When you're looking for a personal loan, banks are usually the first option, but credit unions can provide better terms for their members. In fact, more and more people have switched to credit unions in the past years, and this trend seems set to continue, as there are a number of undeniable advantages.
Advantages of Credit Union Loans
Credit union personal loans for bad credit have better interest rates ? and that's the first thing to be said, and one of the most important aspects for people looking to borrow money. This is possible because credit unions are non-profit organizations. They still have to cover some costs, of course, but they're not trying to gain anything from administering their members' money, and therefore they can provide higher rates for deposits and lower rates for loans.There are fees and commissions to be paid for each transaction, but they are lower than those paid at a bank, on average by about one third. Since these fees add up on the long term, this is also a major issue to be considered when taking a loan.
Also, credit unions often provide better access to financing, even for people with a low credit score. Banks have hard limits and rules in place, and it's very unlikely that they will take their time to understand your particular situation and make an exception for your case ? even when there are reasonable grounds for an exception. Credit unions, on the other hand, have a more flexible approach to this issue, and the staff is often willing to listen to your point of view, and to work with you in order to find the best solution for your current situation.
Advantages of Bank Loans
It may seem like a credit union is always a better option, but that's not entirely true. A lot depends on which union you selected, and on your general relationship with the institution. The first problem with credit union loans is the lack of options: typically, a bank has dozens of different products, but a credit union rarely provides more than one type of each of the major unsecured loans (mortgage, auto, and personal). If flexibility is important to you, this could be a serious drawback. Also, for certain amounts, you may still get a better deal from a bank.Another problem is the lack of accessibility: banks have hundreds of branches everywhere, there's almost always one within 20 minutes of your location. Also, they have online portals, where you can check your balance, send inquiries, or make payments ? so they're accessible at all times. Credit unions do not have a lot of locations, and are rarely available online, so you have to plan your payments accordingly, which means you will waste a lot of time in the process.
On the issue of services provided, banks and credit unions are tied: banks have more experience and more staff available, so they may be able to help you quicker. Credit unions, on the other hand, offer a more personalized experience, and are often able to understand your individual situation better, since they deal with people in the same category as you.?
Source: http://www.mydebtreliefplan.com/2012/12/are-credit-union-personal-loans-better.html
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