Credit union personal loans: Potentially lower rates and more benefits for members

Couple applying for a credit union loan at their local credit unionImage: Couple applying for a credit union loan at their local credit union

In a Nutshell

By taking out a credit union personal loan, you could qualify for a loan with lower interest rates and fees than if you applied for a loan from an online lender or bank. But you must become a member to take advantage of a credit union’s loans or savings accounts.
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If you need to borrow money, credit union personal loans may be a good option. Whether you have an emergency expense or want to consolidate high-interest credit card debt, credit unions typically offer lower interest rates and fees than other types of lenders.

Here’s what you need to know about credit unions and our picks for the best credit union personal loans of 2022.



Best for emergency expenses: Alliant Credit Union

Why Alliant stands out: If you get a loan because of an unexpected expense, like a broken hot water heater or a major vet bill for your dog, you probably don’t want to have to wait very long to get the funds from your lender. With Alliant’s personal loans, you can typically get your money deposited into your account the same day you’re approved. But depending on your bank, there may be a wait before you can access your cash.

  • Loan amounts — Loan amounts range from $1,000 to $50,000.
  • Fees — There are no origination fees or prepayment penalties.
  • Loan terms — You can choose a term between 12 and 60 months.
  • Debt protection plan available — Alliant allows you to add a debt protection plan to your loan. Ranging in cost from 75 cents to $1.99 per $1,000 of your outstanding loan balance, the plan will cancel your payments or even your remaining balance if you become unemployed or disabled, or if you die.
  • Membership — You can become an Alliant member if you’re a current or retired employee of a qualifying company, if you’re a member of a qualifying organization, or if you donate to Foster Care to Success during enrollment.

Read our full review of Alliant personal loans to learn more.

Best for applicants without a credit history: Golden1 Credit Union

Why Golden1 stands out: If you have no credit history or credit scores yet, qualifying for a loan can be difficult. But Golden1 offers a credit starter loan that’s specifically designed for borrowers who want to establish new credit.

  • Loan amounts — You can borrow up to $1,500 on your own, or up to $2,500 if you have a co-signer.
  • Collateral — The credit starter loan is an unsecured loan, so you don’t have to use your car or other property as collateral.
  • Skip-a-payment feature — If you get a credit starter loan from Golden1, you can skip one payment per year as long as your account is current, you have made at least one payment on the loan, and you request to skip the payment at least 10 days in advance.
  • Interest rates — Golden1’s credit starter loan features personal loan APRs in the double digits. The Golden1 Personal Loan option offers APRs in the single digits.
  • Membership — To qualify for a Golden1 loan, you must be a member of the credit union. You’re eligible for membership if you live or work in California, have a family member or domestic partner that is a current Golden1 member, or work for one of the credit union’s partner employee groups.

Read our full review of Golden1 Credit Union’s personal loans to learn more.

Best for military families: Navy Federal Credit Union

Why Navy Federal Credit Union stands out: Navy Federal Credit Union’s products aren’t available to the general public. Membership is limited to U.S. military service members, Department of Defense officer candidates and reservists, Department of Defense civilian employees, veterans and immediate family of members.

If you’re in one of the eligible groups, andyou need a personal loan or a home improvement loan, Navy Federal’s guidelines allow repayment periods of up to 180 months, depending on the loan type and other factors. This can be an advantage because a longer loan term can give you more affordable monthly payments.

  • Loan amounts — The minimum loan amount is just $250, and the maximum amount is $50,000, depending on the type of loan.
  • Collateral — Navy Federal Credit Union’s home improvement loans are unsecured, but  there are secured personal loan options too. You can secure a loan with your savings account, for example, to potentially get a lower rate.
  • Loan terms — As mentioned above, loan terms can be as long as 180 months (some loans can be as short as 36 months or less). For home improvement loans, there’s a $25,000 loan minimum for terms of 61 to 84 months, and a $30,000 loan minimum for terms of 85 to 180 months.
  • Disbursement time — Loans may be disbursed in as little as 24 hours.

Read our full review of Navy Federal Credit Union’s personal loans to learn more.

Best for large purchases: Consumers Credit Union

Why Consumers Credit Union stands out: Credit union personal loans may have lower loan limits than you’ll find from other lenders, often $50,000 or less. But Consumers Credit Union allows eligible borrowers to take out as much as $100,000 with its signature loan.

