Credit Union Car Loans
What Is a Credit Union?
Credit unions are non-profit entities that are owned by its customers called “members" – typically focused around local of professional based communities. Among the several services they offer (such as checking and savings accounts), credit unions often offer auto loans.
Getting a Credit Union Car Loan
If you aren't already a member of a credit union, your first step to getting a credit union car loan is to join one.
Generally, credit union membership centers on one of the following:
- Local communities.
- Professional groups.
- Family.
Aside from being familiar with your local credit unions from advertising or storefronts, you can often check with institutions you have a relationship with—such as your employer—for credit unions they may partner with. Your state may also offer a credit union that encompasses many different employers.
Once you have established membership with a credit union, contact your representative to inquire about applying for an auto loan.
Pros & Cons of Credit Union Car Loans
Pros
You might want to consider taking out a car loan from a credit union for the following reasons:
- Rates – Because credit unions are not driven by high profits, they can offer very competitive auto loan rates.
- Customer service – Since credit unions are member-based organizations, they are highly focused on providing the best customer service possible.
- Strong financial backing – Credit unions are well established and insured financial institutions. You know with whom you are doing business.
Cons
Of course, credit union car loans are not perfect. The following are some disadvantages you might face with a credit union auto loan:
- No special offers – By getting your car loan from a credit union, you will miss out on any special offers available from dealerships.
- Exclusivity – Not everyone can join certain credit unions. For instance, if you don't live in Philadelphia, you probably can't join a credit union that serves Philadelphia residents.
Compare Rates
Once you find one or more credit unions you are eligible to join, make sure to learn what their interest rates, fees, and loan terms are. You can then compare which one offers the best deal.
No matter which credit union you choose, consider shopping for your auto loan separately from shopping for your car. By separating the two activities, you can better focus on getting the best deal on each.
Now that you are armed with knowledge about your credit union's rates and services, you can properly compare their car loan offers with offers from other lenders like traditional banks.
