Both local and national credit unions offer personal loans for people of all credit profiles. However, most loans are only available to members.
Compare personal loans from some of the largest credit unions
Name
APR
Min Credit score
Max loan amount
PenFed Credit Union personal loans
7.99% to 7.99%
580
$50,000
Navy Federal Credit Union personal loans
7.49% to 7.49%
Varies
$50,000
Alliant Credit Union personal loans
10.49% to 10.49%
640
$100,000
Consumers Credit Union Signature loan
11.99% to 11.99%
700
$40,000
Teachers Federal Credit Union Personal Loans
7.99% to 7.99%
Varies
$35,000
What sets credit union loans apart?
Unlike many other lending institutions, credit unions are nonprofits. This means their end game isn’t making profits for its shareholders but providing its members with more competitive services.
Because of this, you’ll need to become a member before you can qualify for a personal loan from a credit union. Some credit unions offer membership to limited groups of people, so be sure to check if you qualify.
Where credit unions shine
Credit unions and online lenders typically have more flexible requirements than banks and are typically more friendly to online customers.
However, credit unions often offer more competitive rates and come with the added benefit of personalized service — if you have any questions, you’ll be able to visit a branch and meet with someone in person.
Where online lenders shine
Online lenders beat credit unions on two fronts: Turnaround time and ease of application. Online lenders can sometimes get you funds in as little as one business day.
You also don’t have to become a member and open a new bank account to be eligible. As long as you live in a state serviced by the lender, you’ll be able to have money deposited into your bank account.
How they’re similar
Credit unions are much closer to banks than other types of lenders. They offer a wide range of financial services, including checking and savings accounts, CDs, retirement funds and multiple types of loans. The applications are typically more involved than online lenders and can take a few weeks to process.
How they differ
The key difference between credit unions and banks is that credit unions tend to have less strict eligibility requirements, especially compared to international banks.
They usually also have more information available online, often providing tables, calculators and other tools so you can estimate how much you’ll pay before you apply.
How can credit unions offer low rates?
Credit unions can offer low rates because of the way they’re structured.
Credit unions have a strong focus on their community of members and use a democratic approach when electing a board of directors. This board provides general oversight of the credit union’s functions and keeps the best interest for the credit union’s members in mind when making decisions.
Because credit unions are nonprofit, their earnings are put back into the members’ pockets — usually in the form of lower interest rates, reduced fees and better terms. This means that you may end up paying less for a personal loan from a credit union than you would from a bank or online lender.
What types of personal loans can I get from a credit union?
While the exact type of personal loan you can get from a credit union will depend on what the credit union offers and your credit, most usually have a combination of three different personal loan types:
Unsecured personal loans. With an unsecured loan — also called a signature loan — you won’t have to put up any collateral. And if you have good credit and a regular source of income, you may qualify for a low interest rate.
Secured personal loans. Secured personal loans are less common, but they allow you to put up collateral — usually a certificate of deposit or a savings account — that acts as collateral should you default. This lowers your potential interest rate and makes it easier for people with less-than-perfect credit to qualify.
Payday alternative loans (PALS). Available at some federal credit unions, PALS are short-term loans $200 to $1,000 with interest rates capped at 28%.
Competitive rates. Because credit unions are nonprofits, they are able to offer competitive interest rates to their members.
Bad credit loans. Some credit loans offer personal loans to individuals with poor credit. However, you may be required to apply with an eligible coapplicant or provide collateral.
Nonprofit institution. Unlike banks, any earnings a credit union sees are redistributed to its members in the form of small dividends, low interest rates, smaller fees and other perks.
Must be a member. In order to qualify for a loan from a credit union, you must first be a member. This means you may have to pay a nominal minimum deposit along with a membership fee.
Slow turnaround. It can take a few weeks — or even longer — to receive your funds.
Limited services. Many local credit unions only have a handful of ATMs and locations. While this might not affect your loan, you could have trouble accessing your checking or savings account if you move.
