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Money is a core component of lifestyle needs such as wedding or trip planning. And a personal loan can be a great way to pay for a large purchase, consolidate debt, or cover an unexpected expense.
When you’re ready to take out a personal loan, you can choose from a few different lending options. While banks and online lenders are both popular choices, credit unions should also be on your radar. Keep reading to learn more about credit unions and why they could be the best choice for your personal loan needs.
Lower Interest Rates
That’s because credit unions are nonprofit organizations that don’t have to answer to shareholders. Instead, they can pass along their earnings to members in the form of lower interest rates on loans and higher yields on savings accounts.
There are Fewer Fees
In addition to offering lower interest rates, credit unions also tend to charge fewer fees than banks. For example, many banks charge an origination fee on personal loans (usually around 1% of the total loan amount). But since credit unions don’t have shareholders to answer to, they can waive this fee and save you some money.
Personalized Service
When you bank with a large institution, you’re just another number on a page. But credit unions are known for providing their members with customized service. When you apply for a loan at a credit union, you’ll work with a loan officer who will get to know you and your financial situation. This allows them to offer tailored advice and come up with the best possible loan solution for your needs.
Quick Decisions
You can expect fast decisions in a credit union regarding various situations. When you apply for a loan at a bank, your application can get bogged down in bureaucracy, and it can take weeks or even months to get approved (if you’re approved at all). But since credit unions have fewer layers of management, they can usually approve or deny your loan application within a few days.
Local Impact
When you bank with a national bank or an online lender, your money isn’t staying in your community. But when you use a local credit union, your money is reinvested in the area where you live, work, and play. This supports the local economy and helps create jobs—something that everyone can feel good about.
Fewer Restrictions
Credit unions typically have lower barriers to who can join than banks do. For example, some credit unions are open to anyone who lives or works in a certain geographic area. In contrast, others serve members of specific groups or organizations. This makes it easier for you to qualify for membership and take advantage of all the perks that come with it (like lower loan rates).
Better Customer Satisfaction
Because the services are more personalized, you can expect better customer satisfaction with a credit union. Your questions will be answered promptly, and you’re less likely to feel like you’re just a number. In fact, credit unions consistently rank higher than banks when it comes to customer satisfaction.
Flexible Repayment Terms
Credit unions typically offer more flexible repayment terms on personal loans than other lenders do. This means you can choose a loan term that fits your budget and gives you the time you need to repay your debt (within reason, of course).
Final Word
Credit unions are a great choice for personal loans. They tend to offer lower interest rates and fewer fees than banks, and they provide personalized service that can’t be beaten. So if you’re in the market for a personal loan, check out your local credit union—you might be surprised at what you will discover!
Have any questions or concerns? Feel free to ask us in the comments section!