Credit unions are financial institutions that offer pretty much the same services as banks, but their products and services usually come with much more convenient conditions than in the case of banks and the customer service environment is also much friendlier and much more customer-oriented. Here are some general things to know about credit unions and some of the advantages that make them worth considering.
What Are Credit Unions?
Credit unions are basically not-for-profit, customer-oriented versions of conventional banks. They are member-owned institutions, which means that anyone who joins a union becomes the co-owner of the organization as well, having voting rights about important matters related to how the union is operated. The membership status also gives credit union members a regular income – as credit unions are not-for-profit organization, they distribute any profit they make to their members, usually in the form of yearly dividends.
The Benefits of Joining a Credit Union
Credit unions are based on the principle of people helping other people and not on the intention of maximizing profit, which has beneficial effects on the conditions available of services and products offered by credit unions. According to a trusted Parker credit union, here are some of the most important perks:
- Lower rates on loans and credit cards – the loans and credit cards offered by credit unions come with more convenient administration and repayment conditions;
- Higher interest rates on deposits – the deposits made by account holders bring more money to their owners in the form of higher interests;
- Available for people with a poor credit history – credit union memberships are also available for people who have had trouble repaying loans in the past and are having difficulties because of bad credit scores. When someone who has been facing such issues in the past wants to join a credit union, the institution runs a check on the person’s finances and they provide assistance and guidance to help the applicant improve their situation;
- Community involvement – many credit unions consider it their mission to enrich the community in which they are present. They usually become involved in the life of the community by providing financial education programs for free to interested community members and in schools;
- A wide range of loans – credit unions usually offer the same types of loans as banks, including mortgage and auto loans, unsecured personal and payday loans and credit lines, all of them with good repayment conditions;
- Quick and easy joining processes – all the members of the Parker credit union share the union’s common bond, the quality or affiliation that stands at the base of the union’s foundation. The common bond can be a profession, employment with a particular company or affiliation with a particular organization, but most often, aspiring members only need to share residence in the same geographical area. Anyone who shares the common bond can apply by providing a proof of ID, a proof of address and a proof of eligibility. Many credit unions also accept applications from the relatives of their members and opening accounts for children is also available from many unions.