A personal loan from a credit union (sometimes called a signature loan) can offer borrowers terms that can often beat those of traditional or online banks. Because credit unions don’t have to answer to anyone but their members, they are often more willing to work with borrowers and offer reasonable terms.
This is important to note for consumers who are seeking emergency funds or looking for an affordable way to consolidate debt, two of the most common uses for personal loans. It’s even more important for borrowers with a poor or limited credit history to shop carefully for these types of loans. Although there are plentiful online loan options for these types of borrowers, they can often come with exorbitant fees and high APRs that can greatly increase the cost of borrowing.
In a new study, MagnifyMoney analysts looked at 50 of the largest credit unions in the country to see which in particular can offer its members one or more of these features.
To determine the rankings, MagnifyMoney compared:
- Loan terms offered
- Annual percentage rates for personal and signature loans offered
- How quickly the funds for the loan become available once the loan is approved
- If the credit union offered any discounts for using a payroll or automated repayment plan
Rates as of 9/18/2018
Best overall credit unions for personal loans
These credit unions offer their qualifying members the triple crown of personal loans: A lower-than-average APR, same-day funding of the loan and a discount for automating your loan repayment via payroll or share account deductions.
Ent Credit Union
Ent Credit Union was founded in 1957 to serve a Colorado Air Force base named after World War II Gen. Uzal Girard Ent. Today, the credit union serves a large geographic community, including anyone who lives, works, worships or studies in the counties of Arapahoe, Denver, Douglas, El Paso, Fremont, Jefferson, Pueblo and Teller, along with parts of Weld County (Firestone, Frederick, Dacono, Fort Lupton, Mead and Erie). You can also qualify for membership if you are civilian or military personnel of the Colorado Air National Guard, Colorado Army National Guard or Buckley Air Force Base. If you qualify for membership, so do your family members.
Once you’ve determined you qualify for membership, you will be able to apply for one of Ent Credit Union’s personal loans. These loans come with no application fee and no early payoff penalties. Terms range from 48 to 72 months, and you can take out as little as $500.
Visions Federal Credit Union
Based in New York state, Visions Federal Credit Union is a 50-year-old organization that serves parts of New York, Pennsylvania and New Jersey. You are eligible for membership if you live, work, worship or study in any of the following areas:
- Broome, Chenango and Tioga counties, N.Y.
- Syracuse, N.Y.
- Select parts of Chemung, Rockland and Schuyler counties, N.Y.
- Select parts of Rochester, N.Y.
- Bradford County, Pa.
- Select parts of south Westmoreland and north Fayette counties, Pa.
- Select parts of Reading, Allentown, Bethlehem and Easton, Pa.
- Bergen and Passaic counties, N.J.
- Select parts of Essex, Hudson and Union counties, N.J.
You can also qualify if you work for one of the employers listed on the “Eligible Groups” tab. If your parent or sibling is a member, you qualify for membership, too, regardless of where you live or work.
There are no prepayment penalties for either of Vision Federal Credit Union’s personal loans. The general personal loan allows you to borrow $1,000 to $30,000. If you have good credit and sufficient income, you may qualify for the Any Purpose Signature Loan, which allows you to borrow between $10,000 and $40,000, though it does come with a higher interest rate.
Your APR will vary depending on where you live, but the 0.25% autopay discount will be there for you regardless.
Logix Federal Credit Union
Logix Federal Credit Union also has ties to aviation. In 1937, the Burbank, Calif.-based financial institution opened to serve employees of Lockheed. Over the years, it has expanded to serve residents of California, Arizona, Maine, Massachusetts, Maryland, Washington D.C., New Hampshire, Nevada and Virginia. You can also qualify if you have family with membership, though all members must go through a special process if they’ve moved and are now trying to get a personal loan outside of one of these geographic areas. You’re not guaranteed to be approved as the credit union may not be able to legally lend in your state, but you do still have a shot.
Personal loans through Logix Federal Credit Union come with no prepayment penalties and have terms up to 84 months. Logix’s AutoPay discount is the most generous around. If you set up automatic payments on your loan every month, your APR goes down an entire percentage point.
Members 1st Federal Credit Union
Members 1st Federal Credit Union is in central Pennsylvania, though you have to do more than live in the region to qualify for membership. You must work for a select employer, go to a select school or attend a select church to qualify.
Or you can become a member through affiliation with the AACA Museum, Army Heritage Center Foundation or Landis Valley Village and Farm Museum. The cheapest option is the Army Heritage Center Foundation, which offers membership for as low as $25.
If your family member or domestic partner belongs to Members 1st, you automatically qualify for membership.
