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When it comes to applying for a personal loan you have a variety of options available to you – secured or unsecured, fixed or variable – and you also have a large number of lenders that are providing them. In your hunt for a loan you’ll come across banks, niche lenders and financiers, and you’ll also find credit unions. This guide will take you through credit union personal loans, how they’re different to bank loans and why you might want to apply for one.
Credit unions function in the same basic way as banks, with the main difference being that credit unions don’t have any shareholders. Credit unions are not-for-profit and instead direct their profits back to their members by offering low interest rates and fees.
You might find a personal loan offered by a credit union personal loan charges lower interest and fees than the non-credit union counterparts. Other than this, credit union personal loans are largely standard products and don’t differ too much from bank loans. As credit unions are smaller, you may find less choice in terms of options, but you’ll find most typical loan products on offer.
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A credit union does not generate profit for shareholders; it focuses on offering benefits to its members instead. When you apply for a loan through a credit union, you become a member of the credit union and you can look forward to benefits that all other members enjoy.
Australian credit unions tend to rate well on customer satisfaction parameters, so you can expect professional and ethical banking solutions. The focus on offering competitive rates and fees means you might be able to find a more affordable personal loan by turning to a credit union.
Since credit unions tend to focus on serving local communities, their presence might be limited to certain regions or areas. This might means credit unions branch and ATM network is quite restricted. However, most give their members free access to rediATMs across Australia.
If you think you might have trouble repaying your loan, seriously reconsider taking out the loan in the first place. Not making timely repayments will see you paying late charges and this could also have a negative effect on your credit rating.
Make sure you go through the loan’s terms and conditions as this will give you a good indication of all applicable fees and charges.
How can I apply for a credit union personal loan?
Depending on the credit union you choose to deal with, you can apply online, in person, or over the phone.
What eligibility criteria do I have to meet to apply?
You should be over 18 years of age, be a permanent Australian resident, have a regular source of income, and you should not have poor credit history.
How quickly can I complete an online application?
If you have all the required documents close at hand, you should be able to complete your application in around 10 to 15 minutes.
How can I make repayments?
Depending on the credit union you get your loan from, you can make repayments via direct debits, salary credit, online banking, and phone banking. You can also look forward to mailing cheques or making repayments in person.
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Hi I’m looking at getting at fixed rate personal loan, I don’t want high interest rates, no hidden cost or fees. I’m looking at borrowing 20,000 and I want to be able to pay it off over 3 to 4 years at no more then 160 a week in repayments. What are my options??
Hello Joe,
Thank you for your inquiry.
You can check your options for 3-year fixed-rate or 5-year fixed-rate, whichever would suit your needs. You can put in your loan amount and choose your term on the Calculator located at the top of each comparison table. Once you have chosen a particular lender, you may then click on the “Go to site” button and you will be redirected to the lender’s website where you can proceed with your loan application or get in touch with their representatives for further assistance.
It is worth noting to review your eligibility requirements and loan terms as this varies per lender.
Hope this helps.
Cheers,
Jonathan