Credit Unions vs. Banks: How to Decide

 

Credit Unions vs. Banks: How to Decide
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Many people are under the misconception that only banks are the institution to go to if you require a loan. The truth is, there are numerous options you can avail but only if you know where to go. For a student, the most common need for a loan is to help pay off their college tuition. Without procuring financial aid, the students cannot afford to go to college.

Apart from the fee, there are plenty of other expenses to manage as well. These expenditures comprise lodging, food, medical, and miscellaneous such as hiring the services of online assignment help. Even if they do get their loan approved, the students must also consider whether they can afford the interest rate. That is why you need to know all your options before you make the decision that works best for you. 

Both banks and credit unions have their own set of pros and cons. To decide which of the two is suitable for any particular individual or organisation depends on their own needs and the types of services offered by each of them.

Online support and services

Banks have been known to provide quality online services for quite some time now related to funds transfer, investments, charity, account statements, tax-related statements, dining, shopping, and health services to name a few. Though credit unions have recently begun to venture out towards online apps and services, their services, quality of services, and server handling capabilities are more limited compared to banks currently.

Over time as their online expertise grow, we can surely expect credit unions’ online services to improve significantly but presently; they have a long road ahead to be able to compete with banks’ online offerings.

Types of organisations

Banks are for-profit businesses, while the credit unions are non-profit organisations. This means that banks have to look out for their shareholders’ welfare and make as much profit as possible while obeying all the rules of the land. Credit Unions, on the other hand, have no such requirements. Since the institution is member-owned, the credit union takes decisions that will prove to be profitable for its members as opposed to focusing on ways to satisfy their stockholders.

Eligibility requirements

Most people assume that getting a membership at a credit union is a tough task. On the contrary, it is as easy as can be. If you are part of a particular community, for instance, a workplace, church, or region, you may be eligible to attain a credit union membership without even knowing it. All you have to do is find out with the credit union in your community.

Interest rates

If you compare the rates placed on credit cards, loans, mortgages, etc., you will be surprised to see a huge difference among both institutes. The interest rates of a credit union will be significantly lower than the rates offered by a bank. Similarly, if you want to invest your money via your savings account, the rate of interest will be higher than the ones offered by a bank.

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