Benefits of Working with a Credit Union for a Loan

Author:     Saturday, August 30, 2014 12:00 AM

Selecting a lender is an important decision, particularly for large loans like a mortgage, car loan or even a large personal loan. Although a traditional bank may offer the loan that you are considering, it is also important to look at credit unions as a potential lender. Working with a credit union provides benefits that may not be available in a large bank.

Lower Interest Rates

The interest rate on a loan is essential to its affordability. A high rate means that you may not be able to obtain the property that you wanted or you may discover that your project will take longer because the loan is too small.

Fortunately, credit unions often offer competitive rates that make it easier to obtain a loan in the amount that you need without paying a large interest amount. Since a credit union is run by a board of members and is designed for a specific community, the rates are not set by national averages or external sources.

While the exact rates can vary based on factors like your credit score, your current debt to income ratio and the type of loan you are requested, you can expect a reasonable interest rate when compared to a traditional bank.

Friendly Service

Membership in a credit union means that you are able to obtain friendly service. The loans are often more flexible and you can expect polite services when you are making a request for a loan.

While every credit union has different services and methods of handling your loan requests, it may even be possible to apply for the loan over the phone or the Internet.

Special Promotions

When you are a member of a credit union, you may qualify for additional promotions and special benefits. Promotions that are available in regards to loans can vary and change over time, so it is important to keep up with the latest deals and options. For example, you may be given a lower rate on closing costs on a large loan or you may be able to ask for the payments to start after a set amount of time.

Convenient Loan Terms

Credit unions are not subject to the same loan terms as a traditional bank. You can request loans that have different lengths of time. The terms and options are more flexible, so if you want to pay off a mortgage in 7 years instead of 30 or 15, then you may be able to make a request for a shorter repayment period.

Obtaining a loan can be an important part of paying for an education, house or personal project. A credit union is a good choice for a lender because you may qualify for lower interest rates, better terms and special promotions.

Source: BFI