Do you need a personal loan? Credit unions are a great place to start if you're looking for a short-term loan. In this post, we'll show you how to get a personal loan from a credit union in any state, plus a few tips for improving your credit score for personal loan prequalification.
Why use a credit union instead of a traditional bank?
A credit union is typically a locally-owned and -operated financial institution that primarily serves the needs of its members. This means that credit unions are more likely to have a personal loan program that meets your needs, especially if it somehow benefits the community. For example, many credit unions offer loans with lower interest rates and shorter repayment terms than those provided by traditional banks.
How to get a personal loan from a credit union
You'll first need to become a member to get a personal loan from a credit union. Membership typically means opening a checking or savings account with a small deposit, and you can join online or in person.
But before you become a member, shop around for the best loan rates. Credit unions typically have lower interest rates than traditional banks, so comparing rates is important before you commit to a loan.
Once you're a member, look for loans that fit your needs. Loans at credit unions come in different shapes and sizes, so it's essential to ask about the terms and conditions of each loan. Usually, you can borrow up to $25,000 at a time, though this varies based on the credit union.
You'll need proof of residency, income, and a minimum credit score to qualify for a loan. Proof of residence can be your state ID or a utility bill showing your name and address.
After you've determined the best loan for your needs, complete the loan application process. You'll typically need to provide your member ID, banking information, and the loan application form. The approval process may take a few days if you're not pre-qualified.
Once you've been approved, you'll then receive a loan agreement and payment schedule. Be sure to read and understand the loan terms before signing anything! Once signed and received, the loan will be transferred to your checking or savings account, typically within 48 - 72 business hours.
Don't give up hope if you haven't been approved for a loan. Many credit unions offer alternatives like borrowing through peer-to-peer lenders or getting a Home Equity Line of Credit. So don't be afraid to ask your credit union what's available to you.
How to improve your credit score to get pre-qualified for a personal loan from a credit union
If you want to get pre-qualified for a personal loan from a credit union, there are a few things you can do to improve your credit score:
1. Pay your bills on time. Your repayment history is the most significant factor that affects your credit score. Make sure to keep your bills paid on time, and don't accumulate too much debt.
2. Keep your account balances low. If you have high balances in your accounts, creditors may think you're likely to default on your loans in the future. If you cannot pay your balances off to lower your utilization, consider requesting a credit limit increase instead; just be aware that you may get a hard inquiry on your credit report. However, if you're approved, the increase in total available credit will more than cover any minor hit to your score caused by the inquiry.
3. Keep an eye on your credit score and immediately report inaccuracies. If you find any inaccuracies on your credit report, immediately contact your creditors or credit bureau to correct the information. This will help improve your score and make it easier to get approved for a personal loan.
The bottom line
Getting a personal loan can be helpful if you need money for emergencies or other unforeseen costs. Credit unions offer competitive rates and can help make getting a personal loan easier than ever. Just make sure you understand the loan agreement and do your research before signing on the dotted line.
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Original Source: Credello: How To Get A Personal Loan From A Credit Union In All 50 States