Credit union personal loans
These nonprofit lenders often offer competitive rates — but you'll have to join to qualify.
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
|Min Credit score
|Max loan amount
|PenFed Credit Union personal loans
|7.99% to 7.99%
|Navy Federal Credit Union personal loans
|7.49% to 7.49%
|Alliant Credit Union personal loans
|10.49% to 10.49%
|Consumers Credit Union Signature loan
|11.99% to 11.99%
|Teachers Federal Credit Union Personal Loans
|7.99% to 7.99%
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.
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%.
Not a member of a credit union? Compare these online personal loan options
Narrow down top personal loans by APR, minimum credit score or more to find the best for your budget and financial goals. Select Compare for up to four products to see their benefits side by side.
Pros and cons of credit union personal loans
- 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
|Other loan types offered
|Navy Federal Credit Union
|PenFed Credit Union
|Alliant Credit Union
|Consumers Credit Union
|San Diego County Credit Union
|Teachers Federal Credit Union
|State Employees Federal Credit Union
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.
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.
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