Best Credit Unions for Personal Loans

Personal loans can be a great way to consolidate debt or make home improvements.

Credit unions offer competitive annual percentage rates for their loan options. On average, they offer lower loan rates compared to those offered by banks. Here are the best credit unions for personal loans:

MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $100,000 from our top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you.

Navy Federal Credit Union: Best for Military Service Members

Navy Federal Credit Union is a top choice for military service members, veterans and their families. It offers a robust suite of banking and lending services, including credit cards, personal loans, mortgages, auto loans and student loans. Interest rates are some of the lowest available, and there are over 350 branches you can visit across the U.S. If you're not located near a branch, you can apply for a personal loan online through Navy Federal Credit Union's website.

Keep in mind that the rules for joining Navy Federal Credit Union are strict, so if you aren't in the armed services (or related to someone who is), you may need to look at other options.

• APR: 8.74%-18.00%

• Loan amount: $250 to $50,000

• Terms: Up to 60 months; longer terms available depending on the loan's purpose

• Key features:

  • Direct deposit into a checking or savings account

  • Variable term lengths and loan amounts

  • Multipurpose loans available

  • Lowest rates available for loans of 36 months or less

Service Credit Union: Best for Residents of North Dakota or New England

Service Credit Union has branches throughout North Dakota, New England and Germany and caters to service members, veterans and Department of Defense employees. However, even if you aren't in the military, you may qualify for membership through other avenues. Members can apply for Service Credit Union's low-APR personal loans, which provide up to $50,000 in funding for any purpose, including home or auto repairs, vacation or bill consolidation.

You can start the application process online or visit your local Service Credit Union branch to learn more.

• APR: As low as 10.49%

• Loan amount: Up to $50,000

• Terms: Between two and five years

• Key features:

  • Use for virtually any purpose, including auto repairs, medical bills, debt consolidation or moving

  • Variable term lengths and loan amounts

PenFed Credit Union: Best for No Early Payoff Penalty

As a military credit union anyone can join, PenFed offers some of the lowest personal loan interest rates, which start at 6.74% APR. But keep in mind that your actual APR is determined at the time of the disbursement of your funds.

The PenFed personal loan has no hidden fees or miscellaneous opening and closing costs. You can use the money for debt consolidation, home improvements, auto repairs, travel or vacation.

• APR: 6.74%-17.99%

• Loan amount: Up to $50,000

• Terms: Up to five years

• Key features:

  • No early payoff penalty

  • No origination fee

  • Use for any purpose, including debt consolidation, home improvement, medical costs or life events

Alliant Credit Union: Best for Low Starting APR

Alliant's personal loan option offers same-day deposit into your account and no penalties for paying off your loan ahead of your payment schedule. There are no loan origination fees and no collateral required for a personal loan.

With a low starting APR, Alliant also offers flexibility in loan amounts, allowing you to borrow up to $100,000, depending on your creditworthiness. You can use your Alliant personal loan to consolidate other debts, pay emergency expenses or make home improvements.

• APR: Starts at 8.74%

• Loan amount: $1,000 to $100,000

• Terms: One to five years

• Key features:

  • No collateral required

  • No prepayment penalties

  • Use for debt consolidation, emergency expenses or home improvements

First Tech Federal Credit Union: Best for Fast Turnaround

Rates vary based on the loan amount and your credit history, but they do go as low as 6.99% APR. The application process for a First Tech personal loan takes a few minutes, and there are no origination or annual fees that you need to worry about.

First Tech is federally insured by the National Credit Union Administration so you can rest easy knowing your money is safe. They specialize in serving the financial needs of employees of some of the world's biggest and most well-known tech companies, such as Amazon, Cisco and HP Inc.

• APR: Starts at 6.99%

• Loan amount: $500 to $50,000

• Terms: Six months to seven years

• Key features:

  • No annual fees

  • No application or origination fees

  • No prepayment penalties

  • No payments for up to 45 days

Digital Federal Credit Union: Best for Delayed First Payment

With a Digital Federal Credit Union personal loan, you can reduce your interest rate by 0.50% if you pay electronically or qualify for Plus or Relationship benefits on your DCU checking. As with many financial institutions, your rate is determined by your credit history, account relationship and repayment method.

Besides the traditional signature loan, you can explore DCU's other two personal loans that are specifically designed to build your credit or borrow against your savings or certificate account.

