DCU loan review: Multiple personal loan options for members

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In a Nutshell

Whether you need a loan for home improvements or want to build credit, Digital Federal Credit Union offers a variety of personal loans. But if you don’t qualify for membership, you’ll need to look elsewhere for financing.

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Pros Cons

Multiple personal loan options

Must become a DCU member to apply

No origination or prepayment penalty fees

No prequalification application

Competitive interest rates for traditional personal loans

 


What you need to know about DCU loans

Digital Federal Credit Union, or DCU, is a not-for-profit financial institution with more than 800,000 members across all 50 states. DCU members can access their accounts at one of DCU’s branches in Massachusetts and New Hampshire, online, by phone or at one of DCU’s shared branch locations nationwide.

DCU offers several types of personal loans, which we’ll detail below.

Multiple loan options

In addition to student loans and mortgages, DCU offers unsecured and secured personal loans. Here are the types of personal loans that DCU offers.

  • Traditional personal loan — DCU offers a traditional personal loan for people who need a larger amount of cash. Loan terms go up to 60 months and the interest rates — which include a 0.5% automatic payments and relationship discount — are competitive.
  • Credit-builder loan — DCU’s credit-builder loan may help you build or rebuild your credit. You can apply to borrow between $500 and $3,000 with loan terms ranging from 12 to 24 months. But keep in mind that with credit-builder loans you don’t have immediate access to your loan funds. Instead, the amount you borrow goes into a savings account held by the lender. To help you build credit, DCU reports all of your monthly payments to the credit bureaus. And when you pay off the loan, you get the money from the account.
  • Quick loan — If you have less-than-perfect credit or need help recovering from a financial emergency, DCU offers a “quick loan.” You can apply for up to $1,000 with no credit check. If you’re eligible, you’ll have up to six months to repay your loan.
  • Secured loan — DCU also offers a secured loan, where you can use your DCU savings account as collateral. DCU’s secured loans have lower starting APRs than its unsecured personal loans, and they have repayment terms of up to 120 months.

Membership required

Before you can take out a DCU loan, you’ll need to be a member. To qualify, you’ll need to meet one of these eligibility requirements.

  • Be related to a current member
  • Work at an eligible company
  • Belong to an eligible organization
  • Live in an eligible community

DCU publishes a list of eligible organizations, employers and communities on its website.

Keep in mind that if you want to apply for a quick loan, you must be a DCU member for at least 90 days.

Interest rate discount

If you qualify for DCU’s traditional personal loan, you might be eligible for an interest rate discount of up to 0.5%. To receive the discount, you must opt for automatic payments and maintain Plus or Relationship benefits on your DCU checking account.

Even if you’re eligible for the interest rate discount, it’s still a good idea to shop around to make sure you’re getting the best rate and loan terms for your situation.

Skip-a-payment feature

If you need a little extra cash or have an unexpected financial emergency, you can apply for DCU’s “skip-a-payment” feature, which allows you to defer a payment. But there’s a $25 fee, and you can only defer one monthly payment if you qualify. Your loan must be at least six months old, your account must be in good standing, and you’ll have to submit your request at least 10 days before your payment is due.

You’ll only be eligible to defer a payment once per calendar year per loan, with a maximum of three deferred payments over the life of the loan.

It’s important to note that deferring a payment will extend your loan term. And even if you defer a payment, you’ll still accrue interest as outlined by your loan agreement. Make sure if you need to defer a payment that you understand the financial consequences.

A closer look at DCU loan personal loans

  • No prequalification application — If you’re considering a DCU loan, you’ll need to apply to check your potential terms since DCU doesn’t offer a prequalification application. DCU says it determines your interest rate based on your “personal credit history, account relationship and payment method.”
  • No prepayment penalty If you want to pay off your loan early, you can do so at any time with no additional fee or penalty.
  • No origination fee — DCU doesn’t charge an origination fee to process your personal loan.
  • Allows co-applicants — If you’re struggling to qualify for a personal loan or want to qualify for a lower rate, applying with a co-applicant may improve your chances of approval.
  • Multiple repayment options — DCU offers a variety of ways to repay your loan, including recurring payments from your DCU savings or checking account, paying by phone, by mail or online.

Who is a DCU loan personal loan good for?

A DCU traditional personal loan may be a good option if you want to consolidate debt or finance a home renovation and are already a DCU member or qualify for membership. DCU’s interest rates are competitive, but see if you qualify for its interest rate discount if you’re comparing potential rates from other lenders.

A DCU quick loan may make sense if you have little to no credit but need money for a financial emergency.

But remember: You must first qualify for DCU membership before you can take out a loan or open an account. If you don’t qualify, you’ll have to look elsewhere for a personal loan.

How to apply for a DCU loan

You can apply for a DCU personal loan online. There’s no prequalification application. You’ll need to provide the following information when you apply:

  • Full name and address
  • Email
  • Date of birth
  • Member number
  • Social Security number
  • Mortgage or rent amount
  • Income
  • Employment status

You can also add a co-applicant at this stage if you’d like.

Not sure if a DCU loan is right for you? Consider these alternatives.

  • Marcus by Goldman Sachs: If you have strong credit but aren’t eligible for DCU membership, a personal loan from Marcus by Goldman Sachs may be worth considering since it also offers competitive rates and an on-time payment reward.
  • Avant: If you have less-than-perfect credit, Avant may be a good option. You can also check your potential rate with a prequalification application without hurting your credit scores. (Your final terms or approval may change if you officially apply.)