When it comes to signature Loans, online loans may not be the answer you seek. Online loans tend to have higher interest rates and terms. If your credit is good, before you choose which financial institution to to secure a signature Loan. home mortgage or car loan, you’ll want to make sure you are getting the best interest rate at the time, which will likely mean shopping around some. Start out checking with your local banks as well as your local credit unions. Credit unions are not as used as banks, but they should be, because in general credit unions tend to offer much lower rates on loans. Lower rates on loans ultimately means that you will owe less over the lifetime of your loan. Other benefits of credit unions include higher savings account interest rates, and better interest rates for credit union backed credit cards.
The interest rate on a credit union signature loan can be as much as 1.70 %, as shown by a June 2011 analysis by Datatrac, which is a financial research firm that provides credit union and bank interest rate comparisons. According to the National Credit Union Administration, as of June 28, 2013, the average going rate of a 36 month car loan was 2.85% at credit unions and 5.59% at banks. That is close to a 50% difference in interest rates! While most credit unions rates typically are about 1 percent to 1.5 percent lower than banks, according to Jim Hanson, who is the vice president at the Credit Union National Association in Madison, Wis, it can be upwards of close to a 50% difference in interest rates. The difference between credit unions and banks is while a bank is a for profit business, credit unions are are a not-for-profit organization. You see a credit union is essentially a cooperative organization which is totally owned by their depositors, not corporate stockholders. Credit unions offer the same services as banks, from mortgages, credit cards to signature loans, yet very few Americans take advantage of credit unions. Credit unions can further reduce interest due to their non profit status, as they’re exempt from many taxes, and these savings from taxes are passed onto the consumers at the credit union. Credit unions are more focused on keeping their clients happy than on turning a profit.
Another benefit of credit unions is readily apparent when it comes to fee’s. Banks and other financial institutions seem to have fee’s attached to everything these days. Credit unions tend to offer lower fees on basic transactions. By keeping fee’s at a minimum, credit unions are better able to attract and keep customers happy. Credit unions also tend to be less restrictive than banks when it comes to credit eligibility requirements. if you have been denied a loan elsewhere or have seen exorbitant credit rates, try shopping around at your local credit unions, as many credit unions are willing to work with you when you have a low credit score. Not only will a credit unions often work with someone with a low score, but also other factors that a bank might deny, such as being self employed or having a bankruptcy on there credit report.