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The 9 Best Credit Unions for Debt Consolidation Loans in 2023

Are multiple debt payments draining your budget? A debt consolidation loan could streamline your finances – combining those pesky bills into one monthly payment. And what better place to get an affordable loan than a non-profit credit union?

What Exactly Is a Debt Consolidation Loan?

Let’s start with the basics: a debt consolidation loan allows you to pay off multiple existing debts by taking out one new loan for the combined total. The new loan ideally carries a lower interest rate, so you save on interest charges while simplifying your monthly bill payments. Pretty neat, right?

Why Use a Credit Union for Debt Consolidation?

Credit unions are not-for-profit, member-owned financial cooperatives. Unlike major banks focused on profits, credit unions exist to serve their members. This typically means:

  • Lower Interest Rates – On loans, credit cards, and other products
  • Fewer Fees – Credit unions are less likely to nickel-and-dime you
  • Better Customer Service – As a member, you’re also an owner

So for a debt consolidation loan, a credit union could offer more affordable rates and terms compared to traditional banks or online lenders.

The 9 Best Credit Unions for Debt Consolidation

1. PenFed Credit Union

With a wide nationwide membership, low rates, and a user-friendly online experience, PenFed Credit Union tops our list for debt consolidation loans. PenFed offers debt consolidation loans from $500 to $50,000 at competitive rates – with no fees for early payoff.

Potential Downside: While membership is open to virtually anyone, there is still a short process to join. Ready to stop juggling debt payments? Check rates at PenFed now.

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2. Navy Federal Credit Union

If you have military ties, check out Navy Federal Credit Union. As the largest credit union, Navy Federal offers extremely competitive rates on debt consolidation loans up to $50,000 – plus additional discounts for using payroll deduction.

3. Lake Michigan Credit Union

Don’t let the name fool you, LMCU‘s field of membership covers multiple states. Members can consolidate between $2,500 and $30,000 in debt through their Debt Consolidation Loan. Plus, LMCU rewards also include mortgage rate discounts.

4. Alliant Credit Union

One of the largest credit unions nationwide, Alliant features remarkably low APRs starting at just 6.24% on their debt consolidation loans up to $50,000. As a bonus, Alliant has an easy online application and funding process.

5. First Tech Federal Credit Union

Tech employees or relatives of members have access to debt consolidation loans from First Tech Federal Credit Union. Borrow from $10,000 up to $50,000 at competitive fixed rates, with no origination fees.

6. Golden 1 Credit Union

Golden 1 Credit Union serves California residents with a range of loan amounts up to $40,000 for debt consolidation. Members can choose from fixed or variable interest rates currently as low as 10.75%.

7. State Department Federal Credit Union

As the name implies, SDFCU membership is open to U.S. Department of State employees, contractors, and their families worldwide. Once a member, you can consolidate debt through their personal loan program with loans starting at $500.

8. SchoolsFirst Federal Credit Union

Serving school employees and families in California, SchoolsFirst Federal Credit Union offers debt consolidation loans from $5,000 to $30,000 at affordable fixed rates currently as low as 8.99% APR.

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9. Suncoast Credit Union

Florida residents can find debt relief through Suncoast Credit Union. Suncoast provides consolidation loans up to $50,000, with rate discounts for using automatic payments.

Finding the Right Debt Consolidation Loan

The credit union debt consolidation loans above can simplify your finances, save money on interest, and get you out of debt faster. But what if you don’t belong to any of these credit unions?

Don’t panic, there are thousands of other credit unions across the country – chances are at least one serves your local community. Spend some time researching their debt consolidation loan programs.

Be sure to compare:

  • Loan Amount Limits
  • Current Interest Rates
  • Repayment Terms
  • Fees (Origination, Prepayment Penalties, Etc.)
  • Eligibility Requirements

How Much Could You Save on Interest?

Let’s say you have $25,000 in credit card debt spread across 3 different cards charging an average APR of 18%. If you consolidated to a 5-year debt consolidation loan at 7% APR from a credit union, you could potentially save over $6,000 in interest charges!

Speaking of interest, have you checked your credit score lately? Your credit score plays a big role in the rates and terms you’ll qualify for on a debt consolidation loan.

Always Prequalify to See Your Actual Rate

When shopping around, be sure to prequalify by having each lender do a soft credit check – this way, you can view your actual rate without impacting your credit score. Once you find the most affordable option that works for you, complete the full application and loan underwriting process.

Struggling to get approved due to poor credit? You may need to take steps to rebuild your credit before qualifying for the best rates on a debt consolidation loan.

Consider Credit Counseling First

Before taking on a new loan, consider speaking with a non-profit credit counseling agency. Many agencies offer free debt relief consultations and can potentially renegotiate lower interest rates and payment plans directly with your creditors – avoiding new loans.

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The bottom line? Consolidating high-interest debt into a lower-interest credit union loan is a smart strategy to pay off debt faster while saving money. But always explore your debt relief options first to find the right solution for your unique financial situation.

HAVE YOU GOTTEN A DEBT CONSOLIDATION LOAN? How did the process go, what credit union did you use? Let us know in the comments!

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