Are you displeased with the quality of service you are receiving from your bank? Don’t worry, if so. Many others feel the same way. A fairly recent study indicates that less than a quarter of American consumers are pleased with their banks’ services. Additionally, many are now turning to credit unions instead of banks for loans and other financial management services and products.
You may choose to do the same. This overview will explain some of the types of loans that are often available through credit unions. However, you must first understand how a credit union differs from a traditional bank to understand why you might take out a loan with one.
What Makes a Credit Union Unique?
Banks are almost always profit-driven businesses. Credit unions are essentially the opposite. To become a credit union in the United States, an institution can only be not-for-profit.
Credit unions also are not owned by individuals who are likely disconnected from their customers. On the contrary, a credit union is owned by its members. This means said members tend to make decisions that are in their best interests. This distinguishes credit unions from banks, where decisions tend to be made in the interests of a company’s profits.
That’s one of the many reasons why loan rates and fees are often more affordable at credit unions. Although the types of loans a credit union may offer can vary from one institution to another, many credit unions offer such loans as:
Personal loans are general loans that can be taken out for a number of reasons. Some people take out personal loans to cover such unexpected expenses as funeral costs. Others take out personal loans for happier reasons, such as planning a wedding or a vacation. Regardless, it’s very common for this type of loan to be available through a credit union.
A vehicle can be quite expensive. While you may be able to pay for one over time, your ability to pay for a vehicle entirely when you first purchase it might be limited. Luckily, you can always take out an auto loan in these circumstances. Although banks offer these types of loans, you may have better luck finding an affordable auto loan through a local credit union.
Recreational loans are similar to auto loans in that they typically allow someone to purchase a vehicle. The difference is that auto loans apply to vehicles that serve a purely practical and functional purpose. A recreational loan may be more likely to apply to a vehicle that, as the name implies, allows for recreational activities. Examples of vehicles a recreational loan may apply to include (but are not limited to) RVs, boats, and motorcycles.
Credit cards are essentially still loans. Many credit unions will offer credit cards to qualifying members. Because credit unions are member-owned, those who might not qualify for a credit card at a traditional bank can often qualify for one through a credit union.
Just remember, the types of loans a credit union may offer can vary from one institution to another. These are merely a few examples of common loan types. Research the options available through your local credit union to learn more.