Do Credit Unions Offer Loans for Large Purchases?
Yes. Credit unions offer a wide range of financial products, including loans and lines of credit, that can be used to finance large purchases without exhausting your cash reserves.
While some of these loans are specific to certain types of purchases—such as a mortgage to buy a home, or an auto loan—consumers can also apply for personal loans that can be used to make purchases at their own discretion. As with any other loan, your access to this financial product will be determined based on a number of data points collected in a loan application, including your income, credit score, current assets, and other information.
What are the Typical Terms and Conditions of a Personal Loan?
Two key criteria to consider when applying for a personal loan—or when comparing personal loan options across multiple lenders—are the length of the repayment term offered for a loan, and the interest rate charged on your balance.
The most common personal loan length of repayment will range between one and five years. While you may find lenders willing to offer a longer repayment term—up to 10 years, in some cases—be aware that the interest rate will likely increase as the length of repayment goes up.
The interest rates charged by personal loans, meanwhile, are likely to be higher than other types of credit you might be using, such as a mortgage. While rates are lower than what you pay with a credit card, the average interest can easily rise above 10 percent for personal loans, although with excellent credit and favorable terms, you might find interest rates available between five and 10 percent.
Keep in mind that these rates are subject to change based on fluctuating economic conditions. If you want a lower interest rate, you may be able to qualify for a credit union secured loan that uses collateral to reduce the lender's risk, and thus your interest rate.
It's also important to review the personal loan terms and conditions regarding the fees you will be charged. Different lenders charge different fees for processing your loan, and the difference can quickly add up to hundreds of dollars.
What Do I Need to Apply for a Personal Loan?
Interested in applying for a personal loan? Always verify the credit union's personal loan requirements before you start the process of filling out an application. In most cases, lenders will request the following information in order to process the application, including:
Depending on the loan type or the lender's requirements, additional information may be requested. Loan applicants should respond promptly to these requests to get their application processed as quickly as possible.
Ready to apply for that personal loan? Contact or visit your local credit union today.