When people need a loan to buy a car or a house or to consolidate their bills, they often look to banks and forget about credit unions altogether. But that’s a mistake, because credit unions usually have the same choices of loans that banks do, and they often carry lower rates and fees and are easier to get.
Credit Union Mortgages
Most credit unions of any size provide mortgages, and there are several advantages to getting a home loan at a credit union. For one thing, credit unions usually offer lower rates than banks. This is due largely to the fact that credit unions are non-profit and often have lower overhead than banks. Credit unions also don’t sell the mortgages they write to investors, which means their underwriting standards may not be as strict, making it easier for you to qualify. Because credit unions have local ownership and management, they may be more flexible in considering individual circumstances. In addition to purchase mortgages for first homes, many credit unions offer mortgages for second or rental homes, home equity loans and home equity lines of credit.
Credit Union Auto loans
Among the most common loans from a credit union are auto loans. For many credit unions, car loans are their bread and butter. Again, because of credit unions’ non-profit status and lower costs, they often can provide lower rates on car loans than banks can. Whether you are buying a new or used car, you always should include a credit union in your search for loans.
Personal loans from Credit Unions
Most credit unions offer personal loans, which are loans that are not secured by collateral. These loans often are called signature loans, because the only promise the lending institution has that it will get its money back is the borrower’s signature on the loan documents. Because credit unions are smaller, more personal institutions, it may be easier to qualify for a personal loan, especially if you already have a relationship with the institution. And because personal loans already carry very high-interest rates, the possibility of a slightly lower rate from a credit union is very appealing.
Share-secured loans from Credit Unions
When it comes to credit union loans, share secured loans are unique to those institutions. A share secured loan is a loan that’s secured by the savings account you have at the credit union. This is an option that most banks don’t offer. The ability to put your savings up as collateral allows you to get a lower interest rate than you would on a personal loan, and it also allows you to not have to tap into your savings, which may be your emergency source of cash.
Other types of Credit Union loans
Many credit unions offer other types of loans as well, although it usually depends on the credit union’s size and the makeup of its market. Many credit unions offer loans that can be used to purchase leisure vehicles such as motorcycles, boats and RVs. Many credit unions also offer small business loans and loans to farmers and ranchers. And most credit unions offer credit cards, which technically become a loan once you use them.
The best loan is one that allows you a better quality of life without over-stretching your finances. We’d love to meet with you at one of our locations and discuss how we can help you with that. Contact us today!