Why you should get your car loan at a credit union Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by offering you interactive tools and financial calculators as well as publishing impartial and original content, by enabling you to conduct research and to compare information at no cost – so that you can make financial decisions with confidence. Bankrate has agreements with issuers including, but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The products that appear on this site are from companies that pay us. This compensation may impact how and where products appear on the site, such as such things as the order in which they may appear in the listing categories, except where prohibited by law for our mortgage, home equity and other products for home loans. However, this compensation will have no impact on the content we publish or the reviews that you see on this site. We do not contain the vast array of companies or financial offers that may be open to you. Emma Turner/Shutterstock.com
5 minutes read Read March 02, 2023.
Written by Meaghan Hunt Written by personal finance contributor Meaghan Hunt is a writer, researcher, and editor across disciplines, with a love of personal finance subjects. After 10 years of work in public libraries, she now writes, edits, and studies as freelancer full-time. Editor: Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since the end of 2021. They are dedicated to helping their readers gain the confidence to control their finances by providing concise, well-studied information that breaks down otherwise complex subjects into bite-sized pieces. The Bankrate promises
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If you have questions about money. Bankrate has answers. Our experts have helped you understand your finances for more than four years. We strive to continuously provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate adheres to a strict code of conduct standard of conduct, which means that you can trust that our content is truthful and precise. Our award-winning editors and reporters provide honest and trustworthy content that will help you make the right financial choices. The content we create by our editorial team is factual, objective and is not influenced from our advertising. We’re honest regarding how we’re capable of bringing high-quality content, competitive rates and helpful tools to you , by describing how we earn our money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated for the promotion of sponsored goods and services, or when you click on certain links posted on our website. Therefore, this compensation may impact how, where and when products are displayed within the categories of listing in the event that they are not permitted by law. This is the case for our credit, mortgage and other products for home loans. Other factors, like our own website rules and whether a product is offered in your area or at your own personal credit score could also affect the way and place products are listed on this site. While we strive to provide a wide range offers, Bankrate does not include information about each financial or credit item or service. If you’re considering buying a new or used car then a credit union is an excellent option for a loan. More than 4800 federally insured credit unions in the United States, with over one hundred million members, according to the (NCUA). Banks with national affiliations have more branches, and they are usually more quick to introduce new technology. However, those who are interested in saving money owe it to themselves to research the benefits that credit unions provide. Credit unions typically have more benefits than banks and online lenders, and they also offer personal service as well as a range of other benefits. The most important thing to remember is
Credit unions are able to offer greater benefits to the borrower than banks are in a position to rival. Lower interest costs, community presence and a borrower-oriented business model distinguish credit unions from other banks.
6 reasons to apply for credit union auto loan If you’re in the market for your next vehicle, think about these six benefits of getting an auto loan from the credit union. 1. Lower interest rates . Unlike financial institutions, credit unions are able to offer lower rates due to the fact that they aren’t a profit-making institution. Therefore, they’re seeing an exponential rise in car loan originations. “Typically, the lending rate (at credit unions) is very competitive compared to other lenders in the majority of conditions,” says Bill Meyer, former director of public relations manager and content manager at CU Direct, which connects credit unions with dealers of all kinds across the country. In the quarter that ended in 2022, the on a five-year , new vehicle loan from a credit union was 4.74 percent, according to the NCUA. For banks, it was 5.53 percent. When you borrow $30,000 to purchase a car, the credit union saves you $327 on interest over the course that of the loan. 2. Community ties, personalized service The process of getting a car loan isn’t much different between bank and credit union. If you’ve got less credit it is possible that you will be eligible for an auto loan through an institution like a credit union instead of a bank. “Credit unions are more likely to have more flexibility in the underwriting process,” says Mike Schenk who is vice president of research and policy analysis for the Credit Union National Association (CUNA) an association for trade. The credit union is also likely to cooperate with those who are going through the rough spots and require longer to complete payments. “You have a unique story and it is more likely to be heard by an institution like a credit union. At big financial institutions there is a greater chance that you will encounter underwriting that’s written in stone and carried out in a corporate office couple of states away. Visit an institution like a credit union, and you’re likely to have a conversation.” 