NORTH PALM BEACH, Fla. (11/3/15)--Personal loans--credit that is not secured by a home, auto or credit card--are gaining steam in the lending market, particularly from credit unions with their lower interest rates.
The demand for unsecured loans at credit unions was up 4% in June compared with a year ago, CUNA Senior Economist Perc Pineda told Bankrate in a recent article about personal loans.
"Personal loans have become a more mainstream offering with dollar amounts that can go over $100,000 and at really competitive interest rates, well below what you would pay on a credit card," said credit expert John Ulzheimer.
Lower interest rates are driving the growth--the average interest rate on a personal loan has fallen to 10.34 percent--Bankrate noted.
Regardless of the financial institution, would-be borrowers still need to go through an application process including a credit score review for a personal loan, Pineda told Bankrate.
Charlotte (N.C.) Metro FCU provided Bankrate with its personal loan requirements, which include recent pay stubs, employment information and references. Loan amounts range from $500 to $25,000, Chief Operating Officer Nicol Matthews said, adding, “Car repairs or replacing appliances are some of the typical ones.”
Look for CUNA’s monthly credit union estimates this week for more insight into the credit union lending and savings environment.