  • Collateral — Consumers Credit Union’s personal loans are unsecured.
  • Penalties — There is no prepayment penalty if you choose to pay off your loan early.
  • Discounts — If you sign up for automatic payments, you can qualify for a rate discount of up to 0.50%.
  • Membership — To join Consumers Credit Union, you have to make a $5 donation to the Consumer Cooperative Association and maintain a balance of at least $5 in your membership share savings account.

Best for secured loans: Connexus Credit Union

Why Connexus stands out: Opting for a secured loan can increase your chances of qualifying for a loan and getting a low interest rate. Connexus credit union offers secured loans as well as unsecured personal loans with terms up to 84 months.

  • Loan amounts — With a Connexus secured loan, you can borrow between $2,500 and $50,000.
  • APRs — Some borrowers may qualify for an APR in the single digits, but maximum rates can go well into double digits.
  • Membership — To qualify for Connexus Credit Union membership, you must work for a participating employer or have graduated from a participating school, live in one of the designated credit union communities, have a spouse or family member that is a member, or join the Connexus Association with a $5 donation.

What you should know about credit union personal loans

Credit unions offer financial products and services that are the same as or similar to those of banks. With both credit unions and banks, you can access things like direct deposit, mobile banking, ATM access and overdraft protection.

But banks are for-profit institutions, meaning they’re in the business of using money to make money. Credit unions are nonprofit organizations, and they’re member-owned.

Typically, credit unions use their nonprofit status to pass savings along to their members, often giving them higher interest on savings accounts and charging lower interest rates and fees on loans.

Here are some things to know before applying for a credit union loan.

1. You’ll need to be a member

Each credit union has its own criteria for who can join. Membership eligibility is usually based on some sort of commonality, like location, relationship to an existing member, or membership in a church, school, labor union or homeowners association.

You can find credit unions in your area via the National Credit Union Locator. Once you find a credit union you want to join, review the membership requirements. If you’re eligible, you can contact the credit union directly to join.

2. You may get a lower interest rate and fewer fees

Credit unions generally are focused on promoting financial well-being for its members rather than turning a profit. As a credit union member, you may be able to get more favorable loan terms — like a lower interest rate and lower fees — than you might get from a bank or other type of lender.

Federal credit unions can’t charge you an annual percentage rate, or APR, higher than 18% for most types of loans they offer. But the average APR for an unsecured three-year loan from a credit union may be even lower, according to data collected by the National Credit Union Administration. In 2021, the national average APR for an unsecured credit union loan was under 9%. Some online lenders charge APRs of up to 36% or more.

With a lower APR, you can save money overall — and you may also have a lower monthly payment.

Not only are the interest rates typically better than you’ll find elsewhere, but the associated fees may also be lower.

3. You might have better odds of approval

If you have strong credit, you might have access to favorable loan terms like low APRs. But credit unions may also be willing to work with you even if you’ve struggled with credit in the past.

Some credit unions may give loans to borrowers who don’t have much credit, or if you have no credit history at all. If you’re already a member of a federal credit union and you need money right away, a payday alternative loan may be an option for tiding you over until your next paycheck.

While the interest rates for a payday alternative loan might not be as low as those of some other unsecured personal loans, federal credit unions cap payday alternative loan APRs at 28%. Compare that to traditional payday loans, which typically come with costs that equate to an APR of around 400%.

If you want to build your credit, another type of credit union loan to consider is a credit-builder loan. Improving your credit can help your chances of getting favorable loan rates and terms in the future.

Just remember that a credit union may not be willing to give you a loan — even if you’re a member — if it doesn’t consider you a member in good standing.

4. You might have limited access

Credit unions typically serve a smaller customer base than traditional banks. You might find that your credit union has a limited number of physical branches.

How we picked these loans

To choose the best credit union loans, we researched 10 credit union personal loans. Each credit union and personal loan was evaluated based on membership requirements, loan amounts, repayment terms, fees and APRs.


About the author: Kat Tretina is a personal finance writer with a master’s degree in communication studies from West Chester University of Pennsylvania. Obsessed with her many side hustles, she focuses on helping people pay down their … Read more.