If you need a personal loan, you might wonder where to start searching for the best interest rates. While there are various options out there, credit unions are often a great place to start. Credit unions are not-for-profit financial cooperatives owned and controlled by their members. This means that they can offer lower interest rates on loans. We'll explore how to get a low-interest personal loan from a credit union.

1. Join a credit union

The first step in getting a low-interest personal loan from a credit union is to join one. Credit unions are typically community-based organizations that serve a specific geographical area or a particular group of people, such as those who work in a specific industry.

To become a credit union member, you'll need to meet their eligibility requirements, which often include living or working in a particular area or belonging to a specific organization. Over 99% of Americans are eligible to join a credit union, so there’s one for you too! Once you've joined a credit union, you'll have access to their loan products, which often include personal loans. 

2. Check interest rates

Once you've joined a credit union, the next step is to check their interest rates for personal loans. Credit unions often offer lower interest rates than traditional banks, but comparing rates from multiple lenders is essential to ensure you get the best deal.

When comparing interest rates, be sure also to consider any fees associated with the loan, such as origination fees or prepayment penalties. These fees can impact the overall cost of the loan and should be factored into your decision-making process.

3. Improve your credit score

Your credit score significantly determines the interest rate you'll be offered on a personal loan. If you have a low credit score, you'll likely be offered a higher interest rate, which can increase the overall cost of the loan.

To improve your credit score, focus on paying all your bills on time, paying down any outstanding debt, and avoiding applying for too much new credit at once. These actions can help boost your credit score and increase your chances of being offered a lower interest rate on a personal loan.

4. Consider a secured loan

If you're having trouble getting approved for a personal loan from a credit union, consider applying for a secured loan instead. A secured loan is backed by collateral, such as a car or a savings account, which can make it easier to qualify and may also result in a lower interest rate.

However, it's important to remember that if you default on a secured loan, the lender may repossess the collateral to recoup their losses. Ensure you can make the loan payments before taking out a secured loan.

Credit unions can be a great place to find low-interest personal loans. By joining a credit union, checking interest rates, improving your credit score, and considering a secured loan, you can increase your chances of getting approved for a loan with favorable terms.