If you need to borrow money to cover a car repair, home renovation, or another large expense, you may want to consider taking out a personal loan from a credit union.
Because credit unions are not-for-profit organizations, they may offer lower interest rates and fewer fees compared to banks, which can save you money over the life of your loan. Just keep in mind that you’ll likely have to be a credit union member to qualify and accept your loan funds.
Credit union personal loans work the same way that personal loans from banks do. But credit union personal loan interest rates are often lower than rates offered by banks since their goal isn’t to make a profit.
You’ll typically need to be a member of a credit union to qualify for a loan, but if you have good credit, you’ll likely be able to lock in a competitive rate and favorable loan terms. Plus, the cost of credit union membership is typically low, though some credit unions restrict membership to certain communities or professions.
If you’re thinking of getting a personal loan, consider these six credit unions. Note that PenFed is a Credible partner lender.
| Credit union | Loan terms | Loan amounts | Fees | Discounts | Minimum credit score |
|---|---|---|---|---|---|
| Alliant Credit Union | 1 to 5 years | $1,000 to $50,000 | No origination or prepayment fees | Check with lender | Check with lender |
| Boeing Employees’ Credit Union | Up to 6 years | Up to $30,000 | No origination fees | Check with lender | Check with lender |
| First Tech Federal Credit Union | 2 to 7 years | $500 to $50,000 | No application, origination, or prepayment fees | Check with lender | Check with lender |
| Navy Federal Credit Union | 3 to 5 years (up to 15 years for home improvement loans) | $250 to $50,000 | No origination or prepayment fees | APR discount worth 0.25 percentage points on select loans for active duty and retired military members | Check with lender |
| PenFed Credit Union | 1 to 5 years | $600 to $50,000 | None | Check with lender | 660 |
| Teachers Federal Credit Union | 2 to 5 years | Up to $50,000 | Check with lender | Check with lender | Check with lender |
Requirements to qualify for a personal loan will vary from lender to lender. But there are some common requirements you’ll have to meet to get a personal loan from a credit union, including:
If you’re struggling to qualify for a personal loan, some credit unions will let you apply with a cosigner or co-borrower. Even if you don’t need a co-applicant to qualify, adding one to your loan can help you lock in a lower rate than you’d get on your own. Just be mindful that a cosigner or co-borrower would see their credit negatively impacted if you didn’t keep up with repayment.
If you’re ready to apply for a personal loan at a credit union, follow these four steps:
- Compare multiple credit unions. Shop around and compile a list of credit unions you’re eligible to join. Make sure to compare APRs, repayment terms, and fees the lender charges to find the right loan for your unique needs. Prioritize credit unions, like PenFed, that offer prequalification: the ability to check rates via a soft credit check.
- Apply for membership. If you aren’t already a member of the credit union you want to borrow from, you’ll likely need to apply for membership to be eligible for a personal loan. However, some credit unions, such as PenFed, roll the membership process into your loan application, so you might be able to hold off on joining until you have a better idea of whether your personal loan application will be approved.
- Submit the application. Many credit unions allow you to submit a personal loan application online, but you can also stop by a local branch to apply in-person. Come prepared with required documentation such as a government-issued ID and recent pay stubs or tax returns.
- Get your funds. Once your application is approved, you’ll sign a loan agreement so you can receive your money. Most credit unions are able to disburse loan funds within one to five days.
Related: Learn more about getting a personal loan on Credible.com
As with any financial product, credit union personal loans have benefits and drawbacks:
Credit unions aren’t your only option if you’re looking for a personal loan. Because online lenders don’t have to deal with the overhead costs of maintaining a physical branch, they can also lower interest rates and more favorable terms than traditional banks.
Let’s take a closer look at how personal loans from credit unions compare to similar products from online lenders.
| Time to fund | Availability | Discounts | Membership requirements | |
|---|---|---|---|---|
| Credit unions | One to five days | Often local, sometimes nationwide | Might offer autopay or membership discounts | Limited to members |
| Online lenders | As soon as the same or next business day | Generally nationwide | Might offer autopay or loyalty discounts | No membership requirement |
If you’re ready to get a personal loan, make sure to compare as many lenders as possible to find the loan that best suits your needs.
Related: Learn more about getting a personal loan on Credible.com