Access to financial services contributes to business growth and wealth creation. Banks are the most common avenue for accessing said services. However, credit unions also offer similar services. A credit union is a non-profit, member-owned financial services provider. They primarily serve communities and should be considered whenever you need financial services.
Some of the benefits of using a credit union include:
They Have Lenient Interest Rates
Capital helps businesses grow, and individuals buy homes and vehicles and build wealth. However, many banks offer to finance at interest rates unfavorable to most people. Consequently, interest payments consume a considerable portion of the monthly expenses for most people with car loans and mortgages. On the other hand, credit unions can provide access to cheaper financing compared to banks due to their non-profit status meaning they do not need to charge high interests. As a result, credit union loans are significantly cheaper than bank loans over the long term. That allows people to get capital for projects while reducing their monthly expenses. Thus, credit unions are a better option than banks when you need financing.
They Support Small Businesses
Small and community-based businesses often find it challenging to secure financing from banks. That is because large for-profit financial institutions tend to create financing options and solutions focusing on larger businesses with more significant revenue. Consequently, small businesses lack access to the capital they need to stay afloat and expand. However, credit union loans offer an opportunity to bridge that financing gap created by banks overlooking small businesses. Since credit unions are community-based, they tend to support financially underserved companies and individuals in their locations. As a result, they help stimulate the economy of local communities and guarantee people have access to services by ensuring vital businesses like the grocery store remain operational. Ultimately, using a credit union guarantees your community access to necessary financial services.
They Offer Satisfactory Customer Service
Banks have a reputation for seeking their shareholders' interests at their customers' expense. For example, some banks charge unnecessary fees without customers' knowledge to boost their profits. Others have a predatory lending practice that disadvantages low-income communities and people of color, thus limiting their ability to create wealth. However, working with a credit union will provide a different experience. A credit union is member-owned, meaning it will offer better customer service than a bank. For instance, credit union loans and other services cater to the needs of low-income communities by guaranteeing accessibility and affordability. Moreover, credit unions tend to be more inclusive of women and people of color.