It is wise to first go to your local credit union when you are thinking about trying to apply for a loan because they generally offer lower interest rates. Credit unions are non for profit and they do not charge expensive interest to make a profit from the customers. Instead, they seek to offer the best customer service by issuing loans that have low interest rates.
Credit unions also charge fees like origination fee and late fee but they are typically lower than banks. Making extra loan payment can help you to settle the loan fast and save a great deal on the interest fee. Before you make extra loan payment, you should check with them whether they charge early repayment fee.
Credit unions are not stuck up like bank where you have to wait for months to get a loan approved. They quickly review your application and you can expect to hear from them within one to two week. They allow you to take out a loan of a few hundred dollars to a few thousands dollars.
At a credit union, the interest rate of the loan can be as low as 5% and up to 10%. With a good credit score, they will assign you the lowest interest rate making it easy for you to repay the loan. They would also offer fast loan approval for people who don’t have good credit.
The thing that set credit union and bank apart is that credit union requires you to be a member while bank accept everyone. To be a member, you may be required to be an employee of an organization, a student at a specific college and etc. In addition, you also have to be residing in the selected areas where they are offering their services. If you have a family member who has a membership with a credit union, you may automatically be enrolled as a member into the credit union. Sometimes, they let you become a member by making a small donation.
You can easily find a credit union near you by doing a search on the internet. On the credit union site, you will find information on the eligibility requirements. After comparing your options, you can visit the site of the credit union that you want to apply the loan and fill in the application form. On the form, you can indicate whether you are applying as a joint applicant or cosigner. You also have to declare your plan on how to use the fund in the form.
You can opt to apply a fixed or variable debt consolidation loan. Fixed loan means that you pay the same monthly payment every month. Variable rate has lower interest at first but there is the likelihood that it will increase over time.