Credit Union Loans Offer Low Rates and Flexible Terms

Credit union loans may have rates and terms that make them ideal for fair- and bad-credit members.
Jackie Veling
By Jackie Veling 
Edited by Kim Lowe
Credit Union Personal Loans Offer Low Rates, Flexible Terms

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

Your local credit union should be one of your first stops when you’re looking to borrow money, especially if you have a fair or bad credit score (689 or lower). Credit union personal loans often have benefits over those of other lenders, including:

  • Typically lower interest rates.

  • Smaller starting loan amounts.

  • More flexible terms.

  • Loan officers willing to consider factors beyond your credit score.

How do credit union loans work?

Credit unions are not-for-profit financial organizations that serve members who live, study, work or worship in a particular area. Each credit union is controlled by members, who elect volunteer 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 an account with an initial minimum deposit, typically $5 to $25. Once your membership is approved, you can access banking services, including personal loans.

Once you apply for a loan and are approved, you’ll receive the funds in your account and then repay the credit union in fixed monthly installments, with terms ranging from one to seven years.

See if you pre-qualify for a personal loan – without affecting your credit score
Just answer a few questions to get personalized rate estimates from multiple lenders.

Best credit union personal loans for 2023

If you don’t have a neighborhood credit union, nationwide options are available. The credit unions below lend in all 50 states and Washington, D.C., and you can apply for membership online.

Alliant: Best for fast funding

Becoming a member at Alliant doesn’t require a fee, and anyone is eligible by joining Foster Care to Success, a nonprofit that serves foster teens across the country. Alliant pays the $5 membership fee to FC2S on your behalf.

Why it stands out: Alliant offers a wide range of personal loan amounts and can approve most borrowers the same day they apply. Once you sign the loan documents, Alliant can also provide same-day funding.

PenFed: Best for co-sign and joint loan options

Though PenFed is known for serving military members, anyone can join by funding a savings account with an initial deposit of $5.

Why it stands out: PenFed offers co-signed and joint loans to personal loan borrowers. By adding someone with a higher credit score or larger income to your application, you may help your chances of getting approved. Co-borrowers are equally responsible for missed payments, but in a co-signed loan, only the primary applicant has access to the loan funds.

First Tech: Best for debt consolidation

First Tech serves mostly tech companies and their employees with personal loans up to $50,000.

Why it stands out: First Tech is a good option for consolidating your debts under a personal loan, thanks to its wide range of amounts, terms and ability to send funds directly to creditors. Though direct payment to creditors isn’t essential for a debt consolidation loan, it means you don't have to send the funds.

Navy Federal: Best for military members

To be eligible for membership at Navy Federal, you must be on active duty in, retired from or a veteran of any military branch; a Department of Defense employee, contractor or retiree; or a family or household member of a service member.

Why it stands out: In addition to Navy Federal's focus 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 your personal loan’s annual percentage rate, which lowers the overall interest you’ll pay on the loan.

Credit union personal loan rates

Rates for unsecured personal loans will depend on your credit score, credit history, income and debts.

Rates can also vary by type of credit union: federally chartered vs. state-chartered.

Federal credit unions cap annual percentage rates at 18%. Your credit union may also charge an application fee that isn't part of the APR.

As of September 2022, the average APR for a three-year federal credit union loan was 9.15%, according to data from the National Credit Union Administration.


Typical APR range

Loan amounts

Alliant Personal Loan
NerdWallet rating 
See my rates

on NerdWallet's secure website

6.24% - 27.24%.

$1,000 to $50,000.

PenFed Credit Union Personal Loan
NerdWallet rating 
See my rates

on NerdWallet's secure website

7.74% - 17.99%.

$600 to $50,000.

First Tech Credit Union Personal Loan
NerdWallet rating 
See my rates

on NerdWallet's secure website

6.70% - 18.00%.

$500 to $50,000.

Navy Federal Credit Union Personal Loan
NerdWallet rating 
See my rates

on NerdWallet's secure website

7.49% - 18.00%.

$250 to $50,000.

How to get a loan from a credit union

A low credit score alone won’t typically disqualify you from getting a loan from a credit union because the organization will consider your whole financial picture, including your credit history and standing as a member with the credit union, when reviewing your loan application. Still, a good score will get you a lower rate than someone with bad credit, so it pays to check your credit score before applying for a loan.

Because credit unions come in many sizes, the application process, approval criteria, rates and other aspects of a personal loan vary. Many credit unions allow online loan applications, which typically ask for personal and contact information, a Social Security number, employment and income details, and any debts.

Local or smaller institutions may require you to apply in person or close the loan at a branch.

Credit union vs. online lender

Online lenders offer loans across the credit spectrum, so they’re another option for bad-credit borrowers (629 credit score or lower) who need a personal loan.

While credit unions conduct only a hard credit check — which can cause a small temporary dip in your credit score — most online lenders typically perform soft credit checks first to see if you pre-qualify for a loan.

Online lenders also offer online applications that don’t require you to visit a branch and typically fund loans quickly.

But loans from credit unions tend to be cheaper than those from online lenders, especially for borrowers with fair or bad credit scores. Borrowers with fair credit received an average APR around 20%, according to the most recent anonymized offer data from users who pre-qualified in NerdWallet’s lender marketplace.


Min. credit score

Typical APR range

Loan amount

NerdWallet rating 

on Upgrade's website


6.50% - 35.99%.

$1,000 to $50,000.

NerdWallet rating 

on Upstart's website


8.24% - 35.97%.

$1,000 to $50,000.

Lending Club
NerdWallet rating 

on LendingClub's website


8.30% - 36.00%.

$1,000 to $40,000.

NerdWallet rating 

on Best Egg's website


8.99% - 35.99%.

$2,000 to $50,000.

Universal Credit
NerdWallet rating 

on Universal Credit's website


11.69% - 35.93%.

$1,000 to $50,000.

Next steps

If you’re a member and you can withstand a temporary hit to your credit score, a credit union may get you the cheapest loan. NerdWallet recommends comparing loans from multiple lenders.

You can pre-qualify with online lenders on NerdWallet and compare your estimated rate with one from your credit union.

See if you pre-qualify for a personal loan – without affecting your credit score
Just answer a few questions to get personalized rate estimates from multiple lenders.
Get more smart money moves – straight to your inbox
Sign up and we’ll send you Nerdy articles about the money topics that matter most to you along with other ways to help you get more from your money.