If you have some big ideas in mind for how to jumpstart your business or are in pursuit of a quality higher education, you may need a loan in order to get the ball rolling. Indeed, it can be almost impossible to make any money doing what you love if you don’t already have a bit of money to get things started. If you’ve never applied for a loan, your local credit union may be the best place to start. In the world of banking, credit unions are the little guys who are there to stand up for the majority of us who are just trying to get on our feet. If this is the stage you’re currently in, here is how to secure a loan from a credit union.
- Make sure that all of your financial information is lined up and ready to go – you want to be sure that you have a clean credit report. If you have unpaid debts on your credit report, or outstanding fees that have gone to collections, you’re going to want to take care of those debts immediately.
- Make sure that you show proof that you are local within a certain community – some credit unions only accept people that are within a certain area code. If this is the case, then they will want to see a few examples of proof, such as your driver’s license, a recent pay stub, and possibly one of your utility bills.
- Make sure that you are already banking with a credit union – for instance, you can open an account with Abri Credit Union or another credit union that may be more accessible in your community. Credit unions, like most institutions, favor people who are loyal and have a history of being good customers. You may want to start by opening a checking account at your local credit union. But be sure to have a strong history of not overdrafting, and then apply for your loan.
- Make sure that you have a reason for your loan – it will help to show the lender that you have a plan. This is why you want to create a business plan that will serve as a blueprint for your company. Specifically, you should describe how you plan on paying back the loan. The credit union will want as much proof as possible that you have a strong business acumen, and if possible, a strong history of repaying your debts.
- Make sure that you have collateral – as with most loans, you want to be sure that you have something that you can give in return. This will help make the credit union feel more comfortable and confident about giving out a loan. If you have valuable assets, such as a mortgage, car, or boat, this will make it easier to convince your local credit union that there will be a plan B if your business venture backfires. Just be sure that you are not offering anything as collateral that you’re not willing to sacrifice. You want to be confident and pragmatic, but you never want to look desperate.