The availability of money from private credit unions has dropped dramatically in recent months because of escalating interest rates.

In normal times, the 801 credit unions in the District of Columbia, Maryland and Virginia serve as private savings-and-borrowing banks for workers who have banded together at a company or a federal agency. Credit unions accept deposits and then loan the money to members at comparatively low rates.

But with the increase in interest rates, credit union deposits have fallen in many instances, officials said yesterday, because they can't pay more than 7 percent on regular deposits. Money market investments and other certificates now pay more than 10 percent.

At the Transportation Department Federal Credit Union, deposits in the last six months have plummeted 32 percent from about $38 million to $26 million.

Other credit unions in the metropolitan area where withdrawals this month have been heavier than expected include the U.S. Navy credit union. "Deposits are not growing as they would normally," a spokesman said.

The League Central Federal Credit Union, a corporate group serving about 300 area credit unions, reported a $5 million drop in October deposits.

Deposits at The Washington Post Credit Union also are down, from $6.7 million 10 months ago to $6.1 million now.

"Young people don't have the money to deposit -- it takes everything they have to live," said William G. Derry, the manager of the Transportation Department credit union.

Other depositors, he said, are putting their money into investments that yield more than credit union regular accounts.

To stem withdrawals and to attract new depositors, the Transportation Department credit union last month began offering higher-paying money market certificates to depositors, officials said. Each day Derry and his staff study the credit union cash flow to determine how much can be loaned.

The organization also has initiated a series of credit-rationing steps to spread around the limited funds."We have priority loan applications -- when a member's number comes up, he gets a loan," Derry said.

For a few months last spring, the credit union stopped making car loans, he said. Some are being extended now, but the car loans may be halted again on Dec. 1 if credit conditions deteriorate, he said.

The credit union's plight represents one aspect of the tightening money scene for credit unions in the metropolitan area.

Borrowing money from the Internal Revenue Service Federal Credit Union also is more difficult that it was once, but for slightly different reasons.

The IRS agency, began months ago to curb loan activity in anticipation that credit would tighten. Steps taken by the IRS union included raising rates on signature loans from 9 percent to 12 percent. The organization also lowered the loan pay-back period from 60 months to 36 months in some cases.

The IRS credit union also was among the few to offer money market certificates to members from the beginning, enabling depositors to earn higher rates without removing their money from their accounts.

"There is no question that we would have lost deposits without the money market program," said IRS credit union manager Floyd E. Schlueter.

Instead, the credit union is "holding steady," he said.

Officials will decide today if loan requirements should be curtailed again to maintain the union's balance. "We have to keep in touch with reality," said Gerald F. Bynan, the loan manager.

Loans from credit unions are in high demand, because their interest rates typically are lower than other financial institutions.

Currently, interest rates are running as high as 15 percent at regular financial institutions.

In contrast, a credit union is normally allowed by law to charge only 12 percent.

At a time of shrinking deposits and soaring demand for its loans, credit unions are using a variety of tools to apportion out the loan money that is available.

At the Agriculture Department Federal Credit Union, an applicant seeking a signature loan qualifies only if his other debts are minimal. If he already owes 25 percent or more of his take home pay to charge accounts and installment notes, he probably won't qualify for a credit union loan, an official there said.

The Navy's credit union also is "a little more persnickety" about who will receive a loan, a spokesman conceded.

The loan disapproval rate was 20 percent six months ago, he said. But now it is closer to 30 percent.