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In THIS Economy? How to Afford a Down Payment with Credit Union Loans

Key Takeaways

You Need a Loan

Whether it’s a down payment for a new car or a laptop, you need that personal loan.

Don’t Settle

Just because we got screwed by the economy doesn’t mean you shouldn’t get the things you want.

Make the Switch

Banks profit off you. Credit unions help you profit. Makes switching seem like a “duh” move, right?

Alright, so, let’s just imagine this is you. You’re in your 20s or 30s. You’ve got a statistically moderate amount of student debt (which, let’s be honest, is still a lot of student debt) and a credit score sitting steadily in the “average” range. Since college you’ve had consistent work in a field you enjoy, but you’re still trying to get on your feet financially.

It’s almost time to take the next adult step, whatever that means to you. It could be a new car or even just a new laptop. But those student loans we just talked about make it impossible to push your credit score in to the “good,” much less “excellent” range, and student loan forgiveness is unfortunately still not a thing, so what happens now? Do you just give up?

Fortunately there is a solution: credit union loans. In this post, we’ll outline the benefits of going with a credit union loan to help you with your next big purchase.

Making a Big Purchase?

Don’t shoot yourself in the foot with a bad bank loan.

Find Your Credit Union Loan

Banks vs. Credit Unions: What’s the Difference?

The first thing we want to discuss is the difference between banks vs credit unions. It can seem like they’re pretty much the same thing, and while there are many similarities, there are some key factors that set them apart.

Credit unions are member-owned financial institutions, controlled by the members. This means they’re all about people helping their people (you). No faceless board of bankers aiming to get profits out of their customers! (That’s how banks operate.)

Instead of going to a bunch of men in a conference room, any profits a credit union makes go back to you and the other members of the credit union. While we don’t mean you get a bonus or anything, you do get huge benefits in the form of higher interest rates on your savings and lower interest rates on loans. Credit unions also usually have fewer fees.

kombucha girl Bank loans vs credit union loans

Why Are Credit Union Loans a Better Idea?

Okay, now that you understand the differences between a credit union and a bank, let’s talk about the differences between a credit union loan and a bank loan. There are a lot of really good reasons you should consider a credit union loan — even if you’re in a better financial situation than the tragic hypothetical person we talked about above.

Lower Interest Rates

As we mentioned, any profits a credit union makes go directly back to its members. One of the ways you receive benefits is in the form of lower interest rates, making loans more affordable for you.

This can lead one of two benefits:

  1. You could have lower monthly payments if you have a smaller monthly budget.
  2. Or you could pay off your loan faster if you have the funds to make larger payments.

Either way, you could save thousands of dollars by the time you pay off the loan, depending on how big it is.

Fewer Fees

Anyone who has ever used a bank or been to a bank or glanced in the general direction of a bank knows that banks have absolutely ridiculous fees. Their fees seem to stem from everything from “management” (whatever that means) to “having a bank account.” At credit unions, since the members own the institution, there’s no reason to create pointless fees which would only hurt the members. As such, credit unions often have lower fees on things like ATMs — or sometimes no fees at all! That’s money you get to keep.

Mr. Krabs GIF

Easier Approval

Mediocre credit? Lots of student loans? At banks, this might cause you to get rejected when you apply for a loan. But with credit unions, you can get approved for much more reasonable loans far easier than you would at a bank. We’re not going to say bad credit = no problem, because it can still be more challenging, but a credit union can be more lenient.

Some credit unions even offer financial literacy classes to help you fix that bad credit.

After all, credit unions are more people-focused — meaning they want you to be able to get the loans you need to build the life you want … without getting yourself into financial trouble. That leads us to our next benefit:

Customer Service

At many credit unions, the goal is not to profit off you — it’s to help you gain more control over your money and your budget. Between financial literacy classes and more personalized assistance (and more interactions with real humans, not robots) credit unions make you feel more financially secure and more cared for. Who doesn’t like feeling special?

No Hidden Fees

We know, we know — we already talked about fees. But in this case, we’re referring to hidden fees within services like financing.

For example, banks will sometimes help you “finance” things like a new laptop instead of giving you a true loan. In these cases, banks can end up screwing you over in the long run with hidden fees, and you can end up paying practically double what you would have otherwise.

We can’t emphasize this enough: credit unions care about your financial future. Most of the time, that means they’re transparent about any fees you might pay. They want you to know what you’re getting into.

There’s Still Hope

Look, just because the economy sucks and you should probably make more money based on the rising cost of living and you were screwed by a terrible educational system does not mean you shouldn’t have a chance to build a life for yourself or your family.

And taking out a loan shouldn’t set you back even more.

A credit union and the loans they offer can be extremely helpful when you’re trying to take the next step towards being a Fully Certified Adult.

Every Little Bit Counts

Better interest rates, fewer fees — it all adds up in the end.

Find Your Credit Union

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