Personal loans at Members 1st Federal Credit Union come in two different tiers. If you are borrowing $25,000 or more, you will pay the interest rate listed above and have terms somewhere between 12 and 60 months. If you are borrowing less than $25,000, your interest rate could be a couple of percentage points higher, with the same terms available.
SchoolsFirst Federal Credit Union
SchoolsFirst FCU serves employees in the field of education in California. You qualify for membership if you work for a public elementary or secondary school, the County Superintendents of Schools, a community college, an authorized college or university, an authorized education foundation, or a private elementary or secondary school — as long as it is listed in the state’s Department of Education School Directory. You can also qualify if you are a pension- or annuity-collecting retiree of one of these educational institutions, or if you are related to a member.
You can borrow between $500 and $50,000 on SchoolsFirst’s no-application-fee personal loans. You will also not be charged any prepayment penalties, and terms go as high as 60 months depending on how much you borrow.
Best credit unions for short-term loans
Using payday loans or credit cards to handle an unexpected expense such as a car repair can be a be a difficult treadmill to exit. But many credit unions offer smaller short-term loans at favorable rates that may be safer when you need to fill a short-term funding gap. Below are five credit unions that offer short-term loans (less than 12 months) for less than $1,000.
Security Service Federal Credit Union
Security Service Federal Credit Union was founded in 1956 to serve members of the U.S. Air Force Security Service. Based in San Antonio, the credit union serves service members in select branches, as well as residents, workers, worshippers, volunteers and students in the following areas:
- San Antonio, Austin, El Paso, Rio Grande Valley and Corpus Christi, Texas
- Denver, Colorado Springs, Pueblo, Fort Collins, Loveland, Boulder and Broomfield, Colo.
- Salt Lake and Utah counties, Utah
If you are a member, those in your family also qualify.
Security Service Federal Credit Union’s personal loans come with no prepayment penalties and terms from 2 to 66. Rates will vary depending on where you live, and the amount you can borrow ranges from $250 to $50,000.
Wright-Patt Credit Union
Located in Ohio’s Miami Valley, Wright-Patt Credit Union serves a wide array of individuals and groups. You can qualify based on your employer or if you live, work, worship or study in one of the following Ohio counties: Butler, Champaign, Clark, Clermont, Clinton, Darke, Delaware, Fairfield, Franklin, Greene, Hamilton, Licking, Madison, Miami, Montgomery, Pickaway, Preble, Union and Warren.
Both military and civilian employees at Wright-Patterson Air Force Base also qualify, along with any military and government personnel in the region who may not have a credit union available to them. If you are retired from a position with the U.S. government, you qualify regardless of place of residence — whether you were employed through the military or as a civilian. Students at Wright State University also qualify. If you are a member, your spouse and children qualify for membership as well.
Wright-Patt’s personal loans are available at an astonishingly low minimum of $500. No other credit union offers such a low minimum, and credit unions are known for offering lower minimums than banks. The interest rates are competitive, and depending on how much you borrow, loan terms can be as high as 60 months.
ESL Federal Credit Union
ESL stands for Eastman Savings and Loan Association, in reference to the legendary George Eastman, who used profits from the company he built — Kodak — to serve as a boon to the local Rochester, N.Y., community. In 1920, he launched Eastman Savings, specifically to serve the financial needs of his employees with a strong emphasis on helping them toward homeownership. In 1996, Eastman Savings became ESL Federal Credit Union.
To become a member of ESL Federal Credit Union, you must live, work, worship or study in Rochester. You can also qualify if you work for any of these employers, or if you are a member, employee, volunteer or retiree of the George Eastman Museum. Individual membership at the museum is $65, though you can gain membership for only $60 if you’re older than 65 or $25 if you’re a student. If your family member belongs to ESL Federal Credit Union, you qualify for membership, too.
ESL’s personal loans have decent rates, though they aren’t the lowest on the market. These rates also go up the longer your term is, which can be up to 120 months. But the lowest amount you can borrow is $250, which is extremely attractive for those who don’t want to borrow and pay interest on more than they need.
Patelco Credit Union
Patelco Credit Union was established in 1936 as a financial institution for AT&T employees. Back then, it wasn’t known as AT&T — it was the Pacific Telephone and Telegraph Co., which is where the credit union gets its name.
To become a member, you must live, work, worship or study in one of the following California counties: Alameda, Contra Costa, El Dorado, Marin, Merced, Napa, Placer, Sacramento, San Francisco, San Joaquin, San Mateo, Santa Clara, Solano, Sonoma, Stanislaus and Yolo.
You can also qualify if you live in Bakersfield, McKinleyville, Santa Cruz or Eureka. Others who qualify include students at San Francisco State University; the University of California, Berkeley; and California State University, East Bay, along with employees and members of Patelco’s sponsor organization. You can check to see if your employer is one of them here. The final group that qualifies is the family of existing Patelco members.
