How Credit Unions Work
If you’ve never used a credit union, you may think they’re the same as banks. There are plenty of similarities, but credit unions are nonprofits owned by their customers. These characteristics often help credit union loan rates stay low.
Credit union loans come in a variety of flavors, but small institutions might have fewer options:- Unsecured (Signature) loans
- Home equity loans
- Auto loans
- Business loans
- Student loans
Becoming a Member
Before applying for a credit union loan, you have to become a ‘member’. As long as you meet their criteria you’re in. You’ll often qualify by sharing characteristics with other members such as where you work or where you live.
If you need to find a credit union that will accept you, try the credit union search tool.
Applying
Contact the credit union and let them know you’re interested in borrowing money. Applying for membership is usually very quick and easy. Once you’re a member, you can apply for the loan.
Like bank loans, credit union loans usually require you to prove your creditworthiness. You’ll need to prove you can repay the loan or use a co-signer.
