Best credit unions for personal loans

Compare top credit unions for personal loans

You will need to become a member of a credit union in order to access its financial products. However, membership requirements aren't always stringent, and there are credit unions that make it easy to join and apply for financing.

Read on to learn about the top credit unions for personal loans, how their financing works and what you need to qualify.

To make our top choices, our research team evaluated 29 credit unions that offer personal loans. We selected six based on factors that are important to borrowers, including minimum required credit scores, repayment terms, maximum loan amounts, annual percentage rates (APRs) and fees.

Our picks may be Authorized Partners who compensate us. This does not affect our recommendations or evaluations but may affect the order in which companies appear.

• PenFed
• First Tech Federal Credit Union
• Navy Federal Credit Union
• Liberty Federal Credit Union
• Bethpage Federal Credit Union
• Teachers Federal Credit Union

Pentagon Federal Credit Union membership is open to everyone, so it's one of the best credit unions to consider for financing if you don't have an affiliation with the military or other groups. This credit union also has a strong online presence that makes it a good option for consumers nationwide, yet it still has physical locations in 12 states.

Unsecured personal loans from PenFed are offered with terms that last from 12 to 60 months, and they come with no prepayment penalties and no origination fees. Loan amounts from $600 to $50,000 are available for eligible applicants, and it's possible to check rates and gauge your eligibility without a hard inquiry on your credit.

APRs for PenFed personal loans range from 7.74% to 17.99% as of this writing, based on loan term and creditworthiness.

First Tech offers locations in eight different states and requires an affiliation with certain membership groups in order to join. For example, you can become a First Tech member if you have a family member with existing membership, you or a family member work for certain partner companies or you're a member of the Computer History Museum or the Financial Fitness Association.

Members can be approved for personal loans in amounts from $500 to $50,000. APRs range from 8.99% to 13.79% as of this writing, based on creditworthiness, and repayment terms can last from 24 to 84 months.

First Tech loans also come with no origination fees or prepayment penalties, and you can check your estimated rate online before you apply.

Navy Federal Credit Union is an institution that serves military members and their families. Joining requires some sort of military affiliation, such as being active-duty military, a veteran, retired military or an eligible family member. Some Department of Defense civilians are also eligible to join.

Unsecured personal loans from Navy Federal are offered in amounts from $250 to $50,000, and repayment terms can last from six months all the way up to 180 months. However, loans for home improvement with repayment terms from 61 to 84 months have a $25,000 minimum loan amount, and home improvement loans with terms from 85 to 180 months have a $30,000 minimum loan amount. Depending on the unsecured loan type chosen, APRs range from 7.49% to 18.0% as of this writing.

While most personal loan options from Navy Federal are unsecured, it also offers secured loans that let you use money in your savings account or certificate of deposit as collateral.

Liberty Federal Credit Union is based out of Indiana, although the institution also has some offices in Alabama, Kentucky, Mississippi and Tennessee. Membership requires you to be employed with or retired from one of its employee groups, a member of an organization within the credit union’s field of membership, or an immediate family member of someone within its field of membership.

Personal loans are offered in amounts from $300 to $25,000, and APRs start at 2.05% for Liberty FCU’s Share Pledge loans, which are secured by funds held in a savings account. For unsecured personal loans, APRs range from 9.09% to 11.59% as of this writing.

Borrowers have the option to repay an unsecured personal loan over 12 to 60 months, which lets them tailor their monthly payment to their needs and budget.

Bethpage Federal Credit Union has over 30 branches in the state of New York, yet anyone is eligible to join nationwide, provided they open a savings account and deposit at least $5. This credit union also stands out for its robust selection of borrowing options, including auto loans, student loan refinancing, home refinance loans and personal loans.

With Bethpage personal loans, you can borrow up to $35,000 and choose from repayment terms that last from 12 to 84 months. These loans also come with no origination fees or prepayment fees, and APRs range from 8.99% to 12.34% as of this writing.

Despite its name, Teachers Federal Credit Union allows anyone to join regardless of their career, location or group affiliation. However, with 33 physical locations in and around Long Island, New York, Teachers Federal Credit Union is best geared to individuals who live in that area.

With unsecured personal loans from Teachers Federal Credit Union, you can borrow anywhere from $250 to $50,000 with the option to repay over 24 to 60 months. APRs can be as low as 7.99% as of this writing, and there are secured loan options available, as well.

Teachers Federal Credit Union also allows joint applications for its loan products, which can be beneficial if you're borrowing with a spouse or partner to fund a joint goal.

Pros and cons of using a credit union for a personal loan

For the most part, the benefits of getting a credit union personal loan vary based on the loan offer itself. For example, a personal loan from a credit union is only better than funding from a traditional bank if it comes with a lower interest rate, a better monthly payment or some other benefit you can't get elsewhere.

However, Laura Sterling, the vice president of marketing at Georgia’s Own Credit Union in Atlanta, says that credit unions are more likely to offer lower-cost services and better interest rates than traditional lenders. This is mainly due to the fact that credit unions are not-for-profit entities, and that they return their earnings to their members in the form of better rates and fewer loan fees.

"On the contrary, banks return their earnings to stockholders," said Sterling.

Earl Young, the chief lending and credit officer at Broadview Federal Credit Union in New York, adds that credit unions also take the time to understand their members' needs and offer flexible underwriting standards that make it easier to qualify. In fact, Young says credit unions structure loan product offerings to accommodate a broad band of credit scores at very reasonable terms and rates.

The obvious downside of credit union personal loans is that some credit unions have strict requirements for membership. Others that do allow anyone to join tend to have limited physical locations nationwide, or even just in one state or a part of one state.

That said, Young notes that joining a credit union may be easier than you think and that the best way to ascertain eligibility is to call and ask any credit union that interests you.

"The qualification process by design is meant to be straightforward, accommodating and very timely," he said.

How to apply for a personal loan from a credit union

Applying for a personal loan from a credit union is a lot like applying with a regular bank or an online lender. The catch is, you may have to apply for membership before you apply for a loan if you're not a credit union member already.

That said, some credit unions make the process of applying for membership and funding fairly hassle-free. A handful of credit unions also let you "check your rate" before you apply, which gives you the chance to gauge your approval odds without putting a hard inquiry on your credit report.

Either way, you can expect to provide the following information when you apply for a credit union personal loan in person or online:

• Full name and address
• Type of application (individual or joint)
• Social Security number
• Employment details
• Income
• Desired loan amount
• Desired repayment term

Many credit unions make it possible to get funding as soon as the next business day after your loan application is approved, although it's possible you'll need to supply additional information or documentation to move the process forward.

Bottom line

The best credit union personal loans come with low interest rates, flexible repayment terms and no hidden fees to worry about. However, while some credit unions allow membership to everyone, others only accept members who fit within certain groups.

With that in mind, you'll want to look over the credit unions on this list to see which ones have membership requirements you can meet. From there, take the time to compare loan options until you find a lender that offers a loan amount and monthly payment that suits your needs.