Consider these factors before applying
The APRs on unsecured personal loans are often higher than secured loan rates. If you’re able to provide some kind of collateral, you may want to consider getting a secured loan. Your creditworthiness affects the APR you are offered. If you have a poor credit rating, you may want to postpone your plan of getting a loan until you repair your credit.
If you feel you might have problems making timely repayments, consider how a personal loan would fit into your budget. Making late payments will have you paying additional fees and can damage your credit.
What do I need to apply for a credit union personal loan?
To get a personal loan from a credit union, you first need to become a member. Each credit union has different stipulations for joining — this is called the field of membership. Eligibility can be determined by many factors — where you live, your employer, your family and any sort of activity within the community where the credit union operates. Once you’re a member, there will be certain requirements when applying for a personal loan, such as:
Personal identification. Driver’s license, state identification card, Social Security card or passport.
Personal details. Verification of address with either a copy of a lease or any recent utility or credit card bills. Also, proof of past or current income with W-2s, recent pay stubs or bank statements.
More loan types offered by some of the largest credit unions
While not common, some credit unions offer business loans. These are best for companies that only need small amounts of financing — under $50,000 — and want to establish a long-term relationship with a community financial institution.
Important factors to consider before joining a credit union
Since local credit unions don’t have as wide a reach as big banks, switching to one can have more of an impact on your daily life than you might expect. Credit unions typically require you to be a member in order to get a loan through them. Consider these factors when you’re deciding whether or not to join a credit union.
Locations. Can you get to a branch of your credit union easily? If not, how long will it take? How important is having a nearby branch?
ATM charges. If you travel a lot, you might end up paying a lot in ATM fees since most local credit unions don’t have ATMs across the country. Some — like NYUFCU — get around this by having co-op ATMs across the country, though that’s more the exception than the rule.
Online banking. Many credit unions still have limited online banking options — they’re good for person-to-person transactions. If you like having a teller who remembers your name, your local credit union could be what you’re looking for.
Bank account options. While credit unions typically offer a wide range of personal loans, your options might be more limited when it comes to the bank account you have to open to qualify. If you have a specific bank account in mind, you might not have as much luck with a credit union.
Bottom line
If you’re already a member of a credit union, then applying for a personal loan may be a good idea. If you’re looking into becoming a member, competitive loan interest rates may be the deciding factor.
However, you should still compare your other loan options. Credit unions may take longer to process your application, and you may not qualify for as much as you would with an online lender. Take your time, and remember: the best loan is the one that keeps your payments low while covering your financial needs.
Frequently asked questions
What eligibility criteria do I have to meet to become a credit union member?
This depends on the credit union you choose. While some offer membership to all Americans, others limit their membership to employees, staff or students of specific institutions and their family members.
Who can apply for a personal loan through a credit union?
You can apply if you’re a member and if you have a regular source of income. To become a member, you’ll have to complete an application and provide an acceptable form of photo ID.
Do credit unions charge loan processing fees?
Credit unions tend not to charge loan processing or loan settlement fees.
Aliyyah Camp is a SEO content strategist and former publisher at Finder, specializing in consumer and business lending. Her writing and analysis has been featured in CentSai, the Dough Roller and the Chicago Tribune. She holds a BA in communication from the University of Pennsylvania.
To verify deposits in your account, it is best to double check that directly with your bank. If you’re inquiring about the direct debit with your life line loan, please note that your lender will only take out your monthly repayment on your agreed date which is the 3rd of each month.
I hope this helps.
Please feel free to reach out to us if you have any other inquiries.
I was approved for a short term loan from my credit union the manager said the funds were in my account I didn’t check while I was there but when I got home later that day it was showing that the funds were not put in my account it was saying actual balance instead of available what did the credit union do wrong cannot contact them until the next business day
Generally, the process of moving the funds into your account depends on a couple of things. 1. The mode of payment that the credit union would use. 2. If the funds would go through a bank before it reaches your account, you may also need to consider the bank’s processing time. You may want to directly contact your credit union for you to see where in the process your approved loan is and how long before it would reflect on your account. Hope this helps.