While Patelco offers the highest minimum loan amount in the rankings, it also offers the lowest potential APR. But this rate is only available if you are borrowing money to pay for back-to-school expenses, with a max loan term of 36 months. If you’re borrowing money to buy a computer or another electronic device, the lowest APR available is 8.80% and loan terms extend to 60 months. Loans for debt consolidation or any other purpose also have a maximum term of 60 months, but the minimum APR is 9.90%.
Best credit unions with automatic payment discounts
“Set it and forget it” is certainly best for keeping your loans current and your credit rating in good shape. And many credit unions offer discounts that knock off as much as a whole percentage point from the rate of your loan. Below are six credit unions offering the deepest discounts for setting up automatic payments.
State Employees’ Credit Union of N.C.
There is a litany of ways to join the State Employees’ Credit Union in North Carolina, and all but one of them are tied to your employer. You qualify for membership if you work for or retired from:
- The state of North Carolina
- The federal government, and your job requires you to work together with the state
- A North Carolinian public board of education
- The North Carolina National Guard
- Any North Carolina county as long as your job is in the field of health, mental health, social services or civil defense
- An agency or department that holds you accountable to North Carolina’s State Personnel Act
You can also qualify as a family member of someone who has an account with the State Employees’ credit union.
While this credit union does offer a fairly steep APR discount for autopay or even having your payment deducted from your paycheck, the starting rates are not incredibly competitive — even if you account for that discount. The lowest rate you could possibly get on a personal loan from this credit union is 10.75% APR as of Sept. 13, 2018.
OnPoint Community Credit Union
OnPoint Community Credit Union serves communities in northwestern Oregon and southern Washington. You qualify for membership if you live or work in Benton, Clackamas, Columbia, Crook, Deschutes, Jefferson, Lane, Linn, Marion, Multnomah, Polk, Washington or Yamhill counties in Oregon, or in the counties of either Clark or Skamania in Washington state. If your family member qualifies, so do you.
This credit union does give you a good APR discount for signing up for automatic payments, but even with the discounts, the rates are nothing to write home about. As of Sept. 13, 2018, they range from 10.00% to 16.00% APR — and that’s after accounting for the discount. Terms are up to 60 months, and you can borrow up to $25,000.
Police and Fire Federal Credit Union
If you are an active or retired police officer or firefighter who serves or served in Philadelphia, you qualify for membership at the Police and Fire Federal Credit Union. So do your family members. In fact, the credit union issues referral coupons that can earn both you and your family member $400 each when they join.
If neither you nor any of your family members meet these criteria, you can check to see if your employer is one of Police and Fire Federal Credit Union’s member groups, which would also qualify you for membership.
While it is encouraging to see the larger APR discount for setting up automatic payments, it should be noted that personal loans at this credit union come with a higher APR than the best on the market. As of Sept. 13, 2018, the best rate you’d be able to get after applying the autopay discount is 9.90% APR on loans up to $30,000. The max term available is 60 months.
Digital Federal Credit Union
DCU, or Digital Federal Credit Union, was chartered in 1979. Today, it’s the largest credit union in New England, but it serves members far and wide outside of its Massachusetts home. You are eligible for DCU membership if you live, work, study or worship in Lowell, Worcester, the northern portion of Chelmsford or the western portion of Tewksbury in Massachusetts. In the state of Georgia, Cumming, Gainesville and Norcross are also eligible locales.
Other ways to qualify for membership include working for an eligible employer or living in specific condominium communities. DCU also works with several Massachusetts-based organizations to offer banking services to those organizations membership. If you want to join the credit union but don’t qualify in any other way, the least expensive way to do so is by getting a $10 membership with a nonprofit called Reach Out for Schools.
DCU’s APR on personal loans starts at 7.50%, and that’s only if you have direct deposit set up on your DCU checking account, which would be used for automatic payments. If you don’t, your potential rates would start at 9.50% APR. Terms can be as long as 60 months, and there are no prepayment penalties.
SchoolsFirst Federal Credit Union
SchoolsFirst Federal Credit Union earned a spot in our best overall list partly because of its generous auto pay discount.
Logix Federal Credit Union
This credit union has the most generous discount of all, which helped earn it a spot in our best overall credit union list.
MagnifyMoney collected the rates and terms from the 50 largest credit unions by assets in July 2018. To determine the rankings, MagnifyMoney compared loan terms, the annual percentage rates for personal and signature loans offered, how quickly the funds for the loan become available once the loan is approved, and if the credit union offered any discounts for using a payroll or automated repayment plan.