Credit Union Personal Loans

Learn about how to compare personal loans from credit unions and find the best deal for you with Savvy today.

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, updated on October 4th, 2023       

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How do credit union personal loans work?

In terms of its function, personal loans from credit unions are the same as any other: they’re a loan designed for personal use with essentially no restrictions on how they can be used. Whether you need some extra funds for help funding renovations around your home, to consolidate outstanding debts or to go on holiday, a cruise or even your honeymoon after getting married, a personal loan can be the financial boost you’re looking for.

The amount you borrow is subsequently repaid over an extended period of your choosing, generally ranging from one to seven years, with interest and fees. These are both key areas of comparison when it comes to personal loans, as they dictate how much yours will end up costing you over the course of your term. Some fees are avoidable, however, such as ongoing monthly fees, establishment fees and early repayment fees.

How are credit union personal loans different to other lenders?

The key difference between personal loans from credit unions and other lenders like banks is that they’re (more often than not) cheaper. This is because while banks are owned by shareholders, credit unions are member-owned and run and plunge profits back into the union to facilitate benefits for their members. These most often come in the form of rate and fee decreases, which can be crucial in the long run in terms of saving you money. To highlight this, you can look at the following example:

A $30,000 personal loan taken out over five years at an interest rate of 8.5% p.a. would cost $615.50 per month and $6,929.76 in interest overall. However, finding the same loan at a rate of 7.5% p.a. instead would save just under $15 per month ($601.14) and almost $900 in interest ($6,068.31).

However, credit unions aren’t generally the cheapest in the market, as smaller online private lenders can more consistently offer the most affordable rates and fees to their customers. The other key advantage that these lenders hold over credit unions is their flexibility when it comes to eligibility requirements. While there’s a wealth of specialist lenders who cater to diverse financial situations, such as those with bad credit or lacking the right documentation, this isn’t the case for credit unions. They’re more like banks in this respect, as they tend to stick to borrowers with stronger backgrounds.

As such, it’s also important that you compare these alternative options with Savvy. We’re partnered with a range of lenders who can work with you no matter where your finances sit, offering some of the cheapest interest rates in the market as well. You can start comparing here today, have your loan chosen and receive your funds in as little as 24 hours.

How to save money on your credit union personal loan

Frequently asked personal loan questions

Are credit union personal loans secured?

They can be – but not all of them are. You’ll be able to choose from a wide range of loan products which encompass both secured and unsecured personal loans. The advantages of secured loans are that they come with lower interest rates and higher borrowing power in some cases. However, unsecured loans, which are more common, are able to be processed more quickly and don’t force you to use an asset as collateral.

How much can I borrow?

This is dependant on several factors, such as your credit rating, past borrowing, income and employment situation. Naturally, the better your record and the more you earn, the more you’re eligible to borrow. This also depends on whether you’ve taken out an unsecured or secured personal loan: unsecured loans are capped at $75,000 in terms of borrowing power but providing security can increase this to $100,000.

Is my interest rate fixed or variable?

Credit unions can offer both fixed and variable interest rates on personal loans. Fixed rates are the most common in personal loans, as they start from the lowest base rate and bring consistency in repayments to facilitate more accurate budgeting into the future. While variable rates are less frequently offered and are more expensive at the beginning, they have the potential to fall during your term and save you money in the process.

Do I have to choose a lender based in my city or state?

No – credit unions generally have the online infrastructure nowadays to support members across the country, regardless of whether they have branch locations in your area. The personal loan process in itself is 100% online, meaning you can choose just about any lender you like.

Will I need to be a member of my credit union prior to applying?

No – there’s no obligation for you to have been a member of your credit union before applying for personal financing. However, you’ll automatically become a member of your chosen union once you sign off on your loan.

Do credit unions offer pre-approval on their loans?

Yes – pre-approval is attainable from credit unions when it comes to your personal loan. This can be incredibly useful to have, as it gives you a firm understanding of the amount you’ll be able to work with upon approval, which will further inform what you can use it for (such as finding specific purchase options within your budget). It’s important to note that just because you’re pre-approved for a certain amount doesn’t mean that your formal approval will reflect this, nor does it mean you’re guaranteed to be approved at all.

Should I get a credit union car loan instead?

Credit union car loans can be a viable option for you if you’re looking to purchase a new or used vehicle. These products are secured by the purchase of the car, so your interest will be lower than a standard unsecured personal loan. However, what’s important to note for credit unions is that the restrictions placed on the type and age of cars to choose from are often greater than those of private online lenders.

Helpful personal loan guides