Local credit unions increasingly are popular alternatives to traditional banks. While banks are privately owned, for-profit institutions with ultimate responsibility to shareholders, credit unions are member-owned, so account-holders simultaneously are the shareholders.
For years, the banking lobby has pressured state and federal lawmakers to make it difficult for credit unions to operate by limiting whom they could serve. With the recent easing of regulations, however, credit unions now are opening up all over the country.
Since you are a partial owner of the credit union at which you do business, it is a great place for you to apply for a loan. If you apply for a loan at a credit union, it certainly is to your advantage that your lenders know you. Even if your credit score is poor, for example, they can rely on other factors to determine whether or not you are credit-worthy. This is particularly true of community-based credit unions.
Credit unions are great places to obtain mortgage refinances in particular. Since they are not-for-profit, credit unions typically offer their members lower mortgage refinance interest rates than do traditional banks.