Municipal Credit Union offers something you won’t find in most other personal loans: Interest rates that are set by the size of the loan and the length of time you need to pay it off. Your creditworthiness doesn’t determine the interest rate.
The largest credit union in metropolitan New York, MCU was founded in 1916 as a safe haven for city workers to avoid loan sharks. It now has 17 branches, more than 400,000 members and more than $2.4 billion in assets.
You have to be an MCU member to qualify for a loan. Membership is restricted to employees of New York City government, a college or hospital in the five boroughs or a New York state health insurance provider. Students at St. John’s University also are eligible as is anyone who shares a household bank account with someone who meets the criteria.
Because MCU is a not-for-profit financial institution, it’s able to offer highly favorable personal loan rates. Unlike banks and other types of lenders, credit unions may not look to maximize their profits by charging higher interest rates and other fees typical of most loans.
Who is an MCU personal loan good for?
- Anyone who meets the minimum criteria. MCU’s interest rates are lower than most traditional lenders, so it could be a good option for those who need a loan and qualify for MCU membership.
- Someone who wants to consolidate credit card debt. If you qualify for membership, MCU offers personal loan rates that are lower than the annual percentage rates charged by most credit cards, which are usually in the double digits.
|Municipal Credit Union||First Midwest Bank|
|Loan amounts||$1,000 to $50,000||$1,000 to $25,000|
|APR range||5.95% to 7.55%||7.17% to 13.10%|
|Origination fee||None||$100 documentation fee|
|Minimum credit score||None||680|
|Time to funding||2 days||Same day|
|Soft credit check with application?||Yes||Yes|
Who should not apply for a loan
- Anyone who wants to pay down their credit card debt in a year or less. If you feel you can pay off your loan in a short period of time, you may be better off applying for a balance transfer credit card with a 0% interest introductory offer.
Unlike many online lending platforms, MCU is a direct lender, meaning your personal loan comes from the credit union, not a partner institution. Many personal loan companies make money by tacking on an origination fee, typically based on a percentage of your loan amount.
MCU doesn’t charge an origination fee.
It offers loans that range from $1,000 to $50,000 for 12 to 84 month terms. Its personal loans carry a fixed annual percentage rate, meaning it will never adjust up or down throughout the life of the loan. The quote you receive is based how much you want to borrow.
Unlike traditional lenders, when you borrow from MCU or other credit unions, the interest rate you’re charged is not based on your financial history. Instead the terms are flat based on the amount you borrow and how long you have to repay the loan.
- Loans of $1,000 to $15,000 that are repayable in up to 60 months carry a 5.95 percent APR.
- Loans of $15,001 to $50,000 that are repayable in up to 60 months carry a 6.95 percent APR.
- Loans of $15,001 to $50,000 that are repayable in 72 months or longer carry a 7.55 percent APR.
MCU rates are all based on automatic loan payments through either payroll deduction or bi-weekly direct deposit. If you plan on paying in person at a branch, the APRs will be 2 percent higher.
Minimum borrower requirements
To borrow from MCU you have to be at least 18 years old, earn at least $15,000 annually and have an account in good standing with MCU — meaning at least $5 in your account without any unpaid charge-offs or outstanding bankruptcies.
Fees and penalties
- MCU does not charge origination fees.
- There is a $25 rate fee if a payment is more than 30 days late.
- APR will increase by 2 percent if you cancel automatic payroll deduction or direct deposit.
- You won’t be penalized for paying off your loan early.
How to apply
In order to apply, you have to be a member of MCU and have at least $5 in a deposit account at the credit union, like a checking, CD or money market account.
Once that criteria has been met, the application process is straightforward and can be done in-branch, through its online banking platform or through the credit union’s mobile app.
The application will ask for the loan amount, terms you’re seeking and general purpose of the loan. You also have to provide employment and monthly income information that MCU will verify. The site has a loan payment estimator so you can get a rough estimate of what your monthly payments will be.
If you’re set up with direct deposit at MCU, you can choose the auto-pay, which gives the lowest rates and has loan payments automatically deducted from your paycheck bi-weekly.
Online applicants can electronically sign and finalize their documents. MCU will contact you if you need to upload any supporting documentation or ID.
What to do if you’re turned down
If you do not qualify for credit union membership, you will need to look elsewhere to get a personal loan.