Are personal loan rates better at a credit union than a bank?

Why credit unions tend to be cheaper: Credit unions do not pay shareholders. Profits return to members as lower rates on loans and higher rates on deposits. The National Credit Union Administration (NCUA) caps the rate federal credit unions can charge on most loans at 18% APR, which protects members from the 29%-36% rates online marketplace lenders sometimes charge higher-risk borrowers.

Who can join: Anyone can join a credit union. Requirements vary: some are employer-based (Boeing Employees Credit Union), some are geography-based (a state or regional CU), some are association-based (teachers, military, etc.). Many also accept anyone who donates $5-$25 to a partner charity. Use MyCreditUnion.gov to find credit unions you can join.

Trade-offs vs online lenders: Credit unions typically require membership, may need a branch visit or phone call, take longer to fund (3-7 days vs 1-2 days online), and have simpler online platforms. Online lenders fund faster, offer better technology, and are available to everyone.

When credit union wins: For borrowers who already have a relationship, have fair-to-good credit (620-730), want the lowest possible rate, or need a loan the NCUA 18% cap protects - credit union is often the best choice.

When online lender wins: Excellent credit borrowers (750+) sometimes find online lenders like LightStream beat credit union rates. Online also wins for speed: funds can arrive the same day for some lenders.