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The best credit unions for personal loans of July 2021
Rates are current as of 7/01/21. The highest APR that any credit union can charge on most loans is currently capped at 18% by the National Credit Union Administration.
You can get a personal loan from many types of institutions, but you may prefer to go through a credit union.
Getting a personal loan from a credit union offers many advantages over a bank or online lender. The max APR is capped by the NCUA, so if your credit isn’t in the best shape, you may get a lower rate than with some online personal loan lenders. Some of our top picks also have smaller minimum loan amounts than other lenders, which could be helpful if you just need a little cash.
You can take out a personal loan for a variety of purposes, including debt consolidation, home improvements, and major purchases. You’ll need to join one of these
to take out a personal loan from them, but here are some great options for beginning your search.
Alliant Credit Union
In most cases, you can get loan approval and funding on the same day with Alliant, which gives the lender a leg up on competitors whose approval processes are slower. The lender charges no origination fees and has no late payment penalty, lowering the overall cost of your loan.
You can also purchase debt protection for your loan that covers death, disability, and involuntary unemployment, safeguarding you from unexpected events that could leave you unable to repay your loan. The monthly cost for debt protection is $1.99 per $1,000 of your outstanding loan balance.
Read Insider’s full review of Alliant Credit Union here.
Navy Federal Credit Union
Navy Federal Credit Union offers loans for as little as $250, the smallest minimum loan amount of all the lenders on our list. If you are looking for an alternative to a payday loan with lower APRs, Navy Federal’s personal loans may be for you. Keep in mind, while the lender doesn’t have a specified minimum credit score, eligibility requirements will likely be higher than with a payday lender.
First Tech Federal Credit Union
You can get a loan for as little as $500 with First Tech Federal Credit Union, which is useful if you’re looking for a small amount of cash and want to avoid the high APRs that accompany payday loans. First Tech loans come with no application, origination, or annual fees, and there’s no penalty for paying off your loan early.
If you’re looking to spread out your payments over a longer amount of time, First Tech has the longest maximum loan repayment length of any lender on our list. You can divide up your payments over seven years, which will reduce your monthly payments but will cost you more overall due to interest.
Pentagon Federal Credit Union
Pentagon Federal Credit Union has one of the shortest minimum repayment term lengths of any of the lenders on our list. PenFed also has one of the lowest starting APRs of any of our top picks for credit unions.
The company’s personal loans have no origination fees and no prepayment penalties. You can apply with a co-borrower, which may help you get a better interest rate if your co-borrower has a good credit history.
Read Insider’s full review of PenFed Credit Union here.
Service Credit Union
Of all the lenders we’ve chosen as top picks, Service Credit Union has the shortest minimum repayment term length. This may be helpful if you can afford larger monthly payments and want to save on the total interest you pay. Service also has one of the lowest starting minimum loan amounts of any of our top picks. If you are looking for an alternative to a payday loan with lower APRs, Service’s personal loans may be for you.
Connexus Credit Union
Connexus Credit Union is the only lender on our list with a minimum credit score requirement. While you can qualify for this lender’s personal loan with good credit, you may have to look elsewhere if your credit isn’t in as good of shape.
Connexus has the lowest APR minimum of any of our listed credit unions, but also has the smallest maximum loan amount of any pick. You may like Connexus if your credit is in good shape and you need a moderate amount of cash.
Other personal loans we considered
- BethPage Federal Credit Union personal loans. BethPage has a solid minimum APR of 6.99% and flexible loan terms from one to seven years. However, you can only borrow up to $15,000 with BethPage, a substantially lower maximum loan amount than any of our top picks.
- Wings Financial Credit Union personal loans. Wings Financial has a minimum APR of 8.99%, which is higher than any of the lenders on our list. Additionally, the credit union only offers three repayment terms: four, five, or six years.
- Consumers Credit Union personal loans. While you can take out up to $100,000 with Consumers Credit Union — a higher maximum than any of our top credit unions — the lender has a high minimum APR of 8.49%.
Which lender is the most trustworthy?
