Credit union is a non for profit organization that offers a variety of financial products just like the traditional bank. They put emphasis on the charity of the members rather than on making money. Their goal is to help the members to save more. For this reason, they will not charge high interest on the loans that they issue. Therefore, if you you need a loan that is cheap, the first place to go is your local credit union.
The credit union will assess your entire financial picture and your relationship with them when reviewing the loan application. Still, those who have higher credit score often end up with a lower interest rate on the loan. Credit unions can approve applicants with poor credit score and have been rejected by the banks. You may need to discuss with the manager to arrange for an affordable loan if you have poor credit score.
Some credit unions allow you to apply a loan with the help of a co-signor. If you don’t have a cosigner, you may apply for a secured loan from the credit union but you have to use your asset as collateral. The funds that you obtain from the credit union is suitable for use on a variety of legitimate purposes. To apply a personal loan from a credit union, you must provide documentation like driver license, and social security number. You also have to provide income proofs such as pay stub, statement of your bank account, and W2 form.
You can easily do a search on the internet to find a credit union near you. Most credit unions only provide services in a state but there are also some that serve a wider geographical area. In order to get a loan, you must first become a member by meeting the eligibility criteria. On the credit union site, you will find the information on the eligibility criteria to become a member.
You can proceed to enter your information in the form if you are a candidate that fulfills all the eligibility criteria. On the application, you can indicate whether you apply alone or want to apply as a joint application. You will get to choose the lending term including fixed/variable interest, repayment, and loan amount. In the application, you also have to state how you want to use the funds. Nowadays, many credit unions let you apply online but you can also walk into the branch to apply or apply it over the phone.
There are 2 types of credit unions which are state and federal credit unions. The difference between a state and federal credit unions is that they have different legal regulations. The federal credit union is governed by a maximum interest rate regulation but the state credit union’s regulation usually have a higher interest rate cap or no cap on the interest at all.