When unexpected costs arise or you want to treat yourself to a holiday, but you do not have the money saved up, there are several options that you may be able to choose from. It is important to choose an option that will most suit your financial circumstances.
You should prioritise options that minimise the total repayment amount as a credit card with a high-interest rate could end up costing you significantly more to pay off.
If you are deciding the best financial solution for you, here are five reasons a credit union could work for you:
Better interest rates
Compared to high-interest credit cards and high-interest loans, credit union loans will usually offer lower interest rates so that you are not paying more in interest than is necessary. Credit unions are not-for-profit organisations that provide financial solutions that are in the best interests of the customers.
Customers come first
Credit unions are set up for the benefit of its members, rather than to make profits for a bank, so the way that the organisation is run is based around providing the best service and financial solutions for members.
Based in your local community or workplace
Credit unions are created in local communities and are set up for members who share a common bond, such as working or living in a specific area or even working in a particular industry.
Due to being community-based, members will usually be able to visit the office in person to speak to the union about their personal situation, creating that personalised relationship.
Impartial financial advice
As credit unions are not driven by making profits, when you ask a credit union customer service adviser about products, they will give you advice based on what is in the best interests of your finances both in the short-term and long-term. A credit union supports people to become better at managing their finances for a brighter future.
Still available with bad credit
While a credit union will not lend money if people cannot afford to pay the loan back, having a bad credit history will not usually stop you from being able to get a credit union loan. Instead of looking at your historical finances, a credit union will look at the current picture and you may still be approved for a loan when a bank has declined a loan application.