Credit union personal loans often cheaper

When shopping for a cheap personal loan, think local.

Your neighborhood credit union should be your first stop for borrowing money, especially if you don’t have perfect credit. Compared with other lenders, credit unions often have lower interest rates, more flexible terms and a loan officer willing to look at more than your credit score.

A personal loan from a credit union is a particularly good option if you:

Are already a member of a credit union or can qualify to become a member Have average or bad credit Don’t mind having to visit a branch to complete the application process

Some banks and many online lenders also offer personal loans, but they typically give the best rates only to those with excellent credit profiles and don’t always consider your overall financial picture.

There are some downsides with credit unions. Many conduct a hard credit check on applications “which can cause a small temporary dip in your credit score “while online lenders typically perform soft credit checks to see if you prequalify for a loan. Credit unions also may not have the latest online or mobile banking technology you would expect from a big bank.

But loans from credit unions tend to be cheaper than those from online lenders, especially for borrowers with bad credit scores. The average rate online lenders charged to customers with scores of 630 or less was 28.64%, according to NerdWallet’s 2016 survey of lender rates.