July 7, 2014
A personal loan can be a great way to finance a one-time expense, whether that’s a medical bill or a new television. Paying back a personal loan on time is a great way to improve your credit score, making this type of debt especially beneficial for first-time borrowers.
When choosing a lender, credit unions tend to be reliable options. In March of this year, the interest rate on the average three-year unsecured loan from a credit union was 9.63%, or almost 1 percentage point lower than the average rate charged by banks for similar notes, at 10.6%, according to the National Credit Union Administration.
Easy to Apply
Some credit unions offer straightforward and relatively painless application processes. At Matadors Community Credit Union (MCCU), for example, you can apply for the loan online. A friendly and knowledgeable loan officer will be in touch with you to go over your application and loan options.
Benefits of applying at a credit union
Compared with other types of loans, personal loans are an especially safe option. Because they’re made for a fixed amount, it’s harder to become overextended than by using a revolving line of credit, for instance. Personal loans typically don’t require collateral the way a real estate loan does, so although defaulting would lower your credit score and hurt your reputation, you wouldn’t have to give up your house or car. This can make personal loans especially valuable for inexperienced borrowers who could benefit from building or improving their credit scores.
Credit unions such as MCCU offer flexible repayment programs. For instance, you can get a fixed-rate loan for up to 12 months or a note for up to five years with a variable rate. This helps the lender tailor a loan repayment schedule that best suits the borrower’s individual financial situation. Some credit unions offer discounted rates to those members who set up automatic repayment from their accounts.
If you find yourself scratching your head trying to figure out what different rates, terms and requirements will mean in terms of your final costs for a loan, many credit unions offer excellent tools that can be used to figure out what your monthly payment may be. Some also provide articles about a wide range of subjects, like credit-card fraud, which you can use to learn about loans and other issues.
Taking advantage of these resources can pay off as you become better equipped to make sound financial decisions.
Get more information on MCCU’s Personal Loans!