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A credit union can be an ideal first stop when you’re looking to borrow money, especially if you have fair or bad credit (scores up to the low 600s). Credit unions offer low rates and consider factors beyond credit score when evaluating your application.
Credit union loans can be used for many purposes, including debt consolidation, emergency expenses and home improvement projects. However, you’ll have to join the credit union to borrow money if you aren’t already a member.
Best credit unions for personal loans in 2026
The credit unions listed below lend in all 50 states and Washington, D.C., and you can apply for membership online.
First Tech: Best for a seamless application process
on NerdWallet's secure website
First Tech Federal Credit Union, which merged with Digital Federal Credit Union (DCU) in early 2026, serves employees at over 1,700 companies, including major employers like Amazon and Microsoft. Members can also join the credit union if they belong to one of 10 participating organizations, live in a community associated with the credit union or have a family member who’s a First Tech member.
- APR range: 7.89% to 18.00%.
- Loan amounts: $500 to $50,000.
- Repayment terms: 6 months to 7 years.
- Funding time: Same day.
Why it stands out: First Tech offers a fast application process. The lender allows potential borrowers to pre-qualify online to see their potential rate, loan amount and monthly payment, even if they aren’t members yet. Those who qualify and accept a loan offer just need to join First Tech before funding.
» READ: First Tech personal loan review
PenFed: Best for no fees
on NerdWallet's secure website
PenFed is known for serving military members, but anyone can join the credit union by opening a savings account with an initial deposit of $5.
- APR range: 7.99% to 17.99%.
- Loan amounts: $600 to $50,000.
- Repayment terms: 1 to 5 years.
- Funding time: Same or next day.
Why it stands out: In addition to its low personal loan rates, PenFed saves borrowers money by not charging any fees.
» READ: PenFed personal loan review
Navy Federal: Best for military members
on NerdWallet's secure website
To be eligible for membership at Navy Federal, you must be an active duty member or veteran of any military branch; a Department of Defense civilian employee; or a family or household member of a Navy Federal Credit Union member.
- APR range: 8.99% to 18.00%.
- Loan amounts: $250 to $50,000.
- Repayment terms: 6 months to 5 years.
- Funding time: Same day.
Why it stands out: In addition to focusing on military members and their families, if you’re active duty or retired military, you can qualify for a 0.25 percentage point discount on select loans, which lowers the overall interest you’ll pay.
How do credit union personal loans work?
Credit unions are not-for-profit financial institutions that serve members who live or work in a specific area or belong to a particular organization. Members own shares of the credit union and elect board members to oversee the organization.
If you meet the credit union’s requirements, you can apply for membership, usually online. You may be required to open a savings account with an initial minimum deposit as low as $5.
After your membership is approved, you can access banking services, including personal loans.
If you apply and are approved for a personal loan, you’ll receive the funds in your account in a lump sum. You’ll then repay the loan in fixed monthly installments.
Repayment terms tend to range from about six months to seven years.
Comparing credit union loans to bank loans and online loans
The loan amounts, terms and requirements can vary depending on whether you get a personal loan from a credit union, bank or online lender. To help understand the differences, NerdWallet researched and reviewed loan features and options from more than 30 lenders. Here’s what we found:
- Credit unions may have lower rates than banks or online lenders, and they let loan applicants borrow smaller amounts. Credit unions may accept borrowers with low credit scores — but they require borrowers to be credit union members.
- Banks generally lend to borrowers with good to excellent credit (scores in the mid-600s or higher). They have low rates and may provide rate discounts or other perks to existing customers.
- Online lenders tend to offer loans to borrowers across the credit spectrum. They may have large loan amounts and a wide range of terms, but rates can be higher than credit unions or banks. Online lenders provide a streamlined application process and typically have fast funding.
» MORE: See where to get a personal loan
Pros and cons of personal loans from credit unions
Pros
Low interest rates.
Small minimum loan amounts.
Applicants may be evaluated on factors beyond credit score.
Cons
Requires credit union membership.
Some credit unions could require an in-person visit.
Credit union personal loan rates
As of September 2025, the average annual percentage rate for a three-year federal credit union loan was 10.72%, according to data from the National Credit Union Administration .
Personal loan rates often depend on your credit score, credit history, income and debts.
Rates can also vary by type of credit union. For instance, federal credit unions cap APRs at 18% .
