Thinking about getting a credit union loan with bad credit? You’ve come to the right place. Did you know that most credit unions would check your FICO score before approving not only your loan request but also your membership application? Yes, that’s right.
But how do you go about it? How do you get a credit union loan with bad credit? What documents do you need to get your loan approved? This article will show you what you need to do to get your credit union loan with bad credit approved in no time.
Here you will learn how to:
1. Become a credit union member
2. Gather your documents
3. Seek approval
4. Get a co-signer (if necessary)
Alright, let’s get started:
1. Become a Credit Union Member
If you need a credit union loan, apply for membership first. To become a member, you need to complete three basic steps:
Meet the Requirements
Your credit score counts in credit union membership application reviews. To become a credit union member, look within your neighborhood for a credit union you can join. That’s easy. Right?
Geographic proximity makes credit union membership easier, whether it is in the city where you live or in neighboring counties. You can qualify for credit union membership through other eligibility paths, including:
- Your family members: You can qualify if a relative is already a member.
- Your employer: If your employer has a connection to a credit union, you can qualify for membership, irrespective of your location.
- Your community: You can qualify through your community. Get involved with volunteer jobs, do community service, or attend schools in your community, and you’ll qualify for membership within your community
Apply and Become a Member
Once you find a credit union you qualify for, apply—either online or in person. To fully become a credit union member, deposit $5-$25. This amount varies, and it all depends on your credit union.
You’re probably wondering why you need to pay to become a part of a group. Right?
Did you know that once you are a part of a credit union, you get to enjoy several benefits, including assistance to members in times of need. Isn’t that amazing?
Plus, with credit unions, once you apply, you become a member for life. In other words, changes in your location or career do not affect your membership status.
Make your deposit either by check or cash, through an electronic fund transfer, or by using a debit card. Bear in mind, though, that depending on your credit union, you may have to leave a certain amount of money in your account—more like an account balance.
For instance, if you have an account balance of about $20 and your credit union requirement is $10, this means you’ll only have access to $10 of your money. Your credit union will prevent you from spending the $10 fund that’s left. Keep that in mind!
2. Gather Your Documents
You can become a credit union member and apply for a loan the same day. If you are already a member, you are one step forward in your loan process. Applying for a loan with bad credit is pretty simple.
However, your loan process may differ, depending on your credit union. To be sure you get approval for your credit union loan with bad credit, speak first with your loan officer to understand available loan options and the documents needed to get them.
Mind you, the loan process may differ slightly, depending on the credit union, but the documents you’ll need to apply for these loans are generally the same:
- Application form: To apply for a credit union loan with bad credit, you need to fill out an application form. This form is available either on paper or online. While filling out your application, provide some means of identification, including your social security number, address, passport, and any other means of identification.
- Employment status: Prove that you’ve been in the same job for a while—maybe one year or more
- Your income: Having stable income is quite important. You need to be certain you can repay the loan you seek—especially now that you are applying for a loan with bad credit. If you have any debt, be sure to inform your creditor. Furthermore, be sure to maintain a low debt-to-income ratio, as it’ll enhance your chances of loan approval
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3. Seek Approval
Most times, your application for a credit union loan—whether or not you qualify—is approved. After submitting your loan application, your loan officer will review your application to make sure you meet the requirements of the loan you applied for.
Even if you do not qualify for a loan—especially at a small community institution—do not worry; you can still get your loan approved. To do this, speak with a staff member who can assess your credit report and offer assistance. Writing a personal letter to such a staff member can help.
Furthermore, if you can, build a relationship with your credit union. It’ll enhance your chances of loan approval—and who knows, your loan officer might just overlook any blemish in your credit report.
4. Get a Cosigner if Necessary
Most times, you can get your credit union loan with bad credit approved without a cosigner. But then again, depending on your union, you may need a cosigner to help fast-track your loan request process.
A cosigner is anyone willing to sign your loan application with you. Your cosigner must have good credit and a decent income level to repay the loan if you fail to meet up with payments. This is such a huge favor to ask of someone. So be certain you request a loan you can repay.
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Conclusion
Now you know it is possible to get a credit union loan with bad credit. Follow through with the processes discussed above to get your loan approved in no time. Before you apply for membership, do proper research to be sure you qualify, gather the needed documents, seek approval (if need be), and get a cosigner if necessary.
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