Why you should get your car loan at a credit union Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial decisions by offering you interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct your own research and compare data for free and help you make sound financial decisions. Bankrate has partnerships with issuers such as, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Profit The deals that are advertised on this website are provided by companies who pay us. This compensation may impact how and where products appear on the site, such as for instance, the sequence in which they appear within the listing categories and other categories, unless prohibited by law. This applies to our mortgage home equity, mortgage and other home lending products. This compensation, however, does not influence the information we provide, or the reviews you see on this site. We do not contain the universe of companies or financial offerings that could be accessible to you. Emma Turner/Shutterstock.com
5 minutes read. Published March 02, 2023.
Written by Meaghan Hunt. Edited by Personal finance contributor Meaghan Hunt is a researcher, writer and editor across disciplines, with a love of personal finance issues. After more than a decade working in libraries that were open to the public and writing, she now edits, and studies as freelancer for full-time. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are dedicated to helping their readers gain the confidence to control their finances by providing concise, well-studied information that breaks down complex subjects into bite-sized pieces. The Bankrate promises
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If you have questions about money. Bankrate can help. Our experts have been helping you master your finances for more than four decades. We strive to continuously provide our readers with the professional advice and tools required to be successful throughout their financial journey. Bankrate adheres to a strict code of conduct standard of conduct, which means that you can trust that our information is trustworthy and precise. Our award-winning editors and reporters create honest and accurate information to assist you in making the best financial decisions. The content we create by our editorial staff is factual, accurate, and not influenced through our sponsors. We're honest about how we are capable of bringing high-quality content, competitive rates and useful tools for you , by describing how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for the placement of sponsored products and, services, or when you click on certain hyperlinks on our website. This compensation could affect the way, location and when products are displayed within the categories of listing and categories, unless it is prohibited by law. We also offer credit, mortgage, and other home lending products. Other elements, like our own rules for our website and whether or not a product is offered in your region or within your own personal credit score may also influence the manner in which products are featured on this website. Although we try to offer an array of offers, Bankrate does not include specific information on every credit or financial product or service. If you're thinking of buying a used or brand new car then a credit union is an excellent choice for a loan. The number of credit unions is more than 4800 federally insured credit unions within the United States, with over one hundred million members, according to the National Credit Union Administration (NCUA). Banks with national affiliations have more branches, and they are usually faster to adopt new technology. But, people who are keen on saving money owe it themselves to explore the benefits that credit unions offer. Credit unions usually have more higher rates than online lenders or banks, and they also offer personal service as well as a range of other advantages. The most important thing to remember is
Credit unions offer more benefits to the borrower than banks are positioned to rival. Lower interest rates, a community presence, and a borrower-focused business model make credit unions stand out.
6 reasons to get a credit union car loan If you're shopping for your next car, consider these benefits of getting an auto loan from a credit union. 1. Lower interest rates . Unlike banks, credit unions may provide lower rates since they're not for profit. They're also seeing an exponential rise in auto loan originations. "Typically, the lending rate (at credit unions) is extremely competitive when compared to other lenders under most conditions," says Bill Meyer who was the former director of public relations manager and content manager at CU Direct, which connects credit unions and auto dealers across the nation. In the quarter that ended in 2022, the on a five-year , new automobile loan from a credit union was 4.74 percent as per the NCUA. In banks, it was 5.53 percent. For example, if you're borrowing $30,000. to purchase an automobile and the credit union is able to save the borrower $327 over the life of your loan. 2. Community ties, personalized service The procedure for getting an auto loan isn't much different between banks and credit unions. If you've got less credit, you may still be eligible for an auto loan with an institution like a credit union instead of banks. "Credit unions are more likely to be more flexible when it comes to underwriting," says Mike Schenk, vice president of research and policy analysis at the Credit Union National Association (CUNA) an association for trade. The credit union is also likely to assist you in the event that you go through a rough patch and need more time to make an installment. "You have a unique story and your story is much more likely to be heard by the credit union. At large financial institutions there is a greater chance that you will encounter underwriting that's written in stone and carried out in some corporate office a few states away. If you visit a credit union, and you're more likely engage in a conversation." 