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Best credit unions for personal loans

A credit union might offer better rates and terms for a personal loan

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When it comes to getting a personal loan, you always have the option to turn to traditional banks or online lenders. However, credit union personal loans are also common, and they may come with better rates and terms, since credit unions are member-owned, not-for-profit institutions.

The best credit unions for personal loans offer a range of flexible loan options with competitive interest rates and no hidden fees. If you're in the market for a personal loan and considering all your options, the credit unions we highlight below could be a good fit.

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.

Pentagon Federal Credit Union
  • Minimum credit score required: Undisclosed
  • Maximum loan amount: $50,000
  • Term length: 12 - 60 months

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.

Features we liked for PenFed include the following:
  • Short credit union membership and loan application process
  • No origination fees or hidden fees
  • Co-borrowers allowed
Before choosing PenFed, consider the following:
  • $50 minimum monthly payment regardless of loan amount
  • Higher starting rates than some other credit unions
  • Limited physical locations
Many satisfied customers rave about the excellent customer service they received, as well as the credit union's competitive loan options.

Austin of Mechanicsburg, Pennsylvania, said that using PenFed was a "great decision" and that he would rate his loan officer with 10 stars if he could. "Not only did the rate beat every other rate, but Jeremy also took time to answer my texts, emails and calls to help walk me through every step of the process," Austin said.

However, some PenFed members complain about constant problems on the PenFed website, including issues with payments posting and slow transactions.

First Tech Federal Credit Union
  • Minimum credit score required: Undisclosed
  • Maximum loan amount: $50,000
  • Term length: 24 - 84 months

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.

Features we liked for First Tech Federal Credit Union include the following:
  • First payment deferral for up to 45 days after your loan is funded
  • Flexible repayment terms up to 84 months
  • Co-signers allowed
Before choosing First Tech Federal Credit Union, consider the following:
  • Specific requirements in order to join
  • Limited physical locations
First Tech Federal Credit Union has not been reviewed by ConsumerAffairs readers.

Liberty Federal Credit Union
  • Minimum credit score required: Undisclosed
  • Maximum loan amount: $25,000
  • Term length: 12 - 60 months

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.

Features we liked for Liberty Federal Credit Union include the following:
  • Very low APRs on secured loans
  • Range of repayment terms
  • Easy online application process
Before choosing Liberty Federal Credit Union, consider the following:
  • Lower maximum loan amount than other lenders
  • Full-service offices only available in Indiana, Kentucky and Tennessee
  • Specific membership or community group affiliation required to join
Liberty Federal Credit Union has not been reviewed by ConsumerAffairs readers.

Bethpage Federal Credit Union
  • Minimum credit score required: 640
  • Maximum loan amount: $35,000
  • Term length: 12 - 84 months

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.

Features we liked for Bethpage Federal Credit Union include the following:
  • Flexible repayment terms
  • Credit union membership open to anyone
  • Joint applications allowed
Before choosing Bethpage Federal Credit Union, consider the following:
  • Maximum loan amount may be insufficient
  • No physical branches outside of New York
  • Longer loan terms have the highest rates
Bethpage Federal Credit Union has not been reviewed by ConsumerAffairs readers.

Teachers Federal Credit Union
  • Minimum credit score required: None
  • Maximum loan amount: $50,000
  • Term length: 24 - 60 months

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.

Features we liked for Teachers Federal Credit Union include the following:
  • Credit union membership open to everyone
  • No minimum credit score requirement
  • Competitive interest rates for eligible borrowers
Before choosing Teachers Federal Credit Union, consider the following:
  • No way to check your rate without a hard inquiry
  • Physical branches are geographically limited
  • Relatively few repayment terms to choose from
Teachers Federal Credit Union has not been reviewed by ConsumerAffairs readers.

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.

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    Is it easier to get a personal loan from a bank or a credit union?

    Credit unions tend to be more flexible when it comes to minimum requirements to qualify for their financial products. For example, credit union personal loans are often available to applicants with a broader range of credit scores.

    Can a credit union deny my personal loan application?

    Yes, credit unions can deny your personal loan application for any number of reasons. For example, you can be denied based on having insufficient income or poor credit.

    Can I get a personal loan from a credit union if I have bad credit?

    Personal loans from credit unions can be available to consumers with bad credit in some cases. However, consumers with subpar credit can expect to pay higher interest rates and have fewer loan options overall.

    How long does it take for a credit union to approve a personal loan?

    Some credit unions may approve a personal loan as soon as the same or the next business day following the application, although your individual results may vary.

    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.

    ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. To learn more about the content on our site, visit our FAQ page. Specific sources for this article include:
    1. National Credit Union Administration "How is a credit union different than a bank?" Accessed Jan. 29, 2023.
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