potential With LendKey

Rather than get out there and “pound the pavement” like your grandfather tells you to do when you’re job hunting, you’re best off using an online platform to compare  student loan rates. And I have the perfect platform. It’s called Len–

“Lending Tree!”

No. No I think they only do mortgages. Also, don’t interrupt. I’m trying to teach people how to refinance student loans without the hassle of going outside and talking to fifty different loan officers here, so if you don’t mind……….

Anyhoo, I was going to say LendKey. The perfect platform for finding the best lenders to refinance your student loans with is LendKey.


How To Refinance Student Loans With Credit Unions And Community Banks
No, LendKey, they are not. [Photo courtesy of]
LendKey hosts a platform of over 300 credit unions and community banks. And since it’s founding in 2007, it’s been pairing up student loan borrowers and community lenders through their easy to use platform.

All you have to do is swing on here and click to check the rates. They’ll give you a huge list of lenders, rates, and terms. From there, you can play around with the filters, changing your location and vocation so that you are matched with a lender that will do business with you as well as things like your monthly budget so that they don’t waste your time with unaffordable loans.

Once you do that, you pick the best lender from the remaining choices and start your application. I’m not going to handhold you through how to do a loan application; it’s data entry. Know your name, date of birth, address and phone number, SSN, occupation, income, and monthly debt expenses. You’re a big kid now, so you can do it.

What’s amazing about LendKey is that, despite not being an actual lender themselves, they treat you as if they are. You see, most platforms that match a user to some sort of merchant or vendor will sort of shuttle you off to said merchant once you decide to do business. Most loan platforms are the same. Oh, you’ve decided to apply for a loan with XYZ Bank? Well, you’ve just landed on XYZ Bank’s site and are their problem from now on. Once the loan is disbursed, the platform has already gotten its money and is done.

But with LendKey, they fully service every loan. There are no origination fees because LendKey does all the paperwork, not the lender. And if you have a problem, LendKey’s customer service comes to your aid. The lender only provides the actual funds, but LendKey is who you are a customer of.

Actually, that last part is only slightly true, because you will also be considered a customer of the credit union or community bank that lent you the money through LendKey.

So that’s pretty cool.

You know what? I’ll let LendKey explain it real quick just in case you’re not staying with me:

Thank you, woman who is significantly more pleasant than me!

How To Refinance Student Loans: LendKey

LendKey is the answer to the great mystery of how to refinance student loans with credit unions and community banks without having to do all that insane comparison shopping. They cater to all credit-worthy student borrowers, even medical graduates with enormous outstanding debt. Hey, future doctors, you’ll cut me a deal on medical bills for that lead, right?

Of course, student loan refinancing might not be for everyone. You have to look at your budget and what your plans for the loan are. Do you want to lower your monthly payments or the overall cost of the loan? Will refinancing be even worth your time (I doubt a variable loan rate under 2% is getting much lower)? There are 6 questions to ask before you refinance your student loans, and I would imagine that each of them would lead to more.

But for the millions of Americans that have huge outstanding balances at rates higher than 5%, refinancing probably will be your best option. And I’d recommend LendKey since they’ll match you with a local (and possibly not-for-profit) lender who will offer you lower rates and no hidden fees. And they’ll handle the customer service themselves, which has some pretty good reviews online.

They also have financial aid information, a number of different loan variants (level payment vs interest-only for four years, fixed rate vs variable rate, etc), and resources to help you determine what sort of strategy you should take before you even do anything. They know more about student loans than I do, and you just listened to me talk about them for over 2,200 words.

So if you’re trying to figure out how to refinance student loans and save a ton of money, I’d definitely head over to LendKey. We can’t stop the system that shames us into taking on tens of thousands of dollars worth of debt for an overpriced education, but we can ease the pain of that debt by lowering our interest rates and consolidating multiple loans into one.

Readers–What do YOU think!? Do you have outstanding student loan debt, and has that debt been worth the education you received? Have you ever refinanced? How was the process? And what’s your strategy to save as much money as possible on your student loans? Leave your thoughts in the comments below!

Disclaimer: Those links to LendKey are affiliate links. That means that if you click on them, apply for a loan, and the loan gets disbursed, I earn a commission at no cost to you. That sounds terrible, but I did plenty of research on them and other student loan refinance companies and they really were the only ones to catch my eye. Do your independent research if you have to, but if this article caught your eye and brought LendKey to your attention, reciprocate the favor by applying for that loan refinance through my affiliate links and by sharing this article with others who are looking to refinance their student loans.


  1. says

    While I currently don’t have any student loans I have a lot of friends that still do. I will definitely be sharing this article with them and letting them learn more about LendKey.

    Thanks for sharing!!!

    • ARB says


      Maybe I should thank YOU for sharing! Or maybe your friends will. I hope that LendKey can help them save money on those outstanding loans. And I hope that their careers and incomes were worth the debt.

      ARB–Angry Retail Banker

  2. says

    I think it depends on what degree you get. I got an engineering degree, and that is worth the paper it is printed on. Remember STEM? (Science, Technology, Engineering, and Math.) However, there is a lot of worthless degrees out there.

    • ARB says


      I certainly don’t mean to say ALL degrees are bad or anything. My issue is with the “everyone go to college” mentality we have. Kids are walking around with tens of thousands of dollars in debt and pieces of paper that don’t get them jobs even though we spent years promising them opportunity if they got that paper. Many fields rightfully require advanced degrees (I’d be a little afraid if my doctor only had a GED). But so many jobs don’t REALLY necessitate a degree, just hands on experience or perhaps specialized training/apprenticeships. And yet our society pushes people who would be going towards these fields into debt-trap degrees because “you HAVE to go to college!”.

      Thanks for commenting!

      ARB–Angry Retail Banker

  3. Stevie says

    No loans for me, but I finished (after dropping out of regular college) using a non-traditional program oriented for working adults. My company paid most of it. But even so, very inexpensive compared to residential college.

    I can’t understand why kids are so reluctant to use easy cost saving measures like community college (instruction just as good as four year), testing in lieu of classes for credit, summer classes, good public schools instead of private, online courses (more convenient but NOT easier). I don’t get the obsession over “top” or selective schools, especially for undergrad. Do most employers care that much about the school on the diploma?

    Perhaps I have a distorted impression, but it seems part of the student loan problem could be rather extravagant lifestyles. I’m astonished at how well some college kids appear to live nowadays. When I was in traditional school the first time, you were expected to live like a pauper. ‘Starving college student’ wasn’t just a saying. Normal living came after graduation.

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