The cost of commodities and our basic needs just constantly increases, and because of this, budgeting is becoming more and more difficult. If you have very limited income and you have a lot of expenses, you will really have a hard time to make both ends meet. This is the reason why many people feel the need to borrow money or apply for a loan.
More often than not, people would go to their local community money lenders, or they go to their banks. However, instead of going to these options, there is actually a better place where you can borrow money with an even lower interest rates – credit unions.
Credit unions are organizations which work similarly like the regular banks. However, the difference is that credit unions are non-profit groups, and they are owned by their members. While banks, on the other hand, exist to make profits that are owned by the shareholders. Because of these facts, it is easy to tell which organization charges lower interest rates and fees and that is the credit unions.
Many people select credit unions over banks for a number of important reasons. Number one is that loans are provided at very low rates. They are also very encouraging to their members when it comes to saving. And whenever their members have financial problems and are in need of assistance, they are there to help them.
How to borrow from a credit union?
Before anyone can borrow from a credit union, they must be a member of the credit union. And before you can get a loan from them, you also need to be able to build up some savings first. The good news is there is nothing that you should worry about when borrowing from credit unions because there are no hidden charges. There are also no penalties if you decide to pay the loan early. For many credit unions, you will not be required to have a collateral unless you want to extend your loan up to 10 years. You can ask your credit union about the type of loans you can avail, as well as the interest rates.
Why is it better to borrow from credit unions?
They offer lower interest rates
When taking out a loan, one of the things that people are concerned about is the interest rate. That is because it’s going to be part of what you will have to pay for is the entire duration of your loan. If you are charged with a higher interest rate, it means you will also have to pay more in order to complete your loan payments. The good news is that credit unions offer the lowest interest rates in the market
Credit unions exist for their members
Banks and other financial institutions exist for the purpose of earning a profit for the shareholders and this is not the case for credit unions. Credit unions also make money but they prioritize their members. It is their members that come first before anything else before they even think about their profit by the end of the year.
Credit unions offer quality customer service
Another nice thing about credit unions is that they offer excellent customer service to their members. And even after the loan transactions, they can manage to maintain their relationship with their members. They also have customer service that is available 24/7 to assist members anytime.
They do not impose a lot of fees and charges
Unlike banks, credit unions do not charge so many fees for every transaction. If you do this in a regular bank, you will surely be charged with fees every time you do a transaction or whenever you do not put enough money on your account.
You also earn money
Believe it or not, but credit unions also help their members earn extra money in the form of dividends. This means that you get to have money without asking for it, without borrowing it. It may not be a huge amount but the nice thing is that you still get free money without having to work so hard for it. This is one of the things that make it more rewarding to be in a credit union.