Top Credit Unions for Personal Loans - NerdWallet (2024)

A credit union is an essential first stop when you’re looking to borrow money, especially if you have a fair or bad credit score (689 or lower). Credit unions offer low rates and flexible terms and consider factors beyond credit score when evaluating your application.

Credit union loans can be used for debt consolidation, emergency expenses or home improvement projects.

Best credit union personal loans for 2024

If you don’t have a neighborhood credit union, nationwide options are available. The credit unions below lend in all 50 states and Washington, D.C., and you can likely apply for membership online.

Becoming a member at Alliant doesn’t require a fee, and anyone is eligible by joining Foster Care to Success, a nonprofit organization that serves foster teens across the country. Alliant even pays the $5 membership fee to FC2S on your behalf.

Why it stands out: Alliant offers a wide range of personal loan amounts and can approve most borrowers the same day they apply. Once you sign the loan documents, Alliant can also provide same-day funding.

First Tech mostly serves tech companies and their employees with personal loans up to $50,000.

Why it stands out: First Tech offers co-signed and joint loans to personal loan borrowers. Adding someone with a higher credit score or larger income to your application may boost your chances of getting approved. Co-borrowers are equally responsible for missed payments, but in a co-signed loan, only the primary applicant has access to the loan funds.

PenFed is known for serving military members, but anyone can join the credit union by opening a savings account with an initial deposit of $5.

Why it stands out: Not only can anyone join PenFed, but unlike other credit unions, you can apply for membership as part of the loan application, letting you combine both these steps into one. PenFed also lets you pre-qualify online to see your potential rate, loan amount and monthly payment without affecting your credit score, so you get an idea of your loan options before you apply.

To be eligible for membership at Navy Federal, you must be active duty, retired or a veteran of any military branch; a Department of Defense civilian; or a family or household member.

Why it stands out: In addition to focusing on military members and their families, if you’re active duty or retired military, you can qualify for a 0.25 percentage point discount on your personal loan, which lowers the overall interest you’ll pay on the loan.

How do credit union loans work?

Credit unions are not-for-profit financial organizations that serve members who live, study, work or worship in a particular area. Each credit union is controlled by members, who elect volunteer board members to oversee the organization.

If you meet the credit union’s requirements, you can apply for membership, usually online. You may be required to open an account with an initial minimum deposit as low as $5. After your membership is approved, you can access banking services, including personal loans.

Once you apply for a loan and are approved, you’ll receive the funds in your account and then repay the credit union in fixed monthly installments, with terms ranging from two to seven years.

Credit union personal loan rates

As of March 2024, the average annual percentage rate for a three-year federal credit union loan is 10.83%, according to data from the National Credit Union Administration.

Rates for unsecured personal loans will depend on your credit score, credit history, income and debts.

Rates can also vary by type of credit union; federal credit unions cap APRs at 18%. Your credit union may also charge an application fee that isn't part of the APR.

Pros and cons of credit union loans

Pros of a credit union loan

Cons of credit union loan

How to get a loan from a credit union

Since credit unions come in many sizes, the application process, approval criteria, rates and other aspects of a personal loan vary.

Here are four steps to get a loan from a credit union:

Bad credit loans through credit unions

Credit unions consider your whole financial picture, including your credit history and standing as a member when reviewing a loan application, making it a good choice for borrowers with bad credit (629 credit score or lower).

Still, a higher score will get you a lower rate, so it pays to check your credit score before applying for a loan and do what you can to lift your score.

Adding a co-signer or co-borrower with strong credit can help you qualify for a larger amount or a lower rate.

For more loan options, also consider online lenders who offer loans to borrowers with low credit scores.

Credit union vs. banks vs. online lenders

Personal loans are offered by credit unions, banks and online lenders, but loan amounts, terms and the experience of getting a loan are different at each.

Banks generally lend to borrowers with good to excellent credit scores (above 689). They have low rates and provide discounts or a faster application process to existing customers. Online lenders offer loans to borrowers across the credit spectrum, plus large loan amounts and longer terms, but rates can be higher than credit unions or banks.

Pros and cons of credit unions, banks and online lenders

Next steps

If you’re already a member and you can withstand a temporary hit to your credit score, a credit union may get you the cheapest loan. NerdWallet recommends comparing loans from multiple lenders.