The time has come and you need to make the decision of where to ask for a loan. This is no easy task if you have a so many options. This article will discuss what the differences are between a bank and a credit union so you have a better understanding.

 

A credit union is an institution where you as an account holder owns part of that union this is completely different to a bank. Credit unions also offer lower interest rates, which are decided by a Board of Directors which, you as a member will elect. They exist to further community development or sustainable international development at a local level. Another difference is that you need to become a member to be able to anything like depositing money, transfers etc. There are similarities to banks this is in terms of the terminology that they use, for example: share draft (checking account), share accounts (savings account) and credit cards are also similar.

Banks are simple and most people know what a bank is about. When you need a bank loan you should consider all the options. The bank will normally, in contrast to credit unions, offer you a higher bank loan. In other words credit unions offer a lower interest rate but a lower sum of money to have access to in terms of loans. Also when applying for a bank loan, you can be assured that banks will serve your financial needs with very little questions asked, but credit unions usually offer a membership to a specific class of customer, whether it is defined by profession or geographic area. Banks, however, do offer a wider range of services, and are often more accessible to customers. In the case of traveling, you will find it easier to find your branch in all parts of the country.

In terms of profits there is a vast difference between banks and credit unions. In banks the profits are shared between the investors of the specific bank. Credit unions are non-profit entities and therefore the profits go to you as an account holder/member in the form of lower interest rates and higher dividends. 

Also credit unions offer more personalized dealings where as banks have many members to cater for and are more impersonal. This is a matter of personal preference, some people might prefer to be more comfortable with mass-produced services or they might want to feel more personal when dealing with their money. Credit unions and banks are all different, meaning a bank can differ from another in terms of their interest rates and the same goes for credit unions. Therefore you need to go do some homework and don’t worry it’ll take you less time than watching a commercial break. You need to go on different bank and credit union sites and compare rates this is really easy.

When choosing between a bank and a credit union for a loan, that choice should reflect your own personal self interest, and should be decided after examining your particular financial situation. The bottom line is that you should take an interest in your interest.

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This entry was posted on Wednesday, March 10th, 2010 at 11:43 pm and is filed under ARM Mortagage, Bankruptcy, Consolodate Mortgage, Credit, Credit report, Debt Consolidation, Debt Relief, Familiy Banking, Hotels, Loans, Mortgage, Personal finance, Reduce Debt, Structured Settlements, Travel Offers, USA Accomodation, Uncategorized, Wealth Building, free 3 credit report. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.