3. An easy loan procedure Gone are the days of needing to visit a branch to apply for the car loan. Most credit unions now let you apply online, over the phone or . If you’re applying for financing at a dealership, “invariably, the dealer will refer you to credit union financing and an institution that you could become a member of,” Schenk says, “so it’s really an easy process.” Still it is recommended to do your research prior to visiting the dealership. Some dealerships don’t cooperate with credit unions and if you can become a member and receive the best price when dealing directly with your credit union. Additionally, you’ll be offered a competitive loan offer before you begin buying a car and won’t be required to pay a markup from the dealer on your rate. 4. Credit unions offer a variety of additional benefits. Members, not shareholders, are the owners of credit unions. Any profits they make go back to the members in the form of dividends. Credit unions are also able to pass on earnings to their members through higher rates on deposits and loan products, such as auto loans. Most credit unions also participate in a shared branch as well as ATM network. Schenk states that CUNA’s members are part of a shared ATM network with more than 40,000 ATMs. Credit unions focus on providing education to their members as well, which means you can get advice regarding the best options for financial planning to suit your needs. “Credit unions are full-service, offering the same financial products as banks. They’re just 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 about your financial situation before the credit union either approves or denies your loan. Credit unions may be more understanding and accommodating than traditional banks in lending decisions. 5. Becoming a member is easy Some believe credit unions are available only to those who work for a certain company, industry or government agency, and that those who are not member of a particular group isn’t able to join. Meyer states that this is not the case anymore. “Most credit unions allow anybody to become a member.” CUNA has credit unions with community charters which permit them to serve more geographical regions. If you’re looking for the nearest credit union, visit and type in your ZIP code. “It would be shocking to meet a customer that didn’t have access the credit union,” Schenk says. 6. Car loans are an integral part of the work of credit unions. Be prepared when an auto dealer recommends customers to credit union prior to the bank. Credit unions for new and used cars alike increased by 17.9 percent and 19 percent and 19 percent, respectively, according to 2022 . Credit unions held $166.8 billion of loan balances for new vehicles at the close on the last quarter in 2022’s third quarter, and $305.3 billion of used cars. How can I apply for an auto loan? A car loan with a credit union is the same with other lending institutions, except for the membership step. Once you qualify as an active member, you are able to apply for a car loan via the internet, over the phone or at branches, based upon the particular credit union. The majority of credit unions will look over the following information to determine your eligibility for 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. You must submit proof of insurance to the credit union in the application procedure. And note that while you might be able to enroll and request an auto loan the next day, some credit unions require you to wait a month or two before you apply. What are the differences between a dealership, bank and credit union car loan? The main difference between a bank or an auto credit union loan is the terms for financing. Some banks offer discounts in particular in the case of a long-term relationship, a good track record of payment and a . Credit unions as well as banks can offer incentives, such as an autopay discount if you are an existing customer. However, since credit unions are not-for-profit organizations and owned by the members, they typically receive better rates and lower charges compared with for-profit banks, which shareholders own. When you apply for a auto loan , the loan comes from a third-party financial entity. Dealers receive compensation to connect you to any of their finance partners. Because of this, you may have better options than the interest rate you get through the dealership versus a bank or credit union. If there’s any issue with the financing firm and the dealer isn’t able to assist the customer — you’ll have to sort it out by yourself. The main thing to remember is that when you purchase a used or new vehicle There are many options for financing. If you’re a member of the credit union you might have access to lower rates of interest and costs compared to big banks as well as dealership loans. The process for applying is the same when you join, and the benefits may help you get approved even if you don’t have the highest credit score.
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Written by the Personal finance contributor Meaghan Hunt is a researcher as well as a writer and editor across disciplines with a passion for personal finance-related topics. After more than a decade working in libraries for public libraries and writing, she currently edits, writes, and researches as freelancer for full-time. Edited by Rhys Subitch Edited and written by Auto loans editor Rhys has been writing and editing for Bankrate since the end of 2021. They are passionate about helping readers gain confidence to manage their finances with precise, well-studied information that break down complex topics into digestible chunks.
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