Banking, Loans, Mortgages, Community | Chartway Credit Union (2024)

FAQs

What is the difference between a bank loan and a credit union loan? ›

Credit unions tend to offer higher interest rates for savings accounts than banks. Lower loan rates. Credit unions typically charge lower interest rates for loans than banks. Lower fees.

Credit unions offer a variety of different loans, including mortgages, home equity loans, home equity lines of credit (HELOCs), credit builder loans, and more. Getting a loan from a credit union should be your first consideration when you're in need of a loan.

Credit unions often hold onto the mortgages they write while banks sell most mortgages they write. If and when sold, your mortgage rate and loan terms should stay the same, regardless of the mortgage service provider. Credit unions may have fewer loan programs than large national banks with government loan options.

To apply for a personal loan from a credit union, you'll have to be a member of that credit union. Personal loans from credit unions generally have lower interest rates and fees than loans from banks or online lenders.

Comparing banks vs.

Since the process of getting a bank loan is more rigorous, banks are typically able to offer lower interest rates and sometimes provide perks for existing customers. Online lenders are less regulated than banks, allowing faster application processes and more lenient eligibility requirements.

Additionally, credit unions often have more flexible lending criteria and are more willing to work with borrowers who may have less-than-perfect credit. Compare repayment terms and interest rates. Credit unions generally offer lower loan rates and simple interest terms.

Lower Rates

A credit union is owned by its members. If you're not already a member, you become a member when you get a mortgage loan through KeyPoint. Credit unions are not-for-profit, which means that we can use part of our profits to offer lower mortgage rates and fees to our members.

Because credit unions are less concerned with turning a profit, securing a mortgage with one will often result in fewer origination fees and other processing costs.

It might, depending on your needs. For example, you may be able to save time and money with a bank if your mortgage loan file is straightforward. But banks don't have to disclose what they make on your loan, so you may pay more than you should if you don't shop aggressively.

In general, lenders extend $30,000 loans to borrowers with good to excellent credit, which is typically 670 and higher. But there may be lenders who lend to borrowers with bad credit. If you're having difficulty qualifying, you may consider getting a cosigner or co-borrower to help you get approved for the loan.

Is it harder to get a loan with a credit union? ›

While a person's credit score is the major factor most lenders will look at in considering loan eligibility, credit unions tend to have more flexibility than banks when it comes to providing personal loans to people with bad credit or no credit.

Choosing between a bank and a credit union may involve some tradeoffs on interest rates, technology and tools, and ATMs and branches. Interest rates: On average, credit unions tend to offer higher rates on deposits and lower rates on loans. (Check out average bank interest rates for savings accounts, CDs and more.)

Bottom line. A credit union may be a good option if you're looking for higher APYs, lower loan costs and a closer relationship with a financial institution.

Key Takeaways

Credit unions are nonprofit and member-owned, so they may offer more favorable borrowing terms on personal loans, including lower interest rates and fees. Getting a personal loan from a bank or online lender may be more convenient, since you don't need to become a member as you would with a credit union.

In fact, the National Credit Union Administration's (NCUA) 2021 credit union and bank rates report found that credit unions offer significantly better rates across the board when compared to banks. All of this data naturally points in the direction of using a credit union to obtain any loan.