People borrow money for a variety of reasons. Like them, you go to the banks hoping you can get the best loan deal ever. But, as you begin entering into a banking relationship, you may fail to realize the possible benefits of going to credit unions over banks.
Although there are several options on where to take out loans in Syracuse, here are the reasons why you should lend money from a credit union.
What Is A Credit Union?
Before we discuss the advantages of joining a credit union, it’s essential to know what it is and how it can work best for you.
In a nutshell, a credit union operates like banks. It also accepts deposits, makes loans, provides ATM and investment services. However, even if they’re both financial institutions, a credit union is somewhat different from banks in the following manners:
Credit unions are considered as not-for-profit institutions. It means that the organization is managed and owned by its members. Unlike banks, the profits earned by the credit union are either given back to the owner-members in the form of dividends or invested back into the institution itself. Since they’re non-profit organizations, they don’t pay federal or state taxes.
Credit unions work like cooperative financial institutions. The members, for instance, may share a common bond such that they may come from the same community, work for the same company, attend the same church, and many others.
Benefits Of Lending Money From A Credit Union
Now that you’ve got an idea of what a credit union is, it’s time to explore the benefits it offers when you lend some money from them. Below are the reasons why going to a credit union in Syracuse is advantageous to your financial situation:
1. Policies Are Customer-Oriented
When opening an account with a credit union, you’ll become an owner-member of the organization. Since it doesn’t have stockholders, a credit union is there to serve its members faithfully.
Given such a philosophy, you can make sure that its operational policies are more customer-oriented than banks. Aside from making the best profits, borrowing money from a credit union allows you to enjoy exceptional customer service experience possible.
2. Loans And Savings Are Insured
Another advantage of borrowing money from a credit union in Syracuse is that the loans and savings are insured at no cost to them. The financial institution’s own policy will protect the loans you’re going to get. In case of your death, your family will not be held responsible for the payment of your loan. Instead, it’ll be paid off immediately.
In addition, your account is guaranteed. Usually, credit unions aren’t under the control of the Federal Deposit Insurance Corporation (FDIC). Instead, they’re a member of the National Credit Union Administration (NCUA). When you become an owner-member of the institution, your account will also enjoy a guarantee of up to $250,000.
Hence, if you’re looking for a credit union in Syracuse, be sure the one you’re going to choose is a member of the NCUA, like empowerfcu.com. That way, you can rest knowing your funds are protected no matter what happens.
3. Loans Have Lower Rates
Compared to banks, a credit union’s primary objective isn’t to make enormous profits for the stakeholders. Instead, it aims to generate money for the benefit of the members. Because of that motive, borrowing money from a credit union can be a great idea.
When you become a member, you can take advantage of lower rates on loans, such as mortgages, car loans, etc. As a result, you’ll not have a hard time paying off your obligations on-time.
4. Loan Repayments Are Flexible
When it comes to loan repayments, credit unions, particularly the one in Syracuse, offer flexibility. It means that if you want to repay your loan faster than initially scheduled, you can do so without having to pay additional costs.
Also, the same flexibility is afforded by a credit union when your financial situation has changed. In the event you can no longer pay off your debt, the organization will not hesitate to offer a potential restructuring of your repayments that works well with your circumstances. Plus, getting loans from a credit union doesn’t come with any administration charges.
5. A Credit Union Can Work With Bad Credit
If you have poor credit, lending money from a credit union can be an excellent idea. They’ll not hesitate to help you get a loan even if your credit rating is terrible or you have difficulty qualifying for a loan. The loan officers of the credit union will discuss with you the possible loan terms that may suit your financial circumstances. Also, they can provide some ways on how to strengthen your credit and borrowing capacity.
6. You Can Get The Most Out Of Financial Education
Apart from offering a variety of financial services to members, a credit union also provides educational programs relating to financial matters. On top of borrowing funds from them, they will also educate you about money and more importantly, on credit matters.
They have staff financial advisors who are willing to give valuable advice and organize free financial workshops. You can also benefit from some other educational programs, such as budgeting strategies, ways on how to pay off loans quickly, and many more.
7. A Credit Union Supports Your Community
Joining a credit union in Syracuse can also benefit the community you belong to. More than the financial advantages, they use their own available funds to donate or sponsor some local activities within the community. These activities may include charities, youth initiatives, and sporting events.
If you’re a college student, becoming a credit union member allows you to avail of some scholarship programs they offer to students. That way, you can ease the financial burden brought about by educational costs.
Lending some money is something that most people will experience in life. Therefore, you must be aware of the options to help you figure out which financial assistance will more likely be advantageous to your situation.
If you consider credit unions as one of your options, hopefully, this article can give you an idea of how financially beneficial it is to be part of such organizations.