Credit unions are entities that offer financial products to consumers. Unlike traditional banks, credit unions are member-owned and put the interests of their members at the forefront. Furthermore, credit unions are not-for-profit organizations that don’t exist solely to turn a profit but to serve its members. These financial institutions offer personalized services, and it’s not uncommon for cost savings to be passed on to account holders.

To illustrate, the national average rate on a 36-month unsecured fixed-rate loan from credit unions was 9.66 compared to 10.40 for banks as of December 30, 2022, according to the National Credit Union Administration (NCUA). For these reasons, credit unions are worth considering if you’re in the market for a personal loan.

How to get a personal loan from a credit union

Are you ready to apply for a personal loan? Once you’ve decided how much you want to borrow, the process is relatively simple and shouldn’t take much of your time. Here’s a step-by-step breakdown of what to expect:

  • Step 1: Apply for membership. Once you’ve scoped out your options and created a short list of top credit unions, apply for membership. You’ll need to provide your name, address, phone number, Social Security number and a copy of your driver’s license, passport or government-issued identification card. Most credit unions also perform a soft credit check when reviewing your membership application.
  • Step 2: Submit a personal loan application. The credit union will typically request the same personal information and documents you provided when applying for membership, along with information about your employer and earnings statements (i.e., most recent pay stubs). You’ll also have to agree to a hard credit check for the lender to process your loan application. It could temporarily drop your credit score by a few points.
  • Step 3: Receive your loan proceeds. Most lenders issue decisions relatively quickly, sometimes within a few hours. If your application is approved, the lender will request any additional documents they need from you (if applicable) and finalize your closing documents. Once you sign on the dotted lines, you could receive funds in just a few business days.

How to qualify for a personal loan with a credit union

Each lender has its own set of guidelines for prospective borrowers. Still, you’ll want to meet these criteria to potentially qualify for a personal loan with a credit union:

  • Be a member of the credit union you wish to obtain a loan from.
  • Have an acceptable credit history, credit score and debt load.
  • Provide proof of steady income.
  • Demonstrate your ability to make timely loan payments

Some credit unions offer online prequalification that let you view loan terms, rates and monthly payments you may qualify for. Plus, there’s no impact on your credit score since the prequalification process only requires a soft credit check.

You can also inquire about eligibility criteria directly with the lender before applying. Doing so can save you time when scoping out personal loan options.

How to decide if a credit union is the right lender

Before deciding if a credit union is the right lender for you, it’s worthwhile to consider the benefits and drawbacks to ensure you make the right choice.

Key advantages

  • Some offer more flexible lending criteria than traditional banks.
  • You could get approved with a lower credit score if you have a working relationship with the credit union you’re considering.
  • Interest rates are generally more competitive compared to what brick-and-mortar banks offer.
  • There are typically fewer fees than you’ll find with banks and online lenders.

Key disadvantages

  • Financial products and services are only available to members.
  • You may be offered a much smaller loan amount than you need.
  • Some credit unions don’t provide innovative mobile banking technology like traditional banks and online lenders.

Credit unions offering personal loans

With over 5,200 credit unions in the US, there’s no shortage of loan options. However, it’s pertinent to only consider those that offer the most competitive loan terms. You should also meet the eligibility criteria of the credit unions you’re considering and ensure the loan amounts work for your financial situation.

While there are many options around the country, some credit unions also offer online services.

Lender Rates Loan terms Loan amounts Minimum credit score requirement
PenFed  7.74%-17.99% Up to 60 months Up to $50,000 Not specified
Suncoast Credit Union  Starting at 10.00% Up to 96 months Up to $30,000 Not specified


Established in 1935, PenFed Credit Union is a viable option for personal loans. If you have excellent credit, you may qualify for a highly competitive interest rate, making borrowing more affordable. Furthermore, you’re free to use the loans however you choose, whether to cover a financial emergency, big-ticket purchase, make a costly home repair or pay off high-interest debt. Even better, the lender permits co-borrowers if your credit score is lower and you want to strengthen your approval odds by applying with a joint applicant.

There are no origination fees, and most loans are funded within one to two business days following approval. You’ll get a loan term of up to 60 months, and PenFed does not charge a prepayment penalty if you decide to pay the loan off early.

Suncoast Credit Union

Suncoast Credit Union opened its doors in 1934 and is now the largest credit union in Florida. It features flexible personal loan solutions that don’t come with application fees or prepayment penalties. Plus, the rates are among some of the lowest in the industry.

It’s also easy to manage your loan while on the go. You can schedule payments through a secure online dashboard, using mobile payments via the SunMobile app or through automatic bill-pay. You’ll also be able to set up payroll deductions. This means loan payments will be taken out of your paycheck, making it easier to budget your hard-earned money.

Credit unions vs. banks and online lenders

If you’re torn between applying for a personal loan through a credit union, bank or online lender, consider these key differences:

  • Accessibility: Personal loans with banks and online lenders are generally available to both current and prospective accountholders.
  • Eligibility guidelines: Banks prefer applicants with good or excellent credit, but online lenders are often more lenient and extend loans to borrowers with lower scores. Like credit unions, banks may lend to you if your history as an accountholder is positive. Online lenders typically focus on your creditworthiness and debt-to-income ratio to decide if you’re a good fit for a loan.
  • Application process: Some banks let you apply digitally, but you may be required to visit a physical branch or call a banker to get started. However, online lenders feature a completely digital application process.
  • Loan amounts and rates: These figures depend on the lender, but credit unions generally offer more competitive interest rates than banks and online lenders.
  • Customer support: You can meet with a personal banker at a bank or credit union to discuss your personal loan and present any questions you may have. Support is limited to email, phone and chat (if applicable) with online lenders.

Bottom line

Credit unions are a viable option when considering a personal loan. They offer personalized service and competitive rates, and you can have peace of mind that you’re dealing with a financial entity that puts its members first. Still, there are a few drawbacks to consider when evaluating your options. Ultimately, getting rate quotes from at least three credit unions is best to ensure you’re getting an exceptional deal on a personal loan.