How Can Credit Unions Help Borrowers Who Need A Debt Consolidation Loan

Financial hardship, short or long-term, may seem like an insurmountable obstacle. Considering a debt consolidation loan from a credit union may be the boost you need to climb that mountain of debt. Here’s how they can help:

Credit Unions Have A Generous Approval Policy

Unlike banks, credit unions are not-for-profit organizations. Their sole purpose is to administrate the financial needs of their members. Banks have a set formula that measures income, credit history and holdings to determine credit worthiness. If you fall short in any of those categories, you will be denied. Credit unions, however, are able to offer much more personalized service. They will review your situation individually, as opposed to using a one size fits all template. A blemished credit history isn’t necessarily a deal breaker at a credit union. If you are able to show that the situation that led to credit problems has been resolved, or is in the process of being resolved, a credit union has more flexibility to work with you.

Credit Unions Offer Lower Interest Rates

The interest rates offered by a credit union will almost certainly be lower than the rate you are paying on your credit cards or other debts. They can also offer loan terms that are unique to your situation. By offering lower interest rates and more time to re-pay the loan, credit unions can lower your monthly burden. Conversely, if you would prefer to pay off your debt sooner, credit unions have the flexibility to shorten the length of the loan or accept pre-payment, usually without penalty.

Credit Unions Are More Customer Friendly

Most financial institutions focus on profit and nothing else. Large banks have millions of customers. Losing one customer due to poor service is not of any concern to them. Credit unions are smaller and much more focused on keeping their members satisfied. The loss of a single member is more impactful on the smaller structure of a credit union. This gives them incentive to provide service with the customers best interest in mind. If an unexpected expense pops up, calling multiple credit card companies and other debtors is not likely to yield successful results. However, one quick call to your credit union may well result in an authorized payment skip or due date delay that can help you in your time of need.

Offering services that are tailored to the needs of their members make credit unions a great place to start looking for your debt consolidation loan.