• APR: Starts at 11.99%

• Loan amount: Varies

• Terms: Up to 60 months

• Key features:

  • No payments are due for the first 60 days of the loan

  • 0.50% discount for Plus and Relationship members

  • Interest rate is fixed for the length of the loan

NASA Federal Credit Union: Best for Longer Terms

Aside from being a banking pillar for NASA employees since 1949, NASA Federal Credit Union offers many financial services, including personal loans. The NASA Federal personal loan comes with fixed monthly payments and offers amounts ranging from $1,000 to $30,000. If you want to consolidate some debt or need to make a big purchase, then this loan might be for you.

On the other hand, you can opt for NASA Federal's CashLine Line of Credit, which operates like a traditional home equity line of credit in that you pay interest only on the amount you borrow. The CashLine Line of Credit allows you to borrow up to $30,000, and no collateral is required.

• APR: Starts at 8.94%

• Loan amount: $1,000-$30,000

• Terms: Up to seven years

• Key features:

  • No origination fees or prepayment penalties

  • Fixed monthly payments

  • No collateral is required for CashLine Line of Credit

Tips for Getting Approved for a Credit Union Personal Loan

Getting approved for a personal loan requires a few things. First, you'll want to become a member of the credit union. Next, check your credit score to make sure it's at least 640. In general, the higher your credit score, the better interest rates you will be offered.

Additionally, review your credit report from all three credit bureaus and see if there's any incorrect information. If there is, you may want to invest the time into getting it corrected before applying for the loan. You'll also need to gather your income information, including your most recent pay stubs, tax returns and bank account information. You may not need all of this information to support your income, but you can save time by being prepared.

Advantages of Personal Loans

Personal loans have quite a few advantages. Here are some to consider.

Can Be Used for a Variety of Purposes

Personal loans aren't designated for a specific purpose like mortgages or auto loans. Instead, it's up to you, as the borrower, to decide how you will use the funds. Examples are for auto repairs, dental work not covered by insurance, debt payoffs or vacation expenses. However, some lenders might have rules against using the money for tuition or cars. Make sure you read the terms of your loan.

Available in Various Amounts With Competitive Rates

Personal loans are available in a variety of amounts and can offer competitive rates than other financing methods, like credit cards. For example, you may only need a few hundred dollars or you may need tens of thousands of dollars. Whatever the case, there's a personal loan that can meet your needs.

Additionally, personal loan rates are competitive, starting around 6%, depending on factors like creditworthiness, loan amount and term.

Allow for Fast Cash Access

Sometimes you need money quickly and a personal loan can deliver. Some lenders will approve your application the same day you submit it and disburse the funds by the next business day. Other lenders may take up to seven days to process the loan.

Disadvantages of Personal Loans

Just as with any loan product, personal loans have some disadvantages, including the following.

Interest Rates Can Be High

Depending on your creditworthiness and other factors the lender takes into account, the APR you are offered for a personal loan can be as high as 36%, which will result in a lot of your payments going toward interest.

Fees and Penalties May Apply

Depending on the lender, you may have to pay origination fees. Additionally, prepayment penalties may apply, which means that you will be charged a fee if you pay off your loan early.

3 Alternatives To Personal Loans

If you're unsure if a personal loan is the right choice for you, consider these alternatives.

Credit Cards

Some cards offer 0% APR for 12-21 months, which would be cheaper than a personal loan as long as you can pay off the debt before the special APR expires. If you need cash for an expense, try using the card for your monthly bills and then put the money you'd normally spend on those bills toward what you need.

Peer-to-Peer Loans

P2P loans are typically easier to be approved for than personal loans. You apply on a platform, such as Prosper or Upstart, and wait to be matched with investors who are willing to loan you the money. Investors will have their own set of funding criteria and fees, which might be more favorable than what a personal loan offers.

Cash Advance App

If you only need a few hundred dollars, using a cash advance app, like Brigit, Dave, Klover or Cleo, might be a good alternative to a personal loan. To qualify, you'll need an active bank account with regular pay deposits. Once approved, the app advances you cash, which you repay with your next paycheck.

Final Take

If you're in the market for a personal loan, it's a good idea to check out the options available through a credit union. You may find that some credit unions offer lower interest rates and better terms than traditional banks, making them a more affordable loan alternative. Shop around before applying to find a loan that best suits your needs.

FAQs

What credit score do I need for a credit union personal loan?

To get an affordable personal loan from a credit union, you likely will need a credit score of at least 640.

How are credit union loans different from bank loans?

One key difference is that credit unions often offer lower rates and shorter terms than banks when it comes to personal loans. Additionally, credit unions are often more willing to work with potential borrowers who have less-than-average credit — especially if the borrower has a positive history with the credit union.

Can I get a personal loan if I'm not a member of a credit union?

No, you must become a member of the credit union to apply for any of its financial products, including personal loans.

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