Why Trust Us

Investopedia researchers collected thousands of data points from dozens of lenders (including 20 credit unions) to evaluate the factors most important for borrowers. We used this info♕rmation to rank each lender based on APRs and fees, loan amounts, repayment terms, customer experience, and other factors. We developed this process to support Investopedia’s mission to provide unbiased, comprehensive financial product reviews and help you make the right financial decisions. Investopedia launched in 1999 and has been researching and evaluating personal loan lenders since 2019.

How Does a Credit Union Personal Loan Work?

With a personal loan, borrowers receive a lump-sum payment, which they pay back over time in 澳洲幸运5官方开奖结果体彩网:installments. Personal loan funds can be used flexibly—borrowers may use them to pay off a home renovation or medical expenses, or even to consolidate debt. ༒Repayment ter𝔉ms vary: Some personal loans have terms lasting a few months while others may be paid off over years. 

Generally, the annual percentage rate (APR), or the yearly interest rate plus fees, is fixed, so it doesn’t rise or fall with changes in the Federal Reserve’s benchmark rate, the 澳洲幸运5官方开奖结果体彩网:federal funds rate. 

Personal loans are typically 澳洲幸运5官方开奖结果体彩网:unsecured, which means that borrowers don’t need to provide collateral to get approved. Instead, lenders rely on a borrower’s credit score as an indicator of their creditworthiness. Usually, lenders will also look at factors like annual income, credit history, and 澳洲幸运5官方开奖结果体彩网:debt-to-income (DTI) ratio.

澳洲幸运5官方开奖结果体彩网:Credit union personal loans are sim▨ila🦂r to personal loans offered by banks. 

However, credit unions may offer lower APRs on personal loans. This is because credit unions are not-for-profit organizations—typically, excess profits are passed down to customers in the form of lower APRs on loans or higher 澳洲幸运5官方开奖结果体彩网:annual percentage yields (APYs) on savings accounts. 

How to Get a Credit Union Personal Loan 

1. Evaluate your finances: Before you apply for a 澳洲幸运5官方开奖结果体彩网:personal loan, look at your current financial situation and consider your needs. What do you plan to use the money for? How much money will you need to cover your expenses? Will your credit score enable you to qualify for a personal loan with a low APR? How large a monthly payment will you be able to afford?
2. Do some research: After you’ve determined what your needs are, research the different lenders who offer personal loans. Credit unions have membership requirements, which means that membership may be restricted to residents of a certain location or members of a particular group, like a church. Some credit unions only require a small donation or a minimum deposit into a savings account to become a member. Look for a credit union that you’d be eligible to join.
3. Consider pre-qualification: If you want to get an idea of what type of loan you’d qualify for without it impacting your credit score, see if the lender offers pre-qualification. 
4. Join a credit union and apply: Once you’ve settled on a credit union to join, apply for membership. Typically, you’ll be required to provide information including your address, Social Security number (SSN), and proof of residence. Once you’re a member, you should be ready to apply for a personal loan. Note that some credit unions allow people to apply for a loan before they become a member.

Who Is a Credit Union Personal Loan Good for?

A credit union personal loan is a good option for bo🐻rrowers who want access to a lump-sum of cash and don’t mind putting in the effort of becoming a🌠 credit union member.

By getting a personal loan at a credit union, borrowers may be able to score a lower APR than they’d get at a tꦰraditiona🧸l bank. This is because credit unions have a not-for-profit financial structure. 

Common Personal Loan Terms to Understand

• Credit score: A 澳洲幸运5官方开奖结果体彩网:credit score is a three-digit number that indicates the likelihood that a borrower will pay back a loan. Credit scores are calculated by weighing factors like payment history, 澳洲幸运5官方开奖结果体彩网:credit utilization ratio, length of 澳洲幸运5官方开奖结果体彩网:credit history, and more. Lenders assess a borrower's credit score to determine whether someone will be approved and their loan terms. A higher score improves a borrower’s chance of approval and receiving favorable terms.
• Annual percentage rate (APR): The APR refers to the yearly interest rate, plus fees, that borrowers pay on a personal loan. 
• Pre-qualification: Before you formally apply for a personal loan, you can check if you’re likely to be approved and the possible terms of the loan by seeing if the lender offers a pre-qualification option. With 澳洲幸运5官方开奖结果体彩网:pre-qualification, you provide information—such as your name, address, and income—and a 澳洲幸运5官方开奖结果体彩网:soft credit check is performed, which is an inquiry into your credit report that doesn’t impact your credit score. However, pre-qualification does not guarantee approval.
• Origination fee: Some lenders may charge an origination fee, or a one-time fee for processing your loan application. It’s typically 1% to 8% of the total loan amount, though sometimes higher, and is included in the APR. 

Pros and Cons of Credit Union Personal Loans

Pros Explained

• May have lower APRs than bank personal loans: Since credit unions are not-for-profit organizations, they generally offer lower interest rates on loans than banks, which are for-profit institutions. 
• Flexibility with use of funds: With personal loans, you can typically use the funds as you choose, whether that’s to consolidate your credit card debt, pay for a home renovation, or finance a wedding.
• Could qualify with a lower credit score: Credit unions may be more likely to approve borrowers with less-than-stellar credit scores because as nonprofits they may take on more risk than traditional banks. 

Cons Explained

• Strong credit score required for lower APRs: While 澳洲幸运5官方开奖结果体彩网:borrowers with bad credit can still qualify for personal loans, to get the lowest APRs, you’ll generally need a solid credit score. 
• No continued access to credit: If you need additional funds beyond the amount of your personal loan, you’ll need to apply for another loan. People who need access to a continuous line of credit should consider a 澳洲幸运5官方开奖结果体彩网:credit card—or a home equity line of credit (HELOC) if they are homeowners—instead.
• Could take longer to get a loan: Unlike banks, credit unions may require people to become members in order to take advantage of their products. That means you may have to apply for membership at a credit union, become a member, apply for a personal loan, and be approved before you receive your funds. However, there are some credit unions that allow people to apply for a loan before becoming a member.
  

How We♌ Choose the Best Credit U🌌nion Personal Loans

Investopedia collected over 2,600 data points from 59 lenders, including 20 credit unions, traditional banks, fintechs, and finance companies, to evaluate and rank the best personal loan providers. We identified and collected 45 criteria, including APRs, loan amounts and terms, fees, customer experience, and more. Our criteria and ratings are also informed by speaking to hundreds of borrowers about their personal experiences with personal loan lenders abo💎ut the process. Research and data collection began on July 23 and ♉concluded on October 18, 2024.

We arranged the 45 criteria into four over-arching categories. We then scored and weighted 26 cr𓆉iteria (1,500 data points) to develop our independent, overall star rating for each lender, using the remaining criteria for background information. The four categories and their weights for this project are:

• Loan Costs (APRs, origination and late fees, autopay discount): 30%
• Borrowing Requirements (Secured loans, membership requirement, minimum credit score, and four other factors): 24%
• Lender Features (Online experience, educational resources, pre-qualification, and seven other features): 24%
• Loan Terms (Loan terms and amounts, funding time, approval process): 22% 

Investopedia’s complianc♌e team monitors changes to key details, like interest rates an🧜d fees, to maintain data integrity. Our compliance team members then update our database and pages to ensure both are accurate as of the date on the byline.

Learn more about how we evaluate personal loans in 澳洲幸运5官方开奖结果体彩网:our complete methodology.