How Credit Union Loans Work

how does a credit union work

Your local credit union operates just like a bank. You can safely save deposit and withdrawal money, earn interest and even take out loans. The only difference is sometimes in order to be in it, you have to meet some qualifications. Your local bank, on the other hand, is open to anyone with enough to open a savings account.

The reason it’s selective?

Due to the fact that credit unions are not-for-profit establishments, unlike banks which exist to make a profit for their shareholders, credit union interest rate loans are often a lot lower than interest rate loans you might receive at a bank. You are generally able to become a member of your local credit union if you live in the same area, are employed, attend school or have some affiliation with a group in the local community.

In some cases you have to be in a certain profession, or involved with a specific group to join a credit union. In other cases, the only stipulations are being at least 18 years old, and being a U.S. citizen or legal permanent resident.

So with credit union interest rate loans so much lower, how come everyone doesn’t use credit unions instead of their banks? Is it harder to get a loan from a credit union? What’s the process exactly?

The fact of the matter is, credit union loans are obtained the exact same way you might get a loan from your bank. Today, one of the most efficient and popular ways to apply for a

loan is online through your credit union’s web site. After completing an application, you will be contacted by a loan officer who will discuss the details of how much money you need to borrow, along with the interest rate that you will be offered. Credit union interest rate loans will depend on your credit card score and how much of a liability you are.

Credit union interest loan rates are also determined by their customers. Considering the interest rates are controlled by a board appointed by the credit union’s customers, interest rates usually remain at the most competitive, lowest rates.

Along with their financial counterparts, credit unions offer loans for the exact same different things that people may need an extra financial boost for. Everything from personal loans, auto loans, student loans, mortgage loans, and business loans are offered through credit unions. The only catch is that you have to be a member.

Do you qualify?

If you’re interested in locating and joining a local credit union, there are tools offered online to help find one in your immediate area.

For example, all you need to join the online Arrowhead Credit Union is a Social Security card, U.S. address, be a citizen or U.S. permanent resident and be at least 18 years old. However, to join the California Credit Union you can only become member if you are an educator in the state of California.

Upon visiting your local credit union’s website, you should be able to figure out which one you might qualify for.

Source: www.gobankingrates.com

Category: Credit

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