Credit Unions can be a great alternatives to banks because they offer lower APRs on most loans, better saving account return rates, low minimum balance requirements and can even be insured by the government up to $250,000.
While there are definite pros and cons to these unions, they are still considered fantastic ways to take out loans, especially if you cannot acquire a loan through a traditional lender.
The most important benefits these unions offer Credit unions differ differently from banks because they are owned by the customers who use them.
Whereas many banks make financial and business decisions to benefit their shareholders, unions make decisions to benefit the overall welfare of the customers.
If, for example, a bank were to start implementing fees to increase a stock price, these fees would likely go to the very customers who want to take out loans with them.
Since the customers of these unions are also the owners, the value of the company is much less relevant to them and the savings are passed onto them.
In general the rates given to union users are better than with banks.
Typically, a union offers a lower annual percentage rate than with a typical bank loan through a lender.
If a credit union issues dividends, these are also issued to members of the union rather than the shareholders of a company.
The services offered by a union are typically similar to banks but they tend to vary depending on the union you become a part of.
In some cases, if you want to become part of a particular union you need to work for or be related to someone who works for a particular company.
Things to know before selecting a union If you do decide to go with a union, you should shop around to make sure that you select the one that is best for you, as there are a number of them out there and they do require a membership to be a part of them.
90 million people in America already belong to a union and it is estimated that around 40 million more are capable of becoming members.
The hardest part of becoming part of a union is dealing with the selectivity.
You may be able to enter into a union if you know someone who is a member or if you work for a particular company as was aformentioned.
Oftentimes, all that's required to bypass these restrictions is a simple small donation, so at best shop around and be informed on what the different unions offer and what the entry requirements are.
Fortunately, if you belong to a union your finances are still safe as though you were with a bank as the FDIC insures the loans through deposit insurance.
Overall Ultimately unions are a much better choice than a bank for finding a loan, but the selective process and variety of choices means you should shop around before choosing one.