Credit Unions and Their Features
Article by Alan Farrow
When a person signs on the dotted line for a loan, payments typically extend from one to five years. Credit unions offer special rates for loans that can be helpful to a borrower. Consequently, they are very popular.
Features of a credit union loan include:
* The insurance on a loan doesn’t come out of the borrower’s pocket.
* Repayment protection insurance is an available option to a borrower.
* Hidden fees and transaction charges are non-existent.
* The calculation of repayments depends on the reducing balance of the overall loan. Interest repayments can be lower if repayments are made more frequently.
* Depending on the borrower’s job, there are many types of repayment loans available on the menu.
* A borrower can prepay a loan without penalty.
* There are also no penalties for large repayment sums.
Additionally, credit unions differ from banks in several respects.
* They have limited membership. If their membership increases, then will lose their status as a credit union.
* Customers are members who may originate from a particular region, type of industry, or other commonly associated groups.
* The emphasis of the credit unions is service, unlike banks whose main motivation is profit maximization.
* The top management is run by volunteers who don’t receive salaries; banks, on the other hand, have a board of directors who receive monetary remuneration.