There are some negative aspects to going with a credit union as well. Many do a hard credit check, which can temporarily hit your credit score – online lenders will do a soft check to prequalify you for the loan. Credit unions don’t tend to have mobile banking technology that big banks also have.
However, credit union loans are often cheaper than what you’d get from online lines, especially for people who don’t have great credit. The average rate online lenders give to customers that have a credit score of 630 or less is nearly 39%.
What’s The Cost Behind A Credit Union Personal Loan
There are two kinds of credit unions:
- State chartered – These credit unions tend to have higher rates, usually dependent on the state the borrower lives in. However, the average is around 11.3% for the last five years.
- Federal chartered – These have a yearly percentage rate of 18% for most loans. During the last five years, these credit unions had an average 9.6% APR for three-year loans.
Before you get a personal loan, be sure to do your homework, so you can get the best deal possible. Also, realize what your loan is going for before you apply for it. Is it really necessary to get one?