3. User-friendly loan process Gone are the days of having visiting a branch to apply for an auto loan. Many credit unions are now letting applicants apply online, over the phone, or . If you're applying for financing at a dealership, "invariably, the dealer can direct you to credit union financing and a credit union you can join as a member," Schenk says, "so it's really an easy process." Still it is recommended to do your research prior to visiting the dealership. Not all dealerships cooperate with credit unions and if you're able to be a member, you will likely get the best deal when dealing directly with your credit union. In addition, you'll be offered a competitive loan offer at the time you start your car search and you will not be required to pay a markup from the dealer on your rate. 4. Credit unions also have additional benefits. Members, not shareholders, own credit unions. Any profits they make go back to members in the form of dividends. Credit unions are also able to give back the profits to their customers through higher rates on deposit accounts as well as on loan products, such as auto loans. A majority of credit unions are also part in a shared branch and ATM network. Schenk claims that CUNA's members use an ATM network shared by more than 40,000 locations. Credit unions are focused on educating their members, too, so you can get advice on the best financial options for your particular situation. "Credit unions are full-service, offering the same financial products that banks offer. They're structured differently which means that they provide significant benefits for credit union members," Schenk says. This focus on the member could be a more thorough discussion regarding your financial situation prior to when the credit union decides whether or not to approve or denies your loan. Credit unions might be more understanding and lenient than traditional banks with regards to the decision to lend. 5. It's easy to join. There are those who believe credit unions are available only to people who work for an industry, company or government entity and that any person who is not member of a group cannot join. Meyer says this is not the case anymore. "Most credit unions will allow any person to sign up." CUNA has credit unions with community charters which allow them to serve greater geographic regions. If you seek a credit union near you, visit and type in your zip number. "It is a shock to see a person who was not able to access the credit union," Schenk says. 6. Car loans are a huge part of the work that credit unions perform. Be prepared if an auto dealer refers you to a credit union prior to you even go to a bank. Credit union for used and new cars alike grew year-over-year in 17.9 per cent and 19 and 19 percent, respectively, according to 2022 . Credit unions had $166.8 billion of loan balances for brand new cars at the close in the 3rd quarter 2022, and $305.3 billion for used vehicles. How can I apply for an auto credit from a credit union loan? Financing a car through a credit union is the same to other lenders, except for the membership process. If you are an enrolled member, you may apply for a car loan online, over the telephone or in branches, based of the institution. Most credit unions will review the following to determine your eligibility in the event of an auto loan: Your personal information. Your income and employment information. Your employment and income information . The number of your vehicle's identification (VIN) and the mileage of the vehicle you want to purchase. Be prepared to show proof of insurance the credit union in the application procedure. Note that although you may be able to enroll and request an auto loan on the on the same day, certain credit unions may require you to wait for a few months or even two prior to submitting your application. What are the differences between a bank, dealer and credit union auto loan? The major distinction between a bank and credit union auto loan is the terms for financing. Some banks can offer promotions particularly in the case of a long-term relationship, a solid payment history and a . Both banks and credit unions might offer incentives such as an autopay discount if you are an existing customer. However, since credit unions are not for-profit entities and owned by the members, they typically enjoy better rates and less costs compared to banks that are for profit, which shareholders own. When you get a auto loan , the loan is provided by a third-party financial institution. Dealers are paid to match you with any of their finance partners. Because of this, there are more options to choose from than the rates that you receive from the dealership versus the interest rates offered by a credit union or bank. Plus, if there is an issue with the finance company, the dealer won't help you -- you will need to solve the problem yourself. If you are looking to purchase a new or used car There are many options for financing. If you are a member of a credit union, you might be able to enjoy lower interest rates and costs compared to big banks or dealership loans. The application process is identical after you've joined and the benefits could assist you in getting approval, especially when there's no greatest credit score.
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Written by the Personal finance contributor Meaghan Hunt, a researcher, writer, and editor across disciplines , with a love for personal finance issues. After more than a decade working in libraries for public libraries She currently edits, writes, and researches as a full-time freelancer. Written by Rhys Subitch Edited and written by Auto loans Editor Rhys has been editing and writing for Bankrate since late 2021. They are enthusiastic about helping readers gain confidence to control their finances with clear, well-researched information that breaks down complicated subjects into bite-sized pieces.
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