Credit Union Financing: Feasible than Bank Financing?

Credit unions offer an alternative source of financing for many who have low credit scores or bad bank standing, but credit unions differ greatly from how banks function to serve their customers. Unlike banks who try to attract customers to purchase or consider financial products and services, credit unions could only serve specific customers. Credit unions also have the following differences with banks.

1.     Common Ground

A customer must have a common ground with the credit union. For example, a medical professional’s credit union may require a customer to be a medical professional. Some credit unions only accept certain ethnicities, races, religions or other categories.

2.     Limited Offers

Credit unions interview their customers and analyse their financial capability. This helps them identify the proper financial products that their customer could surely repay within the time allotted to them. The reason for a credit union’s limited offers is that credit unions only have a limited mint; banks have vaults and banks aim to make profits. Credit unions only depend on member contributions and break evens.

3.     Credit Score

A credit union member does not need a good credit score to get a loan, mortgage or credit card. As long as they have financial stability, they could get a financial deal not based on their credit score.

4.     Low-Interest, Low Values

Credit union products are low-interest products and sometimes, they cannot repay the full amount of a car loan, a mortgage or other financing. Again, the reason for this is their limited resources and non-profit principle. Yet, you still pay less even if you have to pay for the rest of the product or service.