This is a huge debate that becomes a hot topic now and then. People usually have no idea what a credit union is. To present a summary of the concept it is a non-profit financial entity that does not belong to one owner but is owned by its members or investors.

This means that no bank or one individual gains the profit of saving etc. those profits are distributed among the members of the union. This system is opted by many people when they carry out financial planning for their families as they find it more rewarding and secure than bank systems. Let’s have a look at some major benefits that people enjoy the most, being a part of a credit union.

Lower interest rate

Financial planning works differently for every person. Some people tend to plan according to their existing resources. Some involve loans and then pave a way out with more profit and an easy loan return scheme. This loan-taking step is also a big decision as a person needs to find the least interest rate for the loan. This is important because it may take some extra time than what you planned, to return the loan. Meanwhile, interest is going to pile up like a mountain.

Credit unions offer interest rates usually lower than majority banks so that the members feel free to expand their plans. This is a major plus as people would not need to think twice before heading to their credit unions for taking loans.

Similar concerns

Banks are either country-wide, city-wide, or even international in terms of geographic access. But, credit unions are limited in terms of location. This might appear to be a negative aspect, but in fact, this makes it more beneficial for members and the community. People belonging to similar areas may have unified concerns about social development. It will also motivate the members because they will observe people from their own community being benefited by their union.

Fee

These unions charge a lower fee than banks on average. Even if they do charge parallel to banks, they return the profits to their members, which cancels out the cost. This makes it an easy choice for people to consider credit unions in their financial planning.

Personalized services

There are many services offered by unions to their members, depending upon their needs. Even if a single member wants something not previously offered, it may be offered to him considering his membership in the credit union. These services can be of any sort such as providing customized loans, installments, mentorship for financial planning, etc. Members might also be able to vote for various decisions of the union.

Conclusion

People struggle to find favorable banks to invest in or hold their savings but end up being disappointed due to high-interest rates or other problems. Credit unions are a great alternative to banks that not only offer better finances but many customized services for their members.