We’ve reviewed and compared each institution’s Better Business Bureau score to help you make the best decision possible when choosing a personal loan from a credit union. The BBB measures businesses’ trustworthiness based on factors like their truthfulness in advertising, openness about business practices, and responsiveness to consumer complaints. Here is each company’s score:
Most of our top picks are rated A+ by the BBB, with the exception of Navy Federal Credit Union and First Tech Federal Credit Union. Keep in mind that a high BBB score does not guarantee a good relationship with a lender, and that you should continue to do research and talk to friends and family who have used the company.
The BBB gives First Tech a B- grade in trustworthiness because of 32 complaints filed against the business, including one unresolved complaint. The BBB currently does not have a rating for Navy Federal as the credit union is responding to previously closed complaints.
Frequently asked questions
How are personal loans from a credit union different than ones from an online lender?
Credit unions and online lenders have a couple of differences, but the general concept is the same; both institutions will offer you money at a fixed interest rate, to be repaid over an agreed-upon term length.
If you qualify for a personal loan from a credit union, you’ll probably get a better rate than with an online lender as credit unions’ APR ranges are smaller. While online lenders will generally have a seamless online and mobile personal loan experience, sometimes credit unions don’t have access to the same technology.
What credit score do you need to get a personal loan from a credit union?
You’ll have to meet a lender’s credit score requirements to qualify for a personal loan. With the exception of Connexus Credit Union, which has a minimum requirement of 640, the credit unions we’ve chosen have unspecified minimums. Instead, most of these lenders will make their approval decisions based on a complete financial picture, including your credit history, ability to repay, the amount you want to take out, and other factors indicating your overall financial situation.
What are common reasons to get a personal loan?
You can take out personal loan for many reasons, though the list is different depending on the lender. Some common causes include:
This list is not necessarily comprehensive, and you should ask your individual lender about what options it offers.
Are personal loans legitimate?
Definitely. Provided you’re dealing with a reputable lender, you should be safe to take out a personal loan. Find reviews of the company, look for more information, and pay attention to these four signs of potential fraud. Your best option is to find personal loans that are backed by a Member FDIC bank or NCUA-accredited credit union.
You can spot possible scams by looking out for these common signs of fraud:
- The lender doesn’t ask for your credit score or payment history.
- The lender’s website is unsecure.
- The lender guarantees approval.
- The lender isn’t transparent about fees.
- The lender coerces you into getting a loan immediately.
How much will a personal loan cost?
Your total cost will depend on the amount you borrow, the APR your lender gives you, how long it takes you to pay off the loan, and any associated fees.
The higher the loan amount and APR, the more your loan will cost. With a longer term length, you will split up your payments over more time. This means you’ll make smaller monthly payments but pay more in total interest.
How quickly can you get your money?
Depending on your lender, you may get your funds the same day you apply, though some credit unions may take several business days to get you your money. After your loan application is approved, a lender will usually send the money relatively quickly. However, there isn’t always a guarantee about how quickly your application will be accepted.
Personal Finance Insider’s mission is to help smart people make the best decisions possible with their money. With that in mind, we reviewed several credit unions closely. We looked over multiple factors to figure out the best credit unions for personal loans, including:
- Annual percentage rates: The lower the interest rate on your loan, the better. We tried to choose lenders that offer low minimum and maximum rates across the spectrum of credit scores.
- Loan term length: We placed an emphasis on personal loans with a number of repayment lengths.
- Loan amount range: We chose lenders with a variety of loan minimums and maximums, so depending on the lender you choose, you may be eligible to take out anywhere from $500 to $100,000. Your exact loan amount will depend on your creditworthiness and other factors.
- Eligibility requirements: Generally, you can’t take out a personal loan from a credit union unless you’re a member, so we aimed to pick credit unions that make it easy to qualify for membership.
- Trustworthiness: Borrowing from an honest lender is often a top priority for many people. With the exception of Navy Federal and First Tech, we chose lenders with an A+ grade from the Better Business Bureau to provide the most trustworthy lenders possible. The BBB gives First Tech a B- grade in trustworthiness because of complaints filed against the business, while the group currently does not have a rating for Navy Federal as the credit union responds to previously closed complaints.