Notice: We are currently experiencing intermittent connectivity issues.  Online Banking and Mobile Banking are currently unavailable. Thank you for your patience as we work diligently to resolve this issue.
Notice: Campbell Branch is currently closed due to building maintenance. We apologize for the inconvenience and appreciate your understanding.
Find the nearest branch or ATM.
Notice: Our Gilroy branch is currently experiencing intermittent connectivity issues. Thank you for your patience as we work diligently to resolve this issue.
System Maintenance: On Thursday, February 15th, we’ll be performing a scheduled maintenance starting at 10 p.m. PST and ending at 2 a.m. PST on Friday, February 16th. During this time, Phone Banking will not be available. Thank you for your patience as we update our systems to better serve you.
We’re experiencing technical difficulties with our phone system. We apologize for the inconvenience.
Find the nearest branch or ATM.
County Federal will never call, email or text you to ask for information. Questions? Dial us directly at 800-282-6212 - we’re happy to help.
Find the nearest branch or ATM.
All County Federal offices and branches will be closed on May 27th, in observance of Memorial Day.
Find the nearest branch or ATM.
Are you impacted by the severe weather? Contact us today to apply for our Emergency Relief Loan.

All You Need to Know About Personal Loans

All You Need to Know About Personal Loans

All You Need to Know About Personal Loans

Personal loans, sometimes called unsecured loans, are loans that allow flexible use, offer short- to moderate-term repayment options and quick funding. Their versatility and convenience make them a popular choice for borrowers of every financial standing. Let’s take a deeper look at personal loans, how they work, and their pros and cons.

How personal loans work

If you’re interested in taking out a personal loan, visit your credit union in person or online, complete an application, and pending approval, you can walk away with the lump sum you requested, typically within one to three business days. You’ll need to repay the principal of the loan, along with interest, over the loan’s term, which can be as short as six months or as long as seven years, depending upon your lender.

Unlike most other loans, like home loans and auto loans, personal loans are not intended to be used for a single, specific purpose. Once the money is in your hands, you are free to use the loan in any way you please. Some popular uses for personal loans include:

  • Purchasing a recreational vehicle, like a boat or ATV
  • Funding an adoption
  • Covering medical bills
  • Paying off credit card debt
  • Covering a large purchase of any kind
  • Paying for a dream vacation
  • Funding a wedding

Personal loans are an easy and convenient way to get a lump sum of cash quickly for almost any possible use.

Pros of personal loans

There are several distinct advantages to borrowing money through a personal loan.

First, as mentioned, personal loans provide the borrower with the unique freedom to spend the funds in any way they choose. The lender won’t ask to see evidence of how the money was spent, nor will they care to know. The borrower has full discretion over the money.

Second, most personal loans are unsecured. This means there is no collateral, or valuable asset backing up the loan. Consequently, unlike other loans which put the borrower’s assets at risk of being repossessed if they default on the loan, there is no risk to the borrower’s property or possessions through a personal loan. 

Finally, applying for a personal loan tends to be a lot faster than applying for most other loans. You’ll need to have a decent credit score and provide proof of income, but if your finances are in order, approval can happen in 24 hours or less.

Cons of personal loans

There are some disadvantages to personal loans that borrowers should be aware of before going ahead with an application.

First, as unsecured debt, personal loans that are not backed by any collateral will likely have a higher interest rate than loans borrowed against an asset, like a home or a car. The most recent data on the national average interest rate on unsecured loans is 9.28% APR* for credit unions and 10.21% for banks. In contrast, the average interest rate on 60-month new car loans is just 3.45% for credit unions and 5.10% for banks. It’s a good idea to run the numbers to be sure you can comfortably meet the monthly payments before finalizing a personal loan.

Also, even if a personal loan is unsecured, a lender may be able to place a lien on the borrower’s assets if the borrower is delinquent in their payments. While this only occurs in extreme cases, and the lender must sue the borrower in court before they can obtain a lien, it’s important to be aware of this possibility. If it indeed occurs, the borrower could be stuck paying attorney fees and court costs in addition to the loan amount and late fees.

Finally, the amount of money you can borrow through a personal loan may be significantly less than the sum you can borrow through other loans. The exact amount you can borrow will depend on your creditworthiness, but as a general rule, when debt is not secured, lenders are more tight-fisted. Find out how much you’ll be qualified to borrow before you decide to apply for a personal loan.

If you’re ready to take out a personal loan, call, click, or stop by County Federal today! With rates starting at just 8.365% APR*, our loans offer qualifying members a convenient and affordable way to borrow a large sum of cash quickly.

*APR = Annual Percentage Rate. Eligibility and terms apply.

Content Source: CUContent

Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. National Credit Union Administration, a U.S. Government Agency.
Equal Housing Lender
Certified - CDFI - US Department of the Treasury