» MORE: See average personal loan rates
How to get a loan from a credit union
1. Join the credit union if you’re not already a member
Review the credit union’s membership criteria, as some only serve specific audiences, like military members or educators.
You may be able to apply for a membership online or at the credit union’s branch. Some credit unions require you to open an account with a small minimum deposit to gain membership.
2. Pre-qualify
The best credit unions for personal loans let you pre-qualify to preview your rates and terms without a hard credit inquiry. Pre-qualify with multiple lenders to compare offers.
If your credit union doesn't offer pre-qualification, talk to the branch or research loan options online to ensure you meet the basic qualifications and that the credit union offers the loan amount and term you need.
Use a personal loan calculator to estimate your monthly payments based on your anticipated loan amount, rate, and term.
Loan details
2026
Jan
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Your loan estimate
Monthly payment
$212.47
Total principal
$10,000
Total interest payments
$2,748.23
Total loan payments
$12,748.23
Payoff date
01 / 2031
Show amortization schedule
3. Submit an application
Many credit unions have online loan applications. You’ll typically provide your personal and contact information, Social Security number, and employment and income details — plus information about any current debts.
Local or smaller institutions may require you to apply in-person or finalize the loan at a branch.
The lender will perform a hard credit check when you apply, which can cause your credit score to dip a few points.
4. Sign loan documents and get funded
If the lender approves your application, the next step is signing the loan agreement. Read your loan agreement carefully before signing and make sure you understand all the terms.
Once you sign, the credit union will usually disburse funds within a couple of days. Some lenders offer same-day funding while others take up to a week.
Your first loan payment is typically due about 30 days after funding.
» MORE: How to get a personal loan
Tips for getting a credit union loan with bad credit
If you have bad credit (a score below 600), here are some actions to take to increase your likelihood of loan approval or a lower interest rate.
- Build your credit: Check your credit report before applying for a loan and do what you can to build your credit, like disputing errors on your report and making consistent, on-time payments on your other debt.
- Add a co-signer or co-borrower: Adding a co-signer or co-borrower with strong credit can help you qualify or get a lower rate. Co-signers simply vouch for your ability to repay a loan, while co-borrowers share a joint loan together. Both co-signers and co-borrowers are responsible for making loan payments if the primary borrower does not.
- Opt for a secured loan: If the lender allows it, borrowers can secure a personal loan with collateral — typically a savings account or vehicle — which can strengthen their chances of approval or getting a lower rate. However, the lender can take that collateral if you miss payments.
- Request a smaller amount: Lenders may view a large loan amount as risky, so make sure you only apply for the amount you need.
🤓 Nerdy Tip
For more loan options, also consider online lenders who offer loans to borrowers with low credit scores. Payday alternative loans from credit unions
If you’re in need of a small, short-term loan, some credit unions offer payday alternative loans (or PALs). These loans can be up to $2,000 with repayment terms from one to 12 months.
Federal credit unions cap interest rates for PALs at 28% , making them more affordable than traditional payday loans, which can have APRs around 400%.
You may have an application fee for payday alternative loans at federal credit unions, but it cannot be more than $20.
Next steps
If you are already a credit union member or are interested in becoming one, a credit union may get you the cheapest loan. NerdWallet recommends comparing loans from multiple lenders.
Methodology
How we chose the best personal loans
Our team of consumer lending experts follow an objective and robust methodology to rate lenders and pick the best.
30+
Lenders reviewed
We review over 35 lenders, including major banks, top credit unions, leading digital platforms, and high interest installment lenders operating across multiple states.
25+
Categories assessed
Each lender is evaluated across five weighted categories and 27 subcategories, covering affordability, eligibility, consumer experience, flexibility, and application process.
60+
Data points analyzed
Our team tracks and reassesses hundreds of data points annually, including APR ranges, fees, credit requirements, and borrower tools, ensuring up to date, accurate comparisons.
Star rating categories
We evaluate more categories than competitors and carefully weigh how each factor impacts your experience.
NerdWallet’s review process evaluates and rates personal loan products from more than 30 financial technology companies and financial institutions. We collect over 60 data points and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.
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- 1. National Credit Union Administration. Credit Union and Bank Rates 2025 Q3. Accessed Jan 12, 2026.
- 2. National Credit Union Administration. Permissible Loan Interest Rate Ceiling Extended. Accessed Jan 12, 2026.
- 2. National Credit Union Administration. Permissible Loan Interest Rate Ceiling Extended. Accessed Jan 12, 2026.
