Pros explained
- Low rates: Credit union loan interest rates are often lower than those of other lenders.
- Qualifications can be flexible: A credit union might use factors beyond credit scores to assess applications.
- Fewer fees: Origination fees and other charges are less common on credit union loans.
Cons explained
- Limited membership eligibility: You need to be a member to qualify, and not all borrowers are eligible.
- Might need to open another account: Credit union membership often requires you to open another account, such as a savings account, with a minimum deposit.
- Don’t all accept online applications: Some credit unions require phone or in-person loan applications.
Credit union personal loan rates
The average APR on a 36-month, unsecured credit union personal loan is 10.64%, according to National Credit Union Administration data from the fourth quarter of 2025. The average rate was 12.00% for banks during the same period.
Your personal loan interest rate will vary based on your term length, credit score and other criteria. For example, a secured personal loan might offer lower rates.
How to qualify for a credit union personal loan
Personal loan eligibility requirements vary by credit union. Common criteria include:
- Credit score: Your credit score demonstrates your repayment ability to lenders, and most set a minimum score for loan eligibility. Higher scores generally unlock better terms.
- Debt-to-income (DTI) ratio: Your DTI represents your debt obligations as a percentage of your monthly income. A high ratio signals to lenders you might struggle to make payments. A DTI of 35% or lower generally qualifies you for the best loan terms, but you might be eligible for a loan with a higher ratio.
- Collateral: Some credit unions offer secured personal loans, which use savings balances, vehicles or other assets as collateral. This reduces lender risk, which can increase your approval odds and unlock lower rates.
- Credit union relationship: A credit union might offer flexible qualification requirements to existing members with a positive payment history.
How to get a personal loan from a credit union
Follow these steps to secure a credit union personal loan.
- Research credit union membership requirements. Some credit unions limit membership to specific groups, such as military members or teachers.
- Join the credit union if you’re not already a member. You might need to open another account and make a minimum deposit.
- Prequalify to estimate rates. Credit unions offering this option let you check terms with a soft credit pull.
- Submit a loan application. This could be an online, phone or in-person application, depending on the lender.
- Review your terms and sign your loan agreement. Ensure terms are correct and note any applicable late fees, prepayment penalties or other charges.
Alternatives to personal loans
Personal loans can be used for many purposes, but they aren’t always the right option. Other financing might better match your financial situation.
- Payday alternative loan (PAL): A PAL is a short-term, small loan. It usually has flexible qualification criteria and a high interest rate.
- Home equity loan: These loans leverage your home equity for a lump-sum, and you generally need good to excellent credit to qualify. Payments are due in monthly installments, similar to a personal loan, but rates can be lower.
- Introductory APR credit card: A credit card with a 0% promotional APR on new purchases or balance transfers offers a limited period before the standard interest rate kicks in, usually up to two years. Good or excellent credit is usually required.
How Buy Side rates the best credit unions for personal loans
We analyzed data points from more than 30 lenders, including traditional banks, credit unions and online lenders, and assigned ratings on a scale of 1 to 5 stars. Our pool includes partner lenders, but partners don’t compensate us for ratings or influence the outcome of our ratings.
We chose six factors and weighted them based on our expert assessment of their importance to readers. Lenders with the highest point values were assigned 5 stars, with the lowest-scoring companies receiving 1 star. Buy Side’s best credit unions for personal loans features the credit unions that received at least 4 stars out of 5 in our evaluation of personal lenders. Learn more about how Buy Side rates personal loans using data-driven methodologies.
