Advantages and Disadvantages of Seeking Financing From Credit Unions

When you need a loan of some kind, you can pursue financing from several different options including a bank or credit union. While credit unions are not as widely understood as banks, they offer some advantages over traditional banking facilities. At the same time, they also have a few potential drawbacks to consider.


Lower Rates
One of the potential advantages of getting financing through a credit union is a lower rate. Credit unions are nonprofit entities that do not have to pay taxes to the federal government. This means that since they save a larger amount of money as compared to banks, they can pass those savings on to customers in the form of lower rates. You can also get cheaper closing costs and other associated fees when financing.

Customer Service
Another potential advantage of going with a credit union over other financing options is customer service. Credit unions are owned by the members that have accounts there. Because of this, the employees at the credit union are interested in making each customer happy. If you work with a credit union, you actually get to vote on the credit union's board of directors. Since you have a say in important matters, the customer service tends to be better.

Membership
One of the potential disadvantages of working with a credit union is that you have to get a membership before you can gain access to their services. Not all credit unions are open to the general public. Credit unions are made up of individuals that have something in common. They either work together or are affiliated with a certain group. In some cases, this could be a geographic region, but you still have to meet some kind of qualification.

Lack of Locations
One of the potential problems that comes with financing through a credit union is that it may have very few locations to deal with. While most banks that you join will have multiple locations in your area, credit unions may only have one. This may not be an issue if you make your payments online. However, if you like to go into the branch to make your payments or talk to someone in person about issues, this may be a problem.