Many towns and cities have their own local credit unions. These are like banks but they work differently when lending money. They tend to look at each individual on a case by case basis rather than only lending to those with a good credit record. They can also tend to be cheaper for loans than some other lenders and this is why many people like to use them.
As credit unions are individually run, often by churches or local community groups, they all work slightly differently. This is why it can be a good idea to find out more about your local ones and how they operate. Some may restrict membership, perhaps to a certain location, only members of certain community groups or things like this and so it is important to know. It is also worth looking at the types of services they offer and how much they charge for them. You may not find these figures on their website as they may change over time and as they are often volunteer led the website may not be updated that often. However, you should be able to phone them up or pop in and find out, but note their opening hours as they will be unlikely to open standard hours.
Credit unions tend to offer savings accounts and loans. They may have different types of loans at different rates, all of which tend to be lower rates than some other lenders offer. Unless of course you’re talking about short term loans like those offered by paydayloansonline.com. If you have savings with them, preferably saving regularly, then you will be more likely to be offered a good rate for your loan. This is because you can show that you are capable of making regular payments. Therefore it can be in your interest to open a savings account with them and put some money aside each week or month. Then if you do want to borrow some money, you will be more likely to get a good rate on it.
It is worth noting though, that if you want to withdraw savings it is unlikely that you will be able to do this right away. It can be that you have to fill out a form and give a weeks’ notice before you can get the money. This may be okay for you, but if you think you may need some money quickly, then it would be wise to put it elsewhere. This may vary between credit unions though and so it is worth finding out for yourself.
Children can also save at credit unions and it could be a good way for them to learn about the benefits of saving money. Banks often have good rates for children’s savings accounts though so it can be worth comparing these rates to see for yourself as to which might be better for them. They might be better off though not having instant access to their money, which a credit union often does not provide, as this will teach them to think before they spend and that they cannot always have the things that they need right away.
One of the other advantages of using a credit union is that you are supporting the local community. By saving your money there, then that gives them more backing to be able to lend to local people at a good rate. This could help local people stay out of serious debt but allow them to borrow at low rates when they need to. This can be a great way to give back to your local community. It also means that if you are in need of a loan, then you will have access to a lower priced one. It may of course be better to just use your savings that you have with them, rather than borrowing money, but it is still a great option to have to fall back on, should you need it.
If you do need a loan, after you have started saving with the credit union, they are more likely to give you one. Even if you have a low income or poor credit rating, they will still allow you to have a loan if they can see that you are saving ell and feel that you are capable of making repayments. They will choose how much to lend you depending on how much income you have and how much you save each month. Looking at things on an individual basis means that you are more likely to be accepted for a loan and they have reasonable lending rates too.