Building Member Relationships through Private Student Loan Consolidation
Although offering student loans to traditional undergraduate students is often rightfully discussed when credit unions look for ways to build long term relationships with young adults, there is another great opportunity getting overlooked – private student loan consolidation.
While private lenders, including banks and credit unions, play a relatively small role in today’s student lending marketplace, there is well more than $150 billion in outstanding private student loans. Due to the unsecured nature of these loans it’s certainly understandable that they carry higher interest rates than standard home or auto loans. However, many of these loans were made during a time period that is not reflective of today’s rate and regulatory environment, leaving thousands of young adults (many of whom who are employed college graduates) with high-rate debt. Credit unions are uniquely positioned to help these borrowers by providing straightforward guidance and fair-value lending solutions.
With the help of CU Student Choice, leveraging the current rate environment to offer competitive pricing, credit unions can attract new members and develop positive long-term relationships while growing and diversifying loan portfolios. Making these relationships attractive is the fact that they are made to college graduates who are already working and making payments on their existing loans. Questions about graduation and finding a job have been removed from the equation. These traditional closed-end loans enter repayment immediately and provide a solid return to the credit union, while also providing fair value to borrowers.
Finally, since borrowers may want to refinance their debt at any time, there is much less seasonality than compared with an undergraduate private student loan. You can sign and launch a solution any time. The sooner you do, the sooner your members and the cooperative can start seeing the benefits.
For more information on CU Student Choice, reach out to your league representative or Alan Babcock, Lending & Insurance Consultant for CU Solutions Group, at Alan.Babcock@CUSolutionsGroup.com. More information can also be found on the CU Solutions Group website.Go to main navigation