Trouble getting a loan? You're not alone. Consumer lending rates are down, despite the efforts of the Treasury Department to grease lending wheels.
But if you need a loan, consider skipping your local bank and checking out your neighborhood credit union.
Credit unions are still lending. In fact, Mike Schenk, vice president of economics and statistics at Credit Union National Association ( CUNA), says that loan growth among credit unions is growing. He notes that loan growth during recessions in the '80s and '90s were around 3%. "We're more than double that today," he says. "There is still a lot of lending going on."
Here are a few facts about credit unions that hint as to why they may be your best bet for landing a loan in this tight lending market.Different management. Credit unions are run as nonprofits, they largely avoided the subprime mortgage mess and they tend to be portfolio lenders, meaning they keep at least 70% of the loans they make in-house as opposed to selling them to the secondary market. "When credit unions make loans, they keep them on their books," says Schenk. "They care what happens on those loans, and because of that, they're not experiencing the same level of deterioration of asset quality as other types of lenders." Same loan, different rates. A car loan from a credit union is the same as a car loan from a bank. One difference, however, is that lending rates are often lower at credit unions than at bigger banks.