If you find yourself in a short-term financial bind, you might be thinking about a personal loan to help make ends meet. This is especially true as a college student with particularly limited resources. Maybe your car needs a transmission replacement. Maybe you had to go to the ER. Maybe your apartment caught on fire and you don’t have renter’s insurance. Whatever the reason, here are two common types of lenders that can help you out in a pinch. Both lenders provide personal loans at flexible terms, and each type of lender has its own strengths and weaknesses.

Credit Union Loans

Credit unions are nonprofit organizations that pool resources from members. In other words, many individuals put all their money into a central account. Some members borrow money from this account and repay the loan with interest. All members divide the interest from this loan.

Here are the pros and cons:


  • Flexible repayment terms
  • Lower interest rates


  • Requires membership
  • Stricter lending requirements

Because a credit union is a legal nonprofit organization, you will often be able to obtain a lower interest rate than you may find elsewhere. This is obviously a good thing, but be aware that lower interest rates typically enforce stricter borrowing requirements.

Remember that a credit union will only loan money to members. If you are already a member of a credit union, then it isn’t an issue—but it’s worth keeping in mind if you need a loan in a hurry.

Independent Loan Provider

If you are not a member of a credit union and are unlikely to join one, then an independent loan provider may be the right choice for you.

Here are some pros and cons to consider:


  • Flexible repayment terms
  • Less stringent lending requirements


Potentially higher interest rates

Since an independent loan provider is open to anyone, you will not need to apply for membership. Beyond that, one of the major advantages of arranging an installment loan with an independent lender is that they don't always require credit approval. Just be aware that with less stringent lending requirements, these loans may come at a higher interest rate.

Parting Thoughts

Remember that when you borrow money, you pledge to repay that money with interest. Regardless of which type of lender you ultimately choose, make sure you fulfill your obligations. That way you can build a more solid financial footing and improve your credit score at the same time. For more college savvy tips, check out our blog or contact us for advice on saving for college!

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