Which Credit Union Is Best For Personal Loans – Advertiser Disclosure: Many of the offers and credit cards appearing on this site are from advertisers for whom this site receives compensation for being listed here. This disclaimer may affect how and where products may appear on this website (for example, the order in which they appear). These offers are not representative of all available credit card and account options. *APY (Annual Percentage Rate). Credit score ranges are provided as a guide only and do not guarantee approval.
We analyzed the personal loans offered by the biggest credit unions with the easiest membership requirements – and picked out the best options for borrowers. Learn how to compare and choose the best personal loan from a credit union. See the process you need to follow before applying.
Which Credit Union Is Best For Personal Loans
When you need a personal loan, the plethora of options can be overwhelming. Banks are an obvious choice, but you can go online to get a loan. There is also a third option for personal loans: credit unions.
Why A Credit Union Is The Best Place For Personal Loans
Credit unions offer many of the same things as banks, including checking accounts, savings accounts, and personal loans, but they work a little differently.
If you’re not sure what that is, or even what a credit union is, we’re here to explain it all to you, starting with the best credit unions for personal loans.
We reviewed the seven largest US credit unions that basically allow anyone to become a member and apply for a personal loan.
Of the seven credit unions we reviewed, these three stand out as the best for getting a personal loan.
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PenFed Credit Union specializes in serving members of the US military and some US government employees, but membership is very extensive.
That’s just a short list, and there are dozens of companies and nonprofits you can link to that qualify for membership.
For loans, PenFed offers unsecured personal loans and lines of credit up to $25,000.
Some of the other credit unions we’ve profiled offer slightly longer repayment times on personal loans, but PenFed gives you 60 months, which is still very generous.
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The list of sponsoring companies is long and includes some of the biggest names in the tech space, including Amazon, IBM, and Google.
Eligibility is easy as anyone can become a member of the Financial Health Association and Computer History Museum.
First Tech earned second place in our ranking thanks to low personal loan interest rates and high loan limits.
You can borrow between $500 and $50,000 with a secured or unsecured personal loan or personal line of credit. First Take gives you a little more time to repay your loan, with an extended term of up to 84 months.
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Golden 1 is a California-based credit union that opens membership to individuals living and working in California, their family members, members of the Financial Health Association, and members of selected groups of employees.
To maintain your membership, simply open a Golden 1 savings account and maintain a minimum balance of $1.
Golden 1 offers secured and unsecured personal loans from $500 to $50,000. You can also get a “starter” loan of up to $2,500 if you have a co-signer.
Loan term from 12 to 60 months, low interest rate. Financing is quick, with most loans being funded in one to two business days.
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Unlike a bank, which can be run by a board of directors or shareholders, a credit union is run by its members.
The structure of credit unions often allows them to offer better interest rates on savings and deposit accounts, charge lower fees, and offer lower interest rates on loans.
If you’re not sure where to look, you can use the National Credit Union Association’s website to see which credit unions are near you locally.
You can open an account at a bank, but at a credit union you must first be a member.
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Credit unions may also have requirements to maintain your membership from year to year. This means opening a special account or keeping a certain balance in your account.
At the bank, you’re looking at a monthly maintenance fee for a checking or savings account.
With credit unions, those fees are less common, although some (such as the Arizona Federal Credit Union) charge a small monthly membership fee.
When it comes to accessing your money, credit unions can offer the same personal branching experience as banks.
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You can handle any of your banking needs, including branch deposits and withdrawals, opening new accounts, and applying for a personal loan or line of credit.
Non-profit credit institutions; Banking is for profit. They make money by charging bank fees and interest on loans or credit cards.
With credit unions, any profits are returned to members in the form of lower fees, lower loan interest rates, and higher savings rates.
Online banks don’t charge high fees and you can get good interest rates on your savings, but you’re dealing with the convenience of being able to visit a branch when needed.
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However, you don’t have to worry about meeting membership requirements with a credit union.
And credit unions may have fewer branches or ATMs, while banks may have a broader network of branches and ATMs.
Since credit unions typically charge lower fees, you’re less likely to encounter upfront fees, late fees, or prepayment penalties.
Many banks and online lenders don’t even charge these fees, but you are more likely to encounter these additional costs.
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Credit unions may also charge better interest rates. At some other lenders, personal loan rates are in the same range as those charged by credit cards.
If you have a good credit score and qualify for membership, a credit union personal loan can save you more interest.
On the other hand, the bank may offer a higher loan limit or a longer repayment period. For example, Wells Fargo offers personal loans of up to $100,000. If you have large expenses to cover, you may want to stick with a bank or online lender instead.
Each credit union has its own criteria for credit approval, but in general, the higher your score, the easier it is to get approved and the lower the odds.
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If you’re wondering if a credit union is the best option for your personal loan, here are a few things to keep in mind.
Credit unions consider credit scores for loans, but they may be willing to accept borrowers with low (or none) credit scores.
Banks can only lend to borrowers with good or excellent credit, or give the best interest rates to the most reliable borrowers.
This is something you should definitely compare, as some credit unions may have higher lending limits than banks while others may not.
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On the other hand, credit unions may offer small personal loans of $1,000 or less, while banks typically require you to borrow a minimum of $2,000.
Banks are catching up and offering faster loan funding times, but not all are as fast as credit unions.
For example, you might have six checking accounts at a major bank, two or three accounts at a credit union, for example.
Big banks can also be more up-to-date technologically, offering more possibilities with their online and mobile banking services than credit unions.
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For example, you can deposit checks on your mobile device and pay bills online at a major bank, but the credit union may not offer those services.
Major banks and small banks in the region also have their own mobile apps for convenient access. You can sync those apps with your personal billing and budgeting apps so you can do all your money tasks on the go.
For branch access, banks are also better than credit unions. And they may also have a very extensive ATM network.
For personal loans, the bank may give you more time on how you use the loan than the credit union.
Of The Best Credit Unions For Personal Loans
Major bank lenders and regional banks may charge higher interest rates, and the rate you pay depends largely on your credit rating.
If you want a more personalized banking experience, credit unions are probably the real winner. Credit unions are not out to make money. Instead, they strive to give their members the best banking experience possible. There’s less pressure to promote products and services, so you don’t feel like you’re always hitting the mark with bank-like pitches.
When you’re new to using credit or your score isn’t good, you may need a co-signer for a personal loan.
At credit unions this is usually not an issue, but larger banks are often more reluctant to allow co-signers.
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Having a co-signer can make it easier for you to get approved, get you a better interest rate, and potentially allow you to borrow more.
We’ve mentioned this before, but it’s important to reiterate that credit unions can charge much lower fees than banks.
And if there are fees, you can negotiate them with your credit union. Banks may be willing to reduce fees.
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