Becoming A Responsible Homeowner

Why A Credit Union Loan Is Sometimes Better Than A Bank Loan

If you would like to consolidate your debts into a single monthly payment, you might be considering heading to a bank to obtain a loan. However, credit unions also offer loans and a credit union loan can often be a better option than a loan from a bank.  

Receive a Loan as a High-Risk Borrower

Credit unions do not seek to make a profit and instead use the revenue they have generated to reinvest it in the community. You might be more likely to receive a loan from a credit union if you are considered to be a risky borrower. Credit unions often pledge to offer loans to those who are in need.

Pay Lower Interest

A credit union does not have to charge high-interest rates because the goal of a credit union is not to generate a profit. Therefore, you will be able to save in the long run if you choose a credit union. With a bank, if you have a poor credit score, you're more likely to pay higher interest rates than with a credit union.

Manage Your Account Online

In the past, a bank would offer you access to better technology because the bank would have much greater financial resources than a credit union. However, there are many high-tech services available to credit unions today, such as online banking. Therefore, it can be just as easy to engage in online banking with a credit union as it can with a conventional bank.

Obtain a Loan

When you are looking for a credit union, you will need to take into consideration the "field of membership." This refers to the individuals who are allowed to have an account or obtain a loan from a credit union. These can include individuals who are members of a particular church or business, residents of a geographic location, or those who are members of a different type of organization.

However, since the credit union is meant to serve an individual just like you, and is not required to make a profit, you might have a much better experience. Because a credit union has a much smaller footprint, they are not serving as many customers and you will have an easier time scheduling a meeting with your credit union. A credit union will usually have fewer branches than a bank, but this isn't a problem if you often visit the same bank anyway or if you bank online.

Contact a local credit union to learn more.