How to Choose a Credit Union
Consider Several Factors When Choosing the Best Credit Union to Suit Your Needs
With more than 6,200 credit union businesses in the United States, it can be difficult to choose the one that’s right for you and your financial needs. Luckily, AVANA CUSO has more than 20 years of experience working with credit unions to provide services and products to borrowers. AVANA CUSO understands how to choose a credit union, the questions to ask, and the factors to consider.
Federal Credit Union vs. State Credit Unions
One of the first steps in choosing a credit union is deciding between a federal credit union (FCU) and a state credit union. The major difference is that a federal credit union is regulated by the National Credit Union Association (NCUA), while a state-chartered credit union must adhere to state guidelines. These regulations vary by state. FCUs are also insured by the National Credit Union Share Insurance Fund, while state credit unions are backed by either the United States government or the NCUA.
One advantage of an FCU is that interest rates have regulated maximums. State-operated credit unions can have higher limits or no limits, enabling these institutions to have higher rates. On the other hand, state regulatory authorities have greater control and familiarity with state-operated credit unions than the NCUA has over FCUs.
7 Questions to Ask When Choosing the Right Credit Union
How to Choose a Credit Union: Step-by-Step Guide
When it comes to managing your finances, choosing the right financial institution is crucial. Credit unions offer a member-focused alternative to traditional banks, providing competitive rates, personalized services, and community-driven benefits. However, with numerous credit unions available, selecting the right one requires careful consideration. Here’s a guide to help you make an informed choice.
Understand Your Financial Goals
Before selecting a credit union, assess your financial needs. Are you looking for a credit union to secure a commercial real estate loan, manage your savings, or access business lending solutions? Understanding your objectives will help you narrow down your options to credit unions that specialize in the services you require.
Check Membership Eligibility
Unlike banks, credit unions often have specific membership requirements. These may include residency, employment, industry affiliation, or community ties. Research the eligibility criteria to ensure you qualify before proceeding with your application.
Evaluate Available Services and Products
Different credit unions cater to different financial needs. Key services to look for include:
Credit Union Locations
A credit union’s location is a major factor when choosing the right credit union. To easily reach your funds in case of an emergency, choose a credit union in close proximity to your home. You’ll also want to find out the number of branches and ATMs available. Although credit unions were previously known to have scant locations, many are growing in quantity, and most credit unions are members of the Co-op network providing access to ATMs nationwide without additional fees.
Technology
Many believe small financial institutions haven’t caught up with the technological times, but that is simply false. Credit unions have welcomed technology, such as online banking and mobile banking, to provide their members with greater access and service. Determine the types of technology you need from a credit union, whether it be mobile check deposit or Apple Pay, to make a decision.
Compare Interest Rates and Fees
Credit unions are known for offering lower fees and better interest rates compared to traditional banks. Compare rates on loans, credit cards, and savings accounts to maximize financial benefits. Pay attention to maintenance fees, overdraft charges, and transaction costs.
Assess Customer Service and Member Benefits
Since credit unions operate with a member-first philosophy, quality customer service is a key advantage. Consider the following:
Consider the Credit Union’s Reputation and Stability
Research the credit union’s financial stability, customer reviews, and industry reputation. A well-established credit union with a strong financial standing ensures reliability and long-term support.
Understand Loan and Lending Policies
If you’re seeking a commercial real estate loan or business financing, carefully review the credit union’s lending policies. Look for:
Look at Community Involvement
Many credit unions are deeply involved in their local communities, supporting charitable causes, small businesses, and financial education initiatives. If social responsibility is important to you, choose a credit union that aligns with your values.
Compare with Other Financial Institutions
Before making a final decision, compare your shortlisted credit unions with other financial institutions, including banks and online lenders. Ensure you’re receiving the best combination of services, rates, and member benefits.
About AVANA CUSO
Established in 1998 and headquartered in Simi Valley, CA, AVANA CUSO offers competitive and collaborative commercial real estate loans. We partner with credit unions and brokers and connect them to investors across the United States. Additionally, we uniquely support and guide our partners through the entire full lifecycle of loans. AVANA CUSO is a proud member of the AVANA Family of Companies.
