Your local credit union should be your first stop for borrowing money, especially if you don’t have perfect credit. Credit unions often have benefits over other lenders, including lower interest rates for people with average or bad credit, more flexible terms, and loan officers willing to look at more than your credit score.
Many credit unions offer both unsecured and secured personal loans. Both types of loans carry fixed rates, and your exact rate depends on your credit score, credit history, income and debts.
A low credit score alone won’t disqualify you from getting a loan. Credit unions also look at your whole financial picture as well as your standing as a member of the credit union. Still, a good score will get you a lower rate than someone with bad credit, so it pays to know your score.
Credit unions come in many sizes, so the application process, approval criteria, rates and other aspects of a personal loan vary. Some allow online-only applications; others may require you to start the application online and walk into a branch to complete paperwork.
Credit Unions vs. Other Lenders
Many banks also offer personal loans, but they typically give the best rates only to those with excellent credit profiles. Online lenders offer loans for bad credit borrowers, but they don’t always consider your overall financial picture.
Loans from credit unions tend to be cheaper than those from online lenders, especially for borrowers with bad credit scores. The average rate online lenders charged to customers with scores between 630 and 689 is 21.8%, according to NerdWallet’s survey of lender rates.
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