(Request from Christine in NYC) I am just wondering what banks/credit unions or companies you would suggest going to for these loans? I have a full time job offer but will not be paid for a month and a half, so will be needing a loan for first month’s rent as well as a security deposit in NYC.
We featured a credit union (LESPFCU) as part of a previous post on Bronx security deposits. This was an interesting approach taken towards funding rental deposits for lower-income households. Applicants needed to show that they did not earn too much to qualify, yet still have a track record of responsible rent payments.
Since applications are generally based on previous and existing income, your loan application could be approved. Your new job should give you extra ability to repay the loan.
A Brooklyn tenant seeking rental assistance revealed three credit unions that can create more options.
- People’s Alliance Federal Credit Union has opened membership recently to include more residents.
- Bay Ridge Federal Credit Union makes loans to residents in several Community Districts.
- Brooklyn Cooperative Credit Union uses a partial collateral approach that allows applicants to multiply their available cash on hand.
- Municipal Credit Union offers some of the best rates we have seen. Membership is granted to government employees or one of several private employers or industry groups.
Credit unions tend to have the most flexible terms for gaining loan approval. However there are membership requirements that sometimes excludes someone who does not live in a certain area or work for a member employer.
Banks are a for-profit option for obtaining the necessary funds to get moved into a new place. National banks tend to focus heavily on credit rating as a primary loan determinant.
Local banks can provide added flexibility to those who have struggled to meet traditional loan requirements. NYC is served by hundreds of banks, and each has their own set of lending criteria. It is important to consider both the terms of loans as well as the approval guidelines when choosing a bank.
Outside of the banks and credit unions, there are finance companies that serve New York City’s residents who are locked out of normal banking products. One feature of finance companies is that approval is often easier. Another common trait is that interest rates and fees tend to be much higher on finance loans than on bank or credit union products. This means that you could end up paying much more for the privilege to borrow the money you need for your security deposit and first month’s rent.
Ultimately the financial institution that will best serve you will allow you to join based on your current situation, have locations near you and offer the rates on loan products that will be the most affordable for you to repay. The New York State Department of Financial Services licenses and regulates the banks and credit unions that fund loans in the city as well as the rest of the state.