If you live in a certain area or are a member of a certain employee group, then perhaps you should look at getting a loan through your local credit union. Credit unions are less well known than banks, but they can provide loans at cheaper rates for their members. If you want to know more about getting a loan through a credit union, then here are some hints and tips for you.

What is a credit union?

A credit union is a banking institution that is effectively owned and run by its members. Instead of customers just being customers, they are also part of the organisation. Credit unions are non-profit organisations and look for service over profits.

Who can be a member?

Credit union membership varies, but membership is limited to people of a certain organisation or area in order to serve their interests. This could be a geographical area, a workplace, a religion, or something else. They have limited membership in order to give better service, and serve a group of people with a common bond. To be a member of a credit union, you need to be part of one of these groups.

What products can I get from a credit union?

Credit unions have similar products to banks, although many are much smaller and so do not offer quite the same range as a large bank. However, they do offer all the usual products such as savings, credit cards and loans.

Loans cheaper at a credit union

Although credit unions don’t have the same range of products, because they value service over profits they can offer really good rates on items like loans. These rates might not be as cheap as some bank introductory offers, but if you want a long-term relationship in terms of lending and saving then a credit union could really save you money.

Drawbacks of a credit union

Although the loan rates at a credit union can be low, getting hold of a loan is not as easy. If you are a member of a credit union, more often than not you have to save money with them first before you can borrow money. However, if you are not looking for a short-term solution, a credit union can serve you well.

Are they secure?

Many people worry that credit unions, because they are smaller, are not as secure as banks. This is not the case, and credit unions are insured and regulated at much the same level as a bank. If you are looking for a cheap loan rate and an organisation to serve your specific needs, then you should look into your eligibility for a local credit union. If you can become a member, it can save you money as well as offer you a better level of service from people who understand your particular situation.