Are Credit Union Loans Better? (Yes + Here's Why!)
Are credit union loans better than loan options from other sources? The short answer is yes!
If you aren’t familiar with credit unions, they offer borrowers a smaller and more specialized alternative to traditional banks and lenders. Keep reading to learn some of the top reasons why credit unions are the better choice for meeting your financial needs – from mortgages and auto loans to personal loans and student loans.
NOT-FOR-PROFIT STRUCTURE
One of the biggest things that differentiate credit unions from banks and other financial institutions is that credit unions are run as non-profit organizations where consumers become members and even partial owners. Member-owners have a say in how the credit union itself is run and can help determine the election of board members.
This structure also allows members to benefit from and share in the profits through perks like dividends, higher returns on savings accounts, and lower interest rates and fees on all types of financing products. Instead of paying out profits to stockholders and staff, credit unions pass the savings down to consumers.
LOWER RATES
Credit unions offer their members savings in a variety of ways, including lower interest rates than banks and other types of lenders. The amount that you will end up paying in interest over the lifetime of the loan is heavily influenced by the interest rate that you receive. The lower the interest rate, the better.
While there are several factors at play in determining the interest rate on a loan, including your location, career, and credit score, consumers can generally expect that credit union rates are competitive. Applying for your loan with your local credit union can be well worth it.
NO/LOW FEES
In addition to lower interest rates, credit unions are also able to provide their members with lower fees on their financial products. This is true across the board, from mortgage loans to checking accounts.
A credit union may waive common fees such as origination fees altogether and additional expenses are often lower than with traditional banks and other lenders. Instead of racking up the fees and hitting consumers with unexpected charges, credit unions are committed to making community access to personal finance as affordable as possible.
VARIETY OF LOAN TYPES
From debt consolidation loans to the even rarer FHA 203k loans, credit unions are often able to offer and specialize in a variety of lending services that may not be readily available elsewhere. There is usually a dedicated loan officer assigned to you who can help you decide which loan option is right for you and can help walk you through the application process.
In addition, specialty loan types such as RV loans and payday alternative loans are common with credit unions. So when you need to apply for a loan that is slightly outside of the typical parameters, consider giving us a call to discuss your options for financing.
PERSONALIZED SERVICE
Last but not least, one of the biggest perks of taking out a loan with your local credit union is that applicants can benefit from personalized service and custom financial offerings. The small, local structure of a credit union is very different from applying for a loan with a big national bank, resulting in more flexible underwriting and less stringent requirements for borrowers.
Most loan decisions are not based on automated calculations or formulas but are determined by a loan officer who carefully considers each applicant’s creditworthiness and weighs the risk to the lender. When you are dealing with one person at a credit union, this can often mean that it is easier to qualify since the loan officer will work with you to find a solution.
CREDIT UNION LOANS ARE BETTER! CONSIDER ONE TODAY!
At GHS Federal Credit Union, all of our products and services are created with our members and their unique interests in mind. From competitive earnings on savings to lower rates on loans, there are many reasons to join.