Credit Unions are nonprofit, community-based cooperatives where members can borrow from the pool of deposits at a low-interest rate. They function the same way as banks and accept deposits, give out loans and provide other financial services. The critical difference is that their overriding objective is to cooperate for the good of members rather than for profit.
Credit Unions typically accept members within a defined locality. When you meet other requirements, you can become a member by paying a membership fee and depositing a minimum of $25.
Since they do not pay federal income taxes and are more interested in members' welfare over profit, Credit Unions may consider members with bad credit histories. Rather than focus on your credit score like Banks, Credit Unions evaluate your loan eligibility based on factors such as your standing with the credit union, your sources of income, and your employment status.
Requirements To Get Loans From The Credit Union
Requirements for getting a credit union loan may vary depending on the specific facility. But commonly, you must be a member of the credit union, to begin with. To become a member, you must reside or work in a geographical location specified by the Union. Some credit unions base their membership on your affiliation to a particular group or organization, such as an employee of a specific company or government agency.
Other requirements include:
- Low debt to income ratio - This means that the portion of your monthly income that goes towards repaying your total debts is as little as possible.
- Stable income and employment - Your sources of income are crucial. Credit Unions and other lenders will be more willing to approve you for a loan if your income is consistent and you have a reasonably excellent employment record.
Alternative Ways To Get Personal Loans
If for any reason, you fail to qualify for a loan from your credit union due to various reasons, you can explore the option of getting bad credit loans through online brokers. Online brokers such as iPaydayLoans can connect you to direct online lenders who specialize in providing loan services for poor credit customers with high acceptance rates.
Online loan brokers like iPaydayLoans, WeLoans, and CashUSA have the distinct advantage of giving you a greater choice of lenders. Instead of applying severally on different direct lenders' platforms, you can send your details to the loan broker through a user-friendly online form and connect to hundreds of reputable lenders who won't reject you right away due to your abysmal credit. You can compare the multiple offers and select the one with terms that converge closest to your needs.