Credit unions are primarily concerned with offering financial services in the form of personal loans at competitive rates to its members. America First Credit Union is a good example and it is committed to provide quality financial services to members with the aim of uplifting their welfare. Whilst the interest rates for various loans that are charged by different credit unions differ, one major issue of importance is that they are generally lower than those offered by other commercial lenders.
Loan rates offered by credit unions
Credit unions offer competitive rates that are relatively lower than those offered by other subprime lenders. The rates are specifically designed to fulfill the personal needs of the prospective home buyers who apparently are also members of the union. For instance, auto loan rates are fixed and they range from 2, 99 % to 3,2% over a five year period. It can also be seen that mortgage rates are also fixed and they range from as low as 3 % over a 10 year period. The other notable aspect is that 30 year fixed mortgage loans attract rateswithin the range of 4 % and on top of that,the origination fee charged is 0,5 % only. These rates are quite flexible and affordable such that they can help members to be proud owners of homes without encountering many challenges like the case with other commercial lenders whose loans are characterised by high interest rates. These are deterrent to many prospective borrowers since they may not be able meet the conditions beyond their reach.
The major advantage of fixed credit loan rates offered by credit unions is that they are not subject to change once the loan agreement has been signed. This helps the borrowers to maintain a clean credit record since they are assured of paying similar rates throughout which cannot negatively impact on other financial commitments. Likewise, the national economy can never be permanently static since it is likely to be affected by other changes which can trigger increases in interest rates. However, the credit union members are cushioned from such unprecedented changes since their interest rates are fixed. The borrowers also have the opportunity to make advance payments to cover their loans as long as they have enough financial resources at a given time. This is an added advantage since they will only be reducing the fixed amount of money they are supposed to pay at the end of the term of their loans. This again positively contributes towards maintaining a clean credit record by the borrowers which safeguards their future interests since they may need to apply for other different loans.
Other benefits of accessing loans from credit unions
The other major benefit of applying for a loan via a credit union is that it is easy to calculate your own ratethrough the use of the online facility available. There are many options available to calculate the interest rate of the amount you want to borrow to accomplish your financial goals. This is advantageous because you know your expected monthly rates that you are supposed to pay before applying for a loan. This gives you a clear picture if the loan is manageable so that you do not create problems that can negatively affect your credit report in future.