Credit union account owners are twice as likely to say that getting a loan from their financial institution was easy. This holds true across all demographics. 

Your local credit union should be your first stop for borrowing money. This is especially true if you have a fair or poor credit score (below 690). Credit union loans often have big benefits over other lenders, including: 

  • Lower interest rates 
  • More flexible terms 
  • Loan officers willing to consider factors outside of your credit score 

How Credit Union Loans Work

Credit unions are not-for-profit financial organizations that serve account holders who live, study, work and attend school in a specific area. The credit union is controlled by the account holders who are its owners, and who have the opportunity to vote and elect volunteer board members to oversee the organization.

Credit unions offer both unsecured and secured personal loans. Both types typically carry fixed rates, and the rate an account holder obtains depends on his/her credit score, credit history, income and debt.

The nice thing about belonging to a credit union is a low credit score alone won’t disqualify you from getting a loan. Credit unions consider your whole financial picture, including your credit history and standing as an account holder with the credit union.

Credit Union Personal Loan Rates

There are two types of credit unions: federally chartered and state-chartered.

At federal credit unions, annual percentage rates (APR) on most types of loans are capped. According to recent data from the National Credit Union Administration, the average APR for a three-year federal credit union loan in 2021 was 1.1 point lower than what  banks charged.

Rates change on a daily basis but, on average, you can get a much better interest rate on your loans through credit unions.