Even if you have a bill for collection, but you meet all the eligibility criteria of the loan you’re applying for, you should be okay. If you like to apply for a loan with a credit union, make sure you are a member or part of that CU and also meet other eligibility requirements.
In case you are looking for other loans in the market, we’ve listed some of the loan products that you can compare.
Qualifying for a personal loan from a credit union will depend on factors such as the state you are located at, your affiliation to organizations such as the Armed Forces, Department of Defense Coast Guard or National Guard. being debt free will definitely increase your chances of getting approved for a loan. On the page you have opened, please answer a few questions to filter the options suited for you. Of course, if you pay off your debt, you’ll have a bigger chance of approval since paying off your debt will add a good mark on your credit history.
How can I get a small loan with no bank account and work for cash but can have the people I work to verify for me just trying to get on my feet and pay back a small loan and build credit?
Thanks for reaching out to us. Please note that we are not affiliated with any company we feature on our site and so we can only offer you general advice.
There are lenders that offer no bank account loans so it’s still possible for you to get a short-term loan. Comparing these lenders is the best way to find a deal that matches your needs.
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser Disclosure
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
I have a life line loan for $225. They usually take that out on the 3rd. My family deposited $175 on Monday. Will my bank take it?
Hi Katon,
Thank you for getting in touch with finder.
To verify deposits in your account, it is best to double check that directly with your bank. If you’re inquiring about the direct debit with your life line loan, please note that your lender will only take out your monthly repayment on your agreed date which is the 3rd of each month.
I hope this helps.
Please feel free to reach out to us if you have any other inquiries.
Thank you and have a wonderful day!
Cheers,
Jeni
I was approved for a short term loan from my credit union the manager said the funds were in my account I didn’t check while I was there but when I got home later that day it was showing that the funds were not put in my account it was saying actual balance instead of available what did the credit union do wrong cannot contact them until the next business day
HI Lisa,
Thanks for leaving a question.
Generally, the process of moving the funds into your account depends on a couple of things. 1. The mode of payment that the credit union would use. 2. If the funds would go through a bank before it reaches your account, you may also need to consider the bank’s processing time. You may want to directly contact your credit union for you to see where in the process your approved loan is and how long before it would reflect on your account. Hope this helps.
Cheers,
Reggie
Will doctor bill that was sent to collection stop u from obtain a personal loan .
Hi Lilma,
Thank you for your question.
Even if you have a bill for collection, but you meet all the eligibility criteria of the loan you’re applying for, you should be okay. If you like to apply for a loan with a credit union, make sure you are a member or part of that CU and also meet other eligibility requirements.
In case you are looking for other loans in the market, we’ve listed some of the loan products that you can compare.
Hope this helps.
Cheers,
May
If i pay off all my debt will i be able to qualify for a loan from a credit union?
Hi Peedub47,
Thanks for your inquiry
Qualifying for a personal loan from a credit union will depend on factors such as the state you are located at, your affiliation to organizations such as the Armed Forces, Department of Defense Coast Guard or National Guard. being debt free will definitely increase your chances of getting approved for a loan. On the page you have opened, please answer a few questions to filter the options suited for you. Of course, if you pay off your debt, you’ll have a bigger chance of approval since paying off your debt will add a good mark on your credit history.
Hope this information helps
Cheers,
Arnold
How can I get a small loan with no bank account and work for cash but can have the people I work to verify for me just trying to get on my feet and pay back a small loan and build credit?
Hi Dallas,
Thanks for reaching out to us. Please note that we are not affiliated with any company we feature on our site and so we can only offer you general advice.
There are lenders that offer no bank account loans so it’s still possible for you to get a short-term loan. Comparing these lenders is the best way to find a deal that matches your needs.
If you have minimal credit history, there are secured credit cards that can help build you credit and push your credit score up.
Hope this information helped.
Best regards,
Rench