Top Credit Unions for Personal Loans
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A credit union is an essential first stop when you’re looking to borrow money, especially if you have a fair or bad credit score (689 or lower). Credit unions offer low rates and flexible terms and consider factors beyond credit score when evaluating your application.
Credit union loans can be used for debt consolidation, emergency expenses or home improvement projects.
Best credit union personal loans for 2024
If you don’t have a neighborhood credit union, nationwide options are available. The credit unions below lend in all 50 states and Washington, D.C., and you can likely apply for membership online.
Alliant: Best for fast funding
Becoming a member at Alliant doesn’t require a fee, and anyone is eligible by joining Foster Care to Success, a nonprofit organization that serves foster teens across the country. Alliant even pays the $5 membership fee to FC2S on your behalf.
Why it stands out: Alliant offers a wide range of personal loan amounts and can approve most borrowers the same day they apply. Once you sign the loan documents, Alliant can also provide same-day funding.
First Tech: Best for co-sign and joint loan options
First Tech mostly serves tech companies and their employees with personal loans up to $50,000.
Why it stands out: First Tech offers co-signed and joint loans to personal loan borrowers. Adding someone with a higher credit score or larger income to your application may boost your chances of getting approved. Co-borrowers are equally responsible for missed payments, but in a co-signed loan, only the primary applicant has access to the loan funds.
PenFed: Best for a seamless application process
PenFed is known for serving military members, but anyone can join the credit union by opening a savings account with an initial deposit of $5.
Why it stands out: Not only can anyone join PenFed, but unlike other credit unions, you can apply for membership as part of the loan application, letting you combine both these steps into one. PenFed also lets you pre-qualify online to see your potential rate, loan amount and monthly payment without affecting your credit score, so you get an idea of your loan options before you apply.
Navy Federal: Best for military members
To be eligible for membership at Navy Federal, you must be active duty, retired or a veteran of any military branch; a Department of Defense civilian; or a family or household member.
Why it stands out: In addition to focusing on military members and their families, if you’re active duty or retired military, you can qualify for a 0.25 percentage point discount on your personal loan, which lowers the overall interest you’ll pay on the loan.
How do credit union loans work?
Credit unions are not-for-profit financial organizations that serve members who live, study, work or worship in a particular area. Each credit union is controlled by members, who elect volunteer board members to oversee the organization.
If you meet the credit union’s requirements, you can apply for membership, usually online. You may be required to open an account with an initial minimum deposit as low as $5. After your membership is approved, you can access banking services, including personal loans.
Once you apply for a loan and are approved, you’ll receive the funds in your account and then repay the credit union in fixed monthly installments, with terms ranging from two to seven years.
Credit union personal loan rates
As of March 2024, the average annual percentage rate for a three-year federal credit union loan is 10.83%, according to data from the National Credit Union Administration.
Rates for unsecured personal loans will depend on your credit score, credit history, income and debts.
Rates can also vary by type of credit union; federal credit unions cap APRs at 18%. Your credit union may also charge an application fee that isn't part of the APR.
» MORE: See average personal loan rates
Lender | Typical APR range | Loan amounts |
|---|---|---|
11.79% - 29.49%. | $1,000 to $100,000. | |
7.99% - 17.99%. | $2,000 to $50,000. | |
8.99% - 18.00%. | $500 to $50,000. | |
7.49% - 18.00%. | $250 to $50,000. |
Pros and cons of credit union loans
Low interest rates.
Small minimum loan amounts.
Applicants may be evaluated on factors beyond credit score.
May require credit union membership.
May not offer pre-qualification with a soft credit check.
Funding may take longer than online lenders or banks.
Pros of a credit union loan
Low interest rates. Some credit unions offer starting interest rates in the single digits, and federally-chartered credit unions cap their APRs at 18%.
Small minimum loan amounts. Some credit unions offer small loans, starting at $250.
Applicants may be evaluated on factors beyond credit score. Good standing as a member of the credit union can play a role in your application evaluation.
Cons of credit union loan
May require credit union membership. Consider the time needed to apply for membership when applying for a loan.
May not offer pre-qualification with a soft credit check. Some credit unions will require a formal loan application, which requires a hard credit check, before letting you know how much you qualify for.
Funding can take longer than online lenders or banks. While many online lenders and banks offer same or next-day funding, credit unions may need a few days to fund a loan.
» MORE: See where to get a personal loan
How to get a loan from a credit union
Since credit unions come in many sizes, the application process, approval criteria, rates and other aspects of a personal loan vary.
Here are four steps to get a loan from a credit union:
Check eligibility criteria: Review your credit union’s membership criteria, as some only serve specific audiences, like military members or educators.
Apply for membership: You may be able to apply online or at the credit union’s branch. Some credit unions require you to open a savings account with a small deposit to gain membership.
Research loan rates and terms: If your credit union doesn't offer pre-qualification, talk to the branch or research loan options online to ensure they offer the loan amount and term you need. Use a personal loan calculator to estimate your monthly payments.
Submit an application: Many credit unions allow online loan applications, which typically ask for personal and contact information, Social Security number, employment and income details and any current debts. Local or smaller institutions may require you to apply in-person or finalize the loan at a branch.
» MORE: How to apply for a personal loan
Bad credit loans through credit unions
Credit unions consider your whole financial picture, including your credit history and standing as a member when reviewing a loan application, making it a good choice for borrowers with bad credit (629 credit score or lower).
Still, a higher score will get you a lower rate, so it pays to check your credit score before applying for a loan and do what you can to lift your score.
Adding a co-signer or co-borrower with strong credit can help you qualify for a larger amount or a lower rate.
For more loan options, also consider online lenders who offer loans to borrowers with low credit scores.
Credit union vs. banks vs. online lenders
Personal loans are offered by credit unions, banks and online lenders, but loan amounts, terms and the experience of getting a loan are different at each.
Banks generally lend to borrowers with good to excellent credit scores (above 689). They have low rates and provide discounts or a faster application process to existing customers. Online lenders offer loans to borrowers across the credit spectrum, plus large loan amounts and longer terms, but rates can be higher than credit unions or banks.
Pros and cons of credit unions, banks and online lenders
Lender type | Pros | Cons |
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Credit unions |
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Banks |
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Online lenders |
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Next steps
If you’re already a member and you can withstand a temporary hit to your credit score, a credit union may get you the cheapest loan. NerdWallet recommends comparing loans from multiple lenders.
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