For members still dreaming of taking that well-deserved vacation or making those long-awaited home improvements this summer, their credit unions may be the answer. Most credit unions offer low rate personal signature loans and lines of credit which give members financial freedom and flexibility by allowing them to use the money for any purpose.
Most personal lending programs boast a combination of good rates, flexible loan amounts, affordable terms, no fees or penalties, and no collateral requirements.
These unsecured loans and lines are an economical, practical option and are easily available to members without the need for collateral. Personal loans most often have a fixed rate and are a good option for those who do not own a home, or would rather not borrow against their assets. Personal lines of credit are ideal for unexpected expenses and allow members to have an ongoing borrowing relationship with their credit union. A member applies once and can tap into the line as needed. While this is a convenient product, it is important for members to use the line wisely and be cautious of ever over-borrowing, since the rate is often higher than on a personal loan.
TruMark Financial's (Trevose, PA) SVP/Chief Lending Officer, Lisa Albany, says that her credit union's personal loan, with its fixed rate, is a nice alternative to a Visa card. "This product fills a niche for those without collateral and helps these members to establish credit."
A personal loan can also help members pay off other high-interest debt, finance large purchases, or pay for a family member's education expenses.
At Freedom Credit Union (Warminster, PA), Rick MacLeod, Member Services Manager in Lending, says that members use the Personal Loan for many reasons, but most often to consolidate high interest rate credit cards. "With our everyday interest rates at a historic low, we can typically save members thousands of dollars by paying off their credit cards with our Personal Loan."
According to MacLeod, the advantage of borrowing from a credit union rather than a bank lays in the superior rate and lack of fees, even encouraging his members to shop around and compare. "Typically, consumers will receive a much better interest rate from a Credit Union than a bank and we do not have all the regular fees a bank does. I tell our members, "If you can get a better rate at a bank, GO FOR IT!" I can't recall ever losing a personal loan to a bank because of rate."
In terms of determining whether a personal loan or line of credit is better for them, members should assess their financial situation and current needs. Albany says that TruMark Financial's lines of credit often come in handy to members as an emergency fund. "During these uncertain times, we keep our rates competitive to help our members as much as we possibly can."
While MacLeod feels that either product from Freedom would help their members, he tends to recommend the personal loan. "I like the Personal Loan because it has a fixed term so you know how much you need to pay every month and when your balance is going to be paid in full. With revolving credit lines, they seemingly take longer to pay off whereas with the personal loan, there is a light at the end of the tunnel."
Most credit unions have a quick, easy application process for personal loans and lines of credit. At both TruMark Financial and Freedom Credit Union, members can apply online, by phone, or at any branch location.
Even in today's economic climate, life, along with all of its ups and downs, is still happening. Members may be finding themselves in need of some extra help or a tide-me-over fund. Credit unions, staying true to their motto of People Helping People during this time of need, are helping members live life to the fullest with affordable personal lending options.