The Greatest Credit score Union Private Loans of 2020
Personal loans can help you fund home improvement projects, weddings, debt consolidation and other personal life events. Before running to a big-box financial institution, consider applying for your next personal loan from your local credit union. Because of their non-profit structure, the best federal credit unions can offer flexibility and rates not possible through traditional national banks.
To help you compare credit unions and find the best credit union loans, we used our SimpleScore methodology to compare APRs, loan amounts, transparency, support and fees for the best credit unions offering loans to customers.
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The 6 best credit union loans of 2020
|APR||Loan Amount||Membership Requirement||SimpleScore|
|Truliant Federal Credit Union||8.49%–14.74%||$500–$35,000||
|Alliant Credit Union||6.24%–10.24%||$1,000–$50,000||
|Connexus Credit Union||Starting at 7.99%||$5,000–$25,000||
|Golden 1 Credit Union||5.99%–12.99%||$1,000–$75,000||
|First Tech Federal Credit Union||Starting at 6.70%||$500–$50,000||
|PenFed Credit Union||6.49%-17.99%||$500–$20,000||
*Rates accurate as of December 11, 2020, and exclude autopay discounts.
Best for 90-day deferment – Truliant Federal Credit Union
Forget ’90 Day Fiancé.’ What about a 90-day deferment? That sounds much better.
4.4 / 5.0
Truliant Federal Credit Union 4.4
Truliant Federal Credit Union provides financial services to over 200,000 member-owners in and around North Carolina, South Carolina and Virginia. It offers flexible personal loans ranging from $500 to $35,000 for purposes ranging from medical bills and debt consolidation to vacations and weddings. Truliant’s personal loans start at 8.49% APR and all loans are unsecured, although the credit union does offer both secured and unsecured lines of credit to members looking for additional credit-building options. To offer maximum flexibility for members, Truliant charges no fees on personal loans, and qualified members can defer the first payment for up to 90 days.
Best for same-day funding – Alliant Credit Union
If you’re in a hurry to grab some cash and fund your personal needs, Alliant Credit Union lends a helping hand in the form of same-day funding.
4.6 / 5.0
Alliant Credit Union 4.6
Alliant Credit Union boasts over 500,000 members and more than $12 billion in assets, making it the largest credit union in Illinois and one of the largest in the country. Alliant provides same-day approval and same-day funding in most cases, even on the largest loan amounts of $50,000. All personal loans from Alliant are unsecured, so no collateral is required. There are also no origination or early repayment fees, and Alliant offers a debt protection plan to members to further protect their ability to repay.
Best for rate discounts – Connexus Credit Union
Getting 2% usually refers to milk at the grocery store but in this case, it’s rate discounts on your Connexus personal loan.
Starting at 7.99%
4 / 5.0
Connexus Credit Union 4
For members looking for geographic flexibility, Connexus Credit Union provides access to over 6,000 shared branches and 54,000 ATMs across the country through its credit union co-op. Connexus-owned branches are available in Wisconsin, Minnesota, Ohio, and New Hampshire for all banking services. Interest rates on Connexus personal loans are higher than at many other credit unions, but several discounts are available to bring financing costs into a reasonable range. Qualifications for these discounts are straightforward — agreeing to register for digital banking and eStatements will earn a 1% discount while signing up for auto-pay will earn another 1% off the loan APR.
Best for new borrowers – Golden 1 Credit Union
Golden 1 may be the golden child of credit union personal loans, especially for people who need some hand-holding in their first loan experience.
4.2 / 5.0
Golden 1 Credit Union 4.2
As California’s leading credit union, Golden 1 has provided financial and community services through its 70+ branches for over 85 years. Membership is open to anyone who lives or works in California, and the credit union currently has over 1 million members. For members needing some financial assistance, Golden 1 offers several personal loan options, including an unsecured personal loan and a starter loan that is specifically designed to establish new credit. New borrowers can get a starter loan up to $1,500 or up to $2,500 with a co-signer. Golden 1’s starting APR on its traditional personal loan is extremely competitive, and it allows borrowers to skip a payment once every 12 months on eligible loans.
Best for high loan amounts – First Tech Federal Credit Union
High loan amounts aren’t always helpful if they come with costly fees and high monthly payments. First Tech provides the right combination of APRs, terms and loan amounts to support borrowers with high loan needs.
Starting at 6.70%
4.3 / 5.0
First Tech Federal Credit Union 4.3
Founded in 1952, First Tech Credit Union focuses on providing financial services for companies and employees in the technology sector. First Tech is primarily based in Lane County, Oregon, but members also have access to more than 5,600 branches and over 30,000 ATMs through its co-op network. First Tech doesn’t offer the highest loan amount of all credit unions surveyed, but personal loans up to $50,000 and loan terms up to seven years make this offering the best choice for borrowers who need high loan amounts. The first payment on new loans isn’t due for 45 days, and there are no origination, application, refinancing or prepayment fees on First Tech personal loans.
