# Credit Union Loans in High Demand
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-03-14
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Rising Demand for Personal Loans in US Credit Unions
Meta Description: Discover why Credit Unions are the popular choice for personal loans, as Americans turn to non-profit lenders for financial support amid rising costs and
URL: https://financedigest.com/credit-union-loans-in-high-demandhtml

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The Credit Union National Association (CUNA) [have found](https://news.cuna.org/articles/120504-personal-loans-credit-cards-lead-loan-growth-in-december), following findings from December 2021, that personal loans are the highest demand product offered by the unions overall across the US. Throughout December 2021, the quantity of unsecured loans taken out grew by 2.5%, while credit card consolidation loans jumped by 2.3%. Of their range of financial products, including mortgages, these products saw the highest growth. Credit Unions are renowned for their non-profit nature, making their loans cheaper to borrow than from high-street lenders.

**What Are Personal Loans?**

Personal loans are an unsecured form of debt, meaning that no collateral is declared within the contract. This means that if a [borrower fails to pay back their loan](https://www.financedigest.com/loan-automation-and-ai-streamlining-lending-and-borrowing-with-advanced-technology.html "Loan Automation and AI: Streamlining lending and borrowing with advanced technology"), their house, car, or any other asset is not going to be seized. Rather, they will be chased by the Union (or any other creditor) until their debts are paid off.

Personal loans are similar to payday loans. These loans are intended to cover urgent and unforeseen events, with 12 [million Americans making use of payday loans](https://www.financedigest.com/britains-lloyds-racks-up-350-million-of-likely-scam-covid-loans.html "Britain’s Lloyds racks up 0 million of likely scam COVID loans") each year. Meanwhile, there are over 5,400 [Credit Unions](https://www.financedigest.com/6-reasons-to-take-a-car-loan-from-a-credit-union.html "6 Reasons to Take a Car Loan From a Credit Union") in the US. Credit [Unions are heavily turned to by citizens of states](https://www.financedigest.com/ukraines-first-lady-to-be-guest-of-honor-at-eu-state-of-union.html "Ukraine’s first lady to be guest of honor at EU State of Union") which prohibit the use of payday loans. Given that Credit Unions are not driven by profit, their pool of  funds are often smaller than those of high-street or [payday lenders](https://www.financedigest.com/is-googles-payday-lender-ad-ban-singling-out-the-industry.html "Is Google’s payday lender ad ban singling out the industry?"). This means that they can, sometimes, only [offer smaller loans](https://www.financedigest.com/buddy-loans-secures-full-fca-approval-to-offer-guarantor-loans.html "Buddy Loans secures full FCA approval to offer guarantor loans"). For those who need sizable lump sums of cash, they often turn to [alternative sources](https://www.financedigest.com/powered-by-poo-ten-weird-and-wonderful-alternative-energy-sources-that-could-soon-be-powering-our-homes-2.html "POWERED BY POO: Ten weird and wonderful alternative energy sources that could soon be powering our homes") of funding.

**Why Is** [Demand For Personal Loans Rising?](https://www.financedigest.com/oil-rises-on-demand-hopes-as-banking-crisis-fears-subside.html "Oil rises on demand hopes as banking crisis fears subside")

The Covid-19 crisis plunged many into financial ruin, with [employment falling](https://www.financedigest.com/uk-employers-see-slight-fall-in-pay-awards-over-2023-xperthr.html "UK employers see slight fall in pay awards over 2023 – XpertHR") and many Americans encountering unforeseen medical bills. That explains why demand for personal loans is on the up. Typically, these loans are used to cover [medical costs](https://www.financedigest.com/global-medical-costs-expected-to-increase-in-2017-despite-lower-rates-of-inflation.html "Global Medical Costs Expected to Increase in 2017 Despite Lower Rates of Inflation"), dental bills, home repairs, funeral costs, and much more. This explains why from 2021 to 2022, t [he US has seen a 0.3% rise in the number of Credit Unions](https://www.ncua.gov/files/publications/analysis/quarterly-data-summary-2020-Q3.pdf).

The popularity of personal loans is only [expected to increase given the rising consumer demand](https://www.financedigest.com/merck-kgaa-expects-2023-profit-to-slip-as-covid-demand-wanes.html "Merck KGaA expects 2023 profit to slip as COVID demand wanes") that America is experiencing. With retail and food industries beginning to thrive again, we can expect [credit usage to rise](https://www.financedigest.com/bank-shares-rise-after-credit-suisse-rescue-eases-crisis.html "Bank shares rise after Credit Suisse rescue eases crisis"). While this may also be in the form of increased use of [credit cards](https://www.financedigest.com/uk-credit-card-borrowing-rises-by-most-since-2005-boe.html "UK credit card borrowing rises by most since 2005 – BoE"), it will also incite a rise in personal loans.

Not only is consumer retail demand rising, but so too is the [cost of living](https://www.financedigest.com/five-cost-of-living-trends-expected-in-2023.html "Five cost of living trends expected in 2023"). This means that customers not only _want_ to spend more, but they simultaneously _need_ to spend more to cover their basic [costs of living](https://www.financedigest.com/malaysias-new-pm-anwar-says-first-priority-is-cost-of-living.html "Malaysia’s new PM Anwar says first priority is cost of living"). In the period connecting January 2021 and January 2022, the Consumer [Price Index – a measure of inflation](https://www.financedigest.com/uk-shop-price-inflation-hits-record-8-in-january-brc-2.html "UK shop price inflation hits record 8% in January: BRC") – increased by an astoundingly high 7.5%. The ripple effects of this have reached far and wide, but most importantly, are causing [energy bills](https://www.financedigest.com/explainer-why-europe-faces-climbing-energy-bills.html "Explainer-Why Europe faces climbing energy bills") to soar, making necessary bills a heavier burden.

As such, it is likely that this [trend towards personal loans will continue](https://www.financedigest.com/volkswagen-strikes-below-inflation-wage-deal-continues-german-trend.html "Volkswagen strikes below-inflation wage deal, continues German trend"). If you, or a loved one, are [considering taking out a loan](https://www.financedigest.com/do-you-have-bad-credit-consider-taking-out-these-loan-options.html "Do You Have Bad Credit? Consider Taking Out These Loan Options"), it is essential that you have a means of repayment. Failing to repay your debt can land you with further financial issues, such as debt overload or a damaged [credit score](https://www.financedigest.com/how-to-raise-my-credit-score-40-points-fast.html "How to raise my credit score 40 points fast").

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