Best for mobile app account management – PenFed
he future is mobile, and PenFed knows that, which is why it has a robust mobile account management system.
PenFed, or Pentagon Federal, Credit Union serves over 2 million members worldwide and offers a best-in-class suite of financial services, including mortgage and auto loans, personal loans and credit cards. PenFed personal loans are capped at $20,000, so borrowers with larger loan needs will need to look elsewhere. But PenFed doesn’t charge hidden loan fees and funding is offered as soon as the next business day. Members also have extensive self-help options, including 24/7 online support through the company website and the mobile app. The PenFed mobile app makes money management easy with features such as simple account transfers, one-touch bill pay and fingerprint login.
What is a credit union personal loan?
A credit union personal loan is a form of credit that individuals can use for personal expenses, such as medical expenses, home improvements or debt consolidation. These loans are typically offered as term installment loans, meaning the borrower will repay the credit union a set amount each month according to a predetermined schedule until the loan is paid in full.
[ Read: Has the Pandemic Made It Easier to Get a Loan? ]
How credit union personal loans work
Credit union personal loans are very similar to personal loans through other financing institutions with one major exception — borrowers who obtain a loan from a credit union generally must be members of the credit union to finalize the loan.
The repayment terms and amount of each loan will vary among different lenders, but local credit unions will often offer better rates on personal loans than other financing institutions.
The APR, or annual percentage rate, of interest charged on credit union loans is generally lower than rates charged on other types of personal loans. Since credit unions are non-profit community-based organizations, they have the flexibility to provide financial assistance to local community members and take on riskier, less-profitable loans. For-profit national banks must answer to shareholders and demonstrate sound financial practices, so they will assign higher interest rates to borrowers with credit issues.
[More: The Best Credit Union Student Loans]
Credit unions can also be more flexible with loan amounts, and many credit unions offer personal loans starting at just $500. Since larger banks typically won’t bother with such small loan amounts, working with a credit union may be the only way that some borrowers can obtain a personal loan that fits their needs. Small personal loans can also be a great way to build credit for borrowers with lower credit scores.
To facilitate loan transactions, a credit union will leverage the savings of its members to loan money to other members to generate income. To benefit from these financial services, a borrower must be a member of the credit union. Some credit unions will allow an individual to apply for a loan without being a member, but nearly all credit unions will include active membership as a condition of closing on the loan.
[Related: How to Compare Banks and Credit Unions]
How to choose the best credit union loan for you
Choosing a loan from the best federal credit union begins with a detailed understanding of your needs and the ability to repay any amount borrowed. Since credit unions have membership requirements for all financial services provided, there are several steps involved in choosing the best loan for your situation.
- Determine your need. With personal loans, you’ll need to consider both the amount and the purpose of your loan. Some lenders have restrictions on the uses of a personal loan, and you may be asked to provide some type of documentation. For example, if you want a personal loan to cover the costs of purchasing and installing a pool at your home, you may be asked to provide proof that your home owner’s insurance is aware of your plans and will allow coverage once the pool is installed.
- Apply for membership. Credit unions will require you to be a member as a condition of granting the loan, so it’s best to confirm your membership early. You don’t want to get approved for a loan only to have it fall through at the last minute because you didn’t meet the requirements to become a member of the credit union.
- Apply for the loan. Gather and submit any requested documentation, references, and personal information. Credit unions tend to ask for more documentation than other lenders, but that’s just so they can work as hard as possible to get your loan approval.
- Finalize your loan. Many credit unions have an internal underwriting department that can process and approve personal loans within the same day. If you have your application and documentation gathered correctly, you’ll likely be signing paperwork and finalizing your loan within a few hours of applying. Once you are approved and you’ve had a chance to review the terms of the loan, finalize it by providing any additional paperwork requested and signing all documents.
Credit union personal loan FAQs
Do I need to be a member of a credit union to get a personal loan?
In some cases, you may not need to be a member of a credit union to apply for a personal loan, but if you are approved, you’ll need to finalize your credit union membership to close the loan and receive your funds.
Are rates better at credit unions?
In many cases, rates at credit unions will be better than rates for similar personal loans at other organizations. This is because credit unions have greater flexibility in lending money to members, and credit unions are not held to the same rigorous profitability standards as other publicly traded financial institutions.
Do credit unions have worse customer service?
Since credit unions tend to be community-focused, the personalized service available at most credit unions is equal to or better than that available at a national bank. Credit unions may be more willing to overlook past credit issues or craft a financing arrangement for a member that wouldn’t be available through traditional financing channels.
Too long, didn’t read?
Credit unions generally have greater flexibility to grant personal loans to members, even when credit issues or lack of income hinders the approval process. Borrowers without credit or income issues may still want to consider credit union personal loans to meet their financing needs since credit unions offer lower rates, longer terms, and more flexible loan amounts than most traditional lenders.
We welcome your feedback on this article and would love to hear about your experience with the credit union personal loans we recommend. Contact us at firstname.lastname@